The American Daily - 19/03/08
It seems the rumors that the world has reached ?peak-oil? may not necessarily be right. And it?s a moot point ?gouging? does not really exist.
Recent excursions of crude going over $110 per barrel can be directly related to OPEC. Per Alan Caruba (anxietycenter.com), OPEC is composed primarily of Arab and African oil producers, and control ~77% of the world?s crude. The US owns ~2% of the reserves, but uses 24% of the gas.
America actually imports >12% of its refined oil. It?s almost as if someone has purposely limited America?s access. Regulatory costs have made the construction of any new refinery unfeasible since the 1970?s. The vast majority of ANWR, as well as the US?s continental shelf (estimates of >87 billion barrels oil and >86 BBO respectively/DOE; US Minerals Management Services) cannot be accessed because of congressional fiat.
Add to that, gasoline must be refined into 17 different formulations--or >40 for all grades--to comply with pollution regulations. Introduction of ethanol into blends, additional environmental regulations, worldwide falling value of the dollar, an average $0.30/gallon state tax, and Katrina and Rita, all contribute to increased costs of gasoline. With so many options to buy gasoline, and additional costs involved, gouging simply can?t exist.
The actual cost results in a 7-9% margin for gasoline producers. For comparison, Microsoft has a 24% margin. Total profit is always quoted by sensationalizing media outlets, but gasoline volume is higher than other products.
It?s interesting more and more resources are saying some oil is ?abiotic?. This oil is a renewable resource, and is replenished from the mantle of the earth. Peter Huber and Mark Mills (Wall Street Journal) state that the world?s supplies aren?t diminishing, but it?s just more profitable to tap Middle East supplies. From the 12/06 issue of the Oil and Gas Journal, the top oil producers (Iran, Iraq, Kuwait, Qatar, Saudi Arabia, UAE, and Yemen) from 1980-2005 all increased their stated oil reserves. The table suggests that OPEC?s discovery of new fields replaces almost exactly the quantities produced. Even Angola discovered 38 new fields of more than 100 million barrels each.
Per the US Geological Survey, the Middle East has only between half and a third of the recoverable oil reserves in the world. The fact easily forgotten is the Russians drilling Kola SG-3 in 1970. The deep well reached a record depth of 40,230 feet (Free Energy News; Joe Vialls/ 8/25/04) and hit oil. Since then more than 310 successful super-deep oil wells have gone into production.
In 2003 Russia overtook Saudi Arabia as the world?s biggest single oil producer.
Another 20 wells were drilled in the same way in the White Tiger Field in Vietnam. The theory as to how oil is formed at such enormous depths is found in existing archives with over two hundred Russian papers on the subject. A good starting point is ?The Role of Methane in the Formation of Mineral Fuels? (A.D. Bondar/1967).
If one takes Eugene Island, an oil field 80 miles off the coast of Louisiana, one can see oil replenishment here in the states. Discovered in 1973 producing 15,000 barrels of oil per day, it slowed to 4,000 barrels in 1989. The last estimates of probable reserves spiked from 60 million barrels to 400 million barrels.
Researchers found (using 3-D seismic imaging) oil gushing in from a deep source migrating up through the rock. But an oil analysis shows that its age is geologically different, and both scientists and geologists admit that the oil field is refilling itself.
Alex Jones and Paul Watson have described in detail Russia?s boom after discovering ?abiotic? oil. In general terms, they describe ?peak oil? as a scam to create artificial scarcity and drive prices up.
If true, the existence of self-renewing oil fields shatters the ?peak-oil? myth. They claim when gasoline prices escalate beyond $5.00/gal, the populace will believe an inevitable quick decline in world oil production.
It?s not hard understanding that OPEC is an illegal ?cartel? that can?t be taken to court. If more refineries are built and different resources tapped, oil prices would recede and OPEC would see profits diminish. It?s obvious why the argument for ?peak-oil? is so appealing to OPEC. Ever notice how every time there seems to be an energy crisis, OPEC increases production?
We need to remember several important facts. During the 104th Congress, budget bill HR-2491 (included opening up ANWR to drilling) was vetoed by then-President Clinton. The EIA (Energy
Information administration) says that today there are at least 1.4 trillion existing barrels of oil world wide from proven reserves.
It is obvious one political party in America is playing into OPEC?s hands, restricting additional refinery construction, restricting additional drilling on American holdings, enforcing additional foreign dependence on oil, and wants your dependence.
