An interesting article about Oil Production
 

From The NYT.

Amid High Oil Prices, Danger Signs in Production

snip:
The whole article:

http://www.nytimes.com/2008/04/28/bu...il-WEB.html?hp

TheMercenary, thanks for the link. Perhaps this is the beginning of the end of oil.

Oh, is that a good thing?:confused:

I think we may find ourselves living in interesting times.

This works when naive political types, educated to be decision makers, don’t have a clue how things work. What will replace oil? What else can provide that kind of energy per pound? No response is a best answer.

Not included in that article is that the best stuff has already been burned. Not included: the easy stuff has all been consumed. Not included: how many gallons of energy actually get used in productive work? (less than 2 in 10). Not included are that producers cannot keep outputting at near 100% without failures or damaging oil fields. Not included are, for example, 40% loss of production in Nigeria due to strikes and a growing insurgency. Not included are other producers (ie Russia) who have been outputting so much for so long as to now suffer 10+% production reductions. Not includes are option contracts required by suppliers to guarantee their commitments to their customers. Not includes are major changes to refineries as oil quality decreases (becomes more sour).

All this and still no major disruptions. What happens when supplies anywhere are seriously disrupted?

So where is the innovation in America it address these problems? People least able to make technology decisions mandated ethanol AND put up $0.50 per gallon tariffs on those who could provide ethanol productively. Now we have the 'silent tsunami' added to more energy consumption because we mandated ethanol.

More facts in addition to that article.

The pinch of higher gas prices has just begun. Many food items are going up in price, this is only going to hurt those families that are already hurting the most. The slide of the dollars seems to be a major factor and the price of gas will continue to rise.

Big article in the paper this week about the rising food prices and what's causing them. It's 5-6 factors creating a "perfect storm"

1. Trade restrictions on rice and grain in some Asian countries in an attempt to protect their own food supplies.
2. Increased demand in Asia. The wealthier the Chinese are becoming, the more grain they eat. And they are eating much more meat now, which requires around ten pounds of grain to grow one pound of meat.
3. Weather. There has been some bad weather in some parts of the world, temporarily disrupting some of the grain supply.
4. Biofuels. We are putting grains in the gas tank now more and more instead of in our stomachs.
5. Fuel prices are increasing the cost of raising and transporting food.

A few good sized famines and we should have another big assed war to go to.

Hey Tom - you aren't the only one reading The Economist - reference ... seems as though you were presenting their opinions as your own in post #5. Just sayin.

The Economist only reiterated what I also have been posting for some time (except a newest fact - bio-fuel).

I forgot to include another reason for major price increases. Massive and wasteful spending on an unjustified war and irresponsible economic stimulus will now appear on spread sheets. The resulting dollar devaluation further increases oil prices because the world has long been awash in too many dollars. In a previous post, I noted how some countries were suffering increased inflation due to too many dollars in their economy.

But as Cheney said, "Reagan proves that deficits don't matter." The resulting economic punishment is no accident. After all, those money games typically take four to ten years to appear as economic harm.

Massive oil price increases when nothing tumultuous occurred in the world. What happens when something serious happens to disrupt supply?

Never forget lessons of the 1970s when America's political agendas and a lying president made America so internationally unpopular (including an attempt to subvert the Australian government), when American oil imports exceeded 50%, when American products (i.e. GM cars) were routinely stifling innovation and foolishly blaming environmental, et al, when America was spending wildly using economic stimulus to mask economic mismanagement in government. And then something tumultuous happened. What is different today? We are still waiting for that something tumultuous to happen.

About six month ago, I suggested that everyone get their financial affairs in order; prepare for a serious economic downturn. We will not see the damage created by high oil prices for many years. That is how economics works. Everyone should be wary even of an unnecessary war that we have not yet paid for.

Happy "Mission Accomplished" - now five years old and still to be paid for.

They left off the cost of petroleum based fertilizer.

Those (ie the president) who deny oil prices are harming the economy also claim that this country is no longer as dependent on oil as it once was. Well, America almost never imported 50% of its oil until Nam. Those massive oil price increases causes little economic disruption for years. So again, we deny high oil prices will cause massive disruptions - still make vehicles so stupidly as to still have V-8 engines. The V-8 engine in any car is a benchmark in stupidity.

Just about everything is dependent on oil - even meat. So we have yet to see the real price increases. Let's see. Oil prices increased from $10 to $120 per barrel. Did your gas costs increase from $1.20 to $14.40 per gallon? Has your electric bill increased by a 10 factor? No. But parts that increase cost of energy have not yet been replaced, expanded, upgraded, or manufactured yet. Those numerous hidden costs, well, another example of spread sheets measuring the actual cost 4 to 10 years later.

