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O/T Long Term Hope For Oil Price Stability

Discussion in 'Uncategorized Threads' started by School Teacher, Nov 9, 2007.

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  1. School Teacher

    School Teacher Well-Known Member

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    This morning’s news contains the announcement by Brazil's state oil company that it has discovered as much as 8 billion barrels of light crude in an ultra-deep field off the coast of Rio de Janeiro, an amount that could help transform the country into a major world oil exporter.

    Last week, there was a news article about a discovery of a breakthrough new method that may allow the recovery of billions of barrels of oil from oil shale located in the Western United States. The size of this discovery, as memory serves, was as great as or greater than the oil deposits in Prudhoe Bay, Alaska.

    Canada is developing a process to recover oil from its massive oil sands deposits near Alberta. In recent years, oil sands and heavy oil development have been so successful that these resources now account for more than half of Canada's crude oil production.

    Here in Kentucky, Peabody Coal is planning a huge plant to recover synthetic oil and natural gas from massive coal deposits in Western Kentucky.

    Maybe if we can just hang in there, the United States will be able to meet its energy need needs without relying on the Middle East.

    The price per gallon may be high but at least we should have some stability.
     
  2. pendennis

    pendennis Well-Known Member

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    School_Teacher, I don't see much hope in getting oil prices down to reasonable levels any time soon. The folks dealing in futures are just having too good a time by driving prices based on naturally occuring events, such as winter North Sea storms, and summer hurricanes in the Gulf of Mexico.

    It's always good to see that there are alternatives to traditional sources. However, there is too little in resources, and too much in costs for shale deposits and synthetic costs to bring reasonable costs to the market.

    Brazil could probably do a lot, if they don't become a member of OPEC. However, there's just too much profit out there to ignore a high profit commodity which is way over-priced.

    I'm originally from Kentucky, and there was talk in the mid-70's of creating synthetic oil from coal resources. However, then as now, there's just too much in start-up costs and too long a time in earning real profits for this to be effective.

    The solution will be for major production of oil sources which will drive down the cost per barrel. An announcement for drilling in the Gulf of Mexico, ANWR, and off the Pacific coast, would probably cause the price of oil to drop back to $30/bbl, but not before then.

    Parallel development of synthetic sources (shale, coal gasification and liquifaction) will have to been done in parallel, in order to allow an orderly shift from well-drilled oil.

    PS - From where in Kentucky are you? I'm originally from the Louisville area.

    Best,
    Dennis
     
  3. Dahaub

    Dahaub Active Member

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    Tom I am with you on that one. Just watch how the price per barrel will hang where it's at for the longest time before the new discoverys in the costal waters of Brazil and the western US will affect the current prices. I doubt that there will be any lowering of the price for at least 5 to 8 years. That's the opening date of the next big refinery that is being added to the existing one at Wood River Illinois. That is a 3 billion dollar addition fellas. Not just another unit or a new line it's a big one. We will have found new supplies by then also. How much of Russia is left un-explored that would be a good place to start. It's a tough call but when the price of something gets set high how often have you ever seen it drop back to what it was before? It's been over a year since we had any two dollar gas around here. Then that price lasted only for a few days. Dan
     
  4. smokerz

    smokerz TS Member

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    China and India are becoming huge black holes which will suck up all additional production from anywhere/everywhere, and they will pay any price.

    China has trillions of US Dollars to spend.

    Our only hope rests on two fronts, neither of which is being pursued with much enthusiasm-


    Conservation

    Nuclear power
     
  5. bigdogtx

    bigdogtx Well-Known Member

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    It is good that there has been a bunch of oil found. Problem now is turning it into petrol. It will take several YEARS and the wonderful "envirionmentalists" and weak kneed politicians will just keep cowtowing to them.
     
  6. KRE

    KRE TS Member

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    The energy problem could be solved with a different train of thought and action. That said, all we (America) are going to do, is run our lips and open our wallets.

    We created the problem with high priced oil, as well as the China & India issues. One day this country might wake up and understand nothing is without risk.

    That little shovel we were useing to line our pockets, now has a whole dug we can't see out of. Now don't get me wrong, I love this country and much of my lifes work was spent protecting her. We have give away/lost more than money, so the cost of oil is nothing we did not bring on ourselfs.

    We were at a cross roads in the early 70's and took the easy way out, the
    pay-back payday is here. Remember we reep what we settled for.

    Walking past a dollar for tomorrow, to pickup a dime today, must be some of that new math?

