Planning against oil dependency
« on: 2004-06-07 15:51:20 »
[rhinoceros] The following article is about planning against oil dependency. What do you think?
(a) Is government planning for the future a good idea? (b) Would you rather leave the market alone to sort it out? (c) Is it a mute question because it will be (a)=(b) whatever you do?
<snip> The cost of our addiction to oil can be counted not just in the money we pay to OPEC and the multinational oil giants, says Severin Borenstein, director of the University of California Energy Institute and professor of business administration and public policy at the University of California's Haas School of Business.
The lives lost and uncounted dollars spent in Iraq and elsewhere in the Middle East are part of the cost. So are the ill effects on our health and economy from pollution, congestion and accidents.
The market does wonders in many contexts. Prices rise, people consume less and substitute, entrepreneurs find new ways to do things and, ultimately, it all works out. But the market sometimes needs help.
The nation used about 375 million gallons of gasoline a day in March, according to federal statistics, an annual consumption rate of about 135 billion gallons. (California uses about 40 million gallons a day, says Borenstein.)
A 50-cent additional federal tax would curb a certain amount of consumption. But let's assume, very conservatively, that it would raise somewhere around $50 billion a year.
That kind of money would go a long way if we used it right. Here are some suggestions:
First, drastically increase federal research and development. Much of that should go toward conservation and efficiency.
Funding efficiency research is cost-effective. In 2001, the National Research Council found that the federal Department of Energy had gotten at least a 3-to-1 return on its investment in such research. (It was probably much more, when the impact on overall energy usage in the economy was calculated.)
Sustainable-energy advocates have called for a doubling of spending on basic energy R&D in the next few years.
Think of this as "a necessary down payment on the kinds of investment we need in the next few decades to get us to sustainable energy economy," says Bill Prindle, deputy director of the American Council for an Energy-Efficient Economy (www.aceee.org) in Washington. "It's more and more obvious we can't rely on conventional fossil fuels. We have to increase the rate at which efficiency improves."
Mass transit
Second, we should invest in a serious program of mass transit, and not the kind that sucks up most of the transit dollars now. Let's face the fact that rail, while it has a place in an overall mix, has become a bottomless money pit in an increasingly suburban society.
A comprehensive system of buses -- with dedicated bus lanes on major highways -- combined with a feeder system of jitney-like vans and smaller buses would need large subsidies at first, and maybe on an ongoing basis. But it would reduce those ugly side effects of our gasoline habit.
Raising the price of fuel would be painful for some of us, and we shouldn't discount that effect. I don't want to make more trouble for the millions who are struggling to make ends meet now, even in the interest of improving our overall situation.
We could use some of the money we would raise with higher fuel taxes to provide tax rebates and credits to the working poor. Many of them drive the older, gas-eating, polluting clunkers, moreover, and we could subsidize their purchase of newer, more efficient and less polluting cars.
Fewer car trips
In the long run, though, fewer car trips should be the goal. We should more strongly encourage telecommuting and mixed-use real-estate zoning, where people can live, shop and work in the same neighborhoods. States and communities will have to be persuaded -- with carrots and sticks -- to bring their laws into an age where society's larger goals are part of the equation.
Four weeks from now we'll celebrate Independence Day. Let's declare independence from fossil fuels -- and mean it this time. Let's wean ourselves from our politically, environmentally and economically dangerous energy addictions.
I spent $40 for that tank of gas last week. I'd gladly have spent $50 if I'd known the difference would be a serious investment in our future.
