Lets see if we can kick off this new forum in the manner I think it's intended to be.

This subject is not specifically Thailand related of course, though Thailand is effected by it like pretty much every other country.

I was watching Bill Reilly (ugh) today and he was interviewing the former head of Shell Oil. During the interview it was noted that the US consumes roughly 25% of all the hydrocarbons (oil/natural gas/coal/etc) produced globally. This with only (approx) 4.5% of the total global population ! (Note: This is not a US bashing thread. I just needed stats and it helps to point out where we are now).

The US has the 3rd largest population currently (300+ million according to the latest stats I can find). China is first of course with 1.3+ billion, followed by India with 1.1+ billion. Total global population is currently estimated at a little over 6.6 billion.

As we have heard in the news (a lot) recently, the energy needs of both China and India are rising dramatically. Combined, those 2 countries represent about 38% of the worlds population (compared to the 4.5% for the US). As the economies of those countries develop, so will their requirement for hydrocarbons. China is already trying to buy/lease/control as much oil as they can, and are considerably less concerned about dealing with less savoury countries (like the Sudan) than other countries. The Chinese are also using mountains of cash to buy interests in American and European oil companies.

I don't hear India get mentioned anywhere near as much as China when it comes to these matters, but they have to be playing the game as well. The energy needs of the US isn't likely to decrease in the future either, meaning they will require even more than they do now of course.

A recent National Geographic article on the subject noted that some experts believe oil production has peaked. Some think that it is still climbing, but will likely peak in the next 10-15 years. In either case, the outcome is the same. The global supply of hydrocarbons is finite. It took millions of years to create what we are burning off in decades. Once it's gone, that's it. There simply won't be any more.

What happens then ?

Well, it will probably start happening long before the supplies completely run out of course. Some might venture that it has already started (especially those that like conspiracy theories). Competition for the dwindling resources will start getting fiercer. Wars have been fought in the past over resources, and no doubt will be fought in the future over the same.

Bio-fuels are the current fad, but are already showing a serious deficiency. The greater the production of bio-fuels, the greater the demand for the grains to create it. Not too long ago I watched a show that mentioned how farmers were selling more and more of their crops (primarily corn) for bio-fuel production, meaning less for consumers. It was also noted that more and more farmers were turning to growing corn to cash in on this, at the expense of whatever they used to grow. (Won't bother getting into a discussion here about what effect the increased corn production is doing to the farmlands).

Hydrogen fuel cells are also touted as being the next best thing since the invention of the wheel. I used to own stock in Ballard Power (makers of some of the first hydrogen fuel cells). It's been close to 20 years since I first read about it. (sold the stock back in '99)

Mass production of fuel cell vehicles and related equipment doesn't appear to be high on anyone's priority list at them moment, much like electric cars. There are a few of course, but no where near what would be needed to put a dent in the current oil consumption levels.

And even if people woke up tomorrow (in North America/Europe etc) and found reasonably priced electric or fuel cell vehicles available on every car lot, it would still take decades to reduce the number of regular fuel burning vehicles. That would certainly reduce the hydrocarbon needs of most western nations, but wouldn't eliminate them.

And it may not do a thing for various other nations (like China/India) where the population, less affluent overall compared to the "Western" Nations. Those people would be less able (financially) to simply switch over to the new technology.

Well, that's a start. I'd add more but I've got to go for a bit.

Yeah. The US consumes 20 million barrels per day & it's production is around 5 million BPD.

Until recently the relationship was quite cozy.

The Saudi's were quite happy to sell us oil in exchange for dollars.

We should discuss what oil is used for. It is not used to generate electricity.

It is used to make plastic fertilizer paint & all sorts of other things we use.

The discussion should be "Peak Oil" Are we there? Is the current 82 -83 million barrels per day the apex of global production & it's all downhill from here?

America uses oil to power vehicles. Cars Buses Trains Airplanes.

Moving to alternative fuels is a good idea.

Electricity, in the main, is produced from burning coal. It is in China. I have been to Tianjain (among others) & have seen the soot.

Nuclear is a good way to make electricity (of course obama is waffling on this one too). Some electricity comes from Hydro (dams).

Back durng the Enron days it was popular to design power stations which could burn Nat Gas. Thailand has some of these too. I guess most of it's electricity comes from burning lignite (the poor man's coal).

China is running around the world signing deals to develop oil fields in return for exclusive rights to the production. Story on BBC tonight concerning China & Sudan on this very topic.

One assumes they do the same for iron ore bauxite etc.

China is running around the world signing deals to develop oil fields in return for exclusive rights to the production. Story on BBC tonight concerning China & Sudan on this very topic.

One assumes they do the same for iron ore bauxite etc.

Yeah I saw that one as well. Hinted that China was supplying weapons to Sudan in exchange for oil (or oil rights/leases/etc).