    KRE
     
  7. Dahaub

    Dahaub Active Member

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    Jimmy Borem I was told by a petroleum engineer that all the oil one can get out of a well is 35%. Then after the years of pumping or flowing the oil up out of the ground they have to move the well. Sometime several years ago on some smaller producing holes when the redrill was done they went in at a slant and when the hole was fractured they put multiple holes in the pipe and got more oil that way. It's been done for somewhere close to 40 years. I don't know if the oil in the Arabias will be gone in 20 years but I really doubt it. I think they will mysteriously find more fields. Don't you think the oil powers that be are sitting on major oil finds right now? If more is flowing they would take less money for the amount sold so why sell a lot when the amount they are selling now is way high and they are satisfied with that? I remember when they were hitting those enormous holes in Alaska. I don't remember what the price of oil was at the time , less than 10 a barrel, but if the hole wouldn't produce more than 6000 barrels a day it was capped. I just wonder how many holes are capped and waiting to be put in production. This isn't a secret it was on the news and documentaries made at that time. I also knew a fella who was up there drilling and he had told his brother about it. Basic economics at the time now those holes would be major money makers. I wonder if when they add the second pipeline in Alaska the original will be replaced also? Wouldn't it be exiting to work on something as big as that again? Dan
     
  8. skeeter

    skeeter TS Member

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    School teacher,


    Current world crude oil consumption is about 85 Million BPD, or about 31 Billion barrels per year. Your 8 Billion barrel Brazil find, if true, is enough to run the world for about 3 months at current levels - and that's without counting increases in use due to China, India.


    Regarding Coal-to-gas, it has been tried by this country in the past, and is a horrible process economically as well as environmentally. My city is the location of a what used to be one of the hugest coal gasification plants in the country, but they converted it to coke production because it was just so economically unviable. I currently heat my house with gas from this very company, and they buy it all off the commodity market...not a bit of it comes from those trainloads of coal that go in there - that is all made into coke for industrial fuel for things like blast furnaces for making steel.


    It also requires tremendous amounts of water, and with the recent drought and massive construction of water-consuming Ethanol plants, the water consumption of this process could be a deal-stopper in itself, setting aside petroleum economics.


    Regarding the oil sands - saying something is as big as Prudhoe Bay isn't really saying much in the greater scheme, because Prudhoe Bay is already on a downward arc of production, and its glory years are over (and our current dependence on M/E oil was developed _with_ Prudhoe Bay on-line at full production, remember). If all of the goodies in the oil sands could be recovered, it would still only be a fraction of our need.
     
  9. comp 1

    comp 1 Well-Known Member

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    ALL YOU GUYS ARE FULL OF IT. The price of oil has nothing to do with scarcity of oil,the world is awash in oil--it has nothing to do with refinery capacity ;just look at the gas tankers on the road every time the price jumps---they're everywhere moving as much product as possible--every single s.o.b. from futures traders to oil co.'s to individual station owners are jumping on the band wagon because these a##holes have convinced people like you that there's a problem--the federal and state gov't.s are getting rich in tax revenue and have no intention of helping--do any of you know that if you invest almost any amount of money in a limired partnership to drill for oil or gas that the entire amount is tax deductible? And that you pay a much reduced tax rate on your profit. Uncle Sam allows oil co.s to be exempt from almost every antitrust law on the books. WE ARE ALL BEING SCAMMED.
     
  10. wm rike

    wm rike Member

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    Ah, a lot of hot air on this one.

    The only person that has come close to the truth here is Skeeter. Everyone go back and read Skeeter. Do it now.

    All these new "big" discoveries equate to only a few months, a year at best, of production when viewed on a global scale. It's not salvation. It is how we survive, day to day. As for the oil sands and syn-fuels, yeah, there's a lot of reserve there but it doesn't come cheap. Development is costly and so is processing. With regard to energy independence, dream on. It won't happen unless we outlaw plastics, motor vehicles over 3000#, and homes over 2000 sq. ft., and start building nuclear plants fast.

    Note to all of you who talk about "capped" wells. There is no such thing. Ain't. It's a Dan Rather construct. There are plugged wells (permanently abandoned) and there are shut-in wells (capable of production under better economic conditions), but there are no "capped' wells. Don't parrot everything you hear on network news.

    As for those that believe the oil industry is a big money-grubbing conspiracy consortium, please, please, why in god's name haven't you put your money where your mouth is and bought up all the oil stock you can?
     
  11. Buttstock

    Buttstock TS Member

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    Our government has nothing to do with the price of Oil. It's strange that we have two oil men in the White House and we have oil company profits threw the roof. You would think that with all their oil business experience that they would have a solution to this problem or at least try to help. The question seems to be "do they want to help?” We don't hear the words "Win fall Profit Tax" being used by this administration. Why? Maybe its time to pay back all of their constituence. After the Billion's of American dollar we spent on getting Kuwait its little sand box back, we never received and moneys or oil in return. I think I heard some place that the country was just to poor to pay us back. Check their financial statement now...still broke I bet. Especially, if a BUSH is doing the math. Too many things don't add up.... Clinton in White House.... no oil problem...Bush in White House.... Take over oil producing country, Halliburton gets un-bid contract to control oil fields, price of oil goes thru the roof in last years of office. Remember, in Fahrenheit 911 when Bush was standing in the middle of a room full of very wealthy constituencies and said you are my kind of people.

