Another 700 Million barrels of oil found in the Gulf!! Peak Oil...really?

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Another 700 Million barrels of oil found in the Gulf!! Peak Oil...really?

Well it looks like we found even more oil just recently...  700 Million Barrels worth to be exact, all located in the Gulf of Mexico!!

http://thehill.com/blogs/e2-wire/677-e2-wire/165409-exxon-makes-major-oi...

Keep in mind this is not including the recent discovery of the Eagle Ford Shale in South Texas, the Bakken oil fields in North Dakota and Montana, the ANWR area of Alaska and so many others...  I'm sorry, but the whole "Peak Oil" thing isn't holding up too well lately.  The only thing that is holding this back is Obama and friends issuing drilling permits.

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Peak Oil, what Peak Oil?

Now let me see........  that should last the US...  oh, maybe... what?  THIRTY FIVE DAYS???

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OIL SUPPLY

Sadly,  700 million barrels is less than 100 days worth of oil imports.  I am active in the ND fields(Bakken range) and we have hopes. But, realistically, even if we can get to 1 million barrels per day production, this only replaces about 15% or less of oil imports.  Well less than 10% of total  US consumption.  Peak oil is a term which implies cheaply recoverable crude.  Our crude costs at least $40 / barrel to get out of the ground  and we aren't going to sell it at COST!  YES, the cheap oil is DONE.  We have skyrocketed past cheap, peak, oil.  Get used to paying real money at the pump, or stop using fuel.

When Saudi pumps the last of their cheap oil, they will be pumping heavy crude which needs a lot of steam for extraction.  This may also cost $30-$40/barrel to extract.  Worse yet, it is heavy crude, and has very low percentage of light fractions,  ie diesel/gasoline etc.  Saudi heavy crude has half the useable light fraction of ND oil.  YES, cheap gas is DONE.  If oil can stay at over $100 per barrel there will be more economically feasible resources found.   But remember,  that ain't 25cent a gallon gas!  It will be $6/gallon.

PS  Japan will be in the hydrocarbon market soon(nuclear related issues), in a big way, and along with continued Chinese purchasing pressure on World oil supplies  $6/gallon gas may seem a bargain in a few years.  I am old enough to remember the 1973 oil/gasoline rationing we had here in the USA.

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@damnthematrix-RIGHT ON!

I work with ND oil, the Bakken formation.  It is sad but many people think we are sitting on another Saudi there.  Nuh Uhn.   We will be lucky, as a state, to hit 1million barrel per day levels of production.  We have real WATER shortages up here.  Even if we got to 1million bpd that is a small few per centage points of US daily consumption.  It gripes me that so few Americans really know actual numbers.  THANK YOU for making the above point!!!!

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Yes!!!! Really!!!!

Too bad all of it is sludge on the bottom and in the bayou.

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Why is it still a debate?

Over the past six years, I have thought that peak oil would eventually easily be recognized for what it is, an observation over countless fields. It is so basic, but there is always such opposition. It still genuinely surprises me. 

In CM's book he talks about the possibility of a fairly abrupt awakening to the reality of peak oil, sparked by hoarding of former exporters, similar to what Russia did with wheat last year. I still wonder if peak oil will ever be recognized amongst the masses. I could see $300 oil, with people still talking about "big oil" screwing them, or China buying up our oil, or some other nonsense to avoid dealing with the real issue.

I had a conversation with a middle school teacher the other day about high gas prices, and he told me that the oil companies were hoarding oil to keep the price high. I told him that the major independent oil companies (Mobil, Shell, Chevron, BP etc..) only control a very small fraction of the reserves. The state owned companies such as Saudi Aramco control the bulk. I went on to tell him about the extraction and depletion curve that most oil fields follow, and where we are today in regard to discoveries and production figures. He had this blank look on his face, and he said, "I believe in conspiracy theories, and I think the oil companies are ripping us off!" (paraphrased) I'm pretty sure I lost him at state owner oil companies.

By the way, Mike, thank you for constantly responding to the peak oil deniers.

Phil

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700 million barrels and peak oil

TommyHolly wrote:

...  I'm sorry, but the whole "Peak Oil" thing isn't holding up too well lately.  The only thing that is holding this back is Obama and friends issuing drilling permits.

Do you understand Peak Oil?  How about how Peak Oil effects the economy and vice versa?  Refresher time...

Net Energy = usable energy, or the energy remaining after energy input to extract and process fossil fuel

Net Energy can decrease for many reasons.  Some have already been mentioned, but to summarize, net energy decreases when...

1) less barrels available to extract

2) increasing input energy cost to extract and process

Also, if 2 is increasing at a faster rate than 1, then you can find more stuff to drill, yet have less fuel to use.  Diminishing returns.

