I have been doing research on peak oil and the effects it will have on the world. basically the theory is that it is going to run out shortly and and massive livestyle changes will result from this happening. If the information is correct the effects will be devistating as nearly everything we use and rely on from fertilisers for food to pharmacuiticals to fuel will be hugely effected. oil is preety much used in some way or another to make everything and there is no replacement. nothing else on earth can create the energy and work that oil can. It is said that one barrel of oil is equivilant to 25000 man hours and costs roughly $1 to extract per barrel from the oil site in saudi. I dont know if you have reserched the topic at all but if you could provide some insight towards how peak oil will effect the property market and investments it will be very much appreciated.
I am 24 and just about to buy my second investment property for $250,000 renting out at $250 a week. from what i have be reading in the posts i I am now considering not purchasing this property and either searching for a better investment, weather it be in stocks or a better returning property, or just waiting for the shit to hit the fan with peak oil, interest rates, unaffordability etc and figure out what to do from there.
Any advice will be fantastic.
Regards,
Luke
Peak oil is defined as reaching the limit of the rate of production. Not "running out" of oil.
The world has more known oil reserves now than in the 1970s.
Worst comes to worst – oil products will get more expensive. As it gets more expensive, less economical deposits become viable (like oil shale in Canada). As more deposits are exploited the rate of production is increased, and the "peak" moves again.
I've survived the following end-of-the-world scares;
Nuclear Winter
Global Cooling
Mass Starvation
Acid Rain
Y2K
SARS
Global WarmingI expect to survive Climate Change and Peak Oil as well.
I agree with NorwegianBlue.
There is always a new reason why NOT to do anything. You are either moving forwards, or you are moving backwards. Procrastinating is moving backwards. Evaluate the risk, work out a forward move, then make the move.
I personally would look for an investment that doesn't require me to provide so much ongoing funding (i.e. CF+), but that's just the approach I use. That way, if it all turns to crap there's better odds of being able to afford to keep the IP – or at least you can pay more of the debt down while you're waiting for the next apocalyptic scenario to occur
Daedalus
if we run out of oil we will be so stuffed that another 250 k of debt wont change your life , i expect it will be a long drawn out process with regular price hikes rather than a sudden stop .
i was worried about this and decided to purchase more centrally so as not to NEED transport ,( ok i know we all need stuff transported ,but i can walk to the shop ! ) if it all goes pear shaped central will be best
most books will tell you to stick within 6 ks of the gpo as there is best growth there
having said that there are lots of good reasons not to buy most properties and when starting out you will hear all of them !
so be stubborn and persevere ,it has made my life better
(that and the berlin wall coming down !)If you truly beleive in peak oil and are looking at investments then invest in an oil and gas company or invest in property or a business associated with extraction activities.
The oil price is high and tipped to stay high and production costs havent risen much so the stretch is bigger. Extraction technology is also improving we can now get it from deeper in the ground and deeper under oceans and also under ice fields. Oil companies are doing well. I think we will keep finding it and the price will keep increasing to a point where alternative energy becomes viable. I dont think alternative energy will become cheaper rather hydrocarbon will rise in price such that it is the same cost as alternative energy.
We are setting up a new company in Abu Dhabi and up there they plan to double the oil extraction capability in the next 5 years that is a huge committment as it already is a big prodution centre.
The biggest growth in domestic onshore oil and gas is coal seam methane gas in western queensland. There is a lot of devleopment work underway and the local economy will benefit from this. Have a look at what Santos, Origin, AGL, Arrow and QGC are up to in QLD and you will see that there is a lot going on right now.
rentboy which company do you work for ?
NorwegianBlue wrote:The world has more known oil reserves now than in the 1970s..
Where do you get your facts from,…. this statement is simply untrue we have never discovered more oil than we did in 1968,
even with all or modern technolgy, we are burning about 2 times more oil than we are discovering,
rentboy wrote:Extraction technology is also improving we can now get it from deeper in the ground and deeper under oceans and also under ice fields. Oil companies are doing well.
.it's a double edged sword though,… the better we are at pumping out the oil the faster we run out,
when oil companies are spending millions of dollars exploring for oil feilds 2Km under water and in the artic circle it is a sure fire sign we are running out and remember it's not running out that is scary it's the steady decline of global production that is going to cause drama,….. as seen in the 70's a drop in production of 5% cause the price to jump by 800%.
Check the thread below and scroll down for some interesting graphs on what we may be facing.
https://www.propertyinvesting.com/forums/community/opinionated/4322125
Also if you haven't noticed already oil is trading at 3 times the price it was 3 years ago, and opec say's it "won't" raise production which is really code for "can't" raise production.
Don't know what impact high oil prices will have on house prices but Australia will do well in the energy game as there is an abundance of coal and gas reserves that we can compress and sell as LNG.
If the price keeps going up then rentboy is right you should invest in it.
I also work in the oil and gas industry and its awash with money and opportunity. Last year worked with Exxon Mobil and they certainly have long term plans so don't expect anything to stop flowing in the short term.
There is a flip side to peak oil which is that it is a ploy to create scarcity and drive prices up, OPEC don't produce more because that's what keeps prices high.
bardon wrote:I also work in the oil and gas industry and its awash with money and opportunity. Last year worked with Exxon Mobil and they certainly have long term plans so don't expect anything to stop flowing in the short term.There is a flip side to peak oil which is that it is a ploy to create scarcity and drive prices up, OPEC don't produce more because that's what keeps prices high.
