Thread: More on the fuel debate

Originally Posted by Lotz-A-Landies

I'm going to be pedantic on this (How unusual.) My comment, paraphrased by the "Isn't that what I said", about fixed excise and it no longer being indexed was made in lines 1 through 3 of my original post. You chose to condense my post by deleting part of line 1, all of lines 2 through 6 and part of line 7, changing the subject of the apparent paragraph. Then accused me of not knowing what I had written.

Furthermore, I acknowledged that in the absence of a quotable reference for the subject of my third paragraph, I may have erred in the reason for the difference between petrol and diesel prices.

If you wish to criticize my posts then do it by accurately, referencing the text of the original source material, not your own paraphrasing of my words.

Diana

WHOA, slow down! I did not mean to accuse or criticize you or what you said. I actually agree with what you have said, but YOU SAID:"the excise on diesel is higher than the excise on petrol" I SAID:"The excise on both petrol and diesel was fixed in 2006 at $.38143"

By not pasting in the whole complete post, I was not trying to change the context of your words, but highlighting the point I wanted to comment on, and that is only that fuel excise is now the same for both fuel types, and what the value of that excise is. That's it, end of story, no hidden agenda.

Same with the comment re the Diesel Rebate Scheme. It applies nationwide, rural and metro. The argument currently doing the rounds is that the tax component of diesel fuel costs is raising the prices of groceries and other retail commodities, but the truth is that the excise has not risen, and the GST component is claimable by businesses.

Diana, my comments were never meant to criticise or attack you, or to paint you out as not knowing what you had posted, but to complement and clarify the information you had provided in your post. If my response has come across as intending any slight, I apologise for my inarticulate ineptiude. I am sorry for any offence I may have caused you.

[quote=DeeJay;762181]Quote:
Australian oil companies DO NOT buy PREMIUM GRADE crude oil! In fact Australia produces around 70% of its own oil and imports about 30%

Originally Posted by solmanic

Correct me if I'm wrong, but that statistics page doesn't give any indication of what percentage of oil Australia imports vs domestic production for domestic use. It only refers to oil exports and imports.

I simply guesstimated the percentage of imports Vs exports as a % and it was not close to the 70/30.
I would think that most oil not exported from Aus is used here in petroleum refining ??.

From This page
"In 2004/05, Australia imported 64% of it's crude oil, and around 34% was from domestic oil sources."
In 2004/05, Australian refineries produced 12,661 megalitres (million litres)of Diesel, while Australian users purchased 15,185 megalitres of Automotive Diesel. 3,965 megalitres of Diesel was imported, with 3,081 Ml coming from Singapore. In addition, 294Ml of Diesel was exported.
So the import/local crude oil balance is 64/36, and even with 64% of our crude oil needs being imported, refinery capacity wasn't sufficient to meet the local demand for Diesel, with 26% of the local demand being imported.

Originally Posted by JohnE

I thought this started off okay, a bit of sense, it then changes you have to look at the reality of it.

I recall speaking/dealing with a bloke in the oil exploration business some years ago, he told me that the was more oil here in oz than anyone in government was letting on about, the mob he worked for, were drilling locating, testing then capping each find. Yes i know someone on here will probably discount that one.

But as someone earlier put, the iraqi business , i think it was LAL. there is more oil under their deserts than all the arabs combined. but they have exported less than when sadam was still operating, an OPEC plot or an arab one, who knows, there are probably a thousand conspiracy theories.
The bottom line, is your average persons ability to afford things, as the flow on effect from higher fuel prices is very noticeable. Eventually the weekend drives will be taken off most families agendas, as the struggle to make a living and provide for the family gets harder and harder,
We all just have to grin and bear it,stop driving unless absolutely necessary, at least cityites are fine they have public transport.

john

As you say, someone will probably discount your report. I have worked for 45 years in the oil exploration industry, much of it in the area where decisions are made on where to drill and the assessment of the results.

I can say categorically that there has been no oil wells capped that could have been produced (although mistakes can and have been made, usually due to faulty assessment - and these go both ways). There is a grain of truth however in the assertion that some discoveries have been capped and abandoned.

