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The US and China Are Over a Barrel
In the costly competition for oil, cooperation is the wisest course.
Among the many reasons given for the recent surge in gas prices is China's soaring demand for petroleum. Because the Chinese are running around the world buying up every available barrel of oil, the argument goes, we Americans have to pay that much more to outbid them for the leftover pools of crude. And the fact that the Chinese yuan has been growing stronger while the American dollar is shrinking in value has only exacerbated the problem.
Unquestionably, there's some truth to this. China's consumption of oil rose from about 4.2 million barrels a day in 1997 to 7.8 million barrels in 2007, an increase of 86%, the U.S. Department of Energy reported earlier this year. More to the point, the percentage of this oil that had to be imported grew even more. In 1997, China supplied all but 1 million barrels of the oil it consumed each day from domestic fields; by 2007, the shortfall between domestic output and consumption had jumped to 4 million barrels, all of which had to be imported.
To obtain these additional barrels, the Chinese have, in fact, been shopping in some of the same foreign oil bazaars as the United States -- and, with more demand chasing a finite supply, prices naturally tend to rise.
But let's put this in perspective. In 2007, according to Energy Department figures, the United States consumed about 21 million barrels of oil a day, nearly three times as much as China. Even more significant, we imported 13 million barrels every day, a vastly greater amount than China's import tally. So, although it is indeed true that Chinese and American consumers are competing for access to overseas supplies, thereby edging up prices, American consumption still sets the pace in international oil markets.
The reality is that as far as the current run-up in gasoline prices is concerned, other factors are more to blame: shrinking oil output from such key producers as Mexico, Russia and Venezuela; internal violence in Iraq and Nigeria; refinery inadequacies in the U.S. and elsewhere; speculative stockpiling by global oil brokers, and so on. These conditions are likely to persist for the foreseeable future, so prices will remain high.
Peer into the future, however, and the China factor starts looming much larger.
With its roaring economy and millions of newly affluent consumers -- many of whom are now buying their first automobiles -- China is rapidly catching up with the United States in its net oil intake. According to the most recent projections, Chinese petroleum consumption is expected to jump from 8 million barrels a day in 2008 to an estimated 12 million in 2020 and to 16 million in 2030. American consumption will also climb, but not as much, reaching an estimated 27 million barrels a day in 2030. In terms of oil imports, moreover, the gap will grow even smaller. Chinese imports are projected to hit 10.8 million barrels a day in 2030, compared with 16.4 million for the United States. Clearly, the Sino-American competition for foreign oil supplies will grow ever more intense with every passing year.
How, then, should we respond to this challenge? One answer, favored by many in Washington, is to step up American political, economic and military involvement in Africa, the Middle East and Asia so as to enhance America's competitive advantage in the struggle for access to the world's remaining untapped supplies of crude oil.
This, in fact, has been the approach adopted by the Bush administration over the last seven years. It has involved repeated visits to such key oil suppliers as Azerbaijan, Kazakhstan and Nigeria by top U.S. officials, including President Bush, Vice President Dick Cheney and Secretary of State Condoleezza Rice, along with promises of economic aid and, on occasion, increased levels of military assistance. China, sad to say, has responded in kind, inflaming regional tensions and sparking a series of local arms races.
This competitive approach may give American companies a slight advantage in a few oil-producing areas, but it is unlikely to alter the big picture or reduce the cost of gasoline to American consumers. At the same time, it is sure to boost U.S. military expenditures and produce a greater risk of American involvement in overseas energy conflicts.
A far wiser course, I believe, would be to promote energy cooperation with China, rather than competition. Given that the United States and China are the world's two biggest users of petroleum -- a fuel whose worldwide availability is likely to peak at 100 million barrels or so per day in the next five years or so and then commence an irreversible decline -- it makes great sense for us to collaborate in the development of oil alternatives and energy-saving technologies.
Such collaboration could take the form of joint ventures to develop advanced biofuels (not derived from food crops) and transportation fuels extracted from coal (without releasing heat-trapping carbon dioxide into the atmosphere). It could also include the development of super-light vehicles, advanced hybrid engines and other energy-saving systems. Such endeavors have been discussed on a preliminary basis by U.S. and Chinese officials, so it is hardly utopian to envision a more elaborate and constructive undertaking of this sort.
