Oil at $100/Barrel?

[Bjorn]

When do you think the price of crude oil will hit the psychologicaly important threshold of $100 per barrel?

[Nepa]

If something happens to interupt production at this point it could happen this year. I guess the real question should be when will gas hit 4 bucks a gallon.

[Bjorn]

Well i chose the crude oil price since that is global.

Gas price "critical numbers" means very little to people in other countries.

Here in sweden we have already pased the magic limit of 10 SKr/litre. (Quickie math aprox. $5/gallon.)

/Bjorn

[bholdr]

at a certian point, a threshold of efficiency, other sources of eneryg become cheaper than oil. that number, i believe, is around 65$ a barrell currently- the price which would meke oil shale conversion profitable (which unlocks an unreal ammount of oil) ethanol production becomes cost-effictive at about 3$/gallon in the U.S.

basicly, market forces will not allow the proice of oil to rise above a certian point, in today's dollars, i think that point is about 65$/barrell

[Bjorn]

Now i can't say if your figures for when alternative sources of fuel are cost effective. I would however not be suprised if that price is lower than (the equivalent of) $100/Barrel. For the sake of argument i can accept your $65/figure as a correct "rough figure".

Even so i think that even if the "equilibrium price" of oil is $65/barrel these alternative fuels have such a high initial investment and also it takes so much time to build up an industry and an infrastructure of such a scale as to have a large impact on the huge amounts of oil beeing used.

Hence i think prices will continue to rise and rather sharply at that for several years after people start to seriously invest in alternative fuels and probaly easily breach $100/Barrel. After this prices will of course start to drop and come back down to $65/Barrel and probably lower as the technologies for these alternative fuels improve and their production becomes more economical.

I certanly don't think this is an unsolvable problem but I do think it will cause at least a minor economic crisis and I also think it is pretty sound investment advice to invest in varius tech companies dealing with things like oil shale, hybrid engines, etc, etc right about now.

/Bjorn

[Il_Mostro]

You need to understand Extraction rates and Energy Return on Energy Input.

Ethanol can very likely not be produced on any sort of meaningful scale. We kinda need the farm-land to grow food. And ethanol has very poor EREOI, below 1 if you are not careful to look at the full cycle.

And shale... that is the buzz now, but it does not seem likely that we will be able to produce large quantities from it, the current estimates for candian tar sands are 5 million barrels per day. As compared to the 120 mb/d of estimated demand at that point.

Read the Hirsch report, it's interesting.

[wacki]

Here is some relevant info:

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http://www.peakoil.net/uhdsg/weo2004...psalaCode.html