BP Boycott

[Contrarian]

Gidday
There is a email going around asking people to boycott BP until such time as they reduce price to 80 cents.

I will be supporting the social experiment.

Personally I think it's great Janks can't afford to commute in a Chevy Suburban & think petrol should be an expensive luxury, rather than an Allah given right. Toyota & Honda have some sweet hybrids on the market...

[nelehdine]

As a shareholder in BP can I ask why them and not Shell, Mobil, etc ??

[johna]

What annoys me is that they always put all the fuels up by the same number of cents. As a diesel driver, this seems unfair because the percentage increase is so much more.

[Alban]

Boycotting BP is pathetic. Look at the graphs:

http://www.med.govt.nz/ers/oil_pet/prices/

Retail petrol margin (price difference between wholesale and retail) has been steadyish at around 20c per litre for a few years now. Petrol station profit is lower than this because they need to pay rent, rates, staff costs, etc. Petrol stations make less than 10c per litre. NZ govt takes over 60c per litre. Is BP really the problem? Of course not.

[Contrarian]

Nelehdine
This is the spam, chain letter ....
I don't usually play with this sort of thing, but the social/economic aspect has me interested.

Quote"
Not a bad idea!

Take 2 minutes and read this to make a difference in what you pay for your
petrol...

Received the following which sounds like a good idea. A very interesting
idea...will it work ? Apparently we are going to hit close to $1.35 a
litre by the winter. Want petrol prices to come down?
We need to take some intelligent,united action.

Philip Hollsworth offered this good idea. This makes MUCH MORE SENSE than
the "don't
buy petrol on a certain "day" campaign that was going around last April or
May. The oil companies just laughed at that because they knew we wouldn't
continue to "hurt ourselves" by refusing to buy petrol.
It was more of an inconvenience to us than it was a problem for them.
BUT, whoever thought of this idea, has come up with a plan that can really
work. Please read it and join in! Now that the oil companies and the OPEC
nations have conditioned us to think that the cost of a litre is CHEAP at
.89 / .95 cents, we need to take aggressive action to teach them that
BUYERS control the marketplace not sellers. With the price of petrol
going up more each day, we consumers need to take action.

The only way we are going to see the price of petrol come down is if we hit
someone in the pocket by not purchasing their Petrol! And we can do that
WITHOUT hurting ourselves. Here's the idea For the rest of this year, DON'T
purchase ANY petrol from the two biggest oil companies (which now are one
.BP) If they are not selling any petrol, they will be inclined
to reduce their prices. If they reduce their prices, the other companies
will have to follow suit. But to have an impact, we need to reach literally
millions of BP petrol buyers.

It's really simple to do!! Now, don't whimp out on me at this point...If
each of you send it to at least ten people (30 x 10 = 300)... and those
300 send it to at least ten more (300 x 10= 3,000) ... and so on, by the
time the message reaches the sixth generation of people, we will have
reached over THREE MILLION consumers!

Again,all You have to do is send this to 10 people. That's all. (and not
buy at BP) How long would all that take? If each of us sends this email out
to ten more people within one day of receipt, all 300 MILLION people could
conceivably be contacted within the next 8 days!!! I'll bet you didn't
think you and I had that much potential, did you! Acting
together we can make a difference.

If this makes sense to you, please pass this message on.

PLEASE HOLD OUT UNTIL THEY LOWER THEIR PRICES TO THE 80cents a LITRE RANGE.
It's easy to make this happen. Just forward this email, and buy your petrol
it Shell, Caltex, Mobil,or Gull Outlets and drive by BP Stations.
Unquote"

[Halebop]

The conspiracy theorist in me says it was circulated by a competitor. Not to worry.

I did boycott BP several years ago and haven't been back since. I don't know if anyone remembers. It might have been back in 2000? It was convuluted but BP cornered certain geographic markets in spot oil tanker prices and did something to manipulate oil prices as well. I can't really remember the whole deal now. But the outcome was they made a huge short term trading gain at the expense of consumers paying higher petrol pump prices all around the world.

