# Oil - the new war on the US?



## ShareIt (25 April 2008)

I can't believe it! another pipeline attack in Nigeria.... could this be the new war on the US? hurting the consumers pockets? or is someone behind the scence pulling the strings? 

Just the other day we had the Iranian president spill out "Oil is too cheap at $115"...

Obviously this hurts all consumers, but probably more so the US given the recent credit problems... who knows It seems all a little crazy and wrong!


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## Smurf1976 (25 April 2008)

This sort of thing has been going on for ages. What's changed is that the world no longer has surplus oil production capacity with which to offset supply disruptions.


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## ShareIt (25 April 2008)

so do you think we will ever see oil back below $110? or are they just going to keep bombing those pipelines?


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## Smurf1976 (25 April 2008)

Whether it will go below $110 is anyone's guess. My point is simply that production seems to be running flat out so there is no longer an ability to "set" a price and adjust production to maintain it. Now it's a case of fixed production with price adjusting itself according to how much goes wrong (pipelines blown up etc) and demand.

If you buy 100 litres of petrol tomorrow and just set it on fire, that's 100 litres less that gets used for something else (brought about by price). We're no longer in the situation where it means 100 litres more taken from the ground.


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## Kauri (26 April 2008)

ShareIt said:


> so do you think we will ever see oil back below $110? or are they just going to keep bombing those pipelines?




   Not soon... First the Grangemouth refinery strike, then fresh militant action in Nigeria affecting supply. A skirmish between US and Iranian boats in the Gulf overnight, and now there is news from *Dow Jones* that Iraq insurgents have bombed an oil pipeline S. of Baghdad ... should help underpin oil prices into next week??.

Cheers
...........Kauri


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## Sean K (26 April 2008)

And it's running out, and we have no alternative right now.



> *If you think the oil situation is bad, worse is to come*
> Jad Mouawad
> April 26, 2008
> 
> ...



How did this get centralised?


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## KIWIKARLOS (26 April 2008)

We may not have a replacement for oil yet but there are many technologies in their early stages.

Before we can develop these the world could easily reduce its demand for oil by 
1. Increasing efficiency: We could reduce oil demand for cars by about 25-40% by firstly dumping huge wastefull vehicles then moving to hybrid of fuel efficient small cars
2. Public transport: We need a world wide revolution in public transport the europeans are pretty good so far.

As for replacement technologies I don't think that we will ever find an efficient all liquid replacement for oil. Its just so energy intensive to create a liquid fuel with the same potential energy. I think many cars in the future will be mainly electric with some sort of fuel system to extend its range if needed.
Most people use their cars to do the daily trip to work of 10-50km's them use them less often for long trips. 

I believe in 50 years time everything will be electric its just much more efficient.


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## Aussiejeff (26 April 2008)

Kauri said:


> Not soon... First the Grangemouth refinery strike, then fresh militant action in Nigeria affecting supply. A skirmish between US and Iranian boats in the Gulf overnight, and now there is news from *Dow Jones* that Iraq insurgents have bombed an oil pipeline S. of Baghdad ... should help underpin oil prices into next week??.
> 
> Cheers
> ...........Kauri





Actually, the shutdown of the pipeline feed begins tomorrow (Apr 26th in UK). The strike starts on the Sun 27th (UK) and is planned for two days (finish Mon 28th UK time inclusive) then will take another day (or two?) to ramp up the feed pipeline again which means they won't be back up to speed until about Thu 1st May (our time). So, increasing prices past the US$120 mark would be no surprise next week until at least Thu our time.

http://www.bloomberg.com/apps/news?pid=20602099&sid=a6jDOgijlSG8&refer=energy



PS: Further down the page referred to in the link, commentary suggests other fields will have to shut as well and won't resume production for at least a week after the line re-opens!


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## Kauri (26 April 2008)

Aussiejeff said:


> Actually, the shutdown of the pipeline feed begins tomorrow (Apr 26th in UK). The strike starts on the Sun 27th (UK) and is planned for two days (finish Mon 28th UK time inclusive) then will take another day (or two?) to ramp up the feed pipeline again which means they won't be back up to speed until about Thu 1st May (our time). So, increasing prices past the US$120 mark would be no surprise next week until at least Thu our time.
> 
> http://www.bloomberg.com/apps/news?pid=20602099&sid=a6jDOgijlSG8&refer=energy
> 
> ...




