Since 2005, global oil production has plateaued at 86 million barrels a day, or just over a cubic mile per year. Demand for oil has been increasing at about 2% per year. This is why oil prices are increasing. Beginning about now, global oil production will begin the decent toward terminal depletion. As soon as production dips, gas prices will skyrocket. So these are the good old days of cheap oil. Worse, there are no real alternatives, as documented in this free, updated, and well-documented report: http://www.peakoilassociates.com/POAnalysis.html

Ah William, yes its all the evil speculator's fault. If only life was that simple! We could shoot the futures traders then everything would go back to normal, and we could keep on happily motoring into the sunset!

Unfortunately your argument is seriously ignorant of several key facts.

As cjwirth said above, production has plateaued for 3 years while demand has grown. Yes there's plenty of oil on the market, but less and less is "light sweet crude", but rather its heavy sour oil that most refineries can't handle and as a result, no-one wants.

There's new capacity supposedly about to come online, but the reality is that most of these projects are running into problems with dramatically increased costs and delays due to shortages of personnel and equipment. For instance, Khursinayeh, which you referred to, was supposed to be online in late 2007. Its still offline, despite your assertion to the contrary, and may not be in production until 2009. Brazil's Tupi oil field will not be producing for many years, and at 8 billion barrels (if it has that much) it contains only enough to fuel the world for 4 months. Do you have any idea of the difficulties involved in extracting oil from 5 km under the deep ocean? Even when they come online, its debatable whether the new oil will be enough to make up for declining production in older fields.

You say there's plenty of tankers out there, yet the real statistics show that less and less oil is being exported each year. Oil producers are consuming more themselves. Take a look at today's Wall Street Journal article on the topic:- http://royaldutchshellplc.com/2008/05/29/oil-exporters-are-unable-to-keep-up-with-demand/

Your anti peak-oil ranting does nothing to help anyone. Peak Oil or not, prices _are_ going up, they will _not_ drop down to 2006 levels despite all your wishful thinking, and we need to be taking action to wean ourselves off our oil addiction. Next time you write on oil, please take your blinkers off, do some real research, then ask what you're really trying to achieve before you put pen to paper.

hear hear cjwirth and commuter..
speculators are a nice easy target aren't they?

with an opening sentence like this one:

"A conservative calculation is that at least 60 per cent of today’s $128 per barrel price of crude oil comes from unregulated futures speculation"

I am sure the author is limit short oil futures, since they are so OBVIOUSLY overpriced, easy money eh?

And this quote takes the biscuit!

"That headline, "$200 a barrel!" became the major news story on oil for the next two days. How many gullible lemmings followed behind with their money bets?"

Anyone who bought July crude futures on May 6 got long at between $US118.83 and US$121.98 according to my chart.. even if they took another couple of days, they still got in under US$125.. so all those "gullible lemmings" you talk about are still at least a couple of bucks in the money on their oil, if they didn't take profit above $130 that is, which they had ample opportunity to do.

Maybe William Engdahl is just p*ssed off because he has been short oil for the last few months?!?

"The oil price today, unlike 20 years ago, is determined behind closed doors in the trading rooms of giant financial institutions like Goldman Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Deutsche Bank or UBS."

Probably it has to do more with demand rather than speculation.

The price of oil should go up even further to bring globalisation and the mantras of its benefit to a stop.

cjwirth

you are ignoring the fact that at 128 dollars a barrel there is a certain amount of oil which it is profitable to drill. At higher prices more oil becomes available and demand decreases as people look for other ways to provide the energy needed. There will be no dramatic reduction in oil supplies which will destroy our economies, as predcited by the nuttier peak-oil followers.

Past is no guarantee of the future and the more distant that past the less relevant. Or, to put it another way, the more recent the past the more relevant in speculations about the future.

To wit... "The price of oil climbs relentlessly higher."

Light crude hit us$134 barrel about a week ago.
Presently its at us$126. And looking decidedly precarious. But, ya never know.

Poor timing for this article.

If you think oil climbs relentlessly higher, just wait and see how unforgivingly relentless it can be on the way down (much worse). The ahem, arse, can fall out of it very quickly indeed.

The price manipulation charge is well overdone and has been the rallying cry of various commodity 'bugs' for the last decade, at least.

As for blaming the speculators, well, this article certainly isnt speculative. Not in the slightest.

Finally, if you're so concerned about being tapped out by higher oil prices, then buy some insurance, like BHP or Woodside shares. Look at your super fund and take some active responsibility in the future that you are lamenting in advance.

Otherwise, drive your car, without a seat belt on, and blame the telegraph pole when you're heading for it.

ps. if anything, the price of oil has been systematically manipulated to KEEP THE PRICE LOW.

Why else would the worlds biggest consumer of oil, the USA, put so much effort into manipulating and interfering with the pretend sovereign nations who possess the resource. Do you think that the USA would have any interest in the mid-east, on any level if it werent for its massive oil reserves.

The USA has worked very hard indeed to surpress the oil price, over many decades. Much of its recent 'price increase' has been little more than a re-pricing of the progressively worth less unit of exchange... the US dollar. This has been going on for a while and whilst oil lagged the depreciation of the us$, thus transfering wealth (from producer to consumer) by stealth (theft), its now catching up. Fast.

Arguably, thru its geopolitical machinations, the US has kept the price of oil down. Being as oil is the life blood of economic activity and the US is all about the money, its no surprise. They're apparent prosperity has been subsidised by CHEAP oil.

