Saudi Oil Production Cuts

[homeless]

i reckon i could build a wind turbine in my garden

from this i could link to batteries for times of low output and also use extra output to create hydrogen in run a vehicle for myself.

Any extra i could sell to the grid for industry or public use.

considering each of these windmills produces enough electricity to power about 5000 homes, i think i would manage just fine.

And with others doing the same we would all manage fine and have plenty for the city and flat dwellers and industry and transport.

what it needs is a stop to the crazy planning laws and investment.

edit

and keeping on topic we could also live in the windmills very nicely indeed

Edited February 19, 2007 by homeless

[Nationalist]

Interesting that of the 2.5 trillion barrels of oil shale there is almost half is in America.

I know, the jammy barstewards.

However, Shell recently anounced they had a technique for extracting shale oil at $12/barrel. That's viable.

It's true you burn a barrel for every two you take home (more like 10 to 1 in Saudi I believe) but still, with three trillion barrels in Wyomming it pushes "Peak Oil" back by a few decades.

Personally I think it's nuclear or bust for the longer term. Some one needs to stick 100 pins in a map of the UK to see where we're going to site the reactors.

[NoIdea]

See, if there is less energy in a well than it would take to extract that energy the well is unviable.

All of those little wells are pointless, regardless of the price of oil.

For example If a well contains ,say, 100 calories but it requires 200 calories to extract that energy then its pointless.

Whats your bloody problem. I didnt lay claim to any opinion on peak oil - I was just passing on an opinion that I had heard from someone closer to the action.

You really are a tw*t. What's wrong didnt mummy give you enough cuddles or was daddies playing of fellatio not to your liking?

I could argue the toss with you but I REALLY cant be bothered.

You never did answer what your oil credentials were - texas-tim-nice-but-dim. Please dont 'cause I really dont give a t*ss.

Edited February 19, 2007 by NoIdea

[needle]

However, Shell recently anounced they had a technique for extracting shale oil at $12/barrel. That's viable.

Oil has been above $12/barrel for about 7 years now - why havent they done it yet?

[Leonard Hatred]

Oil has been above $12/barrel for about 7 years now - why havent they done it yet?

I reckon that it involves using illegal immigrants to dig it out of the ground by hand!

[qwertyuiop]

Oil has been above $12/barrel for about 7 years now - why havent they done it yet?

Probably the investment needed to build the production facilities - they will do it when the need is pressing I imagine.

Wouldnt suprised me if they would like to consume the rest of the worlds oil first - leaving them with the biggest reserves. Bit of a strategic reserve you might say.

Edited February 19, 2007 by qwertyuiop

[zceb90]

The ability to meet global oil demand is indeed worrying.The Saudi's oil reserves are unaudited,but best guess is they are over-stated.It is indeed worrying that one oil field brings in 50% of their production.A further worry is that they are trying to cover up the dwindling supplies(they don't want the West to seek alternatives)by using enhanced extraction water pressure techniques.Most scholars think this has damaged the strata and only 50% of the oil is gettable as opposed to 70% used to calculate the reserves.With the growth of Chinese and Indian demand it looks like the $60 barrel may be a temporary respite,followed by an assault on the $100 mark in the coming years.

Reports I've read on 'The Oil Drum' and elsewhere indicate that Saudi production continues to fall against a background of a large number of drilling rigs operating in the area. This situation has similarities with that in Texas in the 1970's when the number of wells drilled greatly increased and yet production, which peaked around 1970, continued to decline and has in fact declined relentlessly for 37 years.

Here's a newly published paper of outstanding quality regarding the status of the world's largest oilfield: Depletion Levels in Ghawar

I've commented on this paper in more detail on this other HPC thread: OPEC.... but it's fair to say that if the author's analysis is anything like correct it will produce quite a turnaround on conventional wisdom regarding the future 'Saudi Oil Miracle'

[Goldfinger]

we have the technology to switch from oil to electricity within 10years (ie we have the tech now, but infrastructure would take 5-10 years)

so your question of how much oil do we have is well answered with "enough"

because we have "enough" to transition from oil to alternatives

is that answer more to your taste?

This transfer is only a matter of cost (sorry for stating the obvious). There will always be enough oil to satisfy market

demand at the market price. Again, blatantly obvious. Just won't necessarily mean that people like we can afford it

anymore.

Anyone £10 per litre normal somewhen during the next 3-5 years?

[Frank Hovis]

There will always be enough oil to satisfy market

demand at the market price. Again, blatantly obvious. Just won't necessarily mean that people like we can afford it

anymore.

Anyone £10 per litre normal somewhen during the next 3-5 years?

Agreed. Peak Oil is not about oil running out, just supply falling short of demand so it starts to have a scarcity premium like gold or diamonds so a big premium can be charged over and above the extraction costs, because if you don't want to pay it then somebody else, probably Chninese, will.

There are plenty fo altenratives but they all have a cost above oil and will only begin to make sense when the cost of oil starts ramping up towards its "true" value.

