Thursday, August 7, 2008

Biotouch and the price of oil

Macarena, Elias, Juha, and Bitouch readers, we're now heading towards the second phase with this open innovation platform for Biotouch. Macarena did a great work to get Biotouch started and attracted readers from all over the world. She used some new tools like Yahoo Answers to get more visitors to this blog.

Now I try to attract more readers, commentators, and co-writers. We need to get this waggon moving. A lot of work has been done for years. I hope this will lead to something we couldn't imagine before. Taking this business process to the open is a new and bold move. The social media provides new windows of opportunities for complex issues like Biotech.

We're still struggling with how to turn great innovations like PMEU and the knowledge within the team to Biotouch projects with a solid Financing but time will tell if we're heading in the right direction.

The price of oil is now high, even though it has declined a little from $150 peak prices. But there is still a long way to go before we're down at $50 per barrel. As an evidence, take a look at Elias' email comment and we can see that one of the resasons for the high price of oil is the lack of investments in refinery capacity. Take a look at this quote "There will be no new refineries by Giuseppe Marconi - 2008/07/23" below.

Giuseppe Marconi's comment is two weeks old. Here is Elias' comment.


Thank you for the message. I have adjoined here one comment related to the inadequasy of crude oil preventing the planning of new refineries. I think that this is rather indicative also pricewise.

I would be glad to contribute on "Biotouch" especially since I was generating the concept in the spring in some of our fruitful telephone conversations. It is essentially a way to act in a new direction in order to gain understanding on the microbes.

Tried to call Hannu today, after his message. We will be in touch hopefully on tomorrow.

With best regards,


There will be no new refineries by Giuseppe Marconi - 2008/07/23

Oil companies won't be building more refineries, because there won't be enough oil left to refine by the time new refineries could pay for themselves.

There hasn't been a new refinery built in the US since 1976. In 1982, there were 301 operable refineries in the U.S and they produced about 17.9 million barrels of oil per day. Today there are only 149 refineries, and they're producing 17.4 million barrels. This increase in efficiency is impressive but not a miracle. As with everything these outputs are carefully calculated to optimize profitability. Let me explain.

Truth be told, new refineries require tremendous financial commitments which take anywhere from 15 to 25 years to amortize. With record oil prices it would make perfect sense to invest in a few refineries today, except... for the lack of oil to be refined 20 years from now.

Trends have predicted that peak oil production, where the production of oil starts to decline, will be reached around 2007-2010. After that, there will be less and less oil to refine no matter where drillers look. In this context, building expensive new refineries does not make a lot of sense as existing ones will be sufficient to process whatever little oil is left. So forget about new refineries, except for a few in the northern midwest to process the heavy oil from Canada.
refinery tank.

Crude oil is a finite resource more and more depleted. As such, an increasing demand put on this finite supply necessitates careful management in order to stretch its lifespan and profitability.

2008/8/5 Helge V. Keitel

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