And we have become addicted to that cheap oil. Out of sheer ignorance, many actually feel entitled to this sort of subsidy to 'our way of life.' Do you realise at what price, to oil producing nations and its people, we enjoy this 'oil subsidy.' The ignorant and entitled folks of the west, who eat with their eyes and think with their fear, are in denial and in for a very rude shock as they adjust their false thinking to REALITY.

If anything, oil is cheap and has been kept down by literally cracking skulls, so that we can live the lie, er l mean, dream.

In real terms, oil is still below its price level of the 70's oil crisis. You think oil at us$200 looks expensive? Bwahahahahahahahaha. It might do now. That price wont look expensive if it hits us$400.

Boy, oh boy, are the deluded masses in for a (c)rude reality check.

Let me see: Right-wing cranks think peak oil is a left-wing conspiracy theory, and left-wing cranks think it's a right-wing conspiracy theory. OMG it must be true!!

Hi Paull, The problem is that production is below demand and always will be...... because production is flat and going down and can't be raised, regardless of the price. See my report and then get back to this discussion.

I think williams point has a value as much as all others raised in the posts. But fundamentally we are in trouble by some shocking lack of foresight and balanced management by our governments/parliament, and when the s### does hit the fan big time, group and persons accountable long shifted on to blame, just a government department/political party by some 'name' left...

I find looking at oil demand/supply as a running tap(supply) with hand controlling tap(demand) to price charged for it, to slot in different factors and identify the major ones...

basic rule of business, supply must follow demand...no point making dark-green slippers in millions if no one wants to buy one...

usually cost of supply plus profit will determine price is primary equation, and going by increasing demands we consumers so far happy/able to pay(tap turned up by producers, making more money is reason we are here isnt it(yep...sacarstic)

the major change over last few years to demand is china and india, dramatic increase in demand, usually tap turned up on flow...but...seems flow close to max-out, fitting with peak-oil theory, upsetting demand/supply causing price to rise, forcing oil saving/alternate fuel demand to rise(and which oil industry wants to prevent as it permanently affect their current monopoly), and...yep, demand/supply again...

so futures industry, sloted in between cash and consumer part of tap/hand/flow/money interaction, value of 'futures industry on oil' has to be close to total 'oil money turnover' to have significant effect, dont think so...though I dont have the exact figures of each...but if that is the case then financial markets are in s### for allowing such unbalanced growth in futures/speculation markets to complete in value with the 'real' markets and which case a big down coming up there as well and we the common people are going to suffer over it...we need to control our governments,eg by becoming/ensuring government employees right/need/accountable to individually act in balance in the job asked to be done as prerequisite job requirement...

Sam

Paul.l - "At higher prices more oil becomes available and demand decreases as people look for other ways to provide the energy needed. There will be no dramatic reduction in oil supplies which will destroy our economies, as predcited by the nuttier peak-oil followers."

Good old cornucopians. "Don't worry. When the oil runs out, those clever scientific boffins will come up with something to replace it!"

Not a chance. There is no energy source that comes even close to oil for providing power, especially for transport. The future will be nuclear and pedestrian.

Everyone here should look at the profits of Exxon-Mobil. They are not going down. They are higher than ever (if i understand the situation correctly).

Also I've said it time and again. If the complete idiots who lied about the wars had not created them and destabilised the region, then there wouldn't have been a reason to speculate on the oil in this way. As far asAustralia goes, that is due to Howard and the entire Liberal cabinet who authorised Australia's involvement in the Iraq and Afghanistan wars and now Rudd with the Afghanistan war, despite Australian's opposition to war at the time being something like 70% (a huge majority). Ignoring the lies about the wars, it was and still is a crime against society and the economy.

CJwirth

you say >>The problem is that production is below demand and always will be...... because production is flat and going down and can't be raised, regardless of the price"

You are not right about that. Firstly whilst production may not be able to be increased, the bottom isn't going to drop out of the market either. Oil that is not economically viable to bring up at $128 a barrel can become highly profitable at $200 a barrel. Also, as with the oil shock of the 70's, as prices go up peoples consumption habit will change. That is a standard factor in every market place.

So we will have more expensive oil. But we will also begin to use less of it. To some extent this will settle the market.

I could not read your report beyond the introduction. As soon as you started predicting mass reduction of our species you lost me. You have to produce evidence to come up with that kind of monumental postulation. You're not even close to being able to do that.

For starters mass transit sytems don't need petrol. They can be run quite effectively on bio diesel or electricity. In fact most modern railways are run using electricity.Most large internal combustion engines are run on diesel type fuels which can be replaced by bio diesel.

I'm afraid that your approach smacks a little too much of the chicken little school of public broadcasting.

Seems like a highly plausible argument to me.

What if it is true?

Perhaps then the enemies of all us are the hedge fund and futures manipulators who can quite literally destroy the livelihoods of millions of people over night via a few strokes on a computer keyboard.

Such activities carried to their hubristic "logical" conclusion could even trigger regional wars---even global wars.

Perhaps these smarties are a greater threat to everyones well-being than the threat of global terrorism.

I would call them terrorists.

At the very least such smarties are "living" proof of what Gandhi called the seven sins.

1. http://www.beezone.com/seven_sins.htm

The essay is published by a highly professional research organisation that researchs the effects of globalisation.

