Who is to blame for high gas prices?

[Snipe]

Congressman Roy Blunt's website: (http://republicanwhip.house.gov/News/DocumentSingle.aspx?DocumentID=92903)



AMERICAN-MADE OIL AND GAS: A HISTORY OF SUPPORT AND OPPOSITION
(PERCENTAGES ARE FOR EVERY SUPPLY VOTE IN THE HOUSE)

Washington, June 5, 2008 -

American-Made Oil and Gas: A History of Support and Opposition
(Percentages are for Every Supply Vote in the House)

When it comes to taking meaningful steps to provide affordable energy to the american people, Congress has both the ability and responsibility to act. Unfortunately, a clear pattern has emerged over the years as one party consistently has fought to increase access to homegrown energy reserves, while the other has consistently voted to expand America’s dependence on foreign, unstable energy instead.

BY THE ISSUE


ANWR Exploration

House Republicans: 91% Supported

House Democrats: 86% Opposed



Coal-to-Liquid

House Republicans: 97% Supported

House Democrats: 78% Opposed



Oil Shale Exploration

House Republicans: 90% Supported

House Democrats: 86% Opposed



Outer Continental Shelf (OCS) Exploration

House Republicans: 81% Supported

House Democrats: 83% Opposed



Refinery Increased Capacity

House Republicans: 97% Supported

House Democrats: 96% Opposed



SUMMARY

91% of House Republicans have historically voted to increase the production of American-made oil and gas

86% of House Democrats have historically voted against increasing the production of American-made oil and gas

A pretty damning indictment if you ask me. Go ahead, ask me...

You: What do you think of that Snipe?

Me: Thanks for asking, Mr You. In my estimation this voting record is a pretty damning indictment of the policies of Congressional Democrats.

Edit my Question

Does anyone here think that the policies of Congressional Democrats affect the price of gas at the pump?

Yes We Can!

[Raoul Duke]

Does anyone here think that they policies don't affect the price of gas at the pump?

You're the one making the claim that those policies are affecting prices at the pump, so you have the burden of proof. You're essentially asking everyone else to prove a negative.

[xeus]

You're the one making the claim that those policies are affecting prices at the pump, so you have the burden of proof. You're essentially asking everyone else to prove a negative.

He can ask it another way - Does anyone here think that the policies of Congressional Democrats affect the price of gas at the pump?

And I'd answer YES, I think their policies negatively affect the price of gas at the pump.

[Raoul Duke]

He can ask it another way - Does anyone here think that the policies of Congressional Democrats affect the price of gas at the pump?

And I'd answer YES, I think their policies negatively affect the price of gas at the pump.

He can ask it however he wants. But the bottom line is he's making that claim, so he has to back it up.

[XU 87]

You're the one making the claim that those policies are affecting prices at the pump, so you have the burden of proof. You're essentially asking everyone else to prove a negative.

It's actually pretty simple. Right now, demand is greater than supply. Therefore, prices go up. If you greatly hinder domestic oil exploration, and therefore hinder the ability to increase supply, prices will continue to go up. Supply and demand is a basic economic principle. (And I suspect the dollar also has something do with high prices since a low dollar makes imports more expensive. But if we didn't have to import so much oil the low dollar would have less of an effect.)

But it's laughable when I hear people complain that foreign countries aren't producing more oil when this country puts up all types of roadblocks to block the production of domestic oil.

And note to Snipe: you forgot to include our country's unwillingness to construct nuclear power plants. And in the ultimate of hypocrisy, the environmentalists were successful in stopping Zimmer from becoming nuclear but now complain that Zimmer pollutes because it was forced to burn coal instead.

[Snipe]

It's actually pretty simple. Right now, demand is greater than supply. Therefore, prices go up. If you greatly hinder domestic oil exploration, and therefore hinder the ability to increase supply, prices will continue to go up. Supply and demand is a basic economic principle. (And I suspect the dollar also has something do with high prices since a low dollar makes imports more expensive. But if we didn't have to import so much oil the low dollar would have less of an effect.)

But it's laughable when I hear people complain that foreign countries aren't producing more oil when this country puts up all types of roadblocks to block the production of domestic oil.

And note to Snipe: you forgot to include our country's unwillingness to construct nuclear power plants. And in the ultimate of hypocrisy, the environmentalists were successful in stopping Zimmer from becoming nuclear but now complain that Zimmer pollutes because it was forced to burn coal instead.

Thank you 87. I would agree that it is a pretty simple process.

I do think that nuclear deserves a mention. Lately people from both sides of the isle have been coming together to support nuclear power. I think that trend will continue.

With the high price of gas I think we will also see bi-partisan support in the future for more domestic production.

I wouldn't mind a Mashall plan for American energy indepenence. You could include construction of scores of nuclear power plants, you could tap that magnificent store of oil shale, you could even put some money in updating the energy grid for more reliable and efficient transfers of energy.

I wouldn't mind getting a bunch of clean burning nukes and have them power a fleet of electric vehicles. I would love if not a penny of my transportation dollar had to go offshore. I am ready to buy an electric car or a hybrid if need be. Let's build the nukes and a new America.

[Raoul Duke]

"Right now, demand is greater than supply."

You say this like it's some abstract concept in nature. Demand is high because the American consumer continues to demand more and more oil, despite rising prices. So if the question is 'why are gas prices so high?', you have your answer right there. (Coupled with the fact that gas prices have been historically low, adding to the impression of high gas prices now.) And demand is greater relative to supply because OPEC limits supply. (Yes, I understand that you're arguing the house dems are further constricting supply.)

"If you greatly hinder domestic oil exploration, and therefore hinder the ability to increase supply, prices will continue to go up. Supply and demand is a basic economic principle."

This is really more of what I was getting at in my initial post. You assume, without any evidence, that domestic oil exploration (among the other programs listed on Roy Blunt's website) has the ability to meaningfully increase supply. Oil shale for example, one of those programs listed, is arguably useless as a substitute for crude oil. So it's not necessarily fair to assume that those programs have any impact on prices at the pump. Snipe claimed they do, so he should have to back it up.

Your claim is also suspect in terms of numbers. I'd like to see the evidence that the U.S. has adequate oil reserves to meet its demand for any period of time other than the short term. The way U.S. demand for oil is, I think you'd be confronted with the same problems even if you increase short-term supply.

"And note to Snipe: you forgot to include our country's unwillingness to construct nuclear power plants. And in the ultimate of hypocrisy, the environmentalists were successful in stopping Zimmer from becoming nuclear but now complain that Zimmer pollutes because it was forced to burn coal instead."

I agree with you 100% here. And I don't necessarily disagree with Snipe. I just think you need some evidence to support the claim that house democrats voting against those measures has any realistic impact - especially long term - on the price you see at the pump.

[xu95]

I love the political debates.

xu95

[XU 87]

Raoul, supply and demand is not some abstract concept. Prices go up when demand exceeds supply. Right now, world oil demand is greater than the supply.

But are you arguing that even if the U.S. permits energy exploration as outlined in Snipe's post, that there's no evidence that that this will have any effect on price? If that's so, then your argument flies in the face of all supply and demand concepts.

But like I said before, if you limit the ability of companies to explore and produce oil and gasoline, don't be surprised that the price of gasoline goes up. You may not like it, but that's how the free market works. And no speeches from senators complaining about "greedy oil companies", no matter how wonderful they may sound, is going to change market forces.

But congress did pass a law that says the Justice Department should look into suing OPEC countries for high gas prices, so I'm sure we should see low gas prices in the near future. I'm sure countries like Russia, Venezuala and Iran will increase their production and lower their prices as a result of this congressional threat.

But does anyone else find it ironic that those in congress want to sue foreign countries for not producing enough oil, but expressly prohibit domestic oil companies from producing the same oil in the U.S.? It's one of the more insane things I've seen from government, and that's saying something.

[Billy]

"Right now, demand is greater than supply."

You say this like it's some abstract concept in nature. Demand is high because the American consumer continues to demand more and more oil, despite rising prices. So if the question is 'why are gas prices so high?', you have your answer right there. (Coupled with the fact that gas prices have been historically low, adding to the impression of high gas prices now.) And demand is greater relative to supply because OPEC limits supply. (Yes, I understand that you're arguing the house dems are further constricting supply.)


Usage in the United States has been flat, or slightly lower since it peaked in 2004-05. Increased demand is not driving this year's spike on any level. The trend is identical in most of the larger nations...China being the exception. They have continued to buy huge amounts, and the Olympics seems to be some of the driving force behind that.

You are spot on, however, in citing the fact that the price point for light sweet crude was probably too low for the last twenty years. There could be unlimited OPEC supply, and I don't think that changes anything. I believe that the "market" (OPEC, futures traders, oil companies...in some degree of consort) is now trying to see where the ideal price point is. Frankly, I don't think we're quite there yet, not unless there's some indicator that's fallen off the cliff in the last month or so that I'm not aware of.

They can raise prices as long as they want until usage starts dipping more than the 1-2% we've seen in the last several years. Raise prices by 25% annually, usage (demand) drops by only 2%...you can do the math there. It doesn't work in favor of the party dependent on oil.

Until we start drilling in Alaska, we don't have a beef. Our policy only maximizes the value of foreign oil. OPEC has absolutely no reason to be competitive in either their price, or supply right now. Do they?

[Billy]

But does anyone else find it ironic that those in congress want to sue foreign countries for not producing enough oil, but expressly prohibit domestic oil companies from producing the same oil in the U.S.? It's one of the more insane things I've seen from government, and that's saying something.

You say ironic. I'll take the next step and call it flat hypocritical.

[Cheesehead]

I blame Fred Garvin. Actaully until America is serious about funding alternative energy, we will continue to face these prices. America needs to set a date (like we did to get a man on the moon) and say to the Automakers, you have until X date to come up w/a mass production vehicle that is safe & doesn't rely on gas. Provide a 250 million bonus to the first company that can do it.

[XU 87]

Until we start drilling in Alaska, we don't have a beef. Our policy only maximizes the value of foreign oil. OPEC has absolutely no reason to be competitive in either their price, or supply right now. Do they?