I decided if their traders wanted to fuc& me to get their christmas bonus they really should have thought about who ultimately buys the oil off them. Never ever again. [}:)]

Still, I don't own a car anymore so maybe the bus I took yesterday used BP gas? :(

[bermuda]

Alban,thanks for your graphs.These graphs never seem to get published because they prove that our pump prices are controlled by the price of crude oil.I too think a boycott of any oil company is pathetic.Perhaps, just for a laugh, the Government could fine anyone driving on their own in congested Auckland.Their traffic is unreal.

[Major von Tempsky]

The boycott attempt is just totally pathetic. Its sprung by people who are totally ignorant of economics and long on socialism. It will fail utterly and completely.
The market is the thing. That and technological progress (which is induced by the market).
Attempts at conservation are in the nice to do as a hobby category. They will not solve the energy problem. Only greater supplies from Saudi Arabia etc and a greater effort on alternatives will solve the problem. I believe that synthetic petrol from plants can be produced for about $5 a litre. Swallow hard and use our otherwise useless wall of wood for that.
And abolish Kyoto along the way. Its a complete waste of time and economically counter productive. Luddite stuff.

[skinny]

MVT - the solution is to go nuclear like the beloved French. My father in law is an engineer at Huntly who has proposed this many a time to his Genesis overlords and he just can't understand why the kiwi (he is of latin stock) is so opposed. Kyoto was a noble idea but flawed in execution - I believe in market based incentives to solve the inter-generational energy conflict, not that jack boots from Brussels. In the mean time I'm happy to profit from the mess by holding oodles of old fashioned oil and gas stocks.

[Gryffyn]

MVT - but people are the market. I agree that the BP approach won't work but that is because it is too ambitious and unrealistic. Faced with an oligopoly, a co-ordinated consumer movement is the market in action. Your dismisals are in fact equally ignorant.

Conservation won't solve energy problems but kyoto was developed by economists - it's hardly luddite - it just attempts to put a price on the longer term effects of different energy sources so that market forces can be applied to a long term problem rather than the short term approach by todays govts.

[belgarion]

Too right Gryf ... Once again I post this simple story about short-termism vs sustainability .... Tragedy Made Simple (http://www.textbookleague.org/34cmmns.htm)

[Cooper]

Stupid would be my word for it. If you seriously think bp are making monopolistic profit, buy shares in them! BP have proven to be the only petroleum company who will pay more than just lip service to the idea of funding R&D to develop alternatives or substitutes. The problem is not the pricing of BP and the other countries but the OPEC cartel, and the inelastic nature of petroleum caused by an over reliance on oil with no viable substitutes. In fact, the higher oil price may actually HELP consumers in the long term by forcing companies to develop alternatives as oil costs more. The market for oil will not change in terms of quantity demanded until we use less or develop alternatives.

[Cooper]

Interesting to note the reporter missed the nefarious machinations of the money hungry conglomerate BP when outlining the reasons behind higher oil prices... how could a reprter have missed the fact that BP is to blame?
discl: No BP just a sense of incredulity.

"LONDON The president of the Organization of Petroleum Exporting Countries said Thursday that his group could do little to lower oil prices over the short term and that other forces were to blame for the record high prices this month.
Speaking at the Indonesian Embassy, Purnomo Yusgiantoro said the recent rise in prices was "due to factors beyond OPEC's scope." He blamed speculators, the gasoline markets and geopolitics.
The 11 members of OPEC pump about one-third of the world's petroleum.
Iraq is a member of the cartel, but it has not been included in OPEC production agreements since the United Nations imposed sanctions on the country in 1990 for invading Kuwait. Policymakers who had hoped production from Iraq would help bring down prices have thus far been disappointed.
Purnomo said OPEC would consider a Saudi Arabian proposal to raise oil quotas by 1.5 million barrels a day. OPEC members may meet informally this Saturday, during an energy conference in Amsterdam, but unless all members are present a decision cannot be made, or formally implemented. Their next formal OPEC meeting is scheduled for June 3.
Still, oil prices fell Thursday amid speculation that a meeting this weekend would bring some relief. Crude oil for June delivery was down 45 cents at $41.05 a barrel in late trading on the New York Mercantile Exchange."