And researchs and assesses the research done by others.
Stuff you wont find discussed or even mentioned in the usual "aint globalisation grand" propaganda outfits.

Perhaps some discussion of how oil futures trading actually works would be helpful.

When a trader buys a futures contract, they're actually making an advance purchase on real, physical barrels of oil. If they went "short" then they're betting that when the contract expires the price of oil will be less. If "long" they think it will go up. When the contract expires they either collect money (if they're right) or pay it if they're wrong. They also need to either on-sell the contract to someone who wants the oil, or take delivery of the oil themselves.

Alternately they can sell the contract before it expires, and usually this will either be profit-taking or cutting losses.

Ok so lets say the evil speculators are all going "long", betting that the price will go up. What happens if the real price of oil, the "spot" price, is way less than their predictions when the contracts expire? The speculators make a loss, and if they keep doing it month after month they lose their shirt.

The futures market tries to predict what the real market is going to do, no more. It can push the price up short term, but not over a year or more of sustained dramatic increases like we've seen. It does not determine the real price, which is the result of fundamentals - supply & demand and production costs. To just blame speculators is a nice juicy conspiracy theory. Hey I'm sure someone out there's robbing us, and they're as good a target as any!

Look at the fundamentals. Study the volumes of oil produced and critically) exported globally, and their trends. Then you may begin to understand what's really driving the prices and where they're likely to go long term.

The conclusion the writer puts forward is troulbling - put your trust into the criminal politicians! The writer naively forgets 'big oil' has put its creatures into government to serve their ends such as Bush, Cheney, Rice etc., The very same creatures who came out of or have very direct ties to the Texas oil/petrol industry. Anyone who would put forard that 'big oil' are somehow passive and do not daily intervene to demand their 'right' would be very naive.
Firstly the high prices at the petrol bowser is a direct reflection of the criminal and illegal invasion into Iraq. Which the public have to pay for through taxes. The US government faciliate the handing over the crude oil stolen from Iraq to the petrol/oil cartels (most based in Texas) then sold back to the public at very high prices at the garage bowser. So far some millions of barrels of crude have disappeared over the years without any paperwork or paper trail. None of it possible without the complicit mass media. I thought this quote from an article on Former White House press secretary Scott McClellan’s new book indicting the Bush administration for employing a “political propaganda campaign” and deception to drag the US into an “unnecessary war” in Iraq insightful.

"More fundamental than political cowardice in this process are social interests. The mass media is owned almost entirely by massive capitalist conglomerates. Viacom Inc.’s CBS, Walt Disney Co.’s ABC, AOL Time Warner’s CNN, General Electric Co.’s NBC and Fox, owned by Rupert Murdoch’s News Corp., did not merely bow to pressure from the White House and the right, they actively promoted the war, which was seen as furthering the profit interests of corporate owners and major shareholders whose holdings also extend to other sectors of the economy, including oil, arms and finance capital."
http://www.wsws.org/articles/2008/may2008/bush-m30.shtml

@ Commuter — excellent summary of futures trading, thanks.

The myths implied in this very dangerous piece:

Myth 1. "China's growth in consumption is not an issue — nor is any growth, because the market will find a way to supply."

Instead of talking about what might happen THIS year with China's growth in consumption, I thought the discussion was meant to be focussing on how the price got this high in the first place. We need to go back and look at consumption growth over the past 4 years where demand has increased but — as others have repeatedly pointed out — supply has stayed flat.

So go back and look at China — and indeed, the world's demand before $60 a barrel, and then map out supply and demand since then.

Indeed, Guy Caruso of the USA DOE is a "late peak optimist" but even he stated on ABC's 4 Corners that there was already a very fine line between supply and demand — and that was 2 years ago.
http://www.abc.net.au/4corners/special_eds/20060710/

Myth 2. "Saudi Arabia can supply all our needs".
Rubbish, the same 4 Corners interviewed the former head of Saudi Aramco's exploration division Sadad al-Husseini. He clearly stated that demand is just too high for even Saudi Arabia to sustain. In an explosive interview with the NYT, he also stated that 15 mbd was probably going to be Saudi Arabia's peak. When asked about 20 mbd (because Guy Caruso seems optimistic that this is where all the oil is going to come from) he simply said "No!"
http://tinyurl.com/5xrppz

Given most experts accept that after 2010 the world will need an extra 1 mbd each year to satisfy growing demand, do the math. We don't have long, and it's time to get past propaganda pieces like this one and start the real debate: how the heck are we going to live without oil?

trade 215 made some good points, yes indeed buy some oil companies for the share portfolio/super and stop whining! For anyone who drives a car, takes plane trips, whatever.. you can hedge your exposure. And since so many of you seem to have such firm views on where it is headed, why not open up a futures or CFD account yourself and take advantage of this rare market insight that you have?!?

As for the conspiracy theorists on commodities, there has been a mob agitating for years about how central bank and investment bank sales have depressed the gold price, they even went as far as filing an anitrust lawsuit:
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=21673

Yawn.

Markets go where they are going to go, speculators get burnt as much as everyone else.. when they get it wrong.

Stickman,
this is not just a matter of making some money on the stock-exchange.

This is about government wasting billions and billions of dollars building a highway infrastructure and town plan based on cheap oil, when we are only a few years away from REALLY seeing the final oil crisis play out across the world economy.

Our very food depends on oil and gas energy to the ratio of about 10 calories of oil and gas to every 1 calorie of food.

