2014 a big year in UK oil and gas

Post by **kenneal - lagger** » 03 Mar 2013, 03:57

$150 dollar oil would crash the economy and then the oil price so the extra drilling would stop. That's partly the reason why we have a looming shortage of oil now. The rising price pre 2007 encouraged a lot of drilling but after the price spike and the crash most of the drilling stopped until the price rose again.

High oil prices cannot last because our economies are built on cheap energy. They would have to be completely restructured, especially the US economy which is more sensitive than any other, because of the amount of long distance road transportation built into the system. The size of the country, the distribution of farming and industry, the distribution of housing, shopping and workplaces mean that most things and people have to be moved by road and oil.

As Hirsch said in his report on peak oil it would take thirty years for the US to restructure away from oil. The US hasn't even started yet and we're looking at flat production in a rising market which is being driven from outside the US. We face a series of price spikes and crashes until one of the crashes finally puts paid to the whole caboodle.

vtsnowedin · Post by **vtsnowedin** » 03 Mar 2013, 05:10

When I first joined a peak oil board back in 2008 $100/ bl oil was doom DOOM!! TSHTF and TEOTWAWKI! Now it's something to grumble about and the new normal. I expect $150 dollar oil will be about the same if it comes in a couple of years instead of a couple of weeks. Economies will adjust in months not years and competition will be vested in who can get by with less oil and still produce a product.
Also the US is not as fragile as many seem to think. We use energy the way we do because it is still very cheap and have many options to move to as prices rise. I'd think the UK is on much shakier ground as you have been dealing with higher prices for quite a while and have less waste in your systems to cut out. The US can switch from trucks that get 14 mpg to cars that get 40 mpg. The UK can't switch from cars that get 45 mpg to ones that get 75 mpg as 75 just isn't doable on a fleet wide basis.

Post by **kenneal - lagger** » 03 Mar 2013, 05:50

vtsnowedin wrote: When I first joined a peak oil board back in 2008 $100/ bl oil was doom DOOM!! TSHTF and TEOTWAWKI! Now it's something to grumble about and the new normal. I expect $150 dollar oil will be about the same if it comes in a couple of years instead of a couple of weeks. Economies will adjust in months not years and competition will be vested in who can get by with less oil and still produce a product.

Economies still haven't adjusted. Haven't you noticed all the problems with the Dollar and the Euro that we're still having?

Also the US is not as fragile as many seem to think. We use energy the way we do because it is still very cheap and have many options to move to as prices rise. I'd think the UK is on much shakier ground as you have been dealing with higher prices for quite a while and have less waste in your systems to cut out. The US can switch from trucks that get 14 mpg to cars that get 40 mpg. The UK can't switch from cars that get 45 mpg to ones that get 75 mpg as 75 just isn't doable on a fleet wide basis.

We have cars that do 75 mpg and ones that do 15mpg. The cost of changing in both countries would be unaffordable at the moment even if people wanted to change. The timespan for most people changing would be years while the timespan for oil price change is months. With high oil prices people lose their jobs and can't afford to put fuel in them let alone change vehicles.

In extremis our government could drop fuel tax and over halve the price of fuel at a stroke and we would be driving around in our 15 to 75mpg cars while you would be driving around in your 5 to 40mpg cars. Who would be better off?

vtsnowedin · Post by **vtsnowedin** » 03 Mar 2013, 13:18

kenneal - lagger wrote:[In extremis our government could drop fuel tax and over halve the price of fuel at a stroke and we would be driving around in our 15 to 75mpg cars while you would be driving around in your 5 to 40mpg cars. Who would be better off?

The Americans will not just keep driving their 15 mpg cars, they will park them or cut their driving in half or more, move closer to work (at least mid week) car pool, ride the bus (yes there are some in the US even in Vermont) and make whatever other adjustments it takes to survive.
Who will be better off? We will probably soon see but with 6.8 million barrels a day of domestic production and all the other vast resources the US still has in hand including the tenacity and skill of the work force I like my chances well enough.

Post by **kenneal - lagger** » 03 Mar 2013, 18:30

The big advantage that you have is land compared to most in Europe but especially to the UK. Being the "glass half full" guy that you obviously are could have its disadvantages when TSHTF as you could be a little unprepared for a worse situation than you have envisaged.