[boris]

Alban
Petrol station margin is at the mercy of the oil companies. It varies from 2.5cpl through to approx6.5cpl depending on the strategic importance and volume of the site. Usually the margin is fixed for 1-2 years. The oil companies also take a percentage of everything else they can get their hands on.
cheers Boris

[Alban]

Some interesting comments here - thanks for the info re margins Boris.

My main point was that the NZ govt makes far more money from each litre of petrol than any oil company and the cut it takes is increasing year on year.

If we should boycott anyone, it's certainly not BP, it's the NZGovt.

[digger]

While most comments i agree with,i like to place a 'HERE HERE" becides Cooper and Major Von T. That gives me my 2 cents worth and supports a plea for reality.
Why not buy shares in the enegry sector as a simple solution. Never the less if i need petrol and shell ,or mobil or etc are on my side of the road i will be seen to avoid BP if it is on the other side with a lot of traffic to negotate. In summary it is a head in the sand idea.

[David Renwick]

I've shunned Exxon/Mobil since the pissed skipper of the Exxon Valdez
ran aground.

[willy_wonker]

The US, Aust & NZ's love for big V8 and large 4WD cars are well and truely over. Holdens and Fords are just big old dinosaurs that is ready to die. Time to get one of those Toyota or Honda cars that runs on electric motors.

In another 20 years, the new hydrogen engines will be ready for public use. What then will happen to the oil industry? The main fear is the oil companies with their vast amount of funds that are prepared to stop the progress of the hydrogen engine in order to further line their pockets. This information comes from a good friend who has a Phd in engineering and works in the industry.

[Placebo]

quote:Originally posted by willy_wonker

The US, Aust & NZ's love for big V8 and large 4WD cars are well and truely over. Holdens and Fords are just big old dinosaurs that is ready to die. Time to get one of those Toyota or Honda cars that runs on electric motors.

In another 20 years, the new hydrogen engines will be ready for public use. What then will happen to the oil industry? The main fear is the oil companies with their vast amount of funds that are prepared to stop the progress of the hydrogen engine in order to further line their pockets. This information comes from a good friend who has a Phd in engineering and works in the industry.



Dusted off that old Ben Elton book, eh WW?;)

The oil industry will reinvent itself as the energy industry and continue much as now. Basically they have been evolving into this anyway, these days they are mainly marketing machines.

As for your comments re V8s, well, someone ought to explain that to the good folk at Ford, Holden and the Auckland City Council...

Agree the BP boycott is stupid. Besides which I don't get the 300 million reference. Why would people in Indonesia, America or China care about the price of petrol in Taihape?

Get a bike!

[Capitalist]

Hey Tempsky. This is one for the file. Far too much comedy mileage to be had on this one to let it pass by.


quote:Originally posted by Major von Tempsky

The boycott attempt is just totally pathetic. Its sprung by people who are totally ignorant of economics and long on socialism. It will fail utterly and completely.
The market is the thing. That and technological progress (which is induced by the market).
Attempts at conservation are in the nice to do as a hobby category. They will not solve the energy problem. Only greater supplies from Saudi Arabia etc and a greater effort on alternatives will solve the problem. I believe that synthetic petrol from plants can be produced for about $5 a litre. Swallow hard and use our otherwise useless wall of wood for that.
And abolish Kyoto along the way. Its a complete waste of time and economically counter productive. Luddite stuff.


A delusional person said petrol should be an expensive luxury, rather than an Allah given right.Allah given right my ass. Take your tinfoil beanie off. As Robert Tracinski said "The oil was discovered and drilled for by American, British and French oil companies. These firms were the rightful owners of the oil, and until the 1950s, their rights were mostly respected.

The Arab chieftains who ruled the region had no idea the oil was there and no idea what to use it for; they were still riding camels. But once the West discovered the oil and put it to use -- running our factories and automobiles -- the chieftains began to tax the oil. When that wasn't enough, they simply stole the oil fields, beginning with the de facto nationalization of the Saudi oil fields in 1950. The House of Saud did not seize the oil in the name of the "the people"; they seized it to enrich a small gang of princes and hangers-on. The world's largest deposits of oil fields are controlled by a gang of medieval religious fanatics."