Make no mistake: Intensified competition between the United States and China for access to the world's remaining supplies of oil (and other sources of energy) will inevitably add to the forces pushing gasoline prices skyward and will generate an increased risk of regional instability. Trying to fight China over oil is the wrong approach; we'd both be better off by cooperating in the search for petroleum alternatives.
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52 Comments so far
Show AllSo is it fair that we, as five percent of the world's population, consume 25 percent of its natural oil resources.
Let's not forget our military who consumes 150 million dollars a month in oil to fly the war planes.
Somehow the logic of protecting our national interests falls right out the window.
Here in Hawaii where getting some first hand experience of "peak oil" as one of our oldest inter-island airlines (Aloha) went belly up about a month ago putting 1900 employes out of work. That was the passenger service but the freight service was still running, that was until yesterday, when it suddenly died sending another 300 to the unemployment lines and throwing a wrench in inter-island business.
Aloha cargo handled 85% percent of all inter-island air cargo including mail. Now the major bakery is sending it's goods to L.A. to get goods to the out islands from Oahu. Not a green solution but at least the people won't be forced to eat cake.
I'm sure we will recover from this as other transports will pick up the slack but I'm afraid these events will become more common until in a relativity short time our transport systems and society in general will be remarkably changed.
The global oil schemes have almost nothing to do with "national interests" unless the endless growth (growth for it's own sake being a cancer) of corporate special interests like the MIC and Big Oil are the purpose of our civilization !
It would be much cheaper to simply purchase the oil on the international market rather than go to war to try and steal it for the benefit of American oil corporations while destroying the dollar and our economy in the process, to say nothing of the crimes against humanity !
And yes, Americans are energy pigs and should change. With all the money wasted using the DOD to protect the profits in American trans-national oil corporations we could be converting to electric zero emission electric commuter cars and solar for home use etc. But, Duh!, Big oil and U.S. automakers already killed the electric car idea as a threat to their current polluting and profitable monopolies.
It is all one fine mess and perhaps the biggest problem of all is our elected Congress and the Whitehouse who are owned by the MIC and Big Oil via campaign donations and lobbyists. And of course 151 members of Congress actually have stock in the MIC and I JUST WONDER how many of the traitors in Congress have investments in the oil industry ?
Water Board Washington (new bumper sticker) as we need to know the truth !
jobson April 28th, 2008 1:46 pm
"Why would you believe what the Dept of Energy says about what China is doing?.... The plan is just to vilify and make people afraid of China."
jobson,
Since the government stopped releasing "key" economic indicators from the Bureau of Economic Analysis, I wouldn't believe a word they say about anything! However, common sense would dictate that China, India, and other developing nations will need more oil to continue growing. As their living standards increase and more automobiles are demanded - so will the demand for Oil increase.
This is not about "fear".... it's about challenge!
If Congress as a whole is not willing to bite-the-bullet and put our tax-dollars to work so that this country can move forward instead of backward, then we are going to be knee-deep and sinking fast in the shit they have created as a result of their selfish and mindless legislation.
We're not "fighting" China over its capability to supply the world with cheaper stuff to be sold at Walmart--both here and abroad. There is no reason to fight with them on oil either. We're ALL now paying high prices. Cooperation on energy, just as the author says, would be far better---and visionary even beyond Nixon's famous trip.
This is so true. The only solution to the energy crises is co-operation in the creation of alternate energy sources. The more the large powers try to manipulate and control for their own gain, the more everyone's troubles will multiply. The oil in the ground belongs to the people of the ground where it is and if they want to share the wealth it should be to their benefit to do so.
We will all benefit from co-operation and unselfish preparing for a petroleum-free world or the results of what is happening now will be out of everyone's hands. This corporate owned global economy will self destruct and the common citizens will find themselves in control of their own lives again. Wouldn't that be something!
Another great article by Michael Klare. The only thing I would add is that in addition to working together on new technologies, we, the Chinese, and all other industrialized (or industrializing) countries will have to permanently give up the "infinite growth" model of economics and consumption.
I'm not saying I believe this will happen, but if it did all the rest of the work would be less difficult.
Co-op...co-oper...I'm too patriotically American to even say such an evil socialistic word, let alone do it. Excuse me, I have to go fill up my two Hummers.
Why would you believe what the Dept of Energy says about what China is doing? If you had not noticed, the US government is trying to get Tibet to separate from China. So why would you trust what the US gov't has to say about China's oil consumption? The plan is just to vilify and make people afraid of China.
