Oil price enters "danger zone" to world economy

[Xenophobe]

Well you've spent a lot of time over the years saying that any concern about oil depletion is alarmist nonsense.

I've been here 5 months. But peak oil as alarmist nonsense sounds like something I might have said in those 5 months. Based on historical precedent of course.

But recently you've been quite taken with the idea that we need to transition to using all electric vehicles to solve, in your words, the "peak oil problem".

Now I know I have said that.

So I'm wondering if you could explain what you believe right now. Is there a problem or not?

I have also said that I believe firmly in the Disclaimer listed on JD's blog. Oil is a finite resource. Humans cannot use it forever, and everyone believes that someday, a production rate of it must reach some sort of maximum. Yergin, EIA, Lynch, everyone, JD, everyone.

By logical extension, one day, there will be none. Also by logical extension, if we as humans are not prepared for the day "none" arrives, this is bad. Fortunately, with easily a century of oil left at current production rates, we are cranking out the solutions. This is a good thing, giving us plenty of time to decide which types of EVs we humans like. Giving us time to refine them, choose our favorite colors, decide on performance EV versus economy EV, tall EVs versus short ones, trucks EVs versus minivan EVs, etc etc.

So there is no problem now, but someday, within a few generations, there COULD be. I am happy that humans have built a solution, and it is now available to the motoring public. Human ingenuity and farsightedness is not to be underestimated.

[thuja]

If you don't think the problem of oil depletion will occur for "generations", why do you think oil prices spiked to an all time high in 2008 and are pedicted to top 100 this year?

[Xenophobe]

If you don't think the problem of oil depletion will occur for "generations", why do you think oil prices spiked to an all time high in 2008 and are pedicted to top 100 this year?

Your language is confusing. Modern oil depletion started in 1859, therefore it has ALREADY been occurring for generations. It will continue for more generations. It will continue until we stop using all oil. So none of my argument has anything to do with always present and ever continuing depletion.

Oil prices spiked in 2008 because of commodity speculation, as demonstrated by all the other commodities which did the same thing that year. That speculation was occurring because it was the tail end of a bubble economy, and people had more money to hide and play with than they knew what to do with.

Until Summer 2008, the high oil price was explained by factors such as the huge
petrol demand of the Chinese economy and other emerging economies as well as by
the Peak Oil thesis. But a drop from almost US$ 150 to US$ 45 per barrel showed
that general speculation and capital flight from financial markets to commodity
markets was a decisive factor in the oil price development. Such an extreme
fluctuation can only be explained as a result of a speculative bubble.

Highlighted in red to save mods the trouble of changing color prior to erasing actual information again.

[thuja]

and why is the price of oil spiking now?

[Xenophobe]

and why is the price of oil spiking now?

Same reasons it spiked in 1870. 1874. 1884. 1899. 1915. BIG one in 1919. 1926. 1949. 1974. 1979. 1989.

Whats the big deal? Crude has been spiking in price as long as humans have been using it. You think the newest spike is somehow meaningful? Or more meaningful than all the other price spikes?

[dolanbaker]

and why is the price of oil spiking now?

Same reasons it spiked in 1870. 1874. 1884. 1899. 1915. BIG one in 1919. 1926. 1949. 1974. 1979. 1989.

Whats the big deal? Crude has been spiking in price as long as humans have been using it. You think the newest spike is somehow meaningful? Or more meaningful than all the other price spikes?

2008, it spiked and stunned the already weakened over indebted economies of the west, now it is spiking again while these economies are still weak and indebted, it's like having a greyhound on a lead and expecting it to win a race!

China and others are still primary coal burning economies, so the oil price affects them less.

[Xenophobe]

and why is the price of oil spiking now?

Same reasons it spiked in 1870. 1874. 1884. 1899. 1915. BIG one in 1919. 1926. 1949. 1974. 1979. 1989.

Whats the big deal? Crude has been spiking in price as long as humans have been using it. You think the newest spike is somehow meaningful? Or more meaningful than all the other price spikes?