That pretty much sums things up. Our congress complains that foreign countries won't provide us with enough cheap oil but then refuse to permit the exploration and production of oil and gasoline within our own borders.

I'm still waiting for someone to explain to me how such a postition makes any economic sense.

[Smails]

"I'm still waiting for someone to explain to me how such a postition makes any economic sense."

You'd better get real comfy 87 because I don't think there's an explaination out there that makes any economic sense.

[XU 87]

Actaully until America is serious about funding alternative energy, we will continue to face these prices. America needs to set a date (like we did to get a man on the moon) and say to the Automakers, you have until X date to come up w/a mass production vehicle that is safe & doesn't rely on gas. Provide a 250 million bonus to the first company that can do it.

If there is a viable and profitable market for such a vehicle (ie. someone would make a bunch of money on this vehicle) don't you think companies would and are trying to do this on their own? That's how the free market works. And the free market has worked prettty well for this company for the last several hundred years.

In the private sector, products that benefit society are generally produced not because government says "produce them". They are produced because 1) people have a need for such product and 2) the product can be produced at a profit. As a result of this longstanding free market system, the U.S. has obtained incredible advances in science, medicine and technology.

[XU 87]

You say ironic. I'll take the next step and call it flat hypocritical.

I will concede that "hypocritical" is the better word to use.

[Kahns Krazy]

The short answer to the title of the thread is: China, oil speculators and the weak dollar. The tech stock, housing bubble and oil prices all have similar curves. Will there be an oil bubble burst? I sure hope so.

[xeus]

I will concede that "hypocritical" is the better word to use.

How about asinine?

[XU 87]

How about asinine?

I like that one even better.

[Raoul Duke]

Raoul, supply and demand is not some abstract concept. Prices go up when demand exceeds supply. Right now, world oil demand is greater than the supply.

But are you arguing that even if the U.S. permits energy exploration as outlined in Snipe's post, that there's no evidence that that this will have any effect on price? If that's so, then your argument flies in the face of all supply and demand concepts.
.

I'm not saying supply and demand are some abstract concept. I'm saying that you phrase demand in this instance as an abstract concept, without stating the underlying reason why demand is greater than supply.

As for your second paragraph, which goes more to my main point, Snipe was the one saying -or at least implying- that energy exploration will have a meaningful effect on price. My original point was that he should have to back up that claim, as he was the one who made it. That's not the same as me saying "there's no evidence that [oil exploration] will have any effect on price." I do think though that the very nature of oil shale being what it is will have almost no effect on price at the pump.

Look, I'm certainly not taking the side of the house dems, and I'm about the last person on earth to jump on the big bad oil company bandwagon. But I think any claimed connection between U.S. oil exploration and its potential effect on price merits some evidence in support. I'm just concerned that there isn't enough oil in U.S. controlled areas to make a meaningful impact on price of gas; I think the marginal impact would be minimal.

As a side note, I would point out that price of gas isn't (or shouldn't be) the only consideration here. Other countervailing considerations include foreign policy and environmental issues. I'm just saying that any given policy isn't necessarily the right thing to do merely because it decreases the price of gas.

[XU 87]

I just read an article that says the world demand for oil is 86.4 barrels per day. The problem is that the world supply is 85 million barrels per day.

The U.S. imports 72% of its oil.

The U.S. demand for oil has decreased by 400,000 barrels per day compared to last year. The problem is that China's demand has increased by 500,000 barrels per day.

[Billy]

The short answer to the title of the thread is: China, oil speculators and the weak dollar. The tech stock, housing bubble and oil prices all have similar curves. Will there be an oil bubble burst? I sure hope so.

Wishful thinking, I'm afraid.

In this case, I don't see where the massive change on the demand-side comes to force that to happen. The demand is so high, that the United States is pretty much helpless for the next 5-10 years. An incrementally stronger dollar over that time (which I expect) will help...but it won't burst any bubbles.

In the case of housing...it was an incredibly inflated market running head first into a steadily weakening dollar, higher fuel and food prices, increased umemployment...all creating a perfect climate for foreclosures which stunned low-down payment borrowing. Thus, crippling the demand that was there early in the decade.

Whereas with tech stocks, you could look at the enormous P/E ratios that almost every one of those companies had (regardless of their business model), and sort of draw a conclusion about where that sector was likely going. Once the market weeded out the bad companies, the people fronting the capital finally became picky, and the sector normalized (VERY quickly).

[Kahns Krazy]

Wishful thinking, I'm afraid.

In this case, I don't see where the massive change on the demand-side comes to force that to happen. The demand is so high, that the United States is pretty much helpless for the next 5-10 years.

Investors are looking to hedge the weak dollar, and oil is a prime target. As long as oil prices are increasing at the rate they are, investors will speculate, driving up the cost of oil. Just like in the housing market and internet stock, there is nothing fundamental about oil supply, demand or production that justifies the current run-up in price.

[XU 87]

Investors are looking to hedge the weak dollar, and oil is a prime target. As long as oil prices are increasing at the rate they are, investors will speculate, driving up the cost of oil. Just like in the housing market and internet stock, there is nothing fundamental about oil supply, demand or production that justifies the current run-up in price.

I have to admit that I have little knowledge or understanding as to the dynamics involved with investors attempting to hedge the weak dollar via oil. That being said, if the demand for oil is higher than the supply, as reported, then the price of oil goes up. That much I do understand.

[GoMuskies]

I have to admit that I have little knowledge or understanding as to the dynamics involved with investors attempting to hedge the weak dollar via oil. That being said, if the demand for oil is higher than the supply, as reported, then the price of oil goes up. That much I do understand.

I agree, but I think Kahn's is arguing (and I think correctly) that while maybe oil prices should be increasing based on the fundamentals, there is no fundamental reason for oil and gas prices to have doubled in the last two years.

[XU 87]

And I hope you're right in that regard so we can get gas prices down.

[Billy]

Investors are looking to hedge the weak dollar, and oil is a prime target. As long as oil prices are increasing at the rate they are, investors will speculate, driving up the cost of oil. Just like in the housing market and internet stock, there is nothing fundamental about oil supply, demand or production that justifies the current run-up in price.

I just don't think the three sectors are particularly similar, and so it's not safe to assume their curves will react similarly. I just want to know what your specific reason/event might be that will cause oil to do what tech stocks did...because I sure don't see the trigger with oil.

As I stated before, I think this is mostly an effort to see if the increasingly energy-dependent world will deal with a new aggregate price point. I don't know why those in the oil game wouldn't try it. OPEC and global oil companies are at very low risk here. They can tweak price and/or supply on a moment's notice if they must....because unlike the United States Government, they actually have the ability to control the situation. Until that time comes, I don't know why they wouldn't continue to manipulate the market as much as possible.

XU87 brought up Asia before, and it's a huge factor. Southeast Asia's demand is going through the roof. Not just China, but in some of the smaller countries whose governments have been providing huge oil subsidies. As a result, the private sector has found it more feasible to build an energy dependent Western-style infrastructure (Highways, airfields, huge ports, etc) because they're paying like 25 cents/litre. As a result, there has never been more international demand...so why wouldn't those in the oil game take advantage of that? Why would they continue to charge prices at the same 1950 adjusted level when the world now has no choice but to pay their price?? India seems like they may pull the plug on it...but it's still going to be too late to undo all of the damage. The world has changed...and so I think right now, we are seeing a very steep upward price correction to meet that change.

I also don't think speculation is making that much of a difference. Oil is an options business...so there'd be people lining up around the block in order to short if the price was due to bounce. It's going up because because people keep buying the stuff at $130+.

[dc_x]

IMO, Congress should do whatever it takes to keep gas at $4 a gallon. If the market price of a barrel drops back to $100, they should tax gas to keep the price at $4 a gallon.

With a guarantee of $4 gas, it becomes economically viable for gas companies to invest in oil shale refining, for consumers to buy hybrid cars, and for business to develop alternative energies.

The US currently uses 20 million barrels of oil each day and we only produce 5 million barrels ourselves. There are no reserves in Alaska or on the OCS that are going to put a major dent in that difference.

[dc_x]

I also don't think speculation is making that much of a difference. Oil is an options business...so there'd be people lining up around the block in order to short if the price was due to bounce. It's going up because because people keep buying the stuff at $130+.

Agreed. People act like there are speculators out there buying barrels of oil and hoarding them in their basements. A speculator could speculate in the futures market, but ultimately someone needs to pay these prices for oil. Right now the oil companies are the ones paying these prices - not speculators.

[Billy]

IMO, Congress should do whatever it takes to keep gas at $4 a gallon. If the market price of a barrel drops back to $100, they should tax gas to keep the price at $4 a gallon.

With a guarantee of $4 gas, it becomes economically viable for gas companies to invest in oil shale refining, for consumers to buy hybrid cars, and for business to develop alternative energies.

The US currently uses 20 million barrels of oil each day and we only produce 5 million barrels ourselves. There are no reserves in Alaska or on the OCS that are going to put a major dent in that difference.

That only works if you believe the government would take the tax windfall in your $100/barrel scenario and do something useful with it. Otherwise, you're creating a whole different set of problems. Are you proposing that they'd fund private companies to do R&D with that money? If so, what happens to those projects if the price goes way up or it stays at $140/barrel?

Why not just let the market dictate price? If this got so bad that the next depression were to break out (unlikely), prices WILL drop...like a lead balloon.

And there seem to be varying opinions on how much oil we can produce domestically...and it sort of depends on what you presume demand does in the next 50 years. Obviously, it won't mean much in the next 10 years regardless. You're right. But 20 years from now...coupled with a decrease in demand??? Then you might have something.

[kyxu]

I just read an article that says the world demand for oil is 86.4 barrels per day. The problem is that the world supply is 85 million barrels per day.

The U.S. imports 72% of its oil.

The U.S. demand for oil has decreased by 400,000 barrels per day compared to last year. The problem is that China's demand has increased by 500,000 barrels per day.

I drink your milkshake!! I drink it up!!!