> > [rhinoceros] > The following article is about planning against oil dependency. What > do you think? > > (a) Is government planning for the future a good idea? > (b) Would you rather leave the market alone to sort it out? > (c) Is it a mute question because it will be (a)=(b) whatever you do? > > > Americans must fight petroleum addiction > By Dan Gillmor > http://www.siliconvalley.com/mld/siliconvalley/8852934.htm > > <snip> > The cost of our addiction to oil can be counted not just in the money > we pay to OPEC and the multinational oil giants, says Severin > Borenstein, director of the University of California Energy Institute > and professor of business administration and public policy at the > University of California's Haas School of Business. > > The lives lost and uncounted dollars spent in Iraq and elsewhere in > the Middle East are part of the cost. So are the ill effects on our > health and economy from pollution, congestion and accidents. > > The market does wonders in many contexts. Prices rise, people consume > less and substitute, entrepreneurs find new ways to do things and, > ultimately, it all works out. But the market sometimes needs help. > > The nation used about 375 million gallons of gasoline a day in March, > according to federal statistics, an annual consumption rate of about > 135 billion gallons. (California uses about 40 million gallons a day, > says Borenstein.) > > A 50-cent additional federal tax would curb a certain amount of > consumption. But let's assume, very conservatively, that it would > raise somewhere around $50 billion a year. > > That kind of money would go a long way if we used it right. Here are > some suggestions: > > First, drastically increase federal research and development. Much of > that should go toward conservation and efficiency. > > Funding efficiency research is cost-effective. In 2001, the National > Research Council found that the federal Department of Energy had > gotten at least a 3-to-1 return on its investment in such research. > (It was probably much more, when the impact on overall energy usage in > the economy was calculated.) > > Sustainable-energy advocates have called for a doubling of spending on > basic energy R&D in the next few years. > > Think of this as "a necessary down payment on the kinds of investment > we need in the next few decades to get us to sustainable energy > economy," says Bill Prindle, deputy director of the American Council > for an Energy-Efficient Economy (www.aceee.org) in Washington. "It's > more and more obvious we can't rely on conventional fossil fuels. We > have to increase the rate at which efficiency improves." > > Mass transit > > Second, we should invest in a serious program of mass transit, and not > the kind that sucks up most of the transit dollars now. Let's face the > fact that rail, while it has a place in an overall mix, has become a > bottomless money pit in an increasingly suburban society. > > A comprehensive system of buses -- with dedicated bus lanes on major > highways -- combined with a feeder system of jitney-like vans and > smaller buses would need large subsidies at first, and maybe on an > ongoing basis. But it would reduce those ugly side effects of our > gasoline habit. > > Raising the price of fuel would be painful for some of us, and we > shouldn't discount that effect. I don't want to make more trouble for > the millions who are struggling to make ends meet now, even in the > interest of improving our overall situation. > > We could use some of the money we would raise with higher fuel taxes > to provide tax rebates and credits to the working poor. Many of them > drive the older, gas-eating, polluting clunkers, moreover, and we > could subsidize their purchase of newer, more efficient and less > polluting cars. > > Fewer car trips > > In the long run, though, fewer car trips should be the goal. We should > more strongly encourage telecommuting and mixed-use real-estate > zoning, where people can live, shop and work in the same > neighborhoods. States and communities will have to be persuaded -- > with carrots and sticks -- to bring their laws into an age where > society's larger goals are part of the equation. > > Four weeks from now we'll celebrate Independence Day. Let's declare > independence from fossil fuels -- and mean it this time. Let's wean > ourselves from our politically, environmentally and economically > dangerous energy addictions. > > I spent $40 for that tank of gas last week. I'd gladly have spent $50 > if I'd known the difference would be a serious investment in our > future. > Our main short-term problem is that no new domestic refinery has been built in 30 years, and no foreign refinery has been built in 20, at the same time that the exploding Chinese ecenomy is demanding more and more gasoline by leaps and bounds. It doesn't matter how much oil you can pump from the ground, if the ceiling on