Here Comes $500 Oil

[kurt_cagle]

http://money.cnn.com/2008/09/15/news/economy/500dollaroil_okeefe.fortune/index.htm?postversion=2008092213

I've been arguing for some time that the price drops we're seeing in oil have been temporary (and for the most part deliberately manufactured by the Saudis, who are definitely not overjoyed with the thought of Obama in the White House). Between the inflationary pressures of the bailout (if it happens) and the increasingly fragile state of production -- Mexico will go from being a net exporter of oil to a net importer of oil in 2010 as the oil fields play out there, the Saudi fields are damaged and failing, and the cost of extracting oil from offshore sources continues to climb -- we're going to see the period from 2010 to 2012 to be one of the most challenging times this society has ever faced.

[ladjf]

1. If oil were to go to $500, you can forget about the "bailout" because

with oil at that price, commerce in the United States and most other industrialized Nations would literally grind to a halt. In particular, the transportation industry could not operate with such high fuel costs.

[kristopher]

2. An alternative hypothesis

The oil price spike was a case of market manipulation by the investment houses with large portfolios of bad debt. They were trying to cover their losses with a massive pump and dump on petroleum. Since the supply is well aligned with demand and since there is little supply flexibility the normal constraints on speculation were muted and the speculation was able to proceed. However, the house of cards began collapse and they had to pull their money to try and cover their asses.

Now, the rest of the market is looking for a safe haven for their money, and oil is about about as safe as it gets.


That explains the price rise, the price collapse, the current rise and the timing of the three events.

[GliderGuider]

3. Translation

"Since the supply is well aligned with demand and since there is little supply flexibility"

Tr: We are pumping every barrel we can, and even so we're just barely keeping up with demand -- even though demand is being progressively destroyed at the margins as portions of the global economy go into decline.

How is this not Peak Oil, again?

I do agree that given these fundamentals, the price effects of speculation are significantly magnified. I also agree with the thrust of the OP -- by 2012 it wouldn't surprise me at all to see oil trading at $500.

[kristopher]

4. It's not peak oil because they've been trimming capacity and

foregoing investment in development in order to bring supply and demand into alignment. This decade is the first time in history that the largest part of oil production has escaped US control.

[GliderGuider]

5. Who has been trimming capacity?

What's the evidence for it?
Why, in a global oil market, does it matter who controls production?
What, in your opinion, does the the phrase "Peak Oil" mean?

[tom_paine]

6. Gonna need some hard data to support that assertion...

I will state upfront that data produced by the Bushie Oil Industry itself will be met with automatic skepticism based on the recent past and the shoddy nature of ALL Bushie data, which is perhas the most charitable way I can put it.

So, do you have some independant verfication to support that assertion?

[kristopher]

7. Investigate for yourself.

In the 1990s the petroleum industry closed over 50 refineries, just between 1995 and 2001, refining capacity was expanded at a limited number of plants to compensate for closing of 24 refineries that were not being used at full capacity. In doing so, they slashed surplus refining capacity - deliberately. (The Oil Industry, Gas Supply and Refinery Capacity: More Than Meets the Eye, An investigative report presented by Senator Ron Wyden June 14, 2001)

This effort has been a stated and ongoing goal of the petroleum industry since the 70s, when they first started closing refineries that they were mandated by US law to maintain. The law grew out of the slow ramp up in fuel production in the opening of WWII.

[happyslug]

8. Where and how? the EIA says Refinery OUTPUT has increased since 1990

12,833,000 barrels per day in January 1990 till
15,686,000 barrels per day in July 2008 (September is down, but that is do to the Shutdown for Ike and Gustav).
http://tonto.eia.doe.gov/dnav/pet/hist/wgirius2w.htm

Weekly inputs and Outputs of Refined products:
http://tonto.eia.doe.gov/dnav/pet/pet_pnp_wiup_dcu_nus_w.htm

Do NOT confuse the issue of closing refineries, many of which needed to be closed for good reasons, and a drop in oil refining capacity. The US has INCREASED its capacity to refine oil while closing plants. A similar situation can be seen in Gasoline stations, Today we have 1/2 the total number of Gasoline Stations then we had in the 1960s, but the typical 1960 station had two pumps, today's can have as many as 20. Thus one of today's gasoline stations can pump the same amount of gas as 20 stations did in the 1960s.

