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.