Oil ‘could Hit $250 A Barrel’

[Naam]

The bottom line is the faster we move towards alternatives the better off we'll be.

unfortunately "alternatives" (apart from nuclear power) are presently non-existent. wind, solar, tide and the like will never be able to cover more than a miniscule percentage of the total energy demand.

[Naam]

Is there anyone here who believes that in 20 to 30 years we will NOT have electric cars?

of course the future belongs to cars driven by electricity. ample electricity supply is available in everybody's home from a number of outlets. no need for oil and its derivatives!

I don't think we will need electricity, everything in the future will be powered by alternative energy.

you mean driving up a service station and shout "fill her up with 91 octane alternative"

[Samuian]

Don't worry - start walking or use the Bicycle NOW!

[quiksilva]

I thought that the problem of alternative energy sources was that the investment required to develop them was too high. So as the oil prices climb wont these options become relatively cheaper, and more viable?

[PeaceBlondie]

Of course we will need electricity, and how much of Thailand's electricity uses oil or natural gas for its production? Will the million rice fields of the Lanna Kingdom be replaced with wind turbine farms?

[Thaddeus]

Don't worry - start walking

I move my legs using the power of my mind ....... can barely make it to the end of the driveway.

[Smithson]

I thought that the problem of alternative energy sources was that the investment required to develop them was too high. So as the oil prices climb wont these options become relatively cheaper, and more viable?

Not necessarily, if the alternatives use oil in the production (for parts, transport etc.), then the cost will increase. Although these days you will see sustainable alternatives for lots of things become more economical.

The longer we leave things, the harder it will be. In the 70's when there was an oil panic, the US started investing in solar power. Then when the oil price dropped they lost interest. Imagine if they had continued, imagine if instead of wasting money on stupid things like missions to Mars, they had used the money for research on alternatives. Imagine also if the price of oil had of remained high since the 70's.

If this had been the case, then alternatives could have been developed by now and we'd all be a lot better off.

IMO opinion the best case scenario would be for oil to remain high through controlled supply, forcing us to change. If oil drops again, then we'll forget everything and it'll be business as usual.

The worst case scenario is that we've already peaked.

[Naam]

I thought that the problem of alternative energy sources was that the investment required to develop them was too high. So as the oil prices climb wont these options become relatively cheaper, and more viable?

alternative energy sources might provide energy. what they can't provide is the raw material for thousands of different products (which crude oil does).

edited to make german "krammar" understandable

Edited June 12, 2008 by Naam

[Naam]

IMO opinion the best case scenario would be for oil to remain high through controlled supply, forcing us to change.

change to WHAT?

[Smithson]

IMO opinion the best case scenario would be for oil to remain high through controlled supply, forcing us to change.

change to WHAT?

Change to using less fuel, it's amazing how much other things ppl are willing to give up before the reduce their amount of driving or change to more economical cars, but I think we're getting close to the tipping point.

It may be too late to change to a brave new world of wind powered houses, hydrogen cars and solar planes, but we can still do a lot to reduce consumption. The level of waste is incredible. Just look at the amount of plastic you end up with for simple purchases. 15 yrs ago everything was wrapped in Banana leaf and paper, these days it's all plastic and foam.

[Naam]

IMO opinion the best case scenario would be for oil to remain high through controlled supply, forcing us to change.

change to WHAT?

Change to using less fuel, it's amazing how much other things ppl are willing to give up before the reduce their amount of driving or change to more economical cars, but I think we're getting close to the tipping point.

if people would drive 25% less and therefore use 25% less fuel (gasoline, diesel and liquified gas) the impact on total crude oil consumption would be insignificant (less than 4%).

[Naam]

The level of waste is incredible. Just look at the amount of plastic you end up with for simple purchases. 15 yrs ago everything was wrapped in Banana leaf and paper, these days it's all plastic and foam.

in this respect i fully agree with you.

[stingray]

Hydrogen cars are the future. and you still can using the normal 4 storke engine. BMW have it ready with the normal combustion engine. The problem is only that no goverment like to see the Nitrogen Developments, because they can't get fueltaxes anymore. Therefore it's all a game. Not only saudies, especielly all goverments make money of fuel taxes. In most countries, the fuel taxes depend on procentages. I'm Swiss and we have 60% fuel taxes. Today Swiss Franc is similar like a US Dollar. Just for example: 60% of 2 Dollar per liter is much more than 60% of one Dollar. So who makes the money? Why they should support Hydrogen cars? There is only one Man who support Hydrogen Developments, it is Bush.

