It's hard for me to ignore these assumptions.
Refineries don't get built because of NIMBYism and , to some extent,
regulatory expense. Arianna Huffington even pointed out that some oil
companies
have pushed to get each others refineries shut down by regulators, to
keep the price of refined products high. There's also a high degree of
NIMBYism
and regulatory obstruction in pipelines and supertankers as well. I
HAVE invested in refinery and tanker stocks - and I can affirm that they
can be extremely
volatile, with long periods in which valuations sit at the bottom of
the market. Pipelines and tankers still would be needed if
synthetic/alternative fuels
are developed - and there's lots of possibility in that field.
The Wall Street Journal has pointed out more than once that
disinvestment in the oil industry and alternative energy is because of
the Saudis, dominately.
No business wants to invest in anything that could be wiped out over
night by sheiks who could simply turn a spigot and pump oil for the cost
of running the
machinery. You have to be very motivated or crazy to invest in such an
atmosphere. This fact is also why oil has remained relatively cheap in
real dollars
until recently - the Saudis aren't complete fools and have maintained
prices that inhibit alternative development.
With China and India in the mix, we now may be able to get beyond the
Saudi economic veto that has afflicted alternatives. There also may be
a long gap
in oil well development, after so many years of neglect, based on
volatile prices that inhibited the process. In upstate NY, Fortuna is
on a well drilling binge BECAUSE
of the price of natural gas. Since such is the case in an area as
unlikely as upstate NY, I can safely assume that the rest of the world
will see a similar
explosion of development.
-Original Message-
From: Jed Rothwell [mailto:[EMAIL PROTECTED]
Sent: Tuesday, November 22, 2005 2:58 PM
To: vortex-L@eskimo.com
Subject: Re: Peaked Oil (was: challenging papers)
[EMAIL PROTECTED] wrote:
There is a good reason why noone is building new refineries.
This is exactly right. See K. Deffey's new book, Beyond Oil. No new
refineries, supertankers or pipelines are on order because the oil
companies know they will have no use for them.
One of the reasons OPEC members overstated their reserves is because
their quota was based on their reserves, not their actual production at
the moment.
- Jed
