Wednesday, August 18, 2004
OIL
How concerned are you about oil supplies? Ford and GM, among others, have recently been granted permission to begin offering car loans in China. Can the world produce the oil needed to fuel an explosion (no pun intended) of demand for new gas guzzling vehicle for the Chinese market? Earlier this year domestic steel prices went through the roof due in large part to the booming Chinese economy. China used to produce a lot of low cost steel for export, not anymore. China needs every bit of steel it can produce for domestic consumption. In 2003 China consumed 40% of the world's concrete, largely on massive road building projects.
All of this is great for China and I in no way want to imply that the rise in per capita earnings of the Chinese, now surpassing $1000 US per annum, is a bad thing. The problem is there is a finite supply of oil. We are not making any more of it, no more dinosaurs to melt down. The world is consuming 81 million barrels of oil per day, OPEC produces 1/3 of the world's oil and is pumping about 30 million per day. Oil producing countries have been using new technologies such as slant drilling to pump more oil and faster and yet still cannot keep up with demand. Royal Dutch/Shell has admitted to lying about proven oil reserves under its control. It seems that 22% of the oil that they have reported as "proven reserves" may only be "probable reserves". Yet people think it is outrageous that the price of gas is going up. Do the math.
So let's see; China has build the roads and unleashed the automakers to start financing car sales to a population of 1.26 billion people (we have .28 billion) do you think maybe oil prices may continue to rise?
Kerry is talking about the problem. He is now calling for a massive effort to find alternatives to fossil fuels. Bush doesn't seem concerned. He thinks you should buy an SUV and take it for a spin through a salmon spawning stream.
Yeeha!
How concerned are you about oil supplies? Ford and GM, among others, have recently been granted permission to begin offering car loans in China. Can the world produce the oil needed to fuel an explosion (no pun intended) of demand for new gas guzzling vehicle for the Chinese market? Earlier this year domestic steel prices went through the roof due in large part to the booming Chinese economy. China used to produce a lot of low cost steel for export, not anymore. China needs every bit of steel it can produce for domestic consumption. In 2003 China consumed 40% of the world's concrete, largely on massive road building projects.
All of this is great for China and I in no way want to imply that the rise in per capita earnings of the Chinese, now surpassing $1000 US per annum, is a bad thing. The problem is there is a finite supply of oil. We are not making any more of it, no more dinosaurs to melt down. The world is consuming 81 million barrels of oil per day, OPEC produces 1/3 of the world's oil and is pumping about 30 million per day. Oil producing countries have been using new technologies such as slant drilling to pump more oil and faster and yet still cannot keep up with demand. Royal Dutch/Shell has admitted to lying about proven oil reserves under its control. It seems that 22% of the oil that they have reported as "proven reserves" may only be "probable reserves". Yet people think it is outrageous that the price of gas is going up. Do the math.
So let's see; China has build the roads and unleashed the automakers to start financing car sales to a population of 1.26 billion people (we have .28 billion) do you think maybe oil prices may continue to rise?
Kerry is talking about the problem. He is now calling for a massive effort to find alternatives to fossil fuels. Bush doesn't seem concerned. He thinks you should buy an SUV and take it for a spin through a salmon spawning stream.
Yeeha!
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