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/2005/08/26/9600155_Oil_Gouging/
You are here:
PureEnergySystems.com > News > August 26, 2005

Gouging in the Name of Peak Oil

Oil companies posting huge profits, taking advantage of the perception of scarcity from Hubert's Peak theory that may actually be mostly hype, considering the known existence of renewable magma oil.  (Feedback comment states that magma oil is not adequate to counteract the peak oil phenomenon.)

Opinion

by Sterling D. Allan
Pure Energy Systems News
Copyright © 2005

click for enlargement

Trickle-Down Economics -- political cartoon by Pat Bagley, Salt Lake Tribune; Aug. 26, 2005 (with permission); click for enlarged view

Source: Pat Bagley, Salt Lake Tribune; Aug. 26, 2005 (with permission)

At a time when the price per barrel of oil is reaching record highs, why is it that the large oil companies are also posting near record profits?

Why aren't they using their proceeds to lower the price or address the shortfalls? Why are these companies allowed to get away with this gouging?

According to the Cincinnati Post (ref), Exxon Mobil, the world's largest publicly-traded oil company, announced a 32 percent boost in second-quarter profits, the third-largest increase in company history. Royal Dutch Shell, the world's third-largest oil company, reported second-quarter profits up 34 percent. British Petroleum's were up 29 percent. ConocoPhillips, America's third-largest, reported profits that skyrocketed by 51 percent.

It seems to me that the main reason for this disconnect has to do with the buzz about Peak Oil, which purports that there will come a time when the oil being tapped from known oilfields reaches a climax, and thereafter because the oil will be harder to obtain, the prices must increase. "That is why we are seeing the price increases today", is the punch line of this sky-is-falling story.

In other words, we are not at that point yet, but this future theory is being used as a justification for putting the squeeze on the consumer -- and the economy -- today. 

In the course of running a daily energy technology news service, I run into this line of thinking on a routine basis.

Might the oil companies be faking shortages in order to gouge prices in line with this perception?

If oil is harder to get at, then why are these oil companies posting near record profits? I would expect that their profits would be declining, which would force increases to stay solvent, not huge windfalls.

The fact is, there is a very large body of scientific evidence that oil is not the limited resource we once thought it was. (ref) There is a deep-crust inorganic process involving magma near the mantle that appears to be at work in replenishing the many of the deep oil wells from below, so that a well exhausted at one time might have a renewed supply again just five years later.

Of course this does not mean that we should continue burning fossil fuels at the rate we now are as a society. Global warming is also a very well-documented phenomenon, and humans' burning of fossil fuels is an obvious, and correlated, major contributing factor.

The time is long overdue for us to turn to clean, reliable, affordable energy solutions, which are presently being developed worldwide, but which too often languish for lack of adequate funding.

What the major oil companies are doing by profiting so hugely at this time of planetary need is profoundly unethical. I predict that this year will go down as their last hurrah. The days of oil dependence are coming to a close, and their control over our lives will not last much longer.

Clean energy sources are afoot that will enable each home, each business, to be independent from the grid.

Why can't the oil industry use their profits to help bring this new revolution about -- and profit from bringing forward new technologies, rather than continue to be the infamous antagonist they have been for so long?

# # #


REFERENCES:


Feedback

Supply Dwindling; Magma Oil Not An Adequate Supply

From: Chris
Sent: Friday, August 26, 2005 4:39 PM
Subject: Gouging in the Name of Peak Oil

Dear Sterling ,

I have just come across your most disappointing article titled Gouging in the Name of Peak Oil (/2005/08/26/9600155_Oil_Gouging/).

Two points.  Firstly oil prices (for light sweet crude) are high because there is a shortage in light sweet oil.  Extraction rates for light sweet oil have fallen over the last few years according to OPEC reducing the proportion of light sweet oil.  Refineries are not able to process the replacement (heavy sour) so bid up the price on the desired grade.  Of course the oil companies are making large profits, just because light sweet crude has peaked to be replaced by heavy sour doesn’t affect their costs much but the resulting shortage bids up the price.

