There is no Gas Shortage

[rohanprabhu]

Main Question or Discussion Point

http://tinyurl.com/33r8pt

 

[wolram]

http://tinyurl.com/33r8pt

The best i can come up with is that we have readily available oil for 120 years, i may be wrong but think that does not include oil shale, but the figures are so complex.

 

[Evo]

The last time I checked, we had 50+ years of readily available oil and up to 100 years of oil with new extraction methods. Now, with declined demand we may be able to add a few years to that.

There is also a huge untapped deposit of oil in Antartica, but I would prefer that it remain untapped.

 

[Schrodinger's Dog]

If there's no gas shortage why is the cost of oil so high?

 

[Chi Meson]

The best i can come up with is that we have readily available oil for 120 years, i may be wrong but think that does not include oil shale, but the figures are so complex.

The numbers are so very complex, aren't they? A bit of a shell game, I think, Enron style. That way, when anyone askes questions, oil execs can say, basically, "You wouldn't be able to understand because it is so diffult, and you are not smart enough. But these profits we are making right now hurt us more than it hurts you!"

I'm not swallowing that article whole either. I mistrust anytime some states "here are the verifiable facts" without saying where those facts came from. Also what he is referring to as "reserve" is the total quantity of estmated oil in the ground around the world. (Not sitting in barrels on a shore somewhere.) The reserves of Saudi Arabia, and other OPEC nations are rumored to be over-estimated (outside sources are not allowed to double-check). That rumor is a "verifiable fact" by the way.

ANd the demand from India and China is rising beyond all precedents , so the 2% increase in demand worldwide is a low-ball if anything.

Still, those oil companies are suffering the indignance of making too much money and there is just nothing they can do about it. "Razor thin margins" "You wouldn't understand" "check out my new yachts" "Yes we put W in there, I guess you aren't so dumb..."

 

[wolram]

If there's no gas shortage why is the cost of oil so high?

Because some people need their gold bathroom fittings.

 

[Schrodinger's Dog]

Because some people need their gold bathroom fittings.

Are you trying to blame B&Q for oil prices being high.

 

[mgb_phys]

Oil is a weird business - in the field no expense is spared to get the best survey equipment and take the highest accuracy seismic data. Then they hire the best people to process the data and produce the results of oil bearing volumes.
Then the next layer of management multiplies this by a likelyhood estimation, how many of these areas actaully hold oil, this number is basically a constant for each manager independant of any of the data.
Then the next layer of management multiplies it by a feasibility factor - again pulled out of their 'intellect' that decides what chance there will be technical problems.
Then senior management estimates what the oil price will actually be when the field starts production in 2-3years and decides if it is economic.

Amazing - spend millions on getting an accurate number then multiply it by a list of made up numbers to come up with an answer.

 

[mheslep]

If there's no gas shortage why is the cost of oil so high?

Partially because of inflation and the weak dollar. Investors are parking their money in commodities and consequently inflating the price. I read the the actual supply / demand cost should be $85.