World Oil Supply

Vic Biorseth, http://www.Thinking-Catholic-Strategic-Center.com

Once again, on another topic of contention, the true picture is most likely to be found on the internet. Or, if in print at all, then buried deep in the newspaper, far from the front page, and not on the broadcast news at all. Again, some of you have privately taken issue with my contentions made on the Eco-Nazism page regarding current gas prices compared to any time period since the invention of the automobile, in constant dollars, and with my (and Julian Simon's) contention that we are unlikely to ever run out of oil. This is the news the SLIMC doesn't want you to know.

I found this today at NewsBusters; here it is.

Geologist Refutes Media Myth: World Has Lots and Lots of Oil
Posted by Noel Sheppard (Opens in a New Window) on October 21, 2006

A common theme in the media the past couple of years has been that the world is running out of oil, and that energy prices will do nothing but head higher for the rest of time. Well, a University of Washington economic geologist issued a statement on Thursday not only refuting such contentions, but also claiming that we will never fully deplete the earth’s supply of black gold:

If you think the world is on the verge of running out of oil or other mineral resources, you've been taken in by the foremost of seven myths about resource geology, according to a University of Washington economic geologist.

"The most common question I get is, 'When are we going to run out of oil.' The correct response is, 'Never,'" said Eric Cheney. "It might be a heck of a lot more expensive than it is now, but there will always be some oil available at a price, perhaps $10 to $100 a gallon."

The press release continued:

Changing economics, technological advances and efforts such as recycling and substitution make the world's mineral resources virtually infinite, said Cheney, a UW professor emeritus of Earth and space sciences. For instance, oil deposits unreachable 40 years ago can be tapped today using improved technology, and oil once too costly to extract from tar sands, organic matter or coal is now worth manufacturing. Though some resources might be costlier now, they still are needed.

Cheney used simple economics to dispel the notion that energy prices are at all-time highs:

It might seem that oil supplies are running low in a time when gasoline has reached $3 a gallon. But Cheney – who has been on the UW faculty since 1964 and has consulted extensively for government and industry – notes that gas prices today, adjusted for inflation, are about what they were in the early 20th century. Today's prices seem inordinately high, he said, because crude oil was at an extremely low price, $10 a barrel, just eight years ago and now fetches around $58 a barrel and has been as high as $78.

Cheney blamed common misconceptions for negatively impacting the number of students entering the field of geology:

As major economies, such as those in China and India, develop and are on the verge of greater demand for mineral resources, he said, it is an opportune time for universities to train a new crop of resource geologists who can understand the challenges and help find solutions. He believes that popular but misguided notions about mineral resources might be hampering students from entering the field.

The professor then listed some of these myths that he would like to dispel:

• Only basic extraction and processing costs affect economic geology. That fails to account for such costs as exploration, transportation, taxes and societal and environmental programs.
• Production always damages the environment. Accidents do happen, Cheney said, but much of the perception is based on problems of the past and don't reflect current reality. "It's inevitable that there are going to be oil spills, just like there are traffic accidents on the freeway," he said. "We hope we can manage them, but nothing is risk free."
• Mineral deposits are excessively profitable. Despite widely reported huge oil company profits in the last year, Cheney notes that as a percentage of company revenues oil profits lag far behind those of some major software and banking companies.
• Transportation costs are trivial. In fact, the retail cost of building materials such as sand and gravel are largely driven by the cost of moving them from one place to another, particularly in crowded urban areas. Moving quarries and pits farther away from where people live only increases those costs.
• Ore deposits are uniform. While a valued ore can be found in a large continuous deposit, often it is mixed with other kinds of minerals and extraction becomes more expensive.
• Resources are randomly distributed and so, if human population encroaches, a mine or quarry should simply be able to relocate.