Now throw in the economy.  If there's any chance to "work off our financial excesses" then the economy has to literally be booming for a good decade.  That requires exponentially more net energy.  It's just silly talk.  The economy is not going to boom like it's 1999 (for a full 10 years) and even if it could, there is not enough extra net energy to support it.

No matter where you are politically, the country needs to balance priorities.  I'm not sure what's more difficult - the balancing or actually agreeing on what are our priorities.  

Obama can be blamed for many things, but decreasing net energy is not one of them.  Blame him for not investing the banker's trillions into alternative energy, rather than banks.  Blame him for not being honest that the economy is not going to "get back to where it was," and if you do, be sure to blame every other politician outside of Ron Paul and Bernie Sanders.  Blame him for not pushing to reenact Glass-Steagal.  There are better choices than just blaming him for getting in the way of drill baby drill.

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Damnthematrix wrote: Now let

Damnthematrix wrote:

Now let me see........  that should last the US...  oh, maybe... what?  THIRTY FIVE DAYS???

Lucky for us that isn't the only oil well... it's an additional source.  Your comment is like me saying, "You only made $100 today?  How can you possibly live off $100" LOL!

Every additional source we find adds to our current production totals. Keep in mind I'm not in complete denial that there will be an eventual limit reached in oil production and that we could be at risk of hitting that number.  (And if that is what is truly meant by Peak Oil then count me in...)  What I'm saying is that there is lots of oil left and not all of it is hard to refine shale.  If we had the drilling permits to find it, we would not only increase our oil production domestically, but also have a better idea of how close we are to an actual Peak Oil situation.  Right now it's still just a guess based on incomplete numbers.

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TommyHolly wrote: Keep in

TommyHolly wrote:

Keep in mind I'm not in complete denial........

Looks like a little bargaining going on in addition to partial denial.

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sjdavis wrote: TommyHolly

sjdavis wrote:

TommyHolly wrote:

...  I'm sorry, but the whole "Peak Oil" thing isn't holding up too well lately.  The only thing that is holding this back is Obama and friends issuing drilling permits.

Do you understand Peak Oil?  How about how Peak Oil effects the economy and vice versa?  Refresher time...

Net Energy = usable energy, or the energy remaining after energy input to extract and process fossil fuel

Net Energy can decrease for many reasons.  Some have already been mentioned, but to summarize, net energy decreases when...

1) less barrels available to extract

2) increasing input energy cost to extract and process

Also, if 2 is increasing at a faster rate than 1, then you can find more stuff to drill, yet have less fuel to use.  Diminishing returns.

Now throw in the economy.  If there's any chance to "work off our financial excesses" then the economy has to literally be booming for a good decade.  That requires exponentially more net energy.  It's just silly talk.  The economy is not going to boom like it's 1999 (for a full 10 years) and even if it could, there is not enough extra net energy to support it.

No matter where you are politically, the country needs to balance priorities.  I'm not sure what's more difficult - the balancing or actually agreeing on what are our priorities.  

Obama can be blamed for many things, but decreasing net energy is not one of them.  Blame him for not investing the banker's trillions into alternative energy, rather than banks.  Blame him for not being honest that the economy is not going to "get back to where it was," and if you do, be sure to blame every other politician outside of Ron Paul and Bernie Sanders.  Blame him for not pushing to reenact Glass-Steagal.  There are better choices than just blaming him for getting in the way of drill baby drill.

Let's do a complete refresher then...
1) Take into account all domestically available oil, (a number which we don't have yet since Obama hasn't released exploritory permits)
2) If you throw in the economy realize you are throwing in OPEC price manipulation primarily who's influence would increasingly deminish with each added domestic oil source.
3) People are calculating gasoline prices at the current taxed level.  It's an intristic tax which means it's a tax on a tax, on a tax, on a tax...  Gasoline is only $0.40-$1.00 a gallon without all the taxes.
4) Obama is subsidising additional energy with tax dollars.  Take away those subsidies and it's a HUGE loss which places a ton of blame directly on him as wasting energy.  Oil however, even with the dangers of Peak Oil is still a money makerand net gain.  (And Bernie Sanders' ideology is directly to blame since Socialism is the main cause of all these taxes and drains on the economy and business.)
5) Glass-Steagal was a MARXIST policy and should never be reenacted.  (I'm seeing a trend here though...  Both Republicans and Democrats that have taken part in Marxist programs which have destroyed our economy and caused prices for things like oil to skyrocket.)

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Oil

1. http://www.netl.doe.gov/KeyIssues/secure_energy3b.html

"The U.S. contains some of the world's most thoroughly explored oil and gas basins. Most of the accessible, high-quality oil and natural gas have already been or are being produced, and remaining resources are increasingly concentrated in geologically challenging and environmentally sensitive settings."

