A crude awakening

[PeacePlan]

A crude awakening 2011-NOV-26
http://www.goldmoney.com/images/thumbnails/symbols_empty_petrol.png

One of the joys of interviewing some of the best brains in the world of finance and economics is that they alert you to important factors that perhaps you haven’t fully considered. This was my experience with Chris Martenson in Madrid last week (the interview will be posted on the GoldMoney website in the coming weeks). He reminds us that the availability and price of oil are central to our economic future.

The basic argument is this: very little can happen in our lives without oil. It is required for mining, agriculture, manufacturing, transport and distribution. Global consumption is rising, and extraction has levelled off. Oil-exporting nations are consuming more, leaving smaller balances for those with oil deficits. The cost of extraction is rising sharply: whereas fifty years ago it cost one barrel of energy to extract a hundred, we are moving towards new fields where the rule is one barrel for three. We face a train-wreck between the increasing rates of global consumption and the declining rates of net exportable production.

We are familiar with this story, but most of us underestimate its importance, so it is worth repeating. The chart below (which is based on statistics from BP’s Statistical Review of World Energy 2011 (http://www.bp.com/sectionbodycopy.do?categoryId=7500&contentId=7068481)) sums up the problem.

http://www.goldmoney.com/images/charts/Screen shot 2011-11-24 at 14_27_09.png
The black line is the five-year moving average of the balance between annual production and consumption, represented by the black columns. The last year of production surplus was 1981, thirty years ago, and since then the world has drawn down on strategic stockpiles and inventory to meet consumption demand, at a trend rate that is now accelerating. The blue columns represent the European balance, which has benefited from North Sea oil and which is now running out. The red columns represent North America and Mexico, whose production has been deteriorating since 1984. But most frightening is the Asia/Pacific deficit, the yellow columns, which has soared over the last twenty years.

The chart clearly shows a picture of an imbalance between production and consumption that cannot continue much longer. The world is now caught between inflexible demand – because oil is vital to our very existence – and declining net production. This explains the oil price, which is the blue line in the second chart (I shall comment on gold in a moment).

http://www.goldmoney.com/images/charts/Screen shot 2011-11-24 at 14_27_25.png
There have been three phases: the first, when OPEC jacked up the price of oil; the second when more expensive non-OPEC fields came on stream putting a cap on prices, and finally the third, where prices have increased seven times so far. It is this third trend, from which there is no apparent escape. The chart is on a logarithmic scale, which means that prices have been rising at an exponential rate since 1998.

With the production/consumption imbalance set to deteriorate further, there can be only one result, and that is considerably higher prices. Based on BP’s statistics, which show that the world’s most vital commodity has been in a supply deficit for the last thirty years, the logical outcome is a price explosion. And with quantitative easing in the markets there will be extra money to pay higher prices, the consequences for global price inflation do not bear thinking about. On this evidence we can therefore confirm Chris Martenson’s analysis.

Living with an energy supply crisis will require a radical change in our lifestyles – downwards. The best financial protection from this event appears to be physical gold, which has tracked the price of oil reasonably well over the years as shown in the second chart, and can be expected to continue to do so. After all, the combination of the most rapid global monetary expansion in peace-time history and soaring oil prices is an inflationary disaster in the making.
Tags: commodities (http://www.goldmoney.com/tag/commodities), dollar (http://www.goldmoney.com/tag/dollar), gold price (http://www.goldmoney.com/tag/gold price), oil prices (http://www.goldmoney.com/tag/oil prices), quantitative easing (http://www.goldmoney.com/tag/quantitative easing)
Author: Alasdair Macleod

(http://www.ronpaulforums.com/author/alasdair-macleod)http://www.goldmoney.com/gold-research/alasdair-macleod/a-crude-awakening.html?gmrefcode=gata

[Acala]

Demand isn't inflexible. It can and will go down as the price goes up. When driven by the cost, people will use it more efficiently and the market will find alternatives. Markets are ALL about allocating scarce resources. Why would the market not be able to handle this particular scarce resource? One could probably have made the identical statistical claim about the use of horses in 1900. "We don't have enough pasture to accommodate the growing demand for horses!!!"

Additionally, we are heading into a global economic disaster that will curtail demand dramatically. I think "peak dollar" is far more likely to bring an end to our profligate way of life than Peak Oil.

[Revolution9]

Much industrial lubrication can use graphene suspension lubes at this point and have better specs. Plastics can be made from plant cellulose. Many petroleum based compounds can be produced by genetically tweaked algaes. Overpricing oil will lead to wider use of many new technologies and once they start with the new tech they will have no reason to revert to the older products. Once the military operation scale back there will be alot more oil available and the price will drop. War and military based policing take alot of refined petroleum products for the vehicles, weaponry and combat accessories like polyester straps, plastic buckling, boot soles, combat vehicle interiors and the like.

Rev9

[helmuth_hubener]

Since Peak Oil has been being consistently predicted, with charts and numbers just like this (usually more convincing, actually, with dire consequences and complete tapping out quite obviously right around the corner) since the 1800s, I have a true and sincere question for PeacePlan and others who believe we are about to run out of oil:

Why do you believe this?

Also:

Would it be possible to change your mind by showing dozens and dozens of identical predictions dating back, as I say, to the 1800s, all of which were dreadfully, deliciously wrong?

[Steven Douglas]

Helmuth, obviously you have not been properly educated, so as public service, I am providing you with the following primer on the facts about oil:


http://www.youtube.com/watch?v=4PLQ1XfaTuU

If Rocky Horror can't convince you, who will?!

[acptulsa]

Well, I'm sorry, truly sorry, but I have to post this:


http://www.youtube.com/watch?v=l6ZAktYiumc

[LibForestPaul]

oil is smoke up your ass. dead issue. the real future/war is with money, who owns it, who controls it, who allocates this "resource".
carbon trading.
tax credits.
tax treaties.

[Seraphim]

YEP.

The violently controlled right to issue "money" as credit/legal tender is the real issue.


oil is smoke up your ass. dead issue. the real future/war is with money, who owns it, who controls it, who allocates this "resource".
carbon trading.
tax credits.
tax treaties.

[acptulsa]

Yes, it's about money. But as someone who lives in a town that an oil boom built, let me assure you of something: Energy is money. And while I understand that the petrodollar--the ability to demand that people get dollars before they can buy oil--is at the heart of the issue, you must understand that people of the world don't give a rat's ass about having dollars, what they actually need is the oil.

So, you're right. That said, oil is something a little more substantial than smoke up my ass.

[Seraphim]

Dont worry - Canada has 400 years worth of oil in 2 provinces alone based on current extraction rates.

