The New Digital Oil Field: How Information Technology is Helping to Boost Oil Production
Mission control: Chevron's new real-time drilling optimization center in Texas.
From MIT's Technology Review: "Big Oil Goes Mining for Big Data: As petroleum production gets trickier, digital innovation becomes more crucial":
"The world isn't running out of oil and natural gas. It is running out of easy oil and gas. And as energy companies drill deeper and hunt in more remote regions and difficult deposits, they're banking on information technology to boost production.
"The world isn't running out of oil and natural gas. It is running out of easy oil and gas. And as energy companies drill deeper and hunt in more remote regions and difficult deposits, they're banking on information technology to boost production.
Data, in this case, really is the new oil. "It's pretty
sweeping," says Paul Siegele, president of the Energy Technology Company
at Chevron. "Information technology is enabling us to get more barrels
of each asset."
Oil companies are using distributed sensors, high-speed
communications, and data-mining techniques to monitor and fine-tune
remote drilling operations. The aim is to use real-time data to make
better decisions and predict glitches.
The companies began to employ such technologies more than a decade ago, partly to help its aging workforce multitask remotely. But the technologies have gained speed along with the underlying trends: cheaper computing and communications technology, and a proliferation of data sensors and analytical software."
MP: This is another reason why "peak oil" is "peak idiocy."
HT: Gary Lyle
The companies began to employ such technologies more than a decade ago, partly to help its aging workforce multitask remotely. But the technologies have gained speed along with the underlying trends: cheaper computing and communications technology, and a proliferation of data sensors and analytical software."
MP: This is another reason why "peak oil" is "peak idiocy."
HT: Gary Lyle
74 Comments:
This is another reason why "peak oil" is "peak idiocy."
YES! Thank you.
We've been "at the limit of technology" in petroleum production for decades and technology has apparently failed to get the message because it keeps marching on. And we've been running out of easy oil and gas for 20 years. I remember everyone saying that when I covered American oil and gas independents in the 90's. That whole first paragraph hasn't changed in 20 years.
So why are Chevron, Exxon, Shell, and the other Majors producing less oil every year?
Because most of the resources are state owned and our government locks up the majority of our resources. Hydraulic fracturing caught the regulators by suprise and now they are scrambling to take the credit and regulate it so they own the narrative.
"but, but but ... we WILL run out of oil - you see, the earth has a finite diameter and a finite volume - and so we WILL run out of oil sometime - yea, our calculations were wrong - but you MUST accept that since earth is finite, the amount oil is finite and while it took millions of earth for the sun to create the oil, we humans are consuming it very fast and so we WILL run out of oil"
"And while we are at it, remember that the sun will also burning itself out - and in about oh, 5 billion years or so, it will cease to exist - so you see, we cannot consume resources at any rate"
"The earth was such a fine place for humans when humans did not exist - if only humans had stayed in caves and had to hide from the sun and rain and nature's furies instead of changing the world as they knew it,we would not have depleted the fossil fuel resources and all that"
"There ought to be a moratorium on brains - we have had all the development/technology we will EVER need - so time to pass legislation to stop any human activity that could improve what we are doing to find even more sources of fuel - Imagine if Congress had banned fracking - since Congress cannot predict what humans will do next and innovate - the safest thing to do is ban all innovation" so "we can preserve all existing jobs forever" ...
"Technology is evil - it is helping improve the lives of the poor people and so the poor are not poor anymore - that is disgusting - because so many of them drive, shop, can afford medicines and improve their health - they just clutter the world for us, the elites"
(Just a few random comments synthesized from the infinite stupidity of those that have no idea what they are talking about and yet keep talking)
Krishnan, you are being unreasonable. Peak Oil is a socialist argument; it comes out if the Club of Rome. Nothing the Socialists say comes true.
