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Saudi Arabia’s Plan to Extend the Age of Oil

bloomberg.com

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Re: Saudi Arabia’s Plan to Extend the Age of Oil

#111

Post by beat »

emodendroket wrote: post #102
beat wrote: post #83

Earlier quoted context omitted.

Let's say government A implements a carbon tax that increases fossil fuel costs by 25%. Government B chooses not to do so. So energy, the driver of the economy, is 25% cheaper for government B, giving them a competitive advantage. Now government A will be under massive internal pressure to abolish the carbon tax, because they're losing market share to the cheap energy of government B. That's why it won't work. Extern…

The same could be said for international regulations on, say, fishery. We nevertheless have a system in place that, while flawed, is considerably better than just throwing our hands up.

Good point, but it's a little different. It works well for fish with well-defined fisheries in territorial waters, but it doesn't work for open ocean species. Bluefin tuna in particular is an example. They often cross oceans to get to breeding grounds, and that water is totally unregulated. It can be fished without regulation or reprisal.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#112

Post by magicalist »

msandford wrote: post #69
justincormack wrote: post #53

Earlier quoted context omitted.

Well India has very large kerosene subsidies for the poor, which they are managing to cut because prices have fallen. Replacing these with solar subsidies would make a huge difference, and cut fossil fuel use. And e-rickshaws took off quite fast. The UK had new car sales of almost 2.5 million last year, ridiculously high, the highest in Europe, thats almost 10% of households bought a new car/

10% of households bought a new car, and that means that the average lifespan of a car with its FIRST owner must be on average 10 years. Cars might last 20-30 years in the UK as the previous poster pointed out, and longer in the rest of Europe which is already "rich" relative to India. I think you're proving his point exactly.

> 10% of households bought a new car, and that means that the average lifespan of a car with its FIRST owner must be on average 10 years.

Maybe I need more coffee, but wouldn't that only be true if every household only bought new cars?

In any case, we don't have to guess these things. Simple search found that in 2011 the mean car age on UK roads was 7.44 years. Even accounting for the long tail, that's actually pretty good.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#113

Post by codingdave »

danieltillett wrote: post #2

... and why do we have to follow? The sooner the world moves away from oil the better.

Some people do try to move away where practical. But if you really look at everything you do in a day, petroleum products are everywhere. Even if you take electric-powered transportation (or walk/bike), and run your own solar panels for electricity, and grow all your own food using hand tools... you still probably use plastic somewhere in your life.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#114

Post by alexqgb »

beat wrote: post #83
emodendroket wrote: post #81

Earlier quoted context omitted.

It's very rare that any country's government consists entirely of people acting in concert, so it seems strange to make a sweeping statement like that. Besides that, there are also real costs to environmental devastation.

Let's say government A implements a carbon tax that increases fossil fuel costs by 25%. Government B chooses not to do so. So energy, the driver of the economy, is 25% cheaper for government B, giving them a competitive advantage. Now government A will be under massive internal pressure to abolish the carbon tax, because they're losing market share to the cheap energy of government B. That's why it won't work. Extern…

This is an absurdly oversimplified scenario that in no way accounts for the broad set of options available to governments faced with other governments operating like this.

Let's just say your "Screw it, why bother?" approach is pretty far down the list.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#115

Post by mediaman »

codingdave wrote: post #113
danieltillett wrote: post #2

... and why do we have to follow? The sooner the world moves away from oil the better.

Some people do try to move away where practical. But if you really look at everything you do in a day, petroleum products are everywhere. Even if you take electric-powered transportation (or walk/bike), and run your own solar panels for electricity, and grow all your own food using hand tools... you still probably use plastic somewhere in your life.

But plastic isn't really a big deal when it comes to petroleum consumption. There was an amusing quote I read some time ago, in which the author hypothesized that in hundreds of years, people will be shocked that we as a civilization just lit petroleum (or distillates) on fire, or blew it up in engines, given how incredibly useful it is for things like plastics.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#116

Post by pixl97 »

maxerickson wrote: post #73
criley2 wrote: post #44

Earlier quoted context omitted.

Majority of US imports come from Canada. American reliance on Middle Eastern oil is small. America is down to 27% imports: http://www.eia.gov/tools/faqs/faq.cfm?id=32&t=6 America imports roughly three times as much from Canada as it does Saudi Arabia: http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6 America currently has 690 million barrels in strategic reserve (It's silly to assume that Canadian imports would ever b…

Am I doing the arithmetic right, that it is a 200 day reserve? That creates some flexibility, but it isn't that long a period of time.

200 days at current usage. If the supply was cut off, of course, prices would go up and usage would go down. Prices going up would re-open a huge amount of U.S. production that is currently shut-in.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#117

Post by josefresco »

mikeash wrote: post #77
TheHypnotist wrote: post #33

Earlier quoted context omitted.

I think he's quoting (paraphrasing) a Saudi Arabian prince/king.

For those unfamiliar: "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel." From http://www.gluckman.com/DubaiBiz.html .

Thanks for this.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#118

Post by dirtyaura »

67726e wrote: post #106
crdoconnor wrote: post #90

Earlier quoted context omitted.

Government A will more likely see their market operate in a rational way rather than irrational way. The rational way for its market to respond will be to shift to non-carbon forms of energy generation (which are already pretty much cost competitive without subsidies anyhow). The irrational way would simply be to stop producing and exporting goods because coal is more expensive.

The problem with that line of thought is that it's not going to be cheaper overnight. All the while Government A is plugging along on renewables, driving the price down, Government B is going to be eating Government A's lunch.

If the problem (CO2 pollution) is considered serious enough by multiple governments, Government A can join forces with Government C, D, and E and form a trade agreement against B. They can create a trade embargo against B, or have higher customs tax for products from Government B or other kinds of trade sanctions.

Isn't this just international politics 101? EU and US have trade sanctions against Russia at the moment. UN had embargo against South Africa during the apartheid. Environmental issues are no different.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#119

Post by venomsnake »

at-fates-hands wrote: post #54
wcoenen wrote: post #19

Earlier quoted context omitted.

> US is self sufficient so they don't fear supply crunch The USA is a net importer of crude oil and petroleum products. At a level of 5 million barrels per day. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mt...

You can also add in the lack of refineries and the number has decreased steadily since the 1980's: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=8_... It's great we're producing a ton of oil, but if we don't have the capabilities to refine it, I'm not sure what good it does in the long run.

There has been horizontal expansion of refineries. I don't think US have substantially lower capacity than before.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#120

Post by beat »

alexqgb wrote: post #114
beat wrote: post #83

Earlier quoted context omitted.

Let's say government A implements a carbon tax that increases fossil fuel costs by 25%. Government B chooses not to do so. So energy, the driver of the economy, is 25% cheaper for government B, giving them a competitive advantage. Now government A will be under massive internal pressure to abolish the carbon tax, because they're losing market share to the cheap energy of government B. That's why it won't work. Extern…

This is an absurdly oversimplified scenario that in no way accounts for the broad set of options available to governments faced with other governments operating like this. Let's just say your "Screw it, why bother?" approach is pretty far down the list.

Reality vs theory - "Screw it, why bother?" is the real-world top result. Do you see a concerted international effort to regulate away our dependence on fossil fuels? Because right now, the only concerted international effort I see is OPEC dumping oil on the market to underprice new competitors out of existence.

The "options" of which you speak are mostly what wealthy industrial nations impose on poor and underdeveloped countries. International politics and economics is a seriously hardball game. Sure, it could be better, but it won't be.

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