PEAK oil is BS. Peak CHEAP oil is more accurate.


Yes, it's about money. But as someone who lives in a town that an oil boom built, let me assure you of something: Energy is money. And while I understand that the petrodollar--the ability to demand that people get dollars before they can buy oil--is at the heart of the issue, you must understand that people of the world don't give a rat's ass about having dollars, what they actually need is the oil.

So, you're right. That said, oil is something a little more substantial than smoke up my ass.

[acptulsa]

Dont worry - Canada has 400 years worth of oil in 2 provinces alone based on current extraction rates.

PEAK oil is BS. Peak CHEAP oil is more accurate.

And then there's Alaska, and the Louisiana Strategic Reserves. But, you know, after we pumped the Drumright and Glen Pool fields dry in the process of winning WWII, we decided that we'd just keep some of our own and run our V-8s on everyone else's oil for a while. Then came the petrodollar business, and, well, the Military Industrial Complex loves it some nice imperialism, doesn't it? And what's a little blowback when it plays so nicely into imperialistic and totalitarian plans?

I'd say there are a lot of ingredients in this cluster@#$%. But money, energy and power do all seem to rise to the top of the mix.

[PeacePlan]

Since Peak Oil has been being consistently predicted, with charts and numbers just like this (usually more convincing, actually, with dire consequences and complete tapping out quite obviously right around the corner) since the 1800s, I have a true and sincere question for PeacePlan and others who believe we are about to run out of oil:

Why do you believe this?

Also:

Would it be possible to change your mind by showing dozens and dozens of identical predictions dating back, as I say, to the 1800s, all of which were dreadfully, deliciously wrong?

I don't believe we are about to run out of oil - with that said I will explain what I do believe.

In the 1960's we put up satellites that helped find many of the large oil fields Saudi, Mexico, North Sea etc.

Normal life expectancy of a full production oil field is about 30 to 45 years before they go into decline mode. I will take Ghawar which is Saudi's huge oil field about 170 miles long and 20 miles wide to use as an example. It is in decline mode now which means each year it can supply less and less and has been in decline since 2001 (that is my guess because Saudi's do not give out the numbers). There are many reports of all the problems they are having with sea water mixed into the oil. They pump in sea water to pressurize the wells and allow faster extraction. No matter what they do now they will never be able to pump the 12 million barrels they could 12 years ago. My guess is they are down to 7 or 8 million a day.

Take Spindletop in Texas (please read this link) http://www.priweb.org/ed/pgws/history/spindletop/spindletop.html and it will talk about what it was like. I hope we have a member that knows this area and has been there. It is now basically gone except for some slow pumps that still work it, as some seepage still slowly works its way back into the field from the surrounding ground.

Now here is the problem - we no longer find the huge oil fields and all the easy stuff is gone. We have piled up a huge worldwide debt economy based on fiat money and if there was enough cheap oil (or energy) they could just print more money and inflate. At this time it will not work because whenever they try to inflate and get the economy going the price of oil will take off. It is like having a governor on a car engine so it can never go fast again. If the economy takes off price of oil will kill it.

Bottom line there is no way to inflate out of the debt again..

It used to cost us a barrel of oil to get 100 barrels and now some of the oil we get it take 1 barrel to get 3 - that is a big change.

We are not about to run out of oil - but the cheap oil is history. Much like Silver in Mexico where you could see the veins of silver that were found on the top of the ground http://www.floramex.com/li-history_of_silver_in_taxco.htm the easy cheap stuff is gone.

You can expect a downgrade in your life style as the ability to supply is going into decline. The oil fields we now find are small compared to past fields. I expect many here will think there is no problem, but I can tell you it is a problem for those that want to inflate. Its why nothing they do will work this time and oil is a big part of the whole picture.

That is my opinion and if others have some facts that they can point out where I am wrong I would welcome them because oil and silver fundamentals I love to learn..

[acptulsa]

It is now basically gone except for some slow pumps that still work it, as some seepage still slowly works its way back into the field from the surrounding ground.

That is a partial explanation. Remember that the floors of these underground caverns are not perfectly flat or perfect bowls. I know Indian families in Creek County that still have working wells pumping out of the old Glenn Pool. The family drilled one well years ago which dipped into a seperate little pocket, didn't get too greedy, and therefore they've yet to pump their little reservoir dry.


Now here is the problem - we no longer find the huge oil fields and all the easy stuff is gone. We have piled up a huge worldwide debt economy based on fiat money and if there was enough cheap oil (or energy) they could just print more money and inflate. At this time it will not work because whenever they try to inflate and get the economy going the price of oil will take off. It is like having a governor on a car engine so it can never go fast again. If the economy takes off price of oil will kill it.

Bottom line there is no way to inflate out of the debt again..

It used to cost us a barrel of oil to get 100 barrels and now some of the oil we get it take 1 barrel to get 3 - that is a big change.

I believe what you're talking about here is shale oil. This is oil that has soaked into rocks underground. In order to extract it, you must first force it out of the pores of the rock. This is only done when the price of oil is up, because it's obviously a much more expensive process than putting a natural gas-powered engine on a pump and running it. There is also talk about environmental concerns with the process.

[Zippyjuan]

Peak oil is not that we will literally use up the last drop and have none left but it is true that what is left is getting harder and more expensive to find and extract. New oil discoveries are not keeping pace with demand. The world is currently (as of 2009) consuming over 30 billion barrels a year- the US alone responsible for about 7 billion of that. http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption

In 2007, Brazil reported a record oil discovery at Tupi oilfield- projected to yield an estimated 5-8 billiion barrels. Finds of this scale are very uncommon- yet demand would require that much oil be found each and every year just to keep even with consumption. Meanwhile other supplies are getting used up and yields at known fields decline over time. Drilling one hole like the BP Horizon well in the Gulf can cost over $1 billion per well. High cost and high risk to enter into. Saudi Arabia is spending over $10 billion to bring into production a facility they discovered in the 1960's. It was not tapped before now because of the difficulties and high costs- that field is very low pressure and they have to build pipes to bring in sea water (highly corosive but oil can also be corosive) to the site, be pumped into the ground and that used to increase the pressure so that the oil can be brought to the surface. They need something like two gallons of water to get out one gallon of oil. They also have to drill three wells instead of one per well- two to pump the water in and one to take the oil out. Nearly triples the cost vs a traditional field.

