100 Dollar a Barrel For Oil in Near Future? I Am For It - Here's Why

[danarhea]

It is what could easily happen, if we are successful is slapping sanctions on Iran, and Iran then follows through with its promise to cut off its oil (Iran is the second biggest oil exporter in the world, after Saudi Arabia), the price of oil will eventually shoot through the roof.

Actually, I dont see that as such a bad thing. If this scenario plays out, it will definitely have some posititve impacts, although we will definitely be facing a worldwise economic slowdown of major proportions.

1) The Alberta tar sands, currently under development, will see an increased acceleration in oil production. I dont know if any of the rest of you saw 60 Minutes on Sunday, but the geologists interviewed stated that, with today's technology, 160 billion barrels of high-grade oil, without the sulphur, can be obtained from the tar sands, and that with future technology that is conceivable within the next decade, that figure jumps to 2 trillion barrels. Since Saudi Arabia's reserves are about 220 billion barrels of oil, they will become irrelevant. Sure, we will still be getting most of our oil from foreign sources, but they will at least be from friendly nations, which do not have potential political crises which could disrupt supplies. It is true that mining the oil in Canada is a dirty business, producing pollutants at a much higher rate than conventional oil exraction and refining. However, unlike our government, the Canadians are very serious about pollution standards, and say the have the technology to reduce emissions to acceptable levels. Bottom line - Canadian oil will be plentiful throughout most of this century, once production is ramped up.

2) I listened to an interview with Nick Lampson today on the radio. He has been pushing for the manufacturing of high quality diesel fuel from soybean oil. This is very feasible, once oil prices go above $70 per barrel..... Oops, they just did. How about this idea? Instead of paying farmers to grow nothing, how about paying them to grow soybeans?

3) With oil prices ridiculously high, the development of other alternative fuels, and other alternative methods of producing electricity, will be practically a cinch.

4) With high oil prices, we will have no choice but to conserve. People have a habit of ignoring problems until those problems become very painful economically. Yes, it will hurt, and as a result, we will begin doing what we should have started doing decades ago - Weaning ourselves off of oil dependency through Conservation, coupled with the development of alternative fuels. The EPA already took the first step last year with their mandate of 13 SEER air conditioning systems to replace the old 10 SEER standard. This alone will eventually save 29 percent on electricity use for the purposes of air conditioning, as older systems are replaced by new ones. By itself, this translates into a lot of power plants which wont have to be built. And like it or not, higher CAFE standards are in the near future for us, as well as an acceleration towards hydrogen fuel cells as the primary fuel for transportation.

5) Finally, the cost of trying to be the world's policeman will be too high. Higher oil prices means that we will not succeed in our drive to become the lone world superpower. This also means that no other nation, such as China, will have a chance to become the lone power either, in the distant future. The multi polar paradigm will apply, which will be a more stabilizing influence in the world.

All in all, while there will be much short term pain, not only for us and Iran, but the rest of the world as well, in the long term, this could be a good thing, and is why I am in favor of it.

Let the trade war with Iran begin.

Article is here.

 

[aps]

I'd like to see gas prices increase. People drive too much, and maybe it would make people drive less, including taking public transportation or carpooling. Our environmental air quality sucks in most big cities. The less cars on the road, the better.

 

[Kandahar]

I agree. As much as the shock of $100 oil would hurt the economy in the short-term, it looks to me like the only effective strategy to get people to stop using it. I'm willing to tolerate, say, 10% inflation for a couple years if it means we're no longer dependent on the whims of Arabs, Persians, Russians, Venezeulans, and other dictators.

I'm all for adding on another $1 or $2 in punitive gasoline taxes gradually over the course of the next 2-3 years.

 

[Stace]

I'd like to see gas prices increase. People drive too much, and maybe it would make people drive less, including taking public transportation or carpooling. Our environmental air quality sucks in most big cities. The less cars on the road, the better.

I understand where you're coming from, and I agree, but there are some of us that can barely afford to put gas in our vehicles as it is, and don't have other options i.e. public transportation doesn't have a stop near our homes or place of employment, and/or we don't live close enough to any co workers to make carpooling feasible.

Just trying to look at it from both sides :mrgreen:

 

[Kandahar]

I understand where you're coming from, and I agree, but there are some of us that can barely afford to put gas in our vehicles as it is, and don't have other options i.e. public transportation doesn't have a stop near our homes or place of employment, and/or we don't live close enough to any co workers to make carpooling feasible.

Just trying to look at it from both sides :mrgreen:

I think if gas prices were higher, there would be a lot more demand for public transit and alternative forms of energy. Unfortunately there might be a lag of a year or two between the increased demand for public transit and alternative fuels, and the services/products actually being provided. I definitely see your point, but I think we all need to make some sacrifices for national security. Reducing the amount of oil we use is the most obvious way.

I think a long-term investment in energy independence and national security is well worth a short-term spike in energy prices.

 

[ALiberalModerate]

It is what could easily happen, if we are successful is slapping sanctions on Iran, and Iran then follows through with its promise to cut off its oil (Iran is the second biggest oil exporter in the world, after Saudi Arabia), the price of oil will eventually shoot through the roof.

Actually, I dont see that as such a bad thing. If this scenario plays out, it will definitely have some posititve impacts, although we will definitely be facing a worldwise economic slowdown of major proportions.

