International Cat Speculators Since 2006

Oil – More or Less?


Jordan says we’ll soon be swimming in oil. (Apparently we might be able to re-instate the chewing gum tax cuts then!)

Frogblog says we’re about to run out, and need to stop building roads. (One assumes buses will start flying or something)

So where’s the truth?

For starters, we’re not going to swim in oil. Yes, oil companies might be spending large amounts of money on looking for the stuff, but that’s no guarantee of actually finding oil that’s worth recovering. If the middle east quietens down, the cheap oil there may make recovery of southern oil uneconomic. (The other scenario is that things get worse in the middle east and nukes start flying. With a few million less oil consumers that scenario could lead to lower oil prices too…)

Suffice to say, I’m quite suspicious of claims of immense future wealth. Didn’t Britain discover oil in the north sea?

Frogblog is even more “reality based” – apparently we need magic to solve our problems.

Of course that won’t stop the NZ government going on the biggest road building project in the nation’s history, because they think that another cheap energy source like oil will magically appear.

We have plenty of cheap energy sources. (Hydroelectric anyone?) The problem is to make them portable – a problem that petrol solves easily.

If Frog actually kept up with the technology he’s realise that batteries are now becoming good enough to cover the average commute quite happily – you could just rent a petrol car for longer trips in future.

Comments on: "Oil – More or Less?" (9)

  1. I think there’ll be a lot of oil discovered, and it will make New Zealand very wealthy indeed.

  2. I spent years of my life working on the exploration and drilling projects in the Great South Basin. Its a wonderful place for wildlife, wild weather and wild bloody newspaper articles by retards without a clue.

    Firstly the interest shown by the likes of Exxon [qualify with adjective ‘oil-giant’] is a normal one. It does not show any greater or less potential for the area. Its a punt by a wealthy company that stands to lose mega-millions. There are no poor oil wild catting companies. They are either wealthy-or broke and out of the game. Its a high stakes game. The only fools in it are governments. When Muldoon pissed off the oil companies by changing the deal halfway through the game they told him ” Adios MF”. Rather than face this embarrassment he used the taxpayers money to set up an oil company from scratch and to piss millions against the wall by drilling in unlikely places. The spectacle of George bloody Gair standing on drill floors to declare the well open was a stark symbol of the depths of political moronry to which NZ is now so familiar it doesn’t rate a mention. Even when the exploratory wells were ‘dusters’ the bloody government insisted on trying to drill into metamorphic basement rock for 100’s of meters in some insane hope there was oil there.

    Back to the sane people. There are parameters to their involvement, excellent, expensive research, a decision and a budget. They don’t send good money after bad. The rewards have to outweigh the risks and there is only one way to determine that in the end, by drilling. If they find something it adds to the knowlege base and they do stepout wells to define the area of interest. Then they do reservoir analysis. Compare it to the cost of development and exploitation and do the numbers. These costs in the southern ocean are HUGE. Throw in the usual environmental circus and you have a formidable decision to make. There are years between each stage and billions to be spent at each one. The likes of Jordan and his prediction that we will all be swimming in riches soon is, as usual, the standard fare for his pages–horse shit. He certainly qualifies for his ambition to be a politician. A lobotomy would do that.

    All that has happened is that the gummint has sold the rights to hard nosed capitalists to potentially lose a lot of money. Its theirs to risk and I hope they win out with some rewards. It is what makes this world go around. The wellington crowd hover meantime with the dream of easy money. But what else is new? Their money is always easy and has come from others labour and reward.

    Screw Jordan and the horse he rode in on.

  3. Great comment George. Thanks for the insight.

    Still, I know there is next to no chance of winning the lottery, but it can be fun to imagine winning it.

    Given that I don’t actually buy tickets, I’m not surprised that I haven’t won yet.

  4. Great stuff, George. Very useful.

    What is clear is that if anything does come from the Great Southern Basin, it’s at least ten years away from coming into production, and probably more likely twenty years. It says a lot about Jordon’s concept of economic reality that he’d be putting all his economic eggs in a twenty-year punt.

  5. We’ll find gas and oil in less than 20 years. That’s my opinion, anyway.

  6. Who are you drilling with Jane?

  7. Who aren’t I drilling with may be an easier question to answer.

  8. I’m sorry I asked!

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