To TomE:
You and others taking advantage of a serious issue are just another part of the problem our government needs to regulate. Your obvious disregard is just an ignorant way to make a buck that you will put back into your gas tank anyway. Selfish people like you will of course ruin it for everyone as you always do. Let’s see how smug you are when there isn’t anymore oil in the ground. At a 100 million barrels a day, how long do you think it will last. Join the rest of us in finding a solution and stop being part of the problem.
Our government is run by wealthy individuals that stand to profit even more from higher oil prices. Why would they take money out of their own pockets to help the workforce that keeps them afloat…and what do they care about a world that will shrivel up and die long after they are gone.
The Saudis are already worried about the world cutting back their oil consumption. They stand to lose more money if people use less oil. This person predicting oil at $250 is an alarmist and full of wishful thinking. I know it sounds like communism, but I think the majority should be allowed to decide when one individual has “too much” money. It’s out of control when 1% of the population owns 95% of the wealth.
1. Seems like oil will go on up EVEN IF all Americans stopped all driving today. (And too, global warming will likely continue even if all Americans stopped all driving today. 2. The oil companies are maybe NOT making windfall profits; they have to buy and sell this stuff just like everyone else in the chain. If you think they’re making a killing, and if you believe they’re going to continue to be outrageously profitable, then invest in them for your own profit (I do).
What goes up, must go down… I think that the same thing that happened with the housing market will happen with oil – it’s going to drop down significantly in price, sooner or later. Maybe within the next year. I mean, the price of gas can go up to $250 a barrel, but people aren’t going to pay $10 a gallon for gas. I think people would rather not work then pay that much for gas.
I know I would!
We need an energy policy from our elected officials (both parties) that includes the following -
More mass transit (like Europe)
More conservation (smaller cars, more insulation, smaller homes to heat, more biking, scooters, etc.
More solar power (very promising but not the entire answer)
More wind power (also very promising but again, not the entire answer)
More biomass power (we’ve got plenty of it in certain states)
More drilling for oil (California coast, Alaska, Gulf Coast, etc.)
More nuclear power (even though everyone hates the idea, it seems to work for France)
More coal (yes, it is dirty but we have a 300 year supply of it)
There is no “magic bullet” for this problem and I wish our politicians, and the American people, would get a clue about the scope of the problem and potential solutions.
We should have started all of this in 1974-75 (we had a wake-up call then) but both parties, Democrats and Republicans, sat on their behinds while we made the middle eastern oil producers rich.
Unfortunately, we get the government that we elect. It’s time to throw out our existing politicians who have failed us so badly and put in people who will begin to come up with pragmatic solutions for what is a difficult, but solveable problem.
To Angry Family Man: Because someone says something frightening or distasteful does not make them a fool. This writer does not like ‘expert’s” conclusions but in view of his education and experience he cannot be ignored. I personally think that oil is not as inelastic as he implies. That is, there is a limited supply of oil but before it gets much above $250 a barrel, there will be catastrophic effects on our and other countries’ transportation system, infrastructure and culture that will cap the increase. An increasingly large segment of the population will have self-imposed fuel rationing due to cost, and the lifestyle of most Americans may retreat 75-100 years. Of course, this type of seismic shift in our and other developed countries’ way of life, if it happened quickly, could lead to war (beyond Iraq).
As far as our country being too smart and too powerful for a collapse… I love this country as much as anyone (at least as much as anyone else who’s not served in the military – they can make a higher claim) – but I am a student of history. Ancient Rome, Greece, great Chinese dynasties, the Mayans, history is full of great cultures that thought they were invulnerable. And they all fell due to their own arrogance; moral decay; external factors like powerful neighbors; protracted crop failures or some mix of these factors. So, the prospect of either $250 oil or the results of global warming say, 75 years down the road, these should make us very scared….
“Contrast that with the U.S. where the nearest residence to some worksites is 20+ miles away. The same with shopping, where corner stores and mom-and-pop stores have been pushed out, leaving the nearest shopping multiple miles from residential areas”
Time to go back to old values. Corner mom and pop stores. Friendly neighbours. Community. Family.
Just like a forest fire creates its own weather, oil traders are creating their own forces. In the end, the Fed will increase interest rates double digit, oil will be down to where it needs to be and the people will be broke.
Celebrate Independence Day, Protest High Gas Prices! Park Your Automobile Week – June 29th to July 5th! For American Energy Independence.
Low temperature Solar space and water heating = 30% of U.S. energy consumption. This is a fast, easy, cheap alternative for a lot of oil.
Solar energy is the only alternative with enough scale and scope to power mankind.