2008, it spiked and stunned the already weakened over indebted economies of the west, now it is spiking again while these economies are still weak and indebted, it's like having a greyhound on a lead and expecting it to win a race!

No it isn't. Its the exporting countries wanting a high price for their product, for whatever reason. They've been driving up the price since 1970 with their cartel, and once they realized the world wouldn't end after they tested the limits of price in 2008, there isn't any reason they should be expected to want $40 again, if they think they can get $100.

And they do.

http://tribune.com.ng/index.php/news/15 ... ce-hits-91

[thuja]

Didn't quite answer my question. What do you think are the reasons oil prices are spiking now?

[pstarr]

Oil prices spiked in 2008 because of commodity speculation, as demonstrated by all the other commodities which did the same thing that year.

Nonsense. You might as well blame evil oil companies, environmentalists, liberals, or Sarah Palin for high oil prices.

Well, a futures contract is a bet about the future price. It has no, zero, nada direct effect on the spot price. And that’s true no matter how many Joe Shmoes there are, that is, no matter how big the positions are.

Furthermore, oil is the mother commodity by which all other commodities are produced, by which all commodities are moved, processed, assembled, and retailed, so their prices went up in lockstep with petroleum. The rest is conjecture.

What the commodity markets are telling us is that we’re living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices. And America is, for the most part, just a bystander in this story.

Highlighted in red to save mods the trouble of changing color prior to erasing actual information again.

shouldn't challenge the mods. Bad business.

[Xenophobe]

Didn't quite answer my question. What do you think are the reasons oil prices are spiking now?

I exactly answered your question. Because OPEC has signaled that $100/bbl is fine by them. Was the link erased in an attempt to stop the dissemination of information? Here it is again, just in case.

http://tribune.com.ng/index.php/news/15 ... ce-hits-91

OPEC is a cartel, and as swing producers on a global scale, they have the ability to set the price. The price appears to be $100.

[Xenophobe]

Oil prices spiked in 2008 because of commodity speculation, as demonstrated by all the other commodities which did the same thing that year.

Nonsense. You might as well blame evil oil companies, environmentalists, liberals, or Sarah Palin for high oil prices.

Tell it to Peter Wahl. I referenced his opinion. Tell him a poster on TOD said he was wrong, I'm sure he'll change his mind immediately.

[pstarr]

Oil prices spiked in 2008 because of commodity speculation, as demonstrated by all the other commodities which did the same thing that year.

Nonsense. You might as well blame evil oil companies, environmentalists, liberals, or Sarah Palin for high oil prices.

Tell it to Peter Wahl. I referenced his opinion. Tell him a poster on TOD said he was wrong, I'm sure he'll change his mind immediately.

You always expect me to do your homework.

Answer me this: how can a speculator force the final price of a commodity at sale at the crude terminal if they can not withhold said commodity?

[Xenophobe]

You always expect me to do your homework.

No I don't. I expect you to misrepresent, misunderstand, and mischaracterize anything and everything that comes across your path.

You never disappoint.

[Keith_McClary]

misrepresent, misunderstand, and mischaracterize anything and everything that comes across your path.

You mean like deliberately obtuse pedantry?

[thuja]

ok just to sum up xeno...tell me if this is right. You believe that...

1. Global oil production problems are not something we will have to contend with for generations.

2. The 2008 spike to the highest price recorded was due entirely to speculation.

3. The recent rapid price rise is because OPEC can charge that much.

4. You advocate a push towards transitioning to an electric based grid and away from oil in preparation for supply problems that are likely at least generations away.

Is that right?

[Xenophobe]

ok just to sum up xeno...tell me if this is right. You believe that...

1. Global oil production problems are not something we will have to contend with for generations.

Thats not what I said. However, we have ALREADY had global oil production problems, even within my, and your, lifetime. Seems reasonable that we may have more of them between now, and the time you, or I, am no longer here. And even farther down the road then that!

2. The 2008 spike to the highest price recorded was due entirely to speculation.

I didn't say that. I provided a reference which showed why speculation was the primary reason for that price spike. Please leave the absolutes alone, we can dispense with semantically creative ways to play gotcha, can't we?