Look at Luskin's latest http://trendmacro.com/a/luskin/20040524luskinSMC.asp
Nowadays it's suddenly fashionable for the eco-freaks who predicted doomsday in the 1970s and 1980s to once again remind us that oil is a finite resource, and that someday we're going to use it all up. Hogwash.

[skinny]

Mmmmm...but you see at the end of the article Cap your punter isn't against investing in energy stocks !

For me the issue isn't whether or not the Hubbert's peak hypothesis is correct or not (though I think the evidence is mildly convincing) but what the marginal costs of each unit of energy production is going forward. Until we have a truly profound technological break through it looks set to keep on increasing as the e&p sector is forced into more expensive sites - such as Canadian tar sands or the Barnett shale or the deep water in the South China Seas or off our own Taranaki coast !

BTW - to be alarmist about it all at least in the short term it looks like OPEC IS DEAD. All it can produce is being met by rampant world demand in which case there is no point having a cartel that rationalises supply to keep prices up. U.S. Energy Secretary Spencer Abraham told reporters Sunday that Saudi Arabia has pledged to pump an additional 600,000 barrels a day starting in June, lifting its daily output to 9.1 million barrels and would meet meet all requests up to their full capacity of 10.5 million barrels a day. So, RIGHT NOW, Saudi is pumping 8.5 M Bbls/day, and only has 2 M bbls/d spare capacity...right from the horse's mouth ! The US is in the shoulder season for demand, and most estimates put Q4 useage up about 2 M Bbls/d from current useage. Think about the implications of that!! Also, world oil demand is expected to grow 2 M Bbls/day this year. Where is next year's oil demand growth going to be met ?? The supply-demand situation has never been tighter for crude oil worldwide since WWII.

Big, Big news release, that isn't getting the attention it should but the traders are onto it as futures have not come down much at all despite the Saudi pledge.

The short term supply situation and the longer term marginal cost reason is why I'm a big holder of old fashioned oil and gas companies that have relatively large existing reserves :D

[MeNoBatty]

On a lighter note...

http://www.sierraclubplus.org/hummer/

"Although the Hummer gets only around 10 miles to the gallon, compared to 25 in the original Model T, General Motors insists that it has not fallen behind on the technology curve."

[willy_wonker]

Is this a sign that we should start loving our planet more? Or maybe a sign of punishment for the Bush adminstration for their arrogant attitude towards the Kyoto contract? Whatever it is, must be getting painful for nations that are consuming too much of the worlds natural resources.

Time to think?

[Cooper]

Although I was a huge supporter for Kyoto on the face of it, after I did some reading on it I realised that it was fairly restrictive in it's demands (in terms of the amount of time it gave the signatories to meet the goals) and didn't offer a market friendly means of increasing incentives to the industries themselves. I think someone else has said it on this post but we need to make it more expensive to use petroleum... ie remove the massive subsidies the exploration and production of oil companies are the beneficiaries of and tax the industries that do have alternatives but choose not to use them to encourage them to find cheaper alternatives.
Which is the crux of the matter and the reason the oil price is so inelastic... no substitutes and with the subsidies in place for getting the stuff out of the ground there is no real incentive for an oil producer to throw money into what would appear to be a self-defeating R&D investment into alternatives. Why look for other things to make money off when you're doing just fine, thank you, as it is?

[skinny]

See oil prices closed at another record high last night on the NYSE and my oil and gas stocks went up around 3.5% The market is finally waking up the fact that its not naughty hedge funds or US refining problems or terrorist concerns that will keep prices high over the next year or two or more but the basic demand/supply equation. Thats why the Saudi ministers admission of their maximum capacity was such a bombshell - we're almost there !

But folks its no too late to cash in !!! The E&P sector and integrated oil and gas companies are STILL being valued by the markets as if prices will go back to $20-22 a barrel next year.

Some analysts are changing their view on this, Goldman Sachs was the latest - they have price targets around 40% above where we are today based on prices remaining above $30 per barrel over the next year to end 2005....

check out: DVN, APC, XOM, BRL, BP, SHL....