[House of Lords]

we have the technology to switch from oil to electricity within 10years (ie we have the tech now, but infrastructure would take 5-10 years)

so your question of how much oil do we have is well answered with "enough"

because we have "enough" to transition from oil to alternatives

is that answer more to your taste?

We have the technology do we? How many electric planes are being built right now? Errm, none! Electric lorries? Errrm, none.

We've got enough oil to live a much reduced life in terms of consumption, simple as that. It takes 5-10 years to get planning permission for a nuclear power station in this country so I doubt we're 5-10 years away from saying goodbye to oil. The simple fact is that oil is an incredible substance and we have nothing else remotely like it - biofuels and the like will never come anywhere near, they'll provide us with something but not oil.

[Pete95]

I see a barral of Brent Crude is up almost 3% today to almost $68/barrel - anyone know any reason for the sharp increase?

Filled up with regular unleaded today at 97.9p litre - prices at the pump have certainly been creaping up lately - I expect we'll see the CPI shopping basket ammended soon to remove items heavily influenced by fuel prices... :angry:

[SarahBell]

Oil, Water, Food...

What if it all goes wrong at the same time?

House prices falling won't do any one any good.

:-(

[Goldfinger]

Oil, Water, Food...

What if it all goes wrong at the same time?

House prices falling won't do any one any good.

:-(

That's what I expect, it will all go wrong: stock markets will crash, oil will go up, food will go up.

What else can you expect with dying bees, corn-fuel and peak oil around the corner??

The only good thing is that house prices will fall in real terms. That means those who stay in their

jobs will become wealthier since housing becomes more affordable. House prices do have something

good about them!

[Furby]

This is the last housing boom in my lifetime. No more boom and bust indeed.

Just bust from now on. HPI Will be the last things on anybodies mind in 15 - 20 years time.

Peak oil changes everything.

£10 per litre in 5 years time sounds perfectly reasonable to me. Batton down the hatches.

F

[Willy Weasel]

Blimey - this thread has been brought back from the dead

IMHO this is great news for bears as it means the effect on CPI will be inflationary and that shoots the MPC's white knight for CPI out of the water - 7% IR here we come

[Krackersdave]

We have the technology do we? How many electric planes are being built right now? Errm, none! Electric lorries? Errrm, none.

We've got enough oil to live a much reduced life in terms of consumption, simple as that. It takes 5-10 years to get planning permission for a nuclear power station in this country so I doubt we're 5-10 years away from saying goodbye to oil. The simple fact is that oil is an incredible substance and we have nothing else remotely like it - biofuels and the like will never come anywhere near, they'll provide us with something but not oil.

Absolutely - nothing can replace oil. Sure you can make an electric car, but what are you going to make it from? Wood?

Without oil we back to the mid 19th century.

[Goldfinger]

Blimey - this thread has been brought back from the dead

IMHO this is great news for bears as it means the effect on CPI will be inflationary and that shoots the MPC's white knight for CPI out of the water - 7% IR here we come

Definitely. Don't quite agree with Furby, though. Houses will rebounce in 7 years (argument will be, yeah, everything's dreadful and we heat with

wood and straw again, but, hey, people have to live somewhere, and whoooops....).

[Jonnybegood]

I see a barral of Brent Crude is up almost 3% today to almost $68/barrel - anyone know any reason for the sharp increase?

Filled up with regular unleaded today at 97.9p litre - prices at the pump have certainly been creaping up lately - I expect we'll see the CPI shopping basket ammended soon to remove items heavily influenced by fuel prices... :angry:

Noticed this evening that Diesel is now cheaper than Unleaded petrol, Anyone know why?

[FirstTimeBonkers]

It takes 5-10 years to get planning permission for a nuclear power station in this country.

I think you'll find that the planning laws will be hastily revised when the need arises. Just scare the angry mob enough that their plasma TVs might not work and the nimbys will get steamrolled. This isn't what'll happen anyway; they'll build them on existing sites. And don't believe this 10 years of construction nonsense either; these days the things are practically flat-pack.

[zceb90]

Noticed this evening that Diesel is now cheaper than Unleaded petrol, Anyone know why?

There's somewhat of a squeeze on refining capacity in US, the world's largest gasoline consumer, due to a backlog of maintenance which is now having to be addressed. In addition refineries are having increasing difficulty in handling / having to be adapted to handle the increasingly heavy / sour crude mix following light sweet crude (LSC) peaking globally around 2 years ago. Unlike EU, the US auto fleet is powered by gasoline (petrol) and diesel, as yet, comprises only a tiny proportion of the private vehicle fleet. Given that US gasoline consumption is now around 1.5m bopd above their refining capacity they are bidding for cargoes on the spot market and importing same, hence price hikes are impacting the price of petrol more than diesel.

[huw]

I think you'll find that the planning laws will be hastily revised when the need arises. Just scare the angry mob enough that their plasma TVs might not work and the nimbys will get steamrolled. This isn't what'll happen anyway; they'll build them on existing sites. And don't believe this 10 years of construction nonsense either; these days the things are practically flat-pack.

The existing sites are all coastal (give or take). Let's hope the global warming/sea-level doom-mongers are wrong!