The same thing is going on with refineries, under Federal law if you build a new Refinery in the US it must meant ALL modern Specifications, but if you just expand and improve an old one you do not have to. Thus since the 1970s no New Refineries have been built in the US, but most of the existing plants have double or triple in size. This increase in size of today's refineries more then make up for the drop in the number of refineries (And some of the "closed" refineries where just made part of another existing refinery that just happened to be next to it, so it was NOT really closed, just merged with another refinery).

I do recommend you look at the EIA numbers, the numbers tend to be correct, even while EIA is saying something else.

EIA Statistics:
http://www.eia.doe.gov/oil_gas/petroleum/info_glance/petroleum.html

I will NOT go into the increase oil refinery capacity that has occurred overseas, for example Kuwait makes most of today's aviation fuel in its own refinery as oppose to shipping it to the US to be refined. Most Arab nations have done the same (Iran is the big exception, but that is do to the US refusal to trade with Iran, the Iraq-Iran war of the 1980s and the refusal of the Shah to build refineries while he ruled, for he wanted US backing and control of his oil after it left Iran was part of his Alliance with the US).

[kristopher]

10. I gave the name of one reference (there are many others)

The problem with EIA is that it isn't given to critical analysis; it is a basic data source.

The Oil Industry, Gas Supply and Refinery Capacity:
More Than Meets the Eye
An investigative report presented
by Senator Ron Wyden
June 14, 2001

“As observed over the last few years and as projected well into the future, the most critical
factor facing the refining industry on the West Coast is the surplus refining capacity, and the
surplus gasoline production capacity. The same situation exists for the entire U.S. refining
industry. Supply significantly exceeds demand year-round. This results in very poor refinery
margins, and very poor refinery financial results. Significant events need to occur to assist
in reducing supplies and/or increasing the demand for gasoline.”
Internal Texaco document, March 7, 1996

“A senior energy analyst at the recent API (American Petroleum Institute) convention
warned that if the U.S. petroleum industry doesn’t reduce its refining capacity, it will never
see any substantial increase in refining margins...However, refining utilization has been
rising, sustaining high levels of operations, thereby keeping prices low.”
Internal Chevron document, November 30, 1995

Finding 3
Closing Refineries: Oil Companies Act to Inhibit Supply
While oil companies were making agreements to control oil and gas supply, refineries
were closing. Since 1995, 24 refineries have closed, including refineries in California,
Illinois, Arizona, Oklahoma, Indiana, Kansas, Louisiana, Texas, Mississippi, Michigan
and Washington (the Tosco refinery has subsequently reopened), taking nearly 830,000
barrels a day of refining capacity offline. While capacity at some existing refineries
expanded during this time, the fact is that more capacity would exist if these refineries
were still operating.

According to Energy Information Administration, the following refineries were shut
down between 1995 and 2001:

Year Refinery Location
1995 9 Indian Refining Lawrenceville, IL
Cyril Petrochemical Corp. Cyril, OK
Powerine Oil Co. Sante Fe Springs, CA
Sunland Refining Corp. Bakersfield, CA
Caribbean Petroleum Corp. San Juan, Puerto Rico
1996 10 Tosco Marcus Hook, PA
Barrett Refg. Corp. Custer, OK
Laketon Refg. Laketon, IN
Total Petroleum, Inc. Arkansas City, KS
Arcadia Refg. & Mktg. Lisbon, LA
Barrett Refg. Corp. Vicksburg, MS
Intermountain Refg. Co. Fredonia, AZ

1997 11 Gold Line Refg. LTD Lake Charles, LA
Canal Refg. Co. Curch Point, LA
Pacific Refg. Co. Hercules, CA

1998 12 Gold Line Refining Ltd. Jennings, LA
Petrolite Corp. Kilgore, TX
Shell Oil Co. Odessa, TX
Pride Refg. Inc. Abilene, TX
Sound Refg. Inc. Tacoma, WA

9
Energy Information Administration/Petroleum Supply Annual 1995, volume 1, p. 80
10
Energy Information Administration/Petroleum Supply Annual 1996, volume 1, p. 119
11
Energy Information Administration/Petroleum Supply Annual 1997, volume 1, p. 80
12
Energy Information Administration/Petroleum Supply Annual 1998, volume 1, p. 119



Year Refinery Location
199913 TPI Petro. Inc. Alma, MI

200014 Pennzoil Rouseville, PA
Berry Petroleum Stephens, Ark.
Chevron Richmond Beach, WA

200115 Premcor Blue Island, IL
These refinery closures took more than 830,000 barrels per day of refinery capacity out
of production.