[Kahns Krazy]

There is another peice to the gas demand curve. Demand is relatively inelastic, especially over a short time frame. If high gas prices persist, it will influence people to consider better gas mileage cars when they buy a new car, but they won't buy a new car if they don't need one.

Similarly, changes in other activities that will impact the demand curve for gas will be slow. As delivery costs increase for products shipped over great distances, locally produced items will become cheaper options.

Those changes won't happen overnight, but they will happen.

[XU 87]

I drink your milkshake!! I drink it up!!!

It always helps to put your posts in easy to understand English.

[kyxu]

It always helps to put your posts in easy to understand English.

Daniel Plainview? There Will Be Blood?

Ah, forget it.

[Billy]

It always helps to put your posts in easy to understand English.

So, we've actually found the last guy on Earth not to get that reference.

[Tardy Turtle]

Is it too late to answer the original question?

It's pickledpigsfeet's fault. Seriously.

[XUglow]

I still blame the commodity traders. Seems that six months ago, the board that supervises such trades reduced the amount of money that you had to put up to buy commodities down to 7%. Since then, we have seen a drastic run-up in the amount of money put into oil commodities. It has gone from something like $14B to $280B per day for the speculators. The vast majority of this money is coming from pension fund managers.

OK, I am all for people making a buck, but it ceases to become OK if the practice in question crushes our economy and casues people in 3rd world nations to starve. I hear about China and India all of the time, but together they have increased the daily consumption of oil in the world by less than 1% over the past year.

Who is in charge of this mess?

[American X]

Who is in charge of this mess?

The Invisible Hand.

It is bitch-slapping right now.

[American X]

(Channeling Snipe) From today's WSJ:

Drill! Drill! Drill! (http://online.wsj.com/article/SB121322872046666269.html?mod=todays_columnists)

Congress Dumb (http://online.wsj.com/article/SB121322599645166029.html?mod=opinion_main_review_ and_outlooks)

[waggy]

http://www.americansolutions.com/

[GuyFawkes38]

I still blame the commodity traders. Seems that six months ago, the board that supervises such trades reduced the amount of money that you had to put up to buy commodities down to 7%. Since then, we have seen a drastic run-up in the amount of money put into oil commodities. It has gone from something like $14B to $280B per day for the speculators. The vast majority of this money is coming from pension fund managers.

OK, I am all for people making a buck, but it ceases to become OK if the practice in question crushes our economy and casues people in 3rd world nations to starve. I hear about China and India all of the time, but together they have increased the daily consumption of oil in the world by less than 1% over the past year.

Who is in charge of this mess?


It's in fashion now to blame speculators for oil prices since the collapse of the mortgage market.

But keep in mind two things:

1. Speculators purchasing these futures will, alone, loose their money if it turns out the future markets are inflated. If the markets are inflated (which they might be), then they, not us, will receive the brunt of the financial distress (and we will benefit with even cheaper gas prices than if the inflating of future markets didn't occur. It would balance out).

2. If the future markets are not inflated (which they probably aren't), speculators are performing a service to the economy. Oil companies can finance longterm operations to extract more oil by selling that oil on the futures market.


In general, reforming financial markets can be good or bad. The good reforms usually force all parties to be transparent. Transparency allows everyone to make sound decisions.

The bad reforms of financial markets typically limits trading. Plans to limit trading in oil future markets is a bad idea.

[Stonebreaker]

I didn't read this whole thread, but it makes sense to me that:

-We desperately need more refining capacity (which is too expensive to start from scratch, and the loopholes to do so are enormous)

-The Feds should curtail the state's ability to impose regulations on the type of gas. It would be cheaper if it were all standardized.

-We could save money by not subsidizing foreign oil to Europe. Close the damn loophole!

-Start drilling...The Moose love the pipeline in Alaska, and there are new ways to extract oil.

[MADXSTER]

Has anyone noticed that the BP gas stations are all slowly disappearing?

I've been using these stations since they were SOHIO gas stations. That was my first credit card. 2 of the 3 stations I use most have shut down and have not been replaced by anyone else.

My mother is coming up from Florida and I send her my BP card to use at the pumps. She said the BP's are closing down there too.

If there are record quarterly profits going on then why are these stations closing and not being replaced?

Things that make you say Hmmmmm.

[XUglow]

The oil companies hate retail business. They would rather sell the stations to independents and sell them the gas wholesale and be done with it.

[Stonebreaker]

I'd like to see John Mclain (think Diehard) come out with an aggressive energy policy, and make it the capstone of his vision. People want answers to real problems, not just rhetoric.

[XU 87]

I think we should just rely on wind power. Wind power cars, wind power furnaces, wind power everything. I love wind power. And I think that's Obama's energy platform (besides "change").

[DC Muskie]

I could be wrong about this, and I'm sure I am because only oil companies and Republicans know exactly what the real deal is on this issue, not the rest of us unclean...

But it's my understanding that the Bush administration, led by the man who was immensely successful in his own oil venture as a young man, has opened up millions of acres to lease for drilling that has produced not enough oil to bring down our dependence in foreign oil. And on top of that, there was something I heard on the news today, that the government has open leases with companies to drill, but these companies do not. So which is it exactly?

Are we not opening up more opportunities, or are we, and those opportunities are not producing the amounts of oil that could help us avoid XU 87's dream of having to fart to make his moped go?

Thank goodness we have oil men in the highest seats of office to resolve this issue.

I still think people should just shut up and take the rising gas prices and don't even think about the government bailing you out because people like XU95 are not about to dump more money into an already huge black hole we call the government.

[Billy]

I could be wrong about this, and I'm sure I am because only oil companies and Republicans know exactly what the real deal is on this issue, not the rest of us unclean...

But it's my understanding that the Bush administration, led by the man who was immensely successful in his own oil venture as a young man, has opened up millions of acres to lease for drilling that has produced not enough oil to bring down our dependence in foreign oil. And on top of that, there was something I heard on the news today, that the government has open leases with companies to drill, but these companies do not. So which is it exactly?

Are we not opening up more opportunities, or are we, and those opportunities are not producing the amounts of oil that could help us avoid XU 87's dream of having to fart to make his moped go?

Thank goodness we have oil men in the highest seats of office to resolve this issue.

I still think people should just shut up and take the rising gas prices and don't even think about the government bailing you out because people like XU95 are not about to dump more money into an already huge black hole we call the government.

If it made sense for XYZ company to drill in a specific area, they'd be doing it. My general guess would be that those areas aren't believed to have enough of the resource to make it worthwhile for them to go through the expense of digging for it. I suppose it's possible that if the prices keep going up at 20x CPI, that it could start to make sense in some of those untapped areas.

There's not much question about the vast resources in some parts of the Gulf, or in the preserved areas of Alaska. Companies would have the needed equipment there in about five minutes.

There's no shortage at the consumer level, and there hasn't been enough of an effect on American life to justify the government to step in. I took a round trip to Vegas (not exactly an "essential" destination) last weekend...full airplane both times. In general, people are still paying the price.

[MADXSTER]

The oil companies hate retail business. They would rather sell the stations to independents and sell them the gas wholesale and be done with it.

That's what I would think but BP is simply shutting down their stations. They are not selling them to independents. What gives?

Fewer stations means less competition which means higher prices. Why would BP get out of the market when there are record earnings every quarter.

[GuyFawkes38]

Is there anyone else out there, like myself, who doesn't care about paying more of gas.

In fact, I celebrate high gas prices. High gas prices encourages the private sector to invest in new, eco friendly, strategies. High gas prices encourages people not to drive, which is a really good thing considering the thousands of people who die each year by car accidents.

Us city dwellers subsidize the rural way of life. From the absurd Farm Bill to the subsidization of the airlines to fly to remote locales. Sadly, Congress is structured in a manner to encourage this.

I take some pleasure in seeing rural folk struggle with gas prices. Hopefully they will move to urban settlements and stop being a drain on the economy (yes, that's a generalization. but it's generally true).

[MADXSTER]

Guy, you simply live in a different world. I'm now starting to believe in the theory of multi-deminsional universes.

[GuyFawkes38]

I'm really sick of hearing people complain about gas prices. And likewise, I'm sick of hearing people complain about the economy. We aren't even in a recession. The unemployment rate is remarkably low when compared to Europe.

[DC Muskie]

Is there anyone else out there, like myself, who doesn't care about paying more of gas.

In fact, I celebrate high gas prices. High gas prices encourages the private sector to invest in new, eco friendly, strategies. High gas prices encourages people not to drive, which is a really good thing considering the thousands of people who die each year by car accidents.

Us city dwellers subsidize the rural way of life. From the absurd Farm Bill to the subsidization of the airlines to fly to remote locales. Sadly, Congress is structured in a manner to encourage this.

I take some pleasure in seeing rural folk struggle with gas prices. Hopefully they will move to urban settlements and stop being a drain on the economy (yes, that's a generalization. but it's generally true).

This is a great post. It made me laugh out loud. Well done!

[MADXSTER]

Comparing ourselves to Europe/Europeans in all due respect, isn't very fair. We Americans are smarter, better looking, more athletic, funnier and so much more.

[DC Muskie]

If it made sense for XYZ company to drill in a specific area, they'd be doing it. My general guess would be that those areas aren't believed to have enough of the resource to make it worthwhile for them to go through the expense of digging for it. I suppose it's possible that if the prices keep going up at 20x CPI, that it could start to make sense in some of those untapped areas.

There's not much question about the vast resources in some parts of the Gulf, or in the preserved areas of Alaska. Companies would have the needed equipment there in about five minutes.

There's no shortage at the consumer level, and there hasn't been enough of an effect on American life to justify the government to step in. I took a round trip to Vegas (not exactly an "essential" destination) last weekend...full airplane both times. In general, people are still paying the price.

Yet another example of why it amazes me that George Bush or BP or anyone who gets into this industry can lose money. they are like the Art Modells of the National Oil League. Why would the government give up land that in the end the smart oil people know won't produce something? We should protect those areas, and give land that is obviously more productive for these companies.

