Why is oil so expensive?

Because it's scarce, says David Strahan (no relation to Michael).

The idea that oil companies are somehow 'to blame' for record oil prices and rising fuel costs is seductive but absurd. For all their power and profits, the international oil companies are in fact in trouble. They may still be swimming in cash, but no longer in oil. Despite vast investment in exploration and production, these days they generally fail to replace the oil they produce each year with fresh discoveries, or even to maintain current levels of output. Shell's oil production has been falling for six years, BP's seems to have peaked 2005, and this week even the mighty Exxon was forced to admit its output dropped 10% in the first quarter of the year.

None of this should come as a surprise since all the evidence now suggests the world is rapidly approaching "peak oil", the point when global oil production goes into terminal decline for fundamental geological reasons. Annual discovery of oil has been falling for over forty years, and now for every barrel we find we consume three. Oil production is already shrinking in 60 of the world's 98 oil producing countries – including Britain, where output peaked in 1999 and has already plunged by more than half. When an individual country peaks it only matters for that country – Britain became a net importer of oil in 2006 – but when global supply starts to shrink the effects could be ruinous for everybody.

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"Peak Oil" A Sham

".... up to 400 billion barrels of light, sweet crude oil for America’s future can be pumped from under Manitoba and North Dakota. That’s more oil than Saudi Arabia and Russia put together."

"This high-quality oil isn’t controlled by Moslem zealots, or hidden under a federal wildlife refuge. Moreover, it can now be cost-effectively retrieved with computer-directed horizontal oil wells, probably at $20 to $40 per barrel."

http://www.canadafreepress.com/index.php/article/2561

"Three oil companies have found 15 billion barrels of oil 28,000 feet under the Gulf of Mexico—boosting U.S. proven reserves 50 percent."

"The U.S. could now start harvesting a “super giant” gas field—500 trillion cubic feet—from the Marcellus Shale under the Appalachian Mountains. Again, it would require the horizontal drilling and rock fracturing."

"Brazil has discovered the third largest oil field in history, the Carioca, 170 miles offshore under 6,000 feet of water. The Carioca ranks behind only the Saudi and Kuwait fields discovered 60 years ago."

"The USGS agrees the world has harvested only about one-third of the oil we’ve discovered, not to mention six trillion barrels of tar sands and huge amounts of oil shale already found but not exploited."

"Even in North America, we are not running out of fuels. Between the Bakken, the Marcellus Shale, Alberta’s tar sands, and two centuries worth of coal, North America is rich in fossil fuels. What we now face is our own decision not to use them."

http://www.canadafreepress.com/index.php/article/2752

"Most coal today is used for electricity but the governor’s plan is to turn Montana’s billions of tons of untapped coal into a liquid diesel fuel for our cars."

"Schweitzer wants to take coal that’s been pressurized into a gas, and then use something called the Fischer-Tropsch process to convert that gas into a clean diesel fuel, similar to what is made at a demonstration plant in Oklahoma."

"We can produce this fuel for about $1 a gallon... ," he said."

http://www.cbsnews.com/stories/2006/02/24/60minutes/main1343604.shtml

"Peak Oil" is a sham, just like AGW. These are just a few of the stories refuting the concept of "Peak Oil".

Breakthroughs in the reclamation of high viscosity oil reserves may bring oil wells, once thought "dry", back online and increase the potential output of existing wells and sands. The US has trillions of barrels of oil locked up in shales that new technologies will eventually make viable. Our offshore potential has yet to be recognized and exploited. While Cuba and China drill 60 miles of the Florida Keys, without a word of protest from the left, American companies with greater technological expertise are prevented from drilling.

The environmental left has made it nearly impossible to license and build a new nuclear or coal fired power plant. They have destroyed the independent oil refiners, through excessive regulation, and stopped the building of new refineries. They now oppose any effort to harvest our massive natural oil, gas and coal reserves.

There is no shortage of oil. There is a shortage of political will and leadership. The American people pay high prices for energy, not because they have to, but because they choose to.