Wheeldog

Falls Church News-Press - The Peak Oil Crisis: The Washington Post

The Washington Post ran a front page article on rapidly increasing oil price. The problem was they sugar coated the hard facts to make them more digestible for their readers. The reason the cost of oil has been on a tear for the past several months is simple high school math; increasing demand minus decreasing supply equals higher prices. The Post and other media outlets do not want to do is scare their readership, so they tiptoe around the real issues. Perhaps I am overly idealistic, but I believe the public does not need to be coddled and shielded from reality. When given credible information and facts, even when they are unpleasent, the great majority of people can handle it and make intellegent decisions. Any other opinions?

Wheeldog

I applaud your willingness to face and discuss this crucially important issue and your search for alternatives to a clearly unsustainable source of energy. Oil is literally the energy life blood of modern society. More of it is needed each day, yet less of it is available. Just as a human body becomes weak and vulnerable to crippling breakdowns through loss of blood, civilizations become anemic and can even collapse when their primary source of energy declines. It has happened throughout history. There are ways to avoid the worst case scenario, but that requires planning and preparation. And there is no time to waste.

dahermit

One of the causes stated for the high price of gasoline is that there is a shortage of refinery capacity. The oil producing companies also own the refineries. Why would they increase the capacity of refineries when the lack of refiner capacity contributes to their profit? Would it not make sense to separate the refineries from oil producers?

Bush has stated that he "...hopes that oil companies will invest some of their profit in alternative energy sources...". Why would an oil company develop alternative energy sources when it would cut into their oil profits?

Wheeldog

It is tempting to think of this as a political or economic issue, because then it would seem to be just a temporary condition that can be fixed with a few adjustments to the system. But the basis of the problem is not political or economic - it is geological. It cannot be fixed by a change in political policies or market forces. We are faced with an immutable fact, oil is a finite resource. Once tapped, all reserves have a limited life span. Almost all the "easy" (read cheap) oil has been found and largely exhausted. What is left are small pockets that are quickly depleted, reserves in extremely difficult places to retrieve and unconventional oil (shale, tar sands, thick and sour crude) that give a very small return on effort and investment.

If you follow the news related to oil, you may have noticed that the media is increasingly mentioning "peak oil" and speculating that we may indeed be facing declining world oil production. Of course, they usually include disclaimers saying that there are experts who believe we still have more time until real shortages happen. This train of thought can be summed up as the higher the price goes the more there will be. That is the logic of a child. Rising price is simply a means of rationing where the poor are forced to cut their consumption so the rich can continue to enjoy happy motoring.

Believe it or not, major oil companies do not want to see oil prices this high. They know that overly high prices tend to take the wind out of the economy, and that hurts them in the long run. They also fear that rising prices encourage oil producing nations to nationalize their reserves and throw out the international oil companies. Even oil companies must buy oil to carry out exploration and development of reserves. Rising oil costs make oil development more expensive and discourage companies from tapping into marginal or questionable reserves.