Solar Thermal Power Plants and Wind Farms are the solution to the developing world energy shortage as it concerns the U.S. They can provide heat, electricity, hydrogen, methane and methanol (excellent gasoline and diesel replacement).
The people need to get their local governments to bond, build and operate local Solar Thermal Power Plants and Wind Farms. The community will receive heat, electricity, hydrogen, methane and methanol to use in their homes, businesses, schools, vehicles. It will stimulate the local economy. The alternative is $250 a barrel or higher crude oil prices. And hyper-inflation followed by a fifty year depression.
I think I’d rather build a Solar Thermal Power Plant and be self reliant again, like fifty years ago.
Local communities all over the U.S. built and operated municipal power plants in the past. It’s the solution to the energy crisis now.
I think oil could well pass the $200 mark given the way congress is (not) acting. If they could get thier heads out of thier ass’s and allow drilling in the U.S. along with developing a realistic 5-10 year energy plan prices would go down.
Everyone likes to blame China and India for the big increase in consumption of oil world wide.
News flash: China uses less then 4 million barrels of oil a day. The US? (with 25% of their population) Somewhere around 30mil. 20mil we import. That is 30 million barrels A DAY.
A lot of the world thinks the solution is for the US to use less. They could be right.
People talk about having no hot water, no heat for our homes, no transportation. This would only happen if there is NO oil. If the US would drop our consumption of oil by 15%, it would free up more oil the if China stopped using it completely.
The world really will not end as you know it if you consume 15% less energy. It also wont end if you stop borrowing money, stop expecting the government to solve every problem and provide your every need, stop buying every new toy, cook your own food, keep your car more then a few years or hold on to your clothes until they actually wear out.
Which is a good thing. That it wont kill us. Because we are likely to need to do all of those things very soon.
Horror of horrors! Eat my left overs?! How will I survive?
What would happen if every state in America would scale their 65 MPH signs back down to 55 MPH. Do you think we would use less gas as a nation. Since our freeway signs are posted from 65 – 70 MPH people usually travel 10 MPH faster than the posted sign. Bring it down to 55 MPH then people would drive at 60 – 65 MPH. This in turn would definitely lower our gas consumption. I recently read that major airlines are actually reducing their speeds to do just that; reduce their consumption in gas in turn save some money towards the end of the year bottomlines. This in turn would lower the demand for oil which big oil companies would be forced to drop their prices. Just a Thought.
Dr Stephen Leeb (an economist) made a compelling argument for an impending economic collapse in his book “The Coming Economic Collapse, How You Can Thrive When Oil Costs $200 a Barrel.”
He wrote this book a couple of years ago — after people thought he was nuts for predicting $100 a barrel oil. Every thing he predicted in this book has come true with regard to interest rates, inflation, gold and oil. And as the books title indicates, he predicted two years ago that oil would hit $200. In fact he predicts $260 in the book.
I believe him.
Angry Family Man in California said, in reponse to the posting by Joseph Redman, Kaheohe, HI:
Ok Mr Expert Geologist – here’s a question for you, since you seem so sure of yourself and your deductions.
Why now? In the last 3-4 years -and whatever you do, don’t feed me that BS line about China and India – don’t want to hear that…
We are a smart Nation filled with all sorts of smart people – heck, you may even be one of them. So I’ll ask it in a different manner. Do you really think that we are so dumb, as a Nation, as a World, that if oil was really going to run out tomorrow, as you are making it sound, that we wouldn’t have invested much much more into alternative energy? Does Jetfuel rely on oil? Yes it does. I’d say that’s a big problem. Don’t you think that aircraft engine manufacturers, our Department of Defense and just about anyone with any type of vested interest in National Security would be finding another way to move around our military? After all, we have a world to police …
Joseph Redman replies: Please don’t shoot the messenger: the numbers for global net oil exports are available to you and any other smart person who actually wants to know what’s going on. I’d recommend the work of geologist Jeffrey Brown who digest the data well for the lay public, and posts at theoildrum.com. Search for “Export Land Theory”.
It is a fallacy to conflate energy with cleverness or technology. No, we won’t run out of cleverness but we aren’t magical beings either. We are subject to obvious laws of thermodynamics and geological reality, and must also deal with less-obvious truths such as human capacity for self-delusion and the declining return on investments in complexity in a complex society. We are no more immune to the basic laws of nature and complexity than prior empires have been, or indeed than other species are.