There are other ways of growing food, doing transport (electric trains, trams, and trolley buses all running on green energy), and planning our cities — but I just don't know that we have the time.

If you want a real thrill, google "Export Land Model". Think of it as peak exports. The UK went from its maximum exports to being a net oil importer in just 6 years because of the rising domestic demand but shrinking production.

http://en.wikipedia.org/wiki/Export_land_model

Put it this way, if you want to fly on some overseas holiday, do it soon. If you want to hire a 4 wheel drive and do that round-Australia trip... do it soon. If you want to read about the coming Great Depression to make a decision about getting out of the big cities and building your own survivalist bunker, do it soon. I hope we don't go down that path myself, but government neglect of this issue is really starting to BUG me!

Fuel Watch the best thing since sliced bread I have been using fuel watch for six years and I receive a daily e-mail from the West Australian Government that tells me on a Daily basis the cheapest Diesel close to my Suburb. It is often six cents lower than those Companies that always rip you off and I can still use my shopper docket to go to the Service Station of my choice. I save at least ten cents a litre weekly I always fill up on a Saturday because I even get it 2 cent cheaper again when I buy a paper. Website http://fuelwatch.wa.gov.au.
and e-mail fuelwatch@docep.wa.gov.au
I have to admit Brendan Nelson is wrong to suggest 5 cents off a litre is the way to go. If that did happen the Petrol Multi Nationals would only increase the price of fuel by 5 cents which would go into their pockets once again. I purchased 96 dollars of Diesel last Saturday and with my Store card I got 10 cents off a litre do you know what the reduction was on my fuel bill ? A measly $5.50 what a joke 5% of a hundred dollars please please Brendan and Malcolm please refrain from making fools of yourselves it is embarrasing.

Five dollars off a hundred dollars chicken feed I must admit since I have had gas fitted alongside my diesel I do receive far greater distance on a litre of fuel.

The FuelWatch scheme is probably about all you can do from the end-consumer's viewpoint. It maximises transparency, maybe it does so at the cost of getting cheaper discount specials. Its important because of the public's perception that the prices are all a result of gouging by the refiners & petrol station owners. It can't do anything about the base price of fuel though.

The current "debate" over cutting excise or GST is populism at its worst. Its evident that both parties are thinking only of votes at the next election, not of the long term good of the country. They want to be able to claim "vote for us for the cheapest petrol", nevermind that the savings are equivalent to that provided by shopping dockets. They don't care that it will encourage more driving not less, hence more fuel used, more demand and higher prices.

Debating the reasons why prices are high is really a waste of time and energy, which is why I find William's ill-informed rant so irritating. At the risk of repeating myself, what we need to do is start weaning ourselves off our reliance on petrol and cars.

commuter>"Debating the reasons why prices are high is really a waste of time and energy, "

Don't you think OLO in general is a waste of time and energy? That's a ridiculous statement.

Derivative market values at hundreds of trillions of dollars at present.CDO is an example, its value is based on complicated mathematic model, and tied again and again. Oil as a real commodity is hedge against the dollar. Its "limited", political and economic sensitive characteristic abstracts trillions of dollars to speculate on it. Oil has more financial characteristic than its commodity nature nowadays.

Long or short oil ? only a few institutions such as Goldman Sachs will know, because inventory data, Fed reserve(US dollar), even the US president at their side.(real democracy? no such thing !)

One thing is sure that the greed of hedge fund hurts the real economy. Of course, wealth is relocated within different people and different countries.

Fundamental problem of the speculative bubble in oil is that American over consumed and becomes deep debtor to rest of the world ( and US and some billionaires want to rob the rest of the world smartly and peacefully).

Steel,
price is set by supply and demand. The speculators cannot drive it this much further past the fundamentals or they'll lose money.

Please read the posts in the thread you are subscribing to. Demand has increased for 4 years, yet supply has remained flat.

Demand high, supply low = high prices. QED.

The REAL problem is that the domestic consumption of exporting nations can very quickly eclipse their production, so that they suddenly start exporting less and less oil and then "switch" to being importers.

EG: UK... peak exports to net oil importer, 6 years.

If this happens to Saudi Arabia, the export market could halve in a very short time. So not only do we have the fact of peak oil depletion kicking in at maybe 4% per annum, but inequitable distribution of this oil after exporting nations figure out they need to keep that oil at home.

If the world market "shut down" due to this in say a decade, Australia would suddenly find that we had to rely on domestic production, which by then would be about 10% of daily demand.

Australian society may or may not survive such a cataclysmic infrastructure challenge, but one things for sure: the sooner we learn to live without oil, the better.

There is at least one error of fact in Mr Engdahl's piece. The Bakken field has been known of since the 1950s. The 3.65 billion barrel reserve there is an average of several estimates, but the important point is that this oil is in the form of oil shales, which continue to have significant issues in extraction, which is why the oil is still in the ground having been discovered over half a century ago!

Here here Viking!

As the old add says, "Oils ain't oils!"

So what if there is more "oil" in Canada's tar sands than in Saudi Arabia. It may as well be on the moon if we can't get at it at the incredible volumes we need. Demand is eclipsing supply, and we are suffering rubbish articles about "speculators" driving up the price. It makes me cranky.

