[Kosh]

That's what oil is now. Here's why:

Oil prices surged nearly $5 to a record near $134 a barrel after a US government report showed a surprise drop in crude stockpiles, reinvigorating fears of a supply crunch.

US crude settled up $4.19 at $133.17 a barrel after hitting a fresh peak of $133.72.

London Brent rose $4.86 to $132.70.

The surge came after the US Energy Information Administration showed crude stockpiles in the world's biggest energy consumer fell 5.4 million barrels last week, countering expectations for a build, said Reuters.

"This report gives the market every reason to rally," said Rob Kurzatkowski, analyst at optionsXpress in Chicago.

The fall in weekly inventories is matched by concerns supply problems will continue for years as production continues to fall short of growth in demand.

Oil for delivery in 2016 rose above $142 a barrel, making it the highest contract on the futures curve.

US Energy Secretary Sam Bodman said that there was nothing the government could do to ease the pain of soaring fuel prices for consumers and added that a rise in speculative investment in commodities was not behind the rally.

"We have flat (oil) production ... and increasing demand. I don't think anything can be done near term," he said.

I think that last sentence sums it up pretty well.

[Nuke]

*laughs at all the people who don't take the bus*

[Kosh]

Wouldn't the bus fares go up along with the price of fuel?

[Nuke]

surely i can afford another quarter

[DeepSpace9er]

"We have flat (oil) production ... and increasing demand. I don't think anything can be done near term," he said.

How about Congress gets its head out of its ass and allows more domestic drilling. That alone would begin to ease future supply fears.

[Unknown Target]

Yea, for what, a year? Maybe 10? Then what? Then we panic all over again. It's better that we let the pain of high oil prices spur us into action now, rather than sticking our heads in the sand and allowing more drilling.

[Kosh]

How about Congress gets its head out of its ass and allows more domestic drilling. That alone would begin to ease future supply fears.

Looks like I have to drag the chart out all over again...........




There's been more drilling and production is still falling the US. You can't beat geology.

[MP-Ryan]

Oil prices, like gold, are purely based on speculation.  The market gets wind of ANYTHING to do with oil supply and he price changes (usually in the upward direction).  Where it comes from doesn't matter (as it turns out, US oil comes primarily from Canada and Venezuela).

Basically, even a prediction that alters projections of oil availability 10 years in the future allows the market to gouge consumers now.  Nice, eh?

[Kosh]

(as it turns out, US oil comes primarily from Canada and Venezuela).

The US imports more oil from Mexico then Venezuela. Wont matter for too much longer because all three are in decline (If you count the tar sand production then Canada's is flat). I heard somewhere Mexico is expected to become a net IMPORTER of oil in 4 years.

So I guess rising demand and flattening supply have nothing to do with current oil prices?

[DeepSpace9er]

There's been more drilling and production is still falling the US. You can't beat geology.

Thats all fine and dandy but environmental laws prohibit the drilling of oil where we know there is tons of it. Alaska, the gulf coast, off the coast of California for example. Environmental laws prohibit us from drilling more in the gulf, but not the chinese who are taking full advantage of it.

Drill where we KNOW there is enough oil.

[perihelion]

[raises hand]

As someone who actually works in the oil industry, we can drill where we know there is more oil, but it will never be enough.  Unknown Target hit the nail on the head.  Opening up Alaska and the Rockies for drilling is only going to give a temporary reprieve.  And that, only several years from now.  These projects DO NOT kick in overnight.  They need tons of planning and equipment.  Not to mention manpower that our industry does not have in the right places to get this done without a loooong build up.

And then a few years later, we'll be right back where we started.  Only we may have just created another environmental catastrophe in the process.  The US has been living with dirt-cheap gasoline for far too long due to artificially maintained controls that are finally failing.  It is time to wake up to the reality that the days of cheap oil and gas are over.  Frankly, I'm glad that is coming sooner rather than later.  Maybe economics will cause some changes that common sense has thus far failed to.

[MP-Ryan]

The US imports more oil from Mexico then Venezuela. Wont matter for too much longer because all three are in decline (If you count the tar sand production then Canada's is flat). I heard somewhere Mexico is expected to become a net IMPORTER of oil in 4 years.

Possible.  The Canadian oil supplies have been barely scratched, however.  Especially the more northern and offshore deposits.  This is not, of course, to say that we shouldn't be worried and should keep happily burning away the oil, blissfully ignoring the future.

So I guess rising demand and flattening supply have nothing to do with current oil prices?

Demand and supply now are influencing the projections 10 years from now, which are determining the current prices.  Like I said, oil and gold prices are based entirely on speculation and projections for the future, not the here and now.  The result is that oil companies make a literal killing as prices go up while their actual cost to extract the oil is currently static.  It's a pretty good racket if you're on the money-making side of things.

However, while we're talking oil, the only way you're going to finance a serious attempt at an alternative energy source is through government funding, and right now too many of the Western governments are embroiled in defense spending.  Dump the US DoD's funding into cold fusion research today and by 2010 we'd each have a small nuclear reactor powering our households.

