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Oil Is Everywhere, But High Oil Prices Are Needed To Find It
forbes.com — We're not running out of oil--but high oil prices are needed to find it, says the head of strategy and development at Italian energy company, Eni.
curtissthompson- 226 diggs
- digg it
- themacx, on 10/12/2007, -14/+13B.S. there are more closed then opened. Oil enough but they just like the high prices.
- joeshlub, on 10/12/2007, -15/+15Actually, there isn't plenty of oil. We literally are running out. The department of energy has done a great deal of studies on this, and just because the head of strategy and development at some italian company says something, doesn't devalidate decades worth of projections, studies, and otherwise work.
Additionally, our oil prices aren't set by how much is needed in order to find and recover more oil. It is being set just below the price of alternative energy sources intentionally by opec, in order to get more money. And just so I don't get ripped up, yes I realize that the prices are set through bidding by purchasers, but that doesn't mean opec doesn't govern this by how much they extract and export.
This article is innacurate in many ways, and is really just PR work for this random company. What we need is to limit our dependence on oil by slowly moving to renewable sources of energy, IE solar and wind power. This isn't just hippy talk, that transition along with greater efficiency with the oil we do use can actually help with both the energy and environmental crisis our world is facing.
What we don't need is someone telling us "Hey, we're only charging you a rediculous amount for your own good! It's so that we can use your money to sell you more for an equally rediculous amount down the road! Don't bother buying that hybrid car, or researching alternate fuels, theres plenty of oil, TRUST me, I work for the oil company!"
(Article marked as innacurate) - dagonweb, on 10/12/2007, -9/+9Too bad renewables cannot keep our industries and 6+ billion people alive. Sure, if what you are proposing is a controlled die-off, it can be done, but don't expect the 2-4 billion that need to go to die off quietly. Plus will you be able to persuade the US ?
No my friend, if what you are proposing we achieve continued economic growth for decades, for us westerners AND the rest of the world, not only all the oil in the world is insufficient but the idea that solar power, water turbines and wind thingies can do anymore than make a slight dent is ludicrous. We won't even be able to repair the things when they break, let alone replace them. Visualise all those lubricants, plastic parts, metal parts, transportation costs.
No - the only thing that can safe us from melting down and entering a colleftive global mad max orgy of destruction is develop fusion power AS SOON AS POSSIBLE. I mean, get the damn plants up and running before 2025. At the very lastest.
Every 5 years after that means one billion human beings die from not having electricity, clean water, food, transportation, medicines, fertillizers, housing andsoforth. YES we need oil and industry for all of the above.
I say - a manhattan project effort to develop fusion NOW. - serpentor, on 10/12/2007, -2/+2Why on earth are joeshlub & dagonweb being dugg down??
- pgoetz, on 10/12/2007, -2/+0because people are idiots?
- OBKenobi, on 10/12/2007, -1/+1Amazing that Forbes prints trash like this.
- joeshlub, on 10/12/2007, -15/+15Actually, there isn't plenty of oil. We literally are running out. The department of energy has done a great deal of studies on this, and just because the head of strategy and development at some italian company says something, doesn't devalidate decades worth of projections, studies, and otherwise work.
- Berkana, on 10/12/2007, -3/+21IMHO, even if oil is everywhere but simply not economical, remember that coal is everywhere as well. The problem isn't just oil, the problem is that putting millions of tons of CO2 and other greenhouse gasses into the atmosphere for the sake of living our modern lifestyle is not sustainable; access to oil isn't worth destroying the world over, whether by wars or by climate change via pollution.
- jasonshaffer, on 10/12/2007, -6/+9Oil will be around as long as there is a willing seller and a willing buyer for an agreed price. This is a good thing. The free market always chooses the most efficient and desired solution. If or when oil gets too expensive, buyers will choose something else, but right now it is the cheapest and most efficient way to satisfy our energy needs.
By the way, I'm assuming that you don't purchase oil products after all that preaching? Unless you're practicing what you preach (and this goes for anti-oil politicians) I'm assuming you don't really believe what you're saying. "I don't believe in oil but it's so darn convenient and I need it for..." I know, I know... - ExCornelius, on 10/12/2007, -1/+3For those digging down jasonshaffer, please post a rebuttal.