Refinery Capacity Lost Due to Refinery Closures Between 1995 - 2001
< Numbers in Barrels per Calendar Day >
1995 191,750 bbl/cd 16
1996 268,750 bbl/cd 17
1997 87,100 bbl/cd 18
1998 123,650 bbl/cd 19
1999 51,000 bbl/cd 20
2000 25,700 bbl/cd 21
2001* 80,515 bbl/cd 22
Total Capacity Lost: 828,465 bbl/cd

The major oil companies had a financial interest in seeing the closure of independent
refineries. By reducing the overall supply of oil and gas and reducing the number of
companies involved in producing it, the major oil companies can have tighter reins on the
supply and the price...

[happyslug]

12. My point is even with those closing oil refining INCREASED.

Maybe its my age, but I can remember when ALL, not most, ALL gas stations only had two pumps (and some had just one, you got whatever they were pumping). It is only in the 1970s that you started to see the modern large gasoline stations (Such stations MAY have existed on the West Coast, but no in my area till the 1970s).

In the 1980s I moved to Texas, and saw the massive expansion of the oil Refineries they, yes, the total number of refiners, like the total number of gas stations, went down, but those that survive tended to sell more product then they and their closed competitors did. Furthermore, California, prior to the 1970s had been another area of Oil exportation (Like Texas) and it tended to export refined goods. With the drop off of California oil Production (at about the same time as Texas about 1970) such oil refineries were no longer needed. The area where California exported its oil to either looked elsewhere for refined oil or built refineries themselves (i.e. The far east including Indonesia which was an net oil exporter till the late 1990s).

Other Refineries that were closed were some in the old Oil Region of Pennsylvania, many oil companies started there and continued to refine oil in that region, even as they switch from internal production to refining oil from overseas (Pennzoil was the company most noted for this, but closed their refinery and moved to Texas in the 1990s). It became cheaper to import refined oil from the large Texas refineries then to import crude and refine it. Thus the plants were closed down. You even Mention Pennzoil, but ignore WHY it was closed down.

The problem is NOT the capacity to refine oil, but getting the oil out of the ground and into your tank. Part of that is refining oil, but as I pointed out, many of the Persian Gulf States what to do what the US does, refine the oil themselves thus getting that profit in addition to the profit of selling crude. This between these overseas refineries and expansion of the Texas oil refineries, more then made up any refinery shortage.

Now, an additional reason no one has built an new refinery (and closed existing ones) is that no one will invest into a refinery unless you have a secure set of supply. This is one of the reason the US hates Chavez in Venezuela, the US is afraid he will build refineries to handle his oil, cutting out the US refineries that are processing his oil at present. Given that various oil exporters have started to switch to internal refining, this has become more and more a Concern for the Oil industry. Fortunately for the US, the US is still the third largest oil producer in the World, but we are down 1/3 from what we produced in 1969 (and dropping). Most of this excess refining capacity has been taken over by Mexican and Venezuelan oil but also from oil from other oil exporters.

The problem is NOT a lack of Refineries but a lack of Crude. No one will build a Refinery unless they are sure of having crude to refine. Right now no one, unless they have contracts, can NOT make that assumption. Furthermore all of the refineries you mention did NOT have any capacity to handle heavy sour Crude (They were designed for Light Sweet Crude). These are terms in long use in the oil industry, but it takes more refining capacity to handle heavy sour Crude then light sweat crude. The increase in Saudi Oil production in the last five years has all been heavy sour crude, not light sweat, thus none of the plants you mentioned could handle the heavy sour crude without a complete rebuild, and the cost and profit from such a rebuild was not worth the money.

Now the Texas refineries can handle Heavy Sour Crude, for that is what Venezuela has been producing for about ten years (and will increase over the next 20). This is one of the reason Chavez still ships his oil to Texas to be refined. When Saudi Arabia put more oil out for bids, the people who could bid on it was limited, limited to those people who had excess to a refinery that could handle heavy sour crude.

