Monday, November 29, 2010
A FEW FACTOIDS ABOUT OIL
Every so often I just provide a few quick facts you can use at cocktail receptions or over dinner. Here are a few:
1. The International Energy Agency (IEA) declared that Peak Oil will occur in 2035, a quarter century in the future. They say oil should cost $100/barrel in 2015. (The Chicago Mercantile Index has oil at $90/barrel in December of 2015.) What is particularly interesting about this 2035 date is that Wikipedia indicates that the IEA said Peak Oil (for conventional oil) was reached in 2006.
2. M. King Hubbert in 1956 predicted that the U.S. would reach peak oil in a decade. He was right. He also speculated that the world would reach this point between 1995 and 2000. "Expert" prognostications range from "we have already reached Peak Oil" to 2035 and beyond.
2. According to the IEA, China overtook the U.S. last year as the largest energy consumer, and in 2035 will use about twice the amount as the U.S. Doesn't this scare you?
3. Saudi Arabia has the largest petroleum reserve. Canada is #2 with their tar sands. The U.S. imports more oil from Canada than any other country. Two to three times the carbon dioxide is emitted from the use of tar sand oil compared to standard petroleum. This should scare you even more.
4. Gasoline is really cheap in Qatar: less than a buck a gallon. However, the price in the U.S. is also quite low because of the relatively low tax we pay (from the 23September2010 Economist):
If you were wondering how the Mexican tax can be negative, the country subsidizes gasoline prices. What confuses me is that the price of gasoline today in Mexico is around $3/gallon, around the same as the USA. (Click on state symbol in the "Gasoline Prices" box on the right to get the U.S. average.)
The Dow Jones Industrials fell 40 to 11,052, with world markets also all down. Shanghai dropped an additional 3%. Gold dropped $7/toz to $1366 and oil is at $85/barrel.