You might also wish to google the term “EROEI” which stands for “energy return on energy invested”. EROEI means that at some point while oil is still in the ground, it will become energetically unfeasible to bring to the surface. You invest energy to get energy. At the point it takes more energy to get the oil out than the oil contains, it would be foolish to continue, since you would lose with each barrel pumped. When you add the huge investment in rigs and human energy (compoexity), it gets worse. Fuels with EROEI of less than about 3 would certainly not run society. At the beginning of the oil age, oil had an EROEI of around 100/1. What we’re getting now would average more like 10/1. See where this is going? Stuff like tar sands has an EROEI of less than 3/1, corn ethanol may even be less than 1/1 which is why it will never be sustainable without subsidies except as moonshine.
We humans always use the best first. That means picking the easiest, cheapest resources, and we’ve used those up and moved to the next-best. We’ve been doing that awhile now. Currently the world has plenty of $150 oil but pretty much no $40 oil. And the $150 oil will be gone soon. This isn’t my opinion, it’s fact. Bet otherwise at your peril and your childrens’ peril.
All oilwells are abandoned with plenty of oil still in the ground, and for good reason. It matters little how much is “down there”, it’s a matter of how much can be extracted, and to our society how FAST it can be extracted. (The slight rise in oil prices so far is due to demand getting slightly ahead of supply. Seems about every 1% decline has been causing a 15% price increase, but that will vary).
Your main error is that you believe someone is driving this bus. In fact, humans do not at present have logical leadership, in the sense that they care about you, understand complexity, or are able to game chaotic systems. It’s just all humans doing what humans do. The big oil executives are greedy, but no more so than those who run a toy company. They’re human, they like being rich. “Big Oil” has made money, but they increasingly are irrelevant, controlling only roughly 10% of the world reserves now. Our esteemed scientists are often over-specialized; I know a lot of astronauts & high-tech folks, being pretty high-tech myself, and few of them have done the study necessary to realize what the converging factors will mean. And being human, most don’t want to admit it to themselves any more than you do. The though that their kids and grandkids could face horrific problems is disturbing, so they, too, tend to shoot the messenger. It’s very human.
The US military is, I think, terrified of the fact that they won’t be able to get around. They are planning the same thing Hitler did, the Fischer-Tropfsh process to get fuel from coal. Nasty, but it works. Don’t be expecting them to share it with you though. Farmers, maybe, since food will be running low and you’ll be wanting some. But here’s the deal: the human race has some smart people, but collectively has behaved like yeast in a vat, going through a one-time windfall of miraculously dense and versatile oil energy as fast as physically possible. It would be nice to think we can be more intelligent than yeast, but the fact is we have not been so far.
Most people seem to be in the “anger” stage of Elizabeth Kubler-Ross’ stages of grief about this reality. Scream at the sky, doesn’t cost anything. But here’s the kicker: the only thing to be angry about is our own collective stupidity. That’s the deal. This was all predicted in detail 50 years ago by Shell geologists. There are no super-intelligent leaders hiding much of anything from you, they’re clueless in their own way for the most part.
And the scientists working on fusion and stuff? I wish them luck, and know some of them, but the ITER reactor isn’t even supposed to be ready for build-out until about 2050 – and that’s if everything goes perfectly! Even if they succeed, there won’t be more than a few ever built, because by that time we’ll be doing well to afford concrete, much less maintaining an infrastructure that can deal with massively supercooled structures bubbling away in vats of liquid helium.
Our global societal infrastructure, and industrial infrastructure, has started to collapse. It’s still a bit subtle, but it’s inexorable. I think you probably realize it deep down. There is a problem of “receding horizons”… rather than having more energy every year as we have for the last century, we are now tipping into the stage of having LESS energy available every year. Forever. This means that everything will take longer and a lot of things that used to be possible no longer are. And this will dramatically accelerate. Soon. Indeed, the poor villagers who can no longer afford diesel for their generators to irrigate from depleted fossil aquifers are now dying. The human population will contract dramatically in the coming 50-100 years in a one-time-only crunch. There is no way it can be stopped at this point. Even if some miracle energy source was discovered “just in time”, which would be nice, it would only slow, not change the direction, of this collapse. We are at limits in so many other ways for the same reasons, have strained the biosphere to the breaking point and have changed the planet’s climate irrevocably.
Take phosphorus, for instance. Absolutely necessary for fertilizer to grow food in anything like the amount needed to feed billions of people. We have squandered it. Check out the prices for a fertilizer company like POT. See anything familiar? Supply and demand, as the yeast near the limits of the vat.
So do you buy stock in POT or in a high-tech aircraft manufacturer? Your call, but people will be using parked jets as house trailers soon, and the main products of the aerospace firms will be cruise missiles, etc, for the resource wars.
Bad news to be sure – even worse for most other species since they didn’t have a hand in it. But it’s the real world, and nature bats last. So the answer to your core question is yes, we are exactly that dumb. And it pains me to know it. I wish I were clueless, my dogs seem to have a lot more fun than I do. But there it is.
