Whether it's low maintenance slaves or a caste system, outsourced employees, or inexpensive oil - cheap energy is a necessary evil of all growing economies.
If you take a look at the above image you'll notice that Saudi oil companiess are shifting their production from Light Sweet Crude (LSC) to Heavy Crude in an effort to maintain their previous export levels.
"Oil is oil", some might quip.
But this is not the case.
Light Sweet Crude is more expensive to purchase but cheaper to refine because it contains fewer contaminants and yields more petrol.
The money saved during the refining process more than makes up for any added cost of the initial product.
As supplies of LSC dries up, we will be forced to shift to heavier and more contaminated sources of oil.
Even if we maintain the net quantity of oil being imported - the quality of the heavier oil will be inferior and the petrol yeaild will be lower.
In the end, regardless of the amount of oil being imported, gasoline will be more expensive.
(Image jacked from SeeNew)
2 comments:
It's time to mix the gasoline with ethanol. Just like poor people stretch milk by adding water we already have a solution.
My car takes e85 and it costs me about 2.50 a gallon in comparison to unleaded which starts at 3.39.
So stretch it, smack it down, dilute it or whatever word you want to use to make it last.
That e85 is only cheap because of unsustainable federal farm subsidies. Objectively speaking, it costs more energy to make that alcohol'd gasoline that it would to simply use the unleaded.
Those farm subsidies will be going away, as well as the petroleum inputs, natural gas fertilizer, oil based pesticides and transports, and this illusory stopgap will end very soon.
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