- texastig, on 10/12/2007, -3/+1It's not the CO2 that is causing global warming. It's the sun.
Why is the Mars polar caps melting for?
There's always two sides to a story.
Thanks - cscalfani, on 10/12/2007, -0/+3We are all addicted to OIL. And the Oil companies are our dealers.
You can't not use oil because our whole way of life is built around it, especially in LA.
Hybrids are great but just a band-aid. Any reasonable leader of this country would put into action a quest for renewable fuels on the order that Kennedy did when he set forth the goal of going to the moon.
But all we get are fake leaders who try to emulate Kennedy by stating that "we're going back to the moon" or "we're going to Mars". Give me a break. NASA spend 80 billion dollars to send a satellite to Saturn. I'm all for space exploration, but we need some of those bucks right down here.
Instead we have an "oil president" who spends hundreds of billions (maybe even trillions by the time this whole Iraq thing is through) to fight a war over control of oil.
And don't tell me that we're fighting the war over Iraqi freedom, because there are a lot of people in Africa who aren't that we don't give a ***** about for two reasons. They are black and don't have oil.
- jasonshaffer, on 10/12/2007, -6/+9Oil will be around as long as there is a willing seller and a willing buyer for an agreed price. This is a good thing. The free market always chooses the most efficient and desired solution. If or when oil gets too expensive, buyers will choose something else, but right now it is the cheapest and most efficient way to satisfy our energy needs.
- icefrakker, on 10/12/2007, -3/+6yeah, thats why oil companies are making sky high profits and getting government subsidies at the same time. and of course energy companies would say this to defend the prices they're charging. personally i think the companies are ripping the consumer like mad because we cant do anything about it.
- dirka, on 10/12/2007, -2/+10Correction: You can do something about it, try riding your bike to 7-11 for your big gulp.
- icefrakker, on 10/12/2007, -4/+4some people have things called jobs they have to get to. if you want to bike thats your thing but dont tell other people to do it when you dont know anything about their circumstances. try not be an asinine fool next time.
- flatiron32, on 10/12/2007, -1/+1You could drive less and buy less of thier product. That is what you would do if you thought the hot dogs were not worth what the vendor was charging.
- OBKenobi, on 10/12/2007, -1/+2[quote]You could drive less and buy less of thier product. [/quote]
Some people need their vehicle for work. Bicycles and horses can't handle every job. Besides, where are you going to keep a horse in the city?
(Now picturing someone living in a typical NYC studio apartment with a horse.)
- oilcan, on 10/12/2007, -1/+6the issue isn't running out of oil, the issue is that it's possible to use fuel sources that are less harmful to the environment, and the technology to do so exists, but our infrastructure is stuck in moneymaking mode, so there will be no change until major catastrophe happens to make it so. the concern is not the world running out of oil, the concern is 'when do i cease to make money finding oil'.
- marix, on 10/12/2007, -5/+4Welcome to last year.
- iftheshoefits, on 10/12/2007, -8/+2Well I'll go on record here - remember where you were when you read this, because I'm willing to make a definite statement that I am willing to back up with any size bet you care to wager: "We ARE running out of oil and the world WILL RUN OUT COMPLETELY BEFORE 2015". If you think I'm wrong you're welcome to put some real money on it at www.longbets.org and I will match you dollar for dollar to any limit. There was a blogpost on the oil crisis in early June on worldweirdweb.blogspot.com and that had links to some very informative sites on the situation.
- dave9999, on 10/12/2007, -0/+3It's amazing how people can read anything on the Internet, not care if it has any other backup other than "unnamed sources", put on their tinfoil caps and start preaching.
Out of oil in 9 years? Take just the Canadian Oilsands, even if they triple the current output like they plan it will take 40+ years to get everything recoverable using today's technology. - freexe, on 10/12/2007, -0/+4I will make a better prediction.
"We will never run out of oil."
We may well run out of cheap abundant oil in the next 10-30 years and I do believe that "Peak Oil/Gas" is starting now, but there is so much energy on the planet available to us that we will never run out of affordable energy (It may well be more expensive than we pay now, even double, but still economically affordable and will only decrease in price as technology improves).