Oil shale also takes very large resources. Oil is trapped in rocks and needs extracted. A common method is to extract the rocks, heat the shale (requiring more energy to heat the rocks) and lots of chemicals and water to get the oil out and separated. Economically and environmentally very expensive. That was estimated to use the energy equivelent of one barrel of oil for each barrel produced (the electricity to heat the rocks would most likely come from coal fired power plants). Again, it uses tons of water- and the shale fields are in dry parts of the country with limited water supplies.

Why do oil companies engage in such costly and risky ventures? Because the cheap and easy to get oil is pretty much taken and being used up. Prices are also rising enough to make such ventures more worthwhile since it increases the chances of making a profit on them. If the price of oil drops for an extended time (more than sya a couple of months), these projects may lose their profitability and be abandoned.

[helmuth_hubener]

I don't believe we are about to run out of oil - with that said I will explain what I do believe. ...
[W]e no longer find the huge oil fields and all the easy stuff is gone. ...
We are not about to run out of oil - but the cheap oil is history.Thank you, I see. Your position is indeed a more moderate one than Peak Oil and I apologize for mischaracterizing it. However, your position is still wrong.

The price of oil has been continually falling since it first began being used for kerosene. That's a 150 year trend of falling. It will keep falling. Oil will be cheaper 5 years from now than it is today, as long as the world economy stays free and no collapse or catastrophe intervenes, such as an asteroid crashing into Earth, the formation of a single world government, or a nuclear holocaust. It will be still cheaper in 10 years. And then in 20. There is no reason to believe that the price of oil will ever rise. It never has risen. It never has, despite it being obvious to a lot of people the last 150 years, and constantly obvious for the last 100 years, that dramatic increases were just around the corner. They have yet to materialize. They never will.

http://www.juliansimon.com/writings/Ultimate_Resource/TCHAR11.txt

[Zippyjuan]

Thank you, I see. Your position is indeed a more moderate one than Peak Oil and I apologize for mischaracterizing it. However, your position is still wrong.

The price of oil has been continually falling since it first began being used for kerosene. That's a 150 year trend of falling. It will keep falling. Oil will be cheaper 5 years from now than it is today, as long as the world economy stays free and no collapse or catastrophe intervenes, such as an asteroid crashing into Earth, the formation of a single world government, or a nuclear holocaust. It will be still cheaper in 10 years. And then in 20. There is no reason to believe that the price of oil will ever rise. It never has risen. It never has, despite it being obvious to a lot of people the last 150 years, and constantly obvious for the last 100 years, that dramatic increases were just around the corner. They have yet to materialize. They never will.

http://www.juliansimon.com/writings/Ultimate_Resource/TCHAR11.txt

Really? Are you sure about that? Even after adjusting for inflation it has been going up.
http://inflationdata.com/inflation/inflation_rate/historical_oil_prices_chart.asp
http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart_sm.jpg

I found this line in your link particularly confusing:

The reason that the cost of energy has declined in the long run is the fundamental
process of 1) increased demand due to the growth of population and income, which raises
prices and hence constitutes opportunity to entrepreneurs and inventors;

He assumes that there will always be some technology which comes along to make it cheaper than ever before to produce and that this technological improvement will be greater than the effect of rising demand on prices. Yet that ignores the law of diminishing returns. Yes, technology does allow you to get at more oil but it is not necessarily cheaper than before- the next available source to be extracted is more difficult to get at than the one before it.

Let us take the oil shale example. Yes, you can now pull oil from rocks but not just in terms of financial costs the energy costs are higher than previous methods which simply involved drilling a hole in the ground and pumping the oil out. These rocks have to be dug out, crushed, heated, and have lots of water and chemicals added before you can get the oil out of it. Why does BP drill a $billion hole that goes over a mile below the surface of the water and another two miles into the rock down there? Because they don't have anyplace the can do it more cheaply.

And it is also true that price shocks can effect demand too- for a time. The US had a major price shock from the OPEC oil embargo in the 1970's. Demand dropped off greatly and new technologies came along (since they were more economically viable at the higher oil prices). It took until just a few years ago for our demand (not just per capita but total demand which is amazing considering how much bigger our economy and population are now) finally reached the same level we were at back then. But now we are hitting limits again on how much energy we can squeeze out of a barrel of oil and growing coutries like China and India are demanding even more.

It should perhaps be noted that the article you linked to is from 1993- which was still a part of the time period where the demand for oil was still below the 1970's levels. Even with adjusting for inflation, the price of oil today is nearly five times what it was back then. So much for it going to be even cheaper five or ten years later on. It should also be noted that he was talking about energy in general- not just oil. As the price of oil goes up, other alternatives do become more economically viable. But only at certain oil prices.

[PeacePlan]

Thank you, I see. Your position is indeed a more moderate one than Peak Oil and I apologize for mischaracterizing it. However, your position is still wrong.

The price of oil has been continually falling since it first began being used for kerosene. That's a 150 year trend of falling. It will keep falling. Oil will be cheaper 5 years from now than it is today, as long as the world economy stays free and no collapse or catastrophe intervenes, such as an asteroid crashing into Earth, the formation of a single world government, or a nuclear holocaust. It will be still cheaper in 10 years. And then in 20. There is no reason to believe that the price of oil will ever rise. It never has risen. It never has, despite it being obvious to a lot of people the last 150 years, and constantly obvious for the last 100 years, that dramatic increases were just around the corner. They have yet to materialize. They never will.

http://www.juliansimon.com/writings/Ultimate_Resource/TCHAR11.txt

A lot of people write a lot of shit and much of it is just that, shit.

I will make this as simple as I can and explain it again.

Right now we need a booming vibrant economy to service all the debt. That kind of economy takes more oil so the supply must increase to keep up with demand. We are at a point that the supply can not keep up with increasing demand.

Basic economics 101 - when you change any one of these three things (supply price demand) it effects the other 2. So if you increase demand by a booming economy the price and supply will be effected.

The problem we now have is the economy can not stand 100+ a barrel oil and still pay the debt. They can't inflate like they could in the past. America was run on cheap oil and that era is gone.

You watch and you will see that I am right on this. Each time you see any spark in the economy, oil will head North and the economy will head South shortly after.

We are going to have a downgrade in our living standard - our only hope is to find something that can replace oil.

[helmuth_hubener]

It's actually a chapter of a whole book, zippyjuan, which is very much worth reading, or at least skimming. And yes, I am still quite sure and convinced that oil price has been going down, is going down, and will keep going down. You've kind of got to read the whole chapter to understand all the reasons, or even the whole book, but a couple of points are:

Human ingenuity outstrips all other factors, as long as allowed to be free.
In oil in particular, there are reasons to believe it is a "renewable" resource, a constantly replenishing supply, and that the mainstream view of oil as coming only from decomposed ferns, etc., it incorrect.
We keep on figuring out that old deposits were much larger than we thought, that inextractable deposits are economically extractable, and discovering whole new enormous deposits. There was a huge discovery off the coast of Brazil a few years ago. Look at North Dakota in the last year. It seems like every year now the Earth just keeps on surprising us with new gigantic oil deposits.