But the problem is, soon (as in the next 20 years) pretty much every source of oil will have been tapped and supplies have no where to go but down.

What happens then ?

Natural gas is much like oil. There is a limited supply and when it's used up, that's it. Same for coal/shale/oil sands. At some point in the future, there simply won't be anymore anywhere.

Alternative energies (wind/solar/thermal/tidal/nuclear) are there, but have limited uses. They won't power aircraft, (commercial) ships, tanks, leaf blowers, jet skis and so on.

If not in our lifetimes (for some of us) then most certainly in our children's lifetimes there will come a reckoning, when the world as a whole suddenly is faced with the cold, hard reality that oil is over. I would hope that enough people will have the foresight to do what is needed to avoid a crisis, but it looks now like they are all waiting for something to happen first.

They should be pushing (hard) to get changes made as soon as possible, and start the process of weaning our dependency on oil in the next 5-10 years, so that when the crunch comes, transition to alternatives will have largely already been accomplished.

IMHO, the preferable scenario would see us (mankind) using alternatives to such a degree that what little oil is left in the ground becomes redundant (though I imagine still in demand in some parts of the world).

Waiting to the last second to produce alternatives is nothing but a marketing ploy, designed to ensure top dollar for what ever products will come out as replacements for fossil fuel powered products currently in use.

This is a practise that has been in use for years already, notably in the computer industry. I remember reading an article back when the first Pentium I (486) computer chips started being sold in computers. They already had 586 chips (Pentium II) ready to go, and had the next generation (686) chips in design phase. Then they waited until sales of the new chips started to drop (meaning most people had already switched from the old 286/386 chips), then suddenly, there was a new Pentium II chip on the market that everyone just had to have.

I've tracked gas prices in the past and noticed a somewhat similar trend (in a way). Prices would slowly, slowly creep up until the gas companies noticed a decrease in sales. Suddenly the price would drop a couple of cents. Sales would pick up. Prices would start creeping up and up for awhile until they noticed the next decrease in sales. A couple of Royal Commissions looked into the alleged "fixing" of gas prices by the oil industry and concluded that there was no "collusion" of "fixing" of prices.

But they never explained the phenomenon of when prices rise, they seem to rise almost the exact same amount at every gas station, at the same time (I mean pretty much exactly the same time. I noticed in Vancouver that regardless of brand, they all changed their prices around 3 pm each day, in order to catch motorists on their way home from where ever).

During these Royal Commissions, gas companies explained that the price at the pump reflects the prices of oil 6 months previously, as that is how long it takes (according to them) from the time they buy a barrel until it is shipped, refined and delivered to the gas stations.

However, they never explained why it is that whenever there is a jump in the price of oil, the price at the pumps takes an immediate jump as well (or why the prices never seemed to drop correspondingly when oil went down in value).

It used to almost a tradition that every time there was a long weekend, gas prices would jump up on the Friday preceeding the long weekend. Oil company stats showed that sales jumped dramatically on Friday afternoons as people left on trips, so they would jack up the prices earlier in the day.

How ever during the Royal Commissions, they explained that the price jumps were a result of insufficient stocks of fuel (nothing to do with the price of a barrel of oil). They (again) failed to explain how this seemed to happen every year, at the same time ! Just like they failed to explain that, despite knowing (obviously) years in advance when the long weekends occur, why they didn't prepare for the shortfalls they say just (coincidentally) happen before each long weekend.

As a result though, or possibly because they noticed a trend in people fueling up prior to the long weekends, they now jump the prices up on Wednesdays instead of Fridays.

I do find it a bit surprising that despite all the oil company flimsy excuses about the price of oil being the cause of the high prices at the pump, they still manage to record record breaking profits every year. They could significantly reduce the price at the pump and still make a healthy profit, but healthy profits don't earn the same bonuses (for the execs) as record breaking profits, do they ?

(time for another break)

There is it would seem finite resources for oil and gas, but at the moment there is still plenty to keep us going and enough left over to help economies develop.

The next 20-30 years should and indeed must see a transition to alternative and more efficient energy sources.

However I believe the recent hike in fuel prices is manufactured by the finacial markets to continue their income stream,

and the profits to stock owners after the drying up of credit and equities markets.

The hype over dwindling resources also serves the interests of governments, there's no doubt that resources must be secured for the future, but the fear and anxiety caused to the population as well as the increased financial constraints at a time of recession keeps many people less mobile and less willing to put their head above the parapet. I don't think this is particular to any ideology left or right, but the last twenty years have seen governments try to restrict liberties further and further and I think the oil 'crisis' is just another weapon in their arsenal.

Unfortunately the combination of market forces and government policy mean that people will suffer,

wether that is finacial hardship, further disenfranchisement within society, or death.