how much can be refined into gasoline persists. ANWR is going to be tapped from offshore soon, and Russia's Caspian Sea oil reserves will also be coming online within the next decade. Howver, in the long term, we will deplete our oil reserves. One solution is to extract oil from Canada's massive oil shale reserves, but, due to the relatively high (in comparison to pumping from pools) cost of such extraction, such extraction is not presently economically feasible. When oil becomes more expensive than energy alternatives, the market will naturally favor the alternatives - but not until then. > > ---- > This message was posted by rhinoceros to the Virus 2004 board on > Church of Virus BBS. > <http://virus.lucifer.com/bbs/index.php?board=61;action=display;thread > id=30466> --- To unsubscribe from the Virus list go to > <http://www.lucifer.com/cgi-bin/virus-l>
> Our main short-term problem is that no new domestic refinery has been built in 30 years, and no foreign refinery has been built in 20, at the same time that the exploding Chinese ecenomy is demanding more and more gasoline by leaps and bounds. It doesn't matter how much oil you can pump from the ground, if the ceiling on how much can be refined into gasoline persists. ANWR is going to be tapped from offshore soon, and Russia's Caspian Sea oil reserves will also be coming online within the next decade. Howver, in the long term, we will deplete our oil reserves. One solution is to extract oil from Canada's massive oil shale reserves, but, due to the relatively high (in comparison to pumping from pools) cost of such extraction, such extraction is not presently economically feasible. When oil becomes more expensive than energy alternatives, the market will naturally favor the alternatives - but not until then. > [Blunderov] Possibly this economic scenario could be encouraged by taxation policy? Instead of the blanket tax cuts of supply-side strategy, the tax breaks could be heavily skewed in favour domestic investment in alternative energy R+D.
I'm wondering whether the trickle-down theory, as currently applied, has not overlooked the degree of globalization that has taken place since Reagan's 80's. (PC's were by no means common in 1980, neither was there much of an internet!) Instead of investment trickling down to the bottom of the pyramid, there seems to be reason to suspect that it might be leaching out to other, more attractive, pyramids.
IMO there are so many good reasons for the USA, and the world, to phase out its dependence on oil that it amounts to recklessness not to pursue every possible means to do this.
> joedees@bellsouth.net > Sent: 07 June 2004 10:34 PM > > > > Our main short-term problem is that no new domestic refinery > has been built in 30 years, and no foreign refinery has been built in > 20, at the same time that the exploding Chinese ecenomy is demanding > more and more gasoline by leaps and bounds. It doesn't matter how > much oil you can pump from the ground, if the ceiling on how much can > be refined into gasoline persists. > ANWR is going to be tapped from offshore soon, and Russia's > Caspian Sea oil reserves will also be coming online within the next > decade. Howver, in the long term, we will deplete our oil reserves. > One solution is to extract oil from Canada's massive oil shale > reserves, but, due to the relatively high (in comparison to pumping > from pools) cost of such extraction, such extraction is not presently > economically feasible. When oil becomes more expensive than energy > alternatives, the market will naturally favor the alternatives - but > not until then. > [Blunderov] Possibly this economic scenario could be > encouraged by taxation policy? Instead of the blanket tax cuts of > supply-side strategy, the tax breaks could be heavily skewed in favour > domestic investment in alternative energy R+D. > President Carter did this. Nothing much came of it except ethanol, which made practically no impact. > > I'm wondering whether the trickle-down theory, as currently applied, > has not overlooked the degree of globalization that has taken place > since Reagan's 80's. (PC's were by no means common in 1980, neither > was there much of an internet!) Instead of investment trickling down > to the bottom of the pyramid, there seems to be reason to suspect that > it might be leaching out to other, more attractive, pyramids. > > IMO there are so many good reasons for the USA, and the world, to > phase out its dependence on oil that it amounts to recklessness not to > pursue every possible means to do this. > I agree, but am at a loss as to exactly what those means would be. > > Best Regards > > > --- > To unsubscribe from the Virus list go to > <http://www.lucifer.com/cgi-bin/virus-l>
Re:Planning against oil dependency
« Reply #4 on: 2004-06-07 17:54:47 »
[rhinoceros 1] The following article is about planning against oil dependency. What do you think?
