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Peak Oil Is Here!


LonJowett

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Done and done. Oil isn't running out while we are alive. Or ever.

You are right. And the reason you are right is that the free market system, which I hope will be allowed to prevail, will bring things into equilibrium by arriving at a point where other technologies rival oil on a dollar per joule basis. When that happens, the price of oil will stop climbing. By that time, oil will be seen as a sunset industry, sort of like printing the news on paper, and the oil-based economy will start its decline. The rate of decline will be determined by the rate at which replacement technologies are able to lower their dollar per joule ratio. The use of oil will decline to the point where it will become a reserve energy source - like coal is now.

If you've made money in oil, this is a good time to start getting out. I don't think it will happen quickly, but it will happen. Look at how the price of solar cells has started to come down. You can buy these things at Canadian Tire now. Provinces in the Maritimes are constructing wind farms.

Alberta will be left holding a very greasy bag when the price of oil declines below the cost of processing the oil sands. The ducks in the tailing pond are canaries in a coal mine as to what wil be left when the party's over.

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Ummmm ...no they don't. Even OPEC doesn't set prices....although through controlling how much they produce they influence prices.

Of the 13 OPEC nations, only 6 are Arabs.....

Then why are Arab oil producers awash in wealth?

Arab oil producers are awash in wealth. They have never been so rich. But the paradox is that, in spite of their great and growing wealth, their political weight in the world remains small, even derisory. They have not -- or at least not yet -- converted their wealth into political influence on a global scale.

http://www.middle-east-online.com/english/?id=25838

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Then why are Arab oil producers awash in wealth?

http://www.middle-east-online.com/english/?id=25838

Your question has zero to do with your hypothesis. You could ask the same question of Alberta, Norway or any oil producing nation and it would be just as irrelevant.

The prices are set on the world oil market and are agreed to by the sellers and buyers. That includes OPEC and the 60% who are not OPEC.

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They are regulating themselves, true ...but given that OPEC produces about 40% of the global output of oil, they do not control the price, they can only influence the global price.

Then why do they call OPEC the Reference Basket (ORB) which is used as an IMPORTANT benchmark for crude oil prices?

The OPEC Reference Basket (ORB), also referred to as the OPEC Basket is a weighted average of prices for petroleum blends produced by OPEC countries. It is used as an important benchmark for crude oil prices.

OPEC attempts to keep the price of the Opec Basket between upper and lower limits, by increasing and decreasing production. This makes the measure important for market analysts.

And they are quite successful doing just that.

Influence is the wrong word.

Manipulate is the right word and would be closely related to establishing or setting the price for crude.

http://en.wikipedia.org/wiki/OPEC_Reference_Basket

Edited by Leafless
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Influence is the wrong word.

Manipulate is the right word.

http://en.wikipedia.org/wiki/OPEC_Reference_Basket

Someone like yourself, with such a tenuous grasp on the english language should avoid ducking behind semantics when loosing a debate.

The basket is a monitoring tool. It doesn't set the price.

Whether you choose influence or manipulate the answer is still the same, OPEC neither sets the world price nor controls it.

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Someone like yourself, with such a tenuous grasp on the english language should avoid ducking behind semantics when loosing a debate.

The basket is a monitoring tool. It doesn't set the price.

Whether you choose influence or manipulate the answer is still the same, OPEC neither sets the world price nor controls it.

It sounds like you are talking about the finished refined product gasoline rather than crude.

Do you know what your talking about????

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It sounds like you are talking about the finished refined product gasoline rather than crude.

Do you know what your talking about????

Yes...did I mention refined oil? No. Are you trying to distract? Yes. Do yoiu know what you are talking about? Ever?

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Someone like yourself, with such a tenuous grasp on the english language should avoid ducking behind semantics when loosing a debate.

The basket is a monitoring tool. It doesn't set the price.

Whether you choose influence or manipulate the answer is still the same, OPEC neither sets the world price nor controls it.

The basket develops a OPEC reference price.

OPEC collects price data on a "basket" of crude oils, and uses average prices for these oil streams to develop an OPEC reference price to monitor world oil market conditions.

At its March 2000 meeting, OPEC set up a price band mechanism, triggered by the OPEC basket price, to respond to changes in world oil market conditions. According to the price band mechanism, OPEC basket prices above $28 per barrel for 20 consecutive trading days or below $22 per barrel for 10 consecutive trading days would result in production adjustments. This adjustment was originally automatic, but OPEC members changed this so that they could fine-tune production adjustments at their discretion. Since its inception, the informal price band mechanism has been activated only once. On October 31, 2000, OPEC activated the mechanism to increase aggregate OPEC production quotas by 500,000 barrels per day. At its January 30, 2005 meeting, OPEC decided that market changes had rendered the band unrealistic, and decided to temporarily suspend the price band mechanism.