"promote energy cooperation with China, rather than competition."
This administration? Cooperation? Bwahahaha!!
Meanwhile, 3 US aircraft carrier battle groups have been cruising around, SE of Taiwan. The 4th Fleet has been re-instituted, covering the Caribbean (can you say Venezuela and oil lanes to China, children? Sure, I knew you could).
Don't forget, the defense strategy for the USA is not to allow any other power rival. It's not about cooperating.
Carter had a synthetic fuels program in 1979. The Republicans were and still are bought off by large corporate interests and would rather kill that program and make billions for their friends in the oil industry. This has been going on for 30 years now but has reached the end of the road.
The big guys fight and the little guys suffer.
Hoa binh
Good article, especially the part about cooperation (I can say it) instead of competition with China. Too much emphasis on alternative fuels, especially coal (carbon-capture of transportation fuels derived from coal. How could that work?), and not enough emphasis on conservation.
We waste most of the energy we use.
Whenever I go into a big-box store, I'm nauseated by the sight and smell of plastic---ubiquitous plastic. Since everything is made in China and plastic is derived from oil, shouldn't we be concerned with making sure the Chinese have access to cheap oil?
There's another alternative We The People could chose meanwhile:
It's called USING LESS OIL. Voluntarily.
Like that diet plan offered on SNL (or was it MAD TV) a couple of weeks ago: eat less, move more.
In case anyone hasn't been paying attention, "our" government could give a flying f**k about "us."
Either we become collectively proactive, or we will suffer. Waiting for governments to solve the problem... well, let's see... how they doin' on hunger? The economy? Catastrophic climate mutation? Health care? New Orleans? Illegal occupations?
Nuff said...
Why no mention of Solar Energy? (Yes, of course bio... is solar and bio has its place, but the efficiency is poor.) Development of solar energy systems is surely one field where everyone can cooperate.
China is paying the equivalent of $1.48/gallon these days (look it up if you don't believe me)...so like Americans paying outrageous amounts for medicines from pharmaceutical companies who sell it for its actual cost elsewhere....America is subsidizing China's growth by paying the lions share for fuel.
If anyone knows how this $115/barrel oil gets translated into $1.48/gal for China and $3.50 to $4.25/gal here in the US, let me know...I'd like to know how the volume buyer (US) pays so much more.
Why no mention of the need to IMPROVE PUBLIC TRANSPORTATION? Not once has this author ever mentioned the real need to force the repair of public transportation infrastructure, ruined for nearly 3 decades. I've been to the major cities and I can tell you that people are sick and tired of OBSCENELY HIGH metro fees. Why aren't the bus routes updated and why so few thereby causing more inconvenience? Every time gas prices go up significantly, the metro trains and buses services increase their fares to make sure that their rates are higher than those of driving thereby pushing more people off public transportation. And what about repealing those GAS GUZZLING TAX BREAKS? I guess TAX-UH-CHEW-SHITS FATSO Mr. F***ing Klare owns a gas guzzling SUV and won't come clean ! And why isn't he fighting to make Boston much better in terms of rewarding fuel efficiency and making public transportation more affordable and satisfying? I guess his writing BULLSHIT for a living is all he wants. We need REAL progressives and liberals joining us folks fighting to put better solutions such as improved public transportation and tearing down the RIGGED market favoring gas guzzlers over fuel efficient vehicles, not shitbags like Klare who REFUSE to actually fight to solve the crisis !
Instead of writing PURE BULLSHIT about China vs US on oil, the author could take the money he gets from MA taxpayers and counter-lobby for better public transportation and removing Big Government subsidies to Big Oil. Those two solutions I mentioned above will SIGNIFICANTLY reduce US energy demand, most of which is wasteful !
Klare's assumption that oil extraction will peak at "100 million barrels or so per day in the next five years or so and then commence an irreversible decline," isn't supported by reality. First, what constitutes "oil"? Is it crude oil plus its condensates (C+c), or is it total liquids that even includes ethanol, which clearly isn't oil? Extraction flow rates for C+c have plateaued at just under 75Mbpd annualized since 2005 and are unlikely to grow any larger due to decline rates and "above ground" political factors, such as the current strikes in Scotland and Nigeria, plus the ongoing Nigerian oilwar, which as of today have shut-in just under 2Mbpd of crude extraction. As for total liquids, a great number of oil industry insiders do not expect more than 87Mbpd, which includes bio- and syn-fuels, as mentioned above. (Information documenting the above can be found on theoildrum.com and at energybulletin.net as well as other energy and peak oil related sites.)
