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, Sat, 30 Apr 2011 05:06:04
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1. Oil (and coal and natural gas, the other two forms of hydrocarbon in this sector of the universe) is indeed finite on a given planet . . . in the same sense that the amount of hydrogen on the Sun is also finite. It's just the numbers are so huge that we have nothing to worry about, unless your business is marketing sky-falling.
2. Hydrocarbon is widespread on most planets, moons and astroids. Hydrogen and carbon just happen to be two of the four most common elements in this part of the universe. There is no reason to suspect the earth's makeup is uniquely deprived of hydrocarbon
3. The concept of "Proven Oil Reserve" is usually misunderstood by the lay person. Proven Oil Reserve is almost always about 30 years, for the 150+ years, since the birth of the modern petroleum industry. Why? Because it takes a decade or two to bring a field into production. "30yr" at current consumption rate represents the lead time necessary given growing consumption. When that amount of reserve is found, the oil industry slows down prospecting . . . for the simple reason that prospecting costs money. There is no point finding fields that can not be economically developed in the forseeable future. "Oil Reserve" is not a catalog of the planet. In the real world, unlike in the minds of an ivory tower academic and his gullible pupils, few people would spend billions of dollars tapping miles deep holes into the ground using diamond drill bits just for the sake of cataloging the planet. Oil and mining enginners work with purpose, determination, and bean counters on their backs telling them amortization tables all day!
4. Oil industry itself is a very capital intensive industry. It costs a fortune to discover a new field and then drill wells, but the pumping cost is extremely low. In other words, it's a high fixed-cost, low-variable cost business. If not for the informal cartelization, the industry would quickly become akin to the airline business . . . the $12/bbl oil price and $0.93 gas at the pump in 1999 gave a hint to what a truly free competitive market price for oil and gasoline should/would be like. That's why the industry is not particularly keen on explaining to the public what "Oil Reserve" really means. If the public buys into some kind myth and think oil is "black gold," so much better for the sellers of the goods.
We burn oil/gasoline not because the stuff is expensive. We burn oil/gasoline because it is by far the cheapest portable liquid energy source to burn.
posted by 76.118.39...
, Sat, 30 Apr 2011 23:53:55, Sat, 30 Apr 2011 15:11:07, Sat, 30 Apr 2011 05:06:04, Sat, 30 Apr 2011 13:34:41, Sat, 30 Apr 2011 04:28:11
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