Oil crisis

[damian 0]

I believe in our oil crisis. I believe in it very much.

 

It seems though that reality is yet to bite.

 

Ryan Air are offering a whole host of free flights (plus £15 in tax).

 

I just got ripped off: I paid £0.01 quid for a flight to Northern Italy. It seems that I am the same as nearly everyone else: I support the grossly wasteful application of our most limit and crucial resource. Perhaps I do not believe in the crisis enough....

 

http://www.ryanair.com/site/EN/

[cal 6]

"From FREE", have to chuckle at that.

[Ocean11 0]

Try having a child - it puts the otherwise abstract 'future of the human race' into rather sharp focus.

 

Would it really feel like martyrdom just to find something else to do besides flying to Italy for pocket change? Doing that would make me feel dirty ... personally speaking.

[damian 0]

I certainly do not feel comfortable with the waste of fuel.

 

But they fly regardless of my booking. And my booking does not pay them to fly (as it is only pocket change and tax). Mind you, I currently have booked 12 flights to the region and some of those tickets are for the financial benefit of the airline and thus encouragement for them to continue wasting valuable fuel. Prices will sky rocket soon and all this waste will come to an end.

[Ocean11 0]

What do you think will cause prices to skyrocket?

[NoFakie 45]

Its nice to go places but time spent in airports and on planes is not pleasant. I can't be arsed with short trips anymore. I'd rather enjoy free time with no travel hassles where we are.

 

People in rich countries have lives that materially are the envy of the world, but many of them still want to "get away" very often. It suggests we're going very wrong somewhere.

 

If material things start to become too expensive for a growing number of people, especially former middle class people, politics might actually become interesting again in the First World countries that call the shots. All that "market knows best" and "the end of history" bollox will be out of the window. People might actually start to wrench back control over their lives from big business and their peons in government.

[Ocean11 0]

Another hurricane is heading across the Gulf of Mexico - heading for the state of Texaco, sorry Texas. If it speeds up over the Gulf like Katrina for reasons having nothing to do with global warming or two generations of Bush family influence, and smacks into the Refinery State, we might have an oil crisis for the winter and part of spring too.

[damian 0]

mmmm, something to watch.

 

Natural Gas prices (especially futures) are notoriously volatile. They make crude oil prices seem like a walk in the park. Not withstanding this innate price volatility, gas prices have been behaving very differently to other energy markets in recent times.

 

They sustained a modest steady up trend this year, unlike the more rapid climbs in crude oil. I was surprised at the slow rate of price increase in gas. Prices started to rise more quickly in August and that seemed much more normal to me, but then became choppy and volatile. Then Katrina hit and gas gapped (jumped) from $10 to $12, which is a huge jump. Just in May gas was only at $6. Since Katrina passed energy markets gave up most of the Katrina related gains (Heating Oil, Unleaded Gas and Crude Oil all sold off heavily)..... but Natural gas didn't, particularly the price of gas in the future. It didn't fall at all. Then yesterday came, which saw a 15% jump in Unleaded Gas futures in America (sustain these prices the American dream of big cars and buring fuel are f*cked, by the way), 13% in heating oil (leading into winter) and the biggest single daily move in crude oil prices ever. But most worryingly, natural gas which did not sell off over the last 2 weeks since Katrina, also jumped by 15%.

 

America is in the last stages of an unfortunate housing bubble. The housing boom will end and interest rates have been rising... and may continue to rise if inflation continues as it is. Too many people with too much debt holding depreciating housing assets that 'couldn't ever lose them money'. At this rate, Americans will be substantially poorer and taking short showers this winter. And heavily fertilized food crops may well cost that little bit more as well.

 

Keep you eye on gas as it drives our well-being far more than you might expect. Also don't underestimate what 'true story' is being told by the price of something that is exchanged in a free capitalist economy. Freely determined prices have an amazing habit of telling you something is wrong well before there is any physical evidence.

 

I have seen (and unfortunately traded) episodes like this before in gas: March 28, 2003 saw gas hit a huge peak and then sell off as the gulf war started. That is the kind of make you-break you behaviour of gas prices (and the reason I no longer expose myself to them financially). Lets hope that this is another violent gas spike.

 

Take a look at the chart (cant use html tags at there are parentheses in the url). You will need to copy and paste in into your browswer and remove the spaces from h t t p:(the forum wont let me post unless I modify that bit)

 

h t t p://charts.futuresource.com/cis/fsspon?cont=NGZ5&period=D&size=610x300&bartype=bar&bardensity=medium&headerbackground=(221,221,221)&headerforeground=(102,102,102)&headerdatacolor=( 0, 1,125)&studyheaderbackground=(221,221,221)&showextendednames=true&random=355

 

So what is up? These are not normal times for commodity prices and unfortunately these are commodities that shape how we live

 

I might also mention the price of gold: it is really really high. Gold is considered valuable when otgher markets are considered less attractive due to uncertainty. People think gold offers some security beyond other investments. Yesterday gold hit its highest price in at least 10 years (I have not checked any further back than that).

