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View Full Version : Oil - just some crude for thought


oldandslow
07-06-2006, 11:52 AM
1. Oil rigs are leaving the Gulf in droves - headed for Saudi Arabia...

Quote:
NEW YORK (CNNMoney.com) -- Oil rigs are leaving the Gulf of Mexico in record numbers, threatening to put upward pressure on U.S. oil and natural gas prices, according to a report published Wednesday.

Drilling companies are increasingly signing long-term deals with oil firms to send their rigs to more promising drilling regions overseas, said the Wall Street Journal.

http://money.cnn.com/2006/07/05/news/economy/oil_rigs/index.htm

2. The Saudi's last year promised to keep production at or above current levels - This is how they intended to do it.

3. Unfortunately, however, the Saudi's wells are peaking or perhaps even declining...

In particular, check out the graph at the URL below. The blue line is the number of rigs. The green and purple lines are two different estimates of Saudi production. Rig count is going through the roof. Production is not.

http://www.theoildrum.com/uploads/12/saudi_arabia_prod_rigs_april_2.png

4. Less oil out of the Gulf + Saudi Output peaking = well you figure it out.

Eskimo Joe
07-06-2006, 11:58 AM
1. Oil rigs are leaving the Gulf in droves - headed for Saudi Arabia...

Quote:
NEW YORK (CNNMoney.com) -- Oil rigs are leaving the Gulf of Mexico in record numbers, threatening to put upward pressure on U.S. oil and natural gas prices, according to a report published Wednesday.

Drilling companies are increasingly signing long-term deals with oil firms to send their rigs to more promising drilling regions overseas, said the Wall Street Journal.

http://money.cnn.com/2006/07/05/news/economy/oil_rigs/index.htm

2. The Saudi's last year promised to keep production at or above current levels - This is how they intended to do it.

3. Unfortunately, however, the Saudi's wells are peaking or perhaps even declining...

In particular, check out the graph at the URL below. The blue line is the number of rigs. The green and purple lines are two different estimates of Saudi production. Rig count is going through the roof. Production is not.

http://www.theoildrum.com/uploads/12/saudi_arabia_prod_rigs_april_2.png

4. Less oil out of the Gulf + Saudi Output peaking = well you figure it out.

I'm currently working at a refinery in India that employs between 12,000 and 15,000 people. I don't know how large the refineries might be in Saudi, but this one has some sister plants around. It seems to be pretty large and growing.

Mr. Laz
07-07-2006, 02:25 PM
this oil game is a no win situation.


the only way to win is to not play and get us off oil.


neuter those bastiges in the middle east ... then they can go back to humping camels.

Brock
07-07-2006, 02:26 PM
this oil game is a no win situation.


the only way to win is to not play and get us off oil.


neuter those bastiges in the middle east ... then they can go back to humping camels.

If they're running out of oil, that's going to happen anyway.

Mr. Laz
07-07-2006, 02:28 PM
If they're running out of oil, that's going to happen anyway.
i doubt they are running out ... but even if they are it's going to get worse and worse.


we need a long term energy solution that doesn't give the leverage to another country ... especially not another hostile country.

Hydrae
07-07-2006, 02:42 PM
Hmmm, my wife was talking the other day about some kind of royalty that the oil companies were not having to pay right now to encourage them to increase the amount of exploration in the Gulf. Somthing along the lines of 5-10 Billion dollars saved for them. This was passed back in the mid 90's when prices were still low.

But I will have to check out more on this because I would have a problem with them getting a nice break and leaving the area that created the break in the first place. Sounds like the oil companies are bending us over again but my head is already past my knees, not sure I can bend any further.

BIG_DADDY
07-07-2006, 02:46 PM
this oil game is a no win situation.


the only way to win is to not play and get us off oil.


neuter those bastiges in the middle east ... then they can go back to humping camels.

We are probably 20 years out.

Mr. Laz
07-07-2006, 02:48 PM
We are probably 20 years out.
man ... that's too long


at this point i don't really even car what particular solution we use.



imo if we get Cars off of oil/gas the middle east goes back to being the dirt farm is supposed to be.

oldandslow
07-07-2006, 02:49 PM
Laz...

There are long term solutions - but we are not ready to adopt them...yet.

I suspect we will soon, tho.

Anyway, my ideas are pretty draconian, but I just don't see any other way.

They include...

1. A "man to the moon" research push for clean, alternative energy sources.
2. Build nuclear plants.
3. Carbon tax.
4. Population control. We're gonna be at 300 mil in October and 400 mil in a couple of decades. Take away incentives to have kids (including more govt dole for the number of kids you have) AND control the border
5. Govt incentive for small, local, capitalistic economies - Do away with all corporate welfare.
6. Enforce environmental regs so that clean tech will be developed.