Russia is essentially tied with Saudi Arabia as the largest producer of oil, and Gazprom is the petroleum pumping arm of the Russians. The price of oil is determined by how much oil exporting countries are WILLING to export to market. They have pricing control. This statement is not an “estimate” of future price, it is someone who controls a limited resource TELLING consumers how much they are GOING TO CHARGE!
I think that oil is a bubble and it will eventually crash just like the dotcoms, the housing market, etc. When price outweighs demand, the price will drop as people will look to alternatives for gasoline. Electric cars, bikes, maybe even walking will be the new form of energy. When can generate lots of electricity from many sources (nuclear, hydro, wave, etc.). We can not generate gasoline from many sources. When the price becomes too high for people to use a resource, people will cut back and look for alternatives (demand destruction). We are already starting to see it now. Oil will eventually F-A-L-L. Right now the only question is when. This is not some grand mystery, but simple economics. Of course speculation, currency values, and downright greed compound the issue. All I can say is I’m ready for the Chevy Volt, and apparently so are lots of other Americans.
In the short term, oil (a petrofuel) is probably over-priced, due to speculation. In the long-term, the price of oil will rise until it is no longer affordable. We are close to that point, as there are replacements available right now that are much cheaper than $250 per barrel.
When you’re ready to buy a new car, buy and American make with a lighter body and a smaller engine that can run on biofuels. Minimize air travel. Avoid buying products made from petrochemicals. Everyone can help.
I can’t change the price of oil, but I have converted ALL of my savings 401k investmens into Euro’s and precious metals. I sold my house and now rent.
It’s the best I can do.
Posted By Richard S. San Francisco, CA : June 11, 2008 3:27 pm
HEY I want to get into EURO’s myself but none of the finicial advisors I talk to know anything about it. Can you suggest soemone?
LOL, we have blown through half the world’s oil in hundred years and now we are ready to blow through the rest in twenty years.
If oil is below $250 dollars in 2009 I will be very surprized. Oil is the American way of life and nothing comes close to replacing it. The people who have the oil know they are going to have to charge $1,000 a barrel for it to last until their grand children grow up. More if they want it to last until their great great great greandchildren grow up.
Without oil we lose our cars, heating in the winter time, cooling in the summer time, our computers and the internet, cold ice cream in summer, ice for our mixed drinks, cold beer, lights to work by and live by at home, cell phones and land lines, TV and microwaves.
The last thing that will go will be running water. Then when that goes we will truely be in the dark ages once again.
We have twenty years no more like ten years before we start fighting over oil. No that is wrong we are fighting over oil today in Iraq.
P.S. In regards to “Angry Man”; alternatives to oil are difficult to find because of oil’s energy density.
You can’t force innovation; simply because people are smart doesn’t mean that they will solve every problem. Nuclear Fusion might one day provide nearly limitless energy, 50 years ago physicists said it was 25 yrs away, 25 years ago they said it is another 25 years away. The horizon always keeps receding.
It took 300 yrs to prove Fermat’s last theorem despite the efforts of some of the smartest people in history. Out of the thousands of smart people working on similar problems for years only one person, Einstein, postulated a theory that worked. Despites decades of work on Cancer treatment by some of the smartest people we still don’t have a cure.
The point is that you can’t force progress but, you can make do with the science and technology we do have.
Gazprom said $250 oil. Goldman said $ 150-200. The Fed urgently needs to strengthen the dollar through raising interest rates because inflation risks are dampening growth, increasing unemployment and the trade deficits.
Here are a set of questions people must ask themselves:
Where does the gas in car come from – gas station. Where does the station get its gas, from oil refineries, what about the oil refineries, from oil production facilities, where do the oil production facilities get it from the earth’s crust, where does the earth’s crust get it from, from a geologic process that took millions of years.
So you see the ultimate source of oil, is not under human control. Nature made only a finite amount of oil, it may still be making oil, but at a very very slow rate. Given that the ultimate source of oil is not under human control and is finite, we must start planning for its replacement.
The issue is not running out of oil, rather not having enough oil to satisfy demand. That’s the problem. Apt analogy our bodies are 70% water, we don’t need to lose all 70% of the water to die, losing only 8% of water will lead to death. A shortfall of 10 to 15% of oil supply will lead to serious consequences.
For more info:
http://www.lifeaftertheoilcrash.net/
Though I am more optimistic than the website’s author, he makes a strong case for peak oil.