[Naam]

Hydrogen cars are the future.

present technology still uses more energy to generate Hydrogen than the energy output . WHERE'S THE BEEF?

edited for addendum:

using Hydrogen reduces pollution in certain areas, producing Hydrogen causes pollution by generating the necessary primary energy!

Edited June 12, 2008 by Naam

[Thanh-BKK]

Hi

Hydrogen production requires only two things: water and DC electricity. DC! Which can be produced by solar panels. Hydrogen is the cleanest fuel one can burn because it's "exhaust" is clean water, you can drink rijht from the exhaust pipe (but it's hot). Using DC that water can immediately be split into hydrogen and oxygen again........

As long as it still takes me 30 minutes by motorbike to bring my boyfriend to work every morning, because whole Sukhumvit is jammed with cars that contain a single person, petrol is still too cheap here. Make it 150 Baht per liter, let's see if those "driving for the sake of showing off" people will take the skytrain or a bus. But then.... i guess not. They will eat plain white rice or dry Mama noodles, but will keep driving their 2.000 cc cars around the corner to let the neighbours see how much money they have. It's INSANE. I walk faster along Sukhumvit than i drive a car on it, specially in the morning.

LOTS of petrol could be saved if the police or whoever is responsible would coordinate the traffic lights in a logic manner. I mean, come on - you stand three minutes at a traffic light, finally it goes green and that same moment you can see the next one, 200 meters further, going red - another three minutes.

Best regards.....

Thanh

[Naam]

Hydrogen production requires only two things: water and DC electricity. DC! Which can be produced by solar panels....

which are freaking expensive and so is the energy generated by solar panels. if it was economically feasible to generate electricity to split water by electrolysis into Hydrogen and Oxygen it would be done. unfortunately it is NOT economical and that's the reason why it is NOT done. moreover, to produce solar panels primary energy is need. photovoltaic panels have a limited life time and have to be replaced by again using primary energy

[PeaceBlondie]

I am no engineer. But I understand that technologically, most of the proposed replacements for fossil fuel are still - after decades of development - not yet ready for prime time. It is now prime time. The four-stroke engine is a monstrosity of complexity, and the diesel and two strokes are not much simpler. Yet they account for almost all the power units in the world, based on over 100 years of careful development. Even the rotary engine has not advanced much in its 45 years since Dr. Wankel's invention went into an NSU car. You need to replace hundreds of millions of engines from ship powerplants to weed-whackers, and we are not anywhere near that. You cannot move a supertanker or a container ship across the ocean by wind and solar power.

[Gary A]

The Netherlands are generating hydrogen with wind mills.

[CCCP]

This is nothing more than a global government cover.

Make everyone fear the over exaggerated problems, oil, fuel, climate. Make the world pay the taxes to fund the 500 for further dumbing down of the people.

I agree there are prolems with the climate, but we the consumer contribute to about 3-5% of it. The rest is natural and has been for centuries.

BTW. Your internet usage will be taxed by 2012 and very limited. Guess these crooks don't want us to know what we know.

[rethaired]

Most of this (as much as 60%) is about SPECULATION.

Peak Oil means that there is about 20 to 30 years of cheap oil left (and possibly more because consumption is going to go down with the more economical cars [hybrid/diesel]/more motorcycle use, and people changing their habits). Is there anyone here who believes that in 20 to 30 years we will NOT have electric cars?

Peak Oil doesn't mean cheap oil for 20 - 30 years, cheap oil is already long gone, haven't you noticed? There in no sign that consumption will decrease, it's the opposite. Increasing oil demand means if the US switched to hybrids today, it would only reduce consumption for a few years.

Peak Oil means a peak in supply, after which supply it drops. There are those who believe we've already reached it, others say it will happen around 2010, while some say it'll go for another 20 yrs. Demand is more likely to increase than decrease, so prices will skyrocket. The result could be severe economic depression, war, famine. Oil is used for almost everything, if there is a major drop in supply the world cannot support anywhere near 6 billion ppl.

This all may sound crazy, but those who accurately predicted peak oil in Texas were also laughed at. The bottom line is the faster we move towards alternatives the better off we'll be.

If we wait too long, there may not be enough oil for us to happily drive around in our electric cars!