2. OPEC can influence prices, but they do not have quite the spare capacity as commonly thought. I would bet that they produce less to save for their own population or future generations. There is a good article at the oil drum on spare capacity.

http://www.theoildrum.com/node/8007#more

3. Crude oil makes up the majority of the cost of gasoline. Below is a quote from this USA Today article. http://www.usatoday.com/money/industries/energy/2008-05-24-gas-breakdown_N.htm

The biggest factor in the skyrocketing price of gasoline is the historic ascent of crude oil, which has surged from $45 per barrel in 2004 to more than $135 this past week, setting new record highs all the while.

In the first quarter of this year, based on a retail price of gas that now seems like a steal — $3.11 a gallon — crude oil accounted for all but about a dollar, or 70%, of the cost, according to the federal government.

The rest is a complex mix of factors, from the cost of turning oil into gas to taxes to marketing costs to, sometimes, nothing more than the competitive whims of your local gas station owner.

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LOL.  Anti-Obama people. 

LOL.  Anti-Obama people.  Some of them can't add.  700 million barrels is piddly, and how long will it take to get online and at what cost.  Who is this idiot(TommyHolly)?  Reminds me of a North Carolina fan.

Ernest

Sorry about the idiot part but he seems brainwashed by the establishment and the "Drill baby drill crowd (Sarah Palin).

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putting things in perspective

ewilkerson wrote:
Sorry about the idiot part but he seems brainwashed by the establishment and the "Drill baby drill crowd (Sarah Palin)

So you should be.......  it always takes some time for anyone to "get it".

I'm almost certain that OPEC can no longer influence the price.  I would be very very surprised if Saudi Arabia had not peaked over the past 12 months.  Their pathetic reaction to the Lybian crisis is proof of that, at least AFAIC.  Just 5 or 6 years ago, SA was able to produce up to 13 Mb/day, but today it looks as though it's only 9.5.  There's only one nation left now that hasn't peaked and that's Iraq....  and we all know what a basket case it is.  And to quote Kunstler, it only takes a camel and a couple of pounds of plastics to put an end to that!

You need to understand where a 700Mb find sits in the scheme of things.  In the 50's and 60's, fields in the order of 10, 20, 30, 40 BILLION barrels were being discovered.  Peak discovery was 1964.  And in the past ten years, ALL finds have been in the 100 to 500 Mb range.  That is just ONE percent of the size we were finding just fifty years ago.

Last year we used five times as much oil as was dicovered.

If you can't see a trend here......

Mike

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Oh, I see the trend.  I did

Oh, I see the trend.  I did not do the post sticking his finger at us as idiots.

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Re: Another 700 million barrels

Calling people names is not how we do things.  Thank you for the apology ewilkerson.  Let's keep it cool.

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Apology

I do apolagize about name calling, but 30 second sound bite statements and understanding is one of the reasons we are at this point.  I guess I should try harder to get people to think.  That has gotten harder and harder.  I sure do not profess to know everything, by any means, but I guess I was lucky in my education to be taught to think outside the box.  I guess the evening news has been getting to me.  Cheers, E

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One Thing Holding Us Back Is Civility

TommyHolly wrote:

The only thing that is holding this back is Obama and friends issuing drilling permits.

Do half of the people on this site a favor and leave politics out of it, okay?

We need to come together. As Americans and as human beings (including those in other countries).

I'm sure there are sites and talk shows where people attack each other all the time, but I'm not sure they're very productive nor the kind of place where people come to appreciate one another and help one another.

Such sites and talk shows with their preaching to the choir sure are fun to get your angst out and build up to a crescendo of hatred and dehumanization against fellow Americans who happen to be your family members, friends, neighbors, etc. But that kind of feedback/reinforcement of negative, poisonous thoughts and attitudes leaks out from participants into the public discourse shared by everyone, poisoning the environment and making others feel less safe and less willing to interact or cooperate.

Back To The Topic
As others have mentioned, we in the United States use 18 to 20 million barrels of oil per day. So 700 million barrels is something around 35 to 40 days. If it's extracted out over the course of, lets say 20 years, it will take care of less than 1% of annual consumption, decreasing over time.

As Others May NOT Have Mentioned
This is all  assuming the extracted 700 million barrels of oil isn't sold out on the open world oil markets to the highest bidder (whether foreign or domestic). If a foreign country or corporation can afford pay a higher price and load up an oil tanker at an American terminal in the Gulf of Mexico, ship it home and sell it profitably for a higher price, it will. In that case, it may not be a 35 to 40 day supply, or a 20-year-contribution-of-less-than-1-percent but become negligible.