And I agree, we need to stop complaining about gas prices. Who are these people that are? Suck it up and hit the strip baby. Life isn't all about puppy dogs, ice cream and a $1.00 a gallon gas.

[XU 87]

Is there anyone else out there, like myself, who doesn't care about paying more of gas.

In fact, I celebrate high gas prices. High gas prices encourages the private sector to invest in new, eco friendly, strategies. High gas prices encourages people not to drive, which is a really good thing considering the thousands of people who die each year by car accidents.



I've heard this argument many times before and from a practical sense, it never makes any sense to me. High fuel prices can and do hurt the economy. And high fuel prices can adversely affect many, many people - truckers, taxi cab drivers, commuters, airline passengers, homeowners, etc. etc. I read where P&G may have to raise prices because one of their major suppliers, Dow Chemical, is raising prices by 20% because of (allegedly) higher fuel costs.

But using the reasoning that higher fuel prices will encourage less driving, maybe the government should tax the hell out of cars- that would encourage people not to drive. Maybe the government should put $20 toll booths up every mile on every interstate. That would also encourage people not to drive.

In the theoretical sense, high fuel prices may be good in that we have less driving, and more conservation and less pollution and more money invested in new technologies etc. But in the practical sense, high fuel prices adversely affect almost everyone.

[xeus]

Life isn't all about puppy dogs.

It isn't ???

[vee4xu]

You can blame just about anyone, but it is hard to blame the Democratic congress at this point. Gas prices have been going up since the Iraq war began and the that had nothing to do with this Congress. Speculators and hedge funds have driven the price of a barrel of oil from the mid-30's just a mere few years ago to nearly $140 today. This also has nothing to do with the current Congress. The dollar is as weak today as it has been in almost 40 years. This also is not something created by the current congress. Large oil companies have stonewalled new and innovative ways to use altenative fuels. Most here are probably not old enough to remember the 1973 oil embargo (when a Republican was President). In the 35 years since then, technology has reduced computers that used to fill entire rooms to ones that are just as poweful and sit upon our laps. Also, we have phones that fit in our pockets and connect us to one another anywhere by simply touching a button. In the meantime, oil companies have pooh-poohed ideas to move us away from oil, because there are too many $15+ million annual comp packages at risk to allow it. This also has nothing to do with the current Congress. ANWAR and offshore drilling do nothing to alleviate the long term problem of oil reliance. Sure it may help today, but when I see our car companies selling Tundra's, Hummers, F-350's, Silverardo's, Navigator's Q56's, and on and on,,,that also has nothing to do with the current Congress.

Anyone who want to blame a Congress that has been in control by the Dems since 2006 for a problem that has existed for 35 years also think that offshore drilling is the long term answer to the gas price problem . Our President's current energy policy consists of going to Saudi Arabia and begging the royal family there to pump more oil. They send him home with a resounding no, with his tail between his legs and an admonishment to get his own country's economic house in order.

Wake up folks, its time to have a real energy policy that will result in reducing the Middle East to nothing more than a vast sandbox by rendering their black gold as useless. This is going to take longer than most of us will live, but is starts by admitting the problem and finding new choices and not by wasting money by sucking more oil out of our ground, or blaming a Congress that hasn't been around long enoug to figure out this whole mess let alone fix it.

Heck starting in 1994 the Republicans have had contol of the Congress and Supreme Court and since 2000 the Presidency and have done nothing about abortion, yet I hear no blame going towards them from those who think Dems are responsible for high gas prices. For a party who made such a big issue of abortion, they surely haven't done anything to stop it. I think killing innocent babies is much worse than $4.00 per gallon gas. Yet, Repubs have not stopped the former and are largely responsible for the latter. But, hey that's another topic.

Okay, I'm done now.

[Juice]

Most of our oil does not come from the Middle East.

1) Canada
2) Saudi Arabia
3) Mexico
4) Nigeria
5) Venezuela
6) Iraq

[XU 87]

In the meantime, oil companies have pooh-poohed ideas to move us away from oil, because there are too many $15+ million annual comp packages at risk to allow it.

Wake up folks, its time to have a real energy policy that will result in reducing the Middle East to nothing more than a vast sandbox by rendering their black gold as useless. This is going to take longer than most of us will live, but is starts by admitting the problem and finding new choices and not by wasting money by sucking more oil out of our ground, or blaming a Congress that hasn't been around long enoug to figure out this whole mess let alone fix it.



1) Why would oil companies, who make money selling oil, advocate moving away from oil? Should we also expect Skyline Chili to advocate people becoming vegetarians since it's much healthier to eat vegetables as opposed to hot dogs, chili and a pound of cheese?

2) I'm always confused by people wanting a "national energy policy". It reminds me of the Soviet Union's old "five year plans". By a national energy policy, does this mean that the federal government will vote on what energies to develop and who will develop them? Doesn't the free market, and feasible technology, dictate what energies will be produced?

3) If a national energy policy means that government will stop hindering the free market, then I'm all for it. If government will permit the construction of nuclear power plants, then I'm for a national energy policy. If the government will allow for drilling for oil in the Alaska desert where no one lives, I'm for that too.

4) I'm also done, unless of course someone has the audacity to argue with me and try to prove I'm wrong (which would be a herculean task).

[waggy]

Don't know about this party line stuff. I guess I'd have to brush up on which party was in control of congress, the house, etc. to really dispute it. But it seems to me that it's not a party issue - except for the fact there is too much blame and division. Each member should be voting for what's best for the country, not their personal bank account, or their partys warchest. The party line stuff is possibly the BIGGEST problem, because it's a simple blame shift. It pits regular americans against one another over things like abortion as an example.

Abortion isn't changing because it isn't a religious or ideological issue anymore really. It's an economic one. Neither party really wants the status quo to change in that regard.

The problem is Washington as a whole. They're all responsible.

[DC Muskie]

1) Why would oil companies, who make money selling oil, advocate moving away from oil? Should we also expect Skyline Chili to advocate people becoming vegetarians since it's much healthier to eat vegetables as opposed to hot dogs, chili and a pound of cheese?

2) I'm always confused by people wanting a "national energy policy". It reminds me of the Soviet Union's old "five year plans". By a national energy policy, does this mean that the federal government will vote on what energies to develop and who will develop them? Doesn't the free market, and feasible technology, dictate what energies will be produced?

3) If a national energy policy means that government will stop hindering the free market, then I'm all for it. If government will permit the construction of nuclear power plants, then I'm for a national energy policy. If the government will allow for drilling for oil in the Alaska desert where no one lives, I'm for that too.

4) I'm also done, unless of course someone has the audacity to argue with me and try to prove I'm wrong (which would be a herculean task).

1. So the government shouldn't step in and tell Skyline that they must use oil that doesn't contain trans fat? Has that hurt stopped Skyline or any other restaurant from making money?

2. Doesn't the government issue contracts all the time to companies for a wide variety of things? So the government therefore cannot produce requests for agendas they set? Should we stop this practice all together then since it won't work with with energy? Stop building bridges government!

3. Has the government hindered the free market so much that oil companies are incapable of making profits? I'm always amazed how much trouble the government goes to prevent companies like the oil industry from making money. That's all I hear about is how much the government hinders the free market. Haven't you explained to all of us many times that the job market is still growing and that we are in fact NOT in a recession? How come companies don't drill on land the government already leases to them?

4. Yours truly, Hercules.

[xu95]

Most of our oil does not come from the Middle East.

1) Canada
2) Saudi Arabia
3) Mexico
4) Nigeria
5) Venezuela
6) Iraq


Don't let this get in the way of Vee's hatred for the President. Hell, he first mentions that you can't blame congress because this has been going on for 35 years, but than he still blames the President in the same sentence.

xu95

[xu95]

Don't know about this party line stuff.

The problem is Washington as a whole. They're all responsible.

I can tell you about the party line stuff. I learned it all by listening to DC Muskie and Stiff Little Fingers on Pablo's old board.

When something good happened during the Bill Clinton presidency, it had nothing to do with the Republican Congress, but how awesome Bill Clinton was. When something bad happens now, it has nothing to do with the Democratic Congress but how much of a big flaming tool box GW Bush is. Now you know all you need to know about the party line stuff.

I am actually kind of hoping Obama wins so when things go bad I can hear about how it isn't the Democratic President or the Democratic Congress screwing things up, it is the big piece of flaming turd Republicans with the minority vote.

I actually agree with you on the last point. Everyone in DC is a big flaming box of turd excrement. Except for DC Muskie of course. He is special in his own way.:D

xu95

[DC Muskie]

I am special.

I will say the Democrats in Congress for the last 15 years have been absolutely worthless. On the other hand, the Republicans haven't fared much better.

The problem with Washington is in fact all of us. All of us send our own people here to screw things up. It's always funny when I speak to people back home and hear how messed up this city is. This city is just like any other city and what comes from our government is a direct result of our different views and agendas. Washington doesn't act in a vacuum people. I always ask people when they tell me how messed up DC is, "Well, what are you doing about it?" I get deer in the headlights look. No one rails against one city, well maybe Dayton, then DC. And yet no city is more transient with the way the country votes then DC. One thing stays the same though, DC sucks!

Look at the way Ohio votes. Smails, and others when not watching Roseanne, or the View or knitting, have an interesting voting history. They voted for Clinton twice, they voted for Bush twice. They voted for Carter, then voted for Regan twice. In 1992, they passed a term limit restriction, which is the most ridiculous thing ever thought of, and then proceeded to vote 97% of the incumbents. You have no idea where Ohio will go because Ohio is all over the place. And yet still, Washington is the problem.

Granted, Washington is not without it's faults...but people will always believe what they want to believe. Hell there are 29% of the people in this country that actually think Oil Tycoon President Bush is a good president.

[Smails]

DC does suck...plain and simple. It's filled with nothing but idealistic transplants from other states who think that they've somehow found 'mecca' by going to a district overunn with politicians, lobbyists and do-gooders. And those transplants actually think that they've somehow cultred themselves by the surroundings in which they rent an apartment. It's a smelly...smelly place with smelly...smelly people.