No, I'm sorry, your graph is a little better, but I've seen graphs a whole lot better than that. Graphs that made it clear that disaster is just around the corner. The price of oil is falling in real terms. CPI is a bad joke. The price of oil will continue falling. Forever.

[helmuth_hubener]

We are at a point that the supply can not keep up with increasing demand. That is our key disagreement. I think we have an unlimited supply, a supply which will continue increasing indefinitely. History thus far has vindicated, validated, verified and vouchificated me and Julian Simon.

So, it's not that you and others predicting oil price to rise absolutely couldn't be right. It's just that you're not. And that you never have been. So I tend to go with my theory. Since it's been consistently right. For 150 years.

[Zippyjuan]

It's actually a chapter of a whole book, zippyjuan, which is very much worth reading, or at least skimming. And yes, I am still quite sure and convinced that oil price has been going down, is going down, and will keep going down. You've kind of got to read the whole chapter to understand all the reasons, or even the whole book, but a couple of points are:

Human ingenuity outstrips all other factors, as long as allowed to be free.
In oil in particular, there are reasons to believe it is a "renewable" resource, a constantly replenishing supply, and that the mainstream view of oil as coming only from decomposed ferns, etc., it incorrect.
We keep on figuring out that old deposits were much larger than we thought, that inextractable deposits are economically extractable, and discovering whole new enormous deposits. There was a huge discovery off the coast of Brazil a few years ago. Look at North Dakota in the last year. It seems like every year now the Earth just keeps on surprising us with new gigantic oil deposits.

No, I'm sorry, your graph is a little better, but I've seen graphs a whole lot better than that. Graphs that made it clear that disaster is just around the corner. The price of oil is falling in real terms. CPI is a bad joke. The price of oil will continue falling. Forever.

North Dakota has been through boom and bust a couple of times already- that depends on the price of oil. If it falls (as you predict) then it will again be not worth it to persue the oil there.
http://northdakotaoil.wordpress.com/

North Dakota may be heading into an era of higher energy prices. If so, this is both a burden and an opportunity.

It would be unwise to suggest that the boom-and-bust cycle of energy economics has ended in North Dakota. It hasn’t been all that long ago that North Dakota went through a real roller coaster ride. But there’s a difference between the world and national energy situations today and those of a generation ago.

In the 1970s, when U.S. energy prices were low, they were held down artificially, by government controls. The main reason that North Dakota went through such a roller coaster ride in the 1970s and 1980s was the deregulation of energy prices. Once the price controls went off, production surged. That broke the grip of the oil cartel on worldwide energy prices. So, prices came back down. That rocked the oil economies of western North Dakota, notably in Dickinson and Williston. . . .

Meanwhile, as State Geologist John Bluemle has noted in his forecasts for the future, nation after nation, including even Saudi Arabia, is expected to see oil production peak in the current decade. That’s not to say there will be energy shortages. There’s plenty of fossil fuel energy left, and higher prices should finally spur the development of alternatives. The point is that energy will cost more.

In North Dakota, we’ll suffer. We drive a lot of miles per capita, so we’ll be poorer after we pay our gasoline bills. Because they rely on fossil fuels at every step of their production cycle, farmers will face a further squeeze on profits.

In North Dakota, we’ll prosper. Higher prices will, over time, revive the oil patch. . . .

No doubt the economics of energy still will resemble the boom-and-bust cycles of the past. It may be, though, that the cycle will start at higher points on the chart, so that the highs will be higher than ever and the lows won’t be so low as the lows of the past.



The price of oil is falling in real terms.

Adjusted for inflation IS in real terms. I agree we aren't running off a cliff but we are facing more and more expensive sources of oil to replace what were cheaper ones. Even on an existing oil field, the first few barrels are cheaper to get out than the last few. As the oil is extracted, the pressure falls as well as the level of the oil. To keep it flowing you have to dig deeper and start pumping water to get the pressure back up. That adds to the cost.



Another point is that the excess oil available for export to countries like the US is declining. One by one, countries which used to be net exporters are becoming net importers. In the 1970's North Sea Oil in Britain allowed them to become major exporters. But today they were back to being net importers. Indonesia. Denmark. Egypt. Until 1994 China was a net exporter. Iran wants to develop nuclear energy because it will be hitting that point in a few years at current trends. Oil is their biggest source of revenue and domestic demand is rising faster than their production. By going nuclear for domestic energy, that will hopefully free up more to export for revenue. Mexico is in a simliar situation- possibly losing net export status in less than a decade. The US used to be the world's largest exporter- now we are the biggest importer of foreign oil. Brazil has been reporting some significant finds but they too are consuming about the same as they produce each year.

These trends support the greater likelyhood of higher- not lower- prices and increased scarcity. It won't go to zero- it will just be a lot more expensive.

[Zippyjuan]

That is our key disagreement. I think we have an unlimited supply, a supply which will continue increasing indefinitely

That would violate the laws of physics. Nothing can increase indefinately.

Can we even trust the reported amounts of "proven reserves"? First is with the definition of proven reserves. That is the discovered amount of oil which is recoverable at current prices and with today's technology. If the price goes up, the proven reserves can go up- even if the amount found does not change. It just means that it is now worth it to go after some of those more difficult and expensive sources.

Secondly is the figures for OPEC are highly suspect. One is that, unlike most countries, their reported reserves are not able to be verified or audited. And despite large amounts being extracted every year, they have not been declining.

Another important event happened in the 1980's. At the urging of several members, the quota system was changed. Instead of being assigned a certain number of how much oil that a country could produce, it was decided that it should be based on how much they had in reported reserves. Well, that had the easily forseable result of countries suddenly reporting higher reserves than each other- despite reporting no new significant oil discoveries. A decade later, reported reserves for all OPEC countries were up an amazing 300 billion barrels.

