Comments on Brian Duncan’s “Oil Company Risks”

I think Brian did a great job explaining the risks that oil companies are facing, such as reduction in skilled labor and tight debt markets. This has resulted in leveraged project difficulties as well as scarcity of materials like steel and concrete. However, this article made me wonder about possible solutions that can help us improve our current situation.

The U.S. is the largest oil consumer worldwide. 68% of oil was purchased by consumers and industries. We have been extremely dependent on oil for hundreds of years. Now, oil prices are over $108 per barrel. We are desperate for alternatives.

First of all, oil companies have 10 years of reserves under ground. They are not facing scarcity issues, so investing more money for alternatives doesn’t make financial sense. To them, no alternative makes them profit.

The Hybrid car is not the solution. Most people can’t substitute their car for a hybrid car because of the cars $30,000 or more price tag makes it unaffordable.
Ethanol is not the solution either. It takes more energy to produce ethanol than it can actually yield. It takes acres of corn to produce just a little ethanol. Here is the equation:

11 Acres = 1 year’s oil supply for 1 vehicle

If we want to produce enough ethanol for every vehicle on the road, we will have to cover 97% of farming land with corn. That is not possible at all.

We might be able to reserve tar sand like Canada does. It takes strip mines to get at the goo, called bitumen, which must then be heated with steam and hot water, and then processed with caustic chemicals. It can be harmful to our environment in the long run.

I believe the way to get rid of the oil dependency is to change our life style. We must use more coal, and take public transportation. We need to stop using oil like we have in the past. Use natural solar energy, such as sunlight, wind, and water as alternatives. It takes everyone to make it happen. From saving empty plastic bottles to using a car pool, we all need to start to conserve. It might be a little too late. However, we are left with no other choices.

http://www.energybulletin.net/1253.html

http://www.cbsnews.com/stories/2006/01/20/60minutes/main1225184.shtml