Knowledgeable friends I know have briefed politicians on this stuff repeatedly. Even I've briefed politicians on this stuff, with quotes from their own Federal Peak Oil enquiry results. Yet still there is no REAL public debate or understanding that we are only a few short years off the final oil crisis. Today's prices and financial wobbles are only the first breeze of an almighty storm that is coming.

Eclipse Now said "Stickman,
this is not just a matter of making some money on the stock-exchange."

erm, well yes, actually, that is what this thread is about. The thread is about whether oil prices are being manipulated higher, not about your own personal worst case doomsday scenario. So if there is manipulation of price, this creates opportunities for TRADERS, to take the advantage of PRICE movements.

You may well be right about peak oil and I agree with your argument for greater awareness of the ramifications of our utter dependence on oil... but that is not what this thread/article is about. If you want to steer it off topic then go ahead (no one else seems to bother trying to keep threads on topic around here) but kindly desist from your condescension for those commenting strictly on the issue of prices and markets

http://www.abc.net.au/worldtoday/content/2008/s2252539.htm

Well this guy, who seems to know what he is talking about, says
that the oil really isn't there, which could well be the case.

Its well known that when OPEC decided on quotas between themselves,
they each boasted about high reserves, to increase their individual
quotas. The thing is, we are addicted to Arab oil and we need
a plan b. The sooner that happens the better.

The Author's view is dangerous.

It is predicated on the belief that new finds are just around every corner. That is pure speculation. Its why the futures prices justifiably are so high.

The piece is dangerous because it effectively protects the Rudd status quo rule of Australia which is maintained significantly by soaring oil tax revenues, but also by GST and Immigration policy. What Rudd can't fathom is that people are angry that he pretends to be their friend, gains enormous power from the above three imposts and abdicates any attempt to improve our lives saying that price rises are out or his control. Rudd is politically the walking dead.

What we should demand of the next federal leader is a stop to immigration, an inquest into its corrupt relationship to federal GST revenues, a GEOTHERMAL power program to wean this nation off fossil fuels and a battery powered car manufacturing program that will wean us off oil whilst reinvigorating local car manufacturing with a view to stong export potential.

Without such leadership this nation will get sucked into PEAKOIL wars along with all the other, first world, humpty dumpty democracies.

Philip Tang... you said:

"Probably it has to do more with demand rather than speculation."

I suggest that 'demand' creates speculation.

There was a rather sick joke going round during one of Africa's famines.

One bloke of "un-named ethno/religious-well known for business acumen" background is travelling on a train in Biafra, suddenly a fly starts whizzing around the head of a starving Biafran also on the train,... he suddenly snatches it and..gulps it down.. soon another fly comes along.. and the bloke of 'un-named etc' beats the Biafran to it..and then, with dollar signs in his eyes says "Anyone want to buy a fly" ?

as I said..'demand' "creates" speculation:)

I guess as long as you're agreeing that higher demand has increased the price, I don't care what you call it, as long as it doesn't diminish the fact that..... higher demand increases the price!

What we appear to have here is what Peak Oil author James Howard Kunstler calls "cognitive dissonance".

http://en.wikipedia.org/wiki/Cognitive_dissonance

By all serious and reasonable geological accounts, western civilisation must start wean off the oil. But rather than accept this, we'll just call it "speculation" to try and divert attention from the ugly facts. "It's those speculators!" No, it's you when you fill up your own tank, when you fly somewhere, and when you.... eat.

Dear Friends, I have just updated my report on Peak Oil, many of the answers about supply and demand and oil prices are here: http://www.peakoilassociates.com/POAnalysis.html

I think speculators have very little impact on oil prices. It is purely a supply and demand story. To read more, check out:

http://www.beyondthemargin.net/2008/06/do-speculators-cause-oil-price.html

Bill Engdahl's showcase of the gargantuan hoax of Peak Oil is a timely reminder the charlatans and spin merchants - Rudd, Garret and Penny Wong are still the enemy from within our midst !

The 2020 blab-fest where a thousand of our presumed ' smartest-and-brightest ' were ensconced at taxpayer's largesse, for a week, was the epitome of self-promotion, egomania, and clap-trap propaganda this Nation has ever been forced to suffer, since Gough's schandenfreude dismissal by his holy annointed sycophantic GG, John the back-stabber, Kerr.

Smarting on the steps of Parliament, circa 1974, Gough petulantly branded him " cur's Kerr " to get even.

Most of the distinguished ' wannabe-mensa ' aspirants were hand picked from Labor's elite. The same decrepit dinosaurs hogging the limelight. Superannuated on Parliamentary pensions, life long Gold Passes, and Commonwealth chauffer driven limo's, they mingled with Ozziewood celebs, Cate Blanchett, Hugh Jakeman, Kathy Freeman etc for mug shots and photo shoots, on the lawns of Lake Burly Griffiths.Have you ever ??

The extravaganza only cost a paltry million bucks - small bickies for the newly reinvented boy wonder. Holy smokes. Considering he spent $ 15M to reconstruct Afghanistan for the Taliban, $ 5 M for the Myanmar debacle, $ 30 M for Toyota in Japan, to build an Eco-hybrid car ? All,off the cuff; without caucus or Cabinet approval ! Meantime, GMH's factory in SA, have sacked 1000 workers, pushing families on to dole queues and welfare. Ordinary Australians are battling escalating fuel, food bills, inflation, defaulting home loans, property repossession etc. Now, we are told narcissus Kevin has employed a personal butler, a fashion stylist, and a trainer ! For sheer vanity there is no precedent.