[Jonnybegood]

There's somewhat of a squeeze on refining capacity in US, the world's largest gasoline consumer, due to a backlog of maintenance which is now having to be addressed. In addition refineries are having increasing difficulty in handling / having to be adapted to handle the increasingly heavy / sour crude mix following light sweet crude (LSC) peaking globally around 2 years ago. Unlike EU, the US auto fleet is powered by gasoline (petrol) and diesel, as yet, comprises only a tiny proportion of the private vehicle fleet. Given that US gasoline consumption is now around 1.5m bopd above their refining capacity they are bidding for cargoes on the spot market and importing same, hence price hikes are impacting the price of petrol more than diesel.

Thanks, But as the US as always consumed more petrol than diesel should that mean that Diesel should always be lower than petrol as demand is less.

Why were diesel prices hiked above petrol in the first place? Up until a few years ago they were always lower than petrol, I suppose its down to more diesel now on the road is it.

[Willy Weasel]

Here is an article from Econbrowser published today on this very topic - the evidence for the decline of Ghawar now looks compelling:

http://www.econbrowser.com/archives/2007/0...ern_ghawar.html

[TimG]

We have the technology do we? How many electric planes are being built right now? Errm, none! Electric lorries? Errrm, none.

We've got enough oil to live a much reduced life in terms of consumption, simple as that. It takes 5-10 years to get planning permission for a nuclear power station in this country so I doubt we're 5-10 years away from saying goodbye to oil. The simple fact is that oil is an incredible substance and we have nothing else remotely like it - biofuels and the like will never come anywhere near, they'll provide us with something but not oil.

Nuclear is not the answer anyway.. once the oil runs low just think how expensive uranium will be. It's not like the UK has any anyway!

[zceb90]

Peak oil changes everything.

£10 per litre in 5 years time sounds perfectly reasonable to me. Batton down the hatches.

F

Apart from actual levels of supply the real key to motor fuel prices is the US which consumes around 26% of the world's gasoline (btw with just over 4% of the world's population). Fuel taxation levels in US are minimal and it would be extremely challenging politically to change that situation within the necessary time frame (which should, in fact, have been back in 1970 when lower 48 oil production peaked). Current average US pump prices are around $3.10 per gallon which equates to 41.3p / litre (note that an imperial gallon = 1.2 US gallons). As the columnist and author of 'The Long Emergency', James Howard Kunstler often points out for over 50 years US housing and infrastructure has been designed based on cheap oil and endless motoring - low density developments, surburban sprawl, out of town campuses and shopping malls etc. In much of US it's next to impossible to do business without a car; public transit and facilities for pedrestrians and cyclists are far below EU norms. It gets worse - the average fuel economy of US autos today is around 15 - 20% less than that of the Model T Ford 80 years ago. The huge advances in engine technology have been more than offset by increased power, weight, add-on 'gadgets' and the SUV / light truck culture.

On this basis various writers on 'peak oil' sites have made forecasts as to just how high prices have to go before US starts to wean itself off 'endless happy motoring''; consensus appears to be around $7 / gallon. In the absence of fuel taxation the rise will have to be on the crude price i.e. another $3.90/gallon or $164/bbl. Given the substantial dampening effect of fuel taxation the consequences of a price hike of $164/bbl would be far less in percentage terms at UK filling stations - an increase of some 52p/litre.

In the absence of any major hikes in UK fuel taxation I would seriously question whether a price much over £1.50/litre would apply in UK in 5 years' time because once crude prices rose much beyond a threshold of (say) $200/bbl we would see substantial demand destruction in consuming nations worldwide. Already at $65/bbl a number of poorer nations have withdrawn from the oil market as they simply cannot afford the imports; at $200/bbl (and maybe quite a bit lower) this demand destruction would 'move up the food chain' to OECD nations (including UK / Europe).

IMO the real issue we need to be focussing on is future availability of transportation fuel...at any price (that's not to mention the impact on agriculture of steeply rising fuel and nitrates' prices). This paper is authored by one of the foremost experts on Middle Eastern Oil, a former senior advisor with Iranian National Oil Co: Ali Samsam Bakhtiari and Peak Oil. Dr Bakhtiari concludes that global oil output will fall to approx 55m bopd by 2020 v current output of approx 82m bopd (I think he refers to conventional oil + condensate here). If we project current demand forward to 2020 with 1.7% pa exponential growth it's not unreasonable to see a shortfall v BAU (business as usual) of 45m bopd. Put another way for each 10 litres drivers might expect to purchase in 2020 only around 5-1/2 litres would be pumped at the filling station!

None of us know how this whole scenario is going to pan out but one thing's for sure - it won't be 'business as usual' once global output declines really set in. A recession later escalating into a global economic depression is widely predicted as increasing prices for food, energy and transportation leave far less scope for discretionary spending in all but the richest households. A couple more points to bear in mind: 1) if indeed output were to fall substantially by 2020 serious problems would emerge well before then and 2) 2020 is barely half way through the lifespan of a 25 year mortgage taken out today.