Saudi Arabia cannot pump enough oil to keep a lid on prices

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evnow

evnow

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This is all over the blogosphere.

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".
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Also interesting is that the price of ethanol is sky rocketing, up more than 80 percent in the last two years. This is also responsible for some of the run-up in gas prices...
 
mogur said:
Also interesting is that the price of ethanol is sky rocketing, up more than 80 percent in the last two years. This is also responsible for some of the run-up in gas prices...
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Ethanol price will follow gas price - since oil is an important input for some of the things ethanol depends on (fertilizers, transport etc). That is one of the reasons why ethanol is such a wasteful project.
 
AndyH said:
...And a news report today that our corn inventory is at a long-term low - and blaming it (at least in part) on ethanol production...

http://www.agriculture.com/news/crops/cn-tops-7-on-usda-supply-projection_2-ar14563

The main cause for the supply cut was continued growth in ethanol demand. The USDA increased its projection both for ethanol and corn sweetener.
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I wonder how many dollars we're spending to pay farmers NOT to plant corn. :evil:

Corn supplies at "precarious levels"...peak oil.....yeah, let's all just keep our heads in the sand, shall we? Expect food costs to SOAR in the coming months.
:(
 
Ethanol is a boondoggle that should have been canceled years ago. It is driving up prices for food stocks and gas, causing numerous fuel system problems, is of questionable environmental repute, reduces fuel mileage and power, and exists primarily as a political gimmick to appease the farm belt. And now we have 15% ethanol coming (and they are petitioning for 20%)...

evnow said:
mogur said:
Also interesting is that the price of ethanol is sky rocketing, up more than 80 percent in the last two years. This is also responsible for some of the run-up in gas prices...
Click to expand...
Ethanol price will follow gas price - since oil is an important input for some of the things ethanol depends on (fertilizers, transport etc). That is one of the reasons why ethanol is such a wasteful project.
Click to expand...
 
drees said:
mogur said:
Ethanol subsidies are a boondoggle that should have been canceled years ago.
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Fixed that for ya...
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Yes - but remove the subsidy (and the 15% mandate) - ethanol will die soon. Even biggest backers of ethanol like Khosla are calling for the removal of subsidies.

But guess what - until Iowa is removed as the nation's first caucus, this pandering will continue.
 
evnow said:
Yes - but remove the subsidy (and the 15% mandate) - ethanol will die soon. Even biggest backers of ethanol like Khosla are calling for the removal of subsidies.
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I'd be great if they got rid of all the liquid fuel subsidies. :?
 
drees said:
mogur said:
Corn-based ethanol subsidies are a boondoggle that should have been canceled years ago.
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Fixed that for ya...
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Ethanol subsidies aren't nearly as bad as the fact ethanol is made using food crops. Thou shalt not use food crops for fueling anything other than humans. The only corn-based ethanol on the market should be the kind they store in oak barrels.

I'm actually glad the price of petroleum is set to go up - my only worry is that it will go up too fast. Although I have to wonder if Obama's comment on ending "Big Oil subsidies" has anything to do with this... timing is everything.
=Smidge=
 
1) mideast oil; its been obvious to me that they would never give us accurate info on their supplies and i find it no surprise they are winding down. there can only be so much supply and the volume taken from the area is staggering and cannot go on forever.

2) ethanol is a very sticky subject and i for one, consider a "corn based" diet to be a mistake. HFCS is one major driver of obesity in this country. granted it makes food cheaper but is it really cheaper when leveraged against escalating health care issues that cheap sugar provides us?

the one big problem we have is that convenience foods; high in sugar, salt and fat are much cheaper than whole or natural foods solely because of our ability to have increase corn production 20 fold thru genetic manipulation with chemical seasoning creating a huge oversupply that we were able to create hundreds of food additives.

its funny that ethanol as a fuel is chided since its headlines, but food manufacturers have been using ethanol from corn for years to manufacture some of those corn by product additives, some of which are very energy intense.

corn may seem very different than oil, but the processes to break down corn into the additives is not all that dissimilar than processing oil to make gasoline. in fact; the parallels from the manufacturing process to the detrimental effects of both final products to the US is downright scary
 
Only the starch from corn is used to make ethanol, the rest is left in the distiller's by-products.. this high protein food is fed to animals (or humans in some studies) and has been proven to increase the growth rate (thus lowering cost) of poultry, fish and pigs.. . Nothing really is wasted. Otherwise the starch would be used to make High Fructose Corn Syrup and Coca-Cola.

http://www.admani.com/byproducts/Technical_Info/Corn%20Distillers%20By%20Product.htm

"Starch is removed from corn during the production of alcohol. Since corn is comprised of approximately two-thirds starch, the nutrients remaining in the byproduct, distillers grains, are concentrated three-fold compared to corn grain. Distillers grains typically contain 30-35% crude protein (CP), 10-15% fat (oil), 40-45% neutral detergent fiber (NDF), and 0.8-0.9% phosphorus."
 

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