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Originally Posted by aceventura3
That would not be necessary. For example, look at what Brazil has been doing with bio-fuels, dino oil alternatives can be viable. In Brazil they are using sugar cane which is much more efficient than our approach of using corn. Also oil exploration and drilling is simply more effecient now than 30 years ago. Each individual well can be much more productive today than in the past.
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Biofuels are an unrealistic widescale alternative for the next few years. And it isn't about efficiency in finding and drilling oil, it's in finding and drilling sweet crude at all. You can only expand capacity so far before it becomes impossible to keep up with demand, especially when you get down to the crude that needs more refining. Refining capacity has been a problem recently, too.
We can't have the number of new oil fields go online as we've seen over the past 40 years. I think that's logistically impossible.
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At some point oil will hit $200 in nominal terms, but a loaf of bread may cost $25. Everything is relative.
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This will likely happen by 2010, not 2040.
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One reason billionaires may be avoiding investments in oil companies is because of people like Chavez in Venezuela (stealing oil company assets) or even the Democrats in Washington who want to penalize oil companies through wind-fall profit taxes and excessive regulation.
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I'm not talking about the billionaires avoiding the investments; I'm talking about the ones who are jumping into the earning potential over the next few years. I'm talking about the investors who know about value investing. They see these oil companies with real asset- and earnings-based value up to and past 2010. By the time oil were to return to sub-$70 prices, these guys would already have sold off long ago. Currently, they are in for a bit of a haul and some are still buying up. They see oil & gas as still set to go.