Hello there, Sean,
>The problem is that oil is not, and never has been, a scarce
>resource. The drop in price should show even the most stubborn
>scarce-resource believer that oil is infinite and in massive supply.
>Oil does not come from the ground. Oil comes from the Human mind.
>Just like all resources are not the bountiful gift of Earth but are
>products of the Human mind. Iron ore is just a rock until Man gave it
Don’t quite share your optimism here. Any hard data to back it up? Of course,
there always will be some oil somewhere, but the real question is
for how much and for how long we could really excavate it? By “for how
much” I mean EROEI, by “for how long” I mean it’s not a viable energy
resource to support world’s current, let alone rising, level of consumption
in long-term scenario (= decades to come).
How about the last 200 years? Oil and Gas is an extremely OLD industry. The reason why it has busts and expansions is because it survives while other industries vanish altogether.
There is no limit on oil. Oil is endless. The reason why is because oil is produced, like everything else is produced, by this thing called ‘technology’. Technology comes from the Human mind. It is the Human mind that is the resource. Oil does not flow from the Earth, it flows from the brilliant minds of the Oil and Gas industry. They are the best paid engineers and scientists in the world for a reason.
Saying that oil comes from the ground is as ridiculous as saying computers come from sand. The material does not create the resource or product. The Human minds create it.
Unless there is a Dark Age or a nuclear war or some other disaster, I do not see how technology would go backwards.
>Oil prices are down because there is too much oil. Just like today,
>the idea of expensive natural gas only belongs to the past, the idea
>of oil being expensive may only belong in the past. Future
>generations may wonder why people thought oil would remain expensive
>and cannot imagine what the fuss was all about.
Not quite my perspective as well. Drop in oil prices and crisis of
2008 is certainly not a coincedence but merely a sign of collapsing
debt bubbles. It went down dramatically in 2008 and would have
dropped more if not for US money printing machine that fixed
nothing, but postponed the process until very recently with the end of
QE3. So no surpises that the process has resumed. With debt bubbles
collapsing I don’t see how demand could be on the same level. And if
demand is down, scissors of falling demand and ramping up
production costs annihilate anything above cheap or super-cheap.
Many things went down in 2008, not just oil.
//As for the whole shale thing. It always seemed like Ponzi scheme to
me and it indeed proved to be excactly that. “Analysts” and “experts”
screamed “Buy! Buy! Invest! Invest!” from every frigging gadget with
a TV remote or Internet connection, competing for “fools capitals”.
The recent drop has already started the process of the shale
bubble colapse, it just needs time until it reaches every
“investor’s” mind (last time in took about half a year, somewhere in
the end of 2008 – early 2009, before rig count went down into
You clearly aren’t familiar with the Oil and Gas industry. There is no ‘bubble’ as you think in traditional financial terms. The shale revolution is a technological one such as the invention of off-shore oil rigs. Shale oil will always be around now. The next Civilization game will likely be having ‘shale oil’ as a technological innovation just as it already has offshore rigs as an innovation.
The Energy Corridor is not unlike Silicon Valley in attracting brilliant minds. But what gets me is that no one wants to mention ‘brilliant minds’ in connection with Oil and Gas. Also, oil and gas is mentioned very differently than other resources. Why doesn’t iron or copper get the emotional response that oil does? Oil is just a commodity after all. Perhaps it is because energy market is the bottom of the pyramid of society. We simply need it for everything. The military needs it to run. The food markets need natural gas to fertile its crops and power its tractors.
When the price of oil rises, it is running out. When the price of oil lowers, it is running out. If the price of oil is steady, it is running out. You guys are insane. It’s not running out because it is generated by minds, not by geology. It is like saying geology created the farms and not the farmer or the ocean creates water trade and not the boat merchants.