All JMHO :D

[Placebo]

Oil prices still in the news, now forecast to rise to $60US from current $42 over next 2 years.

If we think we have it bad, check out the UK situation http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2004/06/02/npetr02.xml.

Imagine the reaction here to gas being $3 a litre...

[Capitalist]

The market will sort it out my son. As Luskin says:

Let's stop worrying and start thinking.

First, today's high oil and gasoline prices aren't going to strangle the economy. Sure, when the price of gasoline goes up and stays up, people have to adjust in various ways. No one likes to be forced to adjust. But adjustments don't have to be negative.

One of the first ways people adjust to high gasoline prices — if they are gasoline buyers, that is — is they use less gas. That means they may shift some of their economic activity from things that involve driving long distances in an SUV to other things that involve driving shorter distances in a normal car. Now why should that hurt the economy?

Another way people adjust to high prices — if they are gasoline sellers, that is — is they find ways to produce more gas. They drill more oil wells. They open new refineries. Now why should that hurt the economy?

Are you seeing a pattern here? When prices rise, buyers try to buy less. Sellers try to sell more. And what do you know — as a result of both those things, pretty soon the price starts to fall. No, it's not magic. It's basic economics. It works every time.

[Cooper]

My sentiments exactly Capitalist. Plus the lower margins will force the petroleum companies to look harder at alternatives, which will end our over reliance on oil in the long run.
It's interesting that when oil prices go up the decision from the public isn't to use less petrol but to whinge, moan, point the finger at everyone and then hop in the car to go down to the corner dairy for some cigarettes or comfort food so they can feel a little better about being in a world so free from their own control.

[Gryffyn]

Good points Cap and Cooper but some industries / users can't simply use less or switch to alternatives overnight so there will be cost rises. Greenies should love these events as they push people away from oil.

Now which powerful US family and associated companies are likley to benefit from "They drill more oil wells. They open new refineries" ;)[}:)];)

[skinny]

Aye, aye, I'm the last person who would argue against the linkage between relative prices changes and demand/supply decisions. As Gryff points out though its not like oil needs can be subsituted away from overnight - and the substitution that has occured has simply raised prices for the alternatives Eg. US natural gas prices are also at record highs for this time of the year. (I actually hold more in NG stocks than oil stocks ;))

Energy prices will only decline when supply significantly exceeds demand (there is the reserve aspect), a scenario that is more likely to be via oil and other productive capacities increasing & efficiency gains, rather than through demand destruction with the world economy looking strong ( I think Cap would agree with this !)

Now here is the rub. The CEOs of the majors (eg. BP, Exxon-Mobil) have gone on record recently saying they will not significantly expand capacities until they are confident that higher energy prices are here to stay. Why [?] Because the easy low cost fields have largely been exploited. Massive infastructre investment is needed to open up new significant fields. This line is also consistent with what the IEA is saying. Tee hee, if that isn't a signal to go and buy energy stocks and/or energy service and infastructure companies I don't know what is !!

Skinny have a look at GDY on ASX and who some of the major shareholders are.

[willy_wonker]

It is not just the cost of travel in a car we are worry about. Gas is an input for alot of manufacturing. This cost will be put forward to consumers, thus futher rising inlfation, which will create a rise in interested.

It is not simply just about our private cars.

[thereslifeafter87]

quote:Originally posted by Major von Tempsky

The boycott attempt is just totally pathetic. Its sprung by people who are totally ignorant of economics and long on socialism. It will fail utterly and completely.
The market is the thing. That and technological progress (which is induced by the market).
Attempts at conservation are in the nice to do as a hobby category. They will not solve the energy problem. Only greater supplies from Saudi Arabia etc and a greater effort on alternatives will solve the problem. I believe that synthetic petrol from plants can be produced for about $5 a litre. Swallow hard and use our otherwise useless wall of wood for that.
And abolish Kyoto along the way. Its a complete waste of time and economically counter productive. Luddite stuff.