Thanks from a registered Republican who votes independently because he sees a lot of hatred and ignorance and disrespect on all sides...

Poet

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Don't worry about the

Don't worry about the insult Ernest...

Zero, I read the links you provided.

1. The first link that talks about the US Oil Reserves being "thoroughly" explored... well most of the data from that comes from 2003 according to the website.  And if that was truly the case, why do we keep finding more oil like that of the Gulf and the Eagle Ford area in Texas?  Every time they get permits to explore, they find more oil.  What is the big deal about letting them have all the exploratory permits they want?  I'm not picking on Obama for political bias, even Clinton issued 10 times the permits.

2. I agree that OPEC is most likely exxagerrating the amount of their oil reserves.  That still does not change my statement that the more oil we produce domestically, the better it is for us, especially since we are not part of OPEC.

3. The third article about the cost of Gas being $3.11 is complete bunk.  I already knew the answer to this one but I read the whole link anyway and they got their information from Democrat Senator Dick Durbin from Illinois, one of the most politically biased politicians out there?  He blames the oil companies and corporations...what a surprise, a Marxist blaming businesses?  AP articles throw up a red flag to me any time they don't credit the writer and only talk to Liberals...that's called Propoganda.

Take a look at the cost of Gasoline in countries that don't add INTRISTIC TAXES.  Even at over $100 a barrel, gasoline is still $0.30 cents to just under $1.00 like I said.  The reason Dick Durbin and pals get their number of $3.11 is because they don't explain that it's been taxed with a tax on top of more taxes by that point. 

This is INTRISTIC TAXES: The exploratory permits get taxed, the drilling permits get taxed, the oil wells get taxed, the people working on the wells get taxed, the main offices get taxed, piping or shipping the oil gets taxed, when the refinery takes delivery of the oil it gets taxed, when they make summer/winter blends the additives get taxed, when subsidary gasoline companies purchase the gas it gets taxed, when it gets trucked from the refinery it gets taxed, when the service station receives the gasoline it gets taxed, then the Federal Gov adds additional taxes to combat "Global Warming" and other imaginary things...  This is the point Dick Durbin gets his $3.11 (all taxed for his Marxist entitlement programs).  But then the State, County, and sometimes City taxes it even further which is how we end up with gas being $4.70 in Chicago a few weeks ago.

zeroenergy21 wrote:

TommyHolly

Let's do a complete refresher then...
1) Take into account all domestically available oil, (a number which we don't have yet since Obama hasn't released exploritory permits)
2) If you throw in the economy realize you are throwing in OPEC price manipulation primarily who's influence would increasingly deminish with each added domestic oil source.
3) People are calculating gasoline prices at the current taxed level.  It's an intristic tax which means it's a tax on a tax, on a tax, on a tax...  Gasoline is only $0.40-$1.00 a gallon without all the taxes.
4) Obama is subsidising additional energy with tax dollars.  Take away those subsidies and it's a HUGE loss which places a ton of blame directly on him as wasting energy.  Oil however, even with the dangers of Peak Oil is still a money makerand net gain.  (And Bernie Sanders' ideology is directly to blame since Socialism is the main cause of all these taxes and drains on the economy and business.)
5) Glass-Steagal was a MARXIST policy and should never be reenacted.  (I'm seeing a trend here though...  Both Republicans and Democrats that have taken part in Marxist programs which have destroyed our economy and caused prices for things like oil to skyrocket.)

1. http://www.netl.doe.gov/KeyIssues/secure_energy3b.html

"The U.S. contains some of the world's most thoroughly explored oil and gas basins. Most of the accessible, high-quality oil and natural gas have already been or are being produced, and remaining resources are increasingly concentrated in geologically challenging and environmentally sensitive settings."

2. OPEC can influence prices, but they do not have quite the spare capacity as commonly thought. I would bet that they produce less to save for their own population or future generations. There is a good article at the oil drum on spare capacity.

http://www.theoildrum.com/node/8007#more

3. Crude oil makes up the majority of the cost of gasoline. Below is a quote from this USA Today article. http://www.usatoday.com/money/industries/energy/2008-05-24-gas-breakdown_N.htm

The biggest factor in the skyrocketing price of gasoline is the historic ascent of crude oil, which has surged from $45 per barrel in 2004 to more than $135 this past week, setting new record highs all the while.

In the first quarter of this year, based on a retail price of gas that now seems like a steal — $3.11 a gallon — crude oil accounted for all but about a dollar, or 70%, of the cost, according to the federal government.

The rest is a complex mix of factors, from the cost of turning oil into gas to taxes to marketing costs to, sometimes, nothing more than the competitive whims of your local gas station owner.