Thus, the situation is far worse than described by Klare. Yet, that's not the full picture. We must consider net exports available for importers. This amount appears to have peaked and is currently declining at a rate of .2% Y/Y and accelerating. Please see this and this for information on the concept of net exports and how their decline will affect importing countries. European transport fuel costs are more than double that of the US due to a longstanding tax regime used to construct alternatives, which has allowed their economies to prosper. They prepared; the USA did not. We can already see the dislocation caused by greater than $4 diesel and soon to be $4 gas. Imagine the level of economic pain caused by EU price levels with nothing to show for them in the form of financing alternatives. The proposed actions by some of the posters above need to occur, the mandatory ones being behavioral/cultural.
The escalation of the Iraqi Holocaust proves the Carter Doctrine untenable as it will not secure or increase the amount of oil available for import. The Oil Depletion Protocol proposed by Colin Campbell provides the best prospect for peace and controlled Power Down.
Taking away the "US" and "Them" could save us all a lot of war in the future, but there is no indication that this is a possibility between the U.S. and China. Let's stop pretending though, that we still have an oil supply now and that we don't need to drastically change our lifestyles this minute. Those of us on the bottom,Americans included, already can hardly afford to fly on a plane, heat our houses, drive very far and much less pay our rents. We are becoming more like the China of the recent past, but who is still using all that fossil fuel? Most of us have already lost the humble homes we once owned as we lost jobs that paid something.
We hate buying food that is contaminated, but health food is made for the wealthy who are preoccupied with the extras while the world riots for food. The change we need is so drastic, those on the top of the food chain, which is most of those who write these pieces, rarely are in a place to envision the solutions. So if you are one of the masses, maybe you have a better idea than those who wonder were they should invest their extra thousands in order not to pay taxes and who will be able to afford to burn earth-killing gasoline no matter what the price.
The only people who are cheering at this news is the oil business and the oligarchs who run the countries that have the gooey black stuff. Everyone else should be seriously bummed.
ln Cuba they found a way to get a 1959 Cadillac to get 50 MPG on an alcohol based fuel unfortunately it runs on Bacardi dark.
speculaters and speculation on the commodities market and huge profits being taken
oh no it is India and China and some other boogie men doing it........we as a people are allowing this,not foreigners or stangers or boogie men
and what of Congress looking into this to "see" if anything illegal is going on? No 1929 can never happen again.... but what of 2009?
Kruschev came over when I was a kid took off his shoe pounded it on the podium and said we shall defeat you from within........some thought he was 'mad ' hhhmmm
Regarding ethanol as a substitute, it is less BTU-dense than gasoline, so I doubt that caddy ever got 50mpg. Please see this for elaboration and chart showing E85 more expensive than regular gas. This also means that ethanol produces much more CO2 per mile driven than gasoline. An environmentaly friendly fuel it is not.
.
BOYCOTT the Chinese Olympics........
Don't buy "Made in China" products....on a larger scale don't do business in China.
The Communist Chinese Regime is a murderous human rights abuser, hell-bent on world wide military and economic domination.
Their most recent 500 years, has been repeated warring and suppressions of the Tribes and small Northern and Northernwestern states. These Han and Tang peoples cannot be trusted.
Send a loud message to Communist China....BOYCOTT !!!!!!!
.
the dominant cause of the current spike in the price of oil is speculative money fleeing from the subprime swamp, i.e., we can deal with the current exhorbitancy by reining in the speculators, instead of sacrificing our living standards to their insane bubble.
"Why would you believe what the Dept of Energy says about what China is doing? If you had not noticed, the US government is trying to get Tibet to separate from China. So why would you trust what the US gov't has to say about China's oil consumption? The plan is just to vilify and make people afraid of China."
I think China has done enough to vilify itself. They don't need our help.
Isn't that something, we send our jobs to China so that they can stock Wall-mart with cheap crap, then have to pay higher gas prices for the privilege. Presumably, if this is true, when gas goes up enough, we'll have to go back to producing things locally, because then even the cheap stuff will get expensive.
kloro is correct...speculation is a major factor in the fuel price increases of the past 8 months. The other major factor is the devaluing US Dollar.