The latest Financial crisis, i.e sub prime rollout, is essentially the overwhelming greed of Banks, fiscal entrepreneurs,high rollers and co called financial wizards. The derivative-hedging market of make belief finally took a dive - taking tens of thousands of flotsam down the gurgler. Geoff Dixon of Qantas fame readily conceded, the aviation fuel fiasco isn't impacting greatly ( other airlines have since gone bust ) because as CEO,

What a pity that was cut off in mid-stride - it was getting quite entertaining! All it lacked was an accusation that Rudd's government are puppets controlled by the Illuminati :)

he insured Q & Jet star hedged their pricing to pre 70's levels, thus avoiding the $ 128 pb hike ! Didn't stop him from jackingup the price of ticket sales, or surcharging on baggage handling as well as cancellations of 'non core' flights to the Whitsunday's, Bali, Darwin etc.

Some factoids:

. Aust is 80 % self proficient in crude oil, petrol, diesel and LPG. Only 20 % is imported, mainly from Singapore.

. Tapis crude is the key benchmark. Oz's regional market is in the Asian Pacific, NOT the NYMEX at $ 138 a barrel.

. MOPS95 Petrol is the key petrol benchmark.

. Refiner margins are the difference between crude and product prices - both set by the Oil companies i.e Caltex ( Chevron ) Mobil ( Exxon ) Shell and BP.

. Wholesale prices (TGP) ARE DEPENDENT ON AUST TAXES, SHIPPING COSTS, FUEL STANDARDS, EXCISE, WHARFAGE, TERMINAL ,marketing and refinery margins.

. Generally a time lag 1-2 weeks between Singapore prices and TGP's.

. Metropolitan and regional prices vary considerably.

. Other costs include: transport, administration, insurance, service stations, wages, rents,competition and promotional advertising.

. Oil companies set prices across Aust despite emphatic denying this to the ACCC, State Govt watchdogs, and Federal Fuel watch.

. According to Aust Institute of Petroleum, average oil companies profit over the last 10 years is around 1 cent per litre of fuel sold ??

Incidently, Aust six Refineries control production, distribution and demand. Ethanol is a no brainer. Profits, subsidies, market share and Political donations is a closely guarded secret, and non negotiable. Media sources and enquiries are off limits.

And that, is the true picture every time you fill your SUV.

So Jacinta, when did Australian oil production peak, and what are our production volumes today compared to then?

How will our domestic production look in 5 years? How much of our own consumption will we be able to produce then, and how much will we have to import? What will this do to our balance of trade?

What are the trends over the next decade?

They'll be the REAL factoids when you fill up your scooter. (SUV's will probably be illegal except on special allowance for certain industries.)

Ah easy fixed. Just buy one of these!

http://www.teslamotors.com/index.php

Why do we think that hybrids are the future?

I have no doubt that the future of transport is electric — I just think it's about trams, trains, and trolley buses, not our own cars.

The reason? Peak lithium and other rarer metals essential for the batteries we rely on for cars. Until such time as they manufacture renewable cars from renewable materials that are plentiful and abundant, I'm not sure about the future of a 'car for everyone'.

Also... what do those Tesla motors sell for? ;-)

Trams are fine in cities. The good thing about high oil prices,
I think that all sorts of technologies are going to come out of
it all.

The Tesla is 100k$, but given that it accelerates as fast as
most high powered sports cars, its a bargain! The point is,
it just shows what technology can do, electric cars are not
just for little old ladies, as I used to think :)

A Tesla and some solar cells on your house roof, you'd be set
for life, virtually free travel.

There are a couple of interesting, lengthy articles in last week's
AFR, all about electrics. I've asked Graham if he might be able
to post them on OLO, for general debate, as they are highly
informative.

They mention the Baker, made in 1909. The Edison batteries still
work, you just need to change the electrolyte now and then.

So I would not panic about peak lithium just yet, more like buy
some shares in lithium mines now :)

The point is, the Prius is now old technology, so 70 million for
what? Why not go straight for the future? Do away with all that
weight and those many parts, in a hybrid

Those things are great, but oil is not all about transport. Freight, fertilizers, farm machinery, medicines, plastics - all oil dependant in today's world.

I couldn't care less if I had to walk a couple of kilometres to the shops, so long as there was food on the shelves within my price range. So long as there was food on the shelves at all.

If all we had to worry about was what kind of cars we'd drive Peak Oil would still have a huge impact, but at the end of the day it wouldn't be that bad.

Btw Engdahl was warning of Peak Oil until 2007, when he suddenly decided that oil is "abiotic" - that its origins are not fossil-based but rather are generated somehow from magma deep within the earth's crust. He then reasoned that oil fields are constantly being replenished, and therefore cannot "peak". Given this belief he goes on to deduce that any decline in production must be due to political tampering or price fixing.

http://www.engdahl.oilgeopolitics.net/Geopolitics___Eurasia/Peak_Oil___Russia/peak_oil___russia.html

So the plummeting production in huge fields like the North Sea, Cantarell and USA/Alaska must all be a huge conspiracy? If you commit to a way-out theory like abiotic oil then that's the only possible explanation I guess.

*So long as there was food on the shelves at all.*

Well I certainly don't think that this is going to be your
problem, living in Australia. The thing is, food will become
more expensive to produce, without cheap energy. So it will
be third world countries that struggle. We produced quite
alot of food in Australia before oil came along, we could
do it again, just not have the super cheap export surpluses
that we have now.