This winter in the UK it is predicted that many more old people will die because of the disparity between their incomes and their fuel costs, but on a global scale that is just the tip of the iceberg, in the very near future the disparity will cause hardship for many millions, perhaps death for many and in the long term when fuel relly does start to dry up and the replacement technologies are out of reach of a large proportion of the the worlds population there will be death and suffering and a disparity between the have's and have not's on a scale never seen before.

It could be different if markets were controled and government policies changes, but profiteering and greed have set the course for the future.

Robski. I am so glad you mention this point.

I personally think that speculators account for no more than $20 per barrel.

We could & should restrict trading oil futures to entities that use oil & use futures contracts for hedging. Such as airlines, oil refiners paint & plastic makers aluminium & steel makers. (Who use gas to heat their furnaces.) I feel that hedge funds should not be allowed to trade futures since they have no intention of ever taking delivery of oil.

Now the following is my opinion only.

Several months ago The Saudis claimed that they would increase production by 200k BPD. The market yawned - the price was rock solid. Why?

Because the people that know what's happening knew that the Saudi's were talking out their ass. They didn't have any spare capacity.

I PERSONALLY think they lie about their production - They produce between 5 to 8 M BPD.

At some time in the future Iraq will supplant Saudi as having the world's largest reserves. Russia will always be hovering around #3.

I have recently been to Angola Algeria & Azerbaijan. All 3 of these countries are sitting on HUGE fields. Massive massive fields which need to be drilled & pipelines layed to get the production to market.

Azerbaijan have wells - like Saudi in the 1970's. Ergo if it won't flow 25,000 BPD oil - cap it & move on. I saw wells in the Caspian sea (owned by BP) with 16,000 PSI well head pressure.

Scary & impressive.

Bio Fuels

So what do we do?

Bio Fuels look like they are a pigs ear no matter how much you dress them in silk, carbon fuels have a finite lifetime, nuclear is either reviled or if supported, there are limited companies that can build the necessary factories, a 20 year weight I believe.

So where do we go from here?

Several months ago The Saudis claimed that they would increase production by 200k BPD. The market yawned - the price was rock solid. Why?

Because the people that know what's happening knew that the Saudi's were talking out their ass. They didn't have any spare capacity.

I PERSONALLY think they lie about their production - They produce between 5 to 8 M BPD.

pumping additional 200,000 barrels/day is no problem at all for Aramco. the market yawned because the daily worldwide consumption is more than 80 MILLION barrels.

Is there a worldwide shortage in refining capacity, also? Are tar sands and shale oil ready for commercial production in the next ten years, and at what prices?

The world is not really controlled by 'people.' It is controlled by governments, corporations, and the few families like the Sauds who are incredibly wealthy. Governments cannot wipe their own rear ends well. Businesses are ruled by the capitalist mantra: profit. As for regular individuals, how many ThaiVisa posters would you trust your life to?

Sorry if I am rambling, but governments cannot solve these problems in the next 25 years if they failed to address them in the last 50. And companies will only do what returns profits in the short term.

Robski, ya gottit rite mate.

Simplified, it is just stocks and shares being traded, gambling that is pushing up oil costs, NOT production.

All of course encouraged by the big oil conglomerate greed.

Here's the link to an interesting BBC article on oil speculation:

http://news.bbc.co.uk/1/hi/magazine/7559032.stm

World and life changing invention. Once we get it right, let the Middle East sink back into their stone age with their sheiks, bourkas and Bin Ladens:

World changing invention

Interesting to note that in an unrelated thread about the richest Royals, the Sultan of Brunei slipped down the list largely due to his country reducing the amount of oil they had been producing.

They have had to reduce their production due to their oil fields starting to dry up. While he is still worth a few dollars, what happens in a few years when the fields dry up completely ?

Same for some of the ME countries where the oil is essentially controlled by the ruling family, like Saudi Arabia, UAE and so on ? When their prime source of revenue starts to dry up, and there's no more money to support their regimes ? No more oil to trade for new weapons, pay for the military, hand out gratuities, etc ?

Still, it's (probably) business as usual for a few more years. Will those countries be able to plan for the future when there is no oil, like the UAE is trying to do ?

Even if Dubai is able to attract large numbers of high-end tourists, that isn't likely to make up for the lost oil revenues. Considering to that many of those tourists, and the people buying those high-end condos/island homes, get their money from the oil industries.

What about the other GCCs ? (Gulf Coast Countries) Bahrain, Oman, Qatar, etc.

They can't all become the ME hubs of high-end tourists, especially when all they can offer is some beaches, hugely expensive accommodations/shopping, desert and the sights of rusting, abandoned oil rigs.

Even if I was in the super wealthy, private yacht and jet club, and could afford a luxurious (man made) island mansion in Dubai, it just doesn't have any appeal to me.

Maybe it's different if you are in that exclusive club, and don't want to risk rubbing elbows with common, upper-class type people that have to travel in first class.