The fair price of gas

[natedogg]

Here is the flaw in your interesting theorem:

"Assume you would think it is fair to pay the same price for the energy embodied in oil."


Hint: Would you pay $1600 for whatever it is you get from a gallon of gas?

I doubt it, nor could you afford to. But the same energy extracted from firewood costs $1600. Why? This is not really a very interesting question if you think for a few minutes about supply, demand, and the difference between wood and oil other than they are both some form of carbon.

natedogg

[Il_Mostro]

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Hint: Would you pay $1600 for whatever it is you get from a gallon of gas?

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I have seen numbers like 1 million dollars for 1 gallon of oil, if you count all the stuff you get from it and the alternative ways to get it. I don't have any links, I just recal reading it somewhere.

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I doubt it, nor could you afford to.

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Unless we find a new source of energy, soon, we will have to. If we can afford it or not. The age of oil is coming to an end, people.

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This is not really a very interesting question if you think for a few minutes about supply, demand, and the difference between wood and oil other than they are both some form of carbon.

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I assure you I have thought more than "a few minutes" about all this [img]/images/graemlins/smile.gif[/img]

All those differences is currently to the advantage of oil, meaning oil is better than firewood in every single way when it comes to using the embodied energy. Yet we think it's fair to pay so much less for it.

[natedogg]

All those differences is currently to the advantage of oil, meaning oil is better than firewood in every single way when it comes to using the embodied energy. Yet we think it's fair to pay so much less for it.

Ok fine I'll give you the answer.

The cost to access that energy is cheaper. Digging a hole and pumping the oil and refining it into a gallon of gas is far less costly than chopping down enough trees to match that energy and refining them into to a usable form.

Now, oil may run out soon (probably later rather than sooner) and then we'll see the cost rise. We'll also see it become more economically feasible to extract expensive oil like the Canadian shoals deposits, which is already happening actually. I have looked into buying Canadian oil trust stocks. These are profit-sharing cooperatives that dispense 100% of profits as dividends but have risky propects of finding more reserves.... they are interesting.

Mostro, if you aren't already aware of this website I think you'll love it. www.peakoil.com

Very interesting stuff there.

natedogg

[Il_Mostro]

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Mostro, if you aren't already aware of this website I think you'll love it. www.peakoil.com

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Been there since last summer or so. Managing the weblinks there [img]/images/graemlins/smile.gif[/img] (not doing a very good job at the moment tho, note to self, must be better...)

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The cost to access that energy is cheaper. Digging a hole and pumping the oil and refining it into a gallon of gas is far less costly than chopping down enough trees to match that energy and refining them into to a usable form.

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Yes, I understand this as well. And as you may or may not have understood from my posts I don't really think we should pay as much for oil as for wood, but I still think the disparity is strange.

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Now, oil may run out soon (probably later rather than sooner) and then we'll see the cost rise. We'll also see it become more economically feasible to extract expensive oil like the Canadian shoals deposits, which is already happening actually. I have looked into buying Canadian oil trust stocks. These are profit-sharing cooperatives that dispense 100% of profits as dividends but have risky propects of finding more reserves.... they are interesting.


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Yes, running out will be much much later. But that's not what I'm bothered about, the problem is what's going to happen when we get less and less oil every year.
As for Canadian shale. There is probably money to be made there, but it's not very likely that shale will do much difference to the total amount of oil extracted, it's too slow and too energy intensive, extraction rates are not very good. That does not, of course, mean that it's no use, just that it won't help much in the grand scheme of things.

[natedogg]

I've read that the reserves are gigantic and that extracting it costs about $22 per barrel which has only recently become a profitable margin...

Of course, I'm only going by what I've read.

You work on peak oil? Good job by the way.


natedogg

[Il_Mostro]

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I've read that the reserves are gigantic and that extracting it costs about $22 per barrel which has only recently become a profitable margin...