Iraq made the first move in 1982- saying they suddenly had nearly twice as much as they had previously reported- moving them ahead of their rival Iran and into third place in terms of biggest reserves. Venezuela doubled theirs in 1985 and Iran finally jumped way past Iraq in 1986- going from reporting 59 billion barrels in reserves to 93 billion. Iraq responded the next year by declaring an even 100 billion (they only had 30 billion in 1980). The UAE tripled theirs in 1986. Saudi Arabia was always on the top but they joined the party too in 1988 raising their reserves from 170 billion to 265 billion. Saudi Arabia produces about 11 million barrels of oil a day or four billion barrels a year. It is now 23 years since 1988 so that would come to almost 100 billion barrels produced- yet they still claim they have 264.5 billion left. Something doesn't add up.
http://en.wikipedia.org/wiki/Oil_reserves

[helmuth_hubener]

Adjusted for inflation IS in real terms. Again: CPI is a bad joke. CPI is not reality.


These trends support the greater likelyhood of higher- not lower- prices and increased scarcity. It won't go to zero- it will just be a lot more expensive.The trend is that oil keeps getting cheaper. That trend will continue. You have given me no strong reasons to believe it will not continue. I know they seem strong to you. But you should pretend you're living in 1960 (or 1970, or 1980, or 1990... any time!) and go back and read all the data and magazine articles and journal articles and doomsday books from just 1960, nothing any later. The case will be just as strong, if not stronger, as the case you've presented. Everyone's becoming importers instead of exporters! All the pools are running dry! The world is very well-explored, there will be no new big discoveries! It's all there. It will be very convincing. You'll realize there's no possible way that oil is going to be cheaper in 20 years in 1980. It's going to get a lot more expensive, and fast. There's only so much of it left. It would violate the laws of physics, geology, biology, and common sense to say that there will be many times higher oil production, at a much lower cost, and with much more proven reserves, as we move ever-further into the future. It is exceedingly improbably we'll even have enough to last through the 1970s at current usage rates, much less increase production, increase reserves, and lower prices.

Yet the 70s came, and that is what happened. Then the 80s came, and it happened again. Then the 90s came and it happened again.

This has been going on for 150 years.

Your people don't have any explanation for it. They just keep publishing the same crackpot predictions over and over and people gobble it up. No one cares the guy made the same prediction ten years ago, and ten years before that. Doomsday sells. But it doesn't deliver. And that's the difference between my theory and your. Your doomsday never comes. My lower prices do. Reliably. Always. Check the price of oil in 20 years. You'll see. Maybe you'll even change your mind. Laymen do sometimes change their minds, especially if they have no vested interests in a topic. I can dream, can't I?

Just read the Ultimate Resource II. It stands quite unrefuted, and I would say that's because it's irrefutable, but you could always give it a whirl. Everything's documented and footnoted. There's sources for everything. It's an airtight case. Oil is getting cheaper. Oil will keep getting cheaper. Forever.

[helmuth_hubener]

That would violate the laws of physics. Nothing can increase indefinitely. You seem awfully certain about a conclusion upon which I don't know any physicists who would take such a hard stance. Can entropy increase indefinitely? Can the Universe? Can life and populations?

Kind of hard to say.

In any case, humans continue to dodge the doomsday bullet ever-more audaciously, finding ever-greater supplies of resources in quantities and qualities that no one had dared think realistic just decades before. Yes, there's only so much matter contained in the sphere we call Earth, but by the time we get even close to tapping all of those we will be well on our way (I hope!) to the stars and extracting the resources of all kinds of asteroids and planets all over the place. The trend is more and more abundant resources. There is no reason to believe that trend will reverse, as long as humans are left relatively free. If tyranny's shadow blankets the world, then yeah, all bets are off. But as long as we're free, we will keep coming up with brilliant ways to remake nature into an endless, endless treasure trove.

That's why freedom is so important! Without freedom, sure, everything runs out and we all die. So let's make sure that doesn't happen!

[Steven Douglas]

The organic/"fossil" theory of the origin of hydrocarbons began in the late 1800's, and persists as a mainstream theory to this day. It is one of those "mountains of self-reinforcing evidence" conclusions without actual proof that continues, albeit weakening as more evidence becomes available. One persistent attack on fossil fuel theory is consistent deep drilling at 30,000 feet, far below depths and in types of rocks where no fossil or fossil records exist. Naturally, this is met by the argument that the Earth surface has changed dramatically since the Cambrian explosion, some 530 million years ago (the beginning of all "substantial" life on Earth), which, while correct, only lends enough plausibility to render both arguments inconclusive, and for all practical purposes, moot.

Enter natural gas - which is also thought to be biological in origin, and for the same reasons and falling under the same theory that concludes that liquid hydrocarbons are biotic. The problem: deep-earth drilling and high volume natural gas production by Japanese, Canadian and other drilling and exploration teams, found in fractured volcanics (from DEEP within the Earth) and fractured granitic basement rock with no proximity to fossils of any kind, including, for example, an Archean well in Canada with high gravity oil found in non-porous granite that is billions of years old. These natural gas finds strongly support the theory that the origin of at least some natural gas, and by extension, oil, may be abiotic, and not organic in nature.

http://www.geoscience.co.uk/downloads.html

I personally don't care either way, and don't have a horse in this particular race. But the idea that anything has been conclusively proved one way or the other is false. I view this particular issue as both political and economic in origin, and, like the Fed, with too many unlikely bedfellows, each arguing the same point, from otherwise ideologically opposed positions. Rockefeller wanted a way to make gas seem naturally scarce so that the price could be artificially high. Green interests want gas to be artificially scarce, and for the price to be artificially high, for a completely different set of reasons. And in both cases, academia is MORE than willing to play ball. Thus, the only ones actively arguing for abiotic theory are those who have an interest in exploration and discovery, as they are finding both oil and natural gas in places the fossil fuel proponents are very hard pressed to explain.

[LibForestPaul]

One time, whale oil was valuable and being over utilized. Life went on without blubber, life will go on without oil. Standard of living increases only through scientific discovery. If a power wants to blame decreasing oil supply on a slew of problems created by the actions of illegal nation states, they may do so. I have no intentions of believing their lies.

[Stupified]

That is our key disagreement. I think we have an unlimited supply, a supply which will continue increasing indefinitely. History thus far has vindicated, validated, verified and vouchificated me and Julian Simon.


No material in the known universe is unlimited, especially not here on earth. Everything we have is finite - oil, PMs, technology, human ingenuity... it's all limited.



You seem awfully certain about a conclusion upon which I don't know any physicists who would take such a hard stance. Can entropy increase indefinitely? Can the Universe? Can life and populations?!

Entropy is not physical matter. For entropy to increase, something else must decrease.

No matter is being created in the universe. The spaces in between are just getting bigger, hence the expansion.

Life and population - the one anomaly, although I would argue that they are only infinite for as long as food sources (other lifeforms) are infinite as well. All it takes is one hiccup in the food chain to tear it all apart.

