Why is oil expensive? Are we running out?  | |  The received wisdom is that we have reached "Peak Oil" and this is why prices are so high.
Not so.
We have about 70 years reserves of oil, about the same as in 1980. As demand has increased, known reserves have kept pace due to new discoveries.
We could search harder, there is certainly undiscovered oil out there. If the price increases even more, it may become economic to exploit "tar sands", which will give us at least 100 years extra supply.
There are high stocks of oil at refineries right now. What we lack is refining capacity, and inability to refine enough diesel. We could build new refineries, but if demand increases, the price remains high. Investors are worried that there may be a recession, leading to idle capacity.
Speculators working the oil futures market account for over $60 of the present price increase. They don't want capacity increases: a glut would cause a price collapse.
Environmentalism has prevented new discoveries and new refineries.
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| | | | | | 1.  kerriannc (2579) | 7 months ago |  The demands for oil is very high and when this is so far any particular products then the prices are going to go up and up. I remember when persons in the country areas used to make gases from animals manure but this is not happening again. Yes bio-gas is a thing of the past. I think we need to go back to those days when we used to have cow, hog and horse manure use to make fertilizers and gases. Although things was as what they say backwards in those days things was much better. Food was cooking better with coal and yams, cocoa etc and fruits was eating and tasting much nicer.
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| tractorboy (37) | 7 months ago | I also remember the interest in bio-digesters as a supplemental energy supply on farms in the 1970s, for heating the house or a pig unit. Unfortunately it was nowhere near cost effective. | |
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| | 2.  dodoguy (767) | 7 months ago |  Hi tractorboy,
That's an unusually intelligent post for this particular subject.
I do believe you are quite correct in your assessment of the underlying cause of the current expansion of oil prices.
In short, it's a speculative mania driven by profit-hungry derivative players.
What this means, if true, is that like all such manias, sooner of later the price of oil will skyrocket in a final feeding frenzy, and then the price will collapse. Drop off a cliff, so to speak.
Unfortunately, knowing this to be so doesn't really help the people who are caught having to use an ever-increasing proportion of their limited budgets to put fuel in their cars. Or to pay for inflated food prices owing to the increased transport costs.
So this might indeed be a market-driven mania, but it's a mania that's sure burning a hole in the average guy's pocket!
I guess, if it drives people to find viable alternatives to petroleum oil, then some good might come out of it.
IMO the best available solution would be to develop dirt-cheap electric vehicles and an electrically powered public transport system, and drive the whole electric power grid with dozens of nuke power stations. I'd be happy with that.
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| tractorboy (37) | 7 months ago | I agree. The next step will be higher pay demands leading to a vicious circle of inflation. Definitely need to bump start nuclear, preferably yesterday. Brownouts in a few years anyone? I think we need to solve the nuclear fusion issue. Seawater - unlimited fuel for ever! | |
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| | | 3. snowy22315 (5612) | 7 months ago |  I think rather than concerting our efforts at discovering new oil I think we should spend our efforts toward discovering bio fuel. Even if we do find more oil it doesnt burn clean. We need to find more renewable resources.
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| tractorboy (37) | 7 months ago | Yes, but aren't we doing this anyway? Also, we are well developed in biofuel technology and some say the demand for biofuels is increasing the price of food as it competes for available land. I doubt this - as the price of wheat and maize increases, the price of biofuels increases until it no longer competes with oil. The question is, are we right in subsidising biofuels, or indeed other renewables? Shouldn't market forces decide? I am a farmer, BTW. | |
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| snowy22315 (5612) | 7 months ago | In Arlington County Virginia the school buses run on used vegetable oil. If we can use that we should. | |
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| tractorboy (37) | 7 months ago | My brother went round collecting used fat from chip shops in Southern England. My Dad built a biodiesel plant and converts this into fuel for the pickup and tractor. It is cheaper but now you can no longer get the fat because of environmental regulations and the government clamped down on the process to get tax out of it so it's not worth doing as you have to buy chemicals and dispose of the glycerine by-product. | |
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