| ▲ | 1970-01-01 20 hours ago |
| This is how peak oil happens. Without a healty cartel, oil is doomed. Solar, wind, geothermal, hydro, nuclear. These are more than ripe to disrupt energy into the 21st century. |
|
| ▲ | cj 20 hours ago | parent | next [-] |
| > Without a healty cartel, oil is doomed Why/how? Without a healthy cartel, wouldn't prices go down? Cheaper oil means less adoption of alternate energy sources. |
| |
| ▲ | WarmWash 19 hours ago | parent | next [-] | | The goal of the cartel was to stabilize prices right in the sweet spot to keep the world addicted. Too low and players start losing money, too high and people switch away from oil, too much volatility, and people switch away from oil. | | |
| ▲ | Ajedi32 19 hours ago | parent | next [-] | | > Too low and players start losing money Only the non-competitive ones. That's how competition works. OPEC would be deemed an illegal anti-consumer price fixing scheme under the laws of any country with even the most basic of anti-trust laws, if not for the fact that its entirely composed of sovereign countries not subject to any law but their own. | | |
| ▲ | philistine 18 hours ago | parent [-] | | If the price is too low and fields stop being exploited because they're unprofitable, you reduce the volume produced each day. That means there's scarcity with a low price, and you're back at trying to switch en energy source because you just can't get oil. That moves prices upward, because people are willing to pay more, but increasing production is not like turning the faucet in your home. It takes time. This is the instability of oil production that OPEC tries to prevent, to keep the world hooked on readily available just cheap enough oil. | | |
| ▲ | Ajedi32 18 hours ago | parent [-] | | In a free market "scarcity with a low price" is a contradiction. If there's scarcity the prices will be high, not low. And nobody's going to be reducing production if the prices are high. > instability of oil production that OPEC tries to prevent First of all, if the goal is to prevent instability OPEC is doing a terrible job. Secondly, a cartel is not needed to prevent price instability, as demonstrated by the hundreds of other commodity markets around the world which are not controlled by cartels engaging in price fixing schemes. As with any cartel, the purpose of OPEC is to maximize profits for its members, artificially fixing the price of oil at a level higher than what it would otherwise be in a free market not controlled by a cartel. Price stability is a side effect of that, not the goal. | | |
| ▲ | chasd00 17 hours ago | parent [-] | | > First of all, if the goal is to prevent instability OPEC is doing a terrible job. I mentioned this upthread, the instability OPEC is trying to prevent is civil unrest from not being able to fund their social programs and governments. They need a price that puts them in the black and the rest of the world will pay. If it was a free market the fracking boom would still be raging and oil would be $30/bbl. Many gulf nations would fall apart if oil was at that price for a long period of time hence the price manipulation. (I'm not sure how they got the frackers to ease up, some say many of the frackers were bought out by OPEC members and their wells capped but that's just conspiracy afaik) |
|
|
| |
| ▲ | chasd00 18 hours ago | parent | prev [-] | | > The goal of the cartel was to stabilize prices right in the sweet spot to keep the world addicted. If the price of oil remains low the gulf governments can't fund their social programs and risk instability. That may not be the only reason for OPEC but it's a major one. When fracking really took off the writing was on the wall and I think many OPEC nations have since taken serious measures to shield themselves from price drops. This is probably why the UAE can now feasibly leave OPEC. I thought the fracking boom was the end of OPEC but they managed to hang on. |
| |
| ▲ | array_key_first 17 hours ago | parent | prev | next [-] | | The prices would go down too much, and then infrastructure would rot as production slows down. Then, prices would skyrocket, and so on. Oil production and distribution is basically infrastructure, like energy or internet. It can't really follow free market dynamics without eating itself. | |
| ▲ | HWR_14 19 hours ago | parent | prev [-] | | A healthy cartel means consistent oil prices. Without it, oil may average cheaper over the long term (and almost certainly over the short term), but there will be a lot more variance. | | |
| ▲ | HDThoreaun 19 hours ago | parent [-] | | Ok? If you can’t have price variance buy futures. Price variance doesn’t matter for consumers, just average price. | | |
| ▲ | HWR_14 13 hours ago | parent [-] | | Price variance matters a lot for consumers, especially gas/oil. |
|
|
|
|
| ▲ | coffeebeqn 19 hours ago | parent | prev | next [-] |
| I guess the silver lining from this mess is that maybe some
more governments realize they don’t want their energy policy to force them into a recession every time there’s a conflict in the Middle East |
|
| ▲ | seydor 19 hours ago | parent | prev | next [-] |
| how is the cartel not healthy? uae is 12% |
|
| ▲ | TacticalCoder 19 hours ago | parent | prev [-] |
| > Solar, wind, geothermal, hydro, nuclear. These are more than ripe to disrupt energy into the 21st century. Yes and we've seen negative electricity price in some EU countries a few days ago: very sunny days but not too warm, perfect for solar panels. Supply surpassing consumption: negative electricity prices. While we're, supposedly, living through an energy crisis. There may oil shipment issues and there are issues with energy due to the Russia/Ukraine war too but... Many already understood that there were solutions to not be entirely dependent on oil. Doomsayers are going to argue that "we need electricity during the winter at 6 pm" so a "largely negative electricity on a sunny sunday means nothing" (Belgium, two days ago: hugely negative electricity prices, for example and it's not the only case) but the truth is: we're not anywhere near as dependent on oil as we were during the Yum Kippur war / 1973 oil shock. And oil is definitely limited in how high it can go for as soon as it goes up, suddenly other energy source make more and more sense economically. Once again: negative electricity prices two days ago. Let that sink in. |
| |
| ▲ | HWR_14 19 hours ago | parent [-] | | The problem is that grid scale power plants can't just turn on when the sun isn't shining. If the negative prices during the day and positive prices at night lead to energy storage, then it's a solution. Otherwise, it's just a glut at some times of day. | | |
| ▲ | dcrazy 19 hours ago | parent | next [-] | | This is where grid scale batteries come in. Looking forward to that. (As long as they can avoid blowing up like the one in Monterey…) | |
| ▲ | neoromantique 16 hours ago | parent | prev [-] | | >The problem is that grid scale power plants can't just turn on when the sun isn't shining They can, though? Batteries can offset the start-up times, otherwise gas plants can start up within minutes and nuclear can ramp up within days | | |
| ▲ | HWR_14 16 hours ago | parent [-] | | "Days" is too long when you need power at night. Coal and gas combined cycle plants take too long just like nuclear. Turbines could work. But that's not the majority of plants. |
|
|
|
