Comments on: Time to Push the Saudis on Oil Prices http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/ Wed, 15 Feb 2012 19:42:57 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Larry http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25972 Larry Thu, 20 Mar 2008 20:00:50 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25972 Actually Tom, no we don't. Making marginal reductions in consumption while demand continues to grow strongly in Asia will have negligible effect. The only thing that can help in the short to medium run is to do what the Chinese are doing and produce motor fuels from non-petroleum feedstocks. Unfortunately, with all of the climate mania out there, no investor in their right mind would ever put money into a plant that requires a 30-year payback, and might be forced to shut down in 10, and quite likely would never even get permitted. We're being royally screwed not so much by Saudi royalty, but by all of the NIMBYs and BANANAs out there who resist building anything, regardless of the consequences of inaction. The status quo wins by default. Actually Tom, no we don’t. Making marginal reductions in consumption while demand continues to grow strongly in Asia will have negligible effect. The only thing that can help in the short to medium run is to do what the Chinese are doing and produce motor fuels from non-petroleum feedstocks. Unfortunately, with all of the climate mania out there, no investor in their right mind would ever put money into a plant that requires a 30-year payback, and might be forced to shut down in 10, and quite likely would never even get permitted.

We’re being royally screwed not so much by Saudi royalty, but by all of the NIMBYs and BANANAs out there who resist building anything, regardless of the consequences of inaction. The status quo wins by default.

]]> By: Tom http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25971 Tom Thu, 20 Mar 2008 13:02:36 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25971 We as Americans have the power to control oil prices simply by giving up a tiny bit of our precious freedom. We can do this by not running to Walmart every time we feeled a little bit bored or car pooling once in a while. We could even resort to walking [yes, I said walking] places once in a while instead of driving and improve our health at the same time. Unfortunately it will never happen in our spoiled little corner of the world. We as Americans have the power to control oil prices simply by giving up a tiny bit of our precious freedom. We can do this by not running to Walmart every time we feeled a little bit bored or car pooling once in a while. We could even resort to walking [yes, I said walking] places once in a while instead of driving and improve our health at the same time. Unfortunately it will never happen in our spoiled little corner of the world.

]]> By: Mitch http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25970 Mitch Thu, 20 Mar 2008 10:09:02 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25970 "Opec member the United Arab Emirates is pumping at full tilt at around 2.5 million barrels per day (bpd) of crude and is powerless to bring down record oil prices, the head of the state oil company said. 'Nothing can be done,' Adnoc chief executive Yousef Omair bin Yousef told reporters on the sidelines of an energy event. 'This is the market situation. We are doing our best to induce stability.'" What's this all about then? “Opec member the United Arab Emirates is pumping at full tilt at around 2.5 million barrels per day (bpd) of crude and is powerless to bring down record oil prices, the head of the state oil company said.

‘Nothing can be done,’ Adnoc chief executive Yousef Omair bin Yousef told reporters on the sidelines of an energy event.

‘This is the market situation. We are doing our best to induce stability.’”

What’s this all about then?

]]> By: Mitch http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25969 Mitch Thu, 20 Mar 2008 10:03:35 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25969 Hear, hear Colleen. Why don't these people just glance at E.I.A. and I.E.A. graphs of production since 2005 before they make such daft comments in their articles? Even G.W. publicly said about S.A. "It's difficult to ask someone for something they haven't got". Surely, at these prices, everyone is selling as much as possible? I've never heard of a business cutting back on production because their profits go way up - usually the other way round! Hear, hear Colleen. Why don’t these people just glance at E.I.A. and I.E.A. graphs of production since 2005 before they make such daft comments in their articles? Even G.W. publicly said about S.A. “It’s difficult to ask someone for something they haven’t got”. Surely, at these prices, everyone is selling as much as possible? I’ve never heard of a business cutting back on production because their profits go way up – usually the other way round!

]]> By: colleen http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25968 colleen Thu, 20 Mar 2008 01:50:26 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25968 This is a highly misinformed article. This is a highly misinformed article.

]]> By: Larry http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25967 Larry Wed, 19 Mar 2008 22:38:03 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25967 BB is correct. When the wells were newer, they had more ability to crank up flow and control the market. They probably don't have that ability now, and he's also correct that peak capacity doesn't have a direct correlation with how much is in the ground. Those are two separate issues, though they're both related to the aging of the fields. The important thing that we do know is that they've been poking holes for the past several decades looking for new significant reserves, and haven't found jack. BB is correct. When the wells were newer, they had more ability to crank up flow and control the market. They probably don’t have that ability now, and he’s also correct that peak capacity doesn’t have a direct correlation with how much is in the ground. Those are two separate issues, though they’re both related to the aging of the fields.

The important thing that we do know is that they’ve been poking holes for the past several decades looking for new significant reserves, and haven’t found jack.

]]> By: Bugler http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25966 Bugler Wed, 19 Mar 2008 22:18:19 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25966 Larry, you may well be right about Saudi reserves. I certainly don't trust them on that--or on anything else. Larry, you may well be right about Saudi reserves. I certainly don’t trust them on that–or on anything else.

]]> By: bb http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25965 bb Wed, 19 Mar 2008 21:55:13 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25965 Even though the Saudis may have all those "reserves" in the ground, that doesn't mean they can just start producing more tomorrow. It doesn't work that way. The oil is trapped in rock. Only so much can be pumped or flowed at any given time. And time it takes...to produce reserves. Further, the term Reserves in the oil business doesn't mean that a producer is "holding" back for later. Sure, they might could increase daily output by some incremental measure but only by a small amount. It's not like a dam whereby opening the floodgates increases flow. Most news writers simply don't understand the basic concept of how oil is produced. Even though the Saudis may have all those “reserves” in the ground, that doesn’t mean they can just start producing more tomorrow. It doesn’t work that way. The oil is trapped in rock. Only so much can be pumped or flowed at any given time. And time it takes…to produce reserves. Further, the term Reserves in the oil business doesn’t mean that a producer is “holding” back for later. Sure, they might could increase daily output by some incremental measure but only by a small amount. It’s not like a dam whereby opening the floodgates increases flow. Most news writers simply don’t understand the basic concept of how oil is produced.

]]> By: Larry http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25964 Larry Wed, 19 Mar 2008 21:40:32 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25964 Bugler - exactly my point. While alternatives in the US are captive to global warming politics, the Chinese are busy building coal liquefaction plants - exactly what the Saudis don't want it they have plenty in the ground. It stands to reason that maybe they don't have as much in the ground as we all think they do, or at least have reached a plateau in production capacity. Otherwise, this is both a deviation from past practice, and not very smart in the long run. Bugler – exactly my point. While alternatives in the US are captive to global warming politics, the Chinese are busy building coal liquefaction plants – exactly what the Saudis don’t want it they have plenty in the ground. It stands to reason that maybe they don’t have as much in the ground as we all think they do, or at least have reached a plateau in production capacity. Otherwise, this is both a deviation from past practice, and not very smart in the long run.

]]> By: Bugler http://pjmedia.com/blog/time_to_twist_saudi_arms_on_oi/#comment-25963 Bugler Wed, 19 Mar 2008 20:33:13 +0000 http://dev.pajamasmedia.com/blog/time-to-push-the-saudis-on-oil-prices/#comment-25963 What's to prevent them from whipsawing the price at the optimal moment to undercut U.S. investment in additional capacity and alternative fuels? What’s to prevent them from whipsawing the price at the optimal moment to undercut U.S. investment in additional capacity and alternative fuels?

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