bananas
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Fri May-23-08 04:50 AM
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Total CEO: Oil Relatively Cheap; Less Expensive Than In 1974 |
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Total CEO: Oil Relatively Cheap; Less Expensive Than In 1974
Thursday May 22nd, 2008 / 12h48
PARIS (AFP)--Oil, now costing around $134-$135 a barrel, is in fact a relatively cheap energy source, with a barrel of crude less expensive today than in 1974 in terms of purchasing power, the head of French oil giant Total SA (TOT) said in an interview to appear Friday. Christophe de Margerie also told the weekly Revenu that given production complications oil was unlikely to fall very much below $80 a barrel.
"I know that this can be surprising: oil is not a particularly costly form of energy when compared with other consumer goods," Margerie said. "In terms of purchasing power a barrel costs less than it did in 1974. "If the price appears unable to discourage demand in China and in other emerging market countries it's because new consumers in these countries do not have our memories of earlier price levels," he said. "We see rising costs of new high-tech projects, such as deep-water offshore operations or those that have environmental difficulties, such as the oil sands that Total is developing in...Canada," he said. "And that explains why the price of a barrel is unlikely to fall very much below $80. "All the demands for growth, security and environmental protection contribute to the cost of these projects," Margerie said.
Thursday May 22nd, 2008 / 12h48 Source : Dowjones Business News
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dipsydoodle
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Fri May-23-08 04:54 AM
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1. In that respect its probably true, |
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with respect to purchasing power, but of little consolation.
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YankeyMCC
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Fri May-23-08 05:12 AM
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2. Well in those terms perhraps, I mean it's cheaper than Bottled Water |
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but kinda not the point :eyes: At least not the whole point. There's the little thing of killing the ecology we all depend on too.
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tabasco
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Fri May-23-08 05:25 AM
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3. SHOCKER! Oil company CEO says oil is a good deal ! |
hobbit709
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Fri May-23-08 05:31 AM
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4. In 1974 you could live on minimum wage |
bananas
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Fri May-23-08 08:14 AM
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5. France is socialized, you can live a good life unemployed. |
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We used to talk about a 4-day work week in the U.S., people don't realize how they've been abused.
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GliderGuider
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Fri May-23-08 08:56 AM
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6. I don't know about 1974, but oil is cheap today |
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85 million barrels of oil per day at $130/bbl soaks up less than 7% of the world's GDP.
Of course, if toil prices continue to rise that picture could change fast. Oil prices have doubled in the last year...
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OKIsItJustMe
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Fri May-23-08 11:53 AM
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7. This comparison drives me nuts! |
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Inflation is not some independent force of nature we benchmark prices against.
Inflation is a measure of the price of things; and the price of things for the past few decades has largely been driven by the price of oil.
This comparison is something like, "Compared to the boats in the harbor, the tide isn't high."
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phantom power
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Fri May-23-08 12:24 PM
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8. I'll add another reason I hate comparisons to the 70s: |
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The oil crisis of the 70s was artificial. It was a fucking embargo, and all it took to end the shortages was for OPEC to make a decision to start selling oil again.
The current situation is very damned different. All the valves are already open.
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GliderGuider
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Fri May-23-08 12:42 PM
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9. This is similar to when people point to the Great Depression... |
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... or Germany in 1945 as a testament to the resilience of the human spirit and some sort of proof that things will always get better after a while. In those cases, as in the oil embargo, cheap energy was still available somewhere. All that was needed was for circumstances to allow that energy to pour into the affected area and a bit of time for it to work its magic.
Without cheap energy all bets are off.
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OKIsItJustMe
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Fri May-23-08 01:41 PM
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11. I agree, to an extent, but... |
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That "time of trial" (if you will) did at least point to "the reliance of the human spirit."
The fact of the matter is, a virtually unlimited supply of "cheap (alternative) energy" is still available. We just need to get better at harvesting it. After all, if oil is still relatively inexpensive, then alternatives sources of energy have never been more affordable! and seem destined to get even more affordable! (especially when compared to oil.)
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phantom power
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Fri May-23-08 01:50 PM
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12. The 64 dollar question... |
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is how many people can afford energy at the transition point. In other words, at some price-point, alternatives do indeed become economical compared to fossil fuel. But, what if that price-point is out of reach for 50% of humanity? Or 75% Or 99%?
Also, the kind of sources people are discussing, like wind and solar and friends, are not by themselves replacements for fossil fuel. They generate electricity. So, they don't replace our transportation energy unless we also add in either manufacturing infrastructure for liquid fuels, or manufacturing infrastructure for electric trains, or electric automobiles. Those sorts of considerations increase the crossover price.
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OKIsItJustMe
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Fri May-23-08 01:57 PM
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13. Well, vehicles like the Volt/E-Flex are transitional vehicles |
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They are electric vehicles with liquid fuel recharging systems.
Presumably, as we're making the technological transition from fossil fuels to electricity, the battery packs gain capacity; "gas stations" transition to "recharging stations;" and the fuel tanks shrink and eventually disappear altogether.
We may also see fossil fuel usage phased over to hydrogen usage (where appropriate.)
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OKIsItJustMe
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Fri May-23-08 01:31 PM
Response to Reply #8 |
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Although I'd draw back from it just a tad.
The price shock in the 70's resulted from demand outstripping supply (which was artificially constrained.)
Today, demand is once again outstripping supply. We haven't run out of oil yet. That's still off in the indefinite future. However, we've run up against the stops.
If we decrease demand (as we did in the 70's) prices will adjust accordingly (at least for a while.) However, the handwriting remains on the wall.
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