I could go on and on, but you get the picture.

Mr. Laz
07-07-2006, 02:51 PM
government rebate check for 500 bucks for every new hybrid car sold?

addition 500 tax for each non-hybrid car sold?


the tax will easily pay for the rebate ... maybe a 1000 for each hybrid new car purchase???


encouraging hybrid purchasing with spur the entire market imo


bonus for car companies for importing hybrid new cars?

penalty for importing non-hybrid cars?

Donger
07-07-2006, 02:52 PM
government rebate check for 500 bucks for every new hybrid car sold

addition 500 tax for each non-hybrid car sold.


the tax will easily pay for the rebate ... maybe a 1000 for each hybrid new car purchase???

There's already a hybrid tax deduction. I think it's $3,000.00

Mr. Laz
07-07-2006, 02:55 PM
There's already a hybrid tax deduction. I think it's $3,000.00
hmmm ... maybe it needs to be promoted more :hmmm:



maybe change it from a tax rebate to an instant rebate ... that would encourage more purchasing imo.

Baby Lee
07-07-2006, 02:59 PM
at this point i don't really even car what particular solution we use.
And the winner for Freudian Slip of the Day!!!

Mr. Laz
07-07-2006, 03:00 PM
And the winner for Freudian Slip of the Day!!!
:p

BIG_DADDY
07-07-2006, 03:01 PM
man ... that's too long


at this point i don't really even car what particular solution we use.



imo if we get Cars off of oil/gas the middle east goes back to being the dirt farm is supposed to be.

I was down in Texas trying to pick up some business from a bunch of oil men down in Houston. There seemed to be a general consensus that there was only about 20 years left before the conversion will have had to have been made to hydrogen fuel cells. I didn't get into how long it would take for military applications of such technology or even if it is possible with what we know now. One thing that did seem obvious was that the 2nd largest oil reserve is going to remain very important over the next 30 years particularly from a military standpoint.

oldandslow
07-07-2006, 03:01 PM
Here are the tax credits.

Qualifying hybrids purchased or placed into service after December 31, 2005 may be eligible for a federal income tax credit of up to $3,400.


Vehicle Make & Model Credit Amount

Ford Motor Company Jan. 1, 2006 TBD TBD
2006 Ford Escape Hybrid 2WD $2,600 -- --
2006 Ford Escape Hybrid 4WD $1,950 -- --
2006 Mercury Mariner Hybrid 4WD $1,950 -- --
Some Ford and Mercury Vehicles Certified for the New Energy Tax Credit (April 7, 2006)
Ford and Mercury Sell Over 6,100 Hybrid Vehicles (June 7, 2006)

Toyota
2005-06 Prius $3,150 $1,575 $788
2006 Highlander 2WD Hybrid $2,600 $1,300 $650
2006 Highlander 4WD Hybrid $2,600 $1,300 $650
2006 Lexus RX400h 2WD $2,200 $1,100 $550
2006 Lexus RX400h 4WD $2,200 $1,100 $550
2007 Camry Hybrid $2,600 $1,300 $650
2007 Lexus GS 450h $1,550 $775 $388
Some Toyota and Lexus Vehicles Certified for the New Energy Tax Credit (April 7, 2006)
Toyota and Lexus Vehicles Certified for New Energy Tax Credit (April 25, 2006)
Toyota and Lexus Sells Over 41,000 Hybrid Vehicles (June 7, 2006)

Honda Jan. 1, 2006 TBD TBD
2005-06 Insight CVT* $1,450 -- --
2005 Accord Hybrid $650 -- --
2006 Accord Hybrid
(w/o updated control calibration) $650 -- --
2006 Accord Hybrid
(w/ updated control calibration) $1,300 -- --
2005 Civic Hybrid
(SULEV) MT & CVT* $1,700 -- --
2006 Civic Hybrid CVT* $2,100 -- --

Mr. Laz
07-07-2006, 03:06 PM
I was down in Texas trying to pick up some business from a bunch of oil men down in Houston. There seemed to be a general consensus that there was only about 20 years left before the conversion will have had to have been made to hydrogen fuel cells. I didn't get into how long it would take for military applications of such technology or even if it is possible with what we know now. One thing that did seem obvious was that the 2nd largest oil reserve is going to remain very important over the next 30 years particularly from a military standpoint.

if they already know what and when, then the solution is a matter of choice not possibility.


we should be able to force it to half the time, if we show the will power to commit to it.


the next president needs to step up and say "75 off oil by the end of my administration"

and then focus the energy and money towards that goal.


it can be done

BIG_DADDY
07-07-2006, 03:22 PM
if they already know what and when, then the solution is a matter of choice not possibility.


we should be able to force it to have that if we show the will power to commit to it.


the next president needs to step up and say "75 off oil by the end of my administration"

and then focus the energy and money towards that goal.


it can be done

I know it would be great for a source of energy for houses and stuff like that but I have no idea the kind of horsepower a hydrogen fuel cell could produce in a car, do you?

