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Thread: The world's on the brink of running out of places to put oil Reply to Thread
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Topic Review (Newest First)
03-30-2020 09:50 PM
ralfy When it comes to oil production per capita (which is more logical as oil is needed for a growing population), that peaked back in 1979.

There's also capex. I read that expenditures are doubling every few years while new oil production is halved. Definitely diminishing returns.
03-30-2020 09:46 PM
ralfy
Quote:
Originally Posted by Chuckleberry View Post
`

Eckspurts have been claiming peak oil has been reached or will be reached in the next 2-10 years since the 60's They're predictions have been even worse than the global warming crowd's. Will peak oil one day be reached? Sure but probably not in our lifetimes, maybe in a 100 years, maybe more.
Actually, it was Hubbert who predicted during the late 1950s that U.S. conventional production would peak between the late 1960s and early '70s and world conventional production sometime in 1995. Then, during the 1970s, he argued that because of the recent oil shock world conventional production peak would be postponed by a decade, to 2005 or after.

U.S. conventional production did peak in 1970.

In 2005, the IEA argued that there would be no peak in conventional production, and that any shortages will be due to "above-ground" (i.e., political and economic) issues.

In 2008, they decided to conduct a worldwide survey of oil producers to see the conditions of conventional production, and stated that they would release their report in 2010.

In 2010, they acknowledged that conventional production entered a plateau starting in 2005, which is what Hubbert said predicted three decades earlier.

A few years earlier, the U.S. began investing in unconventional production to make up for that, but the EIA reported that could peak prematurely because of high decline rates coupled with increasing risky debt needed to fund operations.

True enough, the BIS and others estimated that oil industry debts had reached over $2 trillion, and in order to maintain operations, oil prices need to rise to around $80 a barrel so that they could pay just part of the debt. Worse, to borrow more to increase production, they needed oil prices to rise even more. Similar applied to tapping resources like Manifa, where the price has to be at least $150 a barrel.
03-30-2020 09:25 PM
ralfy
Quote:
Originally Posted by shibbershabber View Post
Physical limitation is one thing, and that makes sense.

But when we say 'peak oil' that is not the same as what youve described.

Peak oil is running out of oil... Not running out of easily/cheaply extracted oil
What I described is precisely that: rising oil production cost due to physical limitations. I did not write that peak oil leads to high oil prices.

Also, peak oil is not about running out of oil. It's running out of cheap oil. The word "peak" refers to maximum production, after which production plateaus, and then goes into decline because production cost is too high.

Given that, one can debate on the time in which production will peak. Technically, one can extend the time by increasing credit, which means people can still oil at a higher price because they have more money, and with that companies can continue increasing production because there is demand.

The problem is that the underlying factor that leads to peak oil and that is driven by physical limitations is energy return, or the amount of energy received from a resource that's extracted vs. the energy cost of extracting and processing that resource.

Technically (again), we can extract an estimated 400 years' worth of oil underground just to prove that peak oil (again, a peak in production, not running out of oil) will not take place for hundreds of years, but it's an academic exercise because oil is extracted for a reason, and in this case to be used for economic activity which is used partly to pay for the extraction cost.

What about price? That's determined by the market, which involves not just demand but also speculation. The mainstream view is that oil producers set the price, but it's actually the market that does. That's because producers still have to pay bills whether or not they sell, so they sell whatever price is offered, and then burn through their assets to cover their losses, hoping that the price will go high enough in the future to allow them to recoup their losses, pay for past debts, and borrow again.

In which case, if you want to find out more about peak oil, then you should look at production cost and energy return, not prices or even melodramatic arguments about running out of oil. And if you want to see the effects of peak oil, then consider what happens to oil companies if oil prices go down due to crisis, or what happens to the global economy when oil prices go up.
03-30-2020 03:28 PM
Chuckleberry
Quote:
Originally Posted by RKW View Post
Peak oil is the theorized point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline. As of 2020, peak oil forecasts range from the early 2020s to the 2040s, depending on economics and how governments respond to global warming.