So, you are saying that the Saudis, Koweitis,... do NOT have now cheap oil anymore? The tap is closed? They have had to change their extraction ways? Must

Your comment is NOT supported by the data! (Peak Oil debunked): "[...] at the moment, the "demand is overshooting supply" theory looks pretty unlikely as an explanation of the feverish price behavior in April." There is a whole lot more explanations on that site.

"Some commentators, such as economist Michael Lynch, say that the Hubbert Peak theory is flawed and that there is no imminent peak in oil production; a view sometimes referred to as "cornucopian" by believers in Hubbert Peak Theory. Lynch argued in 2004 that production is determined by demand as well as geology, and that fluctuations in oil supply are due to political and economic effects as well as the physical processes of exploration, discovery and production.^[102] This idea is echoed by Jad Mouawad, who explains that as oil prices rise, new extraction technologies become viable, thus expanding the total recoverable oil reserves. This, according to Mouwad, is one explanation of the changes in peak production estimates.^{[101]" (Wikipedia)}

So, all you have to do if you are producing oil is to reduce the production of oil compare to the demand and create a crisis. Then, buy lots of stock futures and see them rise, rise, rise,... And since you have command of the production, you have command of the stock prices. But, believe whom you like. There are many factors that UNDENIABLY prove that a good portion of the rise of oil prices is speculative in nature. Of course, if you are speculator, why would you not dispute that point! PLease supply counter-arguments with FACTS.

Demand is not likely to increase at those prices. That is such an illogical statement. It is economics 101. Demand will go down or level off as people sell they SUVs and reduce, reuse, and recycle,... Hybrids are already being sold by many manufacturers. Green technology is selling and all of this will reduce demand.

"The faster we move to alternatives?" Presently, the speculating bubble in MANY commodities and for the most part are creating people to DIE of starvation or to go starving. Does this trump that? Do you care? This sounds like an extremist statement and extremism is almost never based on logic or facts, but passion. Use facts.

[rethaired]

I am no engineer. But I understand that technologically, most of the proposed replacements for fossil fuel are still - after decades of development - not yet ready for prime time. It is now prime time. The four-stroke engine is a monstrosity of complexity, and the diesel and two strokes are not much simpler. Yet they account for almost all the power units in the world, based on over 100 years of careful development. Even the rotary engine has not advanced much in its 45 years since Dr. Wankel's invention went into an NSU car. You need to replace hundreds of millions of engines from ship powerplants to weed-whackers, and we are not anywhere near that. You cannot move a supertanker or a container ship across the ocean by wind and solar power.

Totally agreeing with PB. Inventing a technology and mass producing it take time. If capitalism works (and it usually does), lots of company (and the share-holders) will not want to be left on the sideline! It is troubling though that the Canadian Tar Sands are being developped to the degree they are, but maybe this does prove the point that we are going to need oil, maybe less than we used to. However, is it a sign that oil companies know something we don't know.

BTW, laws have been passes recently (May) and will be being passed in the US (and hopefully other countries) to restrict the Enron-type loopholes that are allowing the speculators to play with food prices, oil prices, and other commodities for their pension funds customers, to offset the huge loss of revenues caused by bad loans (banks),... It is not going to be easy, but it will happen!

Ralph Nader: “Oil was at $50 a barrel in January 2007, then $75 a barrel in August 2007. Now at $130 or so a barrel, it is clear that oil pricing is speculative activity, having very little to do with physical supply and demand. An essential product—petroleum—is set by speculators operating on rumor, greed, and fear of wild predictions. “

[britmaveric]

^ They should start adding controls on the oil future markets. Perhaps 50% hold for period of time, perhaps a year then we'll see lot of these tw*ts jump ship.

[rethaired]

Here is an excellent webpage on the history of what led to all this. Here is an excerpt:

In the early 1990s, Mr. West held a seat as a commissioner on the Commodity Futures Trading Commission, the U.S. regulator charged with overseeing trading in hundreds of staple items, from corn and wheat to oil and cotton. Mr. West was a lifelong Democrat; his boss, CFTC chair Wendy Gramm, was a devout Republican and a believer in the laissez-faire, free-market philosophy espoused by president Ronald Reagan, who once described her as his "favourite economist."

In the fall of 1990, the two clashed over the CFTC's response to a New York court decision involving a little-known Bermuda energy company called Transnor Ltd.

Long forgotten by most, Transnor paved the way for wide-ranging deregulation of commodities trading, an effort that helped to spur the rise of Enron Corp. and which has enabled the stampede of large fund speculators into food markets.

