Oil continues its slippery slide...blahblahblah, DanS?

[Sava]

profit is worse than taxes, IMO...

at least with taxes, the money may go to something useful, instead of in the pocket of some corporate fat-cat who already has too much money.

[General Ludd]

Profit is money wasted.

[Flubber]

Originally posted by General Ludd



Energy is only one thing that oil is used for. What about plastics and other manufacturing purposes? Solar power, fusion, hydro, ect.. do not even come close to being an oil substitute.

True. Oil is used for more than energy but I'm betting that energy is still the pedominant usage of oil (don't have time to search for stats but I welcome anyone to confirm or refute this). If you can reduce the energy usage then there is more oil for the plastics industry.





Also-- any chemists out there that can speak to alternatives to oil in plastics and other areas it is used?? I quite frankly don't know

[Flubber]

Canada is trying to do our part to cash in . . . err I mean alleviate any enery crunch

Drillers harvest bumper crop of coalbed gas: At least 3,000 wells forecast for this year

The Edmonton Journal 19 Mar 2005

By Gordon Jaremko



EDMONTON - The new harvest of natural gas from Alberta coal seams is growing fast and shows signs of producing a bumper crop, the provincial energy department reported Friday.

"The amount of activity in this field is pretty phenomenal," said David Breakwell, acting assistant deputy minister in charge of Alberta Energy's gas division.

At least 2,500 coalbed methane wells were drilled in the province last year, he told the Economics Society of Northern Alberta.

The 2004 number was about a 1,000-fold increase since 2000, when tapping Alberta's estimated 620 billion tonnes of coal deposits for gas was still only a research project by a handful of specialist geologists and engineers.

Industry groups, including the Petroleum Services Association of Canada and the Canadian Association of Oilwell Drilling Contractors, appear to be right to predict at least 3,000 coalbed methane wells will be drilled in Alberta this year, Breakwell said in an interview.

EnCana Corp. alone, as Canada's biggest gas producer, has told farmers in the path of its activity that it plans to drill 6,000 coalbed methane wells over the next three years.

Alberta Energy's latest estimate predicts the province's coal deposits will eventually produce about 70 trillion cubic feet of gas, or an energy gusher equivalent to 12 billion barrels of oil.

But the prediction is only a cautious guess based on experience in the United States where coal-gas drilling dates back more than two decades and accounts for 10 per cent of production, Breakwell said.

Alberta industry already improved on the U.S. record by finding and exploiting a dry, shallow coal formation known as the Horseshoe Canyon, he reported.

The geological layer carpets a wide swath of central Alberta at a depth of 200-800 metres beneath dry plains south of Calgary to woods north of Edmonton. It yields gas almost pure enough to put straight into furnaces without the environmental headache of also flowing salt or fresh water.

New drilling and pipeline technology speeds the coal gas harvest. Wells take less than a day. Pairs of tractors plow 1.5-metre deep but narrow trenches with a big spade, unroll pipe from giant spools then put the earth back at a brisk pace.

Up to eight wells per country section are needed because coalbed methane pressures are low. That is up to eight times the number of conventional gas wells. But directional drilling of multiple holes from single sites limits environmental effects and production equipment such as compressors may be buried, Breakwell said.

Alberta's ultimate coalbed methane potential is estimated at 500 trillion cubic feet, or gas equivalent to 83 billion barrels of oil. But much more technology and knowledge will be needed to tap it all, he said.

About 70 per cent of the coal gas is in the Manville formation, a water-logged and deeper formation than the Horseshoe Canyon. "The real prize is to find a way we can deal with the land and water issues in the wet coal area," Breakwell said. "This will not happen in the next year.

Coal-bed methane is an energy source that was largely unknown but is becoming more and more prevalent. While its not "oil" , it is a large energy source that new technology is allowing to be tapped more and more effectively

[pchang]

Plastics rely upon the longer chain hydrocarbons. We can produce these from plant sources combined with organic chemistry (catalysts and polymerization). We can replace oil if we have to. It just costs more (currently).

[Mr. Harley]

In fact the first plastics did not rely on oil at all. Pchang made a very good point about that. There are all sorts of plant feed stocks usable for plastics synthesis.

Now - for biodiesel, coming from Tyson foods (freshly rendered chicken fat is an excellent feed stock).

https://www.mda.state.mn.us/ams/biodiesel/default.htm

and

https://www.biog-3000.com/04%20Bio%20G-3000/Pages/NEW%20Articles%20and%20reports.html

We already have a taxbreak in place for biodiesal, production is ramping up in the EU and US, and if oil prices keep climbing it will not even need supports. OPEC wanted $30 barrel oil for a reason - thing like oil sands, and now biodiesel, are not economically viable at that price. At over $50 - especially at $80 - they become viable.