  In fact it seems that the refinery is already down????

http://support.ukgateway.net/news/n...l&template=/news/feeds/story-template-pa.html

  Cheers
............Kauri


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## ShareIt (26 April 2008)

Not a pretty picture at all! I definitely feel sorry for the people undergoing a food crisis mainly started by this oil war... this saying truly sticks 

"the poor get poorer, while the rich get richer" 

and what better way to show the big corporate cats and Nigerian militants sucking money out of the poor people. It's only a matter of time before we have a full scale riot (which is already starting)....my heart goes out to those people


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## Smurf1976 (26 April 2008)

KIWIKARLOS said:


> We may not have a replacement for oil yet but there are many technologies in their early stages.
> 
> Before we can develop these the world could easily reduce its demand for oil by
> 1. Increasing efficiency: We could reduce oil demand for cars by about 25-40% by firstly dumping huge wastefull vehicles then moving to hybrid of fuel efficient small cars
> ...



Totally agreed it can be done eventually. It's the next 20 to 30 years I'm worried about - we don't have the buses, trains, hybrids, batteries, electric cars, wind, solar, hydro, geothermal etc that we're going to be using. For that matter, we don't even have ourselves set up to build them on that scale yet.

Frist we have to accept there's a problem.

Then we need to decide what to do about it.

Then we need to build the factories to build the alternative energy devices.

Then, and only then, we start the 20 year replacement of current road vehicles with something that doesn't need oil.

I don't see all of this happening in less than 30 years at best, even when faced with outright crisis. Even that would require that we had phased out all petrol engine production a decade from now in favour of a workable electric alternative, somthing that seems difficult to imagine given the scale of the task and that it's taken far longer to achieve far lesser transitions in other areas.


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## Mofra (26 April 2008)

KIWIKARLOS said:


> We may not have a replacement for oil yet but there are many technologies in their early stages.
> 
> Before we can develop these the world could easily reduce its demand for oil by
> 1. Increasing efficiency: We could reduce oil demand for cars by about 25-40% by firstly dumping huge wastefull vehicles then moving to hybrid of fuel efficient small cars
> ...



Switching every form of transportation over to electricity wont make _that_ much difference (even if it was possible to revolutionaise the entire developing world quickly, which it isn't) as oil is intrinsinctly linked to food production, and as recent events show food production may struggle to meet demand in the future. This is before we even consider fuinding replacements for the petrochemicals within other areas of manufacturing (ie plastics & componentry, etc)


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## Smurf1976 (26 April 2008)

I would assume that converting "transport" to electricity would include all mobile energy consumption except aviation. So that means electric harvesters etc not just electric cars.

We're going to need rather a lot of electricity to make this work though given that petrol, diesel etc are a larger energy source for consuming devices than grid electricity in most places.


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## Mofra (26 April 2008)

Smurf1976 said:


> I would assume that converting "transport" to electricity would include all mobile energy consumption except aviation. So that means electric harvesters etc not just electric cars.
> 
> We're going to need rather a lot of electricity to make this work though given that petrol, diesel etc are a larger energy source for consuming devices than grid electricity in most places.



It's not just the transportation of goods that impact the food industry - production is inextricably linked to petrochemical fertilisers, so without them some farmlands will suffer plummeting yields, some may stop production altogether. Transport, whilst economically of vitol importance, could some day pale into insignificance when we realise a reasonbable proportion of the world's population may starve due to the energy crisis.


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## haunting (26 April 2008)

May be the war has already started?

The End of the World as You Know It…and the Rise of the New Energy World Order

http://www.tomdispatch.com/post/print/174919/Tomgram%253A%2520%2520Michael%2520Klare%252C%2520Oil%2520Rules%2521

_What this adds up to is simple and sobering: the end of the world as you've known it. In the new, energy-centric world we have all now entered, the price of oil will dominate our lives and power will reside in the hands of those who control its global distribution.

In this new world order, energy will govern our lives in new ways and on a daily basis. It will determine when, and for what purposes, we use our cars; how high (or low) we turn our thermostats; when, where, or even if, we travel; increasingly, what foods we eat (given that the price of producing and distributing many meats and vegetables is profoundly affected by the cost of oil or the allure of growing corn for ethanol); for some of us, where to live; for others, what businesses we engage in; for all of us, when and under what circumstances we go to war or avoid foreign entanglements that could end in war.

This leads to a final observation: The most pressing decision facing the next president and Congress may be how best to accelerate the transition from a fossil-fuel-based energy system to a system based on climate-friendly energy alternatives. _


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## ShareIt (26 April 2008)

Look at what I dug up.... very interesting! 

Almost predicted to a tee so far. Note, it was published at the end of 2007... read the part "MONEY AND THE MARKETS" followed by "USA –IRAN".

In the "MONEY AND THE MARKETS" part, note the volitile times March 7...

http://www.edtamplin.com/articles/predictionss_2008.htm


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## KIWIKARLOS (26 April 2008)

Mofra said:


> It's not just the transportation of goods that impact the food industry - production is inextricably linked to petrochemical fertilisers, so without them some farmlands will suffer plummeting yields, some may stop production altogether. Transport, whilst economically of vitol importance, could some day pale into insignificance when we realise a reasonbable proportion of the world's population may starve due to the energy crisis.




