Jump to content
Sign in to follow this  
walker

Oil Prices set to tumble.

Recommended Posts

I don't always agree or like what Walker says, but you are failing to see why oil is a better investment. It's because it's a bubble. It's basically a Ponzi Scheme where the investors know that the roller coaster ride is going to end rather quickly, but if you get on board soon enough, you can make a lot of money.

The Oil-Price Bubble

"There are many factors behind the sharp increase in the oil price, but one is usually overlooked: it's a bubble. Where bubbles appear in the market (think of housing and tech stocks, to name two in recent memory), you will find the hidden hand of monetary policy at work. This is an underlying issue that helps explain the price. Recognizing this also helps us make a better judgment concerning the future of the oil price as it relates to overall economic well-being."

http://mises.org/daily/2999

There is an element of bubble in the increased oil price. But the core reason and the bulk of the increased price is not speculators, it's increased demand in the emerging economies.

There have always been oil speculators, just as there are in every other commodity.

Likewise, any devaluation in currency clearly will affect the price of imported goods. This is not news. The domestic price of oil rises in comparison as the Pound devalues.

This is not a "bubble". This is normal market behaviour.

While I know well of the housing bubble and the tech bubble and were involved in both of them... I fail to see how those examples of bubbles hold any comparability to the current oil prices.

I'm sorry. But what are you talking about?

Give me an example of two famous bubbles and somehow that connects to current oil prices because...why?

We had a housing bubble because Clinton enforced bank lending to the uncreditworthy.

Is the American government forcing banks to lend people money for fossil fuels?

The tech bubble had no assets. A rented office and some rented computers. When the company made no money, it's value became zero. They had a 5 year shelf life. Make a return in 5 years or fold.

When an oil rig drills no oil, it can be sold or just moved to the next spot. It is a quantifiable and saleable asset.

The demand for oil is not like the demand for experimental new technologies that are hit or miss, it is not high risk investment.

It is a solid, stable and growing performer with a hundred year long history.

(There is significant risk, but it is geopolitical in nature rather than the usefulness of, or demand for their product).

If I gave you 15 examples of other growing industries that were not bubbles, would that impress you?

The oil industry isn't the American housing market. It isn't the Californian tech industry.

It is the oil industry.

It is deeply unrelated to either of those two.

Man landed on the moon. That has nothing to do with worldwide oil demand either.

When Walker amiably describes oil as a bubble and them goes on to proponent green energy as a safer non bubble bet...

He has really lost the plot.

Green energy is pure bubble. Bubble only.

Oil is proven. A solid, reliable and organically growing performer of over a hundred years.

He has given two examples of bubbles and tried to link them to the oil industry, but I put it to you that the tech bubble and the housing bubble have far more in common with the green bubble than they do any "oil bubble".

It is after all a direct result of government eddict and new, much hyped technology.

To readily compare them to a market in which they have nothing in common and then fail to compare them to markets in which they actually have significant amounts in common is jokeworthy.

You may prefer conspiracy theories, but you should not in anyway underestimate the size of demand from the emerging economies.

Chinese people now buy 50 million cars a year, up from 18 million 30 years ago.

Sorry but the world is not going green or electric overnight. The big growth is not in renewables, it is in fossil fuels.

They didn't buy 50 million electric cars, they bought 50 million petrol cars. Those cars will all be on the road for the next 5 years.

50 million more will be added next year. 50 million more were added last year.

That's just in China.

Whats the most successful economy in Europe?

The one that is the worlds largest manufacturer of internal combustion engines of course.

Every car they sell... needs fuel.

Edited by Baff1

Share this post


Link to post
Share on other sites

Hi all

Baff1 I do not think you realise that you are arguing against your self.

Since the supply of Oil is finite, its average price over time, can only ever go up; while the amount that can be sold and thus can make a profit can only go down. This is classic position in economics of a declining industry.

A Car does not have to be electric to burn Hydrogen

As to your argument about not being able to change to green energy overnight: Frankly pretty much we could.

Shifting across every single one of those fossil fuel engined cars can be achieved by a simple alteration of the carburetor to burn Hydrogen instead of fossil fuel this is essentially what all those Natural Gas engines that you see being used by councils to save money do. And then replacing the existing Fuel Tanks with Gas Tanks again the physical technology is the same as is used by those same natural gas engines.

Is that as efficient as electric motors and Hydrogen Fuel cells? No! But it is a perfectly acceptable transition stage and would be cheaper to run than fossil fuels, which as you point out will only increase in price.

Oh by the way there was a Hydrogen fueled Turbine engine for cars back in the sixties.

We then come to the hydrogen transmission stage and that is even easier, Hydrogen is already shifted round the world so all the technology is there. In the long term, we just shift over to Hydrogen gas instead of methane; town by town, same as we did with the shift from coal gas to Natural Gas back in the 70s.