When oil is discovered in a well, the first question that is asked is "how much is there?", and an assessment is made of this (which may or may not be accurate, depending on the amount of data available). The question has to be asked then, is how much will it cost to put this into production. At a minimum, it will include running casing in the well, running production tubing, a wellhead, probably a separator and stabilisation plant, possibly a pump, and a pipeline to the nearest existing gathering station. All this is costed, and the capital cost compared to the cash flow expected after operating costs and taxes. If the answer is positive, and the discoverer can convince a financial backer of this, development will proceed.

Now it is fairly obvious that there are a lot of variables in these calculations. Obviously, one is the amount of oil, but other key ones are where it is (Development is a lot cheaper if the well is onshore ten kilometres from a gathering station compared to in 2000m of water 200 nautical miles off NW Australia). But the other major variables are the production tax regime, the price of oil, interest rates, how long it will take between capital expenditure and the start of income, environmental constraints and delays, price and availability of hardware etc.

So yes, some oil wells have been capped which discovered oil, but bear in mind that most of these were very small discoveries - for example, Roma Blocks Oil No 4, which discovered oil in about 1938. Despite extensive (and expensive) efforts over the last seventy years, this "discovery" produced a total of about 100 gallons of oil. Even fifteen kilometres from a railhead at Roma, this would not have been produceable. On another scale, the discovery at Rough Range in the fifties found a lot more oil than that, but a number of followup wells, some almost on top of the discovery well, failed to find any more - add to that the distance of the discovery from anywhere, and there was never any chance of it producing.

Of course, from time to time earlier discoveries become economic as infrastructure is extended, as technology is improved, and most importantly, as oil prices increase. I can think of a number of these for example in Bass Strait.

As far as the amount of oil in the middle east goes - there are now suggestions being made that the reason the Saudis have not increased production is not that they don't want to, but that they can't - because they have grossly overstated their reserves and production capacity for years for political reasons.

John

Is this a con ???.....

YouTube - Water Powered Vehicle

Originally Posted by Rosco

Is this a con ???.....

.....

Not quite, I think. The clue is where he says "all it needs is water plus electricity". The energy actually comes from the electricity, and for a lot of welding operations an oxy-hydrogen flame is useful.

But when it comes to running a vehicle, while there is no doubt that the engine would run well on an oxy-hydrogen mixture, unless he has come up with some way of storing the gases better than those that the car industry has, it simply begs the question as to how the electricity is supplied.

If from any sort of storage battery, then just running an electric motor would be far more efficient, although it is possible that as part of the welding device he has actually come up with an efficient way of storing the gases. (There is no actual need to store the oxygen - you could use air instead, but this would reduce efficiency).

John

Sorry about the cut and paste,but this could explain the rising cost of fuel, it's a direct copy from the Wall Street Journal (one of the better US broad-sheets) worth a read

comments awaited

Tony




Oil Exporters Are Unable
To Keep Up With Demand

Domestic Needs,
Sluggish Investment
Crimp Shipments
By NEIL KING JR. and SPENCER SWARTZ
May 29, 2008; Page A8

