The price of gas

On Fri, 21 May 2004 01:48:23 GMT, Philip Sondericker
wrote:

I make no claims as to the accuracy of anything contained in the above
article. But it's an interesting counterpoint to the article claiming that
oil reserves are actually increasing. Is this just more of the usual
alarmism?

The Wall Street Journal had an article the other day dealing with
Hubbert's Peak.

Hubbert predicted that oil production in any field or country would
peak (and then decline) at a fairly predictable time, and history has
borne him out. In the U.S. as I recall it was 1972 (I was surprised it
was so late). In the North Sea it was 2000. Saudi according to the
article is fairly close to peaking, and nothing has been discovered in
the past half-century that could replace Saudi oil.

The article made no mention of fields regenerating, though obviously
it is possible in a given case. (Shucks, there could have been an
undiscovered field/lode/pool near the Mexican one mentioned, which
began to "leak" into the original site.)

As a rule, the WSJ takes a *very* skeptical view of doomsday
scenarios.

all the best -- Dan Ford
email: (put Cubdriver in subject line)

The Warbird's Forum www.warbirdforum.com
The Piper Cub Forum www.pipercubforum.com
Viva Bush! blog www.vivabush.org

"Cub Driver" wrote in message
...
On Fri, 21 May 2004 01:48:23 GMT, Philip Sondericker
wrote:

I make no claims as to the accuracy of anything contained in the above
article. But it's an interesting counterpoint to the article claiming
that
oil reserves are actually increasing. Is this just more of the usual
alarmism?

The Wall Street Journal had an article the other day dealing with
Hubbert's Peak.

Hubbert predicted that oil production in any field or country would
peak (and then decline) at a fairly predictable time, and history has
borne him out.

"Marion King Hubbert, a geophysicist and a geologist for the USGS, is known
for predicting, in 1956, that U.S. oil production would peak in 1970 and
decline thereafter. This peak has come to be known as Hubbert's peak and is
used to allegedly demonstrate that the current demand for oil will lead to a
crisis and that that crisis is nearly upon us."

In the U.S. as I recall it was 1972 (I was surprised it
was so late). In the North Sea it was 2000. Saudi according to the
article is fairly close to peaking, and nothing has been discovered in
the past half-century that could replace Saudi oil.

The article made no mention of fields regenerating, though obviously
it is possible in a given case. (Shucks, there could have been an
undiscovered field/lode/pool near the Mexican one mentioned, which
began to "leak" into the original site.)


Are you referring to David Goodstein's book "Out of Gas"?

"Tom Sixkiller" wrote in message
...

out.

"Marion King Hubbert, a geophysicist and a geologist for the USGS, is
known
for predicting, in 1956, that U.S. oil production would peak in 1970 and
decline thereafter. This peak has come to be known as Hubbert's peak and
is
used to allegedly demonstrate that the current demand for oil will lead to
a
crisis and that that crisis is nearly upon us."


Remakably he was only off by a couple of years.

Mike
MU-2

"Mike Rapoport" wrote in message
ink.net...

"Tom Sixkiller" wrote in message
...

out.

"Marion King Hubbert, a geophysicist and a geologist for the USGS, is
known
for predicting, in 1956, that U.S. oil production would peak in 1970 and
decline thereafter. This peak has come to be known as Hubbert's peak and
is
used to allegedly demonstrate that the current demand for oil will lead
to
a
crisis and that that crisis is nearly upon us."


Remakably he was only off by a couple of years.

Production peaked due to interference by EPA and others, not due to
availability or resources. IOW he was right for the wrong reasons.

This doesn't sound right. Are you saying the "EPA and others," meaning
government regulation, reduced the oil well reserves?


"Tom Sixkiller" wrote in message
news

Production peaked due to interference by EPA and others, not due to
availability or resources. IOW he was right for the wrong reasons.

"Peter Gottlieb" wrote in message
et...
This doesn't sound right. Are you saying the "EPA and others," meaning
government regulation, reduced the oil well reserves?

Reserves (from the time) and known resources are much higher than what we're
extracting.



"Tom Sixkiller" wrote in message
news

Production peaked due to interference by EPA and others, not due to
availability or resources. IOW he was right for the wrong reasons.

Wasn't there an article in the WSJ a week or two ago where some oil company
execs said the regs weren't the primary issue?

