Comments on: Bursting the Oil Bubble: Lower oil prices now with conservation and the “Fort Knox” of oil http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/ The Latest on Climate Science, Solutions, and Politics Mon, 15 Mar 2010 10:05:59 -0400 http://wordpress.org/?v=2.8.5 hourly 1 By: Earl Killian http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14592 Earl Killian Tue, 17 Jun 2008 22:07:51 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14592 Wow, the <a href="http://www.iea.org/textbase/papers/2004/factsheetcover.pdf" rel="nofollow">IEA says</a> "IEA Member countries are holding some 4.1 billion barrels of public and industry oil stocks, of which, roughly 1.4 billion barrels are government controlled for emergency purposes." That is a lot of non-government oil reserves. Someone is making a lot of money with the recent price rise. Wow, the IEA says “IEA Member countries are holding some 4.1 billion barrels of public and industry oil stocks, of which, roughly 1.4 billion barrels are government controlled for emergency purposes.” That is a lot of non-government oil reserves. Someone is making a lot of money with the recent price rise.

]]> By: Robert http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14508 Robert Sun, 15 Jun 2008 23:45:35 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14508 The other BIG problem with your argument is that, even if it was sold off, the money would not be spent on clean energy. Politics and economics just don't work that way. The other BIG problem with your argument is that, even if it was sold off, the money would not be spent on clean energy. Politics and economics just don’t work that way.

]]> By: Robert http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14507 Robert Sun, 15 Jun 2008 23:42:12 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14507 Joe As I'm sure you know, the SPR was set up in 1975 as a buffer against the sort of temporary supply disruptions that occurred in the 70's. It currently holds some 705 million barrels. http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve Some 60% of the world's oil passes through the Straits of Hormuz and any sort of blow up in the ME would be likely to shut in this oil. The SPR would keep things ticking over in the US for 160 days (at 4.4 mbopd) while the problem was hopefully resolved. Note: in an emergency the SPR would be used exclusively by the US as a supplement for missing imports, whereas if it was sold off now it would just flow into the global market. Big difference. The US is not the only nation with an SPR. Japan and China both hold similar reserves. The very fact that such reserves exist reduces the scope for blackmail. It is also proving one of the US's most profitable investments - I wish I had 705 million barrels of oil appreciating in my back garden! Joe

As I’m sure you know, the SPR was set up in 1975 as a buffer against the sort of temporary supply disruptions that occurred in the 70’s. It currently holds some 705 million barrels.

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

Some 60% of the world’s oil passes through the Straits of Hormuz and any sort of blow up in the ME would be likely to shut in this oil. The SPR would keep things ticking over in the US for 160 days (at 4.4 mbopd) while the problem was hopefully resolved. Note: in an emergency the SPR would be used exclusively by the US as a supplement for missing imports, whereas if it was sold off now it would just flow into the global market. Big difference.

The US is not the only nation with an SPR. Japan and China both hold similar reserves. The very fact that such reserves exist reduces the scope for blackmail. It is also proving one of the US’s most profitable investments – I wish I had 705 million barrels of oil appreciating in my back garden!

]]> By: Brute http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14479 Brute Sun, 15 Jun 2008 13:24:51 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14479 Plan Would Lift Saudi Oil Output By JAD MOUAWAD Published: June 14, 2008 Saudi Arabia, the world’s biggest oil exporter, is planning to increase its output next month by about a half-million barrels a day, according to analysts and oil traders who have been briefed by Saudi officials. Times Topics: Oil (Petroleum) and Gasoline The increase could bring Saudi output to a production level of 10 million barrels a day, which, if sustained, would be the kingdom’s highest ever. The move was seen as a sign that the Saudis are becoming increasingly nervous about both the political and economic effect of high oil prices. In recent weeks, soaring fuel costs have incited demonstrations and protests from Italy to Indonesia. Plan Would Lift Saudi Oil Output

By JAD MOUAWAD
Published: June 14, 2008
Saudi Arabia, the world’s biggest oil exporter, is planning to increase its output next month by about a half-million barrels a day, according to analysts and oil traders who have been briefed by Saudi officials.

Times Topics: Oil (Petroleum) and Gasoline
The increase could bring Saudi output to a production level of 10 million barrels a day, which, if sustained, would be the kingdom’s highest ever. The move was seen as a sign that the Saudis are becoming increasingly nervous about both the political and economic effect of high oil prices. In recent weeks, soaring fuel costs have incited demonstrations and protests from Italy to Indonesia.

]]> By: hapa http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14459 hapa Sun, 15 Jun 2008 02:18:50 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14459 forget it. <em>you</em> win either way. forget it. you win either way.

]]> By: civil behavior http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14457 civil behavior Sun, 15 Jun 2008 01:43:06 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14457 You all sound like pretty intelligent scientific types. How much any of you want to bet we have less than twenty years before we know our our ultimate fate? And that it won't matter by then. You all sound like pretty intelligent scientific types.

How much any of you want to bet we have less than twenty years before we know our our ultimate fate?

And that it won’t matter by then.