DC Muskie does not smell.

[xu95]

DC Muskie does not smell.


A lot.

xu95

[MADXSTER]

DC Muskie does not smell.

Thanks for checking Smails. I personally have never had the desire or inclination to seek out that little tid bit of information.

[MADXSTER]

DC does suck...plain and simple.


http://www.kyle-brady.com/wp-content/uploads/2007/11/you_suck.jpg

[DC Muskie]

Most of our oil does not come from the Middle East.

1) Canada
2) Saudi Arabia
3) Mexico
4) Nigeria
5) Venezuela
6) Iraq

Actually from my understanding, we export a certain amount of oil each month, most of which goes to Canada where it gets refined and shipped back to us. So basically we are shipping our own oil to Canada and sending it back to ourselves.

The other thing is, don't we buy oil from a global market? The price in Canada is the same as Saudi Arabia. The supplier then ships it to us as cheaply as possible. So technically we might not get our oil directly from Iraq and the Middle East, the fact is the Middle East drives the entire market.

I could be wrong. Maybe I am. Probably. But it's a good argument to put forth when defending the idea that the Oil Tycoon President isn't invading Canada.

[DC Muskie]

DC Muskie does not smell.

Today. At this time.

[Smails]

Thanks for checking Smails. I personally have never had the desire or inclination to seek out that little tid bit of information.


Anytime fella....

[vee4xu]

We are talking about gas prices and who we believe is to blame for them being so high. I will blame Congress if the problem is their fault. There are plenty of things that are their fault, but $4 a gallon gas is not one of them. They cannot undo in 2 years what took over 7 years to create. On the other hand, President Bush has presided over this country for the past 7.5 years and he is not to blame for everything that's wronng. But, the price of gas today does fall squarely on his shoulders because of decisions he and his cabinet have made. For allowing oil to go to $134 per barrel on the commodities market and creating havoc in the Middle East militarily, this President needs to me held accountable. It happened on his watch. These are facts and there is no malice intended on my part towards President Bush. To tie this thing together and to the original point, drilling for oil is a bandage approach to arterail bleeding. One thing I do blame this Congress for is not more actively pushing for alternative energy over the past two years, but to blame them for the price of gas today because they don't want to drill for more oil is just with all due respect, illogical.

[xeus]

1) Why would oil companies, who make money selling oil, advocate moving away from oil? Should we also expect Skyline Chili to advocate people becoming vegetarians since it's much healthier to eat vegetables as opposed to hot dogs, chili and a pound of cheese?

4) I'm also done, unless of course someone has the audacity to argue with me and try to prove I'm wrong (which would be a herculean task).

I included your #4 to highlight why I am bothering to set you straight regarding your #1.

87, I'll buy lunch tomorrow at Skyline and explain some fundamentals of business strategy to you while we both enjoy our vegetarian bean burritos. Maybe birdman71 can join us.

[GuyFawkes38]

I'm surprised to see so many post demand action from Washinton.

Gas should not be subsidized by Washington. In fact, most economist believe that high gas prices will benefit us in the long run.

[xu95]

We are talking about gas prices and who we believe is to blame for them being so high. I will blame Congress if the problem is their fault. There are plenty of things that are their fault, but $4 a gallon gas is not one of them. They cannot undo in 2 years what took over 7 years to create. On the other hand, President Bush has presided over this country for the past 7.5 years and he is not to blame for everything that's wronng. But, the price of gas today does fall squarely on his shoulders because of decisions he and his cabinet have made. For allowing oil to go to $134 per barrel on the commodities market and creating havoc in the Middle East militarily, this President needs to me held accountable. It happened on his watch. These are facts and there is no malice intended on my part towards President Bush. To tie this thing together and to the original point, drilling for oil is a bandage approach to arterail bleeding. One thing I do blame this Congress for is not more actively pushing for alternative energy over the past two years, but to blame them for the price of gas today because they don't want to drill for more oil is just with all due respect, illogical.

I guess this is where we disagree. Trust me, I don't particularly like $4.00 gas, but I don't want our government or any government for that matter interfering in the private sector. Let companies try to make all they want. When it gets too bad they will be the ones to suffer.

Why should the government tell another country how much they can charge us for oil? Should the government tell Apple they can't charge $399 for a 16GB IPOD Touch? Who gives them the freakin right to dictate how much something costs?

Next you are going to want our government to tell us which school to take our kids to. Which cereal we should feed them in the morning. What time we should send them to bed. Is there anything you think us clones can figure out on our own without the government getting involved?


xu95

[xu95]

I blame the President that Xavier didn't win the National Championship. Heck, I thought he made it quite clear to Miles Brand what needed to happen.

xu95

[vee4xu]

95, just for clarification, I wasn't suggesting that the government do something about the commodities trading. I view that as an issue separate from the Iraq War issue. Both are contributing factors. I am in the investment business, so believe me less government is tolerable and no government is preferable. My point is that somehow commodity traders should not be able to use oil as a way to juice investor returns at the expense of consumers and that solution would not include having the government tell them as much. But, they should have some oversight role.

As for our basketball team, I just wish they got an invitation to meet the President because we all knows that means they would have won the national championship.

[DC Muskie]

I guess this is where we disagree. Trust me, I don't particularly like $4.00 gas, but I don't want our government or any government for that matter interfering in the private sector. Let companies try to make all they want. When it gets too bad they will be the ones to suffer.

Why should the government tell another country how much they can charge us for oil? Should the government tell Apple they can't charge $399 for a 16GB IPOD Touch? Who gives them the freakin right to dictate how much something costs?

Next you are going to want our government to tell us which school to take our kids to. Which cereal we should feed them in the morning. What time we should send them to bed. Is there anything you think us clones can figure out on our own without the government getting involved?


xu95

Bring back Enron and Bear Stearns! Make as much as you can and government stay out! In fact companies should be able to dominate the marketplace, create monopolies, in fact forget labor laws or even weekends! Stupid freakin government needs to stay out of everything expect blasting terrorists.

I'm with you all the way 95! Gad Dum government. No way you are telling me what cereal to eat you communists. Stop giving tax breaks, in fact, stop taxing companies. It's the PRIVATE sector for crying out loud!

[DC Muskie]

I think the president is doing a fantastic tip top job as leader of the free world. No one should blame him for anything, since he is not responsible for anything bad, and can only do good. I read that somewhere.

Yeah Tycoon Oil President Brilliant Bush!

[Snipe]

I think we should drill for more oil. If it doesn't lower the price it will at least provide a boat load of revenue. I think we should build more refineries too.

Guy is correct that the high price of gas does have some positive effects. The market will react to high gas prices. The Prius is a great example. Also note that the Prius is a product of the private market. If we are going to get energy efficient cars, they will come from the private market.

The Government has spent billions on alternative energy but that money goes wasted. The biggest government program for alternative energy is ethanol. It has been an unmitigated disaster. Nobody in Washington will stop it though. And government spending has a "crowding out" effect on the private sector. Let the private market keeps their funds instead of taxing them to produce ethanol. Let those scientists involved in the billion dollar ethanol industry be free to pursue something that might actually be productive.

The government subsidizes ethanol. It also subsidizes wind and solar. Here in Cincinnati wind and solar isn't going to be cost effective. What is effective is geo-thermal heating and cooling. You can reduce your heating and cooling costs up to 60 or 70%. It is an incredible up and coming technology. You won't find any government program in Cincinnati to convert to geo-thermal though, and that would be the most logical program to put money into because it would yield the greatest returns.

I think the Government should get involved in Nuclear power in a big bad way. I also think the government would be the appropriate entity for upgrading and updating our national energy grid and making it more efficient.

I also wouldn't mind to see some pilot projects in oil shale and coal to gas conversion. Once we get the nuclear reactors up and running we can still use our abundant coal supply to run our cars. I would love to drive a hybrid in which the electric component was coming from American made nuclear power and the gas was coming more from America (more drilling, more coal to oil etc).

People can blame who they want, but the fact is we do need a rational and reasonable policy going forward. We are going to be using oil for quite some time. If we can produce another 2-3 million barrels a day lets do it. It won't solve everything but no one solution will. We need to bring them all together.

[XU 87]

Bring back Enron and Bear Stearns! Make as much as you can and government stay out! In fact companies should be able to dominate the marketplace, create monopolies, in fact forget labor laws or even weekends! Stupid freakin government needs to stay out of everything expect blasting terrorists.

I'm with you all the way 95! Gad Dum government. No way you are telling me what cereal to eat you communists. Stop giving tax breaks, in fact, stop taxing companies. It's the PRIVATE sector for crying out loud!

Hercules, Enron committed crimes. I don't think anyone is advocating that government allow companies to break the law. But history tells us that those countries which have limited involvement in the market have strong economic growth. Those countries which try to regulate their markets have low economic growth.

[GoMuskies]

The biggest government program for alternative energy is ethanol.

If we could get the Iowa primaries moved to Super Tuesday, the ethanol boondoggle would probably go away.

Though, all the focus on ethanol has had the fantastic consequence of contributing to major inflation in the price of food staples and starving people around the world. Way to thin the herd guys!

[XU 87]

We are talking about gas prices and who we believe is to blame for them being so high. I will blame Congress if the problem is their fault. There are plenty of things that are their fault, but $4 a gallon gas is not one of them. They cannot undo in 2 years what took over 7 years to create. On the other hand, President Bush has presided over this country for the past 7.5 years and he is not to blame for everything that's wronng. But, the price of gas today does fall squarely on his shoulders because of decisions he and his cabinet have made. For allowing oil to go to $134 per barrel on the commodities market and creating havoc in the Middle East militarily, this President needs to me held accountable. It happened on his watch. These are facts and there is no malice intended on my part towards President Bush. To tie this thing together and to the original point, drilling for oil is a bandage approach to arterail bleeding. One thing I do blame this Congress for is not more actively pushing for alternative energy over the past two years, but to blame them for the price of gas today because they don't want to drill for more oil is just with all due respect, illogical.

