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trendal
J♠



Registered: 04/17/01
Posts: 20,815
Loc: Ontario, Canada
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The Peak Oil Crisis: Our Government is Speaking
#7638407 - 11/15/07 05:46 AM (16 years, 2 months ago) |
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The Peak Oil Crisis: Our Government is Speaking Written by Tom Whipple Thursday, 15 November 2007
You have to be quiet… and listen very carefully, for our government is trying to tell us something. If the news were good, of course, the White House would announce it at the daily press conference. If the news were very good, the President himself might come out into the rose garden and tell us the news himself.
But this news is bad, perhaps very bad, so the government relies on a third tier civil servant to break the bad news gradually so as not get the people too upset or cause a run on anything—banks, mutual funds, gas stations, or grocery stores. The bad news of course is something that many of us have been aware of for many months; this is likely to be a very tough winter for energy prices.
On Monday, Guy Caruso, head of the U.S. government's Energy Information Administration broke the bad news; although he never mentioned the dreaded words “peak oil,” the situation he describes is coming awfully close. The first announcement was that according to EIA models, gasoline prices are due to go up another 20 cents a gallon in the next few weeks. Considering that the AAA had just announced that the average U.S. price was now $3.10, having gone up by 30 cents in the last few weeks, this piece of news made headlines from coast to coast.
To see gasoline at new highs around $3.25 in December (and on the order of $3.75 on the West Coast) suggests that unless there are major changes such as a sharp and sudden decline in economic activity or OPEC discovers a spare million or two barrels a day, then we are all likely to be seeing $4 a gallon and higher next spring.
In recent weeks, there has been much commentary to the effect that the U.S. economy is so strong that it can shrug off $100 oil. Analysts note that gasoline is still a smaller part of the average family’s budget than it was 30 years ago and America does so little manufacturing these days that fuel is not a major part of production costs. Nonetheless, doubts are starting to pop up here and there. They note that this time high gasoline prices did not come from a political problem but are the result of a gradual narrowing of supply and demand which is unlikely to go away until there is a considerable cut in demand.
Caruso’s real message was not the headline grabbing 20 cents gallon, but that the EIA is coming to believe there has been a major change in the oil markets. In the Administrator’s words, “We think we're in a different era with relatively higher real oil prices going out through 2030. Rising demand coupled with ‘insufficient’ investment, lack of access to resource bases in the U.S. and elsewhere, and a ‘dramatic rise in the cost of doing business' are boosting prices.” Caruso added that he expects crude oil prices to remain high through the first three months of 2008, and warned that supplies coming onto the market after that will be more costly.
In a swipe at a new Saudi mantra, echoed by many on Wall Street and in the media, that speculators, traders, and hedge funds are responsible for high prices, Caruso said that while speculators may have helped push the price rise, their impact "is really a symptom of market fundamentals" because demand for oil remains high.
Over in Paris, the OECD’s International Energy Agency monthly report says that "There are strong indications that high prices are depressing demand," and cut its forecasts for demand during the remainder of 2007 and for 2008 by a small amount.
The IEA ominously reports that the OECD still continues to draw down stockpiles by nearly 30 million barrels in September and 21 million in October. Japanese crude stocks are at close to the lowest level in 20 years. Although OECD stockpiles are still close to average, the trends are not good. Since summer, the world has been using more oil than it has been producing, a situation that can not go on much longer without devastating consequences.
OPEC production remains the key to how quickly the troubles come. World production has been on a plateau for two years now and few knowledgeable observers expect that it will ever get more than a couple of million barrels a day beyond current production levels before settling into the long decline that will signal the end of the oil age.
Currently OPEC is on the books to increase production by an 500,000 barrels a day starting on November 1 and there are early indications that production did in fact increase a bit last month. Given the secrecy surrounding production numbers in many OPEC countries, it usually takes a couple of months to sort out what has actually happened.
In the meantime, all indications are that unless we have a major demand-killing economic setback in the next few months, the 500,000 barrels a day increase will not be enough to prevent higher prices so a major effort is underway to convince the Saudis to increase production still further. There are many who doubt that the Saudis really have much spare capacity left, especially in marketable grades of light oils. This may be the reason they continue to rebuff requests for higher production with an emphatic “not at this time.”
The upshot of all this should be clear in the next three to six months. Either OPEC can produce another 500,000 barrels a day or more on a sustainable basis, or they can’t. Either the world economy will continue to grow merrily along at the IMF projected 4 percent growth rate or economic difficulties, perhaps lengthy ones, will set in.
There is clearly some kind of major turning point in the industrial age just ahead and this may be what our government is trying to tell us --- or at least should be.
http://www.fcnp.com/index.php?option=com_content&task=view&id=2089&Itemid=35
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Once, men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them.
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Minstrel
Man of Science