If commuters switched to electric, that would free up alot
of presently used oil, for industries that depend on it
completely.

We then of course have new resources. In the Eastern States,
coal seam gas is becoming big biz, as they have learnt how
to tap into it, in the last few years.

Its so large that they plan to build a number of major
export plants in Gladstones and flog it to Asia. Australians
are free to tap into that supply for energy if they wish,
and are prepared to pay international prices for it.

Jacinta - ignore the petty slights. For some time I gave up OLO because debates often became too personal, resorting to defamatory rhetoric. Revolving around a few macho's who monopolised the columns with their intimidating cyber bullying.

Your blurb is absolutely correct. The National watchdogs have been compromised - hook, line and sinker. After 52 national inquiries of double-speak, the ACCC, Fuel Watch, and myriad automobile Org's input, fuel continues to rise exponentially.

Current affair's Grimshaw and Anna Coran's nightly features of irate customers volubly complaining appears to have little impact on our defacto Federal Govt.

Fuel Watch is a no brainer. The RACQ web site updates fuel costs currently in Queensland. Isn't it fatuous - weekends, public holidays etc that the Oil cartel notches up a few dollars ? Not surprising, considering they own all the Refineries, most service stations and has beholden Kevin in their proverbial pocket. Clueless, directionless and Rudderless, best describes our vanity prone messiah.

Underpinning the Oil debate, is a more sinister aberration. One time it was fashionable to sell all our assets, even birthright - for a salacious place in the Sun, worthless baubles, trinklets and a much coveted Order of Australia. Legions would gladly sacrifice manhood,reputations and even familial ties to justify a whimsical pie-in-the-sky fantasy.E.g Arnott's biscuits, Dick Smith, Victor mowers etc.

Late 50's, US expertise decided to build Refineries in Kurnell, Altona and Western Australia. They embarked long term on cornering the market ( recovering from WWII ) They had already scored undisputed Exploration rights.
Lobbyist, donations, back-room hand shakes and the prevailing laissez-faire attitude in Canberra ensured there was a wall of silence and mutual connivance.

Fiftyfive years on, little has change. Conoco Philips is the major player, operating Bass Strait, Timor sea, the Gulf Coastline and beyond.Improved US technology, laser guided seismic surveys probe deeper into the Continental shelf. Extraction still poses a problem.

Our pristine Barrier Reef, an iconoclastic National Heritage sanctuary has immense proven potential. As Saudi, OPEC and Venezuelan reserves deplete, and insatiable thirst exacerbates, it too will be up for grabs.

Peak Oil's a myth

and furphy perpetrated by uninformed, panicky wide-eyed journalist. USA is now more dependent on Foreign oil then during the 70's ME crisis, despite stockpiling since the Gulf War. The US Geological Survey are constantly reassessing reserves in Alaska, Artic Wildlife Refuge, Prudhoe Bay, and the Western seaboard. Bakken ( Montana ) reputed to be the largest deposits this century. Estimated 503 billion barrels worth a staggering $ 5.5 trillion.

Where our Taxes go:

The GDP under Howard was 4.6% better off than Rudd's economic management team. $ 283 Billion. In June 08 it's fallen 3.6 %
Inflation 4.2%. CPI is up 4.2% Household debt risen 12 %.
Unemployment rose .8 % with 469,800 on welfare.Of these 73,500 are long term unemployable.Youths 15/19 yrs on New Start & Youth Allowance rose 18.5 % to 57,600, despite 275,390 job advertisements ! The ADF spends $ 15 M on recruitment alone. 1:5 are accepted.
Worst Foreign Debt in history $ 1,039 B. 92% arising from Business ( Subprime fiasco)
Current Account Deficit: In the red for 16 consecutive years at $ 19.5 B or 6.9 % GDP. Annualy $ 70 billion.
For the Eco conscious 51,383 vehicles sold Apr08.Annually 518,873 new cars. Ostensibly, Aust is unpretentiously infatuated with the car, not withstanding Rudd's grandstanding on Kyoto Protocol in Indonesia.Penny Wong, Garret take note.

Our carbon footprint is a charade.

Recent research on Carbon emissions on fossil fuels by CSIRO :

Aust has 0.32% of World's population yet contributes 1.43 % emissions Globally.
Each individual generates 5 tonnes annually. Overall 8 billion tonnes in 2005 compared to 5 tonnes previous years.

Per capita, we are 4.5 times Global avarage, just under the USA.

Bottom line - why worry about light bulbs, solar panels, air-conditioners, when we unabashedly pollute the Planet ?

Dalma a few questions if you will?
1. Which decade did we discover the most oil we ever will?
2. How has the discovery of conventional oil been going since then?
3. What is the ratio of discovery to consumption – are we discovering more than we use, or less? How good or 'bad' is the ratio?
4. How many oil producing countries have already peaked and are in irreversible decline?

Thanks in advance for your honest answers.

Eclipse-now or NEVER ??

Are you being facetious ?

If you don't get the gist of the article - it's manifestly clear you are you of your depth.

Go play in the children's league where you obviously belong.

Ciao

Dalma: "For some time I gave up OLO because debates often became too personal, resorting to defamatory rhetoric".

Dalma again: "Go play in the children's league where you obviously belong."

