How are we going to get this great country back on the right path?
Quote: NareedGoing by predictions from the 70s and 80s, by my count we've run out of oil at least three times already.
The figures from 1970s didn't count on oil getting so expensive that companies will be investing $70/barrel just to extract it.
They were based on $3/barrel oil, that is about $15 inflation-adjusted, of which one would spend under $10 on extraction.
They also were based on US providing for over 80% of its domestic consumption, not 30-40%.
So... haven't we run out of oil?
Out of $15/barrel, domestic oil, long ago.
Now we're using about $100/barrel, foreign oil, and that's another supply entirely.
Burn theirs first. He who has oil for his ships, planes, tanks and tractors last wins. Any other answer is nothing more than attempting to buy votes.
Quote: P90The figures from 1970s didn't count on oil getting so expensive that companies will be investing $70/barrel just to extract it.
They were based on $3/barrel oil, that is about $15 inflation-adjusted, of which one would spend under $10 on extraction.
So in the late 70s oil shock, oil was only $3 per barrel? Remember the gas lines in the late Carter years? $3 per barrel? I don't think so.
Now, if you'll excuse me, I'll go hit my head with a hammer.
Quote: QuadDeucesOil Production:
Burn theirs first. He who has oil for his ships, planes, tanks and tractors last wins. Any other answer is nothing more than attempting to buy votes.
That actually makes a lot of sense but we also have to produce enough to keep them from having total control over the prices. Like anything else, there is a need for balance.
Of course, we also need to continue to develop alternative power for all those vehicles, too!!
Quote: NareedSo in the late 70s oil shock, oil was only $3 per barrel? Remember the gas lines in the late Carter years? $3 per barrel? I don't think so.
The original oil crisis was in the early 70s. Yes, $3 per barrel, it's public data. The shock was about there being no more $3 per barrel oil.
Then it was $14 per barrel and there was another whaam when that too wasn't sustained.
The rescue came from OPEC. It didn't come from a new oil tech, it didn't come from a sudden discovery of new oilfields in US.
In 1985, the year that the 1980s oil crisis ended, US oil production decreased. It was OPEC, or specifically Saudi, that ramped it up.
So I reiterate - "we" as in US did run out of oil. Not down to the bottom, but out of enough to feed the consumption.
Quote: RonCThat actually makes a lot of sense but we also have to produce enough to keep them from having total control over the prices.
Actually what we need is the ability to produce. More specifically, the ability to rapidly ramp up the production.
Guess how one maintains that ability?
But some final thoughts:
I would doubt you, or really anyone, would have predicted around 2008 that in 2012, natural gas would cost us about a third and that technologies would become widely available to reclaim it at such a price. Technologies advance and will continue to do so. Companies will find a way to recover oil in a profitable fashion- it's inevitable because of the demand and the potential for profit. While it may seem we're on a cliff today according to your numbers, the market will find a way to move us back from the edge, assuming the government can give private industry enough air to breathe.
Regardless of where things end up in ten years, having good-paying jobs between now and then is still a step in the right direction because we can all agree we don't want a double-dip which appears to be where we're headed. Say what you will about North Dakota: their unemployment right now is at 3% and that's a great thing and it's because of oil. I don't know it can even be argued they should be doing something else or they could be doing any better.
I'm good either way.
Quote: rxwineWhat's the U.S. like with most of the oil supply gone?
Big oil shale mines.
Quote: P90Actually what we need is the ability to produce. More specifically, the ability to rapidly ramp up the production.
Guess how one maintains that ability?
Explore and prove.
Quote: P90
The rescue came from OPEC. It didn't come from a new oil tech, it didn't come from a sudden discovery of new oilfields in US.
In 1985, the year that the 1980s oil crisis ended, US oil production decreased. It was OPEC, or specifically Saudi, that ramped it up.
So I reiterate - "we" as in US did run out of oil. Not down to the bottom, but out of enough to feed the consumption.
Not 100% correct. OPEC was formed in the late 1060s when the Seven Sisters (Exxon, Mobil, Texaco, Chevron, BP, Gulf, and Royal Dutch/Shell group) unilaterally cut the posted price buy an amount that today would be a blip but then was a huge hit to the revenue of the effected countries. Back then they gave revenue to the producing countries by paying a posted price at the wellhead. It was intended to give a 50/50 revenue share. But with falling oil prices the posted price was baically fictional.
Fast forward to the 1970s. OPEC shut off supply because of US Support for Israel and realized they could make a lot of money by keeping prices high. Saudi Arabia, even then, was astute enough to know that if you price high demand will fall and other supply will come online. It took 10 years, but AK, North Sea, and other supply came online and started to reduce world demand.
After about 1980, Saudi Arabia was made the OPEC "swing producer" and with a flexible production quota. As prices fell from the high $20s/bbl they cut and cut production. By late 1985 US imorts of Saudi Oil fell to around 30K bbl/day, meaning probably just one supertanker for that month. North Sea production rose above Saudi Production and the Sheiks hit the roof. The openly cheated on their quota. They changed the relationship with what was left of the Seven-Sisters from buying at the wellhead to giving a guaranteed $2 profit after refining, IOW the incentive was to push as much thru the refineries as possible since profit was locked in.
It worked as intended. US exploration ground to a halt and did not recover for years. 25 years later we are getting back to the point that North America may become 100% of its own supply. The supply is there, and now the Saudis can no longer swing things like then. Drill, Baby, Drill!
Baghdad, Iraq
September 10–14, 1960
in effect January 1961
(Based on a proposal made by Venezuela and Iran in 1949)
Quote: AZDuffmanAfter about 1980, Saudi Arabia was made the OPEC "swing producer" and with a flexible production quota. As prices fell from the high $20s/bbl they cut and cut production. By late 1985 US imorts of Saudi Oil fell to around 30K bbl/day, meaning probably just one supertanker for that month. North Sea production rose above Saudi Production and the Sheiks hit the roof. The openly cheated on their quota. They changed the relationship with what was left of the Seven-Sisters from buying at the wellhead to giving a guaranteed $2 profit after refining, IOW the incentive was to push as much thru the refineries as possible since profit was locked in.
Yes, that's a more detailed explanation of the story.
Note though, that despite the spiking prices, US production was not able to keep up. It didn't increase at all throughout the 1970-1985 oil crisis.
This graph tells the quantitative side of the story:
Quote: AZDuffman25 years later we are getting back to the point that North America may become 100% of its own supply.
Probably can. The question is for how long - and we know it's not long enough - and what happens next.
It won't cut the price of oil significantly, the easy reservoirs in US have been drained, newer ones are expensive.
Just as a matter of pride, "we dun' impot' nuffin'"?
