"High gas price amnesia" is setting in again

[slowmover]

Production matters, not reserves. The first is verifiable, the second isn't.

Low prices hurt Russia. Thats the gambit which makes most sense (having Saudi Arabia pump more).

Tight oil is impressive. I drive around in these fields most days. But where is the profit (outside of real estate shenanigans)?

The long-term viabiiity of tight oil extraction is dependent on planetary economic growth (real goods, not "finance"). What government and central bank in the advanced economies is NOT propping the thing up?The best areas of these fields are drilled first. The rate of production decline, per well, is not for the squeamish. Rising cost of production is only offset somewhat by improved processes.

I doubt there is a long time.


In the meantime -- in The Paradise of Happy Motoring -- we, the wearers of hairshirts will drive another day or two past the SUV owners. Availability trumps price. The feedback loop of the latter kicks crap out of the former.

And, by the way, to take these FE stunts seriously (solo driver isn't ever serious) how about how well your family transportation does when loaded to GVWR. GCWR if with a trailer. I'd like to suggest that is the only worthwhile FE goal.

.

[jamesqf]

Originally Posted by MetroMPG

Sales of trucks, SUVs surge, with lower gas prices.

Could we interject a few words on basic human stupidity here? It's similar to the articles I've been seeing recently about how 401k & IRA plans are bad because they create inequality. (E.g. How 401(k) Plans Have Fueled Inequality in America - Businessweek ) The thesis being the inverse of Aesop's fable about the grasshopper & ant: people who a) contribute to retirement plans, b) don't take everything out & spend it at the first opportunity, and c) don't panic-sell when the market drops, eventually wind up with a nice pile of money, while those who don't, don't. Duh!

Meanwhile, rooftop solar is apparently now at parity with grid electricity in 10 states, and on track for 36 in a couple of years:
Solar cheap

[RustyLugNut]

Originally Posted by Old Mechanic

I think in Saudi Arabia, at one time, water was more expensive than oil. They have one export product, one chance to finance their economy for the rest of their existence. Their only hope is to use that asset very carefully. Maybe solar energy could be their future.

As far as oil and proven reserves versus potential, as yet undiscovered reserves, my thinking is there is probably much more potential supply, however I would like to see more competition for petroleum based energy economies. I think the transition will take a significant amount of time, probably beyond my lifetime.

regards
mech

The problem with the idea of Peak Oil is the understanding of what it is and how oil reserves fit into the picture.

The problem behind the idea of Peak Oil is the constant growth and demand of the world market especially in areas such as China and India. Once the demand exceeds the ability to supply the "easy oil", the price for oil must rise. This brings into play the oil resources that were ignored at lower prices. The oil sands are the biggest example of this along with smaller traditional geographical formations which would not have been economical at lower oil prices. Also, "tapped out" wells can be exploited with advanced extraction techniques. As oil prices rise even more, resources such as tar sands and deep water deposits become economically viable. All this does not mean Peak Oil is the end of oil. It just means that economic growth in the future must deal with much higher oil costs. At a certain point, that economic growth becomes stunted and can collapse. Growing countries such as the aforementioned regions of China and India will be the first to feel this as they have little to no oil reserves of their own.

The idea that there is more oil to be found is true. The problem is the difficulty of extracting it and at what cost. If the costs exceed what an economy is willing to pay, that oil will remain untapped. Economies will then look to economize and diversify their energy needs. We have seen this already happening across the globe.

The current price drop is being driven by Saudi Arabia. The Middle Eastern oil deposits still have large proven classic reserves. However, they are not unlimited. Published numbers for extraction are as low as 25 USD per barrel. Actual costs are most likely lower. However, the Saudi economy is almost wholly dependent on oil exports. Published numbers for their break even are around 85 USD per barrel. The fact that they are driving the prices below this number means they are willing to take a loss for the foreseeable future and cover the losses with their national reserves which are reported to be considerable. Why they are doing this largely unclear as there is no long term advantage to this. They may be able to stop or stunt the growth and exploration of competing oil areas, but that will not help them in the long run. The small oil producing country of Kuwait is an example of the forward thinking needed by many of these countries as they have moved to become a regional leader in banking, education and a hi-technology development hub. Their oil deposits are relatively small and are drawing down. In their wisdom, they are preparing for the future by investing the oil money in their people and infrastructure.

An interesting aside to all this is how the United States Government views this action by an avowed ally as this action attacks the foundation of the US economy as well as the closely allied economies of Canada and South America.

[jcp123]

Back to basics here. I'm loving the low prices!

[jamesqf]

Originally Posted by slowmover

In the meantime -- in The Paradise of Happy Motoring -- we, the wearers of hairshirts...

What hairshirts are those? That I have always chosen to drive small, nimble, comfortable & pleasant-to-drive small (and therefore economical) vehicles is a luxury. From my POV, the people driving oversized, overstuffed large vehicles are chosing to wear hair shirts called status and (illusory) safety.

And, by the way, to take these FE stunts seriously (solo driver isn't ever serious) how about how well your family transportation does when loaded to GVWR. GCWR if with a trailer. I'd like to suggest that is the only worthwhile FE goal.

Why? When I never load one of my vehicles to GVWR, nor pull a trailer with it?

As for the current dip in oil prices, I wonder whether it can't all be traced back to ISIS. They sell oil which they've stolen, and from oil fields which they can work with slave labor, so they don't need to worry about the cost of production.

[Xist]

Stupidity fuels inequality.

[jamesqf]

Originally Posted by Xist

Stupidity fuels inequality.

What I don't understand, and never have, is why equality (as distinct from equal rights) is supposed to be a good thing. Humans are obviously all different, want different things, and have different abilities that they can direct towards getting what they want.

[freebeard]

Equality before the law protects those differences?

Equality through corporate monoculture does not.

Equality as in 'we're all in this together so we might as well try to get along'?

[jamesqf]

No, inequality as in you spend everything you earn on consumer junk (like oversized gas-guzzlers bought on credit, to keep things relevant :-)), while I live frugally & invest, so I wind up with a millon or so at retirement, while you struggle along on Social Security.

[Xist]

Originally Posted by jamesqf

while you struggle along on Social Security.

...and blame others for creating inequality.