I have a strong feeling it’s bigger than most have cared to imagine. Obviously way too big for those who understand or those who are in the industry would dare to share. This topic has a tendency to be compared to the 2000 computer frenzy. Not even close. Y2K was a “virtual” threat that resulted in nothing more than the consumption of billions of dollars. As much as the word “virtual” is used to describe “fact”, I think everyone needs to look up the term in the dictionary. I can’t tell you how many times I’ve heard it the last eight years. Fact is, we all need to understand that we, as a society (a worldwide society), have been consuming crude oil in substantial quantities for a little more than a century. Not even a speck in time. Millions of years for the earth to produce crude oil and less than a 100 years to pump it all out of existence. My chest gets tight when I hear these idiots speak of alternative means of oil excavation. Strip mining coal from the Rocky Mountains and turning it into oil. That sounds like a cost effective, environmentally friendly option. Here’s an analogy. “Hey, it’s cold in here! Lets cut up the floor joists from the house and throw them in the wood burner.” We teeter on the notion that “someone is taking care of the issues”, “everything happens for a reason”, or “it all works out over time”. There’s a devastating potential that’s starting to boil over the pot. Much of our society has been spoon fed the basic necessities of survival for more than 2 generations. There are many reasons why this has happened. It’s obvious our passion to find and build technological advancements to simplify our work is the double edged sword that’s being held to our throat. Is it human nature that makes us work harder in order to have to work less, or is it just plain greed? On the other side of the spectrum, it’s our virtue of compassion that makes us reach out to help the less fortunate. The line between the “less fortunate” and the “less willing” has become overwhelmingly distorted. Like a parent trying to give their kids “everything they didn’t have”, we’ve only enabled the problem through abused, government aid programs.
This isn’t like the “virtual” crude oil shortage engineered by OPEC in 1973. It’s real, folks. We can shake our heads and shake our fists and repeatedly ask “why aren’t they doing something about this”, but for the first time in life as we know it, we’re being forced to change. We’re living in the midst of a historical transition, but still, it’s but a speck of all that has happened and maybe all that is to come. Our world and universe has been building and expanding for over 13 billion years. We’ve unearthed human fossils in Africa that have carbon dated over 200,000 years old. Why in the last 150 years have we advanced so much? We have ideas, theories and assumptions, but either way, here we are. Right smack dab in the middle of a global transitional window for all of humanity to witness. No spectators, just players. So often we’ve heard the signs of the times being compared to the depression. During the depression, the greater majority of those affected didn’t know what it was like to have. We all do.
If China and India are to blame for the demand, Quit selling rice, soy beans, wheat and corn to them. Use these items to make ethanol.
OK
So now that the markets have closed…the value of OIL moved very modestly when valued in Euro’s. It actually WENT DOWN when valued in Silver and was mostly stable across a basket of currencies.
The $5.00 move today is actually US DOLLAR DEVALUATION and NOT OIL PRICE INCREASE.
Re: Posted By Joseph Redman, Kaneohe, HI : June 11, 2008 12:12 pm
Ok Mr Expert Geologist – here’s a question for you, since you seem so sure of yourself and your deductions.
Why now? In the last 3-4 years -and whatever you do, don’t feed me that BS line about China and India – don’t want to hear that…
We are a smart Nation filled with all sorts of smart people – heck, you may even be one of them. So I’ll ask it in a different manner. Do you really think that we are so dumb, as a Nation, as a World, that if oil was really going to run out tomorrow, as you are making it sound, that we wouldn’t have invested much much more into alternative energy? Does Jetfuel rely on oil? Yes it does. I’d say that’s a big problem. Don’t you think that aircraft engine manufacturers, our Department of Defense and just about anyone with any type of vested interest in National Security would be finding another way to move around our military? After all, we have a world to police …
Oil will go higher as long as the US Congress does what it has in the past about permiting drilling, which is nothing!
My friend just moved here from Germany. He bought a very large car that does not get such good gas mileage (Caprice Classic). When I asked why he bought such a beast he said “Because the gas in America is so cheap!”. He explained that the current price of gas in Germany is more than $8.00 per gallon (and has been above $5.00 per gallon for almost 10 years). So I guess we should feel luckly with our “cheap” gas prices!
I try to compile all of my errands on one trip as it is.
I’m active military 15 years, wife (going to college), two kids, and things are getting more and more difficult to manage.
Unfortunately I drive an F150, bad choice on my part, it is needed especially when we flood down here in MS from a 30 minute thunder storm.
I’m still upside down on it, so is trading it in for another more efficient vehicle really the answer? I would love to, but not at the option of having yet a larger note to pay for more efficient transportation. There isn’t much of a public trans system down here, so it’s either walk, bike, or drive, and the first two are taking your life in your own hands on these roads!
I think oil price will stay high or go higher.
1) Who will benefit the most from high oil price?
