I agree about nuclear energy, but I don't think that would make much of difference in oil prices. Petroleum is like 1% of the fuel used to generate electricity.
Actually oil costs the oil companies around $20 or more to produce a barrel of oil these days. On top of just basic production/refining costs, the oil companies have to factor in the cost of facilities they built to find the oil along with any government royalties and taxes that are due. The Saudi's and their national oil company can produce oil for around $2-3/barrel, but this oil is not accessible by the likes of Western oil companies.
if it costs oil companies $20/barrel... thats still 400% profit! and if the saudis can produce a barrel for $2...
But profits are totaled after expenditures are taken out, this includes taxes, royalties, fees, etc. No?
Sooner or later the price has to come down, if the price of oil just continually goes up then people won't even buy gas to start with, and yeah oil refineries are an important step, especially building more of them, you can have all the oil in the world but if you only have a limited number of refinaries to turn them into usuable gas, then prices will be sky high. Aren't companies now banned from investing and drilling in oil reserves in countries? I mean, all the oil in Saudi arabia seems to be limited to the government only.
Gas Prices Could Skyrocket to $4.50 Per Gallon, According to New Report by CIBC World Markets http://www.associatedcontent.com/pop_print.shtml?content_type=article&content_type_id=535645 By David Anderson A new report by CIBC World Markets is predicting that gas prices could skyrocket to as high as $4.50 a gallon in the near future. A press release issued by the group described the reported content. The report claims that increased demand will create new pressures on the world's oil supply, leading to further increases in gas prices. Increased demand for oil in the world's developing countries is expected to combine with diminishing supply to lead to increased gas prices. The report also noted that projects to develop the world's remaining unexploited oil fields are facing unexpected delays. By 2012 the oil supply could drop by as much as 8 million barrels a day below U.S. Department of Energy and International Energy Agency projections, the press release indicated. CIBC conducted a study of close to 200 new oil projects that were supposed to begin production within the next half decade. It projected that most of these projects will experience delays, and that start times for production had been grossly underestimated in many cases. Jeff Rubin, Chief Strategist and Chief Economist for CIBC World Markets, claimed that such delays will cause Canada and Venezuela to reduce oil production projections for 2012 by more than 700,000 barrels a day. Depletion of existing oil fields is expected to increase to a rate of four percent, which could cut global oil production by a rate of up to 4 million barrels per day annually. "Even holding the current depletion rate constant over the next five years, we must produce nearly 20 million barrels per day of new oil just to offset what will be lost through depletion during this period," Rubin said. The report also countered International Energy Agency projections that a supply increase of 10 million barrels per day could be realized by 2012. Instead, the report estimated that the increase would more likely lie at around 3 million barrels per day, due to project delays and the depletion of existing oil fields. Increased demand for oil in countries like China, India, and Russia could push gas prices as high as $150 a barrel by 2012, according to Rubin. He also projected that oil consumption in OPEC nations would increase along with gas prices. Higher incomes produced by rising gas prices would lead consumers in OPEC nations to increase their own oil use, he explained. By 2012, Rubin expects to see demand for oil to fall 10 percent, or about 2 million barrels per day, because of skyrocketing prices.
China and India's massive growth is fueling a huge demand for barrels that supply just can't meet while government regulation is limiting the training of new coopers.
Chindia is growing demand, yes, but you don't know much about the fundamentals of oil if you think that they justify a $100 price.
They absolutely don't (yet), but as with all things: if you say it enough times, then it must be true...
World not running out of oil, say experts Carl Mortished, World Business Editor Doom-laden forecasts that world oil supplies are poised to fall off the edge of a cliff are wide of the mark, according to leading oil industry experts who gave warning that human factors, not geology, will drive the oil market. A landmark study of more than 800 oilfields by Cambridge Energy Research Associates (Cera) has concluded that rates of decline are only 4.5 per cent a year, almost half the rate previously believed, leading the consultancy to conclude that oil output will continue to rise over the next decade. Peter Jackson, the report's author, said: “We will be able to grow supply to well over 100million barrels per day by 2017.” Current world oil output is in the region of 85million barrels a day. The optimistic view of the world's oil resource was also given support by BP's chief economist, Peter Davies, who dismissed theories of “Peak Oil” as fallacious. Instead, he gave warning that world oil production would peak as demand weakened, because of political constraints, including taxation and government efforts to reduce greenhouse gas emissions. Speaking to the All Party Parliamentary Group on Peak Oil, Mr Davies said that peaks in world production had been wrongly predicted throughout history but he agreed that oil might peak within a generation “as a result of a peaking of demand rather than supply”. He said it was inconceivable that oil consumption would be unaffected by government policies to reduce carbon emissions. “There is a distinct possibilty that global oil consumption could peak as a result of such climate policies,” Mr Davies said. The BP economist's remarks were echoed yesterday by Mr Jackson. “It is the above-ground risks that will influence the rate [of oil output],” he said. Cera analysed the output of 811 oilfields, which produce 19 billion barrels a year, out of total world output of 32 billion. These included many of the giants, including Saudi Arabia's Ghawar, the largest known oilfield, which has been at the centre of the debate between peak oil analysts and their detractors. In his book Twilight in the Desert, Matthew Simmons of Simmons & Co, the consultancy, said the big Saudi fields reached their peak output in 1981 but Cera yesterday said that Ghawar was not failing. “There is no technical evidence that Ghawar is about to decline,” said Mr Jackson. Cera reckons that oil output, including unconventional oil, such as tar sands, could allow oil to peak at much higher levels of as much as 112 million barrels per day, with average rates of more than 100million bpd. The Cera analysis targeted oilfields producing more than 10,000 barrels a day of conventional oil and concluded that overall output was declining at a rate of 4.5 per cent a year and that field decline rates were not increasing. This is much lower than the 7 to 8percent average rate that is generally assumed in the industry. Typically, Peak Oil theorists believe that the output of oil reserves can be plotted on a graph as a bell curve, rising to a peak and then falling rapidly. It was proposed in 1950 by M King Hubbert, a US geologist, who successfully predicted the peak of onshore oil production in the United States. His analysis is disputed by many geologists today, who argue that technology has changed the equation, allowing oil companies to produce more oil from reservoirs than was previously possible. Meanwhile, increases in the price of oil has made the extraction of difficult reserves economically viable. _________________________________________________ Is it possible to get the truth out of these 'experts'? Reminds me of the global warming debate.