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gasoline myths

Tommy.......  gasoline costs $5.30 a gallon in Australia, and $0.38 of that is tax.  And that's a FACT.

If you don't get it yet.......  700 million barrels is a paltry amount of oil.  I've already told you it's enough to lat the US just 35 days, so what is it you don't get?

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Oil prices

TommyHolly wrote:

1. The first link that talks about the US Oil Reserves being "thoroughly" explored... well most of the data from that comes from 2003 according to the website.  And if that was truly the case, why do we keep finding more oil like that of the Gulf and the Eagle Ford area in Texas?  Every time they get permits to explore, they find more oil.  What is the big deal about letting them have all the exploratory permits they want?  I'm not picking on Obama for political bias, even Clinton issued 10 times the permits.

Let's assume that the report was from a biased source in 2003 and that we continue to find new oil fields.  So what?  The only question that matters is are we finding more oil than we are using, the answer to which is pretty clearly no.  With that being the case, logically we are in decline.

TommyHolly wrote:

3. The third article about the cost of Gas being $3.11 is complete bunk.  I already knew the answer to this one but I read the whole link anyway and they got their information from Democrat Senator Dick Durbin from Illinois, one of the most politically biased politicians out there?  He blames the oil companies and corporations...what a surprise, a Marxist blaming businesses?  AP articles throw up a red flag to me any time they don't credit the writer and only talk to Liberals...that's called Propoganda.

Take a look at the cost of Gasoline in countries that don't add INTRISTIC TAXES.  Even at over $100 a barrel, gasoline is still $0.30 cents to just under $1.00 like I said.  The reason Dick Durbin and pals get their number of $3.11 is because they don't explain that it's been taxed with a tax on top of more taxes by that point. 

This is INTRISTIC TAXES: The exploratory permits get taxed, the drilling permits get taxed, the oil wells get taxed, the people working on the wells get taxed, the main offices get taxed, piping or shipping the oil gets taxed, when the refinery takes delivery of the oil it gets taxed, when they make summer/winter blends the additives get taxed, when subsidary gasoline companies purchase the gas it gets taxed, when it gets trucked from the refinery it gets taxed, when the service station receives the gasoline it gets taxed, then the Federal Gov adds additional taxes to combat "Global Warming" and other imaginary things...  This is the point Dick Durbin gets his $3.11 (all taxed for his Marxist entitlement programs).  But then the State, County, and sometimes City taxes it even further which is how we end up with gas being $4.70 in Chicago a few weeks ago.

The cost of gas to the domestic population in oil producing countries is irrelevant.  First the price is largely subsidised by the local government so as to pacify the masses.  Second you are correct that taxes add to the cost of production and but more importantly oil is a commodity and therefore its price is not set by the cost of production.  It is set by supply and demand.

Imagine you buy some land for $1 million and discover 10,000 oz of gold on it.  Do you sell your gold for $110/oz ($1million / 10,000 + 10% profit)?  No you sell your gold at the market price $1500 and pocket $1400 in profit.  The cost of production has very little to do with the market price of the commodity other than if the market price is less than the cost, people stop producing it.

TommyHolly wrote:

5) Glass-Steagal was a MARXIST policy and should never be reenacted.  (I'm seeing a trend here though...  Both Republicans and Democrats that have taken part in Marxist programs which have destroyed our economy and caused prices for things like oil to skyrocket.)

I am about as anti-regulation and free market as they come.  I don't like regulations like Glass-Steagal and would not have it under any system that I would propose, but it might be that if you are going to have a monetary system like ours is currently, where FED controlled banks effectively have almost free cost of capital, you might not want to allow investment banks free capital for speculative purposes.  At least you can make the argument that society at large gets some benefits from commercial banks, but it is much harder to justify the need to investment banks to speculate with free money.

If you want to argue that banks should be on their own and not subsidised by a central bank and fractional reserve lending, then I agree Glass-Steagal is not necessary.  Until then, I think it might be better than the alternative. 

That is one of the hard parts for those that try to regulate systems.  Each action (regulation) may have many unintended consequences.  Personally I want as little regulation as possible but when dealing with a system that has as much regulation as our current system, it is not always so simple as less regulation is always best.

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For TommyHolly

TommyHolly

In case you didn't see what I wrote about an 35 days supply to meet American oil usage, spread out over an oil extraction profile of 20 years...

...And didn't see what I wrote about the futher dilutive effect of such oil (and the refined gasoline and diesel products) being sold on the open market.