So as you point out:

The long term average price of Oil will only ever rise.

The Supply will never be able to keep up with demand.

As you now accept:

It is a commodity, and thus subject to speculative bubbles, like the present one.

While the price of Wind Power produced Hydrogen will pretty much stay the same forever.

I there for submit: that fossil fuel is a strategic threat to both individual nation states and to the world economy and that it is economically necessary to stop supporting it.

Oh and by the way you do realise that current oil bubble is going to burst don't you?

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites
a simple alteration of the carburetor

LOL. Cars haven't had carburettors for decades... Everything has EFI's to go along with the digital engine management. Jesus walker, get with the times!

But I guess its just as simple as navalising the Typhoon right? Could be done overnight at little to no extra cost? :j:

Share this post


Link to post
Share on other sites
Hi all

A Car does not have to be electric to burn Hydrogen

Who cares?

Almost all cars don't.

---------- Post added at 02:31 AM ---------- Previous post was at 02:29 AM ----------

Shifting across every single one of those fossil fuel engined cars can be achieved by a simple alteration of the carburetor to burn Hydrogen instead of fossil fuel this is essentially what all those Natural Gas engines that you see being used by councils to save money do. And then replacing the existing Fuel Tanks with Gas Tanks again the physical technology is the same as is used by those same natural gas engines.

Who cares?

Almost all cars haven't been.

Could have, would have, should have; isn't something I can take to the bank.

You do realise that the green bubble has burst don't you?

It's over mate. Welcome to the new world of austerity. Taking checkbooks out of the hands of idiots the world over.

Now I don't disagree that long term the price of fossil fuels will cause them to become economically non-viable.

But in the meantime...

They are still the cheapest form of energy out there.

So it makes absolutely no sense to adopt other methods until that changes. Which it has not.

I understand that you yearn for that day to come, but it has not come yet. Just be patient.

Don't shoot your load too early.

For god's sake man. Please stop explaining economics to people. It's not your strong subject.

When oil prices go up, so do the profits of oil companies. Not the other way round.

It doesn't cost them anymore money to drill it out of the ground today than it did last week. They are just getting a higher price for it because of the increased demand.

So right now, if you are invested in oil like me, you are getting bumper returns on your money.

And if, also like me, you are invested in wind power, you aren't.

Edited by Baff1

Share this post


Link to post
Share on other sites

Hi all

In Reply to DM

Modern conversions to gas fuel are commercially available here in the UK for around £1000. And can be done in less than 24 hours.

http://www.mintlpg.co.uk/adwords.php?gclid=CML1rsyesqcCFcoa4QodNT7w_g

http://www.professautogas.co.uk/prices.html?gclid=CJCSrbifsqcCFUFC4QodommE-w

And consider these are bespoke suppliers, once they are factory based the cost would reduce by a very big factor.

You can buy these gas powered cars factory fitted and second hand already:

http://www.thinkgreencars.co.uk/green-cars/green-cars.aspx?gclid=CNq51s6fsqcCFYFB4QodrAzp-A

The process is explained here:

http://www.ehow.com/how_2175756_convert-vehicle-natural-gas.html

So my argument about converting pretty much overnight, is fully supported by fact.

In reply to Baff1

Who cares?...

Now I don't disagree that long term the price of fossil fuels will cause them to become economically non-viable....

...When oil prices go up, so do the profits of oil companies. Not the other way round.

It doesn't cost them anymore money to drill it out of the ground today than it did last week. They are just getting a higher price for it because of the increased demand.

So right now, if you are invested in oil like me, you are getting bumper returns on your money.

So the reality is you fully accept everything I said is true. Meanwhile the world economy goes down the toilet BUT YOU, BY YOUR OWN ADMISSION, ARE NOT BOTHERED!

Your Philosophy is: "Fuck the world I am alright Jack."

You are not bothered about me talking about economic facts, exactly as T. Boone Pickens did to the Senate, the reason you want anyone, whether it be T. Boone Pickens or little old me, to stop telling the truth about the economics, is because you are afraid it will reduce the profits you are tied into on oil. You are without doubt worried about loosing your shirt.

As I said I do not think you realised; that you were arguing my point for me, the whole time.

We are moving to a hydrogen economy no if buts or maybes

Let me make no bones about this: Fossil Fuel is a declining industry, its time has come and gone. Yes there will be bubbles, because it is a commoditized product where both you admit and T. Boone Pickens points out, it is a finite product where demand outstrips supply, and the market is corrupt, but in the long term that demand oustriping supply inevitably means it is in decline, sorry to upset you with such basic 101 economics.

There will probably be a period when Natural Gas competes with Diesel, particularly in the transport market, but that is purely a transition phase, because Hydrogen is where we are going.