(a) Is government planning for the future a good idea? (b) Would you rather leave the market alone to sort it out? (c) Is it a mute question because it will be (a)=(b) whatever you do?
[Joe Dees] Our main short-term problem is that no new domestic refinery has been built in 30 years, and no foreign refinery has been built in 20, at the same time that the exploding Chinese ecenomy is demanding more and more gasoline by leaps and bounds. It doesn't matter how much oil you can pump from the ground, if the ceiling on how much can be refined into gasoline persists. ANWR is going to be tapped from offshore soon, and Russia's Caspian Sea oil reserves will also be coming online within the next decade. Howver, in the long term, we will deplete our oil reserves. One solution is to extract oil from Canada's massive oil shale reserves, but, due to the relatively high (in comparison to pumping from pools) cost of such extraction, such extraction is not presently economically feasible. When oil becomes more expensive than energy alternatives, the market will naturally favor the alternatives - but not until then.
[rhinoceros 2] I take it that Joe goes with option (b), "let the market alone," and he doesn't think much of the issues in the article as long as oil can be drilled anywhere in the world and refined. (But wasn't it the US oil industry itself that pleaded for government assistance back in 1998 when OPEC was dumping cheap oil.)
The prediction that there will be a bottleneck at the refineries in the future is somehow surprising. If Joe's information is correct, then the refineries built 20-30 years ago are still able to handle the load easily. Is it too hard for the Chinese or anyone to build new ones whenever they need them? Is it a secret art? We have at least two in Greece, at Aspropyrgos and Eleusis -- regretably, the home of the ancient Eleusinian Mysteries, where spring and fertility were celebrated: http://en.wikipedia.org/wiki/Eleusinian_mysteries
By the way, I found an interesting debate (if not quite fresh -- dated Sept. 2000), also during an "all time high", featuring several experts as well as Al Gore and the Shrub:
> > [rhinoceros 1] > The following article is about planning against oil dependency. What > do you think? > > (a) Is government planning for the future a good idea? > (b) Would you rather leave the market alone to sort it out? > (c) Is it a mute question because it will be (a)=(b) whatever you do? > > Americans must fight petroleum addiction > By Dan Gillmor > http://www.siliconvalley.com/mld/siliconvalley/8852934.htm > <snip> > > > [Joe Dees] > Our main short-term problem is that no new domestic refinery has > been built in 30 years, and no foreign refinery has been built in > 20, at the same time that the exploding Chinese ecenomy is > demanding more and more gasoline by leaps and bounds. It doesn't > matter how much oil you can pump from the ground, if the ceiling > on how much can be refined into gasoline persists. > ANWR is going to be tapped from offshore soon, and Russia's > Caspian Sea oil reserves will also be coming online within the > next decade. Howver, in the long term, we will deplete our oil > reserves. One solution is to extract oil from Canada's massive oil > shale reserves, but, due to the relatively high (in comparison to > pumping from pools) cost of such extraction, such extraction is > not presently economically feasible. When oil becomes more > expensive than energy alternatives, the market will naturally > favor the alternatives - but not until then. > > > [rhinoceros 2] > I take it that Joe goes with option (b), "let the market alone," and > he doesn't think much of the issues in the article as long as oil can > be drilled anywhere in the world and refined. (But wasn't it the US > oil industry itself that pleaded for government assistance back in > 1998 when OPEC was dumping cheap oil.) > It's not that I don't think that R&D on energy alternatives is a good idea; it's just that I don't see it going anywhere beyond R&D into mass production until the economic conditions ripen; that is, until global petroleum or gasoline scarcity creates a rise in prices sufficient to trigger a significant and substantial demand for the more (but eventually, not more) expensive alternatives to (economically feasibly) fill the then-created void. > > The prediction that there will be a bottleneck at the refineries in > the future is somehow surprising. If Joe's information is correct, > then the refineries built 20-30 years ago are still able to handle the > load easily. Is it too hard for the Chinese or anyone to build new > ones whenever they need them? Is it a secret art? We have at least two > in Greece, at Aspropyrgos and Eleusis -- regretably, the home of the > ancient Eleusinian Mysteries, where spring and fertility were > celebrated: http://en.wikipedia.org/wiki/Eleusinian_mysteries > > By the way, I found an interesting debate (if not quite fresh -- > dated Sept. 2000), also during an "all time high", featuring several > experts as well as Al Gore and the Shrub: > > Tapping the Oil Reserves > http://www.pbs.org/newshour/bb/economy/july-dec00/oil_9-21.html > > > > ---- > This message was posted by rhinoceros to the Virus 2004 board on > Church of Virus BBS. > <http://virus.lucifer.com/bbs/index.php?board=61;action=display;thread > id=30466> --- To unsubscribe from the Virus list go to > <http://www.lucifer.com/cgi-bin/virus-l>
Re: virus: Re:Planning against oil dependency
« Reply #6 on: 2004-06-07 22:01:43 »
: (a) Is government planning for the future a good idea?