Cheney concluded by expressing the need for a better educated public when it comes to such issues:

"The point is that we have to have members of the public who are not geologists and who know something about mineral resources. There are going to be some important policy decisions in the next decades, so we need to have some smart voters," he said. "We can start in colleges by dispelling myths in courses for students who are not going to become professional geoscientists."

It appears that Cheney’s pleas are falling on deaf ears. According to Google and LexisNexis searches, with the exception of United Press International, there is little evidence that the media are interested in disseminating the professor’s views. Color me unsurprised.

Of course, it seems better than even money that this would have been front-page news on Friday if Cheney’s statement said that we would run out of oil in less than twenty years. As such, this appears to be another instance when science that doesn't fit into the media's agenda will never be seen by the public. How disgraceful.

Yep. Disgraceful. Noting that we are all called to proper Stewardship of His creation, I submit that the distorter of Truth might be a far greater sinner than any driver of an SUV.

Find the way to Please Him, and live forever.

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Date: Thu Apr 12 2007
Name: Stephen
E-mail: stephen_dees@yahoo.com
Subject: World Oil Supply Comments, Pro or Con

After reviewing the information that was offered in the above. I offer some observations and truisms learned at significant personal expense over the last 25 years. I give them to you for the purpose of mental gestation.

First, unfortunately the oil industry, meaning all participants, save perhaps, socialist Venezuela, have for many years manipulated the panic/fear factor of the market place to allow for greater and greater profits.

As an example of the inappropriate level of consideration which this industry receives one must look no further than Iran and Iraq.

If each country was devoid of oil, without regard to ethics, despite the perceived need to "modernize" those societies, there would be no conflict involving the U.S. armed forces. The propaganda about their involvement in terrorism can be said about any other Muslim country, with equal truth.

The next point is some what more difficult to "sell". The United States Government has for many, many, years back-peddled on advances in alternative energy in deference to the oil industry and to an equal extent the power industry.

A virtually endless stream of nay sayers have been produced to misinform the public and to substantiate the already made decision to not support alternatives in which the major participants would be subjected to serious entrepreneurial competition.

So, the "research" into areas which were inherently simple problems was drawn out, so that "serious" problems could be "resolved". I have watched for 30 years, and each time I saw it I became both angry and sick to my stomach. What a puppet show! After 5 years, during that 30, I tried to do something about it. That was a brand new educational experience.

Over 25 years ago synthesis of hydrogen was an economically achievable goal, from water.

Yes, one of the most abundant commodities on the planet. It needed purification to be used in the synthesis process, but it was available. Today water is obtained from the ocean and sufficiently purified to be used for drinking at extremely modest prices, globally. That is not the problem and was not the problem 30 years ago.

Contrast the cost of desalinization of water with the cost of exploring for oil and drilling and piping it back to shore and the other cost factors mentioned by the author(s) involved in the referenced article.

By its prevalence as a commodity, the development of purification designs and electrolysis and solar electric means of conversion were all but totally dissuaded from being developed. The fact is that the people, not only of the United States, the world have been sold a bill of goods.

The cost of design fabrication and operation of hydrogen is actually on a comparative basis. Total new plant to total new plant comparison, considerably less than oil.

So why has not someone done it. Simple, money.

The money necessary to fabricate, construct, manufacture, operate and transport to market. Even today, because of the close ties between the Petroleum industry, the securities industry and the investment industry the money will not be allowed to be made available.

The world monopoly will not allow the world to slip its head out of the noose.

Become more sinister, look at the cost economically in the military sector of industry in using all that hardware to defend the oil. I come from a family in which many members served in the military. When I think of the deaths, and injuries sustained so that a monopoly might be unjustly and inappropriately maintained, I become homicidal myself.

I know of what I speak. I just spent the last year attempting to do just that, meaning attempting to gather the political power necessary to construct my facilities. The crowning moment was from a state representative who would not even consider a proposal allowing the matter to avoid unnecessary costs in securities areas.