1) The Alberta tar sands, currently under development, will see an increased acceleration in oil production. I dont know if any of the rest of you saw 60 Minutes on Sunday, but the geologists interviewed stated that, with today's technology, 160 billion barrels of high-grade oil, without the sulphur, can be obtained from the tar sands, and that with future technology that is conceivable within the next decade, that figure jumps to 2 trillion barrels. Since Saudi Arabia's reserves are about 220 billion barrels of oil, they will become irrelevant. Sure, we will still be getting most of our oil from foreign sources, but they will at least be from friendly nations, which do not have potential political crises which could disrupt supplies. It is true that mining the oil in Canada is a dirty business, producing pollutants at a much higher rate than conventional oil exraction and refining. However, unlike our government, the Canadians are very serious about pollution standards, and say the have the technology to reduce emissions to acceptable levels. Bottom line - Canadian oil will be plentiful throughout most of this century, once production is ramped up.


Article is here.

The problem with those tar sands is the cost of getting the oil out of them. Its definitely technically possible, but most estimates I have read have stated that oil would have to be well over 100 a barrel for it to be economically feasible.

 

[Stace]

I think if gas prices were higher, there would be a lot more demand for public transit and alternative forms of energy. Unfortunately there might be a lag of a year or two between the increased demand for public transit and alternative fuels, and the services/products actually being provided. I definitely see your point, but I think we all need to make some sacrifices for national security. Reducing the amount of oil we use is the most obvious way.

I think a long-term investment in energy independence and national security is well worth a short-term spike in energy prices.

I definitely think we need to fund more research for alternative fuels, and the government needs to raise the standards on fuel mileage. My car is pretty decent on mileage, I get anywhere between 24-27 mpg, but then you look at my husband's truck, and it's ridiculous....I'm not sure exactly what his mileage is, he doesn't keep track of it like I do, but his gas tank holds 15 more gallons than mine does, and he gets about the same mileage per tank that I do.

And then you look at the handful of hybrids that are available....we know the technology is there, so why aren't more manufacturers incorporating it into more of their vehicles? My brother in law has a Toyota Prius, he gets 60 mpg.....If that were available on a larger selection of vehicles, I have NO doubt that people would do whatever they could to trade in their current vehicles for a model that could get that kind of mileage....heck, if we could afford it, I'd gladly trade my car in for a Ford Escape hybrid.....I love the Escapes as it is (I had one for a couple of weeks, but the financing just didn't work out), they actually aren't too bad on mileage compared to most SUVs, and they're perfect for short people like me, but a hybrid just sweetens the deal even more.

 

[scottyz]

I'd like to see gas prices increase. People drive too much, and maybe it would make people drive less, including taking public transportation or carpooling. Our environmental air quality sucks in most big cities. The less cars on the road, the better.

Those of us who live in rural areas don't have such options.

 

[oldreliable67]

Wishing for $100 oil is fraught with the risks of unintended consequences. This thread posits $100 as a sort of bellweather price. In reality, there is no ceiling price. $100 is an arbitrary figure that right now, sounds like a lot, but if $100 for crude becomes a reality, there is no reason for it to stop there. For example, one recent analysis suggested $161. The economic dislocations from soaring crude prices are potentially quite severe, including recession with its attendant increased unemployment and resulting further ballooning of an already climbing deficit.

A key to avoiding or at least minimizing economic dislocations would be availability versus expense: as long as gasoline is expensive, but generally available, the effect is more of a wealth transfer from our pockets to those of the oil producing countries. But if it is unavailable, thats a potentially severe economic problem. Historically, or since the embargos of the '70s, the oil producing countries have made attempts to avoid harming the economies of oil-importing countries, realizing that it is their own best interest for the oil-importing countries to avoid economic dislocation.

But the value of crude supplies as an economic weapon have almost continually been debated in the ME since the '70s, especially by radical Islamic elements. Consideration of such has long been a principal component of US policy and until alternatives are developed, will have to continue to be so.

In inflation-adjusted terms, my guess is that gasoline is still cheaper today than in the mid-1970s (I haven't run the numbers, thats just a SWAG.) My impression is that gasoline would have to get to about $3.50/gallon to get to a comparable 1975 price. Certainly, if anyone has actually done the calc or knows of a site that has, please post it up! So, my impression (but as I said, without doing the math) is that in real terms, gas is still cheap, even at todays prices.

Hybrid vehicles offer some help, mostly as a transition to fuel cell technology. But, they aren't cheap and some aren't cost effective. According to edmunds.com:

"However, when comparing the costs of the other vehicles, Edmunds.com
analysts determined that gas would have to cost at least $5.60 per gallon for
hybrid drivers to break even if they drove 15,000 miles per year over the five
years."

The recently enacted tax reform bill now provides some tax credits for hybrids, but edmunds hasn't updated their analysis yet, AFAIK. Consumers have shown that they will opt for hybrids, even with the financial penalties. Consequently, one has to be encouraged that with some further prodding from public policy to encourage this behavior even more, hybrids could begin to make more of an impact.

Saying that one is in favor of $100 crude on the basis of forced conservation and encouragment to seek alternatives is an appealing generalization, but perhaps overly simplistic. Be careful what you wish for...

 

[danarhea]

The problem with those tar sands is the cost of getting the oil out of them. Its definitely technically possible, but most estimates I have read have stated that oil would have to be well over 100 a barrel for it to be economically feasible.

The cost is there, but is lower than you think. Oil is being mined from the tar sands right now as I post this response. The days of cheap oil are over, but it is not yet the end of oil. We have quite a ways to go on that, but as long as prices keep rising, the incentive will become greater for alternative methods of extracting oil, and alternative fuels.

We happen to have something right here in the good old USA which will also help wean us off foreign oil. Coal - Oil can be extracted from it, and there is an additional century worth of oil in coal. Right now, the price of oil has gotten to the point where extraction of fuel from coal is economically feasable. Its not a new technology either. During WWII, Hitler ran practically his own army off of gasoline which was produced from coal.