In the winter of 1986, Transnor filed suit against some of the world's largest oil companies, alleging that they manipulated prices on the Brent market, an informal oil trading system that at the time determined the daily price of oil.

At first, few paid attention to the lawsuit. That all changed on April 18, 1990, when Judge William Conner delivered a stunning ruling midway through the trial.

The case hinged on drawing a key distinction: Were the 15-day oil contracts that traded on the Brent market "forward contracts" or "futures contracts"?

In a forward contract, the buyer and seller agree to the price of a commodity and a fixed date for delivery. A farmer enters into a forward contract with a food company by promising to deliver a certain amount of grain on a certain date at a certain price. Lawmakers have shied away from regulating forward contracts under commodity trading laws because they are a fundamental part of how farmers and food companies do business — and each agreement is unique.

A futures contract is the same basic agreement, but it trades on an exchange, and the buyer rarely — if ever — takes delivery of the commodities. Instead, futures contracts are used mainly by farmers for hedging and by investors for speculating. These contracts have historically been regulated.

In the Brent case, the difference was crucial, since the Brent market contracts did not trade on any exchange and, in the U.S., were not regulated by the CFTC.

The oil companies, hoping to protect their cozy market, and avoid the red tape and transparency requirements of regulation, argued they were forward contracts.

Judge Conner ruled against the companies, effectively rendering all Brent trading in the U.S. illegal.

Within days, international oil companies stopped trading with U.S. companies and the entire Brent market was verging on collapse.

In Washington, oil industry lobbyists descended on the CFTC, seeking to get the regulator to mitigate Judge Conner's ruling. They found a receptive ear in Ms. Gramm, the commission chair. Ms. Gramm served as a director at the Office of Management and Budget, spearheading a variety of industry deregulation efforts before President Reagan placed her in charge of the CFTC in 1988.

She arrived with other political credentials: her husband, Phil, who is now a senior economic adviser to presidential candidate John McCain, was a Republican senator from Texas.

Even before the Transnor case, Ms. Gramm had started pursuing a deregulation agenda at the CFTC. A year earlier, in 1989, the commission quietly issued a policy statement on swap transactions, deals in which a buyer of commodities such as a pension fund acts through a middleman or a swap dealer — usually a bank. The CFTC declared that it wouldn't regulate swap dealers.

The Transnor case represented another crucial win for financial speculators such as swap dealers. When the court decision was handed down, Ms. Gramm moved quickly to soften the blow to the energy sector, and turned the Transnor decision from an obscure footnote in the history of oil trading into a critical launching pad for a wide-ranging redrawing of the rules of commodities markets.

On Sept. 25, 1990, a policy confirming that the Brent contracts were forward contracts — and therefore, outside the scope of CFTC regulation — was put to a vote among CFTC commissioners.

It passed 3 to 1.

Ms. Gramm faced one vocal critic in her push to keep the Brent market unregulated: Fowler West, the lone 'no' vote.

"It was the way we were doing it, the speed with which we were doing it," Mr. West recalled in an interview. "It was that kind of an attitude that did open the door up for a lot of problems."

Ms. Gramm defends the CFTC's actions, and says the commission faced pressure from Congress to act. Senior CFTC staff, as well as a majority of commissioners, agreed with the interpretation concerning forward contracts, she noted.

"I don't think it was done too quickly," Ms. Gramm, who now chairs the Regulatory Studies Program at George Mason University's Mercatus Center, told The Globe and Mail in an interview.

Mr. West, meanwhile, wasn't merely outvoted. He was muzzled.

Although he wrote an official dissent after the vote, Ms. Gramm and the other commissioners blocked his views from being published in the CFTC's official record.

Furious, Mr. West retaliated by voicing his concern about the CFTC's moves to the New York State Bar Association. The regulator, he told the lawyers' group, "may soon be paying a price for its politically expedient statutory interpretation. I doubt that its new forward contract exemption can be restricted to large international oil and trading firms represented by influential lawyers."

He concluded with an ominous warning: "The public, down the road, will suffer from this fit of deregulation, no matter how well intentioned."

[Brigante7]

It's all pretty clear to me why the cost of oil ,and therefore everything else , is rising, OPEC are purposely producing less oil than is needed purely to push up prices, no?

[BEENTHEREDONETHAT]

It seems like part of the solution is reasonable mass transit in the US similar to Singapores and to Bangkok Skytrain. Right now I'm not really aware of any meaningfull mass transport system in the US other than NYC subway. Of course I haven't been there for some time so maybe things have changed but somehow I doubt it.