Both of these factors are controlled by the US Federal Reserve. When Fed Chairman Ben Bernanke started lowering interest rates in August 2007, the dollar went into free fall, making imported oil ever more costly ,and providing speculators (the same ones who brought you the housing bubble) with cheap money to drive up energy and food costs.
For 8 months the Fed has continued to lower interest rates, and will lower them again later this week, resulting in more inflation of fuel, food and other goods and services.
Some polticians are talking about investigating oil company price gouging. Unfortunately, the oil companies have lots of practice at dodging that bullet. If the politicians want to address the real problem they need to fire Ben Bernanke and replace him with somebody whose monetary policy benefits all of the people, not just the wealthiest 1 or 2% of the population.
To get a feel for how much the devaluing of the dollar affects the price of oil, see these charts ... http://europe.theoildrum.com/node/3106
On one hand, if you compare the peak at the Oct 07 end of the charts to the June 06 peak, you can get a feel for how much the dollar has impacted this. You can see that on the US dollar chart the Oct 07 peak is higher than the June 06 peak, while in other currencies it isn't.
On the other hand, you can also notice that all of the charts have the same general shape showing a long run up of prices to the Oct 07 end of the chart. Ie, oil is going up everywhere. But we are paying an extra premium on top of that because our dollars now buy less.
As always, I love the constant sniping out here attacking an author because he didn't mention one issue or another. Folks, its called GOOD WRITING! If you are writing a piece like this, you only get a limited amount of space. You need to fine tune your piece to clearly make your point in that amount of space.
If you don't do this, you get the typical horrible lefty speech that can be heard at almost every anti-war rally .... long, rambling, incoherent, trying to make way too many points, and in the process just losing the audience.
But hey, for the people on the left who seem to love to attack their allies and friends, I guess its easy to sit back and snipe about how he didn't mention this or that. Or maybe its that constant lefty attitude seen often out here that everyone must be a pure perfect saint or we flay them alive.
I have a geat idea! Lets make up some reason to invade and occupy a relatively defenseless oil-rich country. One with a despotic leader, where the population will adore us for removing the tyrant and give American oil companies PSAs and first dibs on their crude!
Is that a great idea or what?
I could save millions of barrels just by switching off the trafic lights and installing roundabouts. Where traffic lights are essential they must be syncronised to traffic flow. The waste in the USA is the reason so much is required, a habit from previous eras when oil was $25 a barrel. My wife used an electric clothes drier in Florida but I've nobbled it she now hangs them out and the result is much better.
Speeds have to be better regulated and eventually rationing will be the final outcome unless we start conserving energy.
I'm building a Brown's gas machine with a view to using it to power a generator, It's in the early stages now but the system looks promising.
We all have to be more responsible.
andersdi said Some polticians are talking about investigating oil company price gouging. Unfortunately, the oil companies have lots of practice at dodging that bullet. If the politicians want to address the real problem they need to fire Ben Bernanke and replace him with somebody whose monetary policy benefits all of the people, not just the wealthiest 1 or 2% of the population.
Remember, federal reserve is private-owned bank. federal reserve act of 1913 which need to repeal. There is no oversight or control by congress. They(FED) loan to gov't out of thin air and us (taxpayer) pay at interest of that loan to gov't(dept of treasure). Support Ron Paul for president!!!
Can't we just incinerate China with Nuclear Weapons?
Clearly they threaten us. Somehow.
Isn't that the criteria?
Mail your Senator and Congresspersons two pictures... One of a gas station with prices $4 +.... the Second, a picture of a guillotine.
Oil is and will remain much to vaulable to just burn. This is something that most of us don't understand. For now Big Oil is happy to get the most cash for each barrel; but, if I were in charge of the asset, it would be my plan to switch to another type of fuel. Handled properly, oil could last for centuries. Transportation is the top reason for using oil; but, there are other ways to fuel transportation. Finding products to fulfil the other uses of oil will not be so easy. Why not get serious now instead of jumping up and down when gas prices go up. Clean coal up for a start, we have a lot of it. The wind blows somewhere all the time. Solar seems promising. Hydrogen from water need not be delayed any longer. When your cooking on the propane gas powered grill and the tank gets near empty, you go the dealer and exchange the empty bottle for a full one. It is possible to tell when a bottle is nearing empty by its weight. The bottle sits on a spring supported platform and as it gets lighter the spring causes a contact to be made turning on a warning message to the drive to switch tanks in 50 miles or whatever. It's so easy a caveman or cavegirl can do it. Just another good reason to quit smoking. Maybe this is going to bring back the full service "gas" station. Anyway, you just weigh the near empty bottle when exchanged and get a credit. Maybe they'll check under the hood and do the windows? I'm not so sure about all this cooperation being suggested with the Chinese over oil and energy. If the deal there're giving us on oil is like the one we have going with them on their currency, I am afraid we may have a sore spot in a very tender part of our little anatomy.