We are moving to a Hydrogen economy it is not question of if, it is not even a question of when, because we have already started, the only question is how quickly we can get it done; as T. Boone Pickens points out in his testimony to the Senate.

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites

In reply to Baff1

So the reality is you fully accept everything I said is true. Meanwhile the world economy goes down the toilet BUT YOU, BY YOUR OWN ADMISSION, ARE NOT BOTHERED!

Your Philosophy is: "Fuck the world I am alright Jack."

You are not bothered about me talking about economic facts, exactly as T. Boone Pickens did to the Senate, the reason you want anyone, whether it be T. Boone Pickens or little old me, to stop telling the truth about the economics, is because you are afraid it will reduce the profits you are tied into on oil. You are without doubt worried about loosing your shirt.

I'm invested in wind power too Walker.

If oil stops paying and wind starts paying...

I'm not afraid at all.

I still win.

You want this to be an issue of conspiracy.

Of rich and evil oil people burying your eco dream out of greed.

But it isn't.

Your dream is just stupid. That's all.

You have no understanding of the costs involved, becuase you have never had any involvemnt in paying those costs.

You don't pay your own electric bills. You don't own a car.

The reality is you are expecting people to take investment advice from someone who has never made one.

From someone who probably hasn't ever earned their own money in their entire life.

you aren't an authority here mate. You are as far away from knowing anything about that which you are talking as you possible could be and still be a human being.

So crap on about your big conspiracies all you like. Your great dreams of the whole world overnight changing over to hydrogen....

But if you had ever bought a car, you would know how much it cost and how easy it was for you to raise the money to buy it and how long it will take you raise the money to convert it.

You really think half a billion people are going to do this tomorrow night?

Don't be a halfwit.

Oil is here for the forseeable future. It's going to continue to be profitable. And if you and all your friends go green, and everyone in Europe and America does the same.... someone else will pay for it instead. The emerging markets.

It will still get used because it is a cheap, efficient, readily available and easy power source.

Oil is here to stay. Get used to it.

It will run out one day, but not in my lifetime.

Edited by Baff1

Share this post


Link to post
Share on other sites

Hi Baff1

I do not think you are greedy Baff1 I think you are strategically stupid. That is because you may be in business but you do not understand basic economics.

Here I will let a real Oil Man explain it too you.

kWrRBk61FR8

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites
Baff1, check these out:

http://en.wikipedia.org/wiki/Pelamis_Wave_Energy_Converter

Im not sure how expensive they are, but they look pretty good.

Waves pretty good in the terms that it provides a steady supply.

But in terms of investment we are looking at a different equation.

If I have a million pounds, I can get a 1% return on that money by leaving it in the bank.

So in order for me to make money on my investment it must return over 1%.

If wave power offers me 5% return and oil offers me a 10% return than no one in his right mind will invest in wave technology.

It has to be financially viable before it will ever take off.

Organically speaking.

Now of course, we could manipulate the market. We could government subsidise it for example so that the feed in price I recieve for renewable energy is inflated too make wave power offer me a 10% return on my investment also. Or better yet an 11% return.

But this creates a bubble. An artificial market that is dependant on political will. Right now there isn't so much political will to drive up the price of energy generation. To drive up the price of anything.

We literally cannot afford to make ourselves less competative.

The problem we have is political in nature.

We have a whole load of idealistic young people who don't actually pay for anything who wish those that do to subsidise their dreams.

The extra money that we wish to spend on renewable energy has to come from somewhere. Money that we spend there, we can no longer spend somewhere else.

These people are all "Fuck the world I'm alright Jack" types. As Walker puts it.

If a country or the the entire world puts up the cost of living, then those people who can no longer afford it.... die.

It's not a game.

It sounds like a brilliant idea to all those people who haven't ever had to worry about where their money comes from. For who the only issue in their lives is "global warming".

But for most people there are far bigger concerns in life.

This planet will continue to use the cheapest forms of energy available to it as a priority.

If that is oil, then that is oil. Bank on it.

It's not a question of what we want in an ideal world, it's a question of what we can afford. The best value we can squeeze out of our available resources.

Edited by Baff1

Share this post


Link to post
Share on other sites
Hi Baff1

I do not think you are greedy Baff1 I think you are strategically stupid. That is because you may be in business but you do not understand basic economics.

Here I will let a real Oil Man explain it too you.

Kind Regards walker

He's a hedge fund manager Walker old boy.

It's a different kind of investment he makes his money from.

As an investor, I put a certain small amount of my money into high risk investments that profit if regular low risk investments all go tits up.

In this way, I hedge my bets. If everything accepted wisdom relies on goes wrong.. I still don't lose my shirt.

For him to make his money, oil has to fail.