MVT, not everything is about a socialist plot :)

I would say that a boycott like this is a prime example of the market in action. The petrol market in NZ is a classic case of limited competition. If you can hit one supplier in the wallet, then they may drop prices which could spark a price war. This is all ultimately good for the consumer, and is an example of free market action. At the moment, the market is not balanced between supplier and purchaser as it is supposed to be. Instead, the supplier sets the price, and we pay the price they set. That is not a competitive market.

[thereslifeafter87]

quote:Originally posted by Capitalist

The market will sort it out my son. As Luskin says:

Let's stop worrying and start thinking.

First, today's high oil and gasoline prices aren't going to strangle the economy. Sure, when the price of gasoline goes up and stays up, people have to adjust in various ways. No one likes to be forced to adjust. But adjustments don't have to be negative.

One of the first ways people adjust to high gasoline prices — if they are gasoline buyers, that is — is they use less gas. That means they may shift some of their economic activity from things that involve driving long distances in an SUV to other things that involve driving shorter distances in a normal car. Now why should that hurt the economy?

Another way people adjust to high prices — if they are gasoline sellers, that is — is they find ways to produce more gas. They drill more oil wells. They open new refineries. Now why should that hurt the economy?

Are you seeing a pattern here? When prices rise, buyers try to buy less. Sellers try to sell more. And what do you know — as a result of both those things, pretty soon the price starts to fall. No, it's not magic. It's basic economics. It works every time.


Two points cap.

1)the market doesn't work over night - imbalances can take years to be corrected - new production must be brought online, new wells drilled etc.

2)there is a finite amount of oil, and a finite production capacity.

[Cooper]

'87,
I agree with all you've said but I think the key point that is missing from the Boycott BP idea is that we need to change demand for oil in the long run... looking to the short term the boycott may be a great idea, but given that the margins BP are earning come a distant third to those being earned by OPEC and the NZ govt I don't think it would have quite the effect we'd desire.
Given the size of NZ, and the fact that not everyone would join the boycott, BP would probably prefer to take the decreased revenue in the short term in order to protect the margins they are earning for the long term. The incentives for the industry would be the same.
As demand for petrol over the industry would stay the same (under the boycott scenario), and as the price of petrol to the consumer has very little effect on the amount of petrol bought (we yell and scream but we don't really cut back on petrol usage) the long term and underlying problem with our power to react to the variances in the oil price is strictly due to the fact that there are no alternatives and (it follows)inelastic demand. We have to either change our ability to react to the petroleum industry AS A WHOLE or we have to find alternatives.
Gryff, you're right that in the short term we will just have to take the higher prices. No choice. And that's right across the board, plastics, petroleum, transportation... everything. But looking longer term the disquiet caused by higher prices should provide huge incentives for R&D into alternatives. This is not an altruistic thing... the cost benefits of developing alternate fuels go up as the price of a barrel of oil does. The higher the price of oil, the more we are willing to pay to have an alternative to oil.
Skinny: Global demand will get even higher as developing countries whose technologies are just catching up start to demand more on a per capita basis (specifically China). This means that, as you say, a simple reduction in demand for oil will not work. Given that most Govts heavily subsidise (in one way or another) oil exploration there should be an awareness of this. As energy demand is finite and it's costing more and more to get out of the ground, coupled with a growth in likely energy demand either we swallow constant price increases or we develop alternatives (other than gas/oil).
According to "The Economist" the current value of a barrel of oil that is directly attributable to geopolitical instability is btwn $4-$8. That's a ten to twenty % risk premium. That's where our money is going.

[Gryffyn]

Cooper - yes, one has to hope that R&D into alternatives will be hastened by recent events.

Interestingly, in the UK, the original reason for the high component of tax on petrol was to cushion against the fluctuations in oil price, and to provide incentive for other energy sources.

[Cooper]

They'd be better off directly subsidising the R&D themselves. Sounds like they were trying to do a bit of revenue collecting!

[Gryffyn]

Well, that's what most people thought too. But in one way it's an incentive for the market to source alternatives rather than the govt picking winners.

[skinny]

So looks like some consenus from Cooper et al. that higher energy prices (say $30-33 USD per barrel on oil over the medium term) are here to stay and indeed need to be there - is anyone else buying energy stocks ;)[?]

ps - Enigma, I looked at GDY a while back and chickened out for similar reasons to NOG. Both look really good but I think you can do just fine at the moment by simply buying stocks with large prooven existing reserves, rather than the more speculative plays.