You are probably unaware that we have barely scratched the surface. For well over a hundred years people have forecasted that we would run out of oil, but it never happens. Both oil reserves and oil resources have grown every year. This is despite the fact that the Environmentalists have fought our attempts to find and exploit the oil.
Oil reserves are energy we can profitably take out of the ground at today’s prices. Resourses are the known oil which is too costly to tap now. Each year, reserves and resources have grown, because technology has lowered the cost of tapping it.
The shortage here is not a lack of fossil fuels, it is the lack of freedom by which we can acquire it. Why was BP drilling in Gulf waters a mile deep? It was that the Interior department would not allow them to drill closer to shore.
We know there are huge oil resources on the East and West coasts of the continental US, but the government will not allow it to be drilled. We know there is more fuel in the Western Colorado tar sands than in all of the Mideast. We have found enough natural gas in the Chukchi sea above Alaska to supply the US for fifty years. The lack is not of one of energy, nor is it the will and capability to go get it. It is sabotage by very powerful political groups.
Fortunately, we are coming up on peak bureaucracy and peak interference in the economy. People are getting very tired of our economy being hamstrung. We are starting to push back. But, this struggle won’t be easy or fast.
In the private-sector, more is done for less every year.
In the public sector, including the military, less is done for more every year.
Do you know that 22 percent of the federal budget is pent on pensions?
http://www.usgovernmentspending.com/federal_budget
And some federal employees can get lifetime full pensions, and lifetime medical care, after just 20 years of service (uniformed employees of the Department of Defense, and several other agencies).
We have to completely eliminate federal pensions of all kinds, and go to a employee-funded program.
It's "peak idiocy" to deny "peak oil."
*Oil is $100 a barrel in a depression.
*Global oil production plateaued, since 2005 at about 85 million bbd.
*U.S. oil production peaked in 1970 at about 10 million bbd and declined to about 6 million bbd today.
From articles:
"The Citigroup analysts expect that new shale oil plays, if combined with further exploration in the Gulf of Mexico and Alaska, could add 3.5 million barrels per day between 2010 and 2022. But as long as other domestic fields keep declining, the shale boom won’t be enough to get back to our peak. The industry will have to drill furiously simply to maintain the status quo."
----
"Even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030, Dr Birol said (chief economist at the International Energy Agency)."
----
"Oil production in 33 out of 48 countries has now peaked, including Kuwait, Russia and Mexico."
----
"The world is not running out of oil itself, but rather its ability to produce high-quality cheap and economically extractable oil on demand."
"It's "peak idiocy" to deny "peak oil."
*Oil is $100 a barrel in a depression"...
Could be a different reason pt: Gasoline Prices Are Not Rising, the Dollar Is Falling
re: the falling dollar
how does the dollar falling in the US ..affect the price of oil worldwide in all other countries?
my take: the easy oil is largely gone and now we are using more sophisticated (and expensive) techniques to get to the harder to get oil. Rising demand for oil will add even more to the cost.
question: after all is said and done - are we actually producing more or less oil on a worldwide basis?
question: does anyone seriously think there is a worldwide conspiracy of all other countries to "lock up" oil reserves?
question: is oil priced ONLY in dollars? Are all other currencies in the world pegged to the dollar?
For instance, if China buys oil - do they pay for it in Chinese currency pegged to the US dollar?
"The Citigroup analysts expect....."
I used to be one of those analysts. We would to spend a lot of time writing "if X happens, then we expect (the obvious) Y outcome". Really insightful stuff.
All all companies in industries subject to depletion are running up a down escalator. This is nothing new and it is kind of their "thing" to drill furiously, aided over the decades by ever-improving technology.
Rufus: "So why are Chevron, Exxon, Shell, and the other Majors producing less oil every year?"