 

I am not being dramatic for the sake of it nor looking for an excuse to soap box about financial markets. I am looking to raise awareness of what appears to be a clear trend: energy prices are approaching levels that will increase significantly our cost of living and in some cases, change how we live. How well positioned are you and your family for periodic energy rationing? I am not prepared at all.

 

Ocean - Before today I had not seen your above question regarding what might cause prices to rise. Air travel prices will skyrocket when budget airlines realise that they cant continue to cut safety maintenance to absorb rising fuel costs. How many airline crashes have there been this year? I can't fathom why prices have not risen more already.

 

>>People in rich countries have lives that materially are the envy of the world, but many of them still want to "get away" very often. It suggests we're going very wrong somewhere

 

Mr W - I agree with your statement. Just in case it was somewhat aimed at me..... At the risk of a submitting a poor attempt to excuse myself, I travel so often because the one person who I care about lives in a different country to me. I fly because for some stupid reason an overnight train costs way more than a short flight.

[Ocean11 0]

Back to baths once a week, with a few quick dabs with a wet flannel in between. Back to one pair of kecks every two days.

 

The last hurricane produced the most intensive crop of 'let's energy diversity' op-ed pieces that I've ever seen, as well as additional antiwar sentiment. Oh, and global warming and Bush\'s responsibility . Another one might really ram the point home and result in something more practical than opinion pieces.

[damian 0]

I believe they are called bird baths.

 

That was a good article! I read my old local newspaper from home so as to keep up with community events in beloved Sydney. Besides that I read almost zero media output (either too lazy, too busy or too wary of internet 'expertise'). So I was quite surprised to read this piece, even though it was a transcript of a speech rather than copy produced by a reporter. Imagine if a politician in power actually thought like Al Gore does.

[NoFakie 45]

Not aiming at any individuals in this thread. I'd be better off working out how we can make the 450 litres of kerosene in my boiler's tank last longer. Ocean seems to have a promising idea there.

 

If things pan out as they seem, I hope we see energy rationing because that will mean some kind of fairness in distribution, black markets excepted. The current model is those who can't afford the market price do without. Simple regulations like lower speed limits can force energy conservation on everyone who uses it. Its much fairer than leaving it to the market.

[damian 0]

Yes, much better off thinking about your gas tank. Noted.

 

I am all for fair energy distribution, yet must contradict myself by remembering that without free regulated market price discovery you would not have any fiscal sense of scarcity and that would lead to inaction and disaster within a capitalist environment. For fair distribution and a sense of scarcity within the minds of 'resource allocators', that is, in the absence of fiscal feedback, you would need a pure socialist society that was administered without corruption. Until such an environment exists we will be harmed by the removal of free market price discovery. Although there must be an unpredictable period of transition.

 

At times I have reasonable dire hopes for the future of society. Out of nowhere about 1 year ago I decided that our best hope was a socialist style of society to develop where all essential utilities, including food, were controlled by a central authority. A society were selfish pursuit of individual optimisation at the expense of others was actually chronically sub-optimal for the average. I decided that I would gladly live as a socialist.... so long as every one else would also gladly do so. In the eyes of an American, this was the day I conceded competitive defeat.

 

If there was ever a time when the age of American styled global industrial-techno capitalism was going to come to and end, it is now, the fruit has never been so over-ripe and ready top drop. There is no reason at all why in 100 years our great grand children will not be reading about the mostly extinct age of capitalism. It is utterly arrogant to assume that todays 'way' is the best way and that it will perpetuate into the future. Such arrogance has been over and over proven misplaced in the past. There are two reliable assumptions: 1) that of non-permanence of how we live at any point in time. 2) that what we know today is nothing, irrespective of how much we know compared to yesterday.

[NoFakie 45]

If you think that the main problem with resource use is pollution and its effects on the ecosystem, a government in a capitalist society even could justify regulation of supply without the sense of scarcity you mention. It would just be another limit on personal freedom adopted for the good of society. As things stand, you can create as much greenhouse gas as you want subject only to how much fuel you can buy.

 

Market-based solutions are possible but are innately unfair. The congestion charge in London works to keep cars out of the city, but ultimately its only the cars driven by people for whom eight quid (or however much it is) matters. If you've got the money, it doesn't make any difference.

 

Ultimately, humans do not adequately value the environment, so the problem of externalities doesn't look like being solved. Scarcity looks like our best hope at saving us from ourselves.