There is plenty of energy about, it just costs alot of get at or is way past our technical ability to harness. We just have to use what we have available to us at a price that's right until we can get at the more abstract forms of energy. - JES63, on 10/12/2007, -0/+2There is no such thing as "running out" of a natural resource. I simply becomes more scarce and more expensive. At some point crude oil will be less available and alternative fuels will become more economically feasible. The expense will also force people to conserve more.
Someone will discover a way to make an alternative fuel that will compete with oil in the not too distant future. Ethanol competes now in Brazil but that is only by cutting down the rainforest to plant sugarcane. We cant grow sugarcane here in the US in amounts that would be productive. There is a technology to produce ethanol from cellulose that is interesting. Using food (corn) for production of ethanol makes corn more expensive.
The price of harvesting the oil sands in Canada is also now becoming economically feasible. That is a huge reserve of energy.
Nuclear is also much more attractive now that we have breeder reactors and somewhere for long-term storage of the waste (when is that supposed to be active anyway?)
Our solution mix for energy will be determined by the market. The surest way to kill a technology is for a subsidy to force a solution that cannot sustain itself. The market, even if attempts are made to manipulate it, is the best method for rationing energy. It is also the best method of determining the mix of products that supply our energy needs. As more methods for supplying energy come online, market manipulations like OPEC stop working as people use the alternatives to crude. - Sell, on 10/12/2007, -0/+3I'll take that bet. Actually crude oil will always be around, the problem is it becomes to expensive to dig ever deeper, and pump deeper and deeper. There will always be oil we can not get to or decide not to because of cost. So booya, go take an ecology class at your local community college.
- dave9999, on 10/12/2007, -0/+3It's amazing how people can read anything on the Internet, not care if it has any other backup other than "unnamed sources", put on their tinfoil caps and start preaching.
- whoatemydigg, on 10/12/2007, -2/+7The botton line is. If you want to keep your life-style you better be willing to pay for it.
- theoallardyce, on 10/12/2007, -4/+4The issue isn't running out of oil its depending on oil from countries like Saudi Arabia who we have to treat as 'allies' even though they consistently fail every US, UN, and Amnesty report of upholding even the most basic rights.
America's official opinion of Saudi on slavery: Saudi Arabia is a Tier 3 country: "Countries whose governments do not fully comply with the *minimum* standards and are not making significant efforts to do so." I guess thats ok because they were one of the last countries in the world to even think about outlawing slavery. And the state departments opinion on religious freedom? it is a "Country of Particular Concern" under the International Religious Freedom Act, this is an understatement - in the words of one US official "there is no religious freedom in Saudi Arabia" no *****.
Slavery and religious freedom is literally only the tip of the iceberg/sand-dune and yet this country is Americas second most trusted ally in the Middle East only below Israel - who they want to kill, incidentally did I forget to mention that Jews are not allowed to enter Saudi Arabia at-all? Yes thats right our second best ally in the Middle East hates our first ally almost as much as Adolf Hitler. I guess thats more or less ok since our first ally treats us and everyone else like ***** anyway and lies right through their teeth to us.
And this is why we need to find alternative oil supplies not just for us but for the rest of the world too.- dagonweb, on 10/12/2007, -6/+2Absolutely. Saudi Arabia needs to rot in its desert. These people are complete barbarians.
- Araya213, on 10/12/2007, -5/+7Oil is the boot that will forever step on our faces. The government is using it to keep us subservient. That's why we invaded Iraq, the price of oil was getting so cheap that they couldn't' squeeze us (the middle class) for every extra dollar we have. Now the prices are insane and many like myself are getting closer and closer to having to worry about where our next meal is going to come from.
The recent loss of my job was a direct result of price gouging by the oil companies, I live in a small town so I am forced to accept funds from the federal government, I am now their lapdog.
Our governments are supporting this nonsense, the U.S.A. is actually pushing it along. We get a glimmer of hope every now and then when someone invents some miracle product that will bring gas consumption to a minimum, and then they disappear and it never comes to be a reality. You can rationalize this ***** any way you want, but when it comes down to it, it's just a scheme to get rid of the middle class so that the rich can rule the earth. Welcome to the NWO, check your prosperity at the door. - estacado, on 10/12/2007, -4/+5If the cost is so high, then why the f*ck are the oil companies making record profits.