Here's the reported petroleum reserves of the world's largest petroleum companies (million oil equivalenbt barrels):
National Iranian Oil…….315,757
Saudi Arabian Oil…….307,143
Petroleos de Venezuela..…….241,744
Qatar General Petroleum …….178,508
Iraq National Oil…….135,503
Abu Dhabi National Oil…….128,439
Kuwait Petroleum …….112,269
Nigerian National Petroleum …….69,145
National Oil (Libya)…….55,767
Sonatrach (Algeria)…….39,379
OAO Gazprom (Russia)…….29,261
OAO Rosneft (Russia)…….22,885
PetroChina (China)…….22,475
BP …….17,829
Egyptian General Petroleum…….17,597
ExxonMobil ……17,420
Those "majors" you refer to are tiny players in the global energy markets.
PeakTrader will probably argue that reported reserves are fiction. You've got to ask youself whether you're going to believe PeakTrader ....... or the CIA, Oil&Gas Journal, Bloomberg, etc. etc.
Larry: "does anyone seriously think there is a worldwide conspiracy of all other countries to "lock up" oil reserves?"
OPEC members have been openly conspiring for five decades to limit oil production. Sometimes they are successful, sometimes not.
Larry: "after all is said and done - are we actually producing more or less oil on a worldwide basis?"
From the U.S. Energy Information Agency:
World Petroleum Production (Thousand Barrels Per Day)
1990 66,436
1991 66,339
1992 66,553
1993 67,101
1994 68,637
1995 70,305
1996 71,986
1997 74,220
1998 75,681
1999 74,838
2000 77,709
2001 77,641
2002 77,041
2003 79,497
2004 82,982
2005 84,452
2006 84,512
2007 84,363
2008 85,341
2009 84,244
2010 86,651
2011 86,944
That's all the answers for now, Larry. Try Google if you have more questions.
It never has been about "peak oil", but rather "peak cheap oil".
Expect $250-300 minimum oil prices along with $10-12 minimum gasoline in the US, partly due to inflation but mostly due to supply issues.
Amongst many other supply situations, OPEC has promised to ramp up to 12 mbpd for years, and hasn't come even close... and it's sour crude too.
bart: "Expect $250-300 minimum oil prices along with $10-12 minimum gasoline in the US, partly due to inflation but mostly due to supply issues."
We may pay $12 per gallon for gasoline some day. But we'll learn how to use much less gasoline along the way.
"Expect $250-300 minimum oil prices along with $10-12 minimum gasoline in the US, partly due to inflation but mostly due to supply issues"...
I'm guessing here bart but unless something catastrophic and world wide at the sametime happens you probably won't see it happening in your life time unless you're a whole lot younger than I initially thought...
PT: We may pay $12 per gallon for gasoline some day. But we'll learn how to use much less gasoline along the way.
Of course, that's part of the effect of however much free market we have left.
The answer to high prices is virtually always - high prices.
methinks: "And we've been running out of easy oil and gas for 20 years."
Not sure they used the term "easy oil and gas", but 40 years ago the Club of Rome published "The Limits of Growth". The authors concluded that the total global supply of petroleum would be exhausted by 1992.
bart: "The answer to high prices is virtually always - high prices."
Well, I disagree. We're not lighting the night these days with $12 a gallon whale oil. Or $12 a gallon kerosene. Or $12 a cubic foot pariffin wax.
I think the answers to high prices are generally: a) increased supply; or b) substitution.
I'm guessing here bart but unless something catastrophic and world wide at the sametime happens you probably won't see it happening in your life time unless you're a whole lot younger than I initially thought...
I'd be willing to bet we will never see this. As prices rise, we will find an alternative energy source to oil (maybe natural gas? Maybe tidal power? Maybe perpetual motion?) that will render oil worthless. Or, at least, not as desirable. Hell, we'are already seeing it now with the debut of natural-gas powered cars and trucks.
Will oil remain king or a while? Sure. But don't be betting on a Mad Max scenario. It makes for good movies but bad reality.
And Hubbert predicted that US oil production would peak in the early 70s - and it did.