Registered: 03/15/05
Posts: 1,974
Loc: Hogtown
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: trendal]
#7638550 - 11/15/07 07:58 AM (16 years, 2 months ago) |
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Since when has the government been truthful to you?
The only thing this administration is good at is causing fear.
Let the fear of high gas prices drive your actions as an american.
There is no energy shortage.
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shaggydogman
Stranger


Registered: 04/20/07
Posts: 672
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: Minstrel]
#7638618 - 11/15/07 08:47 AM (16 years, 2 months ago) |
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Petrol costs $7.93 per gallon in the UK! $5.31 of which is tax! The tax is flat which means oil prices have less of an effect on prices at the pump. I spend an average of nearly $400 per month on petrol!
Quote:
The upshot of all this should be clear in the next three to six months. Either OPEC can produce another 500,000 barrels a day or more on a sustainable basis, or they can’t. Either the world economy will continue to grow merrily along at the IMF projected 4 percent growth rate or economic difficulties, perhaps lengthy ones, will set in.
Draining all the finite oil reserves of the planet can never be sustainable! To me it seems a really easy choice for the OPEC countries. Sell more of the finite oil they have now at a high price or sell it later at a higher price. Now if I was in that position the only way I would sell it now was if I was broke or someone had a gun at my head!!
I have never quite understood the continual need for economic growth. Is it to keep up with population? Cause it seems much better just to stay at the same or lower rate.
If economic difficulties mean we slow down consumption of the planets resources then bring it on! We should stop being so greedy with what we use. It might be a hard change but it is one that is gonna have to be done some time or another.
-------------------- Rye -- WBS | Grain LC -- G2G | Bulk -- Monotub | 50/50 -- Late Casing -- A Pinning Strategy Disclaimer: My opinion is subject to change at short notice subject to but not limited by new information and knowledge being made available.
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Shroomism
Space Travellin



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Posts: 66,015
Loc: 9th Dimension
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: trendal]
#7638668 - 11/15/07 09:06 AM (16 years, 2 months ago) |
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Good. Down with fossil fuels. I hope and pray the entire industry collapses.
And yes, I do know what worldwide catastrophic consequences would result from such implications. It wouldn't be the end of the world though. Just the beginning of a much better one.
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trendal
J♠



Registered: 04/17/01
Posts: 20,815
Loc: Ontario, Canada
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: Minstrel]
#7638740 - 11/15/07 09:25 AM (16 years, 2 months ago) |
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Let the fear of high gas prices drive your actions as an american.
*Canadian 
There is no energy shortage.
Such a simplistic view of things 
But as for oil...just because there is no shortage where you are, doesn't mean there is no shortage! There are shortages of oil products (gasoline & diesel), they just aren't happening in the first world. As the price of oil goes up, it's the poorest people (and countries) that cannot afford it first. That in turn leaves more oil for us in the first world - at the new price, of course.
Look to Nigeria, China, Malaysia, or even North Dakota (specifically diesel fuel around harvest time this year).
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Once, men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them.
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zorbman
blarrr



Registered: 06/04/04
Posts: 5,952
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: Minstrel]
#7638871 - 11/15/07 10:08 AM (16 years, 2 months ago) |
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Quote:
There is no energy shortage.
-------------------- “The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.” -- Rudiger Dornbusch
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robbyberto
Water Boy


Registered: 05/11/06
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: zorbman]
#7638902 - 11/15/07 10:15 AM (16 years, 2 months ago) |
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Well its true but it doesn't apply to fossil fuels. We just aren't tapping into the energy sources we need to which include solar, geothermal, nuclear, wind etc. We should start to see a renewed interest in alternate fuel sources for personal transportation if the price of oil continues to rise. Hopefully this transition to a better fuel source will have a fire lit under it.
-------------------- “People say having kids is life changing, well that doesn’t necessarily mean a good thing, does it? I could take one of my legs off. That would change my life.” -Karl Pilkington
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zorbman
blarrr



Registered: 06/04/04
Posts: 5,952
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: robbyberto]
#7638917 - 11/15/07 10:20 AM (16 years, 2 months ago) |
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Quote:
Hopefully this transition to a better fuel source will have a fire lit under it.
Hopefully it isn't flammable.
-------------------- “The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.” -- Rudiger Dornbusch
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Silversoul
Rhizome


Registered: 01/01/05
Posts: 23,576
Loc: The Barricades
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: trendal]
#7638936 - 11/15/07 10:25 AM (16 years, 2 months ago) |
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I was hoping the prices would rise more gradually so we would have more time to make the switch to biofuels(which in part will mean being able to create cellulosic ethanol). Oh well. Guess we'd better get on the ball soon. Maybe car manufacturers will start coming out with more hybrid models.
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robbyberto
Water Boy


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Re: The Peak Oil Crisis: Our Government is Speaking [Re: zorbman]
#7638941 - 11/15/07 10:26 AM (16 years, 2 months ago) |
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That would be a plus.
-------------------- “People say having kids is life changing, well that doesn’t necessarily mean a good thing, does it? I could take one of my legs off. That would change my life.” -Karl Pilkington
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Leanin
Student of theIron Game