No the plants you mention (especially the California Plants) were never capable of handling the crude that is coming on line, only some of the Texas refineries can. More are in the process of switching, but that takes time and money. At present we do not have a shortage of Crude to the extent to push the price much higher then it is now, but a crude shortage has slowly become clearer over the last 2-3 years. Demand for oil has increased but supply has only held steady. Sooner or later Supply will drop. The price will increase and unless people finds ways NOT to use oil, the price will go up till people can no longer afford it. Sad but true, the real question is NOT that we do NOT have refining capability, but how do to deal with a world wide shortage of oil?

[kristopher]

14. What the ef are you rambling about?

To repeat the money line from Sen. Wyden's report: "While capacity at some existing refineries expanded during this time, the fact is that more capacity would exist if these refineries were still operating."


The initial point is that because of oil industry efforts to cut surplus capacity from the system supply is more closely matched to demand than ever before. Since expansion of supply isn't an easy task to accomplish, the commodity is ripe for speculative exploitation - especially since there is a regulatory blind spot in oversight.

Not only doesn't your treatise deal with the issue at hand, it masks the long term effects of the move towards consolidation and increased efficiency (that's what the oil companies prefer to call it) on our ability to respond to disruptions in the various stages of providing supply. Just as they "increased efficiency" in refining, so they've trimmed operations at all levels.

[Terry in Austin]

9. Sounds like you're a peak oil denier, kristopher

If not, please offer your estimate on when it will peak and then make your case.

[kristopher]

11. There is no case to be made

"predicting" peak oil is an exercise in futility. It is like predicting when you are halfway through your life. As "practiced" in the intertubes it is a cult of misinformation perpetuated by a self masturbatory circle jerk of incompetent analytic posers.

Does that clarify it? Oil and coal cause climate change. Stop worrying about making an impossible prediction and get to work on eliminating their use.

[happyslug]

13. Good point, what have you done?

I moved to a place where I can bike to work, thus use less oil. I have super insulated my house, so to use less natural gas. What have you done?

As to Peak oil, it is impossible to predict, but the results will be a overall reduction in the use of oil. Thus why we watch it. As o prediction it is a study in who you trust, if it is OPEC peak oil is 2030, if you trust the Oil Companies it is 2010, if you distrust both, it was 2005 (And that is looking more and more the case, Oil use in the US has DROPPED in the last two years, marginally in 2007, a major drop in 2008. The drop is do to the increase in price do to what appears to be a shortage of oil caused by peak oil. Thus Peak Oil tells us not only do I have to do something, so will everyone else, which is why we speak of peak oil.

[kristopher]

15. It is a useless concept and it marks those entralled with it as uninformed.

Seriously. It is useless. Predicting trends is in no way aided by the idea of "peak oil". But hey, if that is what gives meaning to your life...

[Terry in Austin]

16. Nice dodge

"useless concept" = dismissal = denial.

Sorry.

[kristopher]

17. It isn't a "dodge".

It is a fact.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=172249&mesg_id=172402

[Nihil]

18. That isn't a fact, it is a self-referential opinion (being employed as a dodge).

Try again?

[kristopher]

19. Fact, my friend; unless you can explain how you can predict the halfway mark in you life.

It is exactly the same endeavor. When you CANNOT determine the latter half of an event, you cannot predict nor identify contemporaneously the midpoint (or peak if you prefer) of that event. IT IS IMPOSSIBLE.

It is a point in time that is ONLY revealed in hindsight. No crystal ball, no exceptions.

[Nihil]

20. If that was the case, no-one could possibly die before "middle age".

You appear to be assuming that "peak oil" is simply the halfway point
between "first extraction" and "last extraction" (in which case, I can
see why you are saying what you are saying). That isn't the definition
that most people use (which is why people are disagreeing with you).

Peak Oil *can* be predicted to a very good approximation on an oilfield,
national and global level (although the size of the error bars obviously
increases as the overall scale - & thus variation - does).

The bad news (or even worse news than the existence of a peak I suppose)
is that the downside of the peak is steeper than the upside - i.e., the
peak is guaranteed to be nearer the end than the start, thus doubly
refuting your earlier opinion.

[kristopher]

21. I've seen the evidence.

It IS what I'm describing. The fact that people DO die in "middle age" demonstrates the proposition that there is a statistically significant number of humans to base an identification of "middle age" on. That this is of very little use in predicting an individual's life expectancy just highlights the fallacy of the "peak oil" view.

The idea that you can determine the "downside" is as ridiculous as the original concept; it is a lie built on a delusion.

A much better method of modeling is found in basic natural resource economics that rolls policies to capture carbon costs and the effects of new, alternate technologies into the equations.

