Tuesday, February 21, 2006

Cantarell is dying


What does this mean to you?

Well, for starters, don't buy that SUV.

In plain English, the decline in production of oil means that there is less supply. Less supply means higher prices. Higher prices mean economic troubles.

Kinda like the ones we're having.

It is a very common opinion amongst traditional thinking economists that increased prices will encourage companies to find new supply. This is partly true. What they're not taking into account is that there is a great deal of decline to make up for in order to even break even, let alone to come out ahead. And where will all this supply magically come from? Ghawar, the first largest oil field, is dying too, according to most experts.

Let's put it this way. We have a family of Six. Mommy makes 250k / year as a lawyer and Daddy makes 300k /year as a doctor. Mommy dies and Daddy goes insane. It's up to the highschool-ages kids to earn their own living. Four kids can make enough cash to hold up a 550k / year lifestyle, right.

So, Mommy is Cantarell, Daddy is Ghawar. The kids are all the other fields, tapped and untapped. There just isn't going to be enough to make up for the loss of the big ones.


So, what, you ask is the point of all this?

We're all F.U.B.A.R.'d, run for the hills. It's all over. Park your SUV and pass the ammunition.

-LORD gotwa


Blogger notyourmommasoatmeal said...



You need to look on the bright side once in awhile :-) As the market demands it, companies will provide it.

8:20 PM  
Blogger Lord Gotwa said...

Ahh, hybrids. I could talk all day about how hybrids are not the answer, but that'll be for a different day.

3:48 PM  

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