Will oil strike $380 a barrel by 2015?

[4dsc]

http://www.energybulletin.net/5816.html

I don't know about you, but I have noticed that there are quite a few reports being published by financial and investments groups concerning peak oil.. Only a matter time before the corporate owned media gets a hold of these stories..

A steep rise in prices is expected due to growing energy demands

A report prepared by energy economists at the French investment bank Ixis-CIB has warned crude oil prices could touch $380 a barrel by 2015.

Analysts Patrick Artus and Moncef Kaabi said in the next 10 years demand for oil will outstrip supply by around 8 million barrels per day (mbpd).

"If one takes into account the level of previous oil shocks such as in the 1970's, we don't think a price level of $380 per barrel is out of the question," they said.

The analysts argued that the shortfall in energy needs would not be made up by alternatives as they were not developed as yet. "Thus the world will still need to rely upon traditional fossil fuels," their report said.

[Ganja Ninja]

1. It can only go up so far before demand cools off and ...

other sources of oil, like tar sands and oil shale and deep water drilling all become profitable. We'll see the world economy go into a recession before oil ever hits $300 a barrel.

[benburch]

2. Those sources take a long time to "come online".

I have my doubts that they will be instantly ready when the price reaches their profitable point.

[Ganja Ninja]

16. It will take a while but once it profitable it'll happen.

In the mean time we'll be reliving the late 70's and 80's or worse.

[brokensymmetry]

3. There's profit...and then there's energy profit.

The problem with tar sands, oil shale, and so forth is EROEI - Energy Returned on Energy Invested. We started out, a century ago, with an EROEI of 100 to 1. We're going down to a lot less. When the energy cost of extracting a barrel of crude is more than what we're getting, the process breaks down.

Keep in mind that the fancy term for recession is "demand destruction". Part of that will be a substantial reduction of tourism. But what do we do with large numbers of unemployed people with little prospect of regaining jobs? Especially as others recognize that this recession may never end, and hope begins to fade?

Furthermore, take a hard look at the food in the supermarket. How much will make it to your table or mine as transportation costs explode?

Does this imply a large and growing group of unemployed, hungry, hopeless people? I believe that it does. The social and political implications are obvious.

[Boomer]

11. The myth persists

>> The problem with tar sands, oil shale, and so forth is EROEI - Energy Returned on Energy Invested. <<

No matter how many times I've seen EROEI explained on this forum, inevitably someone will pipe up that Peak Oil isn't a problem because we have tar sands and oil shale yet to exploit.

This kind of disinformation only perpetuates the complacency of people who simply don't want to deal with the uncomfortable scenarios of the future.

[SKKY]

5. Finally, some words of freakin' sanity in all of this. Thank you...

Thank you very much! I'm quite tired of all the doomsday predictions regarding Peak Oil.

[Ganja Ninja]

17. That's right it won't be the end of the world.

It will be the end of an era. Prices will realign themselves. Food will go up. Housing in the cities will go up. Electricity will go up. People will switch to smaller more efficient cars and trucks. We may even see serious talk of public transportation becoming the norm.

[DoYouEverWonder]

7. We don't need to tar sands and oil shale

to meet our energy needs. We needs more solar, winds and biomass. Not to mention more fuel efficient vehicles and better conservation policies.

[rndmprsn]

18. They don't think so...

http://www.lifeaftertheoilcrash.net/Index.html

"Can't We Just Look Harder for the Stuff?
What About the Oil Sands up in Canada
& Oil Shale over in the American West?"


Global oil discovery peaked in 1962 and has declined to virtually nothing in the past few years. We now consume 6 barrels of oil for every barrel we find.

According to an October 2004 New York Times article entitled "Top Oil Groups Fail to Recoup Exploration Costs:"

. . . the top-10 oil groups spent about $8bn combined on exploration
last year, but this only led to commercial discoveries with a net present
value of slightly less than $4bn. The previous two years show similar,
though less dramatic, shortfalls.

In other words, new oil discoveries are so few and far in between that looking for them is a monetary loser. Consequently, many major oil companies now find themselves unable to replace their rapidly depleting reserves. As a result, the energy analysts at John C Herold Inc. - the firm that that foretold Enron's demise - recently confirmed industry rumors that we are on the verge of an unprecedented crisis.

The good news is that we have a massive amount of untapped "non conventional" oil located in the oil sands up in Canada.

The bad news is that, unlike conventional sources of oil, oil derived from these oil sands is extremely financially and energetically intensive to extract. Whereas conventional oil has enjoyed a rate of "energy return on energy invested" - "EROEI" for short - of about 30 to 1, the oil sands rate of return hovers around 1.5 to 1.

This means that we would have to spend 15 times as much money to generate the same amount of oil from the oil sands as we do from conventional sources of oil.

Where to find such a huge amount of capital is largely a moot point because, even with massive improvements in extraction technology, the oil sands in Canada are projected to only produce a paltry 2.2 million barrels per day by 2015, not accounting for any unexpected production decreases or cost overuns, both of which have been endemic to many of the oil sands projects.

Even if the projects produce as hoped, 2.2 million barrels per day isn't that much oil considering we currently need 83.5 million barrels per day, are projected to need 120 million barrels per day by 2020, and will be losing over 1 million barrels per day of production per year, every year, once we hit the backside of the global oil production curve.

