That's what they said back in the 70s.Now that's a chilling comment by a official spokesperson. If we don't have enough refining capacity now to meet demand, is expanding the capacity of existing refineries, 25% which sit in Hurricane central, ever going to be enough? From a demand-side, I doubt it. I doubt it.
If conservation were really important to him, he would have pushed automakers for gains in fuel economy.
GW's priorities are to help his buddies and that is it.
"Good job Brownie..."
"We don't we just let these here energy lobbyists write the policy, I've got a vacation to go to and can't be bothered with it.."
Pfft.
Beats the one I had last night ... where I went to a Spurs pre-season game wearing nothing but blue fuzzy bunny slippers.
I had a dream that a hamburger was eating me!
"blue fuzzy bunny slippers"
Why do you feel the need to hide only your feet?
The fuel prices are nuts.
In a 3-mile stretch here on I-35, diesel is anywhere from $3.29 to $2.65. I don't think that anyone knows what the is going on. It seems as though diesel has shot up 60 cents overnight, which sounds like gouging to me - no way the markets have gone up that quickly, I don't care what the demand is.
FINALLY some one from this administration is talking truth to power... I wonder what * thinks? (Simmons is also an energy advisor to President Bush.)
Good Morning America!Matt Simmons believes the natural disaster may well be remembered as the start of "our great energy war." "We're almost at the verge of having real energy shortages," Simmons said last Friday, when he issued a wake-up call to a standing-room only audience at the Center for the Arts. "We could be looking at $10-a-gallon gas this winter."
In direct opposition to the Bush administration's energy projections earlier this year * which assumes Saudi production, now at 10 mbd, would increase another 12.5 mbd * Simmons said, "The likelihood of Saudi Arabia being able to produce 20 to 25 mbd is so low that it should almost be deemed impossible. The likelihood that they could hit 12 mbd and keep this up for 20 years, let alone 50 years or more, is not very high. "We are in a deep energy hole," he concluded. "We must create a Plan B to ensure the future of energy, or we won't have a future of energy."
Finally, Simmons advocated establishing a conservation plan to determine ways to do more with less. "We need to address the shipment of goods," he said, "which is by far the single worst way we use energy. Public Enemy Number One is ironically not the SUV; it's large trucks going long distances over our highways." To increase efficiency and cost savings, railroads and freight cars are preferred transport modes.
"One final word about Katrina and Rita," Simmons concluded. "They were our Fort Sumpters, but we needed a wake-up call."[/b]
From The Wilderness
It's gonna be a long, long winter.
Yahoo FinanceI had an interesting conversation this morning with a Haliburton employee just back from Saudi Arabia. His conversation confirmed what we have been hearing. He said: "people think Saudi Arabia has a lot of oil, but they have been injecting water to increase production for years, and now the production from their giant fields is depleting very rapidly. The Saudis are in panic, pulling in rigs from everywhere, punching more holes in the ground to get quick production to stave off rapid old field production decline, and to keep up appearances. Workers are there from many nations to drill the sites, but the new wells are not very prolific."
Reading between the lines, if Ghawar is still producing at gargantuan rates, why the race to get so many rigs to drill so many wells? And the new well production combined with flowing old well production should be showing huge increases in Saudi production supply. But the monthly reports of Saudi production has not been impressive. For example, last month, the Saudis reported an increase of 50,000bd, mostly sour crude. If Ghawar is depleting rapidly, then the Saudis have a major problem, for not only must they drill more to keep their production stable, but also to make up for the declining production of other OPEC producers. Like a juggler with too many plates in the air, at some point it can all crash down. Simmons stated that once Ghawar starts to go, it will drop very fast.
The old saying about the Saudis is you don’t listen to what they say, but you watch what they do. The account of frantic drilling activity and rig acquisition suggests they are in trouble. My friend’s perception is not just his personal one, he said, but one widely shared by those working the oil fields. FWIW
You're quoting this guy as a source? You could buy two $5 loaves of bread for that."We could be looking at $10-a-gallon gas this winter."
If fuel got to $10/gallon, the US would starve to death, literally. You couldn't afford to buy food.