Order everyone to replace their front lawns annually, and everyone will be richer - for a while. Four to ten years later, the resulting economic recession arrives when all those new lawns finally start to appear on spread sheets as no return on investment.

Largest SUV sales did not increase this quarter for the first time. IOW oil price is finally beginning to have some productive effects. Price finally has attacked the emotions of those who have been so in denial about as to threaten this nation's security, wealth, jobs, standard of living, etc. Those who kept saying make more crappy, inefficient and less safe products, blame the unions, blame foreigners, blame taxes, blame immigrants, blame all Muslims, blame myths about global warming, blame the French, etc are finally being hurt enough as to be forced to make intelligent decisions. Unfortunately their outright denial has been too long. Still, economic pain due to those denials is still to come. We have yet to see the many price increases and feel the pain made necessary due to higher oil prices.

Yes, higher fertilizer costs will be only one of so many punishments that have not yet appeared on economic spread sheets. Even true costs misguided ethanol production has yet to be felt.

I have a hybrid truck, I can put gas in it, or push it.

According to the testimony of one of the farmer organizations on C-Span the other night the amount of wheat and feed being diverted from US production is not significant and is having little to no impact on the price of gas or the price of food. It was an interesting discussion.

My dad has a friend who's running his suv on vegetable oil. He gets it from a fish and chip shop when it's ready to be dumped.

I would love to do it.

I think a lot of people would.

I'm not exactly sure how he does it, but at this stage, he pretty much gets his fuel for free other than the time it takes him to strain the crap out of it.

So the two 'oil men' running this country seem to have overlooked a major crisis and spent 7 years (5 with a one party government) doing almost nothing to reduce consumption.

Conspiracy or just plain old-fashioned incompetence?

And trying to drill in ANWAR and invading oil producing countries doesn't count. We have a 12 million barrel per day gap in domestic production versus consumption. Drastically lowering consumption is our only hope.

I agree with TW that oil and its byproducts are more valuable as an ingredient in plastics, fertilizer, paint, wax, cloth, etc. Burning it in our cars is probably the least productive use for it. At $100 per barrel, it's being priced as the valuable commodity it is. It was the 99 cent gas that was the anomaly.

We're going to have to play catch up here. We're in the same place the Europeans and the Japanese have been for the past decades. Gas is expensive. Drive smaller cars, scooters, etc.

The next president might be smart enough to get us some breathing room. The current resident of the White House has taken a pass on another critical issue of national security. History will not be kind to GWB.

Ethanol. It's 10% of the fuel you're driving around with today.

Google "Bakken formation".

Which is driving food prices higher.Canada has a shitload of oilsands, but it's already been promised to China.

Maybe we can drink their milkshake!*



*This is a reference to the recent fine film There Will Be Blood. It is not a spoiler. Thank you

Corn ethanol not culprit for food inflation

By Christine Stebbins

CHICAGO (Reuters) - U.S. food inflation is rising but don't blame the ethanol-based boom in corn prices, the head of global agriculture and food-industry research firm Informa Economics said on Monday.

Memphis, Tennessee-based Informa, formerly called Sparks Companies, said a study based on 20 years of price data shows that corn prices have minimal impact on the U.S. Consumer Price Index for food, which has been on the rise.

The study, released on Monday, "debunks the concept that the ethanol expansion is the underlying and main significant reason for food price increases," Bruce Scherr, Informa's chief executive, told Reuters in an interview.

"We're not saying that corn prices are cheap, that ethanol hasn't helped underpin the growth in the corn economy," Scherr said. "What we are saying is to blame corn and corn-based ethanol for all of the inflation associated with food and food prices ... is to grossly under-consider all the other forces at work."

http://www.reuters.com/article/reute...42557020071210

Not all, but a contributer.

Consider who may have an interest in seeing corn or other bio-fuels fail. Big Oil. And who has enough money to flood the press with expert opinions and other information management in an effort to maintain profit margin?

lol :king: , I admire your brand of funniness.

I saw this on one of those night time shows.

I'm ready!

'cept maybe here in america will be holding up our micky'ds for the grease. * shrug*

It isn't just Big Oil propaganda even though I'm sure they do add to it. Many environmentalists have doubts about corn and other bio-fuels because it will take food away from humans and cattle and more forested area will need to be cut down to replace the loss. But I do think this is more of a long termed concern than short.

The point is that it will take food away from humans only if we go 100% biofuel. I don't think that is a realistic goal in the near future. Currently the effect on the worlds food source is nothing.