- dagonweb, on 10/12/2007, -4/+5So? Do not vote republican and TAX the ***** out of these vampires.
- frednofr, on 10/12/2007, -1/+4Because oil use is still on the way up, and oil buiness is very capital-intensive.
- ExCornelius, on 10/12/2007, -2/+3Record profits?
Let's say I invest $1 and get back $2. A profit of $1 is not record breaking, but it is a 100% return, which is pretty amazing.
now let's say I invest $500 billion dollars, and get back $550 billion. WOW! I'm an evil bizillionaire?! .... no, I made a profit of $50 billion, or 10% return; decent, but nothing amazing. - estacado, on 10/12/2007, -2/+1Where did you get the 10% number from? The 10% percent is a number you made up to imply the oil companies are not making much. What are the real numbers?
- estacado, on 10/12/2007, -0/+5http://www.msnbc.msn.com/id/8646744/
"The reason for the boom is simple. Much of the investment in finding that oil -- and developing the wells and pipelines needed to produce it -- has already been made. So an oil field that was profitable with oil selling for $20 a barrel is much more profitable with oil trading around $60."
- MacCombe, on 10/12/2007, -0/+3Nice simple message:
It's ok to buy as much as you like of what we're selling, and it's reasonable to pay more for it than you have done in the past. - shmuu102, on 10/12/2007, -1/+3If you don't understand the concept of PEAK OIL, then you are missing the boat, and it will cost you, literally.
google "peak oil" , and start reading.. ( its not my job to teach the uninformed)
The profits come from their markups..... 10% of $3/gal is way more than 10% of $1.25/gal
(this is not to say they are not manipulative greedy bastards.. which they are IMHO)
this article is wrong on many if not most points.... their is lots of oil left...there will always
be lots of oil..we just cant get at it or use it. If it takes more than a barrel of oil's worth of energy to extract a barrel of oil, why would you possible bother??
needless to say.. no digg- EtherGnat, on 10/12/2007, -1/+2"If it takes more than a barrel of oil's worth of energy to extract a barrel of oil, why would you possible bother??"
I agree with you in general but there will likely always be uses for oil regardless of its energy efficiency. Oil is required for other products such as plastics and fertilizers. While oil as energy may someday be replaced, I can't see us abandoning oil completely in the foreseeable future. - ExCornelius, on 10/12/2007, -1/+3First, the price of a good is not determined by cost profit, but rather the demand people have for the good. The cost of the inputs is derived from the price people are willing to pay for the final good. In other words, "prices" flow backwards along the production chain.
For example, in the NYC theatre district a Starbucks charges a really high price for coffee (it's conveniently close to the theatre). The simple but wrong explanation is that the property there is very expensive, hence they need to charge more to cover their costs. The correct answer is that the *property* is expensive because people are willing to pay a high price for coffee, and thus Starbucks will bid up the price of the land. The price of inputs is based on the value of the end-product.
Second, while oil companies are making lots of money in absolute terms, look at the margins. They are making the same percentage return on their expenses as before, around 10%. Looking at absolute numbers can lead one to an erroneous conclusion.
Third, you are correct that one will not profitably use more than a barrel of oil to extract a barrel of oil. Thankfully this is not an issue. The primary issue is the price of extraction, not the medium of energy. Gasoline is pretty much the most efficient means of powering an automobile, but different energy needs can be satisfied by different energy sources. It seems quite reasonable that an oil drill would be powered, in effect, by a nuclear plant, and the oil recovered goes to uses that cannot efficiently benefit from the power plant. - ExCornelius, on 10/12/2007, -1/+2My first sentence should read:
"First, the price of a good is not determined by cost PLUS profit, but rather the demand people have for the good."
I realy hate that digg strips out the plus sign. - Zlaya, on 10/12/2007, -2/+3Peak Oil is a myth. There is so much oil out there, that oil companies had to go around, buy up the smaller refineries, shut them down, in order to slow the production down.
Again, Peak Oil is a Oil Company Lie, and we all fell for it.
- EtherGnat, on 10/12/2007, -1/+2"If it takes more than a barrel of oil's worth of energy to extract a barrel of oil, why would you possible bother??"