Peak cheap oil has arrived,
And Hubbert predicted that US oil production would peak in the early 70s - and it did.
Peak cheap oil has arrived,
US Oil production is just below the 1970's peak.
The world oil production has grown by 26.7% since the 70's and stands at a record production level now.
We ain't nowhere near there yet.
No wait..I was wrong:
US oil supply, not production, is near 1970's levels and rising. My bad.
"Will oil remain king or a while? Sure. But don't be betting on a Mad Max scenario. It makes for good movies but bad reality"...
Absolutely jon murphy...
Consider the following: The Simon-Erlich Wager at Seven Billion People
bart: "And Hubbert predicted that US oil production would peak in the early 70s - and it did."
U.S. oil production peaked not for the reasons Hubbert predicted. It peaked because: a) cheaper sources were available to meet demand elsewhere in the world; and b)government has prevented the development of much of the available U.S. supply.
bart: "The answer to high prices is virtually always - high prices."
JB: I think the answers to high prices are generally: a) increased supply; or b) substitution.
You get new supply with higher prices.
You get better substitutes with higher prices.
Econ 101
I'd be willing to bet we will never see this. As prices rise, we will find an alternative energy source to oil
...
Of course - that's Econ 101, aka Peak Cheap Oil.
And I'm not into Mad Max crud. Please, no covert ad hominems.
WTIC oil, 1968 - $3.07/bbl
WTIC oil, 2012 - $103/bbl avg.
3,250% increase - same oil then as now
BS BLS CPI increase since 1968 - 672%
My CPI w/o lies increase since 1968 - 1,418%
Shadowstats increase - 2,445%
Jet Beagle,
re: but 40 years ago the Club of Rome published "The Limits of Growth". The authors concluded that the total global supply of petroleum would be exhausted by 1992.
I remember a lot of chuckling about it in the second half of the 90's as the price of oil sank toward $10/bbl.
And I'm not into Mad Max crud. Please, no covert ad hominems.
Forgive me, Bart. I had not intended that as a personal attack. I was just saying that economic theory and history teach us that resources become ousted long before they disappear or become extremely expensive (assuming no outside interference). I am sorry you had taken that as a subtle insult; I assure you that was not my intention.
My apologies for misunderstanding JM, no worries.
Emotions suer can run hot on topics like peak oil, etc.
bart,
You stated that the answer to high is always high prices. I countered that the answer to high prices is substitution and increased supply.
I think you should reconsider how substitutes and supply increases affect prices.
When the price of whale oil rose too high, entrepreneurs found a substitute. Consumers didn't continue paying the high price of whale oil. And once entrepreneurs found the substitute, other entrepreneurs found ways to increase the supply of that substitute. The price of the substitute went down - way down, actually, back in the early 20th century.
The answer to a high whale oil price was not the high price - or higher prices.
JB, you're making the same point as I am, but with different words.
You get new supply with higher prices.
You get better substitutes with higher prices.
Whale oil prices rose, more supply was found *and* substitutes were found - peak cheap whale oil happened (limited supply, increasing demand), and other stuff replaced it on the long run.
But in the meantime, prices skyrocketed on a relative basis - much like WTIC is and has... and the prices increases are far from over.
bart: "you're making the same point as I am, but with different words."
No, I'm not. But it's not worth my time to discuss this further.
Your original statement:
"The answer to high prices is virtually always - high prices."
is incorrect, and I think you now realize that.
Emotions suer can run hot on topics like peak oil, etc.
They sure can, Bart. Especially since we cannot see each other's faces or hear each other's tones, what may be said as an off-the-cuff remark can be misinterpreted as an insult.
Thank you for accepting my apology.
JM: And thanks for the understanding.
JB: Dream on. Econ 101 exists, regardless. The cure for high prices is virtually always high prices - throughout history, and including whale oil... or WTIC.
Bart and Jet:
I think you guys are pretty much saying two sides of the same coin.