Here's the link to my comment earlier:

http://www.peakprosperity.com/comment/112504#comment-112504

Poet

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Oil supply

Back when we were buying Saudi oil for $3USD per barrel, the dollar actually had some value. I'm old enough to remember silver certificates. When the dollar was roughly worth an ounce of silver, it would buy what about $35 will buy today. So today, $40 for the wholesale price of a bbl of oil may be a pretty good deal.

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I have my eye on you TommyHolly

I have my eye on you TommyHolly

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goes211 wrote: If you want

goes211 wrote:

If you want to argue that banks should be on their own and not subsidised by a central bank and fractional reserve lending, then I agree Glass-Steagal is not necessary.  Until then, I think it might be better than the alternative. 

That is one of the hard parts for those that try to regulate systems.  Each action (regulation) may have many unintended consequences.  Personally I want as little regulation as possible but when dealing with a system that has as much regulation as our current system, it is not always so simple as less regulation is always best.

+1

Well done for seeing the forest.

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number crunching

One barrel of crude is 42 gallons.

Depending on the quality of the oil and source of data, that yields anywhere between 12 to 28 gallons of gasoline.

Price of crude now = $99.45

So, gasoline would cost between $8.28 and $3.55 per gallon, based solely on cost of crude, if the barrel was used only for gas.  This does not take into account refining and delivery costs, of course.

However, this doesn't take into account the other products made from the rest of the oil, most of which are higher priced.

Also, it seems that newer refineries are able to convert all of the crude into gasoline using advanced cracking methods.  This adds cost of course, but even if we assume that all crude is turned into gas, $100/barrel still puts us at $2.38/gallon of gas without any overhead.

So the claim that most of the gas cost is tax seems rather unbelievable.

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goes211,Great post! -Are we

goes211,Great post!
-Are we finding more oil than we are using, definitely not... because we are not allowed to drill.  I'm saying that Obama should be releasing the permits to at least TRY to find the oil and then we can do a correct comparison.

-The price of gas is largely subsidised, I agree with that too.  I'll talk more about the supply and demand portion with Poet's response.

-I know exactly what you are saying about the Fed and Glass-Stengal and I don't want either.  So I agree with you on that as well.  I too want as little regulation as possible.  It seems the only part we are slightly disagreeing about is the severity of just how bad the peak oil situation currently is, otherwise I have no problem with what you've said.

goes211 wrote:

Let's assume that the report was from a biased source in 2003 and that we continue to find new oil fields.  So what?  The only question that matters is are we finding more oil than we are using, the answer to which is pretty clearly no.  With that being the case, logically we are in decline.

The cost of gas to the domestic population in oil producing countries is irrelevant.  First the price is largely subsidised by the local government so as to pacify the masses.  Second you are correct that taxes add to the cost of production and but more importantly oil is a commodity and therefore its price is not set by the cost of production.  It is set by supply and demand.

Imagine you buy some land for $1 million and discover 10,000 oz of gold on it.  Do you sell your gold for $110/oz ($1million / 10,000 + 10% profit)?  No you sell your gold at the market price $1500 and pocket $1400 in profit.  The cost of production has very little to do with the market price of the commodity other than if the market price is less than the cost, people stop producing it.

I am about as anti-regulation and free market as they come.  I don't like regulations like Glass-Steagal and would not have it under any system that I would propose, but it might be that if you are going to have a monetary system like ours is currently, where FED controlled banks effectively have almost free cost of capital, you might not want to allow investment banks free capital for speculative purposes.  At least you can make the argument that society at large gets some benefits from commercial banks, but it is much harder to justify the need to investment banks to speculate with free money.

If you want to argue that banks should be on their own and not subsidised by a central bank and fractional reserve lending, then I agree Glass-Steagal is not necessary.  Until then, I think it might be better than the alternative.

That is one of the hard parts for those that try to regulate systems.  Each action (regulation) may have many unintended consequences.  Personally I want as little regulation as possible but when dealing with a system that has as much regulation as our current system, it is not always so simple as less regulation is always best.

OK I realize that going on a website that has a lot of Peak Oil supporters and saying “Peak Oil…really” is going to ruffle some feathers, so I’ll try to respond to all the comments as time allows…  Let me clarify that I also believe in Peak Oil… I just don’t think it has reached a turning point yet.  (So no Dogs in a Pile, that isn’t denial, LOL.)  I could be wrong and since that is based partly on fact and partly on opinion, I’m open to hearing from you guys. 

My post was edited earlier.  It said “Don’t worry about the insults Ernest, after all, Ad Hominem attacks are all your type has…”  (Notice how that is not insulting you personally, only highlighting your choice of not contributing anything but an insult for a post.)

