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Av Gas worries? Read This
By H. STERLING BURNETT
Every time oil prices rise for an extended period, the news media issue dire warnings that a crisis is upon us --- it's not! Many factors are contributing to the currently high gas prices: limited refining capacity; political restrictions on development of new domestic sources of oil; reduced supply from several oil exporting countries due to political conflicts; limited supplies due to the actions of the oil cartel OPEC; and finally, increased demand for oil in China. Dwindling supplies of oil are not a factor in the current price at the pump. New technologies continually increase the amount of recoverable oil, and market prices --- which signal scarcity --- regularly encourage new exploration and development. The history of the petroleum industry is one of predictions of near-term depletion, followed by the discovery of new oil fields and the development of technologies for recovering additional supplies. Before the first U.S. oil well was drilled in Pennsylvania in 1859, petroleum supplies were limited to crude oil that oozed to the surface. In 1855, an advertisement for Kier's Rock Oil advised consumers to "hurry, before this wonderful product is depleted from Nature's laboratory." Indeed, seven oil-shortage scares occurred before 1950. Predictions of an oil famine during the Arab oil embargo in the 1970s were followed by a glut of cheap oil. World oil production continued to increase throughout the 1990s. While prices have periodically spiked, oil prices fell to an inflation-adjusted 30-year low in 2001. Estimates of the world's total oil endowment have continually grown faster than humanity can pump petroleum out of the ground. In 1920, the U.S. Geological Survey announced that the world's total endowment of oil amounted to 60 billion barrels. By 1950, the estimate had increased to around 600 billion barrels. The most recent estimate was of a 3,000 billion-barrel endowment. By 2000, 900 billion barrels of oil had been produced. If world oil consumption continues to increase at an average rate of 1.4 percent a year, and no further resources are discovered and no improvements are made in the technology used to recover oil, the world's presently known supply will not be exhausted until 2056. These estimates do not include unconventional oil resources that require additional processing to extract liquid petroleum. Oil production from tar sands in Canada and South America would add 600 billion barrels to the world's supply, and rocks found in Colorado, Utah and Wyoming alone contain 1,500 billion barrels of oil. Worldwide, the oil-shale reserves could be as large as 14,000 billion barrels --- more than 500 years of oil supply at year 2000 production rates. It is true that in the long run, an economy that uses petroleum as a primary energy source is not sustainable. However, sustainability is a chimera. Every technology since the birth of civilization has been replaced as people devised better and more efficient technologies. The history of energy use is largely one of substitution. From wood and whale oil in the 19th century, to coal by the 1890s. Coal remained the world's largest source of energy until the 1960s. No one can predict the future, but the world contains enough oil to last beyond 2100. Only fools would try to anticipate what energy sources our descendants will use that far in the future. Over the next several decades the world likely will continue to see short-term spikes in the price of oil, but these will be caused by political instability and market interference --- not an irreversible decline in supply. |
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How dare you inject logic and reason into the subject of "oil".
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#3
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Well and correctly stated.
Spockstuto wrote: By H. STERLING BURNETT Every time oil prices rise for an extended period, the news media issue dire warnings that a crisis is upon us --- it's not! Many factors are contributing to the currently high gas prices: limited refining capacity; political restrictions on development of new domestic sources of oil; reduced supply from several oil exporting countries due to political conflicts; limited supplies due to the actions of the oil cartel OPEC; and finally, increased demand for oil in China. Dwindling supplies of oil are not a factor in the current price at the pump. New technologies continually increase the amount of recoverable oil, and market prices --- which signal scarcity --- regularly encourage new exploration and development. The history of the petroleum industry is one of predictions of near-term depletion, followed by the discovery of new oil fields and the development of technologies for recovering additional supplies. Before the first U.S. oil well was drilled in Pennsylvania in 1859, petroleum supplies were limited to crude oil that oozed to the surface. In 1855, an advertisement for Kier's Rock Oil advised consumers to "hurry, before this wonderful product is depleted from Nature's laboratory." Indeed, seven oil-shortage scares occurred before 1950. Predictions of an oil famine during the Arab oil embargo in the 1970s were followed by a glut of cheap oil. World oil production continued to increase throughout the 1990s. While prices have periodically spiked, oil prices fell to an inflation-adjusted 30-year low in 2001. Estimates of the world's total oil endowment have continually grown faster than humanity can pump petroleum out of the ground. In 1920, the U.S. Geological