For the bulk of the planet however, it has to succeed.

What is financially best for a hedge fund manager is typically financially worst for the bulk of society.

That's why they all get blamed for profiteering out of peoples misery when things go wrong.

They aren't the biggest capitalist hate figures for nothing.

I agree with the strategics of breaking energy dependance on oil not just for America, but also for our country. This is not a financial concern for me, it is a military one.

So if you wish to argue that renewables are worth paying more for out of strategic security, then I agree. If on the otherhand you wish to try and claim it is the best way to make money, then I wholeheartedly disagree.

Similarly you may wish to argue that renewables are worth paying extra for to save the planet from global warming. Again, this is an argument that holds some merit. (Not enough merit in my eyes, but certainly some).

What I disagree with is people so desperate to pursue one or both of these political agenda's that they are willing to be fast and loose with the economics.

I'm about the money mate. Just the money.

If you fully undersatnd the costs of what you want to do and you still make that decision, that's fine. But if you don't, that's not only a bubble in the making, it's irresponsible. If you are going to make decisions with as greater repercussions as the ones you suggest, you owe it to yourself to make an informed one.

T.Boone isn't the only smart guy in the world.

There are a lot of very smart, very experienced people out in the world trying to make money. There is a reason oil dominates the energy market.

But what he says is true. Just because the U.K. and the U.S. changes to hydrogen and wind, doesn't mean that the demand for oil will disappear.

It won't. The emerging markets will simply buy it all instead.

He on the other hand, will get very rich if this happens because he has invested in hydrogen and wind etc.

As ideas for hedge fund investment, your ideas have great merit.

But for the other 99.99% of all investment they really do not.

Edited by Baff1

Share this post


Link to post
Share on other sites

This blog post has a pretty good explanation of the last "oil bubble". Pretty sure that it's probably just the same thing happening again...just search the page for Sheikh Yamani for the relevant section.

Abs

Share this post


Link to post
Share on other sites

Hi all

As I said I fail to see why people who consider them selves business people feel they are automatically experts in economics, when the the actions of the banks in recent times prove beyond all doubt that the two do not equate.

The Philosophy that is: "Fuck the world, I am alright Jack." is based on tactical success but strategic failure.

UK facing 1970s-style oil shock which could cost economy £45bn – Huhne

Climate and energy secretary says an oil price of $100 a barrel transforms the economics of climate change

Patrick Wintour guardian.co.uk, Thursday 3 March 2011 15.00 GMT

Britain is facing a 1970s-style oil price shock that could cost the UK economy £45bn over two years, the climate and energy secretary, Chris Huhne, is expected to warn in his first intervention on the issue since the start of Middle East political crisis.

In Thursday's keynote speech on the impact of the oil crisis, Huhne argued that an $100 (£61) a barrel price for oil transforms the economics of climate change in Britain.

He disclosed the Department of Energy and Climate Change's (Decc) economists have warned that if the oil price rise turns into a 1970s-style shock the cumulative loss to the UK economy would be worth £45bn over two years. Decc's economists made the calculation on the basis of oil prices rising from $80 a barrel last year to $160, according to Huhne.

At $102 a barrel, oil is at a two-and-a-half year high and there have been predictions that if the political turmoil spreads across the Gulf, the price will rise considerably more...

http://www.guardian.co.uk/environment/2011/mar/03/chris-huhne-oil-prices-green-economy

As always follow the link to the original article in full

If the value of the economy's of the world are reduced to nothing by Oil Price Bubbles, then value of anything you hold is nothing.

Having a great deal of nothing is still nothing.

20000000000000000000000000000 x 0 = 0

It is this failure to think strategically that permeates so many who call themselves business men. In the last great depression they joined the soup queues or sailed off the top of tall buildings or jumped into rivers with pockets full of bricks, or threw them selves under trolley buses and trains.

Not only that but such tacticians are easy marks for those who think strategically. This exposes the nearsighted tacticians to the whiles of the strategician who will always beat them. An analogy might be the fool who bends down to pick up a pound while the thief takes his wallet out of their back pocket. Hense the attitude of those who were beaten by T. Boone Pickens in the last recession.

Those who invest in Oil Price Bubbles are going to get fleeced.

The Dangerous Bubble in Commodity and Oil Prices

Written by Al Fin

Friday, 07 January 2011 14:56

Right now, the printing of trillions of dollars by the Federal Reserve is creating another financial bubble. It is supported only by deficit spending, borrowing, and money-printing. Nothing else is supporting the stock or bond market. Everyone knowledgeable person knows this, but many who are benefitting from the scam choose to deny it. The intent of this bubble is, obviously, to provide cheap capital to the biggest debtors in the world, and to juice stock and bond prices. That helps those who are have obligations and assets created during the previous bubble that went out of control, because it is allowing them to escape before the system blows up, one final time. Meanwhile, many non-connected financial institutions and individual investors are being conned into buying into the bubble through the extensive Orwellian Newspeak that we hear on radio, television and in the business press.

