T&T: A case for cheaper fuel...

[R C Smith Jr]

"If you had to bet whether the price of oil would be higher or lower 10
years in the future, what would you say?

Some argue that the world is running out of low-cost oil and that oil prices
will get higher and higher. Others argue that the current high price of oil
will cause a flood of new oil, much of it from nonconventional sources;
hence, prices will fall significantly ...

The case for much lower oil prices is as follows. There are hundreds of
years of oil supplies (at present and projected consumption levels) if oil
in oil sands and shale is properly included in reserves. In some places,
such as Saudi Arabia and Iraq, there is still much low-cost oil ($15 a
barrel or even less) that can be produced for decades, but not in an amount
sufficient to meet the world's demand; hence, much higher-cost oil is also
pumped. This higher-cost oil includes much of the offshore oil (the huge
cost of the mammoth drilling rigs has to be amortized over each barrel of
oil produced) and on-shore oil in hard-to-reach places and/or produced from
low-production wells...

Does it seem a bit odd that the current price of oil is more than twice the
cost of producing all the oil the world presently needs and will need long
into the future? The reason the price is so high is that the supply has been
artificially constrained by governments. Most (88 percent) of the
conventional oil reserves are owned by governments, and these governments
have underinvested in new production. As is well-known, the U.S. government
has restricted offshore and onshore drilling, shale development, and coal
conversion...

Fortunately, the people are beginning to understand they are paying twice
more for a gallon of gasoline than is necessary, and the global environment
is not benefiting. Less expensive energy and a cleaner environment are most
likely to be achieved quickly not with alternative energy sources but with
an alternative set of congressional leaders."

Those are excerpts from an article by Richard Rahn of the Cato Institute.
Read full article here:

http://www.cato.org/pub_display.php?pub_id=9591

Thought a little GOOD NEWS would be welcome...

Bob
____________________
R C Smith Jr
M/V MARY KATHRYN
1977 Hatteras 58 LRC
South River
Annapolis, Md