Yes, and the must be willing to change the plan at a moments notice if new data doesn't sufficiently correlate with expected results. A quarterly reevaluation of the plan, with a graceful shutdown of the plan if it is failing would be a good example.
:: (b) Would you rather leave the market alone to sort it out?
Yes! But that would include the government's meddling in the middle east and Bush's ties to OPEC, etc. It's too messy to say let the market sort it out at this point.
:: (c) Is it a mute question because it will be (a)=(b) whatever you do?
(Moot not mute) There is no way we can logically extract government meddling from energy. Energy and government go hand in hand. Enron, world bank, etc. --- To unsubscribe from the Virus list go to <http://www.lucifer.com/cgi-bin/virus-l>
Re: virus: Planning against oil dependency
« Reply #7 on: 2004-06-08 00:20:34 »
: President Carter did this. Nothing : much came of it except ethanol, : which made practically no impact.
Serious national alternative energy development is a 10 year program needing 40 plus billion. Not an unfunded bullshit 2 year program run by a President without the backing of American industrialists.
It doesn't matter, though. Wind power is already cheaper than oil in many places. Solar is cheaper than oil in southern california (thanks to Enron!!)
As long as oil prices stay high, distributed alternative energy will win out. --- To unsubscribe from the Virus list go to <http://www.lucifer.com/cgi-bin/virus-l>
To: "Church of Virus" <virus@lucifer.com> Subject: Re: virus: Planning against oil dependency From: "Erik Aronesty" <erik@zoneedit.com> Date sent: Tue, 8 Jun 2004 00:20:34 -0400 Send reply to: virus@lucifer.com
> : President Carter did this. Nothing : much came of it except ethanol, > : which made practically no impact. > > Serious national alternative energy development is a 10 year program > needing 40 plus billion. Not an unfunded bullshit 2 year program run > by a President without the backing of American industrialists. > Industrialists do not back Presidents so much as they back plans - plans that they can envisage culminating in profit accruing to their corprate entities, and thus, to them. > > It doesn't matter, though. Wind power is already cheaper than oil in > many places. Solar is cheaper than oil in southern california (thanks > to Enron!!) > It's kinda hard to power a car on either, though. > > As long as oil prices stay high, distributed alternative energy will > win out. --- To unsubscribe from the Virus list go to > <http://www.lucifer.com/cgi-bin/virus-l>
Re: virus: Planning against oil dependency
« Reply #9 on: 2004-06-08 09:48:07 »
Easy enough to charge a car.
Electrics have better acceleration too - will always beat an oil car accelerating, merging, etc. --- To unsubscribe from the Virus list go to <http://www.lucifer.com/cgi-bin/virus-l>
Predictably, the recent rise in oil prices has drawn the usual doom-and-gloomers - people who have been consistently wrong on oil for 30 years. Once again they're out saying that higher prices prove we're running out of oil and that severe curbs on gasoline consumption must be imposed to preserve what little is left for future generations. They need not worry. There is growing evidence that oil is far more plentiful than we have been led to believe.