[IceFire]

I've heard it from a few people and I like the idea more and more.  Its simple.  We need a Manhattan Project style initiative with emergency funding and whatever else needed to come up with a renewable energy solution.  Hydrogen or whatever.  The money is there if there is the determination to spend it and get the resources (people, time, effort, research, science, etc.) in place to make it happen.  If we, the government, and so forth were sufficiently motivated to do something on that level then it'd be done.

The problem is that we're not yet in the impending danger mode like the US/GB/Allies were in WWII because the other side was working on the same project.  So its not going to happen.  And there would be people questioning the waste of resources...of course its ok to spend billions on liberating/occupying a country with oil and allot of sand.  So it won't happen....but I think it'd be the most forward thinking thing we could do.

And even if for some magical reason oil didn't all of the sudden run out...we'd still be ahead!

[Nuke]

im all for drilling in alaska. not that we need the oil, but that alaska needs the jobs. i don't like the federal government telling us what we can do with our state's own natural resources.

[DeepSpace9er]

As someone who actually works in the oil industry, we can drill where we know there is more oil, but it will never be enough.  Unknown Target hit the nail on the head.  Opening up Alaska and the Rockies for drilling is only going to give a temporary reprieve.  And that, only several years from now.  These projects DO NOT kick in overnight.  They need tons of planning and equipment.  Not to mention manpower that our industry does not have in the right places to get this done without a loooong build up.

Well of course it will never be enough. Its infinite demand vs finite supply. Yes it would take years, I've heard 5 to 10 years to extract oil from ANWR if we start tomorrow, but what it would do is ease future supply worries and lower speculation prices which would cool the markets down. We arent lacking sufficient supply right now, speculators are worried we will in the future. But honestly, oil prices NEED to come down. Hydrogen and electric cars sound well and good, but there are are major needs for oil like plastics, power plants, jet fuel. Airlines are cancelling flights and increasing costs to travel because of this. Whatever environmental religion you subscribe to, you must know that higher fuel prices is devastating to economic growth.

Just wondering who is going to buy the $60k hydrogen cars when the economy is in the tank?

[Nuke]

jp-1 jet fuel is essentially kerosene, which can be distilled from coal if need be. i don't think air travel will suffer as much as land travel. it will suffer, but running out of oil wont exactly kill it.

[Polpolion]

[raises hand]

As someone who actually works in the oil industry, we can drill where we know there is more oil, but it will never be enough.  Unknown Target hit the nail on the head.  Opening up Alaska and the Rockies for drilling is only going to give a temporary reprieve.  And that, only several years from now.  These projects DO NOT kick in overnight.  They need tons of planning and equipment.  Not to mention manpower that our industry does not have in the right places to get this done without a loooong build up.

And then a few years later, we'll be right back where we started.  Only we may have just created another environmental catastrophe in the process.  The US has been living with dirt-cheap gasoline for far too long due to artificially maintained controls that are finally failing.  It is time to wake up to the reality that the days of cheap oil and gas are over.  Frankly, I'm glad that is coming sooner rather than later.  Maybe economics will cause some changes that common sense has thus far failed to.

So it would give the US economy a temporary reprive, and allow us time for further development and resarch of electric/alternativefuel cars, thereby decreasing the time the US spends with huge oil prices. The money saved might even stimulate the electric car industry, but knowing people, you're right, we'd just slack of on the research and be worse than where we were before.

EDIT:

Just wondering who is going to buy the $60k hydrogen cars when the economy is in the tank?

Me.

Of course, it probably won't be "buy" as much as "procure"...

[Kosh]

I've heard it from a few people and I like the idea more and more.  Its simple.  We need a Manhattan Project style initiative with emergency funding and whatever else needed to come up with a renewable energy solution.  Hydrogen or whatever.  The money is there if there is the determination to spend it and get the resources (people, time, effort, research, science, etc.) in place to make it happen.  If we, the government, and so forth were sufficiently motivated to do something on that level then it'd be done.

The problem is that we're not yet in the impending danger mode like the US/GB/Allies were in WWII because the other side was working on the same project.  So its not going to happen.  And there would be people questioning the waste of resources...of course its ok to spend billions on liberating/occupying a country with oil and allot of sand.  So it won't happen....but I think it'd be the most forward thinking thing we could do.

And even if for some magical reason oil didn't all of the sudden run out...we'd still be ahead!

The most promising way to make hydrogen on an industrial scale is using high tempurature nuclear reactors and the sulfur-iodine process. However, the US doesn't have a single nuclear reactor capable of making that much heat, and I'm not sure if it has plans to build any at this point.

On top of that, here is the roadmap for developing this from the DOE website:

   

Goal of the Nuclear Hydrogen Initiative

The goal of the Nuclear Hydrogen Initiative is to demonstrate the economic, commercial-scale production of hydrogen using nuclear energy. If successful, this research could lead to a large-scale, emission-free, domestic hydrogen production capability to fuel a future hydrogen economy.

Why Use Nuclear Energy to Produce Hydrogen?