Mr. Laz
07-07-2006, 03:29 PM
I know it would be great for a source of energy for houses and stuff like that but I have no idea the kind of horsepower a hydrogen fuel cell could produce in a car, do you?
i'm no expert, but i have read on the subject ... from what i understand, horsepower isn't really the issue.

it's more a safety and an infrastructure issue

Hydrae
07-07-2006, 04:09 PM
I know it would be great for a source of energy for houses and stuff like that but I have no idea the kind of horsepower a hydrogen fuel cell could produce in a car, do you?

I do know I saw a thing a couple months ago about a hydrogen cell powered BMW that was able to go up to 300KPH (180 MPH).

http://www.bmwworld.com/hydrogen/h2r_racer.htm

BIG_DADDY
07-07-2006, 04:13 PM
I do know I saw a thing a couple months ago about a hydrogen cell powered BMW that was able to go up to 300KPH (180 MPH).

http://www.bmwworld.com/hydrogen/h2r_racer.htm

Thanks, seems pretty cool but it sure looks huge. I am sure technology will only get better on them. I would love to have high performance toys that never needed refueling. These things will never really be popular without having some decent acceleration.

Hydrae
07-07-2006, 04:22 PM
Hmmm, my wife was talking the other day about some kind of royalty that the oil companies were not having to pay right now to encourage them to increase the amount of exploration in the Gulf. Somthing along the lines of 5-10 Billion dollars saved for them. This was passed back in the mid 90's when prices were still low.

But I will have to check out more on this because I would have a problem with them getting a nice break and leaving the area that created the break in the first place. Sounds like the oil companies are bending us over again but my head is already past my knees, not sure I can bend any further.

This is a start. (http://www.nytimes.com/2006/02/14/business/14oil.html?ex=1297573200&en=87dc413fa6add582&ei=5088&partner=rssnyt&emc=r)

U.S. Has Royalty Plan to Give Windfall to Oil Companies

By EDMUND L. ANDREWS
Published: February 14, 2006

WASHINGTON, Feb. 13 The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years.

Royalty-Free Oil and Gas New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government.

Based on the administration figures, the government will give up more than $7 billion in payments between now and 2011. The companies are expected to get the largess, known as royalty relief, even though the administration assumes that oil prices will remain above $50 a barrel throughout that period.

Administration officials say that the benefits are dictated by laws and regulations that date back to 1996, when energy prices were relatively low and Congress wanted to encourage more exploration and drilling in the high-cost, high-risk deep waters of the Gulf of Mexico.

"We need to remember the primary reason that incentives are given," said Johnnie M. Burton, director of the federal Minerals Management Service. "It's not to make more money, necessarily. It's to make more oil, more gas, because production of fuel for our nation is essential to our economy and essential to our people."

But what seemed like modest incentives 10 years ago have ballooned to levels that have alarmed even ardent supporters of the oil and gas industry, partly because of added sweeteners approved during the Clinton administration but also because of ambiguities in the law that energy companies have successfully exploited in court.

Short of imposing new taxes on the industry, there may be little Congress can do to reverse its earlier giveaways. The new projections come at a moment when President Bush and Republican leaders are on the defensive about record-high energy prices, soaring profits at major oil companies and big cuts in domestic spending.

Indeed, Mr. Bush and House Republicans are trying to kill a one-year, $5 billion windfall profits tax for oil companies that the Senate passed last fall.

Moreover, the projected largess could be just the start. Last week, Kerr-McGee Exploration and Development, a major industry player, began a brash but utterly serious court challenge that could, if it succeeds, cost the government another $28 billion in royalties over the next five years.

In what administration officials and industry executives alike view as a major test case, Kerr-McGee told the Interior Department last week that it planned to challenge one of the government's biggest limitations on royalty relief if it could not work out an acceptable deal in its favor. If Kerr-McGee is successful, administration projections indicate that about 80 percent of all oil and gas from federal waters in the Gulf of Mexico would be royalty-free.