He asked you some pertinent questions that are related to actual oil production data. You answered with personal insults.

If you believe that the earth will produce abundant oil, now and forever, and that the current price rise is only due to speculators, oil companies and governments on the take, well that's your choice. No doubt you'll still be believing it when oil's at $300 a barrel, service stations run dry and supermarket shelves are empty.

Well, good for you - I hope for your sake you're right, because if you're not and Peak Oil is imminent then you're wasting valuable time in which to transition to a lower energy future.

Dalma — I asked you some honest questions. After protesting about being bullied, you try to bully me?

The answers to all the questions I asked — and more — are in an excellent 12 minute video you can download below.

It's full of condensed information for policy-makers, it's free, and for all you peak-oilers out there, even though it's only 55 megabytes it seems to burn to DVD really well and screens quite clearly on my TV! (Even though it's only 55 megabytes! How did they do that!?) It might even burn to CD well!

Quicktime
http://media.globalpublicmedia.com/RM/2008/06/PeakOilPolicymakers.mov

Realplayer
http://media.globalpublicmedia.com/RM/2008/06/PeakOilPolicymakers.rm

I'm appalled.
Answer me this:
Q1. Is it likely to enlighten or enhance debate ?
Q2. Is this an Oz version of the Inquisition ?
Q3. Are you a luddite Emcee quiz master or just arrogant sexist misogynist ?
Q4. Do you interrogate other contestants ?
Q5. What's it worth ?

N/B I am not an employee of the Oil cartel. Oil production figures are denied even to Aust's govt premier Agencies. The ACCC ( actionless committee of couch conspirators )e.g toothless lemmings..oops tigers. Whether by intent or diabolical manipulation not even I can attest to the varacity of Australian Institute of Petroleum.

US Republican John McCain postulant to the Oval Office as recently as this week urged the Government to release proven deposits of Oil - in the Artic Wildlife refuge, Florida Everglades, and Californian western seaboard. Conservative estimates 21 billion barrels - to alleviate fuel hikes of $ 7.00 at the bowser. Previously $ 3.50 a gallon. Ordinary Americans, like their Aust counterparts are upset ( among other things) over food, petrol, inflation, consumer confidence, defaulting mortgages. Interesting enough, he never mentioned Dick Chaney's Haliburton's underground stockpiles or GWB's generous subsidies to wheat/rice producers to switch to corn to satisy the ethanol and bio-diesel lobby ?

California Governor ( anabolic-steroids Terminator ) Arnold Schwarzenegger (R) another hopeful to the Presidency, vowed capping development of known deposits of Oil on the west coast Continental shelf. Enviornmental degradation, electoral and consumer backlash implicitly decided that.Hollywood's A list, and wealthy residents in Long Beach and Malibu strenuously objected to Oil platforms ruining the majestic skyline, and rightly so.

With an 80 % self sufficiency of crude, gas, oil shale and hybrids until 2050 ( according to Geoscience Aust ) The report " Oil and Gas Resources 2005 " sponsered by Dept Industry Tourism & Resources is the blueprint for future " Peak Oil " advocates. It provides graphs, charts and detailed study validated by University Academia experts and the Oil and Gas Industry.

New discoveries : 15 Onshore and 31 Offshore wild cat wells. Deep water exploration drilling

cont..

drilling (>800m) NW shelf,Bight, Sorell, Gippsland, Duntroon and Otway Basin etc
Ever since the Govt granted the Petrol search subsidy 1957, US, Canadian, Dutch and British consortiums have been in the forefront of systematic undersea exploration. Surprisingly, oil and gas reserves tend to increase over the life of a field. This phenomena is known as ' reserve growth '. A common cause of uncertainty in accurate predictions and forcasting !!

The remainder 20 % from Singapore and elsewhere is the ICING on the cake !

The vast " Sunrise deposits " in the Timor Sea. JPDA ( Joint Pacific Development Area ) is still on the drawing board. Then there's Shale Oil, coal bed methane gas in Gladstone, McKay, Newcastle, Yallorn
etc. The Stuart Basin is still in mothballs.

There is NO cause for panic, much less alarm. By the time the last drop becomes apparent Scientist would have long developed the Hydrogen cell. Sophisticated powered long-life batteries ( NASA) and other compact innovations.

Fossil fuels, internal combustion engines etc will be relegated to the scap heap and become museum relics. Perhaps even the 'scourge' automobile ?

Repeat the mantra : " Peak Oil is a giant hoax, myth and furphy "

Ciao

Well, good luck with that mantra of yours dalma :)

For anyone who wants real information about oil fundamentals there's plenty available on the net. "The end of the petroleum age" on http://www.abc.net.au/7.30 is a pretty good place to start.

Why Dalma, you charmer you, I didn't know you had it in you. Avoided the facts nicely there — no one noticed you sidestepping reality with a character assassination at all. No really, they didn't. We were all taken in by your charm. ;-)

(Blows raspberry).

When you attempt to answer the 4 most important questions of our age, I'll take you a little more seriously and be ready to engage you in an adult conversation. Until then, please grow up. In fact, if you behave like that again I'll simply 'spank' you by reporting it to a moderator. OLO isn't about character attacks but actual arguments and data. You'd fail high school debating with the petty rant above. But I repeat, if you grow up and are ready to discuss the actual production data — which is what this thread is actually about — I'll be here to hold your hand as we stare at the end of the oil age together. ;-)