It takes a huge investment, but hey if Singapore and Bangkok can do it you would thing the US could also. But you would have a lot of opposition from the oil companys, car manufactures and tire companys etc. Take the money that is going into Iraq and you could most likely do it. Or perhaps make jails self sufficient, that would release a lot of money.

[wilko]

Most of this (as much as 60%) is about SPECULATION.

Peak Oil means that there is about 20 to 30 years of cheap oil left (and possibly more because consumption is going to go down with the more economical cars [hybrid/diesel]/more motorcycle use, and people changing their habits). Is there anyone here who believes that in 20 to 30 years we will NOT have electric cars?

Peak Oil doesn't mean cheap oil for 20 - 30 years, cheap oil is already long gone, haven't you noticed? There in no sign that consumption will decrease, it's the opposite. Increasing oil demand means if the US switched to hybrids today, it would only reduce consumption for a few years.

Peak Oil means a peak in supply, after which supply it drops. There are those who believe we've already reached it, others say it will happen around 2010, while some say it'll go for another 20 yrs. Demand is more likely to increase than decrease, so prices will skyrocket. The result could be severe economic depression, war, famine. Oil is used for almost everything, if there is a major drop in supply the world cannot support anywhere near 6 billion ppl.

This all may sound crazy, but those who accurately predicted peak oil in Texas were also laughed at. The bottom line is the faster we move towards alternatives the better off we'll be.

If we wait too long, there may not be enough oil for us to happily drive around in our electric cars!

So, you are saying that the Saudis, Koweitis,... do NOT have now cheap oil anymore? The tap is closed? They have had to change their extraction ways? Must

Your comment is NOT supported by the data! (Peak Oil debunked): "[...] at the moment, the "demand is overshooting supply" theory looks pretty unlikely as an explanation of the feverish price behavior in April." There is a whole lot more explanations on that site.

"Some commentators, such as economist Michael Lynch, say that the Hubbert Peak theory is flawed and that there is no imminent peak in oil production; a view sometimes referred to as "cornucopian" by believers in Hubbert Peak Theory. Lynch argued in 2004 that production is determined by demand as well as geology, and that fluctuations in oil supply are due to political and economic effects as well as the physical processes of exploration, discovery and production.^[102] This idea is echoed by Jad Mouawad, who explains that as oil prices rise, new extraction technologies become viable, thus expanding the total recoverable oil reserves. This, according to Mouwad, is one explanation of the changes in peak production estimates.^{[101]" (Wikipedia)}

So, all you have to do if you are producing oil is to reduce the production of oil compare to the demand and create a crisis. Then, buy lots of stock futures and see them rise, rise, rise,... And since you have command of the production, you have command of the stock prices. But, believe whom you like. There are many factors that UNDENIABLY prove that a good portion of the rise of oil prices is speculative in nature. Of course, if you are speculator, why would you not dispute that point! PLease supply counter-arguments with FACTS.

Demand is not likely to increase at those prices. That is such an illogical statement. It is economics 101. Demand will go down or level off as people sell they SUVs and reduce, reuse, and recycle,... Hybrids are already being sold by many manufacturers. Green technology is selling and all of this will reduce demand.

"The faster we move to alternatives?" Presently, the speculating bubble in MANY commodities and for the most part are creating people to DIE of starvation or to go starving. Does this trump that? Do you care? This sounds like an extremist statement and extremism is almost never based on logic or facts, but passion. Use facts.

as I understand it saudi Oil is not particularly useful for production on petroleum.....too muh costly refining or something......so it leads to expensive fuel.

[wilko]

"lies, dam_n lies and statistics" - For every erudite theory on the price of oil you will be able to find a contradicting theory from an equally erudite source.

The main thing is to be HYPER_CRITICAL about the theorist themselves....many have a long history of supporting oil company interests and through sometimes rather oblique connections have a vested interest in oil.

Basically it's no good skimming Google to look for some stats or theory to back up the arguments here, - Google only has limited information - unchecked and free - much deeper and more appropriate research is required than befits this humble thread.

the bottom linre is that oil prices will sky-rocket and demand is increasing whether or not supply or speculators are to blame is academic because it won't stop.

at the end of the day though people are concerned aout energy...too late many would postulate......and bio-fuels are no more than a red-herring.

Edited June 15, 2008 by wilko