No bubble expands forever. The balloon must eventually pop if too much air is pumped in. The same is true of a financial bubble. If the Federal Reserve keeps pumping funny-money dollars into the current bubble, it will continue to expand for a while, until it finally pops into hyperinflation. On the other hand, if the Federal Reserve stops pumping in the dollars, the balloon will deflate quickly. We may end up in a Greater Depression, but coupled with inflated prices because of what was done...

http://oilprice.com/Energy/Oil-Prices/The-Dangerous-Bubble-in-Commodity-and-Oil-Prices.html

As always follow the link to the original article in full

I hate to be a Henny Penny but I really am not the only one who thinks the sky is falling.

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites

So you are suggesting that todays oil prices are inflated by an oil cartel controlling the prices in the same way as they were in 1970's?

I don't see why people who attend school always think they know anything about anything other than school.

Since the 1970's oil production has become massively divergent. It is produced in any number of countries around the world and OPEC no longer completely dominates supply. The power of that cartel has greatly waned.

Trying to relate the 70's oil shock to todays prices is just another example of inflamatory nonsense.

In the 1970's, there was no car market in Korea, China or India. Now there is. Things have changed. Demand for oil has risen massively. The controllablity of the market by speculators has been reduced massively.

I'm sorry but a load of Obama bashing stories about the devaluation of the dollar, are just Obama bashing stories.

Yes it has put the price of imports up for people living in America.

No, it is not creating a new bubble.

It is the result of a very recent, very famous, very large, burst bubble.

The American debt bubble.

That's why they have devalued.

Oil prices have actually risen worldwide, not just in countries with devalued currencies. For those countries the oil price rise has been even more painful of course. Exaserbated.

This is futrther exasserbated by the fact that international oil trades are typically measured in the petro dollar. However it should be recognised that those countries who trade their oil in Euro's not dollars have also increased their prices.

LMAO. Blame Obama if you like.

Should Obama and the fed decide to buy back all of the Dollars they have just printed, the price of oil will still be higher than it was last year, because demand for it has still risen faster than supply.

---------- Post added at 05:26 PM ---------- Previous post was at 05:18 PM ----------

Having a great deal of nothing is still nothing.

20000000000000000000000000000 x 0 = 0

A person with nothing should not be lecturing people with many things on how to get stuff.

A smart person with nothing should be inquiring of the people with much stuff, what they did to get it.

With regards to the eventual reduction of the value of oil assets to zero...

That doesn't stop them being profitable today.

If I make 10% a year return on my money and on the 11th year my stock is worth zero, then far from the value of my investment becoming zero, it will have returned to me, 110%.

(Bear in mind that if I left the same money in the building society it would be the same. So Ideally I would like to see it last at least 12 years before becoming totally worthless, so that I can be laughing all the way to the bank).

That's the strategy, that's the tactic.

If you think oil will continue to be in demand for the next 11 years, go ahead and invest. If you think it will be gone tomorrow. You are an idiot. It won't be.

Just because oil is eventually going to run out, doesn't mean it isn't highly profitable. It is.

It is one of my most profitable investments on the market today.

Given that hundreds of millions of people last year just bought brand new petrol engined cars, I think it's a safe bet that petrol sales will continue at least at todays rates of demand for the next 5 years. At least.

It's a market with an obvious future and a very favourable rate of return. The staple economy of many a blue chip company.

P.S. Even hydrogen cars use oil. The demand for oil will never reach zero. The stock will never become 100% valueless.

Edited by Baff1

Share this post


Link to post
Share on other sites

The mention of hydrogen fuelled vehicles has piqued my interest. How far off are we from having cars which will run on hydrogen at an affordable cost? Another thing, if hydrogen fuel cells are the future as I hope it will be. Will this severly dent the wealth of oil-rich countries who rely on the sale of crude oil? Hydrogen fuelled vehicles would change things in the UK dramatically. We're an island nation so we'd simply extract our fuel from the surrounding sea. I know such a process would be expensive but then it would be self-sustaining from the sale of a hydrogen based fuel source surely? I'd imagine the by-product of such a process would be oxygen which has its uses.

Share this post


Link to post
Share on other sites

Hi Topgun

The key thing to realise is that Hydrogen is not a fuel. It is an energy storage and transport medium.

To create Hydrogen you need to put in energy.

Assuming you used fossil fuels to create Hydrogen it would cost between 0.40 US cents and and 4.00 dollars depending on if you used Natural Gas as you start point or Sea Water. If you use either of these methods you are seriously STUPID. As a moments thought tells you you are wasting the energy to create your transportable fuel. Using Coal or natural gas or oil or even nuclear to create Hydrogen just means you added a layer of inefficiency into your transportable fuel.