[Terry in Austin]

22. Real simple

Track world oil production stats for several years. Every year it declines, the more likely we're past peak -- "no more increase" is the definition of peak oil.

We're in about year four of decline.

Got geology?

[Nihil]

24. No, he hasn't "got geology" ... that much is far too obvious.

Neither is he in the real world of global oil production.

He lives in his little fluffy-bunny cloud of "rolling policies",
"carbon capture" and other elements of denial (not forgetting the
trusty "V2G" pipe-dream).

Anything like reported facts are beyond his understanding if they
don't directly support his own particular wish-list for the world.

:boring:

[kristopher]

25. But that is an economic trend brought on more by threat of carbon taxes

Than geology. If there were no threat of carbon taxes your trend lines would look entirely different.

If/when there is a major shift to EVs there will be another very large shift in trend lines that is totally unrelated to geology.

If the carbon taxes weren't part of the picture then the trend lines would be more closely tied to geologic constraints. IN that case, however, you wouldn't see trend towards decreased production. The economics would be colored by long term increasing demand with the higher prices that result from that demand. The promise of long term higher prices would drive considerably more investment in location and development of supply.

However, as previously stated, climate change IS REAL and it requires action. That means getting off oil for transportation - globally.

So again: basic natural resource economics is able to predict what is happening. "Peak oil" cannot.

[NickB79]

39. So oil production has been flat because oil producers are scared of future carbon taxes?

Funny, because their close friends over in the coal and natural gas fields don't seem to share that fear:

http://www.greencarcongress.com/2008/06/global-energy-c.html

"World natural gas consumption grew by an above-average 3.1% in 2007, although only North America, Asia-Pacific, and Africa recorded above average regional growth. The USA accounted for nearly half of the world’s gas consumption growth, driven by cold winter weather and strong demand for gas in power generation. Chinese consumption grew by 19.9% and accounted for the second-largest increment to global gas consumption. EU consumption declined by 1.6%—the second consecutive decline-in face of warm winter weather.

Gas production rose by 2.4% in 2007. The USA accounted for the largest increment to supply, growing by 4.3%, the strongest growth since 1984. EU production declined by 6.4%, with UK output falling by 9.5%, the world’s largest volumetric decline for a second consecutive year. A small decline in Russian production was more than offset by strong growth elsewhere in the FSU. China and Qatar recorded the second- and third-largest increments to production, increasing by 18.4% and 17.9% respectively.

LNG shipments rose by 7.3%, supported by continued growth in shipments from Qatar and Nigeria. USA LNG receipts rose by one-third as a large price premium to European spot markets resulted in the diversion of cargoes to the USA.

Other highlights of the Review include:

*Coal was the fastest growing fuel in the world for the fourth consecutive year. Global consumption rose by 4.5%. Consumption growth was widespread, with growth in every region except the Middle East exceeding the 10-year average. Chinese coal consumption rose by 7.9%, the weakest growth since 2002, but more than two-thirds of global growth. Indian consumption rose by 6.6%, and OECD consumption rose by 1.3%, both above average figures."

In comparison:

"Global oil consumption grew by 1.1% in 2007, or 1 million barrels per day (bpd), slightly below the 10-year average, according to the Review, while global oil production fell by 0.2%, or 130,000 bpd, the first decline since 2002."

If global oil production is being constrained solely because of the spectre of a carbon tax, why is growth still booming in the even dirtier coal industry? What makes oil special in the mix of fossil fuels?

[kristopher]

43. What kind of investment is required to locate and extract additional supply

What kind of investment is required to locate and extract additional supply for the different commodities?

Then look at the technologies on the horizon and ask what happens as a carbon tax encourages adoption of alternatives?

Domestically we will replace gasoline in personal transport with EVs; then coal with solar, wind and natural gas; next we will replace natural gas and heavy transport fuels with bio-sourced fuels and various developing renewables (wave, geothermal etc).

Since we use 25% of the worlds petroleum, our shift to EVs stands to have a significant near term impact on demand. It isn't possible to forecast global preferences in this manner since each country presents a different profile of resources and needs. However it is possible to say that if we successfully make a rapid move to a renewable infrastructure, it should demonstrate the cost effectiveness so that the rest of the world will have an alternative model to a carbon infrastructure.

[NickB79]

44. That reply doesn't explain anything

"What kind of investment is required to locate and extract additional supply for the different commodities?