However, TANSTAFFL. The free lunch advocated here is no economic impact. As prices climb, you have a larger per centage of your cost going into the energy to produce the item. Prices climb, and econmic growth slows because a basic cost has gone up - you economists can put it into technical terms, but you know what I mean and I am very tired. It like the deficit - after a certain size deficit invariably increases interest rates, which increase the cost of capital. The economy then takes a hit.

[Kuciwalker]

TANSTAFFL?

[Flubber]

Thanks pchang and shawnmmcc.

I suspected there would be oil replacements in that field as well

Oh and shawnmmcc, I would never dispute that high oil prices might start to cripple growth. That is yet anotehr reason OPEC did not want really high oil prices . . . they do not want usage curtailed by an economic downturn.

Only time will tell if the current high oil price will cause such an impact. Here in Alberta its having the opposite effect since it is causing oil companies and the oil service industry to boom with a resulting high demand for steel, workers, and consumables. We are mainly sheltered from the negatives of high oil and will only really feel them once they impact demand in a significant way

[Kidlicious]

Originally posted by Oncle Boris


Why? it's profit?

Yes. Profit can be used to invest, but are businesses going to invest in an environment of uncertainty? No. Sava is right in this case, atleast taxes can be used for something.

[MichaeltheGreat]

They're always going to invest in something, it's not like they're going to stuff all that cash in the world's biggest matress.

[fdgfx]

Exxon Mobile certainly is not going to invest much. Its management predicts that oil price will drop to 30-35 by 2007, and hence no big investments into finding new energy resources. Instead, the company is piling up huge cash hoard to either buy back shares or pay out dividends.

Now that company pays 35% tax on profits and you pay 15% tax on dividends, government is getting its shares from high oil prices, too.

[TCO]

Originally posted by shawnmmcc
In fact the first plastics did not rely on oil at all. Pchang made a very good point about that. There are all sorts of plant feed stocks usable for plastics synthesis.

Now - for biodiesel, coming from Tyson foods (freshly rendered chicken fat is an excellent feed stock).

https://www.mda.state.mn.us/ams/biodiesel/default.htm

and

https://www.biog-3000.com/04%20Bio%20G-3000/Pages/NEW%20Articles%20and%20reports.html

We already have a taxbreak in place for biodiesal, production is ramping up in the EU and US, and if oil prices keep climbing it will not even need supports. OPEC wanted $30 barrel oil for a reason - thing like oil sands, and now biodiesel, are not economically viable at that price. At over $50 - especially at $80 - they become viable.

However, TANSTAFFL. The free lunch advocated here is no economic impact. As prices climb, you have a larger per centage of your cost going into the energy to produce the item. Prices climb, and econmic growth slows because a basic cost has gone up - you economists can put it into technical terms, but you know what I mean and I am very tired. It like the deficit - after a certain size deficit invariably increases interest rates, which increase the cost of capital. The economy then takes a hit.

Eastman Chemical is vertically integrated back to coal (and wood for the cellulose acetate).

[TCO]

Originally posted by MichaeltheGreat
They're always going to invest in something, it's not like they're going to stuff all that cash in the world's biggest matress.

mebbe yes, maybe no. Although companies don't always return money to shareholders, it is not inconceiveble that they might. in addtion to earlier statements, they might have a special dividend (whopping big one). Or they may acquire something (thus wasting the shareholders money and not even investing in any new wells... )

[Kidlicious]

Originally posted by MichaeltheGreat
They're always going to invest in something, it's not like they're going to stuff all that cash in the world's biggest matress.

Not all investments are business investments. Putting your money under the matress is only one thing that you can do with it besides investing in business.

[MichaeltheGreat]

Originally posted by fdgfx
Exxon Mobile certainly is not going to invest much. Its management predicts that oil price will drop to 30-35 by 2007, and hence no big investments into finding new energy resources. Instead, the company is piling up huge cash hoard to either buy back shares or pay out dividends.

Now that company pays 35% tax on profits and you pay 15% tax on dividends, government is getting its shares from high oil prices, too.

If they put it into treasuries or something, or if they just put it in their checking account, it gets reinjected into the economy.

I wouldn't expect them to invest in new resources - why risk killing the ride they're on now?