Secondly this paragraph was particularly concerning:

The fact is, there is a very large body of scientific evidence that oil is not the limited resource we once thought it was. (ref) There is a deep-crust inorganic process involving magma near the mantle that appears to be at work in replenishing the many of the deep oil wells from below, so that a well exhausted at one time might have a renewed supply again just five years later.

I don’t understand how you can defend this position in light of this evidence:

The fact remains that the abiotic theory of petroleum genesis has zero credibility for economically interesting accumulations. 99.9999% of the world's liquid hydrocarbons are produced by maturation of organic matter derived from organisms. To deny this means you have to come up with good explanations for the following observations.

1) The almost universal association of petroleum with sedimentary rocks.

2) The close link between petroleum reservoirs and source rocks as shown by biomarkers (the source rocks contain the same organic markers as the petroleum, essentially chemically fingerprinting the two).

3) The consistent variation of biomarkers in petroleum in accordance with the history of life on earth (biomarkers indicative of land plants are found only in Devonian and younger rocks, that formed by marine plankton only in Neoproterozoic and younger rocks, the oldest oils containing only biomarkers of bacteria).

3) The close link between the biomarkers in source rock and depositional environment (source rocks containing biomarkers of land plants are found only in terrestrial and shallow marine sediments, those indicating marine conditions only in marine sediments, those from hypersaline lakes containing only bacterial biomarkers).

4) Progressive destruction of oil when heated to over 100 degrees (precluding formation and/or migration at high temperatures as implied by the abiogenic postulate).

5) The generation of petroleum from kerogen on heating in the laboratory (complete with biomarkers), as suggested by the biogenic theory.

6) The strong enrichment in C12 of petroleum indicative of biological fractionation (no inorganic process can cause anything like the fractionation of light carbon that is seen in petroleum).

7) The location of petroleum reservoirs down the hydraulic gradient from the source rocks in many cases (those which are not are in areas where there is clear evidence of post migration tectonism).

8 ) The almost complete absence of significant petroleum occurrences in igneous and metamorphic rocks (the rare exceptions discussed below).

The evidence usually cited in favour of abiogenic petroleum can all be better explained by the biogenic hypothesis e.g.:

9) Rare traces of cooked pyrobitumens in igneous rocks (better explained by reaction with organic rich country rocks, with which the pyrobitumens can usually be tied).

10) Rare traces of cooked pyrobitumens in metamorphic rocks (better explained by metamorphism of residual hydrocarbons in the protolith).

11) The very rare occurrence of small hydrocarbon accumulations in igneous or metamorphic rocks (in every case these are adjacent to organic rich sedimentary rocks to which the hydrocarbons can be tied via biomarkers).

12) The presence of undoubted mantle derived gases (such as He and some CO2) in some natural gas (there is no reason why gas accumulations must be all from one source, given that some petroleum fields are of mixed provenance it is inevitable that some mantle gas contamination of biogenic hydrocarbons will occur under some circumstances).

13) The presence of traces of hydrocarbons in deep wells in crystalline rock (these can be formed by a range of processes, including metamorphic synthesis by the fischer-tropsch reaction, or from residual organic matter as in 10).

14) Traces of hydrocarbon gases in magma volatiles (in most cases magmas ascend through sedimentary succession, any organic matter present will be thermally cracked and some will be incorporated into the volatile phase, some fischer-tropsch synthesis can also occur).

15) Traces of hydrocarbon gases at mid ocean ridges (such traces are not surprising given that the upper mantle has been contaminated with biogenic organic matter through several billion years of subduction, the answer to 14 may be applicable also).

The geological evidence is utterly against the abiogenic postulate.
https://www.peakoil.com/contentid-25.html

Best regards,

Chris  


See also

Page composed by Sterling D. Allan Aug. 26, 2005
Last updated December 24, 2014

 

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