- shmuu102, on 10/12/2007, -0/+3I do agree with EtherGnat's point. I was 'speaking' to the oil's main usages, the heroin fix
we have to have to keep the capitalism machine running. Ask an economist what life would be like without average net growth, stagnation, or worse yet...a slow gradual Decline in net growth...
Excornelius: All good points, but you haven't touched on the effects of a continuing decline in oil production, overlay-ed with a increasing demand. Our demand is 2% below
world oil max capacity ( maybe even less now, this number is about a year old).
Gas is an inelastic good; people NEED to get to work, to the store to buy food and
goods. They will pay whatever it costs.. Once there is less gas than the sum total of
what everyone needs, and people will pay whatever it costs, what do you think gas
prices will be?- ExCornelius, on 10/12/2007, -2/+4"All good points, but you haven't touched on the effects of a continuing decline in oil production, overlay-ed with a increasing demand. Our demand is 2% below world oil max capacity ( maybe even less now, this number is about a year old)."
Then the price will go up, and consumption will go down as people *substitute* toward other goods.
"Gas is an inelastic good;"
Over what time period? This matters since everything is inelastic over a short enough time period, and nothing is inelastic over a long enough one.
"people NEED to get to work, to the store to buy food and goods."
No one "needs" anything. They "want" to satisfy some end goal, and so they engage in some means by which they expect to achieve those desired ends. You are correct in one thing, people don't need/want gasoline; they need/want transportation. Thankfully cars are no the only means of achieving it.
"They will pay whatever it costs.. "
Honestly, this is really a rather silly thing to say.
"Once there is less gas than the sum total of what everyone needs..."
There will NEVER be enough oil to satisfy everyone's wants. But there will always be enough oil to satisfy wants *at a particular price*.
"...and people will pay whatever it costs, what do you think gas prices will be?"
I don't know. Neither do you. But what I do know is that as price increases people will consume less by shifting to other goods which satisfy their ends. Let's not forget the role speculators play. They bet their own money that prices will go up in the future, so they purchase and hold oil now to be sold later. This means the price now rises a bit (less oil supply now) and a *lower* price in the future than if they had not speculated. For example (not real numbers):
without speculation, $75/barrel now, $100/barrel in a year
with speculation, $80/barrel now, $90/barrel in a year
The speculation process means the price spikes are ameliorated, giving people more time to shift away from oil, toward other goods. - brkn, on 10/12/2007, -0/+3I really get worried by some people's faith in economics. "Don't worry, market forces will sort everything out, there's no need to try and change behaviour or prepare for the inevitable, because it'll all just get taken care of by the invisible hand." Even assuming that market forces will make everything smooth as silk (which is quite a gamble), it still leaves us with a situation where we get prices-that-are-just-below-tolerable and all sorts of repercussions, than an optimal situation.
"Then the price will go up, and consumption will go down as people *substitute* toward other goods."
The problem is, there are no substitutes at the moment. Our society, industry and economy is so heavily based around oil, it's scary. If we as a society were smart, we'd be pulling out all stops, using as much of the remaining (relatively cheap and abundant, compared to what's to come) oil right now to develop new technology and infrastructure that we can smoothly transition to. That's not happening.
It's nice to imagine that oh, once oil becomes prohibitively expensive, (or takes more energy to retrieve than you get out) we'll just use nuclear-powered combine harvesters to continue our industrialised farming methods, but they don't exist! And there's little to no effort being made in making things like this exist. And of course by the time that we need this kind of new technology it's going to be much harder to invent, since we no long have access to cheap plentiful energy to drive that invention. These things are more complex than the invisible hand of economics conjuring up new energy sources, and infrastructure to support it.
By the time oil does become prohibitively expensive, we'll have little to transition to, and nothing to fall back on to continue satiating our relentless and exponentially growing lust for energy. A likely thing is that we'll continue the binge and start turning to 'alternative' (also unsustainable) energy sources such as coal, which can be much more ecologically damaging than oil is.