"It's one of the greatest train robberies in the history of the world," said Representative George Miller, a California Democrat who has fought royalty concessions on oil and gas for more than a decade. "It's the gift that keeps on giving."

Republican lawmakers are also concerned about how the royalty relief program is working out.

"I don't think there is a single member of Congress who thinks you should get royalty relief at $70 a barrel" for oil, said Representative Richard W. Pombo, Republican of California and chairman of the House Resources Committee.

"It was Congress's intent," Mr. Pombo said in an interview on Friday, "that if oil was at $10 a barrel, there should be royalty relief so companies could have some kind of incentive to invest capital. But at $70 a barrel, don't expect royalty relief."

Tina Kreisher, a spokeswoman for the Interior Department, said Monday that the giveaways might turn out to be less than the basic forecasts indicate because of "certain variables."

The government does not disclose how much individual companies benefit from the incentives, and most companies refuse to disclose either how much they pay in royalties or how much they are allowed to avoid.

But the benefits are almost entirely for gas and oil produced in the Gulf of Mexico.

The biggest producers include Shell, BP, Chevron and Exxon Mobil as well as smaller independent companies like Anadarko and Devon Energy.

Executives at some companies, including Exxon Mobil, said they had already stopped claiming royalty relief because they knew market prices had exceeded the government's price triggers.

About one-quarter of all oil and gas produced in the United States comes from federal lands and federal waters in the Gulf of Mexico.

As it happens, oil and gas royalties to the government have climbed much more slowly than market prices over the last five years.

There is a second page at the link if you want to read more.

Cochise
07-07-2006, 05:13 PM
Laz...

There are long term solutions - but we are not ready to adopt them...yet.


There will be. I don't think that in a hundred years people are all going to be driving gasoline-powered cars any more than people today are riding around on horses.

The problem is not that the last drop of oil will be pumped out of the earth in the next 30 years or so. That's simply not true. It's that the world's consumption is growing at a rate that is starting to outstrip our rate of refining oil. Since we never add capacity it's natural that prices will grow ever-higher.

I don't think that we will ever see a time where there is simply no oil to be had. It will just become too expensive for the average consumer.

But that being what it is, this means there is a market for something better. Cars were better than horses and so people wanted cars. People wanted cars so lots of companies started making cars. Why? Because there was money to be made.

Once there's enough money to be made in an alternative, it will arrive. It's the invisible hand.

I would contend that while prices suck compared to 10 years ago, it's not really hurting the average consumer that bad or else they would all be drastically changing their habits. Sure people drive a little less when it's high, but not many people are carpooling, you don't see many families of 4 in Hondas. You still see lots of Yukons and Explorers out on the road.

I think people still really CAN afford it, as much as it makes them angry and maybe even cut back in another area or two.

Mr. Laz
07-07-2006, 05:29 PM
I do know I saw a thing a couple months ago about a hydrogen cell powered BMW that was able to go up to 300KPH (180 MPH).

http://www.bmwworld.com/hydrogen/h2r_racer.htm


Developed in just 10 months

The BMW H2R was conceived, designed and developed by BMW Forschung und Technik GmbH, the legendary subsidiary of BMW AG, in just 10 months.

oldandslow
07-10-2006, 11:43 AM
Australian news service just produced this short program on oil...

Takes 12 minutes...it's worth the time.


http://www.mylinuxisp.com/~blawrence/oilcrisis_hi.wmv

If all the oil folks they interviewed except exxon are right, all I can say is that we are F*****.

Mr. Laz
07-10-2006, 01:59 PM
Australian news service just produced this short program on oil...

Takes 12 minutes...it's worth the time.


http://www.mylinuxisp.com/~blawrence/oilcrisis_hi.wmv

If all the oil folks they interviewed except exxon are right, all I can say is that we are F*****.
thanks for the link ..... interesting vid

i don't know which side to believe ... but it's pretty clear, imo, that there is too much upside in finding an alternative for gas/oil and too much of a downside to not finding one, to make the decision difficult.


one of the problems is we need to find an alternative BEFORE an oil production problem pops up because the transition will be a disaster if we don't.

we need to get cars off of gas so that there is still enough "easy oil" leftover for us to use while we find alternatives for all the other uses for petroleum products. Also planes etc with take more time to find an answer for.

we need to push Hydrogen NOW imo ... not wait.


human beings aren't ones to be proactive .... they generally don't want to do anything until it blows up.

htismaqe
07-10-2006, 02:02 PM
thanks for the link ..... interesting vid

i don't know which side to believe ... but it's pretty clear, imo, that there is too much upside in finding an alternative for gas/oil and too much of a downside to not finding one, to make the decision difficult.


one of the problems is we need to find an alternative BEFORE an oil production problem pops up because the transition will be a disaster if we don't.

we need to get cars off of gas so that there is still enough "easy oil" leftover for us to use while we find alternatives for all the other uses for petroleum products. Also planes etc with take more time to find an answer for.

we need to push Hydrogen NOW imo ... not wait.


human beings aren't ones to be proactive .... they generally don't want to do anything until is blows up.