You may be able to argue that is is small, but to say it is "nothing" is simply false. The Washington Post article I linked to said it was one of the top 5 reasons why grain prices have increased.

A short search shows that the number, 25% of US corn for biofuel, varies widely. The bottom line is that bio fuel is not a feasible solution to our energy problems. The problem has little to do with how much is available and more to do with the speculative costs of the grain in an effort to make a profit. There is plenty of corn to feed the US and still maintain exports. It is not the volume it is the cost of investors driving up the price. There is plenty of corn.

Someone answer me this. If my friends in the UK can drive small Toyota’s with diesel engines and get 50 or more miles per gallon why can't we get them here? Two road blocks... the oil industry and the auto makers. Nothing will change until we take existing industry and apply it to our cars and trucks. Ford plans on putting the Land Rover diesel engine in the F-150 for '09 with estimated gas mileage of over 30 mpg. No significant R&D, existing industry and putting it in use here. Until we force the hand of these two players nothing is going to change in the US.

Our food supply isn't the only factor with bio-fuels. We might need to keep making new farmland to keep up the supply of corn to both humans and bio-fuel and that can result in serious consequences.

Corn 101.

http://www.cattlenetwork.com/Content...ntentID=218804

Damn Merc., you're starting to sound a little like tw. Are you going to bring up the 90 HP per liter engine now too?

Most of the studies show it can't happen. We will never be able to supply all our needs via bio fuel, corn or otherwise. We need a confluence of factors to make it happen. Bio fuel may even give us a lower return for the release of greenhouse gases and subsequent exchange of energy, i.e. more greenhouse gas per unit of bio fuel produced and used. Bio fuel is not a panacea. The US will not run out of food or corn because of the diversion of use to bio fuel. We may decrease exports but many other countries are increasing the production of grains like soy as well as corn to fend off shortages.

No man, I drive a big truck. Sorry, I hope never to sound like tw. That's a bit scary.

I do think we need to significantly raise cafe standards and take away "average" mpg as a bench mark. The technology is there, we just need to make them do it.

Yes, bio-fuel is not the answer.

I get a kick out of the Extension Economist calculations and predictions. I think they should take some time to watch the Weather Channel, as they don't take Mother Nature's changing patterns, or capricious whims, into account.

Oh, and it's not just livestock feed and corn on the cob. Read the labels in the grocery store and look for corn and corn sweeteners, in the ingredients lists.

The rising cost of food in this country is directly related to the price of fuel and nothing else. Period.

Then how come the rise of food, led the rise of oil, by a year?

I haven't seen evidence of that in the US. I am talking only abou the rise in prices here in the US. I would interested in anything you have that I could read about the rise of US food prices a year ahead of the rise of our cost of gas.

From a Boston Globe article;Plus, don't you remember tw telling us how produce was skyrocketing last summer? :D

:bonk:

:biggrinha

I usually have a problem with phrases like 'always' and 'nothing else'. While I'll agree that energy costs in the supply chain have a lot to do with it, you can't discount natural disasters and drought (possibly more frequent/damaging due to global warming) and rising demand in third world nations that are becoming wealthier.

Originally Posted by TheMercenary:
Originally Posted by richlevy:
Note my comment "in this country", frankly I am not as concerned about third world nations issues as I am about the costs directly affecting our country.

But demand, and the cash to buy, in the rest of the world affects the prices here too.

This was very good.

Who's Fueling Whom?
Why the biofuels movement could run out of gas

By Richard Conniff
Smithsonian magazine, November 2007
I first started to think that the biofuels movement might be slipping into la-la land when I spotted a news item early this year about a 78-foot powerboat named Earthrace. In the photographs, the boat looked like a cross between Howard Hughes' Spruce Goose and a Las Vegas showgirl. Skipper Pete Bethune, a former oil industry engineer from New Zealand, was trying to set a round-the-world speed record running his 540-horsepower engine solely on biodiesel.

Along the way, he spread the word that, as one report put it, "it's easy to be environmentally friendly, even in the ostentatious world of powerboating."

Well, it depends on what you mean by "easy." Bethune's biodiesel came mostly from soybeans. But "one of the great things about biodiesel," he declared, is that "it can be made from so many different sources." To prove it, his suppliers had concocted a dollop of the fuel for Earthrace from human fat, including some liposuctioned from the intrepid skipper's own backside.

Continues:

http://www.smithsonianmag.com/specia...el-200711.html

By using the skipper's butt it also lightens the load. :D
Another good article from a great magazine, read it cover to cover every month.