[damian 0]

In so far as I did not address environmental impacts then you are most correct. I was speaking only from the perspective of dependency upon a non-renewable resource, without consideration to external impact. And indeed I was also short in my thought in that I did not consider a society that was always socialist and administered by honest individuals. Such a society would not need market determination of value in the first place as scarcity would be evident in the allocation decisions of the (honest) controllers. Furthermore, by way of government policy, allocation could easily be a function of not just need, but also an ambition to minimise negative externalities such as environmental impact. Unfortunately this is not an outcome of a market-capitalist economic system as negative externalities do not attract a market value and hence there is no fiscal feedback and resultant consumption response. Negative externalities have no true present value in the decision algorithm of those that consume in todays free market setting. I believe you quite correctly pointed this out.

 

I like your last thought:

 

>>Scarcity looks like our best hope at saving us from ourselves.

 

I agree entirely. In a nut shell that is why this era will end; scarcity is the only thing that will stop the exponential growth of capitalism and leave the door wide open to a different physical life and therefore dominant philosophical ideal. It is a foregone logical conclusion. I wonder how China would like to see teh world operate. because they are the next ones in line for the throne

 

An example of free market fiscal feedback stimulating action. Sydney buses: about 18,000 more tickets were sold on Sundays in August this year compared with last year, and an extra 161,393 passengers a month are catching buses in the peak periods.

 

That is a lot of car trips that no longer take place.

http://www.smh.com.au/news/national/fuel...6982062319.html

[Dims 0]

I think the future will be a socalist society run and administrated by super-honest robots/computers programmed with Asimov's three basic laws of robotics. Throw in a bit of nano-technology and advances in agricultual bio-tech and it could be a very interesting place.

 

I think I might go and write a book about it.

[kintaro 0]

According to the CEO of British Petrolium, John Browne, the World has only 40 years of proven oil reserves and 60 years of natural gas left.

 

Dims, you wouldn't happen to be a Kurt Vonnegut (sp?) fan are you?

[soubriquet 0]

Proven oil reserves is a bit of a red herring.

Exploration is expensive, so companies with

reasonable reserves don't do it. Reasonable in this

context is about 10 years.

[damian 0]

 Quote:

Originally posted by Kintaro:
According to the CEO of British Petrolium, John Browne, the World has only 40 years of proven oil reserves and 60 years of natural gas left.

So what? What do you think?

Even if he (John Browne) is 100% correct, it is only half useful information and certainly no stick to lean on. I agree that absolute supply is important: when the flow stops, so does our modern world. But before the flow stops something else will have a massive impact, that being PRICE.

Price is not binary. All will not be ok up until the exact day that the last drop comes out of the pump. Price will climb to levels of economic strangulation well before the last drop flows in 40 years time.

Don't think in terms of stock, think in terms of flow. That is, don't look at today's demand quantity vs. today's supply inventory. Rather, consider the delta between demand from one month to the next vs. the delta in supply from one month to the next. You have two line doing in opposite directions. And price going one way and one way only until such a time is reached when the guy who delivers your peanut butter to your local K-mart decides he can no longer afford to do so, thus reducing supply and so pushing up the price of peanut butter... along with all essential foods. Nasty. Eventually the price of oil will simply kill off demand and a new equilibrium will be found. Hopefully that equilibrium is capable of furnishing the basic needs of the current (over)population. That equilibrium will also make economically more tasty several energy alternatives. Again, lets hope those alternatives are up to the task. Obviously some tasks are instantly beyond alternate energy types. Ever tries to make plastic or other synthetics with nuclear power, or wind power, or solar energy. I bet you think we don't need plastics or other synthetics any way. How did you clean your teeth today? I bet we do need synthetics.

In the meantime China has very little concern for fuel shortages in America. China is growing and needs more oil. Pesky communist Chinese demand will continue grow and push global energy prices as described above. Higher energy prices means higher inflation in countries like America and therefore higher interest rates (they did it yet again just yesterday). But higher interest rates will pop the housing bubble and the billions in consumer debt will once and for all fart to the surface of American culture. At the same time Bush and his record breaking national debt will not be popular, nor helpful. American inflation will continue to rise, pushed by global oil demand. America will have an ugly situation of stagflation: rising prices with negative economic growth.

America is about to be de-throned and it will not go quietly. The only thing that will keep it in the throne is its disproportionate number of nuclear weapons and distribution of armed bases around the world. That is where it starts (has started) to get ugly. I feel a cold draft, and so should most of today's teenagers in America.