The attitudes Congressionally were, uninterested and unsupportive, to say the least. Further the attitudes within the various states, which would have benefited from the effort, by good paying jobs in the manufacturing sector, engineering jobs and construction jobs were identically uninterested, in fact disruptive.

This attitude from states in locations known nationally to be suffering from great economic stress because of loss of heavy industry jobs.

So the natural response, by a stranger would be that the process which I proposed was uneconomical. "Au contraire" the process which I proposed required less capital dollars to facilitate and less expense dollars to operate and produce a kilogram of hydrogen then to produce a gallon of gasoline!

For those people uninformed the two unit measures are approximately equal in terms of prospective usage and performance. The alternative does not contribute to Global Warming.

In engineering economics jargon my plan required the least Present Worth of Expenditures and also the least annual cost for production and operation. It also provided the better incremental rate of return. Further, as the process was newer, the chances for further cost reductions in production facility repetition were easily predictable.

You see, it is not the better "mouse trap" the governments of the world desire. No it is the concentration of power, and the ability to exercise a stranglehold over society which excites the various body politics. It truly is good to be the king!

I realize it sounds like sour grapes. Allow me to explain the water of the ocean is plentiful, the sun shines for free, and there are plenty of places on the planet where the combination of the two allows for massive quantities of hydrogen to be produced economically and safely.

My plan does not need to go around "looking for my raw stock", like crude oil. My plan does not need power from the grid to do the conversion. My plan uses design components which exist in the world today and are mass producible economically.

Further, as I come to the end of my "rambling and mumbling", there is another problem which should be stated and that is, the world will still need oil. One look at the plastics, drug and textile industry shows are deeply the substance would still be needed.

So what is affected? The supply/demand curve. A decreased demand, a corresponding softening or stabilization of the price, and the potential to use the domestic output to satisfy internal demands. It is called self-sufficiency. All of those conditions, more accurately, the lack of achieving them, are the result of those two faced people in D.C. who have been misled and are misleading the remainder of the population.

I hope you realize, I just could not, anymore, sit and be quiet. I continue with my efforts, I am supported by my knowledge that I am correct.

Date: Thu Apr 12 2007
Name: Vic Biorseth
Subject: To Stephen

Stephen:

First, where I disagree:

1. Our military involvement in Iraq and (potentially) Iran has nothing whatsoever to do with oil. We were being warned about the menace of Sadam and his WMDs as long ago as 1998 by the Presidents Clinton, who were among the many calling for a forcible change of regime there, as shown in the Bush Lied, People Died page and elsewhere. That call was persistent and consistent, from everyone who now claims Bush invented it, right up until he toppled Sadam.

2. I disagree with the notion of any kind of a world monopoly or conspiracy of multiple nations and/or companies that “control” the oil market. If “Big Oil” was anywhere near that powerful, then the price per gallon of gas today would not be the same, in constant dollars, as it was back in the sixties, or fifties, or any decade you can name, since the invention of the automobile. This is pointed out in more detail on the Eco Nazism page. Their profit is high, yes; but their profit margin is considerably lower than just about any other industry around. (Do not count on the SLIMC to report on the expenses of the oil industry.)

Second, where I agree:

Wow.

I always thought hydrogen ought not to be so expensive to make, and couldn’t understand why it wasn’t being made. The internal combustion engine was almost made for it, as I said in the Hydrogen Power page.

I believe that, sooner of later, it’s going to happen, Stephen. Whether it will be done by guys fooling around at home or by some government contract, when it is profitable to produce it, distribute it and sell it, it will replace gasoline. The wind is free, and the sun is free. Windmills and solar panels, of course, are not free. But there has to be a point at which the investment is returned.

You would know more about massive production than I would; but it would seem to me that any nuclear power plant could, with a fraction of its output, create hydrogen for other use. Any big windmill or solar panel project, or hydro-dam, would return its investment (I think) many, many times over its lifetime.

Don’t give up; fight the good fight.

Regards,

Vic

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