It is often confused with oil depletion; however, whereas depletion refers to a period of falling reserves and supply, peak oil refers to the point of maximum production.

https://en.wikipedia.org/wiki/Peak_oil

Using the above information, peak oil has nothing to do, per se. with storage space.
`

Eckspurts have been claiming peak oil has been reached or will be reached in the next 2-10 years since the 60's They're predictions have been even worse than the global warming crowd's. Will peak oil one day be reached? Sure but probably not in our lifetimes, maybe in a 100 years, maybe more.
03-30-2020 02:21 PM
RKW Peak oil is the theorized point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline. As of 2020, peak oil forecasts range from the early 2020s to the 2040s, depending on economics and how governments respond to global warming.

It is often confused with oil depletion; however, whereas depletion refers to a period of falling reserves and supply, peak oil refers to the point of maximum production.

https://en.wikipedia.org/wiki/Peak_oil

Using the above information, peak oil has nothing to do, per se. with storage space.
03-30-2020 12:01 PM
Sneeky Trump tried to get the SPR refilled with oil at a low price in March but the moron Dems in Congress thought funding for the arts and other such BS was more important, so no funding in that stimulus bill.
03-30-2020 11:52 AM
Iamfarticus Saw one place this morning, $1.99 and hear of another close by, $1.93 a gallon. US crude oil is less than $20/barrel.
03-30-2020 10:46 AM
shibbershabber
Quote:
Originally Posted by ralfy View Post
Quote:
Originally Posted by shibbershabber View Post
Peak Oil?

Youre suggesting that the price of oil is tied to a fantasy theory of oil running out?

Yeah, good luck with that buddy... sounds like a bunch of crap.

API doesnt even take a position on the idea, nor have I heard any industry group or representative take a position on it, let alone validate it by tying their pricing to it


*always ready to be proven wrong
Peak oil is not about running out of oil but production reaching a peak because of physical limitations. That's why global oil discoveries peaked in 1964 (or '47, following a Bloomberg report), U.S. conventional production peaked in 1970, world oil production per capita peaked in 1979, world conventional production peaked in 2005, and unconventional production will peak soon (at least according to the EIA).

Also, around two-thirds of oil-producing countries reached or went past peak production. Thus, what you think is a fantasy has been taking place for decades.

Finally, pricing is not tied to peak oil but is determined by the market. What's tied to peak oil is production cost.
Physical limitation is one thing, and that makes sense.

But when we say 'peak oil' that is not the same as what youve described.

Peak oil is running out of oil... Not running out of easily/cheaply extracted oil
03-30-2020 09:59 AM
ralfy
Quote:
Originally Posted by shibbershabber View Post
Peak Oil?

Youre suggesting that the price of oil is tied to a fantasy theory of oil running out?

Yeah, good luck with that buddy... sounds like a bunch of crap.

API doesnt even take a position on the idea, nor have I heard any industry group or representative take a position on it, let alone validate it by tying their pricing to it


*always ready to be proven wrong
Peak oil is not about running out of oil but production reaching a peak because of physical limitations. That's why global oil discoveries peaked in 1964 (or '47, following a Bloomberg report), U.S. conventional production peaked in 1970, world oil production per capita peaked in 1979, world conventional production peaked in 2005, and unconventional production will peak soon (at least according to the EIA).

Also, around two-thirds of oil-producing countries reached or went past peak production. Thus, what you think is a fantasy has been taking place for decades.

Finally, pricing is not tied to peak oil but is determined by the market. What's tied to peak oil is production cost.
03-29-2020 08:53 PM
Big_John Several stations in Oklahoma City are 0.99 a gallon.

