• Tiresias

    Dream on, Gerry Charlotte.

    Of course punishing “Big Oil” doesn’t accomplish anything in the real world – but it sure makes our roomful of dingbats in Washington – not one of whom has ever produced a drop of oil or a watt of energy – feel important. Or tough. Or something.

    And how many people will remember that when Pelosi was sworn in as Speaker in 2006 she bloviated extensively about what she and the democrats were going to do to control oil prices – and the reality is that prices have done what they’ve done under them? (Answer: nobody.)

    And when Schumer runs his mouth about not drilling in the ANWR because even if we started tomorrow we wouldn’t get a drop for ten years, how many people remember that it was Clinton who said no, hmm… 1996 is… twelve years ago. Had we done it, it would be well online, no problem.

    But the biggest issue is: current oil supplies are getting not-all-that-far-away from the party being over. Everybody thinks Bush was being dissed by the Saudis when he asked them to raise production; I suspect the truth is: they can’t. Peak production was always estimated to arrive between 2004 and 2008 (having found and equipped their oil fields we have a fair idea what’s there), and they’re past it.

    In 2003, with Iraq in shambles and not producing, Venezuela crippled, Nigeria blown apart by civil unrest, the North Sea depleting by around 5% anually – Arabia was rumored to be pumping at full capacity.

    In summer 2004 the Saudis repeatedly promised to increase supplies – they couldn’t. (These days, notice, they don’t even promise: they know better.)

    Most people don’t know (apparently neither does congress or the US media) that there are only 6 oil fields in Saudi Arabia. The biggest, and in fact the biggest oil field ever found, is a 300 mile long sliver called the Ghawar Field. It accounts for 60% of all the oil Saudi Arabia ever produced.

    For years Aramco has been injecting seawater into Ghawar as a means of forcing the oil out under pressure. Over time, an increasing amount of what you’re pumping back out is seawater. By summer 2004 this so-called “water cut” was estmated to be 55%. That means that what was coming out of Ghawar was more than half water. (It’s probably also telling that right about then, Aramco stopped their reporting – which was already minimal anyway, reserves are a state secret in Arabia – to the world’s oil community.)

    I’m not advocating “be nice to Saudi Arabia” by any means, but I am saying that the reality is that if they’re capable of increasing production at all, it’ll be by a miniscule amount, maybe 150,000 – 200,000 barrels a day, which sounds like a lot but is nothing by world consumption standards.

    I suspect the dirty little secret is that they’re doing all they can do. (They’re not entirely stupid, y’know. They’ve noticed that we protect them, and they’re aware that we’re the economic engine of the planet. If we went “boink” it would be bad – they know this.)

    And we need to get rid of the democrats and their environmentalist pals. Oil drilling is INCREDIBLY safe environmentally, and we can’t stand here like idiots while Mexico and China take our off-shore oil, and we can’t ignore ANWR (where Schumer has in fact never been. I have. It’s perfect), and we can’t ignore the Dakotas.

    All of which is a stop-gap. What they’ll do is ease us gently out of the oil era. What our politicians are setting us up for is a resounding crash.

    The only thing that explains anyone continuing to vote for these people is massive ignorance.

  • David Foster

    “won’t change a damn thing”…yes it will. It would make people very reluctant to invest in oil companies and other kinds of companies as well, hence starving these entities of capital.

    Congress may love (say) solar power or cellulosic ethanol at the monent…but who’s to say that if these technologies pan out, 10 years from now, they won’t decide to slap an excess profits tax on *them*?

  • Ymarsakar

    It will change the world to be a worse place, Book, which is all that evil people want. The evil corporations are a great heat sink to redirect people’s anger at while shadowy individuals play behind the scenes undergoing the real evil and exploitation.

    Vengeance against the destroyers of progress and order may be a dream, but it is a pleasant dream nonetheless. For in that vengeance lies the seed of future justice.

  • pondering penguin

    Your first commenter is absolutely spot on. My husband was just reminding me that of the seawater injection in Saudi Arabia as I showed him the blog post referenced in your post. He says Phelps is correct in her opinion.