[Steven Douglas]

I would argue that they are only infinite for as long as food sources (other lifeforms) are infinite as well. All it takes is one hiccup in the food chain to tear it all apart.

That definitely requires perspective. The Permian-Triassic boundary (http://en.wikipedia.org/wiki/Permian%E2%80%93Triassic_extinction_event) some 250Mya, marks the greatest mass extinction event on Earth, also known as The Great Dying. Up to 96% of all marine species，70% of terrestrial vertebrates, and the only known mass extinction of insects, with some 57% of all families and 83% of all genera completely wiped out.

The P/T extinction was way more than just "a hiccup" in the food chain, and we have had mass extinctions since; none on that scale, but massive nonetheless. It doesn't "tear it all apart" so much as it redistributes opportunity. In fact, we are all here thanks to all prior mass extinction events, all of those "hiccups" in the food chain, combined.

When I hear people refer to the "delicate fragile ecosystem" of the Earth, with delicate balances, tipping points and such, I just shake my head, partly in wonder, mostly in disgust. Primarily because such thoughts are laden with false (or non-clarified) assumptions, but are otherwise lacking in critical thought. "The Ecosystem" is just like saying "The Economy". Speaking about the aggregate as if it really was a fixed supply, without reference to cyclical dynamics, or "whose ecosystem" or "whose economy" is being affected.

Let's pull our mammalian hand out of the eco-bucket, and even drag a bunch of lifeforms down with us in the process and see what happens. Let's get past the fact that a major catastrophe could wipe out all major species on Earth - humans, pandas, koalas, most mammals - and within a few million years life will opportunistically out, and will replenish the Earth. THRIVING, in fact - with its own new-and-quite-robust balances in place. There are just too many smaller lifeforms just waiting for their chance at bat.

In most cases what we are really referring to, aside from extinctions of specialized species (e.g., no bamboo, no pandas - no eucalyptus, no koalas), is human extinction, or the "tearing apart" of OUR delicate, fragile human-dependent system. And most of that fragility can be traced to artificial mega-controls and manipulations of the aggregate. In other words, I view the single greatest threat to human existence and the quality of human life on Earth are those who view and want to exercise control over all things in the aggregate. Public and private. Centralization, "planning", preference toward collectivization of all kinds, to the negation of individual rights and preferences, as if we had "an economy" and "an ecology" to manage.

There is a tendency by so many to really want all eggs in one controllable basket, with compulsory "all-in-it-together" dependencies on that one basket - such that "a hiccup" really can upset the entire HUMAN food chain. I wouldn't spend an ounce of energy defending such a system, let alone support it. We're not that clever, we are not that wise. And we turn around and project that ridiculous sensibility onto the rest of the Earth, and life on Earth, as if delicate hypersensitivity ruled the day for the rest of the animal kingdom as well. On the whole, it does not. It is a distinctly human "systemic" frailty. Not the physical or physiological frailty of humans themselves - we are the ultimate rat/cockroaches (and I say that as a good thing). We can live in multiple climates and on a vast array of "food" - we can be frugivores, omnivores, carnivores, you name it. If bugs are all that there is to eat, we will live on them.

For as many billions are, and will continue to be forced to suffer and to be manipulated, controlled, and put at MAJOR RISK in the aggregate by select, "clever and wise" elitists and oligarchies throughout the political spectrum, for their own reasons, there are always those who slip through the cracks and are poised to survive, despite the best or worst intentions of all collectivist lunacy.

So when you say, "Everything we have is finite - oil, PMs, technology, human ingenuity... it's all limited." I can see where parts of that might be true, and especially if all my reckoning is based on sustainability of existing macro-systems, as designed. All those so-called limited resources are just waiting to be recycled, regrown, rejuvenated, and redistributed. Redistribution is a very good thing when it happens on individual levels. That is what a truly free market does. But it is a very, very risky and dangerous thing on macro-levels. Even so, I don't have to sit and wonder about systems that were designed to self-destruct, based on the full expectation of the unlimited (growth, expectations, claims on the same resources, whatever). Such a system was never designed to survive in the first place, and always ends in hiccups that trigger massive implosions. Nothing special there, it was predictable from the onset.

However, for life itself, and human survival on the individual level? We were around and thriving long before technology and ingenuity caused an explosion into dominance, and long before bankers and politicians learned how to profit from inflated, completely artificial, unsustainable, and infinite "growth expectations". Even if we end up being victims of our own success or megafailures, the worst that will happen is that we are reduced to our former, more primitive selves. But the "human ingenuity" at that level? Virtually unlimited. As always, and without the slightest regard for the so-called aggregate.

[Wesker1982]

http://www.youtube.com/watch?v=6v3w4eyXVWE

[Zippyjuan]

The video does have some good points. One is that only a certain percent is actually extracted (he cites 35%). What he says next is very important. That is that the remaining oil is left behind either because it is too difficult to get out or that it is currently too expensive to get out. We won't literally run out but it will become more scarce and more expensive. Demand is still greater than newly discovered amounts. If you are willing to spend more and more and more money, yes, you can still get more oil. Towards the end he finally says that it is the end of cheap oil. This is all true. It does not mean that everybody will be able to have as much as they want to use for infinite time.

[helmuth_hubener]

We won't literally run out but it will become more scarce and more expensive.Since this has been predicted non-stop for a century, I wonder why I should believe your prediction.

All of the previous doomsday-criers were wrong. Deliciously wrong. Would you agree with that? If someone was predicting in 1920 that oil's going to become much more expensive in a decade, would you not say in hindsight that he was completely and outrageously mistaken?

So then if you're in 1960 and someone's predicting the same thing, do you believe him this time? Do you say, "Oh, well this time it's different. The situation has changed. Just look at these facts and figures! Obviously oil is about to become permanently much more expensive"? How long does this go on for? How long of a pattern, a track record of failure, must we have before we reject such predictions out of hand? 200 years? 300 years? When does it stop?

Personally, I think it never completely stops, because doomsday sells. There will always be at least some people who buy books and buy into theories predicting imminent doom of one sort or another. I also do hope, however, that the truth will spread and that increasing numbers of the more intelligent people will realize that Julian Simon is right: Freedom+Humanity is the ultimate resource, and with it we'll never run out of any other. Please, zippyjuan and others, look into these matters if they interest you. I think that in the end you will agree that oil will continue getting cheaper, forever.

[SpicyTurkey]

We run out of oil, so what? Something else will take its place.

[helmuth_hubener]

No material in the known universe is unlimited, especially not here on earth. Everything we have is finite - oil, PMs, technology, human ingenuity... it's all limited.And how much of the Universe is known?

Kind of hard to say.