Damn the Matrix,
 $5.30 minus your LOCAL taxes of $0.38 cents is only the tip of the iceberg.  Did you see my post above with the intrinsic taxes added?  That gas has been taxed quite a lot before it ever got to you.  Please correct me if I’m wrong but using your math, $5.30 - $0.38 = $4.92 as the base cost of gasoline… Tictac1 below would disagree.  And what don’t you get about 700 Million Barrels being an additional amount?  1 penny weighs very little but $100 in pennies together weigh a lot!

Poet,
 I’m not the one insulting or attacking anyone.  I make a statement and back it up with facts and logic.  Some people here obviously resort to Ad Hominem attacks when they don’t like what you’ve said instead of bringing up a counterpoint.  You may not always like what I say, but I do keep it civil.  If I point out a politician like Obama screwing up, that doesn’t automatically mean I’m politically polarized to him on every issue.  Bush, Clinton, Bush, Reagan, Carter…all made mistakes and I call them out for them too.  You’ve made this same exact mistake on 3 of my posts in other sections now.  (Your logical error is called Bifurification… the “either you are with me or you are against me” fallacy.)
-Now the second part of your post.  Yes domestically produced oil would be sold on the open market for whatever the current price is.  However, part of the reason that prices are so high is that OPEC controls the majority of the oil and sets the price.  Producing more oil domestically has the effect of lowering prices by lowering the amount of their control.  Don’t you think it’s a good idea to increase the domestic supply?

Johnny Oxygen, that is hilarious! =)

Tictac1,
You are on the right track at least.  However, can you please show me your calculation on how you came to the figure of $2.38?  My guess is that you sold all the products for the exact same price, (which at $99 a barrel, you should of come to a price of $2.25) but that is not the case.  Each product has a different selling price and each product gets taxed differently not to mention each blend of 87-89-and 93.  Gasoline gets the most intrinsic taxes added out of any of the products raising the price dramatically.  Oh, and let’s not forget about the ethanol that is supposed to lower the gasoline costs further?  (But actually comes out of the taxpayers pocketbook through subsidies further raising the taxed cost.)  But let’s say all these products get sold for exactly the same, $2.25 is still almost half of the $4.36 I paid this morning which still proves my point of how much taxes matter when figuring in the costs.   Again, notice how all the OPEC countries have prices at around $1.00 for a gallon of gasoline… 

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Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
correction.....

Damnthematrix wrote:

Tommy.......  gasoline costs $5.30 a gallon in Australia, and $0.38 of that is tax.  And that's a FACT.

If you don't get it yet.......  700 million barrels is a paltry amount of oil.  I've already told you it's enough to lat the US just 35 days, so what is it you don't get?

OOOPS.....  just to set the record straight, I sent this just before going to bed and tired........  the tax is $0.38/litre (not gallon) = $1.44/US gallon which still leaves $3.86 as the cost of delivering a gallon of gasoline here in Australia.

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Damnthematrix
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more perspective

TommyHolly wrote:

goes211,Great post!
-Are we finding more oil than we are using, definitely not... because we are not allowed to drill.  I'm saying that Obama should be releasing the permits to at least TRY to find the oil and then we can do a correct comparison.

I put it to you that you are not allowed to drill for oil in pristine wilderness because in the scheme of things, like your 700 Mb, it will make no difference.....  merely postpone the inevitable by 35 days.  Are you really prepared to totally stuff up what is left of pristine wilderness (in most cases) just so we can all drive for another month?

TommyHolly wrote:

Damn the Matrix,
 $5.30 minus your LOCAL taxes of $0.38 cents is only the tip of the iceberg.  Did you see my post above with the intrinsic taxes added?  That gas has been taxed quite a lot before it ever got to you. 

Not here it isn't......  The Australian Federal Guvmint taxes excise ONCE.  That's it.  AFAIK, there are no taxes on the TAPIS crude we import through Singapore.  I also corrected the cost of delivered petrol here down to $3.86/US gallon when I realised I made an error last night.

TommyHolly wrote:
Please correct me if I’m wrong but using your math, $5.30 - $0.38 = $4.92 as the base cost of gasoline… Tictac1 below would disagree.  And what don’t you get about 700 Million Barrels being an additional amount?  1 penny weighs very little but $100 in pennies together weigh a lot!

Not when they're counted in billions and trillions of DOLLARS....  I wouldn't even bother bending down to pick up a penny.

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jrf29
Status: Gold Member (Offline)
Joined: Apr 18 2008
Posts: 445
Hi Tommy

Hi TommyHolly,

Welcome.  Nice to see somebody with differing viewpoints around here.  I have 2 questions for you:

(1).  You keep referring to the Obama administration's refusal to allow oil exploration.  In the crash course on Peak Oil, we can see the data that oil discovered has been decreasing in a nice smooth bell-cruve since the mid-1960's.  We've been finding less and less each year for decades prior to the time Obama took office as president.  It can't all be his fault, especially seeing how smoothly the graph has been decreasing.  Surely you're not suggesting that there is a huge mother lode waiting to be found if only we'd look for it, are you?