The prevailing theory on the origin of oil is the dead-dinosaur hypothesis, which dates back to the 18th century. Its originator was a Russian scientist named Mikhail Lomonosov, who put it this way in a 1757 paper: "Rock oil (petroleum) originates as tiny bodies of animals buried in the sediments which, under the influence of increased temperature and pressure acting during an unimaginably long period of time, transforms into rock oil."
However, in the 1950s, Russian and Ukrainian scientists developed a new theory about petroleum's origins called the abiotic or abiogenic theory. According to this view, oil is fundamentally inorganic and has no relationship to dead plant or animal life. Rather, oil originates deep in the Earth's crust from inorganic material that is part of the planet's origin.
In the words of geologist Vladimir Porfir'yev, "The overwhelming preponderance of geological evidence compels the conclusion that crude oil and natural gas have no intrinsic connection with biological matter originating near the surface of the Earth. They are primordial materials which have erupted from great depths." For more than 50 years, Russian and Ukrainian scientists have successfully used the abiotic theory to find oil and natural gas. For example, the Dnieper-Donets Basin has yielded a significant amount of oil and natural gas even though it is an area that conventional biological theories reject as unpromising. A recent technical paper found that the results "confirm the scientific conclusions that the oil and natural gas found in...the Dnieper-Donets Basin are of deep, and abiotic, origin."
As Russia has opened up since the fall of the Soviet Union, and because it has become a large and growing factor in the international oil market, American scientists are becoming increasingly knowledgeable about and interested in the abiotic theory of petroleum. Recently, the National Academy of Sciences published a paper on the topic. The Gas Research Institute has financed exploration based on abiotic theories, with encouraging results. And the American Association of Petroleum Geologists has taken an interest in the subject as well.
The leading supporter of the abiotic theory in the U.S. is Prof. Thomas Gold of Cornell. His 1999 book, The Deep Hot Biosphere (Springer-Verlag), is a thorough discussion of the issues. It is based in part on research financed by the U.S. Geological Survey. Among prominent scientists whose work supports the abiotic theory are Jean Whelan of the Woods Hole Oceanographic Institute, Mahlon Kennicutt of Texas A&M University, and J.F Kenny of the Gas Resources Corporation.
Interestingly, economic research also implicitly supports abiotic theory. A leading researcher in this regard is Michael C. Lynch, president of Strategic Energy and Economic Research and formerly chief energy economist for DRI-WEFA.
In a new paper, Lynch debunks a common theory called the Hubbert curve (also debunked recently by Victor Canto on NRO), which postulates that the yield of oil fields is inherently limited. The problem, as Lynch points out, is that actual experience in many instances contradicts the Hubbert theory. Its primary flaw is that it views geology as the sole factor in oil discovery, recovery, and depletion.
In fact, oil prices, government policy, and technology play critical roles. But the evidence he presents on oil fields that yielded far more than the Hubbert curve predicts is consistent with the abiotic theory, which says that oil fields can be refilled from sources well below those in which production now takes place.
Finally, it is important to remember that improving technology improves the oil situation regardless of the theory of its origins. A study last year by Cambridge Energy Research Associates found that five emerging technologies - remote sensing, visualization, intelligent drilling and completions, automation, and data integration - will greatly improve the ability of energy companies to increase their drilling success rate, better manage reserves, and operate more efficiently.
William Severns, the study's leader, explained, "With these capabilities, companies may be able to increase the amount of oil and natural gas recovered in a given field by 2 percent to 7 percent, reduce lifting costs by 10 percent to 25 percent, and increase production rates by 2 percent to 4 percent."
Of course, higher prices also make known deposits of oil that were previously too costly to exploit viable economically. Higher prices also reduce demand. Consequently, it is impossible to ever literally run out of oil. The possibility should not be a factor in the energy debate.