Don't worry about it, watch a dvd.

ps - why do I seem to mention America so often? Because you and your m***ther f**cking greedy 'American Dream' culture is more than half of the problem. America uses more oil than any other nation, yet it is home to only 5% of the global supply. So your habits drive prices up and up and your lack of native supply cause war. WAR is a very bad word, not a Hollywood entertainment concept. War is death. The Middle East has 80% of the worlds remaining oil supply. Why do you think you are at war with them? Why do you think you are losing that war and what do you think you are going to do to win it? There is a lot at stake. Hence the quite justifiable reason why Iran will not back down. Chinese demands isn't helping at all, but one can hardly blame them for wanting to grow. They have after all being quietly well behaved communists for so long now.

[Ocean11 0]

I cleaned my teeth with a plastic toothbrush today. I could just have easily cleaned them with a stick (something I used to do quite happily in the Army). Japanese companies are working very hard at developing carbohydrate plastics and are having some success, so it's not all grim on that score.

 

But yes, the big problem here is America. Using more than their share, and using that share for pointless wars. It's not surprising normal people hate America so much. And the majority of the dumb shits don't even know what they're doing. (It just amazes me that the legions of people who are doing good things in the US have so little impact on the others at the moment.)

[damian 0]

In my platoon I told the Sergeant to make sure every soldier cleaned their teeth before shaving but after cleaning their rifle. I did this as it made my well meaning gumby troops in training feel like they were in a Vietnam movie. And 'cause I didn't like having soldiers with smelly breath. Anyone caught brushing with a finger or god help you, a stick would get some form the Sergeant. He loved yelling. Clean healthy teeth are good for moral.

 

If we all tap alternate sources of energy and methods of synthetic production, then use these resources for producing only that which is necessary, then I think the World will get along quite nicely. It would put walmart out of business as well.

[kintaro 0]

Hey there DB, so what? So nothing, I was just posting something I found interesting and rather than forcing my opinions down all forum members throats I left it at that.

 

As for alternative resources I have invested in a company that is trying to use geothermal energy to provide electricity for all of Hawaii.

 

What was it that you do for a living again, Greenpeace? Wait, wait, that's right, you're a banker. You aren't part of the solution my friend, you are part of the m**ther f**cken problem. So, if you can spare a minute to jump off your moral high horse, you might want to check yoursef before you go judging others. At least that's what I think.

 

I'm gonna go watch a DVD now. I'm feeling a bit nostalgic, I think I'll watch Wall Street. Have a g'day mate.

[damian 0]

I am glad you invest money in such a venture. But it is only money, what else you got to offer? Seeing as you are going to get personal and mention job functions, why don't you do something constructive like donate your free time and intellectual capital to supporting an alternate energy venture rather than squandering your vast dvd derived intellect on weekends full of dressing up like a freako catholic priest and reciting superstitious drivel from the bible to unfortunate Japanese newly weds who are too misguided to know any better.

 

I am not forcing my opinion down your throat. I am giving you a window to look through. It is your probable future, not simply my opinion. Witless and sarcastic responses about watching dvd's is simply a reflection of your utterly incapacity to address the issue that your country is causing us all to suffer. I don't blame you for your response, it would take a much bigger man to respond correctly. For the sake of your wife's future, ditch the simple minded lard arsed dvd addiction along with the weekend priest fetish and do something about your appalling government policies.

 

I notice you came back and edited your post thus:

 

>>You aren't part of the solution my friend, you are part of the m**ther f**cken problem.

 

Said like a true Bush loser. The world has two problems: 1) Energy shortage, 2) America's attitude.

 

Whilst banks do not support a solution to these issues, they are way down the list in causing either of these issues. Banks fly employees all over the world far too often, that is bad. They also lend to oil companies, which could be bad. In the context of an energy shortage, what else do they do wrong? They lend to corporate America!!!!! Why is that so bad? Because .... you guessed it, America's greed is the problem. Didn't think about it that way did you, Kintaro.

 

If you think that banks are part of the problem then I suggest you close all your accounts, repay your loans and stop using their services. That includes going without the transaction facilitation that was in support of your investment in the geothermal company that you mentioned.

[kintaro 0]

Thank you BPC, you've informed me. I'm not claiming to be part of the solution. And I'm not about to say that America isn't the problem. What I said was that you, sitting up in your highrise London office are no better. Can't you see that? You're lending to corporate America? Don't act like you aren't trying to get your own slice of the pie DB. I'm not going to close an account. I'm after my slice as well. I do look forward to a day when we don't have to live like this. But I don't see it happenning in my life time.

 

DB, don't ever mention my wife again, please.

[damian 0]

Regarding your closing request: Fair call, it was only an attempt to motivate you. I won't do it again.

 

Good luck with your slice of the pie.

[kintaro 0]

Same to you! As for bankers, I'm not against them, I was one for 6 years. But your motivation isn't a secret. Good luck bettering the world!