2) Who control oil production?
If the answers to the two questions are the same, then oil price will not drop significantly.
So much melodrama in these posts. To all of the “chicken-little’s” I say that the market will respond the same way it always has. Thus, if the market commands $250, then so be it. I am not suggesting that it won’t hurt or that it will not have severe repurcussions but the reality of the matter is that it is what it is.
Oil -denominated in US Dollars- will ALWYAS be a bad bet as long as the dollar is a depreciating asset.
I can’t change the price of oil, but I have converted ALL of my savings 401k investmens into Euro’s and precious metals. I sold my house and now rent.
It’s the best I can do.
Everyone in the industry that voluntarily “opens their mouth” about “what they think” about the price of oil is ultimately responsible for much of the latest increase. They know what they are doing – they’ve seen it happen several times over the course of the last 2 months, yet people still continue to come out and say the most stupid crap. The traders and the speculators – I hope that they get what’s coming to them. Here the sound of that pop? I hope it hits every damn one of them hard, where it hurts. And am I the only person in the US that thinks this administration has much to do with the problem? Comeon, every freakin person in the Bush cabinet has ties to oil. Not to mention our lack of any foreign policy other than occupation and fighting. I’m sure that little bush made Daddy happy. And those wonderful Republican congressman, god bless them all for blocking the windfall profit taxes on the oil companies – that was such a smart move – STUUUUUUUPID! How much money does big oil give to the Republican party vs the Democratic party, anyone want to post up those numbers? And my last thing before I step down of this soap box…for all you smart people out there that have nothing but support for the price of oil – how far do you live from your job? Do you have a job? Are you rich and retired? Do you think that we can bike 23 miles to our jobs? Do you think that carpools go everywhere? Buses? I’m not lazy and I would bike if I could, but nobody short of Lance Armstrong is riding 46 miles round trip everyday. For those of you that say it is my fault for living that far away – shut up, do you even know what the demographics of the area that I live in are? Everybody is an expert and always has the answer. Go fly a kite.
Oil will rise to the price that represents the value of work done by oil. It is a very versatile and useful mineral. It has been undervalued for a long time. Compare the cost of plowing a field with an oil-fed tractor and the cost of doing it by hand. How much would you pay for the ability to keep the tractor going? A lot.
Reckless spending policies of this present Administration are to blame for everything. Mere months after taking office, the economy began tanking and its no mystery why. Massive deficit spending, deregulation, and general incompetence on a massive level.
Gasoline prices are a SYMPTOM, not a disease. The real crash is coming.
If world oil production begins to decline, all bets are off. You could easily see $250/barrel and the sky is the limit from there. We have to face facts: world oil production has leveled off and is set to decline in the very near future. Mexico, Venezuela, the UK, the US, Indonesia, and now Russia(!) are all past their peaks and are sliding down the depletion curve. It’s only a matter of time before Saudi Arabia’s 50-year-old fields join the club. The days of cheap fuel are coming to an end.
We must begin to accept this reality and plan for the future. We are going to have to rethink almost everything about how we live and work. We will have to learn to do more with less. The sooner we accept this and face up to the enormous challenges ahead, the better off we will all be.
Oh, and I don’t think this issue will need much help getting to the front page or in becoming issue #1 in the election. Events have a way of doing that for you.
$250 per barrel is closer to a “sure thing”.
The scary thing to consider is what will happen to this country. Can we handle a total collapse of our economy? Can the world?
Can you imagine what will happen to the price of a barrel of oil when we actually hit peak oil (the volume of oil pumped out of the ground starts declining)? Or can you imagine what will happen when enough buyers and sellers of oil think peak oil is just over the horizon?
If peak oil is actually far off then these current high prices will help us develop the alternatives (assuming they can be developed!) and peak oil could be manageable.
If peak oil is just over the next hill then we are in very serious trouble indeed. In that case $250 per barrel in 2009 could easily be too low.
I think that oil keeps rising, then governments will do waht it takes to keep their country thriving. I believe that we are on the verge of entering World War three. The situation is going to become desperate and cause strange things to happen. All I got to say to OPEC is what are you going to do when foreign countries take your oil instead of buying it?
I see in the near future a return to rail travel and shipping exclusively, not by diesel but electric and eventually coal fired steam engines. We’ll be heating our homes with wood and coal stoves and growing our own food. Banks will eventually fail and we will return to a time our parents called “the Great Depression” It’s coming, mark my words.
I have to agree with earlier stories that the drastic increase in oil prices is going to create a bubble similar to that of new construction in the housing market.
