"Fossil" Fuels Aren't; Current Reserves

Well, this is my semi-fun thread, as it appears to be part crackpot, but gaining technical support.

I.e., the non-renewable "fossil" fuels will be our doom. Well, Brazil just hit an 8Bn Bbl oil find off their coast in a "deep well" drill. They are about a 1/2mile under water, then drilled 3.5miles deep to hit oil. Reports of this find also indicate that "fossils" have never been at that location, so the oil found has been generated by natural sub-mantle forces.

So, in effect, the concept of non-renewable "fossil" fuels is an inaccurate representation of the source of hydrocarbons and the extent of their supply. The supply has not been exhausted and is growing, but is not yet "produced", i.e. pumped out of the ground as yet.

So Hydro-Carbons are a fairly easy to synthesize compound/molecule by Ma' Nature. The Russians are finding "oil" at deep sites that should not contain oil. It is also noted that the great oil fields in the middle East are over major fractures in the earth's mantle, so are also a natural location for sub-mantle oil to find its way to the surface. Some old, played out oil fields are found to have been re-fueled and have oil again---from where? subterranian.

Regarding oil and gasoline prices, the current reserves are 1.3trillion bbl, an all time high. But global consumption is about 88Bn/day, vs. production of 85Bn/day. Been a long time gone from the econ classroom, but demand exceeding supply means higher prices. I believe that once "production" starts to catch up to demand, then prices will soften. Some report that the near $100/bbl oil prices are futures with a lot "hope and bets" in them.

Also, refinery capacity limits converting oil to gasoline/diesel, so that also drives the demand/supply curves and higher prices. No new refineries inthe US for 30 years! But, Michigan has a major refinery upgrade/construction pending for Detroit proper, but the MGM Grand Casino there seems to get more attention. But if the city fathers ever wake up, the refinery will be a huge boon to them and MI and for lower gas prices.

So being an old guy, I've seen these cycles before. The Jimmy Carter era of wacky federal government interference drove prices out of sight, then zero supply. I was there, up close and personal in the field. What industry can do in an hour with a phone call takes government a year of complete chaos (seen the government up close and personal as well)! 1981 $15/bbl oil was expected to hit $50bbl. Then over several years, market forces caught up and oil settled back to $35bbl. Fortunes were lost by spending in anticipation of $50 oil that never occurred.

So if our government doesn't totally hose up the oil patch market forces (entirely possible), then over the next 3-5 years, I think oil and then gas prices will moderate.

Who knows...I might be right, as long as you don't think in 6-12month periods. (hope I am).

Detroit is getting a big expansion of the Marathon refinery. The problem in Michigan is that Marathon/Speedway pretty much has a monopoly here. Ever since Total sold all of their Michigan assets to Marathon, we have had NO competition. The state attorney general at the time was Granholm and she actually wrote a letter to the Clinton justice department requesting that Total's assets be divested to other entities, not Marathon. She thought the sale would be anti-competitive and it was. Unfortunately, the deal was allowed to go through and now Granholm, as governer, acts like she has no idea that we have a monopoly here.

The increased supply from the new refinery may help to boost the overall supply in this country, but I fear that it will have no effect on prices in Michigan. Marathon controls the wholesale and retail markets here and that will not change. If you buy gas in Michigan, it doesn't matter what brand is on the sign, it most likely comes from Marathon.

Perhaps Citgo will help you out up there. That Hugo Chavez seems like a nice helpful fellow: look at how he gave cheap heating oil to the poor oppressed New Englanders. Maybe Venezuela will take pity on our bankrupt country and supply some boat diesel too....