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Thursday, August 12, 2004

Rant: Oil and Gas Prices....

All the current hooplah about the "record high" oil prices and the corresponding gas prices has me a trifle annoyed. Nobody ever seems to bother mentioning the terms "inflation" or "present value".

For example, I can't remember hearing anything about how motorists in the US really paid more than they do now for gas through most of the 80s or how, adjusted for inflation, the real record high for oil was set at $60 per barrel, back in 1981. ExxonMobil actually had an interesting publication on this, back in 2000.

Personally I am in favor of high oil prices, and as sick as I am hearing about it, I believe it is vital that the public starts getting concerned, and therby modulate its consumption... The higher the oil prce, the more viable alternative forms of energy become.

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3 Comments:

  • Oskar - speaking of oil... for the short term all the higher prices does is make previously unattractive drilling prospects more financially viable. there are enough discovered but not tapped to keep the engineering/construction groups at full clip for a decade or two if prices stay this high. consider for my project the strike price at funding was 20$/bbl. I'm sure there's pressure to cut corners in such an environment to get the platform out there and producing.

    eventually of course, especially as OLED based solar cells and other recent tech is advanced, you're right, they become more attractive. but i won't believe a change has really been made until there's a big shift between hydrocarbons as fuel (use once) and raw materials (potential to reuse).

    By Anonymous Anonymous, at Sunday, August 15, 2004 2:39:00 AM  

  • Sure, I agree with that. Deep sea drilling, tar-sand exploitation, or even simply extracting that last bit of oil out of Texas holes is now not just feasible, but profitable. But similarly investments in wind power, solar power, bio-diesel, or depolymerization are now also that much more worthwhile.

    Another factor I didn't mention was the currently relatively low dollar value. Internationally, the recent increase in oil prices has been offset some by the weakened dollar, which in turn weakens downward pressures. (Incidentally, the current US dollar value is a mixed bag; depending on the index and the era, the current dollar is either stronger, weaker, or roughly the same as it was. See http://www.gpoaccess.gov/usbudget/fy05/sheets/b110.xls, Sheet 2)

    By Blogger Oskar, at Monday, August 16, 2004 8:01:00 AM  

  • If people (and I) had only known that gas-prices would double within another year, and that oil-prices would (seem to) stabilize well above $60/bbl...

    By Blogger Oskar, at Tuesday, September 06, 2005 5:25:00 PM  

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