Investment opportunity?
A mystical feature of a economy of limited resources is appreciation.
Let's say neighborhood has 100 house and there's great demand to live there and the demand keeps going up. That is to say there seems to be no end in sight for rising value for that land.
What do you do if you're one of the owners? Perhaps the boom is just a fade and the bubble will burst, be you never know when, and you're already on top of the world, so what do you do?
If you can afford to hold on , you let it ride.
I tend to think of this appreciate in regards to ANWR oil in Alaska. We have a resource that is currently valued at some $60/bbl, and in some time in the future, within 0 to 30 years, it'll be worth A LOT MORE. It costs nothing to keep it in the ground a bit longer. Why rush it?
Of course we're an energy addict. If we sell it now, we may help keep the value of oil down a bit for a little longer, and then we've got nothing left. If we HOLD it, the price of oil will continue to go up and we'll continue spending more money on foreign oil, and go further into debt in the present, but at least we'll have our secret stash up there buried when we need it.
On the other hand, if you're an optimist, you know the cold-fussion hydrogen economy is just around the corner and it'll make messy dirty oil obsolete, or at least decrease its value for fuel into just a raw material for plastics and roads and such. Perhaps if the optimistist hit their stride, we may be at "peak price" now, and we ought to sell before it becomes less valuable.
Well, maybe they are right demand will go down, but we've not really got much anyway, so why not save the last bit for our plastics and such, even if we don't ever need it for a fuel source?
On the other side of the world, what strange force compels oil exporters to continue pumping out oil as fast as they can? Why don't they also wait for appreciate?
The whole system is corrupted in my opinion, corrupted by expectations that past success mean we don't need to worry about the future.
The reality for the U.S. is that we need to use LESS oil sooner or later, and drilling the last oil of ANWR doesn't really help us face that question. Buying more expensive oil from Saudi Arabia doesn't help either. And all successful efforts to conserve will just depress the demand, reduce the prices and encourage new buyers.
Well, I don't really believe in hoarding, but I like rainy day investments. I suppose I might just drain the Gulf of Mexico of Oil because it's "Damn hard" and I like my rainy day investments to be a little more accessible. Not that ANWR is much nicer, but at least there's no hurricanes and you get some good sunny days a few weeks of the year.
It is curious to imagine what Saudi Arabia might do if the U.S found a way to increase our Strategic reserve by a factor of 10 and started buying all the surplus we could find. It would obviously raise prices, which they'd like, but sellers must start getting worried if buyers are too enthusiastic about buying something they're just storing away for a rainy day. They might actually get a clue and decide to NOT expand their production to meet the market.
I'm not at all invested in the energy industry, not nowhere, except perhaps my tax dollars paying for Democracy for Iraq.
Just sort of curious. $500B for freedom for 20 million people of Iraq. That's $25,000/person. I hope they're really grateful for us bombing them and stuff.
Just out of curiousity, how much oil can you buy for that? Looks like about 8 billion barrels of oil, about the value of the oil in ANWR if you're an optimist. About the amount of oil the U.S. consumes in about a year. Well, maybe also the cost of sending a dozen of astronauts to Mars to take some pictures and grab some rocks.
The cost of War is truly astronomical. And soon will be our energy prices...
Let's say neighborhood has 100 house and there's great demand to live there and the demand keeps going up. That is to say there seems to be no end in sight for rising value for that land.
What do you do if you're one of the owners? Perhaps the boom is just a fade and the bubble will burst, be you never know when, and you're already on top of the world, so what do you do?
If you can afford to hold on , you let it ride.
I tend to think of this appreciate in regards to ANWR oil in Alaska. We have a resource that is currently valued at some $60/bbl, and in some time in the future, within 0 to 30 years, it'll be worth A LOT MORE. It costs nothing to keep it in the ground a bit longer. Why rush it?
Of course we're an energy addict. If we sell it now, we may help keep the value of oil down a bit for a little longer, and then we've got nothing left. If we HOLD it, the price of oil will continue to go up and we'll continue spending more money on foreign oil, and go further into debt in the present, but at least we'll have our secret stash up there buried when we need it.
On the other hand, if you're an optimist, you know the cold-fussion hydrogen economy is just around the corner and it'll make messy dirty oil obsolete, or at least decrease its value for fuel into just a raw material for plastics and roads and such. Perhaps if the optimistist hit their stride, we may be at "peak price" now, and we ought to sell before it becomes less valuable.
Well, maybe they are right demand will go down, but we've not really got much anyway, so why not save the last bit for our plastics and such, even if we don't ever need it for a fuel source?
On the other side of the world, what strange force compels oil exporters to continue pumping out oil as fast as they can? Why don't they also wait for appreciate?
The whole system is corrupted in my opinion, corrupted by expectations that past success mean we don't need to worry about the future.
The reality for the U.S. is that we need to use LESS oil sooner or later, and drilling the last oil of ANWR doesn't really help us face that question. Buying more expensive oil from Saudi Arabia doesn't help either. And all successful efforts to conserve will just depress the demand, reduce the prices and encourage new buyers.
Well, I don't really believe in hoarding, but I like rainy day investments. I suppose I might just drain the Gulf of Mexico of Oil because it's "Damn hard" and I like my rainy day investments to be a little more accessible. Not that ANWR is much nicer, but at least there's no hurricanes and you get some good sunny days a few weeks of the year.
It is curious to imagine what Saudi Arabia might do if the U.S found a way to increase our Strategic reserve by a factor of 10 and started buying all the surplus we could find. It would obviously raise prices, which they'd like, but sellers must start getting worried if buyers are too enthusiastic about buying something they're just storing away for a rainy day. They might actually get a clue and decide to NOT expand their production to meet the market.
I'm not at all invested in the energy industry, not nowhere, except perhaps my tax dollars paying for Democracy for Iraq.
Just sort of curious. $500B for freedom for 20 million people of Iraq. That's $25,000/person. I hope they're really grateful for us bombing them and stuff.
Just out of curiousity, how much oil can you buy for that? Looks like about 8 billion barrels of oil, about the value of the oil in ANWR if you're an optimist. About the amount of oil the U.S. consumes in about a year. Well, maybe also the cost of sending a dozen of astronauts to Mars to take some pictures and grab some rocks.
The cost of War is truly astronomical. And soon will be our energy prices...
posted by Ares Olympus at 9:40 PM
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