Survey announced that the world's total endowment of oil amounted to 60 billion barrels. By 1950, the estimate had increased to around 600 billion barrels. The most recent estimate was of a 3,000 billion-barrel endowment. By 2000, 900 billion barrels of oil had been produced. If world oil consumption continues to increase at an average rate of 1.4 percent a year, and no further resources are discovered and no improvements are made in the technology used to recover oil, the world's presently known supply will not be exhausted until 2056. These estimates do not include unconventional oil resources that require additional processing to extract liquid petroleum. Oil production from tar sands in Canada and South America would add 600 billion barrels to the world's supply, and rocks found in Colorado, Utah and Wyoming alone contain 1,500 billion barrels of oil. Worldwide, the oil-shale reserves could be as large as 14,000 billion barrels --- more than 500 years of oil supply at year 2000 production rates. It is true that in the long run, an economy that uses petroleum as a primary energy source is not sustainable. However, sustainability is a chimera. Every technology since the birth of civilization has been replaced as people devised better and more efficient technologies. The history of energy use is largely one of substitution. From wood and whale oil in the 19th century, to coal by the 1890s. Coal remained the world's largest source of energy until the 1960s. No one can predict the future, but the world contains enough oil to last beyond 2100. Only fools would try to anticipate what energy sources our descendants will use that far in the future. Over the next several decades the world likely will continue to see short-term spikes in the price of oil, but these will be caused by political instability and market interference --- not an irreversible decline in supply. |
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"kontiki" wrote in message ... How dare you inject logic and reason into the subject of "oil". I guess that I fail to see logic, reason or even relevence in the post. You never really "run out" of anything (except perhaps dodo birds). As relative supply shrinks the price goes up until enough demand is choked off that equalibrium is reached again. The higher price also allows exploration in higher cost areas. The relevent question is whether the supply is (or will be) great enough to allow the price to be low enough for any given use. The notion that because people have been wrong in the past about the supply of something that they are wrong again is also flawed. We know more about the supply of oil now than we did 10, 30 or a hundred years ago. We also know that demand is also vastly greater than 10, 30 or a hundred years ago. The whole "will it run out" question is pretty simple. The supply is finite and the consumption increases continously. It either runs out eventually or the price goes up high enough that consumption stops growing. Anyway, avitaion fuel prices probably have more markup at the FBO level than actual petoleum cost. Mike MU-2 |
#5
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"Mike Rapoport" wrote in message k.net... Anyway, avitaion fuel prices probably have more markup at the FBO level than actual petoleum cost. That may or may not be true. The line up at an auto-gasoline station is more or less continuous throughout the day, every day. Big volume. Good deals from the wholesaler. I am not sure that can be said at the GA FBO. Is his volume great enough that the wholesaler is chomping at the bit to supply him? I don't know the GA FBO business, but I know of marinas in this neck of the woods where their "wholesale" COST per gallon (okay, per litre) is actually similar to what the same unleaded gas costs the *motorist-at-the-pump" on the highway.... simply because their volume is (relatively) too low to be worth the delivery-truck's bother. |
#6
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The markup at the FBO level is generally about $1. The marinas here are
all connected to gas stations and pump from the same tank. They still charge a lot more if you pump it into a boat instead of a car. Mike MU-2 "Icebound" wrote in message ... "Mike Rapoport" wrote in message k.net... Anyway, avitaion fuel prices probably have more markup at the FBO level than actual petoleum cost. That may or may not be true. The line up at an auto-gasoline station is more or less continuous throughout the day, every day. Big volume. Good deals from the wholesaler. I am not sure that can be said at the GA FBO. Is his volume great enough that the wholesaler is chomping at the bit to supply him? I don't know the GA FBO business, but I know of marinas in this neck of the woods where their "wholesale" COST per gallon (okay, per litre) is actually similar to what the same unleaded gas costs the *motorist-at-the-pump" on the highway.... simply because their volume is (relatively) too low to be worth the delivery-truck's bother. |
#7
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On Mon, 07 Feb 2005 01:32:41 GMT, "Mike Rapoport"
wrote: The markup at the FBO level is generally about $1. The marinas here are It's about 20 to 30 cents here. There is a big difference in how much the dealer pays depending on how much they take from the truck. True there is usually a bigger mark up at the marinas on top of the higher price they have to pay. I'd assume it vaires widely just as it does in aviation. Roger Halstead (K8RI & ARRL life member) (N833R, S# CD-2 Worlds oldest Debonair) www.rogerhalstead.com |
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