Alternative fuels will come.

They just haven't figured out a way to make oil companies filthy rich off of them yet. Once they do, the floodgates will open.

Mr. Laz
07-10-2006, 02:07 PM
Alternative fuels will come.

They just haven't figured out a way to make oil companies filthy rich off of them yet. Once they do, the floodgates will open.
True dat

i just hope they don't try and squeak out every last drop of cash from oil before moving on.

it' will make the transition hellish

oldandslow
07-10-2006, 02:33 PM
I am not one of those who fanatically believe that "tech" is going to somehow magically "save us." Indeed there is very little evidence to illustrate that this is true. In fact there are many scientists who believe the age of big discoveries is gone...

For example -

Even if we did throw money at the problem, it's not certain we could fix it. One of the strangest portents of the end of progress is the recent discovery that humans are losing their ability to come up with new ideas.

Jonathan Huebner is an amiable, very polite and very correct physicist who works at the Pentagon's Naval Air Warfare Center in China Lake, California. He took the job in 1985, when he was 26. An older scientist told him how lucky he was. In the course of his career, he could expect to see huge scientific and technological advances. But by 1990, Huebner had begun to suspect the old man was wrong. "The number of advances wasn't increasing exponentially, I hadn't seen as many as I had expected not in any particular area, just generally."

Puzzled, he undertook some research of his own. He began to study the rate of significant innovations as catalogued in a standard work entitled The History of Science and Technology. After some elaborate mathematics, he came to a conclusion that raised serious questions about our continued ability to sustain progress. What he found was that the rate of innovation peaked in 1873 and has been declining ever since. In fact, our current rate of innovation which Huebner puts at seven important technological developments per billion people per year is about the same as it was in 1600. By 2024 it will have slumped to the same level as it was in the Dark Ages, the period between the end of the Roman empire and the start of the Middle Ages...

more here...

http://www.timesonline.co.uk/article/0,,2099-1813695_1,00.html

Jared Diamond (Guns, Germs, & Steel) makes essentially the same argument. After a time even tech hits the same law of diminishing return return that everything else does....

htismaqe
07-10-2006, 02:35 PM
I am not one of those who fanatically believe that "tech" is going to somehow magically "save us." Indeed there is very little evidence to illustrate that this is true. In fact there are many scientists who believe the age of big discoveries is gone...

For example -

Even if we did throw money at the problem, it's not certain we could fix it. One of the strangest portents of the end of progress is the recent discovery that humans are losing their ability to come up with new ideas.

Jonathan Huebner is an amiable, very polite and very correct physicist who works at the Pentagon's Naval Air Warfare Center in China Lake, California. He took the job in 1985, when he was 26. An older scientist told him how lucky he was. In the course of his career, he could expect to see huge scientific and technological advances. But by 1990, Huebner had begun to suspect the old man was wrong. "The number of advances wasn't increasing exponentially, I hadn't seen as many as I had expected not in any particular area, just generally."

Puzzled, he undertook some research of his own. He began to study the rate of significant innovations as catalogued in a standard work entitled The History of Science and Technology. After some elaborate mathematics, he came to a conclusion that raised serious questions about our continued ability to sustain progress. What he found was that the rate of innovation peaked in 1873 and has been declining ever since. In fact, our current rate of innovation which Huebner puts at seven important technological developments per billion people per year is about the same as it was in 1600. By 2024 it will have slumped to the same level as it was in the Dark Ages, the period between the end of the Roman empire and the start of the Middle Ages...

more here...

http://www.timesonline.co.uk/article/0,,2099-1813695_1,00.html

Jared Diamond (Guns, Germs, & Steel) makes essentially the same argument. After a time even tech hits the same law of diminishing return return that everything else does....

Of course...the more of the unknown we reveal, the less of it there is to reveal...

oldandslow
07-10-2006, 02:44 PM
good line 'mage.

I simply tire of the "invisible hand will solve all problems" argument. I am not doggin' capitalism, but some folks around here hang on to the myth as fundamentally as any extremist.