According to an article I read in the city newspaper a few years back, a man in Vancouver invented a device that hydrolyses water to obtain hydrogen which is then injected in small amounts into the combustion mixture. The result is complete combustion with virtually no pollutants except for CO2. The mileage is more than doubled and at the end of a run the tailpipe is cool enough to hold. The article said 3 other people were working on the same thing. It was expected that within 6 months they would be putting these devices into trucks. This was years ago and I have heard nothing else since.
Where there is a will there is a way. There is no will, except to prevent a move toward reducing the profits of the energy companies.
Oil was at 60 dollars a barrel on June 1 , 2007, the date the Dubai mercantile exchange opened with the help of NYMEX. Today it is 118 dollars a barrel, despite a looming global recession which should cause prices to drop. Funny how this gets overlooked
There is no shortage of oil today. There is a mentality that goes like this - why invest in refineries and increase oil production capacity today, which is expensive, when we can just stay where we are and sell the oil at 200 dollars a barrel tommorow. Oil had sold for as low as 13 dollars a barrel in 1999 or 2000. Chinas increasing imports 3 billion barrels per day in that period (compared to 100 billion of global production) causes the price of oil to increase by a factor of 9? BS. This can only happen if our government permits it.
Certain industries need to be nationalized, banking, oil, agriculture, health care.
"There is no shortage of oil today."
That's correct; there is no shortage of $120 oil. There is a shortage of under $100 oil. If you actually looked around the world, you would see there's no "looming global recession." Instead, there are booming economies more than willing to pay the current price and more for oil, which will easilly continue increasing demand even if the US demand started to drop. Furthermore, no country imports "3 billion barrels per day," nor is global extraction even approaching "100 billion."
Even more naive is the belief that Congress can stop the rising price of oil and its products exhibited by too many above. Every time a Peak Oil related article is reproduced here, I've attempted to provide positive critique and links to more information for people to become educated. It's clear most don't even bother to read the comments or click the links; otherwise, the discussion would be at a much higher level. Kudos to Sampson for doing some looking and finding the information that shows that the devaluing dollar isn't the sole culprit. The same is true for speculators. Yes, some people are going long oil, but that's because the fundamentals--demand outstripping supply--gives the rationale to do so.
got it! stop every 'race'event in this country(world)nascar,drags,baja,motocross sad to say the list just keeps going and going.not just the races themselves,every bit of energy spent on it.travel to and from,machine shops making parts,hot dog vendors,what could there be,thousands of wastefull steps to see an event that doesn't meen shit.our childrens children(if humans make it that far) will ask,"......what could they possibly have been thinking? " blessings to all
As the author discounts China's consumption as a factor in oil prices we see that shrinking production is also a lesser issue. The dominant cause of today's oil price inflation is the collusion between the criminals in the White House and their criminal constituents - the oil companies, oil speculators, and war profiteers. The bonanza can't stop. Iraq must remain in chaos, and pliable new puppets must be installed in the White House. Watch the price drop way low right about election time to benefit the Repuks and tell me it's not collusion.
There is a laissez-faire capitalist rationale for allowing the oil companies to extract record profits year after year. They need the money to invest in the next generation extraction/refining methods. Next generation - wow - more efficient, right? WRONG. The next generation has to refine much lower grade crude - the high grade stuff is almost gone now. So the next generation production will have lower value, which means higher costs per unit of production, and Canadian tar sands, "natural gas" liquification & shipping, coal liquification, hydrogen "fuel cells", and all the rest will be even worst. These methods all have the two key attributes necessary to the capitalists: 1.) they waste very large amounts of inputs (technology, energy, materials) to maximize buck churning, and 2.) they keep control in the hands of the capitalists. It's all very highly destructive and unnecessary.
