SailDog

http://www.sailready.com

21 Comments

    • The Great Oil Deception: Part Two [view article]
      The other issue is that oil is becoming harder to find. Chevrons Jack find appaently cost $100m.

      Brazil oil E&P will be extrordinarily expensive and the technology to drill it does not exist. New metals will need development and the cahllenge of lifting 100+ deg C oil through water at 4 deg C has not yet been addressed. I have no doubt all thes issues will be overcome, but it aint cheap.

      So I accept the argumant that much of the cost is cyclical, but much is structural too. Brazil is a new oil province. Which is great, but it isn't Ghawar, that's for sure.       Jun 15 08:41 AM
    • Crude Report Stumps Analysts [view article]
      This may be the impact of the growing net (oil) export problem. Imports are down significantly from Venzuela and Mexico; and the turn around time for shipping from the Middle East is 5 times longer than from the Carribbean. Just a hunch........ It would be worth while checking where the shortfalls are occurring. If it is in the Gulf refineries I am not surprised.

      This is what is known as the Export Land effect - oil exporting countries have rapidly growing domestic consumption and stagnant or declining production dealing a double blow to net exports. Globally exports of oil are down some 2m barrels since 2005.       Jun 12 08:44 AM
    • Energy: Government Vs. Market Solutions [view article]
      I agree governments make useless decisions. However in Europe where "gas" is $10 a gallon they use half or less the fuel used in the US. As a result Europe drives cards that get double the mileage of US cars, they have a better train system (in France a brilliant train system) and they are much less exposed to Peak Oil.

      In contrast "the market" in the US has led to the strip mall/exurban model lifestyle that is even now proving the first casualty of Peak Oil.       Jun 07 10:15 AM
    • The Power Failure on Wall Street [view article]
      I too have grave doubts about the sanity of the markets, but they are always right, so I try and keep these sentiments to myself.

      As for the oil price I am afraid that neither Econ 101 or Econ 201 covered that part of price theory where not only is the supply curve perfectly inelastic, but the demand curve is too.

      Simple logic, visulaizing two vertical, or one vertical line (supply) and one nearly vertical line (demand) tells me that the prices are highly volatile and that more or less any price is possible.

      If I woke up tomorrow (well Monday) and found the oil price was $70 I would be no more or less surprised if it was $150.

      Having said that I do accept that the supply curve is vertical and furthermore I understand why. What amazes me is how many people do not accpet that it is vertical, or have no clue about where it is. That includes governments, heads of corporations and various other talking heads.       May 24 10:44 AM
    • Why Oil Won't Penetrate $150/Barrel [view article]
      Yes, but what about the people who actually want oil? May 23 08:23 AM
    • Who's Really to Blame for Rising Oil? [view article]
      The author of this article needs to learn Economics 101, then read a but of Herman Daly, then some Hartwick, even some Harold Hotelling. He knows nothing.

      To point out the bleeding obvious supply is static and demand is such that all will be taken up at what ever the latest high price is. It is inelastic. No one will care if you do not buy gas on a Monday.       May 12 06:57 AM
    • Our Energy Efficient Economy Can Handle $112 Oil [view article]
      I agree with the negative sentiments above. He also conveniently ignores (or maybe has never learnt) the Jevons paradox. Anyway the argument is worn and tired. I first heard it years ago. It doesn't in any way illuminate anything - it is just a fleeting meaningless soundbite, something the Labour Party would be proud of. May 05 09:27 AM
    • We're Nearing Crunch Time for Oil [view article]
      I agree with A von A - tar is tar. It is not oil.

      Jim did acknowledge his 5 point wish list was just that - wishing on a star. New oil production must outstrip production declines elsewhere significantly and there are quite a few roadblocks in the countries mentioned. The projects will be more difficult and more expensive than can possibly be imagined.

      Ethanol is a form of top-soil strip mining. It can be done once, for a short period and the you are in worse trouble than ever.

      Plug in hybrids - maybe. Lithium seems to be a problem.

      Adjustment of populations to mass transit? In the US? Or here in Oz? Like the morons in the US we have craftily built all our new suburban McMansions at the end of dead end streets. Buses will never run down them.

      Industrial production from trucks to rail? I read somewhere else today that "Just in Time" is a concept whose time has passed. Jim seems to agree, but I am not sure that our warehouse on wheels economies will adjust smoothly. At the very least there will be significant losses in efficiency and higher costs.

      My point really is that all of these megatrends must come together spectacularly well (and a lot else besides) for there not to be significant dislocation as oil becomes unaffordable.       May 05 08:51 AM
    • Why Exxon Still Denies Peak Oil [view article]
      Brian - first off 2008 is a <i>forecast</... At least I am dead certain that the calendar is not abiotic. Then the IEA data includes biofuels and syncrude from tar, which by definition are not crude oil. Their energy contribution to society (over their energy inputs) is miniscule or negative; and the impact of their prodcution on the world has been catastrophic.