When you say it like that Hydrogen just looks plane STUPID. So why have I got a bee in my bonnet about it, am I really that thick? Wait and see!

Now we come to the renuables.

We can ignore the bio methods, burning: wood, ethanol and algae etc. They are a separate issue and only marginally impinging on the future Hydrogen economy.

We only need to consider the Earth/Solar Energies: Wind, Hydro, Sun, Wave, Tidal and Geothermal power etc.

Tapping costs

In order to take energy from one place to another there are costs in terms of doing so, the costs of tapping that energy.

The Earth/Solar Energies are all more or less free in terms of motive power though like any other generating system they require a method of tapping the energy, Turbines, generators, dams, energy sinks etc.

Existing fossil fuel energy sources such as gas, coal, and oil need also need power generating stations. These also have extraction costs: exploration, the oil rigs, refineries, pump stations pipelines, transmission cables etc.

Earth/Solar Energies also have a need for some though, not all of those, so there will probably be some small savings there.

In theory the fossil fuels have a big advantage; you can turn them on and off when you want to too. In reality this not quite the case, those refineries, generators, pumps and oil tankers have to be manned and run 24/7 356 days a year. If you turn off some of them, it is equivalent to scrapping them and sacking the workforce, at the very least it costs millions of dollars but let us assume that the theory is true.

For Nuclear power the costs are huge, mainly to do with decommissioning which we still have not solved, but they can more less be turned on and off at whim of course like any other business the biggest costs are probably staff and they do not go away because you are not generating.

You just told us this Hydrogen will cost more the Fossil Fuel!

Well that was fossil fuel created Hydrogen, when we are talking land based Earth/Solar Energies created Hydrogen and that is more or less Zero Dollars to produce. Nothing magic here. It is simply excess capacity. You are already producing the electricity and as Baff1 pointed out regularly the wind blows when you do not need the electricity; at night etc. Energy used to create Hydrogen then is as near as dammit Free! Of course in reality you would sell it to reduce the cost of your electricity supply making your whole operation more efficient.

But most Wind Power will be deep sea where the majority of wind is. And where we tapped it for trade for thousands of years before we created steam power and the industrial revolution. In fact I expect wind power capacity to exceed total electricity requirements by a factor of four or more for maximum efficiency.

BUT YOU CAN NOT TURN THE WIND ON AND OFF!

The fact is you do not need to, just the same as with fossil fuels you use an energy storage and transport medium. You create Hydrogen with excess supply! Wind blows at night use it create Hydrogen then burn it when you need energy.

No Fuel is where you want it

In reality all fuels are usually no where near where you need. The Earth/Solar Energies are no different from fossil fuels, America has to transport most its fossil fuel energy all the way round the world! There are hundreds of tankers sitting in the oceans round the world. Naturally a Hydrogen economy would need something similar. Though it would probably be considerably cheaper.

Most of your wind is far out at sea or in the middle of the country on a flat plane. But once again you can create hydrogen and it is eminently transportable. The cheapest and easiest way is probably in big unmanned gas bags. Tow them with helium airships or gas sea tankers. Or just make them self driving using a little of their own gas for fuel. Or stick it in your natural Gas pipeline. Or compress it into storage tankers same as we do now. The methods are just mundane logistics.

We are past Peak Oil

The key thing about all this is though that even though such a Hydrogen economy would be considerably cheaper, that is not, contrary to what Baff1 says, because whether or not Hydrogen production is cheaper, it is the essential reality that the Fossil Fuel industry is in decline. If Baff1 knew economics he would understand this. T. Boone Pickens an oil man most of his life explained this in that video I posted up, we are already past Peak Oil, demand is growing faster than supply.

Oil is dead that is why there are Oil Price bubbles, they can only exist when demand outstrips supply and when the market is corrupt, they both go hand in hand.

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites

Hydrogen is a fuel.

It is used in rockets.

It's it requires an aweful lot of energy to make, and it's very dangerous to store.

hindenburg_disaster.jpg

@ Walker, demand for oil is definitely growing faster than supply. that is why it is such an excellent investment. Demand is also expected to continue to grow faster than supply, which means it is expected to continue to be a good investment for the forseeable future.

It's a growth industry.

New deep water fields are opening up, siberian ones, shale gas... the arctic...

As demand outstrips supply, the price of oil rises. As the price of oil rises, oil sources that were previously non financially viable to exploit become so.

Also the tecnology man uses to gather the oil improves opening up new reserves.

Oil exploration is ongoing with new reserves being found every day.

New markest have recently opened up and world usage is increasing dramatically.