The use of oil for fertiliser is tiny compared to its use as a fuel. We don't have to move all transport to electricity but the more we do the cheaper oil will become and the longer it will last. We have to have oil for plastic and fertiliser but even with better farm management and plastic recycling we could scale back our use of oil for those as well.

We currently have technology to make diesel fuel from coal and your never going to replace all oil based technology, in fact the world must use as much oil as possible while it can because with out oil the world would be a lot worse place. Hunger and standards of living would drop dramatically and we will never ever have any comparable cheap and energy dense fuel untill we get some serious technical advancements.


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## Smurf1976 (26 April 2008)

Nitrogen fertilizers can be made from electricity. It's been done before, it works, but it only makes sense when the source of the electricity is something other than fossil fuels (given the inefficiency of fossil fuel power generation).


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## nioka (26 April 2008)

Smurf1976 said:


> Nitrogen fertilizers can be made from electricity. It's been done before, it works, but it only makes sense when the source of the electricity is something other than fossil fuels (given the inefficiency of fossil fuel power generation).



 I would suggest it would be very expensive. However farmers are cutting down on nitrogen fertilisers by growing more and more nitrogen fixing crops. By growing soya beans between cane crops the nitrogen requirement of the cane is markedly reduced and there is the bonus of a bean crop. Before the advent of a lot of the nitrogen fertilisers farmers grew other bean crops and ploughed them back into the soil. Organic farmers do the same. Vetch  and Lab Lab are nitrogen fixing plants used a lot as nitrogen fixing plants in pastures. Vetch was often grown with a wheat crop in the past and will be used more in the future. We stopped using these systems on some of our farms years ago as fertilisers became cheaply available but started using them again as the prices rose. Most farmers these days are fairly smart businessmen and not like the steriotype yoekel that a lot of city people imagine. They will adapt.


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## JeSSica WaBBit (27 April 2008)

Oil - the new war on the US, well with the military might of the USA there are more strategic ways of hurting a nation other than bare knuckle fisticuffs.

Good tactics by USA's enemies and no doubt it would bring them to their knees quicker and have more impact than any other style of warfare so i think there is some merit to it.

But, at the end of the day i think its fair to say were are pretty much screwed at present and its not beyond the realms of reality that society today as we know it could collapse in the next 30 years.

No need to complicate things, the reality is, oil is running out, we are using more and more of the stuff every year, in about 30-50 years most of it will be gone and talk of replacement fuels at present is just nonsense. 

A crisis is looming and i dont think we are capable of fast tracking our technology quickly enough to keep pace with our demand for energy. Meanwhile, as with anything that there is more supply than demand common sense and logic tell you the price will continue to increase.

We have stuffed up big time. Urban planners forgot that oil is NOT an infinite resource, DOH!!!!!

Cities have been built with endless energy in mind, our travel distances to and from work and general commuting are to long. We transport food and products over huge distance, internationally in many cases.

Our society revolves around oil. As mentioned by others, its not just fuel for cars and aviation and the like but plastics and other products derived from oil. Nearly every single thing produced has an oil component in it somewhere.

Just think about that, nearly every single thing depends on oil and lets just say we have about 50 years or less of the stuff to go. SCREWED big time!!!!

Best to have yourself some land so you can grow your own food, store your own water and do your best to be self sufficient.

Needs a huge rethink and i just dont see us digging ourselves out of the poo this time. Like most things, by the time most people realise what is going on it will be WAY to late, just like global warming.............

But, in the short term, as far as i am concerned oil stocks are where the money will be made. Trade the volatility and do it well and i believe you should be able to do well...............



JW


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## urgalzmine (27 April 2008)

lol funny rabbit 

you make me laugh


If you guys have Smart Investor edition May 2008 10th page talks about oil as a percentage as income. I will just type the whole thing out so this is a direct quote:

" Over the past 25 years the price of petrol may have nearly tripled - the capital city average was 47.38cents per litre in dec 1983 and 138.76cents a litre in feb 2008. 

As a percentage of our income it hasnt behaved so badly. A 60 litre litre tank of petrol costs 8% of average weekly ordinary - time earning in march 1984 fell steadily in 6.6% in march 1994 and 5.9% in march 2004.

It is on the rise again but at 7.5% of average earning, it still hasnt reached its former high. Even if it rises to $1.50 a litre that will represents 8% of weekly earnings.

For age pensioners with cars. a 60 litre tank of petrol costs 39.7% if their average weekly pension in 1984. It still represents more than 30% of their age pension today "


Take this article how you wil,l but according to this atricle petrol probably wont fall.


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## ShareIt (27 April 2008)

very valid points JW.... it looks like we are screwed for now... but the bottom line is that the human race has always adapted to changes and have been doing so for the last thousands of years of good and bad (way before oil came into play)... the sad thing is that we became so dependent on it but like through all years, our human instinct will get through it eventually and it will be another page in the history books


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## Sean K (27 April 2008)

I'm with you there, but a bit scared of the transition. eeeeek!!!


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## JeSSica WaBBit (27 April 2008)

Well, i hope you are right because i dont like thinking about being in the situation i have predicted.

Its a frightening prospect, but lets hope some smart cookie works out a solution pretty quickly. 

Maybe we could clone 'Hawkins' and have 1000 clones working on it in some bunker deep within the earths crust.

Maybe if they can work out how to use the powers of quantum physics we might get over the line.............

Not sure, its going to take a miracle but nothings impossible.

Until i hear otherwise, i'll be long on oil.

JW


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## ShareIt (27 April 2008)

JeSSica WaBBit said:


> Well, i hope you are right because i dont like thinking about being in the situation i have predicted.
> 
> Its a frightening prospect, but lets hope some smart cookie works out a solution pretty quickly.
> 
> ...




There is thousands of years of history written that supports my point that we will recover... whether it happens in our generation is another story.... eitherway, long on oil is the way to go by the looks of it


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## spectrumchaser (27 April 2008)

wicked wabbit
"Best to have yourself some land so you can grow your own food, store your own water and do your best to be self sufficient."

  We tried that in the 60s the best part of it was the 
"free love" !


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## rederob (27 April 2008)

ShareIt said:


> There is thousands of years of history written that supports my point that we will recover... whether it happens in our generation is another story.... eitherway, long on oil is the way to go by the looks of it



Those many years are not too relevant, are they.
Tell me what crude oil was used for 1000 years ago.
Sorry, 500 years ago.
Sorry, 200 years ago.
Sorry, 100 years ago.  Ahh, that's better.
Now tell me what it will be used for in 100 years time.
Sorry, 50 years time.
Sorry, 20 years time.
Sorry, make that 10 years time and then tell me how much you think you will be paying for it.
In the meantime, tell me to the nearest billion how many people rely on oil related products for their present lifestyle.  Then take a stab at how many billion more might like a slice of that lifestyle if they could afford it.
Not too hard I hope.


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## ShareIt (27 April 2008)

rederob said:


> Those many years are not too relevant, are they.
> Tell me what crude oil was used for 1000 years ago.
> Sorry, 500 years ago.
> Sorry, 200 years ago.
> ...




I think you REALLY misunderstood my point. Perhaps read a few posts before the one you replied to. 

I wasn't talking about oil in this respect... I was talking about human instinct and how we adapt to survive current situations. JW made some valid points, but what I said is that I have thousands of years of history to prove that we ALWAYS find ways out of bad situations.

I am almost 110% sure that there were many people saying things like JW and yourself when the black plague was about, or during WWII, September 11, the list can go on for thousands of years... and the bottom line is that human nature has always responsed by adpating to situations... the Oil case will be no different, it might mean we take a step back... but whatever the outcome, we will adapt as history has proven many times


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## Mofra (27 April 2008)

KIWIKARLOS said:


> The use of oil for fertiliser is tiny compared to its use as a fuel. We don't have to move all transport to electricity but the more we do the cheaper oil will become and the longer it will last. We have to have oil for plastic and fertiliser but even with better farm management and plastic recycling we could scale back our use of oil for those as well.
> 
> We currently have technology to make diesel fuel from coal and your never going to replace all oil based technology, in fact the world must use as much oil as possible while it can because with out oil the world would be a lot worse place. Hunger and standards of living would drop dramatically and we will never ever have any comparable cheap and energy dense fuel untill we get some serious technical advancements.



In terms of percentages of uses for crude oil, this is the best I could find:







18% used for non-fuel purposes, when you take into account jet fuel (no reasonable viable alternative on the near horizen) this is 21.4%, a significant proportion that will add upward pressure on oil prices in the medium & long term future. If major shipping has a viable alternative to diesel in the future, it would be gas/jet fuel as per the engines used in most modern warships however this will still swallow some percentage of crude oil production.

As for obtaining oil from coal, it is possible however both thermal & coking coal prices are rising faster than oil, and when you consider 60% of the US electricity energy needs are still obtained from coal, it appears unlikely that diesel obtained from coal will be economically viable anytime soon. When we consider the food crops now being grown to supplement drilled oil via ethanol production instead of actual food for human consumption, the food production figures could develop into a full blown crisis.

Taking into account the petrol engines in the new Chinese & Indian car markets and 2005 being the peak year for oil production I'm not convinced of any real retracement in oil prices in the near future.


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