There's no dispute that Bush has been the President as gas prices rose. But what exactly did he do to cause gas prices to go up? Should we blame Clinton who vetoed a bill to drill in Alaska about ten years ago? You say drilling for oil is a bandaid, but the fact is that if you want to drive your car, we need oil.

And what can congress do, other then getting out of the way, to enhance the invention of alternative energy? New products come out because 1) people need them 2) the product can feasibly be produced and 3) the producer can make a profit. As a result of this free market system we have seen incredible advances in science, technology and medicine in the last two centuries. We didn't see these advances because government wanted them and signed laws stating, "Someone should invent an automobile".

There's a LOT of money to made on alternative energy. As a result, I'm sure there are many companies trying to develop and produce it.

[XU 87]

I included your #4 to highlight why I am bothering to set you straight regarding your #1.

87, I'll buy lunch tomorrow at Skyline and explain some fundamentals of business strategy to you while we both enjoy our vegetarian bean burritos. Maybe birdman71 can join us.

Yesterday, Cincinnati city council announced that eating meat is contributing to global warming (no joke). Therefore, it's beans, rice and carrott sticks for me for now on. No more cheese or milk since that comes from cows, who, according to city council, are contributing to global warming.

[Billy]

I'm surprised to see so many post demand action from Washinton.

Gas should not be subsidized by Washington. In fact, most economist believe that high gas prices will benefit us in the long run.

Yes, but that statement by economists usually comes with the assumption that it causes demand to drop enough to finally make the science and R&D a profitable venture. Based on the data coming in (somewhere in the 2-4% range as far as year-over-year decrease), we're not there yet. I'm not even sure we're close.

So no, the current prices are not "good for the economy" long term, especially within a nation where the infrastructure is so oil dependent. Macroeconimically, this price increase will be absorbed by the average consumer...but it will come at the expense of tourism, the airline industry, trucking, cheap imports, etc. Those are all bad things...not at all good for the economy.

[Snipe]

I understand the theory of futures markets, but I have never traded in one.

If a farmer is going to bring 1000 bushels of corn to market he can sell those bushels of corn as futures and lock in a price. Similarly a grocery store could forecast their need for bushels of corn at a later date and lock in an acceptable price by buying futures of corn. That is pretty easy for anyone to understand.

If I wanted to speculate on the price of corn I could do that as well. I could purchase this farmer’s 1000 bushels to be delivered later in the hopes that the market price would increase. I could then sell those bushels and make a profit.

Here is the crux of what I have been pondering:

I could buy 1000 bushels of corn on the futures market. If push came to shove I could even take delivery of the bushels and sell them to wholesalers myself. Castellini or some of the other produce places have buyers that buy the stuff by the truckload all the time. I used to work for a produce company. Like many commodities, it is easy to buy and sell the stuff in bulk. Plenty of players on the market, none of which can dictate the market price.

And it doesn’t have to be corn. I could buy copper futures on the commodities market. I could take delivery of it as well. I could get some warehouse space and put it on the pallet racks. Doesn’t go bad and it will hold it value.

That is the problem that I have with oil when I try to picture the practical theory of oil futures. I could buy some oil futures. This is theoretically the purchase of future oil to be delivered at a later date. The problem is I couldn’t possibly take possession of the oil. Oil is delivered by large tankers, some of which carry over 3 million gallons. It would be a logistical nightmare to get my oil, and then I would need to store it. Selling it also would be a lot of fun. It is an industry with high barriers to entry and exit.

I think that many people can speculate on oil futures for their own personal gain. Some will win and some will lose. But I also think that if someone is controlling or manipulating the price I would look past the idle speculators and concentrate on those few who can actually take possession of the oil and bring it to market. They are the only ones who are actually “buying it”, and I think they would have the most impact on the price.

That is my theory that I have been toying with. I would like people with more experience and insight (or any idea) to poke holes in that and raise questions that I may be overlooking.

[Billy]

Yesterday, Cincinnati city council announced that eating meat is contributing to global warming (no joke). Therefore, it's beans, rice and carrott sticks for me for now on. No more cheese or milk since that comes from cows, who, according to city council, are contributing to global warming.

See, I would've expected them to invoke the "fat people cause global warming" argument.

Fat people require more fuel to have their heavy asses transported from point A-to-point B. More fuel consumption = bad for the Ozone.

I saw some chick on Hannity and Colmes argue this about a month ago.

[Snipe]

Bring back Enron and Bear Stearns! Make as much as you can and government stay out! In fact companies should be able to dominate the marketplace, create monopolies, in fact forget labor laws or even weekends! Stupid freakin government needs to stay out of everything expect blasting terrorists.

I'm with you all the way 95! Gad Dum government. No way you are telling me what cereal to eat you communists. Stop giving tax breaks, in fact, stop taxing companies. It's the PRIVATE sector for crying out loud!

I would like to note that the private market is the one that exposed Enron. They were involved in illegal activity but the government didn't catch on and the regulators failed to catch them as well. It was the market that exposed Enron though the collapse of its stock. All the criminal investigations started after the market sent the signal. If Enron was instead The Department of Housing and Urban Development, their would have been no market signal. And as HUD has long done they have been criminally wasting tax payer dollars for decades. The great thing about the market is that it polices itself and weeds out the Enrons. The Government has no such internal cleaning device for the likes of HUD.

I would also like to add that I think Bear Sterns should have been allowed to fail. When the government steps in to cover bad loans it only allows banks to continue failed policy of extending credit to people who are not credit worthy. It also pushes up the cost of loans to people that actually pay their bills. Not only are you paying your loan, you are now through your taxes paying someone else’s. If Bear Sterns made bad loans, they should eat them. Capitalism is about risk and reward. We need to let institutions fail when they deserve too.

[Billy]

I understand the theory of futures markets, but I have never traded in one.

If a farmer is going to bring 1000 bushels of corn to market he can sell those bushels of corn as futures and lock in a price. Similarly a grocery store could forecast their need for bushels of corn at a later date and lock in an acceptable price by buying futures of corn. That is pretty easy for anyone to understand.

If I wanted to speculate on the price of corn I could do that as well. I could purchase this farmer’s 1000 bushels to be delivered later in the hopes that the market price would increase. I could then sell those bushels and make a profit.

Here is the crux of what I have been pondering:

I could buy 1000 bushels of corn on the futures market. If push came to shove I could even take delivery of the bushels and sell them to wholesalers myself. Castellini or some of the other produce places have buyers that buy the stuff by the truckload all the time. I used to work for a produce company. Like many commodities, it is easy to buy and sell the stuff in bulk. Plenty of players on the market, none of which can dictate the market price.

And it doesn’t have to be corn. I could buy copper futures on the commodities market. I could take delivery of it as well. I could get some warehouse space and put it on the pallet racks. Doesn’t go bad and it will hold it value.

That is the problem that I have with oil when I try to picture the practical theory of oil futures. I could buy some oil futures. This is theoretically the purchase of future oil to be delivered at a later date. The problem is I couldn’t possibly take possession of the oil. Oil is delivered by large tankers, some of which carry over 3 million gallons. It would be a logistical nightmare to get my oil, and then I would need to store it. Selling it also would be a lot of fun. It is an industry with high barriers to entry and exit.

I think that many people can speculate on oil futures for their own personal gain. Some will win and some will lose. But I also think that if someone is controlling or manipulating the price I would look past the idle speculators and concentrate on those few who can actually take possession of the oil and bring it to market. They are the only ones who are actually “buying it”, and I think they would have the most impact on the price.

That is my theory that I have been toying with. I would like people with more experience and insight (or any idea) to poke holes in that and raise questions that I may be overlooking.

I don't think you're too far off.

Personally, I don't think the speculators are creating the problem. If the prices were believed to be grossly out of whack (i.e. a price the oil companies or consumers won't pay), you'd see a huge sell-off. It's not as if when I buy X amount of barrels of light sweet crude, I am somehow bound to keep it until the delivery date. It's similar to a share of stock in that regard.

In general, the people blaming speculators are not, themselves in the market. That's what I'm noticing.

[Raoul Duke]

I would also like to add that I think Bear Sterns should have been allowed to fail. When the government steps in to cover bad loans it only allows banks to continue failed policy of extending credit to people who are not credit worthy. It also pushes up the cost of loans to people that actually pay their bills. Not only are you paying your loan, you are now through your taxes paying someone else’s. If Bear Sterns made bad loans, they should eat them. Capitalism is about risk and reward. We need to let institutions fail when they deserve too.

The problem with the BS situation though was counterparty risk. I think it's pretty widely conceded that if BS would have failed, the rest of the market was at substantial risk of failure. So I don't think the Fed was bailing out BS for the sake of bailing out BS; the Fed was bailing out BS for the sake of the entire market and hence the entire economy. If the risk had been isolated to BS, I don't think the Fed would have bailed it out.

[Raoul Duke]

And as for alternative fuels, ethanol is a horrible idea with present-day disastrous and tangible consequences, as others have pointed out (subsidies, inflation of commodities prices, etc.) But it is somewhat of a stalking horse. There are a number of alternative fuel efforts that may prove successful.

Nuclear power, as others have suggested, is one example. Believe it or not, there are efforts underway to get rid of the overwhelming regulatory hurdles to expanding nuclear power. From what I know, nuclear power is immensely safer than it was 30 years ago.

There is also an effort to [I may butcher the explanation] create 'synthetic' oil through the use of genetically engineered enzymes. This research has made substantial progress so far and has the potential to create cheap, efficient, and environmentally friendly (or at least less harmful) fuel.

[Billy]

The problem with the BS situation though was counterparty risk. I think it's pretty widely conceded that if BS would have failed, the rest of the market was at substantial risk of failure. So I don't think the Fed was bailing out BS for the sake of bailing out BS; the Fed was bailing out BS for the sake of the entire market and hence the entire economy. If the risk had been isolated to BS, I don't think the Fed would have bailed it out.

Yes, that was undoubtedly their rationale.

Similar to the deal in the UK with the government's purchase of Northern Rock. They ONLY bailed them out because of the impact it would have had nationwide. Other mortgage companies that failed asked for help, but were not considered.