Then look at the technologies on the horizon and ask what happens as a carbon tax encourages adoption of alternatives?"

How does that square with an INCREASE in global coal consumption? It doesn't.

[kristopher]

45. Dude, I can't increase your IQ. Sorry.

[GliderGuider]

46. Oooooh. Nice shot, Mr. Ad Hominem...

[kristopher]

48. Not ad hominem...

"What kind of investment is required to locate and extract additional supply for the different commodities?

Then look at the technologies on the horizon and ask what happens as a carbon tax encourages adoption of alternatives?"

How does that square with an INCREASE in global coal consumption? It doesn't.

The answers to the study questions I provided explain the prediction made. If the poster has actually answered the questions (a very large if) and still fails to see the answer to the original question, it is because the poster can't make sense of a complex set of variables well enough. That is a quality measured by IQ.

I'll allow that laziness is also an explanation.

[GliderGuider]

49. Now you're just back-pedalling

A post that is nothing but a comment on someone's IQ is an ad hominem argument. There's absolutely no wiggle room on that.

Ad Hominem

An ad hominem argument, also known as argumentum ad hominem (Latin: "argument to the man", "argument against the man") consists of replying to an argument or factual claim by attacking or appealing to a characteristic or belief of the person making the argument or claim, rather than by addressing the substance of the argument or producing evidence against the claim.

[kristopher]

50. Where do you get "back peddling"?

The poster wrote "That doesn't explain anything" when in fact, my post did explain everything I wrote. There are three basic elements to communication, the sender, the message and the receiver. I identified the receiver as the problem element. That isn't an attack on the person, that is a correct answer to the problem posed.

[GliderGuider]

51. You can't put lipstick on that pig.

"Dude, I can't increase your IQ. Sorry." is an ad hominem argument.

[kristopher]

52. That's your opinion.

It isn't correct.

[Nederland]

27. Ummm, your link doesn't show a decline in oil production

According to your own link the highest production month for oil occurred in May 2008.

[Terry in Austin]

28. Riiiiiiight...

Here's a concept for you: "trend line."

That blip is not a trend reversal. Yes, this is only a three or four year trend out of 149, but a trend it is. The major point is that for 145 years, the trend was always up, and our whole industrial economic setup came to be based on the assumption that this would always be the case.

Now it isn't. That's why it deserves serious attention. Mostly what it gets is denial.

[Nederland]

31. Again, you are wrong

Global Oil production has peaked twice before: in 1973 and again in 1979. Your claim that the trend is always up is not supported by the facts.

[GliderGuider]

32. 1973 and 1979 featured geopolitical events that curtailed supply.

There is no such feature on today's landscape. Oil extraction has hit a plateau in a relatively benign above-ground environment.

Is this the peak of production? We don't know for sure, of course, but if the world didn't increase its oil production as prices quadrupled it sure looks like it. Unless everybody in the oil-producing world just decided they didn't need any extra money, of course.

[kristopher]

34. Sure there is: Global Warming

Get your head out of the tar sands.

[GliderGuider]

38. Evidence?

I know your opinion, but I've never seen you present any evidence to support it.

[kristopher]

40. Evidence?

You mean of the impact of GW on policies that affect consumption of fossil fuels?

That's like asking for evidence of GW itself - the evidence is scattered in a thousand different places. One of the larger pieces is the movement of the issue of GW through the United Nations. The progression of initiatives from 1992 until today spells tomorrows future clearly. The problem isn't going away and pressure to seriously pursue a solution is reaching critical density. If you don't know this, you aren't paying attention to the real world.

I posted on another thread the prediction of EPRI regarding the adoption of PHEV/EV. Feel free to peruse their site and get a feel for how soon that transition is expected to manifest itself.

[GliderGuider]

47. You and I have very different standards of evidence.

To me evidence is a fact or set of facts in support of a hypothesis, that can be demonstrated to someone else regardless of their beliefs. Your "evidence" appears to be bound up in tortured chains of logic. What you present on this topic is not evidence, it's opinion.

[Nederland]

35. No geopolitical events on today's landscape?

Are you serious? The US has 140k+ troops in the Middle East, Pakistan is a mess, and Iran is trying desperately to obtain a nuclear weapon. Do you seriously think that none of those things is affecting the price of oil right now.

Right...