Entropy is not physical matter. For entropy to increase, something else must decrease.One thing in particular. But yes.


No matter is being created in the universe. The spaces in between are just getting bigger, hence the expansion. Oh really? Are you so sure? How do you know that in the whole Universe no matter is being created anywhere? Energy and matter do appear to be able to convert into each other, after all. And do we really know the Universe is expanding? Are we so sure? Is it possible the Universe is infinite?

I would say any knowledge of such things is very tenuous indeed. We're speculating on the size and shape of the continent when we've never even left the village. What very small amount of data we have is being leveraged into very grand conclusions.

But in any case, I don't know if you think oil is going to become more rare or not, but if you do, your position is a retreat far further than you intended to go, I think. It retreats into the realm of the absurdly irrelevant. Let's say we're having a thread about "The Sun Is About To Explode". The implication is that some action must be taken, perhaps we must empower govt bureaucrats to save us, or all start driving Priuses, or in the case of we good folks here on RPF we're to all start stockpiling underground sun-shielded bunkers (or something). I come in and say "No, obviously the sun is not going to explode, not now, not ever, it will keep burning forever, these predictions are always wrong, there's no reason to believe it's right this time". One approach is to then give the specifics of the basis of the crackpot prediction: "But the sun spot activity is increasing at 500% per week; at this rate we only have two more months at most". The other approach is to retreat to: "There is only a finite amount of hydrogen in the sun, you can't deny this, and so the laws of physics prove that it will eventually run out, and when that happens current science predicts it will explode." This second approach is the retreat to total irrelevancy. Yeah, sure, the sun might explode in a few billion years. Billion! So am I still supposed to be ordering that sun-proof lining for my bunker? Obviously billion is the same as forever and was completely what I meant by my claim that the sun would last forever.

Same thing here. If we are now talking about "But there is only a finite amount of matter in the Universe, and thus a finite amount of oil" then that is a totally ludicrous conversation to have. OK, in 500 billion years when humanity has filled the stars and is running out of hydrocarbons, wake me up. I will panic then. Then I will start looking into solar panels or buying a Prius. Until then.... we seem to be doing OK. If you are saying oil will become scarce in 500 billion years and I'm saying oil will never become scarce, obviously we are saying the same thing and are in total agreement. Is that the case?

[Zippyjuan]

Since this has been predicted non-stop for a century, I wonder why I should believe your prediction.

All of the previous doomsday-criers were wrong. Deliciously wrong. Would you agree with that? If someone was predicting in 1920 that oil's going to become much more expensive in a decade, would you not say in hindsight that he was completely and outrageously mistaken?

So then if you're in 1960 and someone's predicting the same thing, do you believe him this time? Do you say, "Oh, well this time it's different. The situation has changed. Just look at these facts and figures! Obviously oil is about to become permanently much more expensive"? How long does this go on for? How long of a pattern, a track record of failure, must we have before we reject such predictions out of hand? 200 years? 300 years? When does it stop?

Personally, I think it never completely stops, because doomsday sells. There will always be at least some people who buy books and buy into theories predicting imminent doom of one sort or another. I also do hope, however, that the truth will spread and that increasing numbers of the more intelligent people will realize that Julian Simon is right: Freedom+Humanity is the ultimate resource, and with it we'll never run out of any other. Please, zippyjuan and others, look into these matters if they interest you. I think that in the end you will agree that oil will continue getting cheaper, forever.
Oil has been becoming more expensive. I presented a chart earlier which showed that. Even after adjusting for inflation. I showed that the oil which is being sought now is more difficult and more expensive to get at than before. If oil will always get cheaper forever then it should eventually become free. Perhaps you can provide us with a chart showing that the price of oil is always going down. I would like to take a look at it. Thank you.

[Travlyr]

A lot of people write a lot of shit and much of it is just that, shit.

I will make this as simple as I can and explain it again.

Right now we need a booming vibrant economy to service all the debt. That kind of economy takes more oil so the supply must increase to keep up with demand. We are at a point that the supply can not keep up with increasing demand.

Basic economics 101 - when you change any one of these three things (supply price demand) it effects the other 2. So if you increase demand by a booming economy the price and supply will be effected.

The problem we now have is the economy can not stand 100+ a barrel oil and still pay the debt. They can't inflate like they could in the past. America was run on cheap oil and that era is gone.

You watch and you will see that I am right on this. Each time you see any spark in the economy, oil will head North and the economy will head South shortly after.
When Doug Casey came out as a believer of peak oil (http://www.caseyresearch.com/cwc/doug-casey-energy-optimism-and-opportunity), I was like "whoa". What's going on here? We know for a fact that counterfeit money is the source of poverty and enslavement and that suppression of energy is the game the counterfeiters play.



We are going to have a downgrade in our living standard - our only hope is to find something that can replace oil.

It is already here. Industrial hemp competes directly with oil and industrialists. It is just illegal.

We have abundant green energy when it becomes legal. When we get the counterfeiters in exile, then the real wealth boom begins and standards of living reach for the sky... literally... flying cars and a peaceful world to explore.

[helmuth_hubener]

Oil has been becoming more expensive. I presented a chart earlier which showed that. Even after adjusting for inflation.Aha, this is where I failed at communication. CPI is the measure of inflation that chart "corrected for". That's why I replied that CPI was not a good measure of inflation. In other words, the chart does not actually correct for inflation. If you actually correct for inflation in a simple, non-biased, non-government way, oil is getting cheaper. The simplest way I know of, though it's not perfect either (precious metals are commodities too) is to look at the price of oil in terms of gold. Ron Paul did this in a debate once a couple months ago, although he used silver -- he pointed out that his silver dime could buy the same amount of gasoline as it could back in the 1970s, or something like that. In fact, Ron was understating his case. It doesn't buy the same amount, it buys more. Because oil has been getting cheaper.

Edit: OK, here's what he said exactly:
http://www.youtube.com/watch?v=KUXIa_T-ueA


If oil will always get cheaper forever then it should eventually become free.
Oil will not become free. Does not follow. Not all curves reach zero. You might as well say that if oil gets cheaper forever then oil will eventually have negative price; people will pay you to take it away. Which also does not follow.

[Steven Douglas]

In other words, the chart does not actually correct for inflation.