Has it peaked?

It's not beyond the realms of imagination. But you should recognise that if it has, it has peaked after 200 years of industrial exploitation, there could well be another 200 years to go.

Anecdotally and historically, steam did not replace wind over night. Petrol did not replace steam over night. These change overs took around a century each time.

No need for premature ejaculation we have a long long time to change over to something new.

Oil is very far from dead. It is currently the mostly widely used fuel source on the planet. Absolutely no form of fuel is currently less dead.

I think what you mean is.... you want oil to be dead.

That's not quite the same thing.

P.S. Warren Buffet > T.Boone.

As for knowing anything about economics... OK, I'll bite, what are your economics qualifications? What leads you to believe you know more about this subject than others?

Edited by Baff1

Share this post


Link to post
Share on other sites

Thank you guys. I imagine that when people refer to 'hydrogen' power vehicles, they mean hydrogen fuel cells? In such a case, isn't hydrogen stored in liquid format as of course it would be highly combustible in a gaseous state? What are the other alternative fuel sources one can use in the forseeable future? Bio-fuel? Ethanol? Vegetable oil - if possible?

I think one way which will alleviate the 'energy' crisis at home is to adopt renewable energies as is feasible. For instance, there are communities in the U.K which use solar panels to generate their own power. Any excess energy is then stored at home or shared with an electricity supplier. I think in the case of a latter, a rebate of sorts is available?

I know there's been a long-running discussion and it's interesting to read but there's no need to make snide digs at each other guys. You both seem reasonable. :)

Share this post


Link to post
Share on other sites

Hi Baff1

Hydrogen is a fuel.

It is used in rockets.

It's it requires an aweful lot of energy to make, and it's very dangerous to store.

hindenburg_disaster.jpg

Hydrogen is probably less dangerous and destructive to store than oil.

fire-deepwater-horizon-300.jpg

bp-oil-spill-capped.jpg

Your little Hindenburg firecracker looks miniscule when you compare it to things like this:

http://www.nerc.ac.uk/images/photos/oil_depot_11_12_05_1150.jpg

oil-explosion-buncefield-depot-11-dec-afp-bg.jpg

Of course then we have the Natural gas explosions in houses round the country every year.

http://www.globalnational.com/wideangle/explosion/3766128/story.html

I could go on forever...

Where as you have 1 explosion from ancient technology to use.

Hmm...

Do you really want to fight that battle?

Hydrogen is lighter than air and tends to rise away from human beings, but I accept there will probably be similar numbers of Hydrogen Gas Explosions to the numbers of Fossil Fuel explosions we experience now.

But you are correct I should have said Hydrogen is not an Energy Source rather than it is not a fuel.

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites

I don't consider it to be a battle Walker.

Hydrogen is considerably more dangerous to store than oil due to it's volatility. It is also more volatile than natural gas.

So whatever destructive problems you have seen with those sources, expect worse from Hydrogen. Hydrogen however is considerably less of a polultant than oil.

Rising away from human beings? I thought you wanted to put it into cars not weather balloons.

Would you mind explaining your economics background to me please?

You seem pretty certain of yourself, what is your background?

At the moment you see, I'm just dismissing every word you say as the words of some student type internet conspiracist. You know what I mean, all reactionary lefty and nothing more.

Which might be a bit unfair to you after all the time you have taken with me in your replies.

What in your life has led you to this economic opinion please?

Edited by Baff1

Share this post


Link to post
Share on other sites

Hi Baff1

My knowledge of economics is nothing special. My Degree was a combined honours Degree in two subjects rather than the usual one, and four years rather than the usual three. It was a BSc. Combined Hons. in Business Information Technology. It included two semesters in Economics all in the first year. I was in the top 10% in economics nothing spectacular. All many many years ago now.

The stuff I am pointing out is after all Economics 101.

I began as an Engineer back in the 70s when computers were programmed with brown paper punched cards and ticker tape. Giant rooms full of whirling tape drives. Hard Disks the size of plates inside perspex domes that looked like a then modern day equivalent of the covered silver platter the butler used to served the meat from. Ballistic Printers that would give a jack hammer a run for its money in terms of earth shake and volume. A staff of tens and buildings full of ancillary equipment like air conditioners. All to serve a computer with 1K of memory programed usually in Assembly Language or FORTRAN or COBOL and later in Basic.

I worked on some of the earliest CNC machines and became a Welder and worked on one of the worlds first Welding Robots it started out as an Analogue computer running it to begin with. So that might give you an idea how far back this was. Since then I have been a Social Worker for a few years and Librarian for a long time and spent a fair few years working for a climbing wall and as a climbing instructor. I have worked in the city and done market analysis as a contractor and worked for everything from the TUC to big Arab Investment firms. I also worked on the technical side of Satellite Broadband and military simulation. I even subcontracted for BIS for a while.

