more oil news
Jun. 27th, 2005 08:54 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
chelidonPickens: Oil spike will lead to $3 gas
(subhed: Head of BP Capital Management says the black gold in the ground simply won't meet demand)
NEW YORK (CNN/Money) - Gasoline prices, reversing a two-month slide, are again approaching records and at least one expert thinks they could hit $3 a gallon soon in the United States.
"We'll see it within a year," T. Boone Pickens, head of the billion-dollar hedge fund BP Capital Management, said on CNN's "In The Money" over the weekend.
[snip]
Pickens said a shortage of oil is the main reason behind the price increase and didn't see how the world could produce more than the current 84 to 85 million barrels a day that currently comes out of the ground.
"We're coming up on a brick wall," he said. "The fourth quarter this year is going to maybe be the most interesting quarter I've ever experienced in my 50 years in the oil industry."
Unsurprising -- the supply/demand curves are colliding even now. And while higher oil/gasoline/diesel/heating oil prices are important, that's really small potatoes compared to the fireworks that peak natural gas production will cause a few years later, since an increasing number of our electrical generation plants run on natural gas. If oil prices spike, gasoline gets more expensive, as well as diesel, jet fuel, etc, and that affects the cost of transporting goods (including ourselves). If natural gas prices spike, electricity, and everything that depends on it suddenly costs twice or three times what it used to). Yikes.
Since it takes years to design, plan, build and put a new power plant into prodution, now is a really good time to press local, state and national politicians and your local utility to start building renewable source plants (wind, solar, hydro, geothermal) An appeal to patriotism and reducing dependence on foreign oil is a good card to play now, but the real reason to start building renewable now (better yet would have been 20 years ago...) is that it'll help mitigate the effect of oil and natural gas prices spiking dramatically.
Here's an interesting and readable review of investment banker Matthew Simmon's new book, describing what he sees as the inevitable near-term decline in Saudi oil production. If this happens, and like global warming, more and more signs are pointing in that direction, the oil economy will be in full-scale retreat, soon.
I may be giving Bush and Co way more credit than they're due for any kind of long-term planning ability, but Bush's Middle East crusades make a lot more sense if viewed as a desperate (and ultimately, hopeless) attempt to ensure military control of dwindling supplies of Middle-eastern oil to keep America's (and his oil buddy's) economy from suddenly collapsing.
(subhed: Head of BP Capital Management says the black gold in the ground simply won't meet demand)
NEW YORK (CNN/Money) - Gasoline prices, reversing a two-month slide, are again approaching records and at least one expert thinks they could hit $3 a gallon soon in the United States.
"We'll see it within a year," T. Boone Pickens, head of the billion-dollar hedge fund BP Capital Management, said on CNN's "In The Money" over the weekend.
[snip]
Pickens said a shortage of oil is the main reason behind the price increase and didn't see how the world could produce more than the current 84 to 85 million barrels a day that currently comes out of the ground.
"We're coming up on a brick wall," he said. "The fourth quarter this year is going to maybe be the most interesting quarter I've ever experienced in my 50 years in the oil industry."
Unsurprising -- the supply/demand curves are colliding even now. And while higher oil/gasoline/diesel/heating oil prices are important, that's really small potatoes compared to the fireworks that peak natural gas production will cause a few years later, since an increasing number of our electrical generation plants run on natural gas. If oil prices spike, gasoline gets more expensive, as well as diesel, jet fuel, etc, and that affects the cost of transporting goods (including ourselves). If natural gas prices spike, electricity, and everything that depends on it suddenly costs twice or three times what it used to). Yikes.
Since it takes years to design, plan, build and put a new power plant into prodution, now is a really good time to press local, state and national politicians and your local utility to start building renewable source plants (wind, solar, hydro, geothermal) An appeal to patriotism and reducing dependence on foreign oil is a good card to play now, but the real reason to start building renewable now (better yet would have been 20 years ago...) is that it'll help mitigate the effect of oil and natural gas prices spiking dramatically.
Here's an interesting and readable review of investment banker Matthew Simmon's new book, describing what he sees as the inevitable near-term decline in Saudi oil production. If this happens, and like global warming, more and more signs are pointing in that direction, the oil economy will be in full-scale retreat, soon.
I may be giving Bush and Co way more credit than they're due for any kind of long-term planning ability, but Bush's Middle East crusades make a lot more sense if viewed as a desperate (and ultimately, hopeless) attempt to ensure military control of dwindling supplies of Middle-eastern oil to keep America's (and his oil buddy's) economy from suddenly collapsing.