No, the CPI certainly doesn't correct for raw inflation. But oil does! That's the funniest part to me. It hails back to Rockefeller's original problem - how to price and give oil an artificial scarcity of its own. Because oil is so readily available, it has always had the problem of intrinsic value fixing. Ironically, oil has a level of its own based on a very loose demand and supply loop that gets monitored and artificially corrected for. In a very real way, oil can be inflated or deflated relative to the dollar, as it is often deflated to match scarcity/inflation/deflation expectations - which are in turn pegged to currency scarcity/inflation/deflation expectations. Does that make oil an unreliable indicator of inflation? Hardly! I think just the opposite. I think it's a fine indicator, albeit every bit as artificial as the dollar it's leveraged against.

[Zippyjuan]

Aha, this is where I failed at communication. CPI is the measure of inflation that chart "corrected for". That's why I replied that CPI was not a good measure of inflation. In other words, the chart does not actually correct for inflation. If you actually correct for inflation in a simple, non-biased, non-government way, oil is getting cheaper. The simplest way I know of, though it's not perfect either (precious metals are commodities too) is to look at the price of oil in terms of gold. Ron Paul did this in a debate once a couple months ago, although he used silver -- he pointed out that his silver dime could buy the same amount of gasoline as it could back in the 1970s, or something like that. In fact, Ron was understating his case. It doesn't buy the same amount, it buys more. Because oil has been getting cheaper.

Edit: OK, here's what he said exactly:
http://www.youtube.com/watch?v=KUXIa_T-ueA


Oil will not become free. Does not follow. Not all curves reach zero. You might as well say that if oil gets cheaper forever then oil will eventually have negative price; people will pay you to take it away. Which also does not follow.

Yes, I would agree with you that gold is also a commodity so comparing the relative prices of the two is not necessarily better than comparing it to the CPI. We can compare different commodity prices to each other over time and come up with different results. I would argue that gold has been undergoing a bubble (risen higher and faster than it has in the past) and that demand for oil is down from what it normally would- both due primarily to the same event- the current economic crisis.

I did find a long-range chart of the oil- gold ratio. The years prior to 1972 can probably be ignored since the price of gold was basically set by the government via the gold standard.
http://www.insidersstrategygroup.com/images/web/smart-investing-daily/20110224-Gold-Oil.jpg

Between 1988 and 2008 (the beginning of the economic crisis), the price of oil in terms of gold was rising. Twenty years of not declining prices for oil in terms of gold- going from being able to get over 30 barrels for an ounce of gold down to about nine. It is true that since 2008 that ratio has fallen quite a bit. How that compares with the 1970's depends on which year you pick. Try 1975 and things are pretty close to where they were back then (actually using the newer data from SeekingAlpha link below it is more expensive today- over 20 barrels for an ounce of gold back then vs 15 barrels today) but pick 1977 and you can get more oil for an ounce of gold today (roughly ten then up to 15 now). http://www.insidersstrategygroup.com/images/web/smart-investing-daily/20110224-Gold-Oil.jpg

Seeking Alpha says the ratio today (earlier this year) is about 15 with a peak during the crisis of 29. This is a much shorter timeframe chart which begins with 2006.
http://static.seekingalpha.com/uploads/2011/3/7/saupload_zigler_blog_030711_fig2.jpg
http://seekingalpha.com/article/256874-gold-oil-ratio-critical-now

[PeacePlan]

Watch the price of oil as the economy attempts its recovery. I suspect we will see 4 bucks a gallon for gas shortly and maybe 5 by summer and this will end the recovery that is starting to grow. Like I said the world economy is like an engine that has a governor on it.

[helmuth_hubener]

Peace Plan, you very well may be right. There are very good reasons to believe the price may do this the next year or two. But that's just a short-term thing. Short0term predictions are uncertain. Long-term, over the decades, commodities always get cheaper as long as we continue to have freedom.

[PeacePlan]

Well I am starting to plan my silver/gold stock trade... I am 100% in right now on those stocks and as the price of oil ticks higher I will start selling some. My plan is to end up selling 50% and keep 50%. When the economy tanks again from the high prices of oil I plan to start buying back that 50% I sold. I still think we have a ways to go and will be watching for when that price starts to effect travel plans because it cost too much to travel. My guess is we have a couple more months to go before I trade. Also if we attack Iran I may not do the trade at all..

[PeacePlan]

Peace Plan, you very well may be right. There are very good reasons to believe the price may do this the next year or two. But that's just a short-term thing. Short0term predictions are uncertain. Long-term, over the decades, commodities always get cheaper as long as we continue to have freedom.

Not when you are running out of something... Oil is getting used up and will not be replaced.. If I had the last million barrels of oil on this planet it would sell for a lot more than our current price of 107 a barrel. Oil can't be replaced and we are using it up.

Your thinking is wrong on this silver and oil both are things that are being used up and become rarer and when you get people bidding the price to get something? The relationship of say chickens which you can breed and grow compared to a barrel of oil are two different things. Say you can trade 20 chickens for a barrel of oil today. In the future the amount of chickens may grow as breeders become more effecient so you may have more chickens in the future. The relationship of the chickens to oil has changed and so will the amount of chickens you will have to give to get the declining amount of barrels of oil.

I hope that made sense to you - anyhow it does to me.

[InTradePro]

Seems relevant


http://www.youtube.com/watch?v=4kZotftLE0A

[PeacePlan]

I must be missing something as I don't see this as relevent.

[Zippyjuan]

The theory of abiotic oil is so far not supported by facts (which the video is trying to promote). If petroleum is unlimited and easily found, why are compaines spending a $1 billion a hole to drill deep wells in places like the Gulf of Mexico? If they had cheaper oil to get, they would go after that first since they could make more money off it. The claim that fossiles have not been found "below 16,000 feet? We don't know if there are or aren't fossiles there- we haven't looked that deep for them.

[PeacePlan]

The theory of abiotic oil is so far not supported by facts (which the video is trying to promote). If petroleum is unlimited and easily found, why are compaines spending a $1 billion a hole to drill deep wells in places like the Gulf of Mexico? If they had cheaper oil to get, they would go after that first since they could make more money off it. The claim that fossiles have not been found "below 16,000 feet? We don't know if there are or aren't fossiles there- we haven't looked that deep for them.

Abiotic oil if real does not matter because none are being refilled. I read all that abiotic oil bs a few years ago and what a bunch of hogwash. The wells just refill themselves. We have a bunch of oil fields that are now depleted and I want one of these abiotic people to point out the ones that have been refilled - just show me is all I ask.. None of these people (abiotic) will say how long or when the field will be filled again.. It is bullshit..

[Zippyjuan]

You do get some refill- cosider drinking a glass of water or milk and set it down. In a few minutes you may see more in the bottom of the glass. It did not magically apppear- it was just along the sides of the glass and dripped back down to the bottom. Same happens in wells. You take it out and some seeps back in from cracks or fissures in the rocks.