Is it as simple as the oil companies simply doubling the price they pay for crude? Do they have to? What about the shrinkng portion of lower 48 state crude? Is that $120/bbl now?
Its good for reducing CO2 emissions. I'm space heating only a small part of my house with the furnace thermostat turned back to 60, and driving less and plan to eventually replace my 27 mpg Impala with something closer to 40 mpg. That is just a start, I'm sure.
The oil era has peaked and we need to get over it. Life won't be as easy, but the peak hasn't come a moment too soon.
We may have entered a dangerous phase - we could be approaching the peak plateau for oil production. If this is the case, simple supply and demand rules take over. There is no question the tanking of the U.S. buck and a wee bit of speculation :) are responsible for a portion of the current price of sweet crude. If the buck was at its 2002 level, oil would probably be trading at $75.00 - $80.00 or so. Gasoline consumption in the U.S. is down slightly, in the past this would have had an impact on oil prices but no more. The emerging oil consumers in China, Russia, India and other nations are taking care of that. 70% of oil consumption in the U.S. (the U.S. consumes a total of 25% of the planet's oil production) is for transportation fuels - seems like a good place to start cutting back.
This article presents the author's "predictions."
What BS. Stop trying to predict. Folks, it's a sham, a fraud. Welcome to the world of the Black Swan.
That's pure Hogwash! JUst one excuse out of thousands that are used for the big oil and other corporations from making record profits all on the backs of the hardworking worker. People it's time you wake up and smell the roses or you're gonna be pissed on from now on and you're letting them get away with it.
Great article!
There is obviously no sham here. Its fairly normal. China and India along with most of Asia is using more oil, oil companies are gouging the Bejesus out of everyone. Local stations take the opportunity to raise prices if Grand ma sneezes. The Arabs are laughing all the way to the bank.
So gas goes up....people will buy and drive more efficient cars, build more energy efficient homes,source food more efficiently. Wheres the downside?
The oil companies have a lot of old oil that has far less cost of production cost per barrel than new fields, does anyone think they are averaging costs?
" If anyone knows how this $115/barrel oil gets translated into $1.48/gal for China and $3.50 to $4.25/gal here in the US, let me know…"
Well, one thing contributing to the high cost is the "overhead" involved. An Exxon CEO was paid $400 MILLION for about ten years of work. One of his crowning achievements was to create false-front science organizations to create disinformation that would deny the reality of global warming. A Chinese business manager would never be paid that kind of money.
And if you want to factor in the complete cost someone will have to figure how much support the DOD gives Big Oil with the help of our tax dollars. What they are doing in Iraq has not only raised prices, but we are accumulating national debt at the same time, but the MIC and Big Oil profits are higher than ever. They are also laying claim to Central Asian resources that will be sold mainly in Asia via Afghanistan but at a terrible cost to the taxpayer. But I would expect the Afghans to simply blow up the pipelines.
In short, they want to sell as much gas as possible at the highest possible price and control as many sources as possible with the illegal use of the U.S. military.
And then (am I the only person in America who keep repeating this) there is the simple fact that the dollar has taken a 100 percent loss in value against other currencies like the Euro. Thus the oil producing nations want twice as many dollars for the same barrel, but our incomes are not increasing at the same rate of inflation. And there are many war-related effects on the dollar as well as our huge deficits and very fuzzy Federal Reserve policy (can't run a war on a credit card) designed to compensate for a variety of problems. And then they have been simply increasing the money supply..yes..they just make more of the worthless stuff thus devaluing the currency we all use. Has anyone noticed that they stopped issuing the M3 report in 2006 which keeps track of the total money supply ?
And, the specualtion that happens in the two big oil trading markets in London and NYC can add as much as 30% to the price of a barrel !
Why not nationalize the energy business like Venezuela where gas is about TWENTY-FIVE CENTS A GALLON !
Etc.
The obscene price of oil has an upside- waking a small minority of Americans to the point of a tiny "ahaa" moment. "Something is happening here but you don't know exactly what is- do you Mr. Jones?". The entire US auto fleet is about to sink under the crushing pressure of $200 oil.
I have been feeling for years that the bizarre obsolete autos around here are something straight out of the Flintstones. It kind of makes sense if you think about it. A substantial percentage of Americans really do believe that dinosaurs walked the earth with our Homo ancestors. It's all part of the LNCB program!