Saturday, October 01, 2005

Yes children... the oil industry is a fraud. and why peak oil is bunk

Over at Evolution: Take the next step they brought up a story about Coal Gasification. I remember stories from when I was a youngling about the "profit point" of coal gasification.... And this blog article showed me that *I* was real forgetful

Will it be a profitable venture? The estimates that I have seen for the break-even point — the point at which producing fuel this way is more economical than getting it the conventional way — is between $35 and $45 per bbl. for crude oil. As we all know, crude oil has not been as low as $45 per bbl. for some time and is now at about $67 per bbl. I don’t imagine that it will ever again dip that low.

While Oil Shale is still a way from a good profit margin... as you see here coal gasification means money hand over fist.

The US has vast coal reserves and Oil has been over the 35-45 dollar mark for some time now. SO why hasn't the oil industry gotten in to coal gassification? Because we don't live in a capitalist country anymore. Large buisness no longer look for cheaper ways to get buisness done, they instead look at ways they can make the most money quickly. The live fast and die hard approach of modern corperations serves the shareholders best, and serves the officers with their options even better but does not create a long term value to the industry or even to the corperation. They keep taking short profits and not worrying about will their be long term profits to take.

And this should also point out why the crisis outlined by the people who believe in peak oil is bunk. We have large reserves of coal, and since coal gasification is ChEAPER then oil right now not only would a slow down from peak oil not happen, we would have energy costs reduced between coal and oil shale.

The folks in the middle east would be screwed however as their cash cow would be gone... but hardly what the folks who present the peak oil hypothesis say would be a global collapse.

So we have petrol of some form or another for the considerable future

and IF the oil companies were ran by capitalists... It'd be cheaper

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