Friday, June 01, 2007

The long run

There is no clear formula for calculating the concept of success because success can only be defined from factors like goal and duration. For example, a guy might be considered successful in getting a girl, but a failure if the relationship does not work and they split up in terrible anger or grief. In the long run, it was not a good idea to get the girl.

The same theory can be applied to any problem. For example outsourcing. In the short run, the company wins, because they reduce the costs of employment. They might even win in the long run, but the money go outside the country, diminishing by a little the success of all companies in the same region. In this case, the long run might prove that making a united front is better than scattering the resources between competing factions. Or maybe not.

The other day I was thinking of oil. A friend of mine sent me this link to a site that talks about the coming of an age in which oil is no more. It is coming soon and it basically means a dramatic (and probably violent) scaling down of world energy output. In the same time, a Romanian minister declared that he intends to push for investments in the gas sector, like finding new natural gas reserves.

And something blinked. If the oil and natural gas are scarcer and the price is likely to go up very quickly and dramatically, wouldn't that mean that keeping the oil in the ground would be a far better deal? Why extract it now, when the US and OPEC are still managing to keep the prices to a decent level (through a lot of indecent actions)? Wouldn't it be better, in the long run, to wait until the price skyrockets and everybody else is left without? In the short run, oil companies and ministries make a lot of money from it, but in the long run, they could make a lot more. Yet the people that are in charge now probably won't get anything. So they greedily suck it up and sell it.

Now, since I've defined the problem, I should think of a solution. And I think the only solution here is this: people that have charge over the oil in the ground should be able to sell the rights to the oil once it has been extracted. That means that I could sell some guy the right to the oil underground, even if I am not extracting it. Maybe even a nice clause that if the oil is not extracted in time, the guy could get his money back with a considerable interest as penalty. I believe it could work, since the price of the underground oil is likely to increase in time.

Thus the oil in the ground is transformed into money, independently of the extraction process. The extractor will get a percentage of the price of oil, then pass it to the owner or find some other arrangement to sell it and split the profits with the owner of the oil. I think it's a great idea to make money from oil without burning it. The only drawback is that someone could invent a better and cheaper and cleaner energy source. Bummer! :)


Vleeptron Dude said...

Hiya Siderite!

Thanks for leaving a comment on my Vleeptron post about Assymetrical Warfare and the USA war to "pacify" the Philippines.

What were you Googling for that led you to my post?

I lost my editing control of Vleeptron for a while and started another blog, which is the one I post to now:

Please visit, hope you enjoy it. In particular, my worldwide news service, Agence-Vleeptron Presse, is always very proud of its coverage of the Eurovision Song Contest. How did Romania do in Helsinki? Did you sing about Love? (Did you sing in English?)

Is Ploesti still the refinery complex in the middle of huge oil deposits? Or is American Grandpa way out of date, as usual?

About oil, there's a Saudi saying:

My father rode a camel.
I drive a car.
My son flies a jet plane.
His son will ride a camel.

I speak a very old version of Romanian. It's a dialect from about 200 AD from some place called Dacia. I studied it in school, so I could talk to dead people. (But it lets me eavesdrop on Romanians on Internet Relay Chat.) Buna! Salut!

About oil, there's a Saudi saying:

My father rode a camel.
I drive a car.
My son flies a jet plane.
His son will ride a camel.

Look, I just woke up 5 minutes ago and am injecting coffee directly into my heart. But you have a really interesting blog, thanks for bringing it to my attention.

And yes, I have a lot of steam. And yes, POWER TO THE PEOPLE! (You happen to be talking to an Old Sixties Hippie.)

la rivedere!
Bob / Massachusetts USA

Siderite said...

Wow! So many questions, so little time. I will try to answer them, though. I am glad you find my blog interesting.

I have no idea what happened in Eurovision. It was always an outdated silly contest that I found no interest in. I am certain, though, that the song was really stupid and the only reference to love was in the implied context of sex.

I don't know how huge the deposits are, but they are extracting the oil, whence my post.

What a Syriana-type saying :)

Even the Romans in 200 AD did not learn Dacic in schools, geez! Anyway, Romanian is a lot more like Latin that Dacic. Can you write a passage in Dacian? Better still, a blog! :)

The sixties must have been grand. Unfortunately all great ideas end up being abused, thus the downfall of the hippie movement. I will settle with a lot of close-to-good ideas, so no one will notice me and abuse me. Hence, this blog :)