On September 1, 2005, the OPEC basket price rose to $61.37 per barrel, its highest price since the price band mechanism was established. From December 2, 2003, when the basket price last crossed the $28 per barrel threshold, the OPEC basket price has traded above the $28 per barrel level for 585 consecutive trading days through March 7, 2006.

http://www.eia.doe.gov/cabs/opec.html

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The basket develops a OPEC reference price.

http://www.eia.doe.gov/cabs/opec.html

Exactly, you use a refence point to monitor the average.

These don'y support your errors. Don't support the ludicrous statement that Arabs set the proce of oil, doesn't support your blunderous brainfart that OPEC does either.

All they can do is adjust production to influence the price. Demand is the greater force,

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Exactly, you use a refence point to monitor the average.

So, what does it do with this data?

OPEC collects price data on a "basket" of crude oils, and uses average prices for these oil streams to develop an OPEC reference price to monitor world oil market conditions.
OPEC is an organization of oil-producing governments that cooperate to manage oil supply and prices in order to maximize the revenues of the member states and promote stability in the oil market

http://www.harvardir.org/articles/1299/

And don't try to censure me claiming I can't refer to Middle East oil as Arab oil.

EVERYONE BUT YOU DOES.

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And don't try to censure me claiming I can't refer to Middle East oil as Arab oil.

EVERYONE BUT YOU DOES.

perhaps between apoplectic spasms you can make up your mind. Are you talking about mid east oil or are you talking about OPEC?

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perhaps between apoplectic spasms you can make up your mind. Are you talking about mid east oil or are you talking about OPEC?

Technically, I could be talking about either.

The organization now has thirteen member states. They are listed below with their affiliation dates. Note that although the effective official language of a 7-nation majority of OPEC member-states is ARABIC.

http://en.wikipedia.org/wiki/OPEC

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Technically, I could be talking about either.

http://en.wikipedia.org/wiki/OPEC

How about i paste the entire correct quote....

Note that although the effective official language of a 7-nation majority of OPEC member-states is Arabic, OPEC's official language is English.

I'm curiious leafless, do you like me consider a dishonest quote mangler a worthless entity?

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"So what does it do with this data?
"OPEC is an organization of oil-producing governments that cooperate to manage oil supply and prices in order to maximize the revenues of the member states and promote stability in the oil market"

This quote is incorrect. OPEC can manage oil supply and does. It is a governmental cartel, it cannot manage prices. Prices can only be managed in a monopoly. OPEC does not comprise a monopoly. They can certainly, economically speaking, slit their throats by stopping production allowing other oil producing countries to cash in on the lowered supply or glut the market resulting in lower prices and thus limit their profit margin. But I am inclined to think that supply and demand are managing their prices and consequently, world prices, more than they are managing the prices. They only manage prices to the highest they can get but that is not managing prices then is it?

I am certain they don't manipulate the prices to go down. Only an open market will do that.

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I'm curiious leafless, do you like me consider a dishonest quote mangler a worthless entity?

Whats the matter Dancer, it is not a dishonest one but only a relevant one.

Can't face the fact OPEC stands for Organization of ARAB Petroleum Exporting Countries" and its majority 7-nation membership speaks ARABIC.

You go straighten them out Dancer! LOL

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I am certain they don't manipulate the prices to go down. Only an open market will do that.

Sure they do. From the same link:

In 2000, OPEC increased output four times to try to reduce the high oil prices that threatened to diminish oil demand.

So flooding the market with oil, when demand is high, will artificially under MOST circumstances result in lessening the demand, resulting in lower oil prices or if demand still remains high will stabilize prices.

http://www.harvardir.org/articles/1299/

BTW- personal opinions are worthless (in this type of issue) unless backed by some sort of proof.

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The conclusion I must make is that opinion has taken over the thread since fact has run out or been ignored and personal insult is the only fare to offer.

I stand unconvinced peak oil is here!

If you do believe the most respected journal of economics, what can be said.

The world’s most respected journal of economics has now officially acknowledged the advent of peak oil, validating (finally!) what we’ve been saying for years.

In a July 19 article, the venerable Economist cut straight to the point:

“The world is consuming more oil than it is producing.”--The Economist, July 14-20 print edition.

http://www.wealthdaily.com/articles/peak+o...tion-global/374

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If peak oil isn't a reality then the only explaination for the current shortages and high prices is that the law of supply and demand has failed or is badly misunderstood. That the assumptions that underpin market theory might be wrong is probably an even scarier proposition for most economists. No wonder they want to pretend otherwise.

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Sure they do. From the same link:

So flooding the market with oil, when demand is high, will artificially under MOST circumstances result in lessening the demand, resulting in lower oil prices or if demand still remains high will stabilize prices.

http://www.harvardir.org/articles/1299/

BTW- personal opinions are worthless (in this type of issue) unless backed by some sort of proof.