    My husband is an engineer in the oil drilling biz. He’s worked all over the world for 30 years and was told of the seawater injection in Saudi Arabia several years ago by a colleague who was involved with the operations.

    They won’t increase production because they can’t, in his opinion. That’s the dirty little secret.

    Terrific post.

  • rockdalian

    But the biggest issue is: current oil supplies are getting not-all-that-far-away from the party being over.

    Tiresias

    I must disagree. If you are speaking of Middle East oil, you may be correct.
    However, if you are referring to world supply, then I disagree.
    Peak oil has been predicted for ages, and as you can see, we still have plentiful oil.

    Vast oil potential in Arctic, new data says

    http://tinyurl.com/2van9k

    Massive Oil Deposit Could Increase US reserves by 10x

    http://tinyurl.com/2o7or3
    This is really the tip of the berg, so to speak.
    The earth creates oil, even as I write this.

  • Tiresias

    Worldwide demand is currently estimated by the EIA to be 118 million barrels a day.

    Let’s be kind, and say it’s only 100 million barrels a day. And let’s be insanely optimistic and say that every single drop of that “newly” discovered 600 billion barrels is 100% recoverable. (It isn’t “new.” Geologists have known for years. There have been oil wells in the Dakotas for my entire life, and we didn’t go to Prudhoe Bay by accident: the Arctic – land and seabed – was being looked at in the 1960s. They went for the land first: it worked best with the technology then available.)

    At 100 million barrels a day, every ten days the world is consuming a billion barrels. Every year, 36 billion.

    The math is fairly straightforward. 600 billion barrels will last somewhat under twenty years.

    The world, which was measuring oil reserves in trillions of barrels not terribly long ago, is indeed past peak production and on the downward slope. Peak estimates have been adjusted many times to account for new finds (including the Dakotas and the Arctic – neither of which are “new”) and 2004 – 2008 has been a persistent conclusion.

    What makes it tricky to figure out is the ever-changing demand side of the equation. There is also the simple fact that a trillion barrels of oil was one thing when world demand was 20 million a day – it’s quite something else when the demand’s 120 million a day – and growing.

    None of which addresses the main American issue: the democrats and environmentalists aren’t going to let you get at that additional supply, thus guaranteeing we crash, rather then ease down for a soft-ish landing.

    Schumer and his fellow idiots want to take the “excess profits” or “windfall profits” and put them in a “trust fund.” How that will lower the price of a barrel of oil by as much as a penny is not explained. More importantly, how it will increase the supply by as much as a drop is left equally to the imagination.

    Lastly, the planet is indeed making new oil. It’s a little slow compared to a need of 100+ million barrels a day, but indeed it is.

  • Ymarsakar

    Oil won’t run out so long as American technological levels increase and the oil fields are protected by area denial military forces loyal to either human rights, capitalism, or America.

    Without technological advances, oil won’t be of much use either way, for all things will stagnate and the environment will go to hell.

    Without security on the oil fields, eventually some Arab crazy will burn it all down one way or another. Or put a nuke there and deny the area to everybody else not in a radiation suit.

  • Ymarsakar

    Schumer and his fellow idiots want to take the “excess profits” or “windfall profits” and put them in a “trust fund.” How that will lower the price of a barrel of oil by as much as a penny is not explained. More importantly, how it will increase the supply by as much as a drop is left equally to the imagination.

    Breaking the power base of Democrats and socialists should be people’s top priority. Not winning elections against them. Elections can only ever be a means to an end.

  • rockdalian

    Look, we have the Bakken fields, the outer continental shelf and all the offshore drilling opportunities, ANWR, and so forth. There’s probably over a trillion barrels worth of reserves out there. And Republicans in the Senate are trying to move a deregulated drilling bill through the process. McCain should be backing this and talking about it.

    [Larry Kudlow]
    http://tinyurl.com/5hv94z
    While discussing McCain, the author makes my point.