Oil

dms dmschanoes at earthlink.net
Mon Aug 11 10:07:20 MDT 2003


I don't have formulas or amulets or bibles.

The fact is you didn't answer the concrete elements of my response:
1. Markets do not respond to events 10-30 years down the road.  They can't.
If that were the case there would never be any overproduction, period.
2. Neither the industry, nor its regulators, nor its research arms agree
about the approaching scarcity of oil.
3. Oil went from $10/barrel to $30 a barrel in a year, based on what new
information about scarcity?  The OPEC actions have nothing do with scarcity.
4. No one denies that oil is a finite resource.  The question isn't only the
dimension of that finitude.  The question is how capitalism operates.
5. Proven reserves, based on an economic, that is to say, social formulation
have doubled in the past 30 years.  Most of that increase has been added
through the"drillbit" as improved technology makes the economics practical.
Ergo reserves are not a geological category but an economic one.
6. North Sea oil production peak was extended by 6-7 years with half the oil
still under the sea.  The end of the economic life of the North Sea is a
product of profit, i.e. commodity production, not scarcity.
7. On the contrary comrade, China is virtually unexplored for new oil fields
and encouraging results are now coming in from current activities.  So too
the west of Iraq is undeveloped.
8. I have never argued that there are alternatives to fossil fuels. But I'll
tell you what, the Athabasca tar sands are estimated to hold amounts of oil
equal to some of the largest liquid reserves, and obtaining that oil is a
question of economics, profit, not the 2nd law of thermodynamics.
9.  On the contrary again comrade, I believe I have provided concrete data
about production, fixed investment, reserve estimation, profit, cost to
support my thesis.  You have not provided any information to refute the
validity of that data.  You have provided speculations that upon close
examination (i.e. OPEC is pumping "flat out," etc.) don't have any basis in
fact.

best,
dms




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