[XU 87]

I am generally against government bailouts of failed companies. But I have to agree with the BS "bailout". And the company stock was selling for something like $160 per share last summer and about $60 the day before the bailout. The shareholders got around $10 per share. So it's not as though the company, and its shareholder owners, didn't have to pay heavy consequences as a result of poor decision making.

[American X]

'Speculators' is this week's Halliburton (although feel free to still blame everything on Halliburton).

[xu95]

Bring back Enron and Bear Stearns! Make as much as you can and government stay out! In fact companies should be able to dominate the marketplace, create monopolies, in fact forget labor laws or even weekends! Stupid freakin government needs to stay out of everything expect blasting terrorists.

I'm with you all the way 95! Gad Dum government. No way you are telling me what cereal to eat you communists. Stop giving tax breaks, in fact, stop taxing companies. It's the PRIVATE sector for crying out loud!

I in no way implied companies should be allowed to break laws. THanks for implying that for me though.

I just said the Government has its role, and it isn't to interfere with business.

xu95

[xu95]

I think the president is doing a fantastic tip top job as leader of the free world. No one should blame him for anything, since he is not responsible for anything bad, and can only do good. I read that somewhere.

Yeah Tycoon Oil President Brilliant Bush!

Bill Clinton never did anything wrong either.

xu95

[Billy]

Bill Clinton never did anything wrong either.

xu95

Seriously. I mean what the hell was he supposed to do as that young woman enticed him into allowing her to slurp on his trouser snake?

Say no??

[xu95]

Seriously. I mean what the hell was he supposed to do as that young woman enticed him into allowing her to slurp on his trouser snake?

Say no??

I can't blame him for that.

I just love the posters who blame everything on Bush, but Clinton was the greatest thing since the invention of fire.

Bush has done some things wrong, but not everything in the world is his fault.

xu95

[Snipe]

And as for alternative fuels, ethanol is a horrible idea with present-day disastrous and tangible consequences, as others have pointed out (subsidies, inflation of commodities prices, etc.) But it is somewhat of a stalking horse. There are a number of alternative fuel efforts that may prove successful.

Nuclear power, as others have suggested, is one example. Believe it or not, there are efforts underway to get rid of the overwhelming regulatory hurdles to expanding nuclear power. From what I know, nuclear power is immensely safer than it was 30 years ago.

There is also an effort to [I may butcher the explanation] create 'synthetic' oil through the use of genetically engineered enzymes. This research has made substantial progress so far and has the potential to create cheap, efficient, and environmentally friendly (or at least less harmful) fuel.

We need to get out of ethanol yesterday. I am all for alternative fuels, I just view attempts by our government to provide the answer as suspect.

I support government involvement in nuclear because you need it. That industry demands regulation almost by definition. It is past time to start building more plants. By the time we retire those plants we should be on to the next big thing. A plant built today should last a good 60 years. We are going to have to start building plants just to replace what we will be retiring in the future.

I am all for synthetic and environmentally friendly fuel too. With gas at $4 a gallon, that is what many people in the market desire. The government doesn't need to fund it to get research going, the market is moving in that direction. I am also afraid of "crowding out" good research with wasteful government spending (see ethanol).

Here is one idea that is going to catch on, the gas/steam hybrid:

The Return of Steam (http://www.time.com/time/specials/2007/article/0,28804,1677329_1677971_1677973,00.html)

Study: Steam Hybrids Using Waste Heat Recovery Could Reduce Fuel Consumption Up To 31.7% (http://www.greencarcongress.com/2008/04/study-steam-hyb.html)

It is a lot easier to conserve energy than it is to develop a wholly new type of energy (and the delivery system infrastructure to get it to market).

Imagine a future American fleet that is using electric/steam/gas hybrids. When can get the electric from our nukes, get the steam energy from our water and get more of the gas from exploiting our own reserves. I really like the thought of filling up the water tank of my car! We could see extreme increases in energy efficiency, and that would really pay off in cutting down the need to import oil.

I think that oil is going to be around for a long time. We need to play this game in a smart way and work to our strengths.

[waggy]

In very limited numbers. Honda is probably the most progressive automaker in the world.

How the FCX Clarity works: http://automobiles.honda.com/fcx-clarity/how-fcx-works.aspx

[MADXSTER]

BMW has had a hydrogen 7 series for quite some time now. It's only in Europe. The tank is similar to the tank for your outside grill. Nozzel off, old tank out, new tank in, nozzel on.

Refueling stations are the key.

[DC Muskie]

Hercules, Enron committed crimes. I don't think anyone is advocating that government allow companies to break the law. But history tells us that those countries which have limited involvement in the market have strong economic growth. Those countries which try to regulate their markets have low economic growth.

Enron committed crimes outside the boundaries of what the government set. I'm pretty sure Enron would tell you a free market would allow them to do the things they did. Government restraints be damed! I mean you don't want boundaries or interference byt the government, but when people get screwed, you applaud the government for having boundaries.

Aren't we in a free market and aren't we experiencing low economic growth? I may be wrong here, but isn't China's government pretty controlling, and yet their economy is growing?

Do I have that correct?

[DC Muskie]

I would like to note that the private market is the one that exposed Enron. They were involved in illegal activity but the government didn't catch on and the regulators failed to catch them as well. It was the market that exposed Enron though the collapse of its stock. All the criminal investigations started after the market sent the signal. If Enron was instead The Department of Housing and Urban Development, their would have been no market signal. And as HUD has long done they have been criminally wasting tax payer dollars for decades. The great thing about the market is that it polices itself and weeds out the Enrons. The Government has no such internal cleaning device for the likes of HUD.


Yeah, the market is great, they create these monsters, and yet are capable of reeling them in. The government however commits crimes and can't be stopped because it's citizens are incapable are being an exact replica of the "market."

We are screwed.

[DC Muskie]

I in no way implied companies should be allowed to break laws. THanks for implying that for me though.

I just said the Government has its role, and it isn't to interfere with business.

xu95

How does anything exists in this country of laws outside the government? What role do you want the government to have? Are they allowed to interfere when it effects their business? Such as the government won't be able to pay for the bridges they build because they won't get the revenue off the gas tax since consumption is down.

The government is a business to. It has expenses and revenues, the only thing is, they never run out of customers.

[DC Muskie]

I just love the posters who blame everything on Bush, but Clinton was the greatest thing since the invention of fire.

xu95

I never voted for either one of them...they are both crap.

[Raoul Duke]

Aren't we in a free market and aren't we experiencing low economic growth? I may be wrong here, but isn't China's government pretty controlling, and yet their economy is growing?

Do I have that correct?

China is growing in spite of, not because of, its command economy. And the party has, to a large extent, tacitly adopted market reform and capitalism, e.g., private property ownership, etc.

[GoMuskies]

The government is a business to.

Just not a very good one.

[DC Muskie]

Just not a very good one.

Hmmm...so you would say a business that has been in place for over 200 years not good?

[GoMuskies]

Hmmm...so you would say a business that has been in place for over 200 years not good?

Not at the business aspect, no. Hell, any decent business that old would have been acquired by now.

[DC Muskie]

Not at the business aspect, no. Hell, any decent business that old would have been acquired by now.

huh. Interesting...so it seems the United States excelled despite itself. Or we should all be speaking Mexican.

[GoMuskies]

Canada has yet to go for the hostile takeover or even to put together a tender offer. Given the potential geographic synergies, that's pretty telling.

[Snipe]

If our government was a business it would be out of business. If you tried to run your own budget like the federal government you would be bankrupt (much like our government!). If you tried to run a private pension like they run social security you would be in jail.

And China instituted free market reforms in the 1980's. Milton Friedman went over there in 1980 and again advised them in an inflationary crisis in 1988. China has embraced the power of the market and it has helped to pull hundreds of millions out of poverty. That was no central plan, it was the market.

[DC Muskie]

If our government was a business it would be out of business. If you tried to run your own budget like the federal government you would be bankrupt (much like our government!). If you tried to run a private pension like they run social security you would be in jail.

This is where it gets really confusing for me. On one hand the government is bankrupt, but at the same time too restricting, however, it is smart enough to allow business itself to operate in an open and free atmosphere, so long as it doesn't break any laws.

So our free market is just the same as China's, maybe we should adapt China's form of business and pull millions out of poverty as well. China must not operate like we do in a business sense.

[DC Muskie]

Canada has yet to go for the hostile takeover or even to put together a tender offer. Given the potential geographic synergies, that's pretty telling.

That's a good point.

[Snipe]

This is where it gets really confusing for me. On one hand the government is bankrupt, but at the same time too restricting, however, it is smart enough to allow business itself to operate in an open and free atmosphere, so long as it doesn't break any laws.

So our free market is just the same as China's, maybe we should adapt China's form of business and pull millions out of poverty as well. China must not operate like we do in a business sense.

You my friend are the legendary Sofa King.

Repeat after me:

I Am Sofa King We Todd Did.
I Am Sofa King We Todd Did.
I Am Sofa King We Todd Did.

[Raoul Duke]

Friday is my favorite day of the week.

[waggy]

China's economy had nowhere to go, but up.

[DC Muskie]

You my friend are the legendary Sofa King.

Repeat after me:

I Am Sofa King We Todd Did.
I Am Sofa King We Todd Did.
I Am Sofa King We Todd Did.

I have no idea what that means. But I'm understanding that in order to be a proper American, you must hate your government overall.

[XU 87]

Enron committed crimes outside the boundaries of what the government set. I'm pretty sure Enron would tell you a free market would allow them to do the things they did. Government restraints be damed! I mean you don't want boundaries or interference byt the government, but when people get screwed, you applaud the government for having boundaries.

Aren't we in a free market and aren't we experiencing low economic growth? I may be wrong here, but isn't China's government pretty controlling, and yet their economy is growing?

Do I have that correct?