The price of homes soared out of control while the cost to build stayed relatively low. This increase in profit margin led to a flood of inventory. Eventually the purchase prices exceeded what we could pay, and the homes began to stay on the market for 6 – 9 months. This has led to a sharp decline in housing prices.
I believe we could see oil do the same thing. Reports say that the cost to produce a barrel of oil is at $50 and I think I can speak for most in saying that fuel is at an unbearable cost these days. As we adjust our usage and inventories increase we will see the oil bubble pop and eventually more realistic gas prices.
Commodities all work the same so this could easily become reality. However, this is an extremely optimistic scenario, so hope for the best but plan for the worst.
Any discussion of up-side oil price futures by analysts from Goldman Sachs or Morgan Stanley must be treated with extreme distrust. These two companies maintain huge long positions in oil futures, and benefit from speculative upwards price movements. If this isn’t conflict-of-interest, hten nothing is!
I couldn’t tell you how high its going to go, but I will tell you that it’s a lot more complicated than just the “Evil oil companies.” We need to look at a our own demand for oil which has seriously increased since the 1990’s. The # of suvs you see on the road has a lot to do with the increase. And unless the supply starts to catch up with the demand, or the demand lessens. You may just see the prices continue going up. When people start getting rid of thier gas guzzling 8 cylinder engines, and start buying more fuel efficient models; then we will see the price of fuel decrease just like it did back in the late 70s and early 80s when we had our last fuel crisis. By the way if we could get a few of those liberal democratic congressmen to allow us to drill in our own country for oil or put up a refinery or two. We might be able to increase the supply. We haven’t built one in this country in 30 years. Last but not least lets not be too hasty with those evil oil ceo’s after all their profit off of what you pay at the pump is 4%. By comparison your Government takes 15% of that in Taxes. Just something to think about.
Well, your question hinges upon the value of a dollar…or 250 of them.
We must separate the price of oil from the vaue of the currency.
If oil was pegged in Euro’s instead of dollars the price of the commodity would be far more stable. However, we would perceive inflation as it takes an increasingly higher number of US dollars to purchase Euro’s.
Our pain is mostly the result of US dollar devaluation on the International markets.
The answer is obvious. There are really two reasons as to why oil will continue to skyrocket in the coming years. #1. China and India as well as other developing countries are consuming oil at a feverish pace which will inevitably begin to outstrip supply causing a massive increase in prices. #2. All oil purchases around the world are denominated in American Dollars (Petro-Dollars). The US has been printing money at such a feverish pace causing price inflation. As the US continues this destruction and devaluation of the US greenback oil prices will continue to rise in conjunction. A country cannot continue to print fiat money without inevitable hyper-inflation.
This country is in terminal decline. The fact that nobody here is willing to accept the real reason behind the current crisis is ample evidence of this.
The evidence is all around that much of what is happening with oil prices now is speculative in nature and dare I say may be there is manipulation. All it takes for major movement in the price is a single statement not linked to the fundementals (EU Central Banks last Friday). And lets not forget the analyst for giving the green light with statements like “we can see oil prices at $150 a barrel”. Gives everyone the go ahead to bid it up without regard to basics. And the financil firms handle the trades, make investments and pocket teh commissions. I guess for some of the financial firms it is one way to soften the blow from the subprime mess they made. Just make another one. They’ll have moved on to something else by the time regulators figure it out.
As for alternative energy all for it. Just remember they’ll eventually figure out how to inflate and manipulate that one too!
Unlikely we get to $250. By then the entire world will be in a depression and demand will fall as will oil prices. Eventually things will stabilze for a while on a lower level of consumption and economic activity. After a while new imbalances between supply and demand will develop and oil prices will start rising again as the vicious cycle repeats. We either “find” alternative sources of energy and conservation or we’re looking into a very bleak future. For the sakes of this country I hope we get busy rather sooner than later.
I’m a geologist and former oil exploration seismologist who has more recently worked in environmental conservation.
The reality is that oil is incredibly underpriced. We don’t like hearing that because we’ve evolved our lifestyle on the tacit assumption that oil will be basically free, or available cheaply forever.
Well, the real world simply isn’t set up that way. What we now see is people casting about for scapegoats – speculators, big oil, radical islam, environmentalists – when the problem is deceptively simple. Billions of human beings all using more of a finite resource.
The human capacity for denial is incredible, and we will keep denying that oil is getting scarcer as the price rises inexorably and it is ultimately rationed. And by “ultimately” I mean within 10 years in the USA. The only number we need to look at are the world net exports, and those are falling off a cliff. We will lose Mexico entirely in the next couple years as an oil source as the Cantarell field collapses, leaving us to bid against growing economies in China and India for the dwindling oil available for export.