RenewableCandy · Post by **RenewableCandy** » 03 Mar 2013, 22:09

The economic effects, Doom included, are like a flood. We're the better-off people near the top of the hill, and most of us remain oblivious to the wet agony in the valley below. We just don't know personally, most of the people involved in it. We therefore tend to think that things are better than they actually are.

biffvernon · Post by **biffvernon** » 03 Mar 2013, 23:43

As in I notice that Detroit is bankrupt.

http://newyork.newsday.com/news/nation/ ... -1.4739056

vtsnowedin · Post by **vtsnowedin** » 04 Mar 2013, 07:22

kenneal - lagger wrote:The big advantage that you have is land compared to most in Europe but especially to the UK. Being the "glass half full" guy that you obviously are could have its disadvantages when TSHTF as you could be a little unprepared for a worse situation than you have envisaged.

I think I have considered all possible future scenarios including Zombie hoards ,military coups, Liberal majority governments, $20 diesel fuel, US government bankruptcy and economic chaos, 200 foot sea level rise, desertification of Vermont from sustained drought from climate change. A third great great depression, loss of my pension and social security, loss of health care insurance, the collapse of the medical economy, War, of several types with several opponents.
Whichever one shows up I plan on taking it on and surviving as long as possible and leaving my family as well positioned as possible after I'm gone.
What have I missed?

ziggy12345 · Post by **ziggy12345** » 04 Mar 2013, 07:31

Back on topic

Yes there will be a resurgence of north sea oil activity and here is the reason

http://www.telegraph.co.uk/finance/news ... urity.html

That and the fact that Talisman is owned by Sinopec while other marginal field operators are looking at selling to the Chinese who have bottomless pockets when it comes to spending on development

What it wont do is raise prodcution by more than 5%

Cheers

biffvernon · Post by **biffvernon** » 04 Mar 2013, 08:31

vtsnowedin wrote:
What have I missed?

Asteroid?

vtsnowedin · Post by **vtsnowedin** » 04 Mar 2013, 09:19

biffvernon wrote:
vtsnowedin wrote:
What have I missed?
Asteroid?

I'll risk it.

PS_RalphW · Post by **PS_RalphW** » 04 Mar 2013, 10:55

vtsnowedin wrote: The US can switch from trucks that get 14 mpg to cars that get 40 mpg. The UK can't switch from cars that get 45 mpg to ones that get 75 mpg as 75 just isn't doable on a fleet wide basis.

My car did 79mpg (UK gallons) whilst driving 400 miles over the weekend.

Admittedly, I set the cruise control at 61mph.

VW is bringing out a smaller car with a nominal 95mpg rating.

vtsnowedin · Post by **vtsnowedin** » 04 Mar 2013, 15:02

RalphW wrote:
vtsnowedin wrote: The US can switch from trucks that get 14 mpg to cars that get 40 mpg. The UK can't switch from cars that get 45 mpg to ones that get 75 mpg as 75 just isn't doable on a fleet wide basis.
My car did 79mpg (UK gallons) whilst driving 400 miles over the weekend.

Admittedly, I set the cruise control at 61mph.

VW is bringing out a smaller car with a nominal 95mpg rating.

I was wondering who would jump in on that point. Notice I said "on a fleet wide basis" . You certainly can get some cars that are small and light enough to get 95 mpg and move up your fleet average from where it is but many people do need a vehicle larger then a golf cart and you will never get them and their tools into that new VW so I doubt the UK will ever average 75mpg. In stead the total miles driven will drop. Do you fancy having your plumber room in with you for the four days he is working on your house?

JohnB · Post by **JohnB** » 04 Mar 2013, 15:27

vtsnowedin wrote:Do you fancy having your plumber room in with you for the four days he is working on your house?

The plumber could bring his own room!

Maybe what's needed in future are tradesmen who work very close to home, where walking and cycling are practical, and a vehicle used just when necessary.

Where that isn't practical, they could live on the road, moving from one job to the next and living on site, in something like this (but maybe with a bigger trailer), with high fuel consumption, but minimal mileage:

PS_RalphW · Post by **PS_RalphW** » 04 Mar 2013, 15:29

The plumber could drive the mile to my house on monday with his tools, then commute on foot or bike the rest of the week

On the motorways, it is always the small, efficient cars that are driven at a fuel sipping 60mph, and the brick-like 2 ton SUVs that thunder past at 80mph+