(2).  Let's assume that there is a mother lode to be found in the continental shelf off the coast of the U.S.

Oil is a national resource of critical importance.  In just a little more than a century, we have burned through much of our entire allotment of oil, built over many millions of years.  We have to make this stuff last!  If we are lucky enough to have some oil left in the continental shelf (which is land under the control of the federal government), shouldn't we think about keeping it in reserve?  A hundred years in the future, it will be a strategic material of inestimable importance to our nation. 

You can complain about gas prices at $4.00.  But in centuries to come, gas prices might be $150/gal.  Wars might be won or lost based on which army can secure an adequate supply of oil.  People might eat or starve based on which nation has enough oil to produce fertilizer.  Wouldn't it be nice to save some for the future of our nation, instead of pumping it as quickly as we can?

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sofistek
Status: Platinum Member (Offline)
Joined: Oct 2 2008
Posts: 644
Magic Elixir

Tommy,

Are you searching for a miracle, by any chance? You do realise that oil, and all (essentially) non-renewable resources are bound to peak, if consumed, don't you? You do realise that discoveries may not add to production but only mitigate declines, don't you?

Please don't pretend that peak oil means that at some point no oil will ever be found again. Oil production projections include an estimate for yet-to-be-found oil. For the find to be significant, you have to somehow show that the discovery is in addition to the projected discoveries already included in peak oil production estimates. Can you do that?

But it seems you're quite happy for environment to be destroyed so you can fill up your car for as long as possible. Your sort of attitude is the one that will assure environmental and societal collapse because you don't think we need to change our lifestyles at all, provided we can keep getting oil companies to explore. After all, why else would a measly 700 million barrel find (not yet developed) excite you so much?

Tony

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TommyHolly
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Posts: 90
Damn the Matrix,There are

Damn the Matrix,
There are areas of wilderness with nothing there like the ANWR part of Alaska or the OCS.  I've seen quite a few news and film crews go up there.  Theres not much of anything there and of course, I wouldn't accept drilling unless they can keep things clean.  One exploratory drill site can go for many miles looking for oil.  So a small footprint above ground with a large directionally bored footprint underground disturbing nothing seems acceptable.  A small 1-mile square facility has little to no impact.

As far as Australian taxes I'm not sure about.  I'd have to look into your system which would take way more time then I have right now.  (I think I should just fly to the land down under and take one of those Government "Fact Finding" trips?  I'll be on the lookout for Chopper Reed and Drop Bears of course, ;-)...  But I know that Singapore taxes the hell out of everything so I wouldn't be surprised if they already taxed the oil many times over before you guys bought it.  Something to look into...

I actually still pick up pennies, as long as they are not all nasty or dirty.  That reminds me, I better go wash my hands.

JRF29,
Nice to meet you! 
1. No it's definitely not all Obama's fault.  President Bush also was slow on many oil permits as well going so far to make certain areas wildlife refuges with no drilling rights ever??  And things don't all fall on the President (whoever they are) anyway because Congress and all these energy commissions play a big part too.  There are places like the Outer Continental Shelf (OCS) that we know has oil but we can't drill there!.  Since the 60's less permits have been continually issued so that would definitely have an effect.  I say let them explore at least to find the oil and then we can decide on whether or not to drill.  No I don't think there is a huge mother lode but there is obviously lots more oil out there and nobody really knows because the permits haven't been issued.  Note: What is funny is that President Clinton himself has personally chided the Obama administration for not issuing permits out fast enough.

2. We do and do not have to make this stuff last.  After all, the Earth makes more.  The theory that Oil is a "Fossil Fuel" has been debunked years ago which makes perfect sense because there is no way all these Gazillions of Barrels of Oil just came from Dinosuars.  And the places they've been drilling are areas in which Fossils have never been found.  Granted, it is a slow process so it's not like the Earth can immediately produce an abundant supply.
So let's assume the current oil available is all we will ever have as a thought experiment.  What is wrong with using the oil and when it runs out then switching to alternate forms of energy?  It's not like it would run out overnight.  We would see our supply gradually decreasing and if we had issued exploratory permits, we'd have a much better idea of how much we had left and how long it would last.  Entire countries are already at war for things as simple as access to clean water so it's not like running out of oil would be creating a war that wouldn't of happened anyway?  If there truly was a finite supply, it would run out eventually run out for everyone.  Since we have alternatives, I don't see a problem with crossing that bridge as we come to it?  I'm just asking the question, maybe there are good reasons not to.

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