So is that setting the price or is that attempting to manipulate supply. Nowhere is there a direct assignment or manipulation of prices beyond what supply and demand dictate. Admittedly there are parameters around that which is called bartering or dealing. All sides attempt to win in the outcome.

I don't wish to get convoluted about opinion and fact. If you have facts I would like to hear them. If you quote other people's opinions and/or theories then I accept them as that only.

The world’s most respected journal of economics has now officially acknowledged the advent of peak oil, validating (finally!) what we’ve been saying for years.

In a July 19 article, the venerable Economist cut straight to the point:

“The world is consuming more oil than it is producing.”--The Economist, July 14-20 print edition.

The above quote from wealthdaily.com is an opinion piece.

I haven't read the article in the Economist so I can't say that the statement "The World is consuming more oil than it is producing." is indicative of peak oil nor would I consider an article in the Economist the final word on Peak oil.

Ok, now I have read the article in the Economist. and it says this at the end:

"Unlike last year, they now have roughly 3m bpd of spare capacity they could tap. But such reasoning assumes the cartel is more predictable than the hurricane season or the politics of the Middle East."

Having "spare capacity" is not indicative of peak oil. I would conclude that the author of the wealthdaily article took the statement "the world is consuming more oil than it is producing" out of context. And how could we consume more oil than we produce unless we were utilizing reserves which would be soon depleted.

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If peak oil isn't a reality then the only explaination for the current shortages and high prices is that the law of supply and demand has failed or is badly misunderstood. That the assumptions that underpin market theory might be wrong is probably an even scarier proposition for most economists. No wonder they want to pretend otherwise.

The law of supply and demand is serving us well for the most part. There is a shortage of supply in the west because China and India are increasing demand and are willing to pay a higher price to fill it. If we wish to maintain our supply or increase it we must pay the competitive price.

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The law of supply and demand is serving us well for the most part. There is a shortage of supply in the west because China and India are increasing demand and are willing to pay a higher price to fill it. If we wish to maintain our supply or increase it we must pay the competitive price.

Serving us well, who's this "us" you're talking about? I fail to see how China and India are able to out bid us on something we have that they don't. Its bizarre given the purchasing power of our dollar vs the yuan or rupee. These countries must be close to coming up against a ceiling you'd think.

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Serving us well, who's this "us" you're talking about? I fail to see how China and India are able to out bid us on something we have that they don't. Its bizarre given the purchasing power of our dollar vs the yuan or rupee. These countries must be close to coming up against a ceiling you'd think.

The "us" is the market. How are they outbidding us? We are not suffering a shortage. I can still find gas at any gas station I care to go to.

Should we nationalize our oil industry? Gas is still cheaper than bottled water, eyeball.

I would be against nationalizing it.

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I don't wish to get convoluted about opinion and fact. If you have facts I would like to hear them. If you quote other people's opinions and/or theories then I accept them as that only.

The above quote from wealthdaily.com is an opinion piece.

FACT:

Well Pliny, the fact is we are short of oil or President George W. Bush would NOT be humiliating himself and U.S. citizens by begging the Saudis to pump more oil.

RIYADH, Saudi Arabia — President Bush used a private visit to King Abdullah’s ranch here on Friday to make another appeal for an increase in oil production that might give American consumers some relief at the gasoline pump. The Saudis responded by announcing they had decided a week ago on a modest increase of 300,000 barrels a day.

The White House said the increase would not be enough to lower gasoline prices, which are nearing $4 a gallon, and industry analysts called it mostly symbolic.

http://www.nytimes.com/2008/05/17/world/mi...nyt&emc=rss

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The "us" is the market. How are they outbidding us?

With government subsidies. We have to compete against these in addition to their lower labour costs and environmental standards. I thought all this subsidizing business was illegal now, in any case why hasn't the almighty market corrected this artifical distortion all on its own?

We are not suffering a shortage. I can still find gas at any gas station I care to go to.

Then there should be nothing to justify the high price we're paying or the downturn in the economy that we're experiencing as a result. Why does the law of supply and demand seem to be broken?

Should we nationalize our oil industry? Gas is still cheaper than bottled water, eyeball.

I would be against nationalizing it.

Given the constitutional hysteria that nationalizing Alberta's oil industry would cause, I concede it would probably only make things worse. Can we not at least impose duties on imported goods from countries that are subsidizing their economies at our expence? Given the price increases accruing to speculation I would also propose a hefty tax on oil stock profits. These could be used to offset personal income taxes.

As for carbon taxes...the wind has shifted, growing numbers of people do not believe that we need to do anything to reduce carbon emmissions and until recently governments have neglected and resisted doing anything about them, so why drive prices up even farther with them? Why now when AGW skepticism appears to be on such a roll?

Edited by eyeball
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