Peak Oil | Will the Price of Oil ever come down? | Global Energy Crisis

The Oil price would come down in the short term. It cannot stay up there unless the Corporations want it to stay up there. But in the long run, here ain’t no way we can prevent a huge increase in Crude oil.

The demand for energy worldwide is constantly rising, but the production of oil is in decline. There has not been a significant Oil discovery in the last 4 decades. That is very scary.

In 2005, total worldwide energy consumption was 500 EJ (= 5 x 10²⁰ J) with 86.5% derived from the combustion of fossil fuels. Out of that, about 180 EJ is obtained directly from Oil, 120 EJ from Coal and 110 EJ from Natural Gas. The Industrial world depends very heavily on Fossil fuels.

Source: World Consumption of Primary Energy by Energy Type and Selected Country Groups, 1980-2004

Maybe Shale Oil and Tar sands can be used to ratchet-up production of oil, in effect quadruple the total oil produced. But this is not going to happen, because producing oil this way is very expensive.

Allegedly there are 1.5 to 1.7 trillion barrels of oil in the Colorado Green River valley, in the form of Oil Shale. The last attempt to recover this oil was thwarted by a sudden drop in oil pricing caused by Saudi Arabia increasing production.

Companies existing purely for shale oil recovery went bankrupt. Major oil companies stopped their losses by abandoning the project. The price of oil is very sensitive to production quantities. A 1% shortage causes far more than 1% price increases, and visa versa. Increasing oil supply by tapping the shale oil could cause serious price drops, making the whole enterprise unprofitable.

At the present time, only Canada has a large-scale commercial tar sands industry.

Alberta sits atop the biggest petroleum deposit outside the Arabian peninsula - as many as 300 billion recoverable barrels and another trillion-plus barrels that could one day be within reach using new retrieval methods. (By contrast, the entire Middle East holds an estimated 685 billion barrels that are recoverable.) But there’s a catch. Alberta’s black gold isn’t the stuff that geysered up from Jed Clampett’s backyard. It’s more like a mix of Silly Putty and coffee grounds - think of the tar patties that stick to the bottom of your sandals at the beach - and it’s trapped beneath hundreds of feet of clay and rock.

It is basically a mining operation to extract this oil and it adversely affects the environment. And not to forget the production cannot be raised to the level where it becomes unprofitable for the companis in business.

Today, you can basically pump out a barrel of oil from Iraq for less than 1$, and it sells for $125+ in the international market. Now, thats what I’d call a “Ginormous” profit.

That is why, Corporations who don’t want to lose their profits are keeping a close eye on the production of oil. The banking cartel is going hand-in-hand with these people. There is not enough funding for alternatives to the present carbon-based fuel, which is unsustainable.

Wait for a while, demand would soften, and the price of oil would be within comfort limits for a while…