And that is a lot of what really worries me. Oil is a finite resource, and we're starting to hit the peak where increases in production can't keep up with exponential increases in demand. Instead of seeing the obvious and preparing for the inevitable, we're bingeing and guzzling and thinking the problem will magically take care of itself. And this 'taking care of itself' will incur a considerable hit to our current quality of life. - ExCornelius, on 10/12/2007, -1/+4@brkn
"I really get worried by some people's faith in economics."
Economics is the study of how people respond to incentives in a world of scarcity. You can either accept or reject the conclusions of economic reasoning; faith isn't relevant here.
I'm fairly confident that no one is arguing the market is perfect. In fact, perfection isn't even an option. "The market" is just people freely trading goods and services with willing others. Trying to "change behaviour or prepare for the inevitable" is a perfectly reasonable thing to do, and it occurs on a daily basis. What you are arguing is you think people are wrong in their judgments. Fair enough. What's your proposed alternative? The police-power of the state? How about this:
"Don't worry, [government] will sort everything out, there's no need to [let people] try and change behaviour or prepare for the inevitable [based on their own values], because it'll all just get taken care of by the [omniscient state]."
"The problem is, there are no substitutes at the moment. "
Sure there are. If the ends is "getting to work" one can bike, walk, take public transportation, car-pool, move closer to work, drive to work but not drive on the weekends, etc. The choice does not have to be between "current oil consumption" and "no oil consumption." People are smart enough to modify their behavior in steps ("at the margin" in econ-speak).
"If we as a society were smart..."
This gets at a bigger problem with your position. Everything is "we". "We" all have to do things one way or another; "we" need this or that. But that's not the case. People have different wants, and can satisfy them in different ways. It's satisfying for one to think they can architect perfection for everyone else, but that's a bit hubris-tic.
"And there's little to no effort being made in making things like this exist."
Then what does that tell you about people's expectations of the future? If you think they're wrong, feel free to educate them. Unfortunately, the default position seems to be "I think you're wrong, so I'm gonna get the government to force you to do it my way."
"These things are more complex than the invisible hand of economics conjuring up new energy sources, and infrastructure to support it."
Reality says otherwise. "The Invisible Hand" is just a convenient name for the *fantastically* complex interaction of TRILLIONS of valuations made all around the globe by billions of people. The market is not one thing.
"And that is a lot of what really worries me. Oil is a finite resource"
All resources are finite.
"and we're starting to hit the peak where increases in production can't keep up with exponential increases in demand."
If that's true, then invest in alternatives. If you're right, you will make a profit AND be helping society. If you're wrong, you'll be out some cash, but will not have erroneously imposed your views on others.
- ExCornelius, on 10/12/2007, -2/+4"All good points, but you haven't touched on the effects of a continuing decline in oil production, overlay-ed with a increasing demand. Our demand is 2% below world oil max capacity ( maybe even less now, this number is about a year old)."
- lasermike026, on 10/12/2007, -0/+2Who is Leanardo Maugeri? Or! What I found on wikipedia.
http://en.wikipedia.org/wiki/Hubbert_peak_theory#Critique - atpcliff, on 10/12/2007, -0/+0Hi!
Alternative energies can easily provide all the power that the world needs-obviously not by next week. In the US, 70 sq. miles of solar collectors in Nevada would provide 100% of the electrical energy currently used in the US. Also, covering all of the high wind potential areas in N. and S. Dakota, along with large areas in TX, would also provide the US with 100% of the electrical energy they need. Doing both would provide twice as much electricity as the US currently uses. Also, both wind and solar power, along with all the other alternative sources of energy, are rapidly getting more efficient on a monthly basis.
Remember, oil was once an alternative fuel!!!
cliff
YIP - Muddle, on 10/12/2007, -0/+0I love strawberries! Years ago they used to be sold in corrugated, biodegradable cardboard containers. Now they are sold in plastic containers made from derivatives of oil. There are more strawberries at the local market, in fact I can go to ten dozen different stores in any small city and find more strawberries than the entire local population will eat in a year. Most of them are of low quality, green or have mold on them if you look real close. All are enclosed in plastics derived from oil. Everyone here walked out of the grocery store this week with more oil than it took to get there. Actually it's more expensive oil, because it's been touched by more hands than you can possibly imagine to create the packaging. That little bag on that slab of ribs increased the price over $2.50 and used enough oil to get most of us to the grocery store and back.
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