Firstly opec are not silly,…. they know high prices creates interest and demand for alternatives and they do not want to kill there golden goose, so in the past have always increased out put to met demand,… this time prices are higher than they have ever been but they still refuse to lift production,….
and in answer to your first piont,… offcoase oil isn't going to stop flowing,… but our ability to produce ever incresing amounts of it is not going to be possible,…. If the big oil companies believed that oil production was going to continue to rise into the future as demand continues to rise surly they would be building more refineries,….
However there has not been an oil refinery built in the USA since 1976,…. the simple reason is that the oil companies know that production of oil can not really be lifted much more so the existing refineries will be enough,…. mean while demand is still growing at an ever increasing rate,……. so the only way is up for the price of fuel.
The Maths behind our future energy needs is very worrying,…. if we follow our current trend just to maintain prices at todays levels over the next 7-10 years we will have to increase global annual production by 50% which is clearly impossible.
and we will have to discover about 300 billion barrels of oil reserves just to replace the feilds we deplete between now and then, to put that in perspective the US is celebrating the find of an oil field in the golf of mexico that is estimated to be between 3 and 15 billion barrels, even at the high end of the estimate, it only equals 6months of global supply,…
over 50% of todays production comes from the mamoth fields discoverd nearly 5 decades ago,…. some of which are well into decline pumping upto 50% water.
Caltex Australia actually made history earlier this year when they had to ship oil all the way from west Africa to sydney because there was no avaiable supply anywhere closer, and to refine it they had to make modifications to the refinery because it was much heavier oil than the light sweet crude we have used in the past.
There are companys now that are producing oil out of sand, yes that's right, Mining sand and turning it into oil.
There is a lot of sand on the planet..
hbbehrendorff wrote:There are companys now that are producing oil out of sand, yes that's right, Mining sand and turning it into oil.There is a lot of sand on the planet..
they can't go create oil from just any sand,…..What you are talking about is "oil sands, Tar sands and oil shale Mining",…… yes it is possible however it turns the production of oil into a mining operation requiring massive open cut mines which is devasting to the environment,
not to mention the fact that to produce 1 barrel of oil they use the amount of natural gas equal to 6 barrels of oil, it is not a cheap or easy way to get oil.
not to mention the fact that to produce 1 barrel of oil they use the amount of natural gas equal to 6 barrels of oil, it is not a cheap or easy way to get oil.[/quote]
This is good more demand for our gas reserves
Tysonboss1 wrote:Caltex Australia actually made history earlier this year when they had to ship oil all the way from west Africa to sydney because there was no avaiable supply anywhere closer, and to refine it they had to make modifications to the refinery because it was much heavier oil than the light sweet crude we have used in the past.
Or could this be an example of innovation and adaption by a leading edge company with its eye on the global ball ?
bardon wrote:This is good more demand for our gas reserves
There are much better ways of using that amount of natural gas,
Plus it would make every vechicle using petrel, release 6 times more carbon emissions,… so I don't think oil shale is the cure all,
bardon wrote:[Or could this be an example of innovation and adaption by a leading edge company with its eye on the global ball ?
Yes you can sugar coat things like that I guess,….Offcourse it doesn't change the facts behind the reasons they are beening forced to adapt, and make such drastic changes
it doesn't change the fact that they are now having to pay almost 3 times as much per barrel than they were 3 years ago,…. fo oil the costs them much more in shipping costs to get to market,… and they are having to spend millions of dollars on plant upgrades to refine this fuel and they had to get special permission from the EPA because this heavy oil releases allot more pollution during the refining process.so who pays for this extra cost,…. us…..
seriously what are you saying,… do you honestly believe we can continue to indefinatly increase production into the future on a resource that is already in a mature state due to decline.
Quote:Tysonboss1 wrote: Where to do get your facts…
Here's one reference, there are plenty of others if you don't trust BP.
NorwegianBlue wrote:Quote:Tysonboss1 wrote: Where to do get your facts…
Here's one reference, there are plenty of others if you don't trust BP.
What are you trying to say with that link,….
I have absoulutly no doubt that there is in excess of 30 Years reserves in the ground but it will not be business as usual till the day the last drop is sucked out,…. the issue is not the amount of reserves in the ground but the rate of production that is the drama,….
as oil fields age the rate they can produce oil drops,… because when a field is young 100% pure crude bubbles out the ground as it gets older less and less crude is pumped slowly it drops to 95%crude 5% water,…. 90%crude 10% water,… 85%crude 15% water etc.etc,…
as I said earlier about 50% of the global production is coming from wells that have been pumped for the last 5 decades alot of which are already producing 50% water,….
say over 10years production slowed at some of the worlds key oil fields ( the giants we found in the sixties) by 30%,…. we could easily see global production drop by 10%, but if we follow todays trends in the growth of energy demand we will need to be producing about 50% more oil by then,.. not 10% less, so there would be a 60% production shortage.
Using the example of the 70's oil crisis which was a short term made made production shortage where oil production was decrease by 5% and world oil price rose by 800% what do you think the impact of a 60% production shortage would be
The green line is the oil price and the black line is production levels,… note the sharp rise in price when global oil poduction droped by 5%,……
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