Again, keep in mind this is not a debate about whether or not Peak Oil is a viable theory. This is a debate about when Peak Oil will happen.

[GliderGuider]

37. None that are significantly reducing oil supplies.

The impact of the Iraq invasion was felt in 2003. Their output dropped by 700 kbpd, but despite that world output that year rose by 2 mbpd. Iraqi output recovered to its pre-war value of around 2 mbpd within a year or so, but despite that recovery global output remained flat. The Iraqi war is not currently interrupting their oil production. Pakistan is not an oil exporter. Iran's oil production has remained constant at 4 mbpd since 2003. Hell, even Nigeria is limping along near its all-time high.

If you're claiming that producers are deliberately throttling back output to "get back at" the USA, you'll need to present some proof. There's no evidence of that in the numbers, unless maybe Mexico is really mad at Amerika.

We're on a supply plateau right now, despite rising oil prices and no evidence of above-ground supply disruptions anywhere. I have no idea if this is the peak, but if it were, this is exactly what I'd expect it to look like.

[kristopher]

41. Not so long ago weren't you fond of quoting the head of the IEA?

I forget why you cited him but I recall clearly that he has made repeated assertions that the primary reason for stagnating production is stagnating investment? Over and over the man said that very thing and you know it. Yet here you are acting as if you've never heard it.

You were asking for evidence of my stating that GW is exerting a downward pressure on production; well, this is one of those pieces. They aren't investing because they are anticipating the promises of the UN regarding GW are going to come to fruition. If you can come up with another explanation for this lack of willingness to spend money on oil when the price is as high as it is, then I'd love to hear it.

[Nederland]

42. Sorry, I was mixing price versus production

I believe the price is going up because of instability in the region, but you are correct in asserting that events have not affected production rates beyond the 2003 dip in Iraqi production you mentioned. My mistake.

[Terry in Austin]

33. Noticed you're among the stalwarts over in the PO group, nederland

How's that bet working out for ya, anyway?

Gotta say, the old cornucopian drumbeat is sounding a little thin these days...

[Nederland]

36. Response

If you took some time to actually read some of the threads over there, you will notice that I always correct myself (http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=266x2614">like this) when proven wrong by the facts--an activity you seem utterly incapable of doing. The fact is you have been wrong twice in this thread. You claimed we were in year four of decline, and that is wrong. You claimed that during the previous 145 years the production the trend line was always up, and that is wrong.

Perhaps you should learn from my example. When someone points out a factual error, simply own up to it. In this case it is especially strange that you refused to admit your error, because my point was a relatively minor correction. Yes, you were incorrect in your assertion that we were in the forth year of decline, but if you had simply admitted that and revised your point by saying that the past four years look pretty flat compared to most of the previous 145 years, that would have been that. Instead you chose to compound how ridiculous you looked by making another incorrect assertion, one that was equally demonstrably wrong.

Really, admitting you are wrong isn't hard. Try it sometime, you might find it rather liberating.

[Nihil]

23. How can you refer to "evidence" in the same post as that crap ...?

Namely,
> A much better method of modeling is found in basic natural resource economics that
> rolls policies to capture carbon costs and the effects of new, alternate technologies
> into the equations.

i.e., pie-in-the-sky waffling suitable for a sociology essay but having no relationship
(except wishful thinking) to the current real-world situation.

"rolls policies to capture carbon costs"
"the effects of new, alternate technologies"
:rofl:

[kristopher]

26. You revel in you ignorance, don't you?

Your lack of understanding regarding the way events are shaped by political and economic frameworks is exceeded only by your indifference to your own ignorance.


I've made my argument clearly and pointedly.

You resort to personal attacks.

You lose.

[Nihil]

29. Were you looking in a mirror when you typed that?

> I've made my argument clearly and pointedly.

You repeatedly reference your own opinions, disregarding whichever
facts disprove them, go all pretentious & pompous then start to
bleat "Personal attack - I win!!!".

Still, at least it is shorter than your previous failing tactic
of reposting the same irrelevant five page screed in place of a
genuine answer.

Off you go then, post your last word and go back to the state of
denial where you may happily "revel in you ignorance" ...
:hi:

[kristopher]

30. Still nothing but personal attacks.

I made specific arguments that you seem to be unable to address.

Instead, you continue with ad hominem.

Since it is self evident that you would address the arguments if you could, obviously you can't.

"Peak oil" obsessives are barking up the wrong tree.