Tuesday, 19 May 2009

Slick thinking

Although there's nothing like a good fiction novel, I've been reading a fair chunk of non-fiction of late - mostly biographies of people who inspire me but also the history of large corporations. Have you ever wondered how Exxon started life? A man in Ohio called Rockefeller sowed the seeds for what is now the largest public company in the world. Over a hundred years of history seeped with family feuds, public humiliation, Government intervention, forced break up... could almost be the storyline for the next Dallas series.

It's particularly interesting within the context of OPEC and the controlled regime with which we produce oil and gas globally now. Although having said this, we like to think there are regulations in place to protect us but really the balance of power is shifting to the emerging markets who still have reserves of oil to drill. In the US, imports of oil are now more than double what is produced nationally.

Which brings me on to Peak Oil - probably most famously associated with Hubbert's theory that predicts the point at which any given oil field hits peak production after which, it goes into decline. People have tried to apply this on a global level to see when World oil fields will go into terminal decline with varying predictions from the pessimist "it's already happened" to the optimist "won't be til after I'm dead". Answers on a postcard please!

The price of oil spiked at $160/barrel last year which had people stocking up at petrol stations and saw our electricity bills and transport costs go through the roof. And yet we pay $3 for a litre of bottled water which is equivalent to $475/barrel. I don't even pretend to understand the complexity behind setting oil prices (one would like to think it is just a by product of a free market) but it's scary to think there are people out there who do this for a living and can have such a big impact on our daily lives.


  1. A litre of water tastes better than petrol. But a litre of meths (with ice and slice) hits the spot....

    PS No, I'd never abandon Leeds but it's been tough these past few seasons watching them trying in vain to get promoted. We were close this season but no cigar.

  2. Are you sure you're not Scottish? haha - many a happy memory of moonshine, white lightening...

    Very very close - saw it on TV - against Millwall was it?

  3. I definitely agree with your oil / bottled water comparison.

    I will have to check the price of exxon. I have some for both boys to go to college. I have been waiting for it to peak again to sell off and squirrel away in a bank.

  4. The amount of difference the price of oil can have is immense, makes government spending plans look like peanuts! The oil price halving over the past 6 months has been more helpful to the world economy than any stimulus packages.

    You'd do well to wait - no one pays dividends like a NOC but they're going to have to re-start their investments soon because reserves won't replace themselves!

  5. I'm still shocked at how much people in developped countries will lay out for bottled water... considering the tap water is perfectly safe and drinkable in most places!!!

    After living 9 years in Mexico I remember considering it a luxury to be in a country where I could just open a tap and serve myself a glass of water... and now I'm guilty as well of the bottled water craze :o( (although admittedly the water in Alicante isn't that great for your system, to much Ca and other heavy minerals)

  6. O, must I teach you everything! Jed clampett was shooting at some food and up through the ground came a bubbling crude(oil That Is) now the next thing you knew, old Jed became a millionaire! Thats how the oil business started!LMTO!!!!(Tonsils)

  7. ughh...I try not to think about it. I do however like to read and learn about history.

  8. O, I am so very interested in the oilfield services - I'd love to read this book, which is it and who is it by?

    P.S. I love your blog!

  9. Hey O, thanks :) I'll be dropping by your blog often :) And will get back to you on which ever book I manage to get my hands on first