March 15, 2005

Go out back and pick up a handfull of oil!

I heard something on the radio a few days ago which grabbed my ear really hard, and it hasn't let go ever since. It seems you can extract oil from shale rock, um, or something like that. I'm no geologist, but if you read this story you'll know what I'm talking about. The guy at the bottom of the story who has the production process down to some pretty nifty science has a 14,000 barrel a day production at $16 a barrel. Thing is, he's got the process patented, and it doesn't sound like he's backed by Shell or Chevron or some other American oil giant. Someone better go buy this guy's idea from him and put some major cash behind it before our gas prices hit more than $2.50 a gallon nation wide. Think about it! Oil for the world would cost $80 a barrel in two years and we'd be sitting pretty with $1 a gallon for gas because our oil would cost around $25 a barrel. More cool stuff if someone would put it to use!


tammo21 said...

I read this too in an econ magazine, don't remember which. The problem is not the refining process, it is actually getting the material to extract the oil from. The whole process of getting the material, checking quality, extracting the oil, and then refining it, costs well over $32 per barrel.

It's currently being done, but not primarily, because ground oil is so much more economical.

The problem with oil prices is not supply, but both demand, and lack of competition in the oil marketplace.

The JimP said...

The problem is supply, but not in the lack of supply... More in where the supply is. We pay a 25-35% premium on light sweet crude because there's the possibility the supply lines in any number of OPEC countries might be hit by some act of terrorism. That fact alone is why oil closed today at $55.05/barrel instead of the possible $32/barrel you speak of in your comment. The problem is only compounded by lack of competition int he marketplace. Think of it this way: If you were the only game in town and everyone is always going to buy your product why would you keep your prices low? Human nature dictates you will raise your prices when competition is removed because you can, not because you have to. If some company, doesn't have to be an oil company, decided to dump a bunch of money into shale and oil production somewhere other than in OPEC countries the competition would drive prices down by virtue of the fact the product can be found for cheaper elsewhere. It's like what happened when Treats burned down and Winkler's jacked their prices up because there wasn't any other grocery store in San Andreas. It was either drive to Jackson to shop or don't shop. People shopped or drove, but when Treats rebuilt Winkler's went out of business. That's why Comcast runs their shop out of that building now instead. Once a different source of energy or a different source of oil is found OPEC will not be able to mandate prices by reducing production anymore. It'd be nice if we maybe put up some more refineries, though... We're just as much to blame here in the US for the high prices as anyone, I guess. With all of our regulations on new refinery construction it's no wonder there haven't been any new refineries built in the past 20 or so years.

JPSLAYER said...

Theres more that what meets the eye on just the price of oil and the price of gas. The E.U. has been itching to get the price of oil changed from dollars($) to Euros for years.
The Socalist in the E.U. would be more than happy to see that come true.
Other than our natonal debt, the act of changing the value of oil from dollars to euros seems to be the only way that the E.U. can compeat with us on an economic scale.

Yes, Shale is EVERYWERE. But rest asured the eco-nuts will find some kind of endangered slime mold that only lives in shale.

The JimP said...

I remember some video game somewhere along the line where you ate slime molds to stay alive!

The EU is having enough trouble getting their countries people to support themselves right now. The weaker dollar in todays global market means countries other than the US want more US products because they're cheaper (trade deficit). If the EU really wants to make changes in the world market they should reconsider the $2/gallon tax (on average) they levy on their own people to use gasoline. This oppressive approach to their internal oil markets makes their demand so miniscule when compared to China and the US their aspirations of changing the trade currency from dollars to euros is pretty much a pipe dream (pardon the word play).

Anonymous said...

Yes, but the growing china market and the expantion of trade market in china (especialy oil) is reason enough for the E.U. to do every thing in their power to insure that the global market value of oil was switched to euros.( Oil for food comes to mind ) With the help of the U.N. I think ( just a theory ) that the French, Russians& the Germans ( the main players in the E.U. were all working with Saddam in bribary and kick back money to bring this about. Its just a theory but think about it.

Saddam was bribeing Officals in the U.N. and others.
It was not just to be able to fund terror, it was to grease the wheels of lifting sanctions on Iraq.
I think that in return, Saddam would have lobbied Opec and used the full backing of the E.U. to intimidate the Opec nations to comply.

As we see now Mr Chavez is causing quite a panic in whith his bluster. we could see $80 a barrell oil within the next year.

Remember a weaker dollar means a stronger euro. These are the means on witch the blood suckers like George Soros make billions.
It is not a verry far strech that the opec nations could deem the US dollar "unstable" and make the switch under that context.
I hope that I am wrong. But on a lighter note, ANWR passed and now let the drilling and the clubbing of baby harp seals begin... haha

The JimP said...

I know the euro is stronger than the dollar, but I can only start to wonder why. The economies of the EU are falling apart at the seams. The average unemployment rate over there is above 7% and in France it's 10%+. That coupled with the fact that it's near impossible to dismiss non-productive or incompetent employees because of the socialist mentality over there it's a wonder anything is strong at all. Our weakened dollar will not last. We've pulled out of our recession and businesses are making profits again. Things will turn back around and the EU will have to stop rattling it's saber for fear of looking foolish; well, that is to say more foolish than they already do. Global income tax my ass!

tammo21 said...

I believe that video games was "jamoriah" on the oldschool mac.


Anonymous said...

Yes Jim I know. But there economist know just like ours that China is an exploding market. It dosent matter if there unemployment rate is sky high. that what socalism is ( communism lite).

The simple fact that Soros and other socalist are betting agenst the dollar and forcing markets to do the same or loose abundle on the currancy market is proof enough to me that this whole thing is a set-up by the french and russians. Why would soros and the like help people like Move Well its simple. he hates this country more over he hates the Christians in this country. He bankrupted the goverment of Milasia and tryed to do the same to the bank of London.

With the monitary clout of this man and others like him its a wonder he has not tried it sooner.

All I can say is with what he has tried, and what he is still doing, by the way of campaign contributions, adds and lobbying efforts. the US government should clime up his butt with an electron microscope ( a real big one ) and find out what his internatonal affilations realy are.

Yesterday at one of these wonderfull Move on . org rallys you had 6 or so of the most powerfull Demoncrats on the hill. That is troubling to me. Especialy Ms. Rodham. I dont that in this day and age that this country could survive 4 let alone 8 years of her as president especially backed by Soros and the nutty pinkos.

(Spine shivers) later JP

Anonymous said...

sorry I dont mean to be anonymous just dont know how to work this crazy thing. JP

The JimP said...

China is too big on their own way of doing things to want to trade in anything except the yuan. The EU and the Soro's of this world can't seem to put together coherent thought enough to be able to get serious people to listen to them. That's why Soros spent almost half a billion to get Kerry elected and it all fell on it's face. I'm not going to start looking at all of their bluster from a dim point of view until they stop spinning their wheels and do something substantial again. Until then I'm just gonna sit back and watch Rome burn, so to speak.

As far as China's economy... I believe with the right policies in place and stronger ties with our fellow super-power their freight-train style entry into the world market will not be as painful as everyone is predicting. This thing with Taiwan would be distressing if something were to come of it, but China's been puffing out it's chest over that for fifty or so years, so until more news comes from it I'm not going to lose any sleep. Besides, Jenny's dad's going back home to China here this month, and he's pretty smart. What do you want to bet he'll have them figured out before he gets back??? heheh