Bruce Bartlett is senior fellow for the National Center for Policy Analysis.
OIL produced the modern world its ways of work, warfare and recreation and soon, we are told, the end of cheap oil will produce abrupt, wrenching changes in the way we live. Changes, certainly, but not convulsions, because the modern world responds to price signals. That is why U.S. energy efficiency energy consumed to produce a dollar of GDP has roughly doubled since the oil shocks of the 1970s. America's less than 5 percent of the world population consumes more than 20 percent of all oil. Surging demand by India and especially China will cause prices to rise. And terrorists, or chaos in Venezuela (America's fourth-largest supplier, behind Canada, Saudi Arabia and Mexico) or Nigeria (the fifth-largest) could cause prices to soar.
However, in 1920 the inflation-adjusted price of gasoline was twice today's. To match 1981 prices, a gallon of gasoline today would have to be $3.50. Inexpensive gasoline is one reason why since 1988 the average gas mileage of U.S. passenger vehicles has declined, and why in the 2003 model year, for the first time since the mid-1970s, the average weight of a new car or light truck was more than two tons (4,021 pounds).
In 1977 President Carter said we "could use up all the proven reserves of oil in the entire world by the end of the next decade." But today known reserves are larger than ever. Reserves and production outside the Middle East are larger than they were 31 years ago, when a State Department report was titled "The Oil Crisis: This Time the Wolf is Here."
In 1971, a year before Texas output passed its peak, U.S. production was more than two-thirds of the nation's needs. Today the nation imports 54 percent of the oil it uses. M.A. Adelman of MIT notes that in 1971 non-OPEC countries had about 200 billion barrels of proven reserves. In the next 33 years they produced 460 billion "and now have 209 billion 'remaining.' " Note Adelman's quotation marks. To predict actual reserves would require predicting future exploration and development technologies.
However, the rate of discovery has been declining for several decades. Of course, oil supplies are, as some people say with a sense of profound discovery, "finite." But that distinguishes oil not at all from land, water or pistachio nuts.
Russell Roberts, an economist, says: Imagine that you love pistachio nuts and are given a room filled 5 feet deep with them. But you must eat them in the room and must leave the shells. When will you have eaten them all? Never. Because as it becomes increasingly difficult to find nuts amidst the shells, the cost of the nuts, in time and effort, will become too high. You will seek a substitute pistachios from a store, or another snack.
Oil over $40 a barrel accelerates exploration for new fields, and development of known but technologically inaccessible fields, including some fields four miles below the surface of the Gulf of Mexico, where there may be at least 25 billion barrels. High prices may also prompt development of hitherto economically unfeasible sources, such as U.S. oil shale and Canadian tar sands. Tim Appenzeller, writing in National Geographic, says tar-sand deposits in Alberta "hold the equivalent of more than 1.6 trillion barrels of oil an amount that may exceed the world's remaining reserves of ordinary crude."
Alberta, a future Saudi Arabia? Perhaps. Full-throttle production of oil from tar sand is not economical. So far.
John Kerry, whose idea of the future extends only to Nov. 2, says we should use less oil, but gasoline should be cheaper, so President Bush should stop filling the Strategic Petroleum Reserve. But that is taking just 0.2 percent of the oil in the world market. Were Bush to stop topping off the reserve, as President Clinton did to help Al Gore's 2000 campaign, Kerry would accuse Bush of manipulating prices for political advantage.
The futures market is wagering that oil in the summer of 2005 will be about $35. The more distant future will be shaped by how much various nations have inflated estimates of their reserves. But, then, Alaska may have three times more reserves than originally estimated.
MIT's Adelman notes that even before 1800 before the coal-fired industrial revolution Europeans worried about exhausting coal supplies. "European production actually did peak in 1913 and is nearly negligible today." Billions of tons remain beneath European soil but are uneconomical to remove.
Author
Logged