Bart, if I am understanding you, you are saying that when prices are high, it spurs research into substitutes.
Jet, if I understand you, you are saying increased prices force substitutions and increased supply.
You are both right here. But I would just add one word to all this: "relative." When prices are relatively higher, they will lead to substitutes and research.
Look at the energy market right now: oil's price didn't change dramatically over the past year, but natural gas' fell. This is spurring more shift towards natural gas and away from oil, keeping oil prices in check.
And what if we had a different scenario: Let's assume the price of gas falls to $1/gal. Cheap right? Let's say, now, someone for fun invents a perpetual motion machine that can power your car. Never needs any input and costs $0.50 to install (I know it's unrealistic, but run with me). All of a sudden, gas is realitvely expensive. This will spur people to shift to this new technology.
I think this is what you are both saying, yes?
JM: Yes.
Oh, one other part of the analysis I forgot to mention:
Jet: you were also saying that high prices will attract more suppliers into a market, thus reducing the price?
Jon Murphy,
Sorry, but I don't think that's what Bart originally said at all. His statement at 9:35 am was:
"The answer to high prices is virtually always - high prices."
Bart repeated that incorrect statement at 3:05.
I disagreed with that statement at 9:05, and I still do. If you don't understand why that statement is wrong, Jon, I'll be happy to explain.
No, I understand your explanation completely. I just think what Bart was trying to say was not what he was saying.
Jon,
I can think of three ways the market can react to high prices:
1. reduced demand
2. substitute goods
3. increased supply
Those are answers to high prices - all of which tend to reduce prices. So the answer to high prices is not high prices.
That's what I learned in Econ 101.
As far as I am concerned, Ed's statement is meaningless.
Excuse me. Bart's statement was meaningless.
You are absolutely correct. But what I think Bart was saying as before you get to those three options, you need high prices.
What he said was "The answer to high prices is virtually always-high prices."
What I think he meant to say was "Prices need to be high before change can be affected."
Bart, please correct me if I am misinterpreting your words.
that's sort of what I got out of it... he was "implying" ....no?
I think the answers to high prices are generally: a) increased supply; or b) substitution.
You won't get increased supply because the cheap oil is mostly gone. While there is a lot of oil still in the ground it is more expensive to extract and it requires far more energy per energy extracted. We have already hit the peak for the extraction of light sweet crude. While we have some new supply from sour crude and unconventional heavy oils the products lost from a barrel of light sweet require more than one barrel of this new oil. This means that the substitution is not as simple as the optimists are claiming.
What has saved us is a huge decrease in demand as the real economy collapsed due to the credit crisis. The problem is that the demand decrease has made supply side solutions far less likely. That means that we either get a stagnant economy as far as the eye can see or much higher prices that create another economic readjustment.
I'd be willing to bet we will never see this. As prices rise, we will find an alternative energy source to oil (maybe natural gas? Maybe tidal power? Maybe perpetual motion?) that will render oil worthless. Or, at least, not as desirable. Hell, we'are already seeing it now with the debut of natural-gas powered cars and trucks.
Look at your history. The Fed has managed to destroy more than 95% of the purchasing power of the USD. Unless you get a collapse and a prudent Fed it won't take much more before Bart's predictions are reality.
U.S. oil production peaked not for the reasons Hubbert predicted. It peaked because: a) cheaper sources were available to meet demand elsewhere in the world; and b)government has prevented the development of much of the available U.S. supply.
No. It peaked because there were no new discoveries to offset production. The government is getting in the way but it is not preventing oil production from reaching the 1970s levels. That is being prevented by geological reality and technology.
You are both right here. But I would just add one word to all this: "relative." When prices are relatively higher, they will lead to substitutes and research.
Eventually. But the price of oil could explode until the marginal users are squeezed out of the market.
Look at the energy market right now: oil's price didn't change dramatically over the past year, but natural gas' fell. This is spurring more shift towards natural gas and away from oil, keeping oil prices in check.