What a great deal for cross-country RV'ing.... Oh, except we can't do that with COVID.
03-29-2020 08:37 PM
shibbershabber
Quote:
Originally Posted by ralfy View Post
Meanwhile, production costs are still high because of peak oil, with the industry needing the price to reach up to $100 in order to pay for previous debts (around $2 trillion). Also, there appears to be a correlation between oil consumption and economic growth.
Peak Oil?

Youre suggesting that the price of oil is tied to a fantasy theory of oil running out?

Yeah, good luck with that buddy... sounds like a bunch of crap.

API doesnt even take a position on the idea, nor have I heard any industry group or representative take a position on it, let alone validate it by tying their pricing to it


*always ready to be proven wrong
03-29-2020 08:17 PM
ralfy When oil is cheap because of low demand brought about by other crises, income eventually weakens for the same reason. That's because higher income is dependent on a growing economy, and a growing economy on increasing demand.

At the same time, production is curtailed because costs are high, the price and demand are low, and debts remain. Oil companies have to keep making debt payments (debt went up to $2 trillion because of peak oil: unconventional oil production is much more expensive) and paying for overhead costs even as it sells less oil. At some point, some firms will have to cut production, with some even closing, because they had to burn through their cash flows, sell off assets, and lay off personnel. That in turn may make it hard to bring back production capacity to previous levels.

If economies ever recover, then demand will recover as well. At that point, the price may increase significantly if there isn't enough supply as much of production has gone offline. The higher price (probably around $80 a barrel) should allow oil companies to recoup losses, and if it goes up further (at least $100), borrow more to meet demand. But higher prices also lead to economic crises if people lack income even after recovery (because they had to cover their losses as well), which means they have to borrow more (which increases debt, which in turn also leads to economic problems) or decrease demand, which brings us back to the first point above.

In short, the price of oil can't be too low or to high, because either way the economy weakens. The problem is that the cost of oil is rising because of peak oil, and a low price leads to oil industries weakening (and eventually leading to lower production) and a high price to economies weakening (and eventually leading to combinations of higher debt or weakened demand).
03-29-2020 08:43 AM
randyt
Quote:
Originally Posted by Kymudder08 View Post
Anything you can do to kerosene to keep it fresh for next winter?
I'm not sure because I've never had any trouble. I have kerosene that is 5 years old and still burns great. I keep it out of the light and keep the can full as much as possible so it doesn't condensate.

Also as a HVAC tech I've removed fuel oil tanks from basements with oil that was several years old. I've used that oil.

what kind of trouble have you had?
03-29-2020 07:44 AM
DeBrewhaha I can tell you that working in the industry right now sucks. With the price per barrel below $30, O&G companies are looking to shed expenses as fast as possible. I expect to see continued layoffs over the next many months.

We donít need $100 per barrel as mentioned above, but above $50 would help me sleep better at night.
03-29-2020 07:30 AM
DeBrewhaha
Quote:
Originally Posted by jandh View Post
Why so cheap in OK? Where I am in Michigan I see $1.60-1.90 everyday.

One word: taxes.
03-29-2020 07:27 AM
Kymudder08
Quote:
Originally Posted by randyt View Post
I'll be stocking more kerosene and lp gas.
Anything you can do to kerosene to keep it fresh for next winter?
03-29-2020 07:04 AM
randyt I'll be stocking more kerosene and lp gas.
03-28-2020 08:36 PM
Erie1700 So... not too informed on the science of all this but... what does fuel stabilizer do? You already know where I'm going with this.
03-28-2020 08:32 PM
shibbershabber Still paying $2.50+ per gallon in the Portland, OR area....

Literally zero change in price from neither low demand or low oil price.
I dont buy lack of demand either. I am going to and from work everyday and there might be 10% fewer cars compared to normal.
03-28-2020 07:02 PM
ralfy Meanwhile, production costs are still high because of peak oil, with the industry needing the price to reach up to $100 in order to pay for previous debts (around $2 trillion). Also, there appears to be a correlation between oil consumption and economic growth.
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