I didn't look into it further. What's the problem? Failure of the
marketplace to place sufficient refining capacity on line? The price of
bringing more well capacity online is too high or unpalatable to the public?
What? Or is it working the way it's supposed to and there are just a bunch
of people annoyed at higher prices?

Are you an expert in the field (no pun intended) or just going with a gut
feeling? Just curious, because while I would gladly discuss with someone
with significant industry knowledge I really don't have any time to debate
environmental politics or with someone who bases their knowledge on one
party's propaganda (either one). No offense but it's late.


"Tom Sixkiller" wrote in message
...

"Peter Gottlieb" wrote in message
et...
This doesn't sound right. Are you saying the "EPA and others," meaning
government regulation, reduced the oil well reserves?

Reserves (from the time) and known resources are much higher than what
we're
extracting.

In article , Tom Sixkiller wrote:
Reserves (from the time) and known resources are much higher than what we're
extracting.

I think the point is not that we are about to run out of oil, but we're
going to run out of *cheap* oil.

Necessity being the mother of invention will mean that as the *cheap*
oil all disappears, new technologies will become economically viable
(biodiesels, renewable sources, energy from agricultural waste) that
aren't at the moment because oil is so much cheaper.

In our urban society, the threads are intricately woven, so even those
of us who don't fly or don't drive will see the cost of living increase
for a while. We'll survive, but it might not be all milk and honey for a
few years whilst we get used not to the lack of oil, but the lack of
cheap oil.

--
Dylan Smith, Castletown, Isle of Man
Flying: http://www.dylansmith.net
Frontier Elite Universe: http://www.alioth.net
"Maintain thine airspeed, lest the ground come up and smite thee"

I agree that refining capacity has been impacted by various enviornmental
regs. These haven't affected drilling (and hence production) much though.

Mike
MU-2
"Tom Sixkiller" wrote in message
...

"Peter Gottlieb" wrote in message
et...
This doesn't sound right. Are you saying the "EPA and others," meaning
government regulation, reduced the oil well reserves?

Reserves (from the time) and known resources are much higher than what
we're
extracting.



"Tom Sixkiller" wrote in message
news

Production peaked due to interference by EPA and others, not due to
availability or resources. IOW he was right for the wrong reasons.

This doesn't sound right. Are you saying the "EPA and others," meaning
government regulation, reduced the oil well reserves?



I was there at the scene of the crime.

There are really two 'shortages' in domestic production.

One is the shortfall in refinery capacity. We haven't built a new refinery in
the US for 15 years, and that is entirely because of EPA regs and NIMBY
protests disguised as environmental concern.

But the shortfall in recovering domestic reserves is more complicated.
Enviromentalism is part of it, but there are economic reasons as well.

In the 70's and into the early 80's, we had a lot of domestic capability, and
the JR Ewings of the country saved our butts during the embargo. Unfortunately
for them, they made a lot of money doing it, so we destroyed them.

First was the "Windfall Profits Tax". Oil exploration has always been boom and
bust. Wildcatters made alot of money during the booms and invested in new
equipment and grew their companies during those times. During the lean years,
the capital reserves sustained them to the next boom. So, Nixon and Ford,
seeing the boom during the embargo years, called those profits obscene and
confiscated them with the "Windfall Profits Tax." Carter continued the price
controls Nixon started, then dropped them on everything EXCEPT petroleum and
health care, bleeding the Ewings with skyrocketing costs and controled prices
for their products. Then he finished off the domestic oil industry with the
Fuel Use Act, which attempted to force gas producers to sell their gas to
homeowners in the NorthEast at prices that did not justify the pipeline
capacity needed to get it there, by not letting them sell the gas to industry
in the South were they could make a profit at the controlled prices.

So, all our JR Ewings went bankrupt. Hundreds of billions of dollars worth of
equipment rusted away or was sold for scrap. The Arabs put the final nail in
the coffin by boosting production so the price feel for a while to 11 or 12
dollars a barrel.

Now, all the wildcatters who know how to get the oil have huge bankruptcies in
the resume and can't raise the money for new equipment. Further, the banks know
that the Arabs can drop the price any time they want to drive domestic
producers broke if they become a threat to their monopoly. So the banks arent'
going to finance domestic production so long as th Arabs can manipulate the
market to destroy their competitors.

The field is left to a few multinationals. And we're screwed.

Government meddling in the free market did it, but it was alot more complicated
than the EPA alone.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG