High oil price

How do you guys think the oil price will go?

Last I checked it was above $57 a barrel.

How high can it go before it causes some very serious problems??

mime said:

How do you guys think the oil price will go?

Last I checked it was above $57 a barrel.

How high can it go before it causes some very serious problems??

Click to expand...

Ouch, 57.26 Currently. I think we are going to see some effects of this on monday.

From what i've read U.S Investment Bankers Goldman Sachs havewarned of a "Super-Spike" in oil prices to more than $100 BARREL ! with a view to prices in 2005 being US$50 and 2006 US$55.

Fat Prophets Andrew GEDDES forecasts US$60 Barrel in 2005

Time to sell the V8 and get into Oil Stocks ?

Plenty of oil to go round: OPEC

From correspondents in Washington

11may05

THE world has at least two million surplus barrels of oil a day and market prices should not be at their current high levels, a top official from the OPEC producers' cartel said today.

Adnan Shihab-Eldin, acting secretary general of the Organisation of Petroleum Exporting Countries, said the fundamentals of supply and demand did not justify an oil price of above $US50 ($64.70) a barrel.

Current global production is running at around 30 million barrels a day, while world demand for OPEC oil is under 28 million barrels a day, the Kuwaiti official told the CNBC network.

"So there's two million barrels right there of excess supply and that will help commercial stocks and others to build," he said.

"I think that the concern about (supply) tightness in the future... this is what is driving prices above 50 or hovering around 50 - we don't think fundamentals justified that."

The main oil contract traded in New York, light sweet crude for delivery in June, was trading 17 cents higher at $US52.20 a barrel in late trade today on fears that global demand may outstrip OPEC's production capacity.

Source :

http://www.theadvertiser.news.com.au/common/story_page/0,5936,15250478%5E1702,00.html

OPEC’s influence is fading, but could rebound next year

Production increase won’t make impact until barrels hit the market

By BRAD FOSS

The Associated Press

WASHINGTON ”” OPEC’s inability to bring down the cost of oil has helped push U.S. gasoline prices higher than $2 a gallon for the past three months.

But don’t jump to any hasty conclusions about the cartel’s influence or intentions in the market. The Organization of Petroleum Exporting Countries could be in a stronger position next year if analysts’ forecasts of a growing supply cushion prove to be correct.

And while that would ease traders’ jitters and likely make oil and gas cheaper, it also might put OPEC in the mood to cut production to prevent prices from falling too far.

OPEC officials ”” who this week said they are considering boosting their output target by 500,000 barrels a day ”” insist they aren’t to blame for the latest surge in oil prices. They say their aim is to ease prices as a way of keeping the global economy from seizing up.

But traders dismissed the latest effort ”” as well as the OPEC agreement June 15 to raise its output target by half a million barrels on July 1 ”” because no new barrels would immediately hit the market, and because it would further deplete OPEC’s already thin supply cushion.

“It’s clear that OPEC has lost control of prices in the near term,” said Yasser Elguindi, senior managing director at Medley Global Advisors in New York.

OPEC officials pin the blame for soaring prices on the world’s limited refining capacity and speculative trading on futures markets. But that’s not to say they’re unhappy ”” despite public pronouncements to the contrary ”” about the huge profits the cartel is reaping.

Analysts said there are a wide range of factors contributing to the 60 percent surge in oil prices in the last year that are beyond OPEC’s control.

“It’s a bit naive to think that it’s up to OPEC to open the taps and flood the market,” said Antoine Halff, director of global energy at Eurasia Group in New York.

And yet, with crude inventories steadily rising, the roughly 30 million barrels per day that OPEC has been pumping cannot be ignored. “Stocks have been rebuilt by quite a bit,” Halff said.

In the United States, crude supplies stand 8 percent higher than year-ago levels, according to the Energy Department, which said this week that “inventories remain well above the upper end of the average range for this time of year.”

Whether the economic and political uncertainty around the globe justifies the level of fear gripping energy markets or not, analysts said the underlying factor ”” the extremely thin supply cushion ”” could begin to dissipate in 2006.

PFC Energy, a Washington-based consultancy, estimates that OPEC’s spare production capacity ”” currently about 1.5 million barrels per day ”” is on pace to rise as high as 2.7 million barrels per day a year from now. Moreover, most of the extra barrels coming from Saudi Arabia, Kuwait and Nigeria will be the light-sweet crudes that refiners prefer for the production of transportation fuel.

This could be enough excess production capacity to ease traders’ jitters and allow prices to begin falling. It is at that point, PFC and others warn, that OPEC might step into its lost-but-not-forgotten role of reining in output to defend prices.

“What we don’t know s what level they want prices to stay at,” Elguindi said, though he emphasized that the days of $25 a barrel as a suitable level are long gone.

Oil was at this price in the 80's and petrol was 20c/litre.

So why $1.20 now?
Tax? thought GST was supposed to axe that.?

In Indonesia its 40c/litre.
Britain $2.20/litre

"Oil was at this price in the 80's"

no it wasnt.

Inflation adjusted, it was $90. It was in the low $30's back then.

Inflation adjusted, $1.20 is not bad.

Oil aint expensive........yet

The problem is their arn't enough refineries for world demand. I heard on the news that all the refineries have been pushed to their production limits and with winter demand in the States coming it's not going to get any better. Plus the huge growth of China is also putting heavy pressure on demand.

Things are looking pretty good for energy but not the rest of the market. But as said before oil is still very cheap. I think $70 a barrel plus the world market will feel it. It probably wont get that high anytime soon though.

mime said:

The problem is their arn't enough refineries for world demand.

Click to expand...

True. But the crude oil supply is also stretched to the limit so if there were more refineries then that would simply shift the bottleneck. Also, most of the easy prospects for more crude production are heavy sour crude (thick black oil high in sulphur) which most refineries can't process.

So it's rather hard to increase the supply of refined products over the coming years.

I just heard an opinion that the high price is because of companys pushing up the price for profit by creating panic about supplys saying things lke $100 a barrel.

Now I'm not sure what to think. Sell or hold.

money tree said:

"Oil was at this price in the 80's"

no it wasnt.

It was in the low $30's back then.

Oil aint expensive........yet

Click to expand...

Well seems this chart is wrong then.Should have been more specific
Mid 80s
Now even then at $60/ barrel why wasnt it $120/ litre? in 85

tech/a said:

Well seems this chart is wrong then.Should have been more specific
Mid 80s
Now even then at $60/ barrel why wasnt it $120/ litre? in 85

Click to expand...

Because that chart's in 2004 Dollars rather than nominal price. The actual price peaked around US$40.

Also the refining margins were a great deal lower back then. There was a surplus of refining capacity which ultimately resulted from the abrupt trend change in oil demand growth in 1979. Quite a bit of refining capacity was still under construction worldwide and yet demand started to fall. By 1985 both crude supply capacity and refining capacity were in surplus, hence low margins and crude prices slumped once OPEC realised that yet another production cut would be necessary to support the price of crude.

Actual OPEC production levels were getting pretty low by this stage so individual OPEC countries started the great reserves bidding war. Since OPEC quotas between members are partially based on reserves, claiming greater reserves immediately gave them a bigger slice of the pie. The other OPEC countries responded pretty quickly and now they generally report total discovered rather than remaining recoverable reserves which is, of course, a considerably lower figure which would reduce their quota.

Today there is basically no spare refining capacity IN OPERATION and refining margins are sky high as a result. There is some mothballed refining capacity (including in Adelaide) but try and restart that and no doubt the NIMBY crowd will have quite a bit to say. (The plant in Adelaide is near the Lonsdale Mitsubishi plant (separated by the rail line) and Lonsdale power station (20MW, diesel fired). An industrial area but no doubt the NIMBY's would mutter something about real estate prices as they always do...

As for building new refineries, not much point really when the feedstock just isn't available on sufficient scale.

Various government requirements both in Australia and overseas have acted to restrict international trade in refined products due to differing environmental specifications. These days it's not possible to trade gasoline between several of the US states because they all have different regulations!!! Needless to say this hasn't helped industry efficiency.

Modification of oil refineries to produce these cleaner fuels has also tended to reduce capacity.

And finally, tax.

Thank you.
Smurf---just what I was looking for.

Life After the Oil Crash

Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global "Peak Oil."


"Are We 'Running Out'? I Thought
There Was 40 Years of the Stuff Left"


Oil will not just "run out" because all oil production follows a bell curve. This is true whether we're talking about an individual field, a country, or on the planet as a whole.

Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up.

In practical and considerably oversimplified terms, this means that if 2000 was the year of global Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world’s population in 2020 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil-dependant economies will crumble, and resource wars will explode.

The issue is not one of "running out" so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn't need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.

In a similar sense, an oil-based economy such as ours doesn't have to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10-15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty.

The effects of even a small drop in production can be devastating. For instance, during the 1970s oil shocks, shortfalls in production as small as 5% caused the price of oil to nearly quadruple. The same thing happened in California a few years ago with natural gas: a production drop of less than 5% caused prices to skyrocket by 400%.

Fortunately, previous price shocks were only temporary.

The coming oil shocks won't be so short-lived. They represent the onset of a new, permanent condition. Once the decline gets under way, production will drop (conservatively) by 3% per year, every year.

That estimate comes from numerous sources, not the least of which is Vice President Dick Cheney himself. In a 1999 speech he gave while still CEO of Halliburton, Cheney stated:

By some estimates, there will be an average of two-percent
annual growth in global oil demand over the years ahead,
along with, conservatively, a three-percent natural decline
in production from existing reserves.That means by 2010 we
will need on the order of anadditional 50 million barrels a
day.

Cheney's assesement is supported by the estimates of numerous non-political, retired, and now disinterested scientists, many of whom believe global oil production will peak and go into terminal decline within the next five years.

Some geologists expect 2005 to be the last year of the cheap-oil bonanza, while estimates coming out of the oil industry indicate "a seemingly unbridgeable supply-demand gap opening up after 2007," which will lead to major fuel shortages and increasingly severe blackouts beginning around 2008-2012.

The long-term ramifications of Peak Oil on your way of life are nothing short of mind blowing. As we slide down the downslope slope of the global oil production curve, we may find ourselves slipping into what some scientists are calling a "post-industrial stone age."

Peak Oil is also called "Hubbert's Peak," named for the Shell geologist Dr. Marion King Hubbert. In 1956, Hubbert accurately predicted that US domestic oil production would peak in 1970. He also predicted global production would peak in 1995, which it would have had the politically created oil shocks of the 1970s not delayed the peak for about 10-15 years.


"Big deal. If gas prices get high, I’ll just drive less. Why should I give a damn?"


Because petrochemicals are key components to much more than just the gas in your car. As geologist Dale Allen Pfeiffer points out in his article entitled, "Eating Fossil Fuels," approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US.

The size of this ratio stems from the fact that every step of modern food production is fossil fuel and petrochemical powered:

1. Pesticides are made from oil;

2. Commercial fertilizers are made from ammonia, which is
made from natural gas, which will peak about 10 years
after oil peaks;

3. Farming implements such as tractors and trailers are
constructed and powered using oil;

4. Food storage systems such as refrigerators are
manufactured in oil-powered plants, distributed across
oil-powered transportation networks and usually run on
electricity, which most often comes from natural gas or
coal;

5. In the US, the average piece of food is transported
almost 1,500 miles before it gets to your plate. In
Canada, the average piece of food is transported 5,000
miles from where it is produced to where it is consumed.

In short, people gobble oil like two-legged SUVs.

It's not just transportation and agriculture that are entirely dependent on abundant, cheap oil. Modern medicine, water distribution, and national defense are each entirely powered by oil and petroleum derived chemicals.

In addition to transportation, food, water, and modern medicine, mass quantities of oil are required for all plastics, all computers and all high-tech devices.

Some specific examples may help illustrate the degree to which our technological base is dependent on fossil fuels:

1. The construction of an average car consumes the energy
equivalent of approximately 27-54 barrels, which equates
to 1,100-2,200 gallons, of oil. Ultimately, the
construction of a car will consume an amount of fossil
fuels equivalent to twice the car’s final weight.

2. The production of one gram of microchips consumes 630
grams of fossil fuels. According to the American Chemical
Society, the construction of single 32 megabyte DRAM
chip requires 3.5 pounds of fossil fuels in addition to 70.5
pounds of water.

3. The construction of the average desktop computer
consumes ten times its weight in fossil fuels.

4. The Environmental Literacy Council tells us that due to
the "purity and sophistication of materials (needed for) a
microchip, . . . the energy used in producing nine or ten
computers is enough to produce an automobile."

When considering the role of oil in the production of modern technology, remember that most alternative systems of energy ”” including solar panels/solar-nanotechnology, windmills, hydrogen fuel cells, biodiesel production facilities, nuclear power plants, etc. ”” rely on sophisticated technology.

In fact, all electrical devices make use of silver, copper, and/or platinum, each of which is discovered, extracted, transported, and fashioned using oil-powered machinery. For instance, in his book, The Lean Years: Politics of Scarcity, author Richard J. Barnet writes:

To produce a ton of copper requires 112 million BTU's or the
equivalent of 17.8 barrels of oil. The energy cost component
of aluminum is twenty times higher.

Nuclear energy requires uranium, which is also discovered, extracted, and transported using oil-powered machinery.

Most of the feedstock (soybeans, corn) for biofuels such as biodiesel and ethanol are grown using the high-tech, oil-powered industrial methods of agriculture described above.

In short, the so called "alternatives" to oil are actually "derivatives" of oil. Without an abundant and reliable supply of oil, we have no way of scaling these alternatives to the degree necessary to power the modern world.

"Is the Modern Banking System
Entirely Dependent on Cheap Oil?"


Yes.

The global financial system is entirely dependent on a constantly increasing supply of oil. Since as explained above, all modern economic activity from transportation to food production to manufacturing is dependent on oil supplies, money is really just a symbol for oil. Commentator Robert Wise observes:

It's not physics, but it's true: money equals energy. Real,
liquid wealth represents usable energy. It can be exchanged
for fuel, for work, or for something built by the work of
humans or fuel-powered machines. Real cost reflects the
energy cost of doing something; real value reflects the
energy expended to build something.

Nearly all the work done in the world economy -- all the
manufacturing, construction, and transportation -- is done
with energy derived from fuel. The actual work done by
human muscle power is miniscule by comparison. And, the
lion's share of that fuel comes from oil and natural gas, the
primary sources of the world's wealth.

As Dr. Colin Campbell writes in "The Financial Consequences of Peak Oil," the continued expansion of this wealth is only possible so long as the oil supply continues to expand:

It is becoming evident that the financial and investment
community begins to accept the reality of Peak Oil, which
ends the First Half of the Age of Oil. They accept that banks
created capital during this epoch by lending more than they
had on deposit, being confident that Tomorrow’s Expansion,
fueled by cheap oil-based energy, was adequate collateral
or Today’s Debt.

The decline of oil, the principal driver of economic growth,
undermines the validity of that collateral which in turn
erodes the valuation of most entities quoted on Stock
Exchanges.

What the average laymen often fails to recognize is that the oil driven "economic growth" Dr. Campbell speaks of is absolutely necessary for individuals, businesses, and governments to pay off their debts. Commentator John La Grou writes on page six of his 11 page report on Peak Oil :

. . . debt service requires economic growth in proportion to
the size of the debt. Today's industrialized debt is at its
highest "real dollar" value in human history. Personal debt,
corporate debt, government debt - all are at or near
historical highs, and growing at historically unparalleled
rates. Hence, the level of economic growth required to
sustain such debt is at an all time high.

The connections between the oil supply and the financial system are almost universally overlooked/ignored by persons concerned about Peak Oil despite the fact they are relatively easy to understand. It's simple: when you take out a loan, you do so with the expectation that there will be more money available to you in the future than there is now.

Since money is really just a symbol for oil, you are actually taking out the loan with the expectation - whether you realize it or not - that there will be more oil available to you in the future than there is now.

If this ends up not being the case - if the money/oil supply has actually decreased by the time it comes for you to pay back the loan - you default on your loan.

Consequently, once the oil supply can no longer grow, the global financial system will collapse as individuals, corporations, and governments begin systemically defaulting on their debts.

This financial collapse will, in turn, further devastate our ability to implement alternative systems of energy. Any crash program to develop new sources of energy will require a tremendous amount of capital, which is exactly what will not be available once the global monetary system has collapsed.

Thus, the aftermath of Peak Oil will extend far beyond how much you will pay for gas. If you are focusing solely on the price at the pump, more fuel-efficient forms of transportation, or alternative sources of energy, you aren’t seeing the bigger picture.


"Is the Bush Administration
Aware of This Situation?"


Absolutely.

As mentioned previously, Dick Cheney made the following statement in late 1999:

By some estimates, there will be an average of two-percent
annual growth in global oil demand over the years ahead,
along with, conservatively, a three-percent natural decline
in production from existing reserves. That means by 2010
we will need on the order of an additional 50 million barrels a
day.

To put Cheney’s statement in perspective, remember that the oil producing nations of the world are currently pumping at full capacity but are unable to produce much more than 80 million barrels per day. Cheney’s statement was a tacit admission of the severity and imminence of Peak Oil as the possibility of the world raising its production by such a huge amount is borderline ridiculous.

A report commissioned by Cheney and released in April 2001 was no less disturbing:

The most significant difference between now and a decade
ago is the extraordinarily rapid erosion of spare capacities at
critical segments of energy chains. Today, shortfalls appear
to be endemic. Among the most extraordinary of these
losses of spare capacity is in the oil arena.

Not surprisingly, George W. Bush has echoed Dick Cheney’s sentiments. In May 2001, Bush stated, "What people need to hear loud and clear is that we’re running out of energy in America."

One of George W. Bush's energy advisors, energy investment banker Matthew Simmons, has spoken at length about the impending crisis.

(Note: Although he has advised Bush/Cheney, Simmons considers himself strongly non-partisan on energy issues. His writings are highly regarded amongst the energy and banking community for their grounding in nonpartisan, heavily documented, and virtually infallible research & analysis.)

Simmons' investment bank, Simmons and Company International, is considered the most reputable and reliable energy investment bank in the world.

Given Simmons' background, what he has to say about the situation is truly terrifying. For instance, in an August 2003 interview with From the Wilderness publisher Michael Ruppert, Simmons was asked if it was time for Peak Oil to become part of the public policy debate. He responded:

It is past time. As I have said, the experts and politicians
have no Plan B to fall back on. If energy peaks, particularly
while 5 of the world’s 6.5 billion people have little or no use
of modern energy, it will be a tremendous jolt to our
economic well-being and to our health ”” greater than
anyone could ever imagine.

When asked if there is a solution to the impending natural gas crisis, Simmons responded:

I don’t think there is one. The solution is to pray. Under the
best of circumstances, if all prayers are answered there will
be no crisis for maybe two years. After that it’s a certainty.

In May 2004, Simmons explained that in order for demand to be appropriately controlled, the price of oil would have to reach $182 per barrel. With oil prices at $182 per barrel, gas prices would likely rise to $7.00 per gallon.

Simmons predictions are downright tame compared to what other analysts in the world of investment banking are preparing themselves for. For instance, in April 2005, French investment bank Ixis-CIB warned, "crude oil prices could touch $380 a barrel by 2015."

If you want to ponder just how devastating oil prices in the $200-$400/barrel range will be for the US economy, consider the fact that one of Osama Bin-Laden's primary goals has been to force oil prices into the $200 range.

Oil prices that far north of $100/barrel would almost certainly trigger massive, last-ditch global resource wars as the industrialized nations of the world scramble to grab what little of the black stuff is remaining. This may explain why the director of the Selective Service recently recommended the military draft be expanded to include both genders, ages 18-to-35.

A March 2005 report prepared for the US Department of Energy confirmed dire warnings of the investment banking community. Entitled "The Mitigation of the Peaking of World Oil Production," the report observed:

Without timely mitigation, world supply/demand balance will
be achieved through massive demand destruction
(shortages), accompanied by huge oil price increases, both
of which would create a long period of significant economic
hardship worldwide."

Waiting until world conventional oil production peaks before
initiating crash program mitigation leaves the world with a
significant liquid fuel deficit for two decades or longer."

The report went on to say:

The problems associated with world oil production peaking
will not be temporary, and past 'energy crisis' experience will
provide relatively little guidance. The challenge of oil peaking
deserves immediate, serious attention, if risks are to be fully
understood and mitigation begun on a timely basis.

. . . the world has never faced a problem like this. Without
massive mitigation more than a decade before the fact, the
problem will be pervasive and will not be temporary.
Previous energy transitions were gradual and evolutionary.
Oil peaking will be abrupt and revolutionary.

As one commentator recently observed, the reason our leaders are acting like desperados is because we have a desperate situation on our hands.

If you've been wondering why the Bush administration has been spending money, cutting social programs, and starting wars like there's no tomorrow, now you have your answer: as far as they are concerned, there is no tomorrow.

What is particularly disturbing is, that from a purely Machiavellian standpoint, they are probably correct in their thinking.

Crazy as it sounds I think the long term outlook for the price of oil will be a downward trend.

Many people are selling thier large cars in favour of driving smaller cars that are most certainly cheaper to run and are less to register, and insurer.

The more expensive fuel becomes the less that people will comute, and hence the price will fall.

With the advent of new technologies such as natural gas burning buses, smart cars, hybrid, hydrogen, and solar power cars it will eventually replace the need for oil.

It does sound crazy, Krisbarry. I can't see fuel usage dropping until we invent fusion energy.

Americans have not slowed their vehicle fuel consumption at all so far, the price has got to get higher before peoples attitudes will change.
Just look at all the fuel inefficient 4WD toorak tractors around town.
I read a report ten years ago saying this would happen, now it's happening and people can't mentally grasp it. This will be a major test to our civilsation.

krisbarry said:

Crazy as it sounds I think the long term outlook for the price of oil will be a downward trend.

Many people are selling thier large cars in favour of driving smaller cars that are most certainly cheaper to run and are less to register, and insurer.

The more expensive fuel becomes the less that people will comute, and hence the price will fall.

With the advent of new technologies such as natural gas burning buses, smart cars, hybrid, hydrogen, and solar power cars it will eventually replace the need for oil.

Click to expand...

I must point out the timing problem here. There is in my opinion no realistic prospect of widespread use, to the point that many of us here on ASF will own one, of these alternative fuels being in use within the two or so year timeframe in which they are required.

Natural gas depletes too and is part of the problem, not the solution. Golbal gas discovery peaked in the 1970's and is now falling below consumption just like oil did 25 years ago. Australia plans to export much of its gas with some experts suggesting a production peak around 2030 in this country and at a very similar time globally.

The only long term solution is to get away from fossil fuels altogether. Unfortunately, I do not believe that the public is in any way ready to accept what is to come. Ironically, it is the environment that will most likely prove to be the greatest problem.

Firstly, tourism is an obviously high risk industry with much to lose. It is not simply a question of paying more for fuel but one of a physical constraint. Stop eating, give up commuting or cancel the holiday? I think the likely outcome is fairly obvious.

Welcome to the new reality. Tourism as a "sunset" industry whilst coal mining, hydro-electicity and nuclear energy enjoy boom times. A Green's nightmare for which few are prepared. Whilst renewables are the long term solution, the problem is one of timing and cost. Realistically, we are going to burn more coal, mine more uranium and dam more rivers.

I do not doubt for a moment that attitudes towards energy development will shift once reality hits. In rough terms, replacing oil with electricity via the much hyped hydrogen requires roughly a quadrupling of electricity generation. Now think back to all those power debates and you will start to understand the problem. Get ready for some interesting times! Don't think in terms of another Snowy scheme or a nuclear reactor. Think in terms of another Snowy built every 3 months for the next half century and you are getting closer. Obviously we don't have enough rivers but you get the point.

The environmental politics alone are somewhat mind blowing. And that's to mention nothing of the broader implications.

Smurf, you make some excellent points. We are a society that is reliant upon oil. Even our roads come from a by product of the refining process. We need to move away from oil to a more sustainable energy source. Queensland is currently looking to build a gas fired power station at Chinchilla. It's probably good that it isn't coal fired but it doesn't solve the problem long term either. From what I gather when some experimental technology looks promising, some large company buys the patents and you never hear about it again! It would be a brave Government though that genuinely tried to tackle the issues you raise. In the meantime, the markets will continue to reflect the dilemma.

Just out of interest, I read on the NY times that China had less oil imported than last year (???). Sorry, saw the article this morning and I can't find it now.

DTM said:

Just out of interest, I read on the NY times that China had less oil imported than last year (???). Sorry, saw the article this morning and I can't find it now.

Click to expand...

I haven't seen the figures but if that's the case then it would most likely be due to increased grid electricity generation (mostly coal-fired) displacing the diesel generators which live out the back of practically every Chinese factory.