3. The recent rapid price rise is because OPEC can charge that much.

I did not describe the recent increase as rapid. And yes, I provided a reference showing that OPEC is quite happy with $100 oil.

4. You advocate a push towards transitioning to an electric based grid and away from oil in preparation for supply problems that are likely at least generations away.

Incorrect. I advocate taxing/legislating/requiring that the price of oil be set at $250/bbl immediately. I would not characterize this as saving the world, or even the US, from supply problems over multiple generations (plural is your estimate, not mine) but it would certainly stick a fork in supply problems for a decade or two. And that would be enough time for the transition which has ALREADY started to have a good chance of becoming a permanent one.

Is that right?

No. But I think I clarified your misunderstandings pretty well.

[thuja]

lets figure it out then. the first point. You said we have had supply problems and will have them again. But before you said that oil supply is plentiful for generations...can you clarify?

then the second...sorry the 2008 spike was due primarily to speculation. Yes?

third...prices are high because opec can charge high prices?

fourth...you advocate a 250 barrel price. If supply is not a problem for generations, why?

[Xenophobe]

lets figure it out then. the first point. You said we have had supply problems and will have them again. But before you said that oil supply is plentiful for generations...can you clarify?

Sure. We have had supply problems before. For example, entire oilfields have been burned down. In 1863 for example. More than a hundred years later, in Kuwait (I bet Saddam thought he was original, eh?) it happened again! Embargos, hurricanes, ships sink, refineries explode, no power along the Gulf Coast shuts down a pipeline,

There have been, and will be, oil supply problems.

But there are not oil volume problems.

When I said that OIL is plentiful, for generations, I was referring to the amount we have available, sitting around in the ground, just waiting to be scooped out. 40 years of regular inventory, another decade of NGLs, another couple decades of unconventionals and heavy, another couple decades of new discoveries and changes in incremental recovery.

then the second...sorry the 2008 spike was due primarily to speculation. Yes?

Primarily, yes, I believe that to be true.

third...prices are high because opec can charge high prices?

Prices aren't high right now. And yes, they are generally what they are because OPEC controls the surplus capacity.

fourth...you advocate a 250 barrel price. If supply is not a problem for generations, why?

To save the planet of course. Just because we have plenty of oil doesn't mean that we should take the easy way out and use it all in a wasteful manner the way we have been.

[pstarr]

ok just to sum up xeno...tell me if this is right. You believe that...

1. Global oil production problems are not something we will have to contend with for generations.

Thats not what I said.

Yes you did. You said the following:

We're increasing production again...maybe we'll create another plateau in another generation?

Do you want a link? It's easy and fun!

2. The 2008 spike to the highest price recorded was due entirely to speculation.

I didn't say that.

Liar.

3. The recent rapid price rise is because OPEC can charge that much.

I did not describe the recent increase as rapid. And yes, I provided a reference showing that OPEC is quite happy with $100 oil.

Actually OPEC is not in the least bit happy as they prefer not to stifle demand. As recently as early 2004 the Saudis reiterated their support for the stated OPEC policy of maintaining an oil price band of $22 to $28. I find no evidence that world demand, inflation, or other external economic factors would challenge their promise by 4x.

4. You advocate a push towards transitioning to an electric based grid and away from oil in preparation for supply problems that are likely at least generations away.

Incorrect. I advocate taxing/legislating/requiring that the price of oil be set at $250/bbl immediately. I would not characterize this as saving the world, or even the US, from supply problems over multiple generations (plural is your estimate, not mine) but it would certainly stick a fork in supply problems for a decade or two. And that would be enough time for the transition which has ALREADY started to have a good chance of becoming a permanent one.

That would be a regressive $8 barrel gasoline tax against middle America. For what? AGW? How would you prepare for the economic shock?

Is that right?

No. But I think I clarified your misunderstandings pretty well.

You clarified you own hatred for the American

[rangerone314]

How high do you think oil can go before large numbers of people start dying off (in million-bbl/day) and how long to reach that point?