Here in the USA the price of gas has been going down more quickly than its rise this summer to record prices, as this chart shows. The trend is similar to that of crude oil .
Are prices in the rest of the world changing similarly?
Does anyone really understand the pricing of oil? You can say "supply and demand" but it's not so clearcut. I doubt there's that much more supply today than six months ago, or less demand.
Sure was a dramatic drop in prices. In the Caribbean island where I live, we use litre. We are now paying the equivalent of US$ 2.00 / gallon...down from almost US$ 5.00, not so long ago.
It is $1.87/gallon here yesterday, down from high of about $4.20 or so earlier this summer. One station in St Louis is still selling at $3.80/gallon because he said he isn't going to lose over $5,000.
Gasoline pricing has so many variables that I am surprised that it tracks with crude so closely. The whole chain from well to pump is fraught with so many perils and 'Murphy' points it is unbelievable. The Madness of Crowds is pretty important - generally, there is enough gas available to keep the average tank half full; like a run on a bank, if the people think there might be a problem with supply and everyone wants to keep their tank full all the time (just in case) - well, that will tax the entire system from refinery to pump. This is what happened during the early 70s gas shortage - nobody wanted to take the chance to run out, so they topped their tank every chance they got, and the stations began limiting how much you could buy at a time, the hours they were open, etc and it cycled out of control (let us not even think about the oil companies and their profits).
I just did a little research and am aghast at what I did not know:
For a little idea of scale - one barrel of oil is the energy equivalent of 25,000 man hours (the output of 12 people for one year). In Saudi Arabia, it cost one or two dollars to get one barrel of oil out of the ground. One barrel of oil produces 19.5 gallons of gasoline - the rest is tar, oils and the stuff of asphalt. In a process called 'cracking'(catalytic and thermal cracking, hydrocracking, catalytic reforming, alkylation, and polymerization), more gasoline can be processed from the barrel (42 US gallons).
Not all oil is the same:
Venezuelan crude produces about 5% gasoline whereas Texas and Arabian oil produces about 30%.
So one dollar invested in getting oil out of the ground returns 25,000 person hours of labor. This is the densest energy content available.
Production of one calorie of food requires 10 calories of petroleum.
Not sure what it means but it does not look good if 'peak oil production' happens anytime soon. If we do not figure out a way to supplement oil, can we even maintain our current lifestyle w/o oil. If we do not remember 1973, we will be doomed to repeat it.
Not sure what it means but it does not look good if 'peak oil production' happens anytime soon. If we do not figure out a way to supplement oil, can we even maintain our current lifestyle w/o oil. If we do not remember 1973, we will be doomed to repeat it.
Production can be increased and decreased - sometimes it's a matter of how much effort companies want to put into it (that is, cost of extraction.) I think " oil reserves " is a figure that's more important. That's a measure of what's believed to be in the oil fields that are being exploited. There's always more out there waiting to be found - under the ocean, deeper down, in places that haven't been investigated. Seems we keep having 50-150 years of oil still in the ground, year after year.
Is the amount of oil underground/undersea a finite quantity? Most likely. Are we likely to exhaust the economically recoverable portion of that in our/our kids/our grandkids/our greatgrandkids' lifetimes? Probably not. Should we be looking for means to reduce oil use, or at least slow the growth of its use? Certainly.
Production can be increased and decreased - sometimes it's a matter of how much effort companies want to put into it (that is, cost of extraction.) I think " oil reserves " is a figure that's more important. That's a measure of what's believed to be in the oil fields that are being exploited. There's always more out there waiting to be found - under the ocean, deeper down, in places that haven't been investigated. Seems we keep having 50-150 years of oil still in the ground, year after year.
Is the amount of oil underground/undersea a finite quantity? Most likely. Are we likely to exhaust the economically recoverable portion of that in our/our kids/our grandkids/our greatgrandkids' lifetimes? Probably not. Should we be looking for means to reduce oil use, or at least slow the growth of its use? Certainly.
But not for Al Bore's reasons.
' Proven Reserves ' are stated by interested parties with reasons to overstate them. These are unaudited claims that increased by 50% from 1985-87 (from your link). What I am talking about is Peak oil production which is different than that; POP is currently 85 million barrels per day. Current world oil consumption is 80.290 million barrels per day. India is ramping up production of a cheap car; China is ramping up production of a cheap car - world consumption is going to outstrip POP very soon. It does not matter how much oil is under the ground if it can not be pumped fast enough to meet supply. Running out of oil is not the problem, getting it out of the ground is the problem and we've got about 90% of the easy stuff under production.
Taking cheap shots at Vice President Gore is not the sign of a strong argument.
To get back on topic, US gas price is now at about the level it was in early 2004. In the last six months prices of many goods rose along with gas, due to production and transportation increases. Anyone notice price drops of thing that went up?
Really, what's the cause of this steep decline of oil price? I've not seen any good explanations yet.
