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Old 02-20-2010, 08:50 AM
 
Location: Wherabouts Unknown!
7,764 posts, read 16,834,005 times
Reputation: 9316

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I was living in British Columbia Canada at the time of the oil embargo, so I missed out on that whole experience. Never even saw a gas line, yet I have no doubt that we are far less prepared for another oil embargo should it come to pass.....simply becasue there are far more cars on the road today than there were back then, and many of those additional cars are gas sucking SUVs and tank size pick up trucks, driven by people with an I-am-the-center-of-the-universe mentality. It would not be a pretty sight. IMO, this is far more likely to occurr than many of the economic meltdown theories proposed on these forums.

 
Old 02-20-2010, 09:07 AM
 
8,317 posts, read 25,774,765 times
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Quote:
Originally Posted by CosmicWizard View Post
I was living in British Columbia Canada at the time of the oil embargo, so I missed out on that whole experience. Never even saw a gas line, yet I have no doubt that we are far less prepared for another oil embargo should it come to pass.....simply becasue there are far more cars on the road today than there were back then, and many of those additional cars are gas sucking SUVs and tank size pick up trucks, driven by people with an I-am-the-center-of-the-universe mentality. It would not be a pretty sight. IMO, this is far more likely to occurr than many of the economic meltdown theories proposed on these forums.
Not to mention that we relied on only about 20-25% of foreign oil to meet our needs then. Things went ape**** in this country in 1973 when only about 10% or so of our oil supply was disrupted--and only for a relatively short period of time. Today, we rely on foreign oil (a lot of it from now rapidly depleting fields in Mexico) for nearly 70% of our oil needs. Imagine what things would look like if we had, say, a 35-50% oil supply disruption in this country. And suppose the disruption of a good chunk of our supply became more or less permanent. A lot of people would probably starve.
 
Old 02-21-2010, 12:39 PM
 
Location: C-U metro
1,364 posts, read 2,721,923 times
Reputation: 1160
Default Mexico???

Our #1 source of foreign crude is Canada, not Mexico. Has been for almost 10 years now. Saudi is #2 and Mexico is #3. Total take from the entire Gulf Region is 15% of total foreign purchases (excl Saudi).

If I were to be worried about oil, I would be worried about the cap-and-trade scheme that was proposed in Congress earlier this year. It handed out so many freebees to the coal and natural gas industries that it would, and has, shut down refineries in this country. There is a missing point of order in the prior discussion of the 1970's embargo. Price controls.

Nixon set price controls as a way of controlling inflation after closing the gold window in 1971. Once OPEC removed oil from the US market, refiners had to pay more for crude as the available supplies in the US were usually lighter, sweeter crudes. They were not allowed to raise fuel prices due to the price controls so they only produced enough refined product to meet market contracts. Had price controls not existed, Americans would complain about the cost of fuel but they could at least easily obtain it much like in 2007.

The "peak oil" business is as much bunk as the "man-made global warming" business. There are factions on both sides and neither are entirely correct and skew data and rhetoric to fit their needs. The fact that the energy and manufacturing sectors of our economy have greatly improved their energy conservation and reduced fuel use is lost on the "peak oil" people. Refineries in the 1970's ran nothing like refineries in 2010. Also, the anti-peak oil people refuse to understand that they are advocating higher fuel prices by refusing to cut back consumption by the consumer. Smaller homes and neo-urbanism desires run rampant in the Gen-X and Gen-Y demographics. They are likely to use less refined product over their lifetime than the Boomer generation just because of factory efficiencies and the lack of large numbers of gas-guzzling vehicles in use. They are likely to use more energy as they prefer electricity guzzling flat-screen TV's, computers, video games and rechargeable electronic devices. As our very few electrical generating plants using fuel oil remaining in the US, peak oil will have a negligible impact on the price of electricity which was not the case in 1970's America.

Factoring out inflation, it is unlikely that oil will hit a long sustained economic draining price provided price caps on refined product are not put in place in the US or China. Monies that are paid to producing firms will be put back into locating further deposits of oil, gaining more recoverable barrels in existing deposits, using technology to open up deposits once found unrecoverable and increasing efficiencies in the refining process which all act to counter the price paid for the barrel of crude.
 
