The end of oil?

[widebody911]

Interesting reading: http://www.lifeaftertheoilcrash.net/Introduction.html

For example, he examines alternative energy:
(excerpts)
http://www.lifeaftertheoilcrash.net/PageTwo.html

Discuss, and try not to get verklempt.

[cmccuist]

Necessity being the mother of invention - when oil gets too expensive to get out of the ground, another source of energy will emerge.

Energy being directly proportional to mass (E=mc^2) indicates that the amount of energy available is not the problem. Converting it to a usable commodity is the problem. That's why I've never understood convervation of oil (higher milage autos, solar and wind power etc.) Let's use it up and move onto something better.

$55/bbl crude isn't getting anyone's attention yet. Even Greenspan is saying it's not a problem. I say let's all drive Cayennes, Hummers, Escalades and Canyoneros (Marge Simpson's SUV), use up the available oil and get on to the next source of energy.

Nuclear powered cars would be nice. You buy one and never have to refuel. Insead of a low oil pressure light, there would be a light that came on when you had a loss of coolant accident or a SCRAM. The accelerator, instead of opening the butterfly on the FI, would lift the control rods out of the reactor. If you plowed into a guard rail, instead of a tow truck, you would call a hazmat unit. Obviously there are some problems to work out.

[hoff944]

If you can make synthetic motor oil, why not make synthetic gas. The Nazi's did it in WW2.

[jyl]

Originally posted by cmccuist
. . . I've never understood convervation of oil (higher milage autos, solar and wind power etc.) Let's use it up and move onto something better.

$55/bbl crude isn't getting anyone's attention yet . . .

IMO, the weak link in that argument is that we don't have "something better" today and aren't likely to have it for some considerable time.

Oil at current prices is a fairly inexpensive and convenient source of energy. The extraction, processing, and distribution have all been figured out. Alternative energy sources are more expensive and will probably remain so for many years, until the technology is better developed. So reducing oil usage now saves money. not to mention reduces pollution and our dependence on politically unstable parts of the world.

Over the past 30 years, major increases in oil prices have usually coincided with the start of significant recessions. Greenspan testified that so far this year, the rise in oil prices has reduced US GDP growth by about 0.75%, which is not a trivial amount. He believes that the US economy is less sensitive to oil prices than in prior decades, not that it is insensitive.

The other weak link, for me anyway, is that $2.70/gal premium is definitely getting my attention. Paying >$50 to fill my tank is not so fun. $50 isn't spare change (in my world, anyway) and I would much rather spend the money on something else.

Edit: US GDP growth in 2004 so far has been about 3.5% and average US GDP growth for the last 10 years has been 3.3%. These are from a Wall Street Journal article today, I can go look up the exact numbers if anyone cares. Anyway, by Greenspan's estimates the rise in oil prices has reduced economic growth by about 1/5th in 2004. That's not insignificant.

[jyl]

Originally posted by hoff944
If you can make synthetic motor oil, why not make synthetic gas. The Nazi's did it in WW2.

Because synthetic gasoline is much more expensive than conventional gasoline. It is made from natural gas. Natural gas prices are also rising, by the way, and it too is a finite resource.

[red-beard]

The is only one proven alternative energy source, with thousands of years of proven reserves, which produces no greenhouse gasses, and CAN power the entire world even at present including growth rates.

And it ain't wind, solar or hydro-electric.

[bryanthompson]

If you are referring to pedal power or walking... people create greenhouse gasses... especially after taco tuesday :lol:

We'll never be off of oil until there's need. until then, it's all pie-in-the sky ideas, bad science about global warming, and fearmongering causing prices to go up. As cmccuist said on the first reply, necessity is the mother of invention.

[SteveStromberg]

Wood Gas was used during WW2 also.

[cmccuist]

One other thing to consider - refining capacity in the US is maxed out. There are no new refineries being built and existing refineries are being run at near 100%. In addition, any money being spent at these US refineries is being spent on upgrading existing units to conform to environmental regulations rather than increasing capcity.

What I meant by $55/bbl not getting anyone's attention is we're still climbing into our Hummers and Escalades and F250's and Hemi P/U's. There are the greens driving their hybrids, but not in significant numbers. I'm fine with all that - to each his own, but we're not going to see any development in new energy sources until oil is REALLY hard to get out of the ground.

GO Astros!

[Moses]

Originally posted by red-beard
The is only one proven alternative energy source, with thousands of years of proven reserves, which produces no greenhouse gasses, and CAN power the entire world even at present including growth rates.

And it ain't wind, solar or hydro-electric.

I have no idea why nuclear has such a bad rap. Newer technology could make a Chernobyl-like event virtually impossible. Besides, traditional energy like coal and fossil fuels have killed thousands and will predictably kill more.

I have a vision of tiny "household" nukes that run your home or business. Electric cars charged at your home powerplant. Hell, France is bout 80% nuclear and it hasn't screwed them up. Wait... I take that back.