Registered: 04/18/06
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: robbyberto]
#7638952 - 11/15/07 10:28 AM (16 years, 2 months ago) |
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fuck em all
they are just taking advantage of the RELIANCE ON OIL. governments wont try to lower it cuz they want their cut too.
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Minstrel
Man of Science


Registered: 03/15/05
Posts: 1,974
Loc: Hogtown
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: trendal]
#7638964 - 11/15/07 10:31 AM (16 years, 2 months ago) |
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Canada has huge deposits of oil.
Oil scares in the states, though are commonplace, and deliberate, because they import most of theirs.
They don't yet realize it's because of their shitty dollar that they are gonna be paying more.
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AlteredAgain
Visual Alchemist



Registered: 04/27/06
Posts: 11,181
Loc: Solar Circuit
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: Silversoul]
#7638966 - 11/15/07 10:31 AM (16 years, 2 months ago) |
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too bad they already killed the electric car.
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mushbaby
woodswalker




Registered: 09/30/06
Posts: 2,645
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: AlteredAgain]
#7639642 - 11/15/07 12:51 PM (16 years, 2 months ago) |
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When I was very young there was a so-called gas/energy shortage. A couple of other "oldsters" here might remember. THis was in the 70's.
The gas prices were about what they are now. It was supposedly so bad they were rationing. Depending on your birthdate or registration or some crazy shit like that you could buy gas on this day or that day.
Then miraculously "new oil reserves" were found and the prices dropped (eventually) back down to less than a dollar a gallon. I find the similarities disturbing.
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Silversoul
Rhizome


Registered: 01/01/05
Posts: 23,576
Loc: The Barricades
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: mushbaby]
#7639648 - 11/15/07 12:53 PM (16 years, 2 months ago) |
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It was my understanding that that oil shortage was caused by an embargo by OPEC. It had nothing to do with new oil reserves.
http://en.wikipedia.org/wiki/1973_oil_crisis
Even with new oil reserves like ANWR, I've heard it estimated that we would need to discover another Saudi Arabia every 10 years to keep up with consumption.
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mushbaby
woodswalker




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Posts: 2,645
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: Silversoul]
#7639684 - 11/15/07 01:03 PM (16 years, 2 months ago) |
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It could be, I haven't done my research.
I lived in So Cal at the time. My mother and grandmother were driving in the desert (past El Centro) and on in Western Arizona for their job. I absolutely swear that they told me more than once when I was growing up that they saw oil trucks dumping oil out in the desert.
They aren't ones to tell wild stories. They did stop and talk to a truck driver. He told them that due to the rationing there was no demand and even though he thought it was a waste he was just doing his job. Call me crazy if you must but these stories have always made me feel it's more manipulation than anything.
I am all for the alternative fuels. But think it has to stay somewhat diversified. If say everyone goes to a biofuel like corn what would happen to energy prices after a bad drought or flood?
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beneath
One Way Street


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Re: The Peak Oil Crisis: Our Government is Speaking [Re: Silversoul]
#7639687 - 11/15/07 01:04 PM (16 years, 2 months ago) |
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i hope we run out of oil as soon as possible.
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trendal
J♠



Registered: 04/17/01
Posts: 20,815
Loc: Ontario, Canada
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: beneath]
#7639696 - 11/15/07 01:06 PM (16 years, 2 months ago) |
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We're only halfway there
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Once, men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them.
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Silversoul
Rhizome


Registered: 01/01/05
Posts: 23,576
Loc: The Barricades
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Re: The Peak Oil Crisis: Our Government is Speaking [Re: mushbaby]
#7639711 - 11/15/07 01:09 PM (16 years, 2 months ago) |
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Quote:
mushbaby said: If say everyone goes to a biofuel like corn what would happen to energy prices after a bad drought or flood?
That's why corn is not the best biofuel crop. There have been recent advances in making cellulosic ethanol, which would allow us to use agricultural waste as well as common prairie grasses such as switchgrass, which grows naturally with no fertilizer or pesticides needed.
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Cowgold
Bullshit


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Re: The Peak Oil Crisis: Our Government is Speaking [Re: trendal]
#7639739 - 11/15/07 01:14 PM (16 years, 2 months ago) |
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Shaggydogman said, "I have never quite understood the continual need for economic growth. Is it to keep up with population? Cause it seems much better just to stay at the same or lower rate."
I think the biggest reason there is a constant increase in demand is that there are several nations experiencing industrial booms. China's economy, for one, has been growing rapidly and competes with us for the same oil reserves.
I'm not worried about it. The biggest impact anyone of us will feel is higher prices. Why not off-set the higher prices by investing in oil.
I think businesses that have a stake in alternate fuels should have investments in petroleum also.
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