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.

How dare you inject logic and reason into the subject of "oil".

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.

"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

"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.

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.

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