The world's top oil producers are proving unable to put more barrels on thirsty world markets despite sky-high prices, a shift that defies traditional market logic and looks set to continue.
Fresh data from the U.S. Department of Energy show the amount of petroleum products shipped by the world's top oil exporters fell 2.5% last year, despite a 57% increase in prices, a trend that appears to be holding true this year as well.
There are several reasons behind the net-export decline. Soaring profits from high-price crude have fueled a boom in oil demand in Saudi Arabia and across the Middle East, leaving less oil for export. At the same time, aging fields and sluggish investments have caused exports to drop significantly in Mexico, Norway and, most recently, Russia. The Organization of Petroleum Exporting Countries also cut production early last year and didn't move to boost supplies again until last fall.
In all, according to the Energy Department figures, net exports by the world's top 15 suppliers, which account for 45% of all production, fell by nearly a million barrels to 38.7 million barrels a day last year. The drop would have been steeper if not for heightened output in less-developed countries such as Angola and Libya, whose economies have yet to become big energy consumers.
For all the attention paid to China's increasing energy thirst, rising energy demand in the Middle East may pose the greater challenge. Last year, the region's six largest petroleum exporters -- Saudi Arabia, United Arab Emirates, Iran, Kuwait, Iraq and Qatar -- curbed their output by 544,000 barrels a day. At the same time, their domestic demand increased by 318,000 barrels a day, leading to a loss in net exports of 862,000 barrels a day, according to the U.S. Energy Information Administration.
Demand in the Middle East is a major factor right now, said Adam Robinson, an oil analyst at Lehman Brothers in New York. Mr. Robinson predicts the region will constitute more than 40% of increased demand next year.
Saudi Arabia in particular has become a major energy consumer as the country pushes to put its oil riches to greater use. The kingdom is in the middle of a major investment campaign to become a world player in petrochemicals, aluminum and fertilizers, all of which will require huge amounts of oil and natural gas.
Since 2004, Saudi oil consumption has increased nearly 23%, to 2.3 million barrels a day last year. Jeffrey Brown, a Dallas-based petroleum geologist who studies net export numbers, said that at its current growth rate, Saudi Arabia could be consuming 4.6 million barrels a day by 2020.
That would cut significantly into Saudi exports even as the world looks to its largest oil supplier to help manage rising demand. Saudi Arabia has nearly a quarter of the world's proven reserves and supplies around 12% of the 86 million barrels a day that the world now consumes.
One reason Middle Eastern nations are using more oil is a shortage of natural gas, said Bill Farren-Price, director of energy at Medley Global Advisors. This is particularly troublesome during the summer, when governments scramble to keep the lights on and air conditioners cranking.
Some producers, such as the U.A.E., are easing back at times on the crucial industry practice of injecting natural gas into crude oil fields, which is done to boost reservoir pressure and increase crude recovery rates. Halting the injections ends up undercutting oil production, further reducing exports.
As top exporters hit trouble, historically marginal players such as Brazil and Kazakhstan are likely to play a greater role. Three of the four non-OPEC players among the top 15 oil exporters -- Russia, Norway and Mexico -- are reporting declines in production this year. Kazakhstan is showing slight net export gains.
No big exporter is struggling more than Mexico, where net exports dropped 15% in 2007. Mexican officials announced Monday that output from the country's once-mighty offshore Cantarell field had plunged by a third in less than a year.
Analysts said there are reasons for optimism. Russia's government is scrambling to alter the tax rates that many say have put a lid on new oil development. Mr. Robinson said 65 new ultra-deepwater drilling rigs are expected to arrive over the next three years, following a five-year stretch in which the industry gained only 10 such rigs.
Those additional rigs will help companies tap some of the most promising, but now inaccessible, waters off Brazil, Australia, West Africa and in the Gulf of Mexico.
"The sense in the market is that peak oil is here and that things will only get worse," says Mr. Robinson. "But the verdict is still out on that."

A good post. The reason that the oil market defies traditional market logic is that it takes years for the work to be done to increase production in the face of increased prices - and given the history of the industry, investors need to know that they (rather than governments) will reap the benefit of the higher prices before they spend the money.

Major oil producers such as Saudi Arabia, Mexico, Venezuela etc have spent most of the profits from their production on anything (for example, subsidising local petrol prices) rather than increasing production (why do that - it will just force the price down), which is all well and good until demand exceeds production capacity, which is what has happened. And even now, why would they spend money on exploration or production facilities given that even though the exports are less the income is more?

John

Originally Posted by JohnE

I thought this started off okay, a bit of sense, it then changes you have to look at the reality of it.

I recall speaking/dealing with a bloke in the oil exploration business some years ago, he told me that the was more oil here in oz than anyone in government was letting on about, the mob he worked for, were drilling locating, testing then capping each find. Yes i know someone on here will probably discount that one.


john

I worked on oil-rigs in western Qld in the mid eighties there were wells capped then only because it wasn't ecconomicly viable to retrieve the crude, what the situation with those wells is now I don't know.
Peter