I agree with 90% of what you are saying except for 2 points.
The oil companines are not controlling the price of oil through
limiting their refining capacity. If you were to look at the balance
sheet of ExxonMobil, ChevronTexaco, or any of the other majors, you
will see they are making very little money in the refining business.
They are buying high priced crude and refining it into gasoline. The
lion's share of profit for the oil companies is coming from the
upstream portion of their business (I should know as I am in this
business). What people fail to realize is the huge amount of capital
involved in developing large projects. It is not unusual to spend
hundreds of millions of dollars drilling wells, setting platforms,
and laying pipelines. Even when you find a new source of oil, it can
take years (4 to 5 years is not unusual) for the new finds to come
online. When the projects do come online, sure they throw off huge
amounts of money, but they normally take years to recoup the initial
investment.
Second point, I would not say that oil is running out tomorrow, but I
would say that oil is becoming much harder to find and produce. Most
of the giant oil fields have been found. The ones that have not been
found are in areas that are off limits to drilling or are in areas
that are too expensive at todays prices to explore in. The fields
that are found now are smaller and hence take more $
bbl recovered to
develop. There will be a day in the future (I might not see it but
my children will) where we will have to rely on something besides
hydrocarbons to fuel this world.
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