Dan, stimulation of oil wells is quite common, particularly steam injection. The oil is still there; it just becomes harder to recover. Oilfields in Saudi were so easy to recover back in the day that all they had to do was sink a hole and perforate; now they'll have to pay a little more to get it out of the ground and their disposable take on the energy $ will go down - their costs will come more in line to what it takes to produce a barrell of oil domestically. You should see the wells in California; I have personally logged two different wells 20 feet apart (the oil is highly viscous and does not migrate through the rock well).
This suggests that they are trying to make a load of money while oil prices are through the roof. Or as the old timer's say: "Make hay while the sun's shining".The account of frantic drilling activity and rig acquisition suggests they are in trouble. My friend’s perception is not just his personal one, he said, but one widely shared by those working the oil fields.
Kind of a no-brainer you'd think.
$10/gal is stretching it. We're not facing those kinds of shortages... yet.You're quoting this guy as a source? You could buy two $5 loaves of bread for that.
If fuel got to $10/gallon, the US would starve to death, literally. You couldn't afford to buy food.
But we by no means would starve to death with $10 gas. Britain is around $8 right now, and they look well-fed to me. And Americans on average have significant "energy reserves" anyway.
It will suck, and pretty much will put an end to the suburban American way of life, but it won't kill us.
One reason the Saudis are freaking out is because with oil at $65, many more non-OPEC sources of oil become viable, and the cartel starts to lose control of the market.Dan, stimulation of oil wells is quite common, particularly steam injection. The oil is still there; it just becomes harder to recover. Oilfields in Saudi were so easy to recover back in the day that all they had to do was sink a hole and perforate; now they'll have to pay a little more to get it out of the ground and their disposable take on the energy $ will go down - their costs will come more in line to what it takes to produce a barrell of oil domestically. You should see the wells in California; I have personally logged two different wells 20 feet apart (the oil is highly viscous and does not migrate through the rock well).
Yes on all accounts.
Yup.
The phenomenon is easy to grasp with a couple of easy analogies.
Imagine someone in a hot air balloon dumps a bag of $100 bills over your house and you get to keep all that money.
You would pick up the bills that are nearest to you on the ground as they would require the least amount of effort to get, and then you would work your way around to the stuff on top of your car, then get up on a ladder and get up on the roof and up in any trees. The stuff that takes the least amount of effort gets picked up first, then you will gather the stuff that is harder to reach after you can't find any easy stuff.
The same is true for oil exploration and exploitation on the part of our oil-using civilization. We picked up the cheap, easy to get stuff and it is running out.
Now imagine that you are a person trapped on a deserted island. You need 2000 calories to live and the only food on the island is in the form of some fruit trees in the middle of the island that drop fruit regularly on the ground. You can walk over, pick up and eat a fruit at a cost of say, 10 calories, and get 500 calories from each fruit.
You will need 4 fruits (plus a very small fraction) to survive per day.
Now imagine that the easy fruit on the ground is gone, and you have to climb up the tree, go out onto a branch and laboriously saw the fruit off the tree. This takes 200 calories for EACH fruit.
You will now need 6.67 fruits per day to survive and your total caloric intake has gone from 2040 calories to over 3300. Your body still only needs 2000 calories, but you had to spend 1300 calories to get that.
The same is true for oil energy. The "return" on each new barrel of oil gets slimmer, so even if the world's economy/energy needs weren't growing our energy consumption would.
BUT
The world economy is growing. For each 1 percent of GDP growth, we need 1 percent PLUS X percent with the X percent being determined by the efficiency of our energy sources.
SOOOO....
If supply is constant or shrinking, and overall demand is going up, where does the "price point" go?
You guessed it, UP.
High enough that competing energy sources will eventually become more cost-efficient. I think faster than the oil companies expect.
Low density suburbs are only possible at this point with cheap gasoline.
Imagine the effect on real estate if everybody suddenly figures it is cheaper by a wide margin to live closer to where they actually work.
I think the biggest socio-economic effect of all this is that American Cities will start becoming more and more dense and the crap around the edges will shrivel somewhat.
The economic implications of this are staggering, considering how much capital is tied up in homes, and how deep into debt so many people are. A lot of americans have banked on their homes appreciating and that may well not be the case.
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