I am missing out a lot. As you can guess from that I am not a kid.

Hydrogen is considerably more dangerous to store than oil due to it's volatility. It is also more volatile than natural gas.

So whatever destructive problems you have seen with those sources, expect worse from Hydrogen. Hydrogen however is considerably less of a polultant than oil.

Rising away from human beings? I thought you wanted to put it into cars not weather balloons.

The reason why I am saying rising away is that if it leaks, in a well ventilated area, it is less likely to stay at ground level where people are, like oil and petrol do. An explosion in the sky is a bright fireball spectacular and all, but mostly just show. You may have noticed Hollywood uses them all the time.

But accepting that Hydrogen can explode is a given. In all honesty the explosions I would expect to be similar to Natural Gas explosions.

Of course you do not have the risk of burning to death in a pool of oil. Which is probably a plus.

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites

It explodes a lot easier than gas.

I think it might be to do with the amount of oxygen it requires.

Nice one matey I appreciate the potted life history.

That does indeed change the way I was thinking about you.

Here is a quick example of the ACTUAL economics of the hydrogen engined car.

Note well I said actual not fantasy.

Yesterday, (or perhaps the day before..) you gave me a fantasy economics example in which the whole world could go hydrogen overnight.

You told me how much sense it makes to do so.

Well, it's been overnight.

So in order for that to be actual economics and not fantasy economics, do you now own that hydrogen engined car?

If not, why not?

The answer to that question, if the answer is no... is the economic reality.

If yourself, as big a proponent of hydrogen engines as you are did not buy one overnight as you are suggesting everyone is doing or should do... why would you imagine any one else is going to?

If you yourself have done it, then your ideas hold some merit.

If not, they hold none.

If however you already own a hydrogen engined car... I will of course learn to respect you far more than in my earlier post.

I'm not intrested in predictions based in fantasy. Only those based on fact.

So if you are that guy who owns a hydrogen engined car, in my mind I will reserve a spot for you as a possible guru of future trends. But if you are that guy who does not, I will file you under, lefty green whiner.

Edited by Baff1

Share this post


Link to post
Share on other sites

Hi all

I think I can help everyone including Baff1 to understand the safety issues with following facts.

Hydrogen is actually safer than most fossil fuels.

In the low concentrations where explosions occur the energy required to ignite Hydrogen, its Auto Ignition Temperature, is higher than that of Gasoline, Petrol, Kerosene and Diesel and slightly lower than that of Methane.

Diesel or Jet A-1: 210 °C (410 °F)

http://en.wikipedia.org/wiki/Autoignition_temperature

Hydrogen 500°C 932°F

Gasoline 280°C 536°F

Kerosene 295°C 563°F

Methane (Natural Gas) 580°C 1076°F

Petroleum 400°C 752°F

http://www.engineeringtoolbox.com/fuels-ignition-temperatures-d_171.html

A gas explodes when there is low fuel and high oxygen concentrations, bit of basic chemistry 101 there. So this is the more important temperature to consider.

In certain "Optimal burning conditions and concentrations" where various factors are at play it is possible for hydrogen to ignite more easily than petrol, but these are burning type environments, not the low concentration explosive ones. Hydrogen does not burn as hot as say oil or petrol so is much less likely to cause secondary fires.

Unlike a petrol tank, it is not possible for a tank of compressed Hydrogen to explode; unless Oxygen or another oxidiser was introduced into the tank. Since the gas is compressed this would require some one doing it purposefully. Fuel and Oxygen containers and transmission systems have different connectors precisely to prevent this sort of thing.

A tank of petrol on the other hand can and often does have oxygen in it; with spectacular and often fatal results.

The explosive force of fuel is a complex question the other side of the equation is the level of oxygen or oxidiser present but assuming in air, then the explosive force of an equal quantity fuel then hydrogen is higher than Natural Gas and petrol. However this is complex subject.

http://en.wikipedia.org/wiki/Energy_density

Interestingly this is why hydrogen makes a better fuel than petrol.

And as I said before, because Hydrogen is light rising in air at 22m per second or 6 times the speed of Natural Gas, methane; Hydrogen disperses very quickly and as I said away from the ground where people tend to be.

Hydrogen and its transport are subject to modern safety methodologies.

Petrol can not be said to be any where near as safe, and many people are killed and horribly maimed by it every year.

In fact if petrol had been introduced under the same safety regime as Hydrogen is required to fullfil, then Petrol would have been banned decades ago.

Petrol is just no where near as safe as Hydrogen.

Kind Regards walker

Edited by walker

Share this post


Link to post
Share on other sites

Please sign in to comment

You will be able to leave a comment after signing in



Sign In Now
Sign in to follow this  

×