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Yes, the reserves are gigantic. And they are probably economically viable at present prices. The problem is not price, it's extraction rates. And also that the extraction is horrendous to the environment.
But, by all means, if you have money to spare it's likely there will be much money to be made in shale. (Don't hold me acountable if it isn't, though [img]/images/graemlins/wink.gif[/img] )

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You work on peak oil? Good job by the way.

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Well, work is to much really, but I contribute in a small way, yes.

[natedogg]

Ah, I didn't catch the part about extraction rates. But wouldn't that be resolved with more investment in extraction companies?

And the environmental considerations are of course important. I'm one of those weird libertarian types who actually thinks environmental protection is a valid use of state force... it falls under protecting citizens from forces too big and powerful for them to deal with... But cleanup and prevention could be priced into the cost and likely will be. Cost will go up for sure but maybe not so much that it causes economic meltdown?

Anyway, this is really interesting stuff but I have to stop for tonight... [img]/images/graemlins/smile.gif[/img] I'll respond to tomrrow if you want to continue this interesting lineof discussion.

natedogg

[Il_Mostro]

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Ah, I didn't catch the part about extraction rates. But wouldn't that be resolved with more investment in extraction companies?

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Probably not. I read a calculation stating that in order to provide a-lot-of-oil (I don't remember the exact figure, but something that would mean a difference) you would need a waste pond the size of lake ontario...

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And the environmental considerations are of course important...

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I agree. Wholeheartedly.

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Cost will go up for sure but maybe not so much that it causes economic meltdown?

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Well. What would happen if we pay 200$ per barell of oil (for example)? A lot of things would be different, that's for sure. It all depends on what you mean by economic meltdown, I suppose. I think a new great depression that will dwarf the on in the 20:s is almost inevitable.

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Anyway, this is really interesting stuff but I have to stop for tonight... I'll respond to tomrrow if you want to continue this interesting lineof discussion.

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A shame, I was just getting started (it's 9.30 am here, I suppose I should continue doing what I should be doing, i.e work.. [img]/images/graemlins/smile.gif[/img] )

Good night, sir.

[Il_Mostro]

For you, and everyone else who is interested (trust me, you should all be)

Below is a link to a PDF with slides that in a concise way explains the problems we face. It does not go into much evidence, that you have to find at other places, but it is a good summary.

The Status of Future Energy Sources
Future of Energy Seminar
Houston, Texas
February 8, 2005
Presented by:
Matthew R. Simmons

Simmons

[jaxmike]

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whats short sighted is your assumption that we will be using oil/gas for a large percentage of our energy needs in 20 years.

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What do you propose we will switch to within 20 years?

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20 years was just a number I threw out, but who would have thought in 1945 we would be on the moon just 25 years later?

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If you would have said 200 years you'd have some credibility, but 20... there is no alternative in sight, nothing we know now will be able to take up any slack att all the coming 20 years. Even if we had an alternative to start implementing right now, it would take more than 20 years to retrofit the current infrastrukture to something else.
And we don't have any alternative in sight.

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yes, hybrids, electric, continuing cold fusion research, fuel cells, nat gas, etc. etc. etc.... no alternatives indeed.


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my point is that its obscene to assume you know whats going to happen. you are willing to make leaps in logic that are neither justified nor rational.

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I don't assume what's going to happen. But I do have an informed opinion. What new energy sources do you think will come online in the short term?

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thats is one problem i have with liberals,

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This is getting silly beyond belif. Liberals? You don't know anything about my political belifs. It's fairly far away from american "liberals", that's for sure.

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I bet you are a full blown socialist?

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they feel what they say, and despite all their protests to the contrary, they do not THINK about what they say.

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I have thought and read a lot on this subject, why do you assume I have not? And I have not yet seen and "protests to the contrary" that has been credible, every single one has been refuted.
Please share your views, backed with fact.

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i have, and my justification for the price of gas is far more sane than yours.