Old 02-22-2010, 08:42 AM
 
8,317 posts, read 25,774,765 times
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flycat2k's post is myopic, at best. As Mexico's fields decline, the US will either have to lower consumption, or replace that oil from other sources. Where? The North Sea fields are also in serious decline. Our own North Slope of Alaska has peaked. There are ominous signs that the largest fields in the world--cheap, easy to get sweet crude in the Saudi fields--are declining at higher rates than expected--and so on and so on. Meanwhile, demand--from emerging economies and the age-old scourge of out-of-control population growth--continues. So, we are in for savage competition for remaining resources, with high prices. Even if we manage to bring unconventional oil sources online, they are going to be expensive. $6-$8 per gallon fuel, here we come. Meanwhile, we continue to debase our currency, which will make those imports just that much more expensive for us--if we can buy them at all.

Now, someone will say this has nothing to do with Colorado coming out of the recession. Sorry, it will have plenty to do with it. It may significantly boost some parts of the energy sector of the Colorado economy, but it will slaughter tourism and that huge part of the "goof-off" Colorado economy that is dependent on discretionary income. It will probably knock off what tarnish is left on the suburban living arrangement, and destroy what is left of the residential real estate market that the debt bubble hasn't already killed off. So, buck up little campers, we're in for a long, very long, economic dry spell--probably measured in terms of a decade or more.
 
Old 02-22-2010, 09:18 AM
 
Location: C-U metro
1,364 posts, read 2,721,923 times
Reputation: 1160
Default Oh, yes, I'm an idiot

Sorry jazz. I've worked from crude all the way to refined product over the past 10 years. I'm a licensed engineer. I love it when people who've never set foot in a refinery or oil rig tell me I have it all wrong, particularly when they either have no technical college degree or some BA in basketweaving or communications. Saudi crude isn't sweet (it's medium sour) and do you even know what that means?!? From your previous post, you have no clue. You seem to have latched on to one article about the Mexican fields being mismanaged and totally dismiss the Canadian supplies which rival the entire Persian Gulf region.

I'm glad you listen to all the ads on talk radio and are stashing away those gold coins at 15% over spot. It keeps Limbaugh, Hannity and Beck in fat city. All old people think that the world will end in their lifetime and yet we're still here. Will the earth run out of oil at some day in the future? Likely. But the sun will burn up the earth at some point in the future too and I'm not really going to worry about that.
 
Old 02-22-2010, 10:16 AM
 
Location: Everywhere and Nowhere
14,131 posts, read 27,007,803 times
Reputation: 6824
This is gettin' good. May need to crack open a beer and watch how it plays out.
 
Old 02-22-2010, 10:18 AM
 
Location: SW Colorado
147 posts, read 560,104 times
Reputation: 87
Quote:
Originally Posted by jazzlover View Post
flycat2k's post is myopic, at best. As Mexico's fields decline, the US will either have to lower consumption, or replace that oil from other sources. Where? .

How about Brazil?

Oil-rich Brazil eyes spot as top exporter - Washington Times

“Brazil's recent oil discovery threatens to knock Venezuelan President Hugo Chavez off Latin America's oil throne and possibly snatch Venezuela's title as the Saudi Arabia of the Western Hemisphere.
Enough oil is tucked deep below the ocean off Brazil's coast to turn the country into a major oil exporter, and the Brazilian government is recrafting its oil policy with the U.S. as a potential market, many analysts say.
Containing 8 billion to 12 billion barrels of reserves, the Tupi and Iara fields lie buried under layers of rock and salt beneath the ocean floor, about 170 miles off Brazil's southeastern coast. They are thought to be the largest crude discovery in the Americas since Mexico's oil discovery 30 years ago. “
 
Old 02-22-2010, 10:39 AM
 
20,836 posts, read 39,041,284 times
Reputation: 19042
Let's bring this thread BACK to Colorado.

My opinions are based on a few books like The Oil Factor (by Leeb) and scouring various major news and investment sources.

I suspect we may see expensive oil again, but not for a few years until the world economy resumes hitting on all 8 cylinders, unless a black swan event such as major war or natural disaster takes out a ton of capacity.