We may indeed see $250 oil by next xmas. I don’t predict that, but for what it does, and how irreplaceable it is, it could be $1000 per barrel and not overpriced.
The question is, as what point does the catabolic collapse of our evolved economic system occur? It has started with airlines, will spread to trucking and all transportation, and will affect the very basis of American life as “just in time delivery” chains sputter to a halt.
Not good news, but news the US public needs to understand and internalize. In five years we will be wishing for $250 oil.
Medium to long term, the change in consumer behavior here and tanking economy may limit prices to the range they are in now (call it 120-150) but a bad hurricane doing damage in the Gulf (and not just scaring people)could cause $200 for awhile.
Until Americans replace their “me-centric” mind-set with a “God-centric” mind-set, oil costs will continue to rise. Attitudes of getting richer and having fun need to be replaced with attitudes of sacrifice and care for others.
I don’t see how oil could hit such a high level, unless the Dollar plummets by 40%.
If the dollar remains at its current point and oil still rises to $250, we’re looking at world-wide impact. Fuel, heating oil and plastic prices would nearly double in price. This would be passed on through all chains of the economy, leading to a 30% rise in airline ticket prices, a 60% rise in food costs, and 25 – 50% rise in electricity costs in some areas.
Countries providing subsidies for their gasoline prices would have to stop them.
Demand will tank long before we manage to get oil up that high.
And yes, I realize that European countries have been living with high gas prices for years. But their system is set up different than the U.S. They have a strong public transportation system. Commercial, Industrial, and Residential districts are close together, allowing for walking/biking to work. Shopping is typically within walking distance from every residence.
Contrast that with the U.S. where the nearest residence to some worksites is 20+ miles away. The same with shopping, where corner stores and mom-and-pop stores have been pushed out, leaving the nearest shopping multiple miles from residential areas.
Makes you think how funny that comment is considering it came from the CEO of a major oil company who stems to profit from it. I think greed is the only factor considering this is a relatively inelastic product. Should have been controlled like public utilities originally. I guess it’s how the work turns.
That’s right! We need to free ourselves from this madness. Let’s hope that the next President (whomever it is) makes energy independence a priority.
It should make little difference if oil is $250 or $130, we will not see $25 oil again. This makes the point even sharper that we, as a nation, need to find and develop alternatives which allow us to keep our dollars at home rather than funnel them to sovereign countries that do not like us, respect us, or want us.
I remember reading articles on cnn.com where people said that $100/barrel oil is absurd. With supply not keeping up with demand, the sky’s the limit on oil prices. I don’t think $250 is absurd at all. We can’t drill our way out of this problem because oil is a finite resource. One day, and one can argue when, it has to run out. Simple math and physics, folks.
Our government has failed us on energy security. President Bush should do what John Kennedy did with the space program. Kennedy got on national television and challenged our country to put a man on the moon by 1969. The President should do the same thing and challenge our country to find a solution to get off of oil by 2020. If this country can invent electricity, automobiles, aviation, computers, and countless other innovations that have changed our lives, we can surely solve this problem.
Prices will continue to rise. Above ground pressures coupled with simple demand will not lead to lower prices. The media, CNN included, seems to forget that the surpluses being reported by various countries and OPEC are mostly increases in heavy sour crude, which is not helping anybody. Most US refineries are not capable of handling this type of crude meaning that a shortage of light sweet crude is very real.
Good job CNN, in dropping the ball yet again. Oil prices will keep climbing until all of us are walking.
I can remember when the “experts” balked at $80 dollar oil. Then the “experts” said no way to $100 dollar oil. Every time we approach a new high, or pass a new high the “experts” simply start talking about a higher price. If I want to know the future of oil prices i’ll ask one of my cats.
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I know I risk being beaten up on the street to say what I am going to say.
Personally, I think high oil price is reflecting the scarcity of oil on earth crust.It is sending a signal to everyone to consume less, supply more and find alternatives, which is a good thing after all.
High oil price is the best solution to solve the global warming problem. We have to start changing our life style for our own good because our planet can no longer take infinite amount of Co2 which is produced primarily by burning of fossil fuel.
No one likes the change, including myself. I understand that people suffer, especially low income families. But it is the reality we have to face sooner or later and i believe that the “pollute the world to prosper” approach has to be slowed down if not put to an end. We have just to hold back our gratifications for a while.
The U.S. has grown stronger and stronger each time after some kind of crisis.
We invented fuel efficient combustion engines and has been using energy way more efficient than ever after the oil crisis in 1973. The economy had grown in an spectular speed after the lesson learned during the great depression.
When things start to look bleak, the silver lining is right ahead of us.
If you ask who benefit the most in the crisis, i will say: Mr.Earth