Gas is a stranded market. When shale producers have to keep drilling to keep their leases and you have a warm winter AND a very weak real economy the price falls below the cost of production. This means that we will see a move away from gas production as companies that do not have to drill cut their capital spending until prices become favourable.
The oil market is global. If US prices fall more of the oil will flow to other markets.
Jet: you were also saying that high prices will attract more suppliers into a market, thus reducing the price?
You are missing the point. The new supply has to replace oil lost to depletion (around 4 mbpd) before it can add a single new barrel to the market. A shale well produces around 100 bpd after a year and a half. See the problem?
You got it V - he has a logic problem.
But what I think Bart was saying as before you get to those three options, you need high prices.
What he said was "The answer to high prices is virtually always-high prices."
What I think he meant to say was "Prices need to be high before change can be affected."
Bart, please correct me if I am misinterpreting your words.
Close enough for horseshoes.
You don't start to get more supply or substitution until prices get high enough (assuming level or increasing demand as V pointed out).
V said: No. It peaked because there were no new discoveries to offset production. The government is getting in the way but it is not preventing oil production from reaching the 1970s levels. That is being prevented by geological reality and technology.
Thanks V, and agreed. I just bypassed his incorrect Hubbert assertion.
"The government is getting in the way but it is not preventing oil production from reaching the 1970s levels:...
Now that doesn't seem to make sense vangeIV especially when the Democrats had many & large no drill zones from '07 through to now as far as federal land goes...
The federal government is also the nations biggest landlord too...
"You won't get increased supply because the cheap oil is mostly gone"...
Maybe that might be a good bet today but maybe tomorrow (technology marches on) there may be scads of cheap oil to be found with improved imaging and algorithms for instance...
Another thing I wonder about is how good is the survey data from 15, 20, or 30 years ago when said data made drilling look like a bad bet?
Any ideas vangeIV?
Now that doesn't seem to make sense vangeIV especially when the Democrats had many & large no drill zones from '07 through to now as far as federal land goes...
You only drill where you have indications of cap rock, a suitable reservoir, and a carbon rich source rock. That makes most of the land in the US totally unsuitable for oil development. The areas where discoveries were made have already been developed. There are not many areas where exploratory drilling has not happened so opening them up will not likely cause enough new production to offset depletion.
If you look at the new production in the US you see very low well productivity as the norm. That means that you need a huge number of new wells just to offset depletion, which is something that few of the optimists bring up or want to talk about.
The federal government is also the nations biggest landlord too...
Who cares? What matters is how much oil is under federal land. And from what I see there isn't enough to make a big difference. Yes, you can develop it to help offset the depletion. But you will NEVER go back to the old peak rate or sustained production that is much higher than where you are now.
Maybe that might be a good bet today but maybe tomorrow (technology marches on) there may be scads of cheap oil to be found with improved imaging and algorithms for instance...
You underestimate the technology already in use. We can already find oil trapped behind water sweeps and use specialized drilling skills to get to it. This helps but it is not material when we look at the big picture. The bigger problem is the damage done to reservoirs done by the use of water sweeps and other methods. They did help us maintain high oil production but at a cost of leaving behind small pockets trapped in areas that are expensive to access and quick to deplete. Once the leading edge of these sweeps make it to the horizontal wells they flood out and become worth a great deal less if not worthless.
New technology will help us find substitutes but the damage done by pursuing dead end schemes like wind, solar, and shale are diverting too many resources from possibly profitable projects that make sense.
Another thing I wonder about is how good is the survey data from 15, 20, or 30 years ago when said data made drilling look like a bad bet?
You are selling short the very people who were responsible for finding 90% of the world's great oil fields. They did a great job and only missed the smaller plays that made little economic sense at the time. The smaller plays will help but they do not matter to the big picture.