If prices do get way up, Colorado may yet get some of that oil shale into production, despite water issues. It used to be a rule of thumb that $100/bbl oil would make shale viable. I recall reading that CO and WY have shale oil reserves which rival the Saudi fields for sheer size. To put these into play requires that oil prices do two things: GET high, and STAY high. Temporary high spikes are not sufficient to justify the investment needed to bring this oil to market.

Canada has the tar sands and other resources. I've enjoyed high dividends for years on Canadian energy trusts who pump mostly the normal forms of crude, though some do hold tar sands resources.

The huge Bakken area over in ND is said to have 3-4B/bbls of oil.

ANWR and our own off-shore (drill baby drill) resources await sufficient hue and cry for oil, and will be drilled - someday.

In the past year, major finds have been noted for off-shore Brazil and a crusty old coot in TX has recently devised a viable method of getting a lot more oil out of declining mature fields in TX (I read that one just last week).

Overall, seems the world is somewhat awash in oil. But if supply does get short, and STAYS short, then we can play our COLO shale resources and our significant natural gas resources here as well. This will make COLO a hot play in the traditional (oil-gas) energy biz. Boom times will return to areas that are now hurting.

Today's news indicates that coal demand in China is well up, and that *may* generate more business for Colorado mines. Other news has big money getting in on various energy producers, miners and airlines in advance of recovery taking off. Oil is at $80/bbl today. All of this bodes well for recovery in Colorado, as well as everywhere. Whether it comes sooner or later to COLO is not that big a deal, except to the unemployed.

Wild Card: Solar, wind or nuclear power will fuel battery powered cars that reduce demand for oil. I want the world to push hard for renewable energy sources in order to make the world's oil and coal reserves last for the next several thousand years. Yes, we need to have a very LONG term view and not burn up all our coal, gas and oil in the next couple hundred years. These materials have many uses beside mere combustion and it is these uses for which we need to assure a supply.

IMO, I don't foresee any terrible oil shocks in the near-term (3-6 years) that will affect recovery from the current recession.

Overall, I foresee a future that is much the same as we now see it, with business as usual and no sudden, massive upheavals.

Colorado will come out of the recession. Hopefully long-term planning and investment will assure a more stable future.
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Last edited by Mike from back east; 02-22-2010 at 01:45 PM..
 
Old 02-22-2010, 10:53 AM
 
Location: Wherabouts Unknown!
7,764 posts, read 16,834,005 times
Reputation: 9316
Mike from back east wrote:
IMO, I don't foresee any terrible oil shocks in the near-term (3-6 years) that will affect recovery from the current recession.

Overall, I foresee a future that is much the same as we now see it, with business as usual and no sudden, massive upheavals.

Colorado will come out of the recession. Hopefully long-term planning and investment will assure a more stable future.
Although I do not share your optimistic view with regard to oil shocks, I do however appreciate your generally optimistic viewpoint ( someone's gotta balance out the pervasive pesimism! ). I hope my pessimism proves fruitless. Obviously I'm still shell-shocked from the 4 bucks a galllon scenario that occurred not-so-long-ago, the current unemployment spike in Grand Junction, and the almost completely stagnant real estate market in Grand Junction for the past 18 months with no sign whatsoever that it will improve anytime in the near future. I genuinely admire your optimism. I don't know how you maintain an optimistic outlook when so much sh*t is hitting the fan.
 
Old 02-22-2010, 10:58 AM
 
Location: Irvine, CA / Golden, CO
59 posts, read 171,305 times
Reputation: 46
Colorado is well positioned to benefit from natural gas production. As Cap & Trade and the general “green” movement chugs along, this will improve demand for CO natural gas. Technology and know-how is improving and lowering the cost of coal bed and stratified formation gas production, at least as long as the CO water commission doesn’t shoot this Golden Goose.

Gas and diesel will always be the preferred fuel for motor vehicles, at least within my lifetime. Methane chemistry and synthetic “clean” fuels are the growth markets of the future and will likely take certain market share from oil and coal; for example, power plants, municipal transportation and many industrial applications.


Quote:
Originally Posted by Mike from back east View Post
Colorado will come out of the recession. Hopefully long-term planning and investment will assure a more stable future.
I agree.
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