      I will accept C+C as crude oil and that did Peak in Jan 2008 at something like 100k barrels more than the previous Peak in July 2006. However these tiny changes in production are well below the error level in the data set so I am not going to read and weep. In any event I would welcome a robust increase in production, or even just an announcement that a significant new province of easily recoverable oil had been found.

      I am not sure why you and people like you want to muddy these waters. At the very least wishing/hoping/believi... in abiotic oil (even with pictures from the mid-Atlantic ridge) do not amount to an increase in a recoverable resource. Intellectual honesty demands that you concede there is a significant risk that oil production has peaked or soon will and that the consequences, already highly damaging, can only get worse.       May 05 08:27 AM
    • Why Exxon Still Denies Peak Oil [view article]
      CERA calculate production declines as 4.5% which amounts to nearly 4m barrels per day of lost production from existing fields. It is higher in the North Sea, at Canterell and various other OECD fields, so quite how they get to 4.5% we shall never know.

      Even so, using this 4.5% decline rate one can quickly work out that the world loses 9m barrels per day from existing fields in about 2 years and three months. That is one Saudi Arabia in less than 30 months and 2 Saudi Arabia in less than 5 years.

      Please can some of those who commented above (except Brian Pursley - who implausibly believes in abiotic oil regeneration) explain just how many Saudi Arabias are "out there"?

      I personally think anybody who believes oil production will rise smoothly in the years ahead is deluded or ignorant. We are at or near the limit in terms of daily production. It is really quite simple, it is VERY important, yet seemingly, like lemmings, we do not care about the cliff ahead.       May 04 04:18 AM
    • Oil Hits New Record - Is $125 Next, or $100? [view article]
      Oil has lurched up in a series of steps over the last ten years, during which there have also been some big drops. I am not aware of any reason why this pattern should change. Apr 22 08:12 AM
    • The Reasoning Behind Oil's Irrationality [view article]
      From an investment perspective I cannot fault this article's conclusions. But his reasoning did prompt a recall of that syndrome of not seeing the wood for the trees.

      The fundamentals are why oil is $90+ and will carry on trending up.

      Whinging about oil locked up in ANWR, Venezuela etc misses the point that we have passed the point when oil becomes more valuable in the ground than as dollars in the bank.

      It doesn't matter why production has remained flat at 85m barrels a day since 2004. The fact is that it has. Meanwhile China, India, Russia and most of the OPEC countries are using much more oil. As production is flat, that must mean more and more people in other countries are using less oil. That is why the price is trending up. It doesn't seem so difficult to me, but nobody else had said as much that I have read. Jeffrey Brown's Export Land Model is very alarming. Is suggests that net oil available for export is in an accelerating downtrend.

      The final point is field decline. The North Sea is declining at around 8%, while Canterell crashed 20% in 2006. Global field decline could be anything between 4% and 10%, though nobody knows the exacty number. Platts report field declines of 8% in certain Saudi fields, but we don't know which fields, or what the overall picture is.

      If we take the low end and round it down, global field decline from existing production is 3m barrels per day every year. In other words, with flat production since 2004, new production additions in the 3 years have totalled 9m barrels per day. That is more than total Saudi production. How many more Saudi Arabias are there?       Nov 03 11:41 PM
    • Petro-Canada Announces New Oil Sands Breakeven: $50 a Barrel [view article]
      This is nonsense. The price is dependent to a very great degree on the price of natural gas. Crude oil itself is another major input. Supply capacity for NG and oil is getting tighter every day - as the prices go up so will the break even for Tar sands. It's like the end of the rainbow - always just ahead; you can never reach it. Once the true scarcity of North American natural gas is priced in the tar sands are dead.

      The operators know this because they talk about nukes to deliver the heat needed. If nukes are ever needed the tar sands operations will die.       Jul 17 10:06 AM
    • Oil-Rich Canada Inspires Investor Confidence [view article]
      Tar sands (it's tar, not oil) use copius quantities of natural gas to "make" the oil in a process that has been described as turning gold (natural gas) into lead (syncrude). natural gas is in declien across North America and it is unlikely that it will continue to be burnt to make oil. That is why operators are talking about nukes to generate the heat needed to crack the tar into shorter chain compounds (oil).

      The other unanswered question is environmental. Collosal contamination seems certain. Is there enough water? What about air pollution and the CO2 footprint?

      I think the tar sands are a giant red herring built on the back of incorrectly priced natural gas. I wouldn't go near them.       Jul 04 10:24 AM
    • US Oil Companies Borrow A Page From OPEC's Playbook [view article]
      The article doesn't make sense.

      The fundamental problem underlying all of this is faltering oil supply. Read www.businessweek.com/m....

      OPEC are lying about their ability to raise production. They most likely can't and this is a smoke screen. The oil companies know that production growth has stalled. Why invest billions in new plant if production growth has stalled?

      They would prefer to take the heat on all of this nonsense rather than admit the truth: Global production cannot increase. They know they are going to take heat anyway, so they prefer to blame it on the president. He is an unpopular idiot, so it doesn't matter.       Jun 19 10:21 AM
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»