The huge reserves of oil shale in the American west suffer from similar problems. Although high oil prices have prompted the US government to take another look at oil shale, it is not the savior many people are hoping for. As geologist Dr. Walter Youngquist points out:

The average citizen . . . is led to believe that the United States really
has no oil supply problem when oil shales hold "recoverable oil" equal to
"more than 64 percent of the world's total proven crude oil reserves."
Presumably the United States could tap into this great oil reserve at any
time. This is not true at all. All attempts to get this "oil" out of shale
have failed economically. Furthermore, the "oil" (and, it is not oil as is
crude oil, but this is not stated) may be recoverable but the net energy
recovered may not equal the energy used to recover it. If oil is
"recovered" but at a net energy loss, the operation is a failure.

This means any attempt to replace conventional oil with oil shale will actually make our situation worse as the project will consume more energy than it will produce, regardless of how high the price goes.

[Wright Patman]

4. It's a race against time

for U.S. society as a whole and those who wish to maintain control over it.

I can almost guarantee you that the dumbed-down American public, particularly out here in the sticks of Texas, who believed in WMDs and Saddam ordering 9-11, are also susceptible to being turned around by a demagogue from the other direction. People can only buy the argument that tax cuts for the uberrich are the solution to every problem for so long, particularly as their own standards of living stagnate at best and head down the toilet at worst.

If that happens, $5-a-gallon gas (or maybe even $4) will cause blood in the streets that not even the USA PATRIOT Act's repressive measures will be able to contain.

Ever since Carter was booted out of office for wearing a sweater and turning down the thermostat at the White House, Americans have been inculcated by Reagan and his successors that we have a God-given right to cheap oil. I don't think people buy the scarcity argument even now.

And they never mention that Iraq is only exporting around half of what it did even under UN sanctions because that would remind the masses of how spectacularly unsuccessful the glorious troops have been. The only part of that whole FUBAR that went right was 'shock and awe.' They should have withdrawn immediately after that and let the Iraqis clean up the (at that time) manageable mess.

They also never mention that the U.S. taxpayer is still providing subsidized gasoline for the motorists of Iraq at something like five cents per gallon because that's what Saddam was doing and we do not want to be accused of making things worse than they were under the dictator.

That would be an excellent campaign talking point for a demagogue to demand that the U.S. government provide gasoline for Americans at the same price we do for the Iraqis.

[Delphinus]

6. There's a good discussion started on this

over at the Peak Oil subgroup. If I do this right, this will be the link:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=266&topic_id=624&mesg_id=624

If I didn't do it right, go to the Peak Oil subgroup and find it near the top.

[Robworld]

8. Life will be like Mad Max

I hope by the time oil reaches 380 dollars a barrel, we might have an alternate source of energy. Of course if there is an alternate source of energy, oil will never reach that price, but that will never happen as long theres a Bush in the White house.

http://www.dumdumgoestothecircus.com/

[Auntie Bush]

9. No, because there won't be a shortage of oil in the US because

George et al will have passed laws allowing us to make pre-emptive nuclear strikes on all rich OIL countries and on anyone using too much oil. We will have bombed all their countries back to the stone age and the Chimp will have changed the law saying we no longer have to fix the countries we broke, so they won't be needing any OIL and we'll all be driving big SUVs just to rub it in their faces. AHHHHH, the sweet smell of victory!

And the Idiot-In-Chief has three and a half years to accomplish that with no problem...especially when he is in control of all three branches of the government plus the media and the voting machines. Now, I think I'll take a Paxil and go back to bed and curl up in the fetal position and pull the blankets over my head.

First time I ever envied all the really old people in this world...they don't have to stick around and watch all the destruction of our beautiful country and world.

[sam sarrha]

10. Hemp-oil Bio-Diesel can free us from Arab oil, Solar can provide 72% of

day time energy for the nation.. Bu$h un-funded the pilot project his second day in office, http://www.AMSOIL.com type products can also free us of Arab oil.. 250,000 mile oil changes with 1,000,000 mile extended engine wear..

there is lots of things out there, but the Corporate Whores we elect are keeping it off the market.

[triguy46]

12. ...when they pry my cold dead hands

off the steering wheel of my H2 Hummer....

[LoneDriver]

13. And a loaf of bread will be $25

A quart of milk $30. Just depends how far in the tank the dollar goes. Note that he did not quote it in Euros. This is a comment about the dollar as much as about oil.

[Media_Lies_Daily]

14. If it does reach $380 per barrel, nobody I know will still be driving...

...and most businesses will be completely shut down. Food costs will skyrocket to a level which will make even the basics unobtainable. Transportation costs will remove all but the largest transport companies from the road. Air travel will be almost completely shut down.

There is quite a bit more that I could add, but I think you're getting the picture now.

[Tai-chi]

15. A long and deep recession is looming

US, Japan, EU and CHINA will face huge challenges during the next 10-15 years to come. Real estate prices are going to plummet and most Joe Averages will face bankruptcy. This highly debtridden US consumer fiesta fueled by cheap credit is soon coming to an end.
And then oilprices will nosedive 50+% together with most commodities and goods.

A 1930's replay. But much, much worse.
Take care. And get out of debt.

Tai-chi.

[dissent1977]

19. The corporate media knows about this, they just won't report it

"quite a few reports being published by financial and investments groups concerning peak oil.. Only a matter time before the corporate owned media gets a hold of these stories.."

The Corporate owned media already already HAS gotten a hold of these stories, they just don't want to report on them. I recently did a survey of three local newscasts in the Twin Cities and found that 28% of their ad revenue comes from the auto industry, far more than any other industry. If they were to report on peak oil SUV sales would fall quickly, and their advertisers would not be happy.