[Cooper]

Ironically I like the look of BP because they seem to be doing the most to research alternatives. Chairman talked the talk when he first came into the job and actually followed up by walking the walk, which is a surprise to many.

[willy_wonker]

The real question is:

How long before we consume all the oil from our tiny little planet?

[Gryffyn]

I once read WW that it would be a very long time away - that we have enough for several hundred years at least but that the price is artificially kept high through the cartels.

[skinny]

Gryff - that is certainly what most people think but I've come round to alternative points of view on both. OPEC has basically said to its cartel members you can produce what you want (the quota increase is pure smoke and mirrors.) There is no point having a cartel if there is no need for price rationing ! Of course if the world economy were to slow down appreciably they would be back in business, but at the moment with demand so strong its all a bit of a waste of space. It will be very interesting to see where oil prices go this year !

On oil production having spent a good deal of time going through IEA material (www.iea.org) and sites putting out research oil reserves, e.g. http://www.princeton.edu/hubbert/index.html
it seems many experts believe that world oil production is peaking (the peak date is estimated within the next 5 - 20 years) and that we'll see a steep decline in production thereafter. Now, talk is cheap of course but I do see it as at least credible based on the resources car companies (e.g. Toyata) and even some of the oil&gas companies (BP) are now devoting to alternative energy technologies.

[Major von Tempsky]

Well it seems that the petrol boycott has ended as predicted. Funny that.
And for those that predict that life as we know it will come to an end when the oil runs out (there's still plenty to be found undersea).
It won't.
You can still make petrol & from natural gas which is more abundant than oil, shale oil, tarsands, coal, and then you can make ethanol from all sorts of crops such as sugar (hot countries), sugar beet (cold countries incl NZ), pine trees & &., methanol from ethanol and synthetic petrol from methanol.
Life must be so unrewarding, so frustrating, being a professional doomsaying Greenie...

[skinny]

MVT - yep I have complete confidence life will not come to an end & alternatives will be found IF the easy stuff does run out at some point as many geologists expect. (BTW - as a Francophile how could you forget nuclear !) In short, relative prices will adjust such that technolgies will find a way ;)

However, I dont think the transition path will be smooth at all given normal myopic behaviours and its where I see investment opportunity. Those companies with large holdings of traditional lower marginal cost reserves, those buying up exploration rights to the new frontiers (oil sands, shale, south China seas, etc), and those holding patent rights to key new technologies should do very well indeed....I hope !

[Major von Tempsky]

There is a certain sneaking suspicion that the oil majors plus the car majors have bought up patents and frozen out certain technologies and fuels until it becomes economic/profitable to dust them off.
One can refer to Germany in WW2 with petrol/petroleum products from coal, and much more recently (the 1990's - is it still going?) South Africa with petrol from coal through Sasol.
I believe Brazil sells a mixture of 50% ethanol/50% petrol for specially produced car engines to run on.
Naturally the oil majors/auto firms have such a huge investment in their distribution system and infrastructure that they are very loath to change until it is inevitable when we will suddenly find that lots of things we are being told are uneconomic are now desirable but large amounts of capital are necessary to finance the new ethanol/methanol/hydrogen distribution system and car engine factories. And the cost of motoring will go up. It might even be possible for governments to reduce their huge share of petrol and car taxation to faciltate the changes when they see there is no alternative to avoid chaotic disruptions of society.
And the Greens may even be able to represent it as a victory that fuel from crops (i.e. sustainable) has come in while the rest of the world smiles at them as one does at a small child.

[willy_wonker]

If everyone buys a Hybrid electric/gas engine Toyota/Honda, we would cut the oil companies revenue by half. Wont be too long before the hydrogen engine comes out, assuming the oil companies dont put barriers up to stop the research progress.

[Gryffyn]

WW - Hydrogen has major safety, supply and delivery problems yet to be resolved. First will be a methanol hybrid that is less efficient but which can tap ibto existing supply infrastructure. Economist has done several features on this over the years.