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The point is that as prices drop - places where it is pumped will go off line. This will decrease the supply causing the prices to rise again. So the solution to the fuel has to be a strong enough supply to continue to drive prices down even when the supply from locations with higher drilling costs go offline.
The US Navy developed synfuel for the use in a battle group at sea. This would be much less expensive in a land based unit. http://www.google.nl/patents/US7420004 We can be free from the Oil Cartels. We do have the resources to be free from this. But as long as oil is sold on the world market we will pay world market prices. Without a vastly increased - long term - solution we will not drive these prices down. The world will buy more and more fuel. Unless there is a huge imbalance on production side prices will not fall. If prices do fall, those areas of production that cost more to drill / produce than the current market per barrel cost will close. In the 1980's the oil fields in OK shut down because they needed 15 / barrel to pump the stuff from the ground. They capped their wells. Saudi Arabia pumps oil for 2 / barrel.
Chestertonfan, By the way is that GK Chesteron? Check out this new Canadian company. They have the best concept I have seen in a long time. You can do Nuclear in many ways. http://terrestrialenergy.com
Oil companies are controlling the price, and making sure that the price stays high. I think this is the point of the article. While every energy user wants to lower costs, a business selling things has a good incentive to raise prices to increase margins. Which is the POINT of the article. There is an ever increasing demand around the world which I welcome. But with drilling costs at 80 / barrel the people selling that oil are not open to oil at 15 / barrel. Yes, nuclear can go miles without government subsidies. It just needs a reasonable level of regulation. Currently Nuclear power faces the highest levels of unreasonable regulation of any power production. Radiation is regulated to below background levels. Safety reviews can take years and years and cost millions while a plant is shut down - not producing revenue. What we need for nuclear is what Conservatives always say - reasonable cost benefit based regulation. We don't need subsidies.
I agree that Bio fuels are the WORST way to go. 40 percent of NG is used to make Fertilizer and then we turn around and use those crops to make a fuel? We would do much better burning that percent directly in transportation. Syn fuels can be produced from any carbon and hydrogen source. Look up Navy and Fuel from seawater CO2. That is an expensive process but they estimate they can make the fuel at 3 dollars / gallon - at Sea! If you are using a land based chemistry and a rich source of carbon synfuel can be produced for 50 / barrel or less with mass production. This could be driven down with volume production.
No need for fusion, which is still very very difficult. Fission works great and is safe and very abundant.
Vic156, I really like pebble bed reactors. They are simple, produce high heat and are totally self regulating. You can put them almost anywhere and they would be safe. You can hook them up to a normal air turbine. Check out this design. http://atomicengines.com
Chestertonfan, Agreed, batteries today are too expensive, but they are close to the energy density needed for a reasonable car. Do you have any estimates on the reserves available offshore Santa Barbara? Yes, Nuclear heat for oil sands would reduce their cost and is one of the designs looked at by Canada.
I agree that the market will figure it out. It already has. It is much more profitable to sell oil at 100 / barrel than at the 15 dollars a barrel it cost when I got married. There is NO incentive by any oil or NG company to lower that cost to the consumer. We need an energy competitor who can introduce vast amounts of new energy into the market. That would be Nuclear.
Cappmann, Many of these regulations could be met easily by a synfuel which would be at the same time - cleaner and more energy dense, about 20 percent more energy dense than current refined fuels. This is because you are building up a hydrocarbon rather than refining one out so what you get is more of the fuel and less of the pollutants. I agree that government restrictions on drilling are annoying, but I am also concerned that we are in a long term rising demand market. The rest of the world is powering up and asking for liquid fuels. We will need a LOT more fuel to keep the prices at a reasonable level. This is why I am advocating coal to synfuel using Nuclear heat.
Vic156 I live in an apartment and have for much of my life so your point is well taken that an EV for an apartment dweller is not easy. My only point is that it is feasible in the medium term. The Elio will be a good cheap option for inexpensive commutes if it is built. A vehicle can be converted to NG for as little as 50 dollars in equipment. It is the regulations that prevent us using it for cars today. I am not saying that drilling for oil is a non-starter. I am saying that if Nuclear power were allowed to even submit designs on a normal basis - say approval in 2 to 4 years for a design, that we don't need to drill for oil, we can produce it from coal for about 50 / barrel. I really want cheap oil, but drilling today is working because the prices are above 100 / barrel. In many places they are able to access the oil because of this high price. If the prices drop below 80 / barrel many wells would shut down - forcing a rise again. We need a better long term solution that is cheaper.
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