]]> By: Joe http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14453 Joe Sun, 15 Jun 2008 01:15:51 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14453 So "If you were to offer the contents of the SPR on to the world’s markets it would make a barely perceptible dent in either the per-barrel price" -- BUT it somehow offers a defense against ... what exactly? Nothing, by your own admissions. It serves no value. Might as well get some clean energy $$$ for it. So “If you were to offer the contents of the SPR on to the world’s markets it would make a barely perceptible dent in either the per-barrel price” — BUT it somehow offers a defense against … what exactly? Nothing, by your own admissions.

It serves no value. Might as well get some clean energy $$$ for it.

]]> By: Robert http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14448 Robert Sun, 15 Jun 2008 00:02:43 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14448 The US trade deficit is heading towards $1 trillion a year. If you were to offer the contents of the SPR on to the world's markets it would make a barely perceptible dent in either the per-barrel price or the US trade deficit. Having done this the US would then have no reserve and be sitting there with its legs wide open waiting to be kicked in the goolies by some well meaning friend such as Chavez or Ahmadinejad. Now that WOULD get the speculators excited. Great plan Joe. The US trade deficit is heading towards $1 trillion a year. If you were to offer the contents of the SPR on to the world’s markets it would make a barely perceptible dent in either the per-barrel price or the US trade deficit.

Having done this the US would then have no reserve and be sitting there with its legs wide open waiting to be kicked in the goolies by some well meaning friend such as Chavez or Ahmadinejad. Now that WOULD get the speculators excited.

Great plan Joe.

]]> By: David B. Benson http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14447 David B. Benson Sat, 14 Jun 2008 23:00:48 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14447 Saudis will do it for you. :-) "Plan Would Lift Saudi Oil Output" http://www.nytimes.com/2008/06/14/business/14oil.html?_r=2&partner=rssnyt&emc=rss&oref=slogin&oref=slogin Saudis will do it for you. :-)

“Plan Would Lift Saudi Oil Output”

http://www.nytimes.com/ 2008/ 06/ 14/ business/ 14oil.html?_r=2&partner=rssnyt&emc=rss&oref=slogin&oref=slogin

]]> By: hapa http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14445 hapa Sat, 14 Jun 2008 20:17:02 +0000 http://climateprogress.org/2008/06/13/bursting-the-oil-bubble-lower-oil-prices-now-with-conservation-and-the-fort-knox-of-oil/#comment-14445 sorry. that was too strong. here's the problem as i see it. we've all known that 450 ppm wasn't the right stabilization number. we knew we were going to lose more carbon sinks and we knew that since climate science was consistently underestimating the speed of ecosystem decline, that meant climate science's atmospheric safe zone estimate was deeply suspect. hansen's people say the safe zone is below 350 and that we can't practically expect to get there if we even peak at 450, because there's only so much we can take out. this isn't news. hansen's best estimate then is that coal emissions must go away in rich countries by 2025 and non-rich countries by 2030. oil and natural gas, besides scarcity and extraction expense, can be handled with ordinary market forces. <em>that</em> isn't news. the news is for finance people. assuming, fairly, that CCS is a dream, we have less than 20 years to replace coal, ok? all that equipment. and a fair amount of oil-dependent equipment. 20 years: <em>less than one investment cycle</em>. meaning that if we choose to ignore the clear signs that the safe target is below/behind us, we'll not only need to be replacing all the dirtiest equipment -- truly sunk costs, mostly with their original capital debts repaid -- we'll have <em>new</em> sunk costs, fully indebted, of equipment that was built on moderate-reduction-curve assumptions, during this coming pro-active administration/congress. so if you want to talk about how much things will cost, factor in the likelihood of the major target being dropped drastically, and a major part of the first round of serious mitigation effort <em>having to be scrapped</em> because the lenders and operators assumed they'd finish cleaning up their industry between 2030-50. sorry. that was too strong.

here’s the problem as i see it.

we’ve all known that 450 ppm wasn’t the right stabilization number. we knew we were going to lose more carbon sinks and we knew that since climate science was consistently underestimating the speed of ecosystem decline, that meant climate science’s atmospheric safe zone estimate was deeply suspect.

hansen’s people say the safe zone is below 350 and that we can’t practically expect to get there if we even peak at 450, because there’s only so much we can take out. this isn’t news.

hansen’s best estimate then is that coal emissions must go away in rich countries by 2025 and non-rich countries by 2030. oil and natural gas, besides scarcity and extraction expense, can be handled with ordinary market forces. that isn’t news.

the news is for finance people.

assuming, fairly, that CCS is a dream, we have less than 20 years to replace coal, ok? all that equipment. and a fair amount of oil-dependent equipment.

20 years: less than one investment cycle.

meaning that if we choose to ignore the clear signs that the safe target is below/behind us, we’ll not only need to be replacing all the dirtiest equipment — truly sunk costs, mostly with their original capital debts repaid — we’ll have new sunk costs, fully indebted, of equipment that was built on moderate-reduction-curve assumptions, during this coming pro-active administration/congress.

so if you want to talk about how much things will cost, factor in the likelihood of the major target being dropped drastically, and a major part of the first round of serious mitigation effort having to be scrapped because the lenders and operators assumed they’d finish cleaning up their industry between 2030-50.

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