Hydrogen offers significant promise as a future energy technology, particularly for the transportation sector. The use of hydrogen in transportation would reduce U.S. dependence on foreign sources of petroleum, enhancing our national security. Significant progress in hydrogen combustion engines and fuels cells is bringing hydrogen-powered transportation closer to reality.

The primary challenge to the increased use of hydrogen as part of the Nation’s overall energy infrastructure is the cost associated with its production, storage and delivery. Hydrogen is the most common element in the universe and can be produced from readily available sources such as methane and water. However, existing hydrogen production methods are either inefficient or produce greenhouse gases. Nuclear energy has the potential to efficiently produce large quantities of hydrogen without producing greenhouse gases and hence, to play a significant role in hydrogen production.

Developing an Integrated Hydrogen Program

The President’s Hydrogen Fuel Initiative is a research and development effort to reverse America’s growing dependence on foreign oil and expand the availability of clean, abundant energy. Hydrogen is produced today on an industrial scale in the petrochemical industry by a process of steam reforming, using natural gas as both source material and heat source.

A potentially better option for the future could be the use of advanced nuclear technology to produce hydrogen. High-temperature heat from an advanced nuclear system could be supplied to a hydrogen-producing thermochemical or high-temperature electrolysis plant through an intermediate heat exchanger. Such an arrangement could provide high efficiency and avoid the use of carbon fuels. The Nuclear Hydrogen Initiative is exploring a range of hydrogen production technologies that could enable various Generation IV systems to produce hydrogen across a range of temperatures; however, high temperature processes show the greatest promise.

Significant research and development (R&D) will be required in order to complete a commercial-scale demonstration. The hydrogen production system and heat transfer components, such as intermediate heat exchangers, will require the evaluation and development of high-temperature, corrosion-resistant materials.

The Office of Nuclear Energy (NE) has developed a Nuclear Hydrogen R&D plan, which defines the objectives and goals of the Nuclear Hydrogen Initiative and identifies the R&D required to deploy the most promising technologies.

As part of the President’s Hydrogen Fuel Initiative, the Nuclear Hydrogen Initiative is being implemented in close cooperation with programs in other DOE offices that are conducting hydrogen R&D -- the Offices of Energy Efficiency and Renewable Energy, Fossil Energy, and Science. This cooperation eliminates redundancy while ensuring that R&D is complementary. NE has also established substantial cooperation in this area with its international research partners.

Program Highlights

The Nuclear Hydrogen Initiative addresses the need for greater utilization of our energy resources by developing energy conversion systems to economically produce hydrogen for use in our national transportation system.

Program milestones include:

    * FY 2008: Complete construction of integrated laboratory-scale thermochemical and high-temperature electrolysis hydrogen production systems and begin testing.

    * FY 2011: Select technologies to be demonstrated in the pilot-scale hydrogen production experiment.

    * FY 2013: Begin operation of a pilot-scale hydrogen production system experiment.

    * FY 2016: Complete the final design of a commercial-scale nuclear hydrogen production system.

    * FY 2019: Complete construction and checkout of the nuclear hydrogen demonstration facility and initiate demonstration of commercial-scale hydrogen production.

FY 2006 Planned Accomplishments:

    * Construct major components for the S-I cycle reaction sections in preparation for integrated laboratory-scale system operation in FY 2008.
    * Operate 20-25 cell high temperature electrolysis (HTE) stack at 100 Normal liters per hour for 1000 hours.
    * Complete flowsheet analysis for most promising alternative thermochemical cycles.

FY 2007 Planned Accomplishments:

    * Complete assembly of integrated laboratory-scale S-I thermochemical system and pre-operational testing.
    * Conduct component reaction tests and design laboratory-scale experiments for most promising alternative cycles.
    * Complete  assembly of  the  integrated laboratory-scale HTE system and perform pre-operational testing to verify individual component performance.

Even if it goes according to plan, we wont even have a prototype ready until 2019. What is their plan for other methods of production?

but what it would do is ease future supply worries and lower speculation prices which would cool the markets down.

It would take much more than that to even make the US production flatten out, not to mention make up for the declines in countries like mexico.

[Solatar]

*laughs at all the people who don't take the bus*

If there was a bus system or other form of public transportation that I could actually take advantage of, I'd jump on it. I'd love to live in an area where I could ride my bike most places. Since I'm going to college in the fall, that'll become a reality I think as there is a bike path from the university into town.

[Nuke]

id like to see more improvements to public transportation. the trains in the usa are a joke, so noone wants to ride on a train with technology, save from the diesel electric engines used (those came out in the 60s/70s), from the 40s. bank the curves for higher speeds, and use streamlined trains. bus systems are ridiculously overcrowded, at least all the bus systems ive used. nobody wants to ride the bus if its gonna be full all the time and if they have to wait more than 20 minutes for one.

for cars, we should be building them out of carbon fiber and running 4 cylinder engines. a carbon fiber body aside from being really light can easily be made in any hyper-streamlined shape you can think of. this gives you the ability to better streamline the cars, reducing their drag coefficients. less wind resistance and less weight means that little 4cyl engine is gonna give you the same performance of a 6cyl or better engine in a metal car. reduced mass also improves safety because less energy must be dispersed in collisions.