Posted by Max Dunn
Sun, 07 Mar 2010 06:10:06 GMT | no comments
I have often thought that the recession was really caused by the high price of oil and not by subprime mortgages. However, I haven’t seen any credible source to back this up until I read a post by Jeff Rubin today called: We’re all PIGS now.
Rubin worked for nearly 20 years as the chief economist of CIBC World Markets and here is what he believes:
It wasn’t subprime mortgages but triple-digit oil prices that brought down the world economy.
And unless that economy started to wean itself off an ever-depleting supply of affordable oil, there would be other recessions to follow as economic recoveries would simply push oil prices right back into triple-digit range.
While I took exception with a lot of what Rubin said in Why Your World is About to Get a Whole Lot Smaller, here he is in the territory he knows best – economics – and I think his conclusion that record oil prices caused the recession is right on the money.
Posted in Peak Oil
Posted by Max Dunn
Tue, 09 Feb 2010 16:51:56 GMT | no comments
The CEO of Petrobras gave a presentation in December of 2009 which shows world oil capacity peaking in 2010 because new oil projects won’t be able to offset the decline in existing oil fields.
These statements are in line with other oil company like Aramco that believes world oil production is on a peak plateau, and Total that doesn’t see global oil production ever exceeding 89 mbd.
(Reference: The Oil Drum: World Oil Capacity to Peak in 2010 Says Petrobras CEO)
Posted in Peak Oil
Posted by Max Dunn
Wed, 25 Nov 2009 16:21:40 GMT | no comments
Oil demand is predicted to rise by 1.3 million barrels per day (bpd) next year to 85.9 million bpd, according to a Reuters poll of the ten top oil-tracking analysts and organizations. This bodes ill for the prospect of meeting the world’s oil demand, which is feared to erode the huge crude stockpiles which resulted from the global recession.
Even though major US crude ETFs like the United States Oil Fund LP (NYSE: USO) and oil companies like Exxon Mobil Corporation (NYSE: XOM) are not showing robust results today, if the demand curve beats the supply curve next year, these stocks will see a major upgrade. "The key question for prices is supply," Barclays Capital analyst Costanzo Jacazio said.
Investment banks Goldman Sachs and BofA-Merrill Lynch have the most bullish outlook for demand, projecting 86.4 million bpd and 86.7 million bpd respectively. This is good news for the likes of USO and XOM.
(Posted on 11/24/09 at 1:45pm by Ed Liston on Benzinga: The Stock Idea Network. Demand For Oil Will Likely Beat Supply Next Year)
Posted in Peak Oil
Posted by Max Dunn
Tue, 12 May 2009 15:55:33 GMT | no comments
by Steven Kopits, Managing Director, Douglas-Westwood, New York, 5/11/2009
NEW YORK: In seeking to explain the run up in oil prices from 2004 to 2008, commentators often turn to “speculation” as the primary cause. While speculation – or at least a kind of piling-on – may have explained the very late stages of the oil price rally, the willingness to attribute oil prices primarily to financial investors – as the CBS news show ‘60 Minutes’ did a few months back – risks drawing the wrong lesson from the period. Let’s re-wind the clock and recall the events of the time.
Read more...
Posted in Peak Oil
Posted by Max Dunn
Mon, 09 Mar 2009 22:25:54 GMT | 1 comment
Sometimes people talk about "running out of oil", but the world will never completely run out of oil. There will always be some oil remaining somewhere that can be scavenged from old fields, reclaimed from tar sands or stripped from oil shale.
There is, however, a limit to how fast we can pull oil out of the ground. Peak Oil will occur when the world hits this peak in production – and this will likely happen soon!
Read more...
Posted in Peak Oil
Posted by Max Dunn
Sun, 08 Mar 2009 05:22:16 GMT | no comments
Previously, I posted a table showing how oil in the US is used. Here is a graph that shows the same information in a prettier form:
(Reference: Year 2000 data from Ending the Oil Age)
Posted in Peak Oil
Posted by Max Dunn
Thu, 05 Mar 2009 18:12:54 GMT | no comments
A lithium air (Li-air) battery with a novel structure is looking very promising for use in battery-powered vehicles.
One problem with battery-powered vehicles (and an argument for hydrogen fuel-cells) is that it takes a while to recharge the batteries. While this is fine for city driving (since the batteries can be recharged overnight) it makes it tough to drive a long distance, like driving from San Jose to ski at Lake Tahoe.
This Li-air battery could solve the problem of long charge times by allowing service stations to replace the liquid electrolytes and metallic lithium cassette, allowing battery-powered cars to be driven continuously.
Then the metallic lithium can be electrically regenerated from the used liquid electrolyte making the process sustainable.
This Li-air battery could prove very useful in making battery-powered vehicles more practical.
(Reference: AIST Develops New-type ‘Li-air Battery’)
Posted in Electric Vehicles, Peak Oil
Posted by Max Dunn
Wed, 28 Jan 2009 01:44:29 GMT | 1 comment
The price we pay for a gallon of gas at the pump doesn’t include all the costs associated with it, like environmental costs and tax subsidies. One older study found that if we included all of these, we would be paying and extra $5 to $14 per gallon!
However, if we look at just the cost spent on military defense of oil in the Persian Gulf, it would be less than this.
One rough estimate would be to assume that 15% of the $430 billion DoD budget was spent on defending our oil interests in the Persian Gulf. Spread over the 142 billion gallons of gas we use each year, it works out to $0.46 per gallon.
Of course the hard number to determine is how much of the military budget goes to just protecting oil in the Persian Gulf. The $65 billion seems to fall in the middle range of what is spent on that region, but there is a lot of differences in opinion over how much spending would be reduced if we didn’t need to protect the oil there.
Here are some of the studies and what they determined we would need to add to the price of a gallon of gas to cover the cost of protecting oil in the Persian Gulf:
So don’t assume the price you pay at the pump is the true cost of gasoline. There are a lot more costs hidden away in making that gasoline available and in the environmental problems it causes that you pay for elsewhere.
Posted in Peak Oil, Sustainable Energy
Posted by Max Dunn
Mon, 26 Jan 2009 00:25:41 GMT | no comments
Here is an interesting article written by Michael W. Foley, a former professor in the social sciences, that looks at various examples around the world where there was social breakdown, what the factors led to ensuing violence, and how the US might react given a similar crisis situation:
Coming Chaos? Maybe Not
He found that while there were many cases where economic and ecological collapse led to violence, there were also many cases where it didn’t. The major determining factors were:
- Political motivation
- Police
- Leadership
- Community
His conclusion is that prospects for violence in the US following a “hard landing” are very small, except in some isolated locations where police and community support break down.
Posted in Global Warming, Peak Oil
Posted by Max Dunn
Tue, 02 Dec 2008 16:56:34 GMT | no comments
It is well known that a large part of our military expenses goes to protecting the flow of oil from the Persian Gulf. What has not been as clear is the actual cost of this protection. However a recent study sheds some light on this hidden expense.
In this study, Mark Delucchi of the Institute of Transportation Studies at UC Davis estimates that American taxpayers spent between $27 billion and $73 billion in 2004 (which was the most recent year data was available) for military protection of US oil interests in the Persian Gulf region.
While this is a huge number by itself, it works out to only $0.03 to $0.15 cents per gallon of gas for motor vehicle use.
Posted in Peak Oil, Sustainable Energy