How the Oil Industry has Deceived the US with the Promise of Energy Independence
http://oilprice.com/Energy/Energy-General/How-the-Oil-Industry-has-Deceived-the-US-with-the-Promise-of-Energy-Independence.html
How the Oil Industry has Deceived the US with the Promise of Energy Independence
http://oilprice.com/Energy/Energy-General/How-the-Oil-Industry-has-Deceived-the-US-with-the-Promise-of-Energy-Independence.html
The oil industry critique has quite a few valid points. But the author is too optimistic about solar and wind.
But the author is too optimistic about solar and wind.
I vote that we use the hot air coming out of DC & Brussels etc. It'll solve any energy crisis.
"And from what I see there isn't enough to make a big difference"...
Just how valid was that data you looked at vangeIV?
Just how valid was that data you looked at vangeIV?
The data is valid. What projects do you see being planned that could possibly offset the continued decline and add a material amount of oil to the total production in the US? Keep in mind that some future projects will go ahead as planned but their total output will not even be sufficient to make up for regional depletion. That is a huge problem that is not being addressed. Just how many $5 million wells that average 100 bpd can you keep drilling before the lenders get nervous?
Many of you know that I have been pounding on Chesapeake Energy for years now even as Mark was hyping the company's press releases regarding the shale revolution. A friend sent me this link. It looks as if the SEC is finally asking the questions it should have asked a few years back.
GAO: Recoverable Oil in Colorado, Utah, Wyoming 'About Equal to Entire World’s Proven Oil Reserves'
http://cnsnews.com/news/article/gao-recoverable-oil-colorado-utah-wyoming-about-equal-entire-world-s-proven-oil
GAO: Recoverable Oil in Colorado, Utah, Wyoming 'About Equal to Entire World’s Proven Oil Reserves'
Resources are not reserves. Kerogen is not oil.
Shale oil is not economic and has never been economic.
Do not confuse tight oil with shale oil.
in the same GAO report but not in the news article was this:
" Uncertainty about viable technologies.
A significant challenge to the
development of oil shale lies in the uncertainty surrounding the
viability of current technologies to economically extract oil from oil shale."
http://goo.gl/EcYiQ
the news article skated right by that important caveat.
"Peak cheap oil" is alive and well.
The marginal cost of oil production is currently around $90/bbl.
It's kind of sadly funny about the peak cheap oil deniers.
Here we are in 2012, celebrating getting new oil from tar, sand, cracking rocks 1,000'+ down in the earth for new oil, and also from 1,000s of meters below the ocean floor - and no one sees or admits how absurd it is against denying 'peak cheap oil'.
Marginal oil production costs are heading towards $100/barrel
http://ftalphaville.ft.com/blog/2012/05/02/983171/marginal-oil-production-costs-are-heading-towards-100barrel/
WTIC oil, 1968 - $3.07/bbl
WTIC oil, 2012 - $103/bbl avg.
3,250% increase - same oil then as now - and WAY above the lying CPI energy stats.
A simple extrapolation of the trend from 1968 (just over 8%/year) shows a barrel of oil at $250 in just under 10 years. That translates to about $11 gasoline, assuming no tax hikes on gasoline.
And yet when you calculate how many barrels of oil can be purchased with an ounce of gold, this quantity remains remarkably constant over the decades at 15, plus or minus 1.
Huge volatility - from 7:1 to 34:1.
http://www.nowandfutures.com/images/oil_gold_ratio.png
Here we are in 2012, celebrating getting new oil from tar, sand, cracking rocks 1,000'+ down in the earth for new oil, and also from 1,000s of meters below the ocean floor - and no one sees or admits how absurd it is against denying 'peak cheap oil'.
Some people refuse to see reality or to hear the alarm bells.
Some people refuse to see reality or to hear the alarm bells.
Sad but true.
More chart proof of peak cheap oil:
http://www.nowandfutures.com/images/oil_production_vs_brent.png
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