Declining Oil Reserves

Mike Hagen mhagen at olympus.net
Tue Feb 22 12:06:15 EST 2000


Welcome to alt.forestflames.

I hate to come off as being too cynical but this wouldn't be the first
time OPEC has played hardball during a major US election. They may have
a favored candidate who will, upon election, suddenly 'get tough' and
deliver lower prices. They'll have made plenty by then, and will have a
leash on the new Pres. The favored candidate doesn't even have to know
he's been picked. 

Though it smarts every time I fill up, I look forward to the day when
OPEC, the middlemen, the taxing agencies and the makers of gas guzzlers
get so cocky they slip up and make solar, hydrogen and alternatives
feasible. It'll still cost the average Joe, but it may be better for the
long run.

Karl Davies wrote:
> 
> Christopher Erickson wrote:
> 
> > Karl's analysis fails to take into account the existence of "back stop"
> > technologies. In particular, as the price of oil begins to rise, alternative
> > energy sources become economically viable.
> 
> Right, and there are lots of them.
> 
> > For example, I have seen studies
> > that indicate that solar cells become very competitive when the price of oil
> > rises to about $25 per barrel. Thus should the price of oil stay much above
> > $25 per barrel for any substantial period of time, industry and individuals
> > will begin to bring solar on line, thereby forcing the price of oil back
> > down to the $25 range.
> 
> Good point.  Wood energy could do the same.
> 
> > (Of course, this is a long run phenomena. In the
> > short run, the price of oil can rise and has risen substantially above $25.)
> 
> But as soon as people start making investments in solar, wood, etc, the oil
> producers could drop prices back down to $10 per barrel, and keep them there
> just long enough to squash the competition.  They've certainly done this
> before.  What's to stop them from doing it again?  Unless they're now seeing
> competition as being in their best long-term interest...
> 
> > With technological advances, the cost of solar power will fall, hence the
> > price of oil will decline long term.
> 
> Hmmm.  I wonder if the oil producers are in the process of adjusting their
> long-range strategy.  Maybe they're willing to let prices rise enough so that
> solar and some other energy sources become competitive for heating buildings,
> but not not enough so that they become competitive for powering cars, for
> example.  The fact that heating oil prices have gone up a lot more than gasoline
> prices might support this argument.  Or is there some other reason for this?
> 
> KD




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