[red-beard]

The Chernobyl factor is the problem. That accident could not happen in the west in a commercial reactor. And we do silly things, like having a containment facility, that the Russians didn't do. Chernobyl was housed in a regular factory building.

Three Mile Island, while terrible, showed that even if the operators do _everything_ wrong, no radiation will be released. The woman who claimed the radiation exposure, turned out to be Radon, which is natural and a signifigant problem in the North-Eastern US.

It is simply fear. Fear that continues to be drummed up by the left leaning intilecuals.

[jyl]

Other than the radioactive waste product, I think nuclear power is great.

The waste problem can't be dismissed, but it seems like the downside caused by the waste should be carefully compared with the downside caused by the pollution / greenhouse gases of oil, natgas, and coal and the downside of being so dependent on oil.

If we look at this rationally and rigorously, it might make sense to greatly step up the US nuclear energy program.

However, it makes even more sense to reduce our energy consumption, whereever we can do so with relative ease. I just don't get the idea that we should hurry up and use up oil. Why is waste ever good?

[jyl]

Originally posted by cmccuist
One other thing to consider - refining capacity in the US is maxed out. There are no new refineries being built and existing refineries are being run at near 100%. In addition, any money being spent at these US refineries is being spent on upgrading existing units to conform to environmental regulations rather than increasing capcity.

What I meant by $55/bbl not getting anyone's attention is we're still climbing into our Hummers and Escalades and F250's and Hemi P/U's. There are the greens driving their hybrids, but not in significant numbers. I'm fine with all that - to each his own, but we're not going to see any development in new energy sources until oil is REALLY hard to get out of the ground.

GO Astros!

But the question is why is refining capacity maxed out?

The major US oil companies are rolling in profits. For example, Exxon-Mobil (ticker XOM) is reporting pretax margins >14%, after being stuck in a 6-10% range for all of the '80s and '90s, and its revenue and EPS are hitting new records. The oil companies have all the money they need to build new refineries, update new ones, etc. With $10 billion of cash on the balance sheet and $15 billion of free cash flow in 2003 (heading higher in 2004) XOM can hardly pretend it is too poor to build a refinery or three. Similarly for the other majors.

Environmental regulations are not a barrier. They may be a nuisance from the oil companies' point of view, but they have the most cooperative EPA they could possibly hope for under this Administration. Do you seriously think Exxon-Mobil couldn't use its friends in the White House to smooth out any regulatory obstacles?

I see two possible reasons why refinery capacity is not being added.

First, the oil companies may not believe that $55/bbl oil will last, and are reluctant to start long-term projects that won't be as profitable under $35/bbl oil.

Second, the oil companies may have calculated that their profits and return on capital will be higher with less refining capacity. Tight refining capacity contributes to high fuel prices and high crack spreads. Crack spreads (difference between crude and refined product) have risen from the 2.0-3.5% range in 1999 to the 6.5-7.0% range today and were as high as 12% earlier in 2004. This is great for oil company profits.

[cmccuist]

Originally posted by jyl
...I just don't get the idea that we should hurry up and use up oil. Why is waste ever good?

Of course you're right about waste never being a good idea John. I'm just looking at the practical aspects. We're not going to dismantle our oil refining equipment or oil rigs or internal combustion engines until it gets too expensive to base our energy on hydrocarbons. That's human nature.

Nuclear - be it fussion or fission - is not going to be considered seriously until hydrocarbons are less available. Long term planning is not something that the human race is typically good at. Crisis management is what we do.

As far as nuclear waste - I think you have brought up a very profound way to look at nuclear power. Being as meltdowns are not normal (Chernobyl and 3 Mile Island) the only compelling argument against nuclear is what to do with the waste.

Solve that problem and there would be a corresponding decrease in the resistance to nuclear.

[Serge914]

Originally posted by Moses
I have a vision of tiny "household" nukes that run your home or business.

Forget it, there are too many morons around that can't even program their VCR or put air in their tires, neverthless take care of a nuke. And it would be like giving candies to terrorists.

A good combination of wind, solar or hydro-electric are the way of the future.

[speeder]

The U.S.A. has had massive opportunities to formulate an intelligent energy policy during the last 30 years when we could more than afford to do it, but greed and short-term thinking got in the way. Big surprise. The last straw, IMO, was abandoning CAFE standards in the '80s by classifying all SUVs as "trucks" instead of simply passenger vehicles, but hey, the auto companies made a killing, right? Got to get while the getting is good.

Now that oil prices have taken off, (and it's not the $2.50 @ gal. regular that scares me, it's the 10 cents a gallon weekly rise/instability), consumers and vehicle suppliers are going to prove that we could have burned 1/2 as much the whole time w/o any significant reduction in quality of life. Americans waste energy for the same reason that dogs lick their balls, because we can. I mean could.

A quick trip to Europe will show anyone that using a Suburban as a one person car is not necessary for happiness to be achieved, in fact it may be the opposite. Out of control consumerism is great for GM and the ad industry, but not the human psyche, IMO at least.

In the words of the late Frank Zappa, "The difference between humans and other animals is our ignorance, arrogance, laziness and stupidity".