    .... But we have our guns...
     
  12. hoggy

    hoggy TS Member

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    .... But we have our guns... BUT FOR HOW LONG???????
     
  13. Capt. Morgan

    Capt. Morgan TS Member

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    jbbor,

    Those links are interesting and, no doubt, the basic facts in them are true. But the articles are full of generalizations and over-simplifications regarding the processes and prospects for developing and producing oil from unconventional sources. The articles are rife with phrases like "just do [this or that]" or "it's simply a matter of...". Projecting how a thing could/will be done is infinitely faster and cheaper than actually slogging through the nuts and bolts of doing it. Comp 1's conspiracy theory...now that's just the BS of frustration! You're just being over-optimistic.

    Morgan
     
  14. phirel

    phirel TS Member

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    Absolutely the Government has a major role in the current price of oil. Exxon makes a profit of around 7 cents per gallon of gasoline. The Federal, State and local Governments make a direct profit of around 55 cents per gallon of gasoline. Through indirect taxes, governments make another 70 cents per gallon. Who is ripping us off, Exxon or our Government?

    But, I am not worried. If H. Clinton is elected, the current rate of government profit from gasoline will seem very reasonable.

    Pat Ireland
     
  15. comp 1

    comp 1 Well-Known Member

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    Capt. morgan, I never said anything about a conspiracy--just stated obvious facts--WAKE UP--you've bought into the media/p.r. hype about third world countries and the GLOBALIZATION bull s##t. GLOBALIZATION : the new buzz word created by politicians and stock market gurus to explain why the average citizen is being SCREWED.
     
  16. grunt

    grunt TS Supporters TS Supporters

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    Gas prices going up at least .20 a gallon by next week.
     
  17. gbatch

    gbatch TS Member

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    Well, one thing is for sure. Brazil won't need to use much of the oil they may pump. They run all their autos on ethanol now, made from sugar cane. Just hope Hugo Chavez doesn't commandeer that oil somehow.

    Here's one I just don't get. Why does anyone think that the supply of oil is in any way limited? Oil is, as I recall, created when organic matter deteriorates over time. Isn't it just possible that the earth is still making oil? Perhaps it's in places we haven't discovered, but it never ceases to amaze me the regularity with which I read a story about a large new oil discovery. Using technology and know-how that was only a dream a decade ago. Why is it so hard to believe those finds won't continue?

    Nope. I'm not a doomsayer. I see nothing wrong with research toward viable, economical alternatives to oil and gas. But please don't tell me we are running out. As long as there is demand for oil, man's ingenuity will find a way to get at it. It would not surprise me a bit if, over the next 50 years or so the Middle East's control over oil supplies began to dwindle as their reserves are depleted and as new reserves are discovered in other parts of the world. Heck, if they can find oil in Pennsylvania, why not in China?

    Oh, and as an aside, when ever anyone asks me why I drive a large SUV that uses so much gas, I usually engage them this way:

    1. Well, don't you think that oil is a major problem in the world, you know contributing to all those CO2 emissions and global warming the way it does? (Yes, of course).

    2. Well then don't you think we should each do everything we can to get rid of it as fast as we can? (Of course, they say).

    Well sir, I'm doing my part. I'm burning gasoline as fast as I can in my SUV and will continue to do so until there isn't a drop left anywhere. Now, why the heck are you driving that hybrid? Seems to me you're not doing your part.

    Gene Batchelar
    Wheaton, IL
     
  18. g7777777

    g7777777 TS Supporters TS Supporters

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    Lowering of price?

    Is something going to happen to China, India, and Pakistan?

    I dont think so

    regards from Iowa

    Gene
     
  19. halfmile

    halfmile Well-Known Member

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    There are too many people in the world.

    NO one would like my solution.

    HM
     
  20. KelleyPLK

    KelleyPLK TS Member

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    Currently we have 30 bucks of speculation built into oil ! Also Oil companies
    release there own Data on supplies if the supply isnt onsite , Then its not counted . There isnt a shortage . The next administration will drop the price of oil drasticly . Dont listen to nay-sayers men boosted the price Oil . men will drop it back . All the corn and beans will be forgotten veg based fuel will fall be the wayside . Windmills will not be turning H cars wont be made until a President is in office without ties to Oil industries . Bush,s Grandfather was major shareholder and CEO of Shell Oil Co . Now owned by Royal Dutch Petroleum
    Are you getting a clear picture yet , How can you raise the price of Oil ? Start war in the Mid East ? Might work . Bush family is the RICHEST TO EVER SIT IN WHITEHOUSE !


    Pat Kelley
     
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