No. Enron's committing of crimes, and particularly filing false and illegal financial statements, is neither permitted nor generally accepted in the free market. But the free market shut Enron down, not the government. In the fall of 2001, the market became spooked because of Enron's perceived shady financial disclosures and the fact that Enron had entered into large transactions with other companies operated by Enron's own CFO. As a result, banks would no longer loan Enron money, even 1-2 day loans, and Enron's energy trading partners would no longer trade with Enron. Enron basically ran out of liquidity and had to file for bankruptcy. After the bankruptcy filing, the fraudulent financial disclosures and sham business transactions were fully discovered.

I'm not arguing that the free market doesn't need laws. Of course it does. But the laws should be limited in scope. The market works just fine without undue government interference. The free market isn't perfect, but it's the best system we have.

As for China, from what I understand, China keeps a pretty tight lid on the political arena but does advocate free enterprise. The latter would partly explain why so many companies are now doing business in China. But maybe someone who knows more about China can explain what's going on over there.

[Araceli]

Enron committed crimes outside the boundaries of what the government set. I'm pretty sure Enron would tell you a free market would allow them to do the things they did. Government restraints be damed! I mean you don't want boundaries or interference byt the government, but when people get screwed, you applaud the government for having boundaries.

Aren't we in a free market and aren't we experiencing low economic growth? I may be wrong here, but isn't China's government pretty controlling, and yet their economy is growing?

Do I have that correct?
There is a big difference between "Free Market" and "Capitalism". Ayne Rand demonstrates this in her great novel,ATLAS SHRUGGED. Some of those big petroleum companies are anything but "Free Market" advocates. I´ve seen Cuban troops protecting Gulf Oil in Angola. Whose side was Gulf on? Its all a question of expediency. As a "Capitalist" friend of mine told me in Spain just prior to the death of Franco......"Who cares about politics. If the Communists take over my country, I´ll be a Communist. If its the other side, I´ll go there. Both have cash to spend." What the hell is George Soros? He certainly isn´t poor and he uses "everything" to his advantage. He is a Capitalist and knows how to work the cards. How much oil stock is in his hands? I´ll bet you that he has lots and lots, but Bush is the culprite. Soros backs Obama. Up to today, McCain is the only one proposing solutions to the crisis and he has made an end run around MrObama.

[waggy]

But I'm understanding that in order to be a proper American, you must hate your government overall.

These guys are recruiting members DC... http://www.al.com/newsflash/regional/index.ssf?/base/news-36/121390886711610.xml&storylist=alabamanews

Ideology differences aside, they probably have some beotches tied up in their basement...

[Snipe]

Oil speculation: Why we don't have answers (http://money.cnn.com/2008/07/07/news/economy/oil_prins.fortune/index.htm?postversion=2008070709)

Interesting article on oil speculation.

I don't think what people fear are actually independent speculators but market manipulators.

I could by oil futures and bet that prices could rise or fall. If I did I would profit if the market went the way of my bet.

This article points out that they don't know who is doing the speculating.

I imagine a scenario where I am a wealthy Saudi conglomerate CEO. I have shell companies that both buy and sell oil futures. One of my companies sells them for 145, and another buys it for 145. I don't make any profit off the transaction. But since my company produces oil, I then justify an increase in the price of crude because the futures price just went up.

It is a simple theory, and if that was the end of it you could do the same thing to any commodities market. The problem with oil is that it is a bit different than other commodities. (I can buy futures but I can't easily receive the oil or easily move the product once received.)

Oil also has a Cartel in place that is dedicated to getting the most profit for the members. They have a lot of money and they don't have to disclose where they spend it. If they spend it in an effort to manipulate our markets we would never know. American oil companies are most likely not the source of manipulation. That doesn't mean that they don't profit or will not take advantage of the market price.

The Cartel is a powerful thing. Imagine a Cartel for grains and foodstuffs. If you got Europe, Canada, Argentina and the US on board you could raise the price of food for the entire world. And they couldn't just drive less in the short term or they would starve. Call it GrainPEC for good measure. They aren't growing their own food in Saudi Arabia. If push came to shove they would have to pay whatever price was set. The same thing is happening to us with oil.

GrainPEC instead of OPEC will never happen. It isn't politically correct to starve the world for profit. Not that people aren't doing that right now just in a different way with oil. Oil production and demand haven't risen that dramatically in the last 5 years over the globe.

I suspect that the market has been manipulated in many ways. I think that some countries in the Middle East may have interfered in Iraq just to spike the price. And why not, they had every monetary incentive to do so. The oil market seems out of whack.

[GuyFawkes38]

Snipe, as far as oil speculation goes, it seems like there is an overall consensus growing from economist that speculation is not causing the price of oil to increase.

According to what I've read, if speculation was a cause for increasing oil prices, you would see an increase in the inventory of oil (for speculators to take oil off the market for future use, they would have to store it).

But that's not happening. Speculators are simply making bets on the future price of oil. And doing that, without taking oil off the market, does not cause an increase in the price of oil.

(the article you linked to is a mess. It acknowledges the complexities of the oil markets and then makes the bold claim that congress should understand it and regulate it. I'm not buying that argument).

[boozehound]

Interesting point Snipe. I had never really thought of the oil cartels in that particular way, but it makes a lot of sense.

[The Artist]

I really hope we start drilling for oil in Alaska. Supposedly the increase in supply will change the price from approx $4/gallon to $3.92/gallon.

Who can say no to that!?

[Kahns Krazy]

I was part of a Cartel once. It was awesome.

[muskienick]

I was never invited to participate in that old cartel. I'm guessing that it was because I'm about 147 years old (while the preferred members were mostly in their late 20's and 30's) and I had the audacity to stick up for the XU Dance Team on one or two occasions on Pablo's Board (a definite No-No). I somewhat envied the camaraderie enjoyed by the members of the old cartel but I wasn't willing at that time to buy into quite all the philosophies espoused by its members.

[boozehound]

I really hope we start drilling for oil in Alaska. Supposedly the increase in supply will change the price from approx $4/gallon to $3.92/gallon.

Who can say no to that!?

The figures on that are a bit skewed as I understand. The thought being that if we simply released that oil on the open market it would only very slightly reduce prices. If we used that oil only to slake US demand than the price savings would be more substantial. It is a temporary band-aid at best. What we really need to do is reduce demand (which we are already doing) and develop viable alternative fuel sources (and don't even get me started on E-85). Unfortunately we can't just snap our fingers and have a viable alternative to oil, it will take time. In the mean time we need to do what we can to keep prices reasonable, and make sure we don't have $8/gallon gas.

[XUglow]

Someone sent me this picture the other day showing the negative impact oil development has on wildlife in Alaska.

http://www.anwr.org/gallery/images/17-Caribou_no_impact.jpg

It is kind of funny.

[American X]

I just wanted to thank Big Oil for their outbreak of altruism in bringing oil prices down to $63 per barrel, less than half the high earlier this year.

[MADXSTER]

I'm glad that gas is down to $1.86 per gallon however, every time I think about how much all of us have been taken advantage of it pisses me off. At $1.86 per gallon they are still making a profit. It's not supply and demand. It's not refineries. It's gouging.

Which brings me to another point. I'm all in favor of companies making a profit. Even a very hefty profit. But at what point does it become gouging? Extortion? Swindling?

[American X]

It's not supply and demand. It's not refineries. It's gouging.

How is it gouging?

[MADXSTER]

I don't know. But something just isn't right. Right after the wind storm prices went from $3.99 to $4.19 per gallon. Now they've dropped to $1.86. And like I said, they are still making a profit. Over the last year plus, someone has been making incredibly astronomical money.

I've always said follow the money. Something smells afoul.

[American X]

I don't know. But something just isn't right.

Something smells afoul.

That level of economic analysis seems to work for Congress.

If you go back through this thread, I'm sure someone explained that absolute profit is an arbitrary and meaningless number. Profit margin is the meaningful measure. Despite the initial shock at the absolute dollars of oil company profits, the profit margins are generally around 9%, consistent with most industries and far, far less than many industries such as software.

Some companies have to be the smallest and some the largest. Right now energy companies are the largest making their profits appear huge.

When the cycle downturns and oil companies are running in the red years on end, will we subsidize them for the massive capital investments required for oil exploration, drilling, and refinement?

[Snipe]

Congressman Roy Blunt's website: (http://republicanwhip.house.gov/News/DocumentSingle.aspx?DocumentID=92903)


AMERICAN-MADE OIL AND GAS: A HISTORY OF SUPPORT AND OPPOSITION
(PERCENTAGES ARE FOR EVERY SUPPLY VOTE IN THE HOUSE)

Washington, June 5, 2008 -

American-Made Oil and Gas: A History of Support and Opposition
(Percentages are for Every Supply Vote in the House)

When it comes to taking meaningful steps to provide affordable energy to the american people, Congress has both the ability and responsibility to act. Unfortunately, a clear pattern has emerged over the years as one party consistently has fought to increase access to homegrown energy reserves, while the other has consistently voted to expand America’s dependence on foreign, unstable energy instead.

BY THE ISSUE


ANWR Exploration

House Republicans: 91% Supported

House Democrats: 86% Opposed



Coal-to-Liquid

House Republicans: 97% Supported

House Democrats: 78% Opposed



Oil Shale Exploration

House Republicans: 90% Supported

House Democrats: 86% Opposed



Outer Continental Shelf (OCS) Exploration

House Republicans: 81% Supported

House Democrats: 83% Opposed



Refinery Increased Capacity

House Republicans: 97% Supported

House Democrats: 96% Opposed



SUMMARY

91% of House Republicans have historically voted to increase the production of American-made oil and gas

86% of House Democrats have historically voted against increasing the production of American-made oil and gas


A pretty damning indictment if you ask me. Go ahead, ask me...

You: What do you think of that Snipe?

Me: Thanks for asking, Mr You. In my estimation this voting record is a pretty damning indictment of the policies of Congressional Democrats.

Does anyone here think that the policies of Congressional Democrats affect the price of gas at the pump?

Yes We Can!

Thanks for bringing this up again Amex.

I looked at my original post and I started to think about Change That We Can Believe In.

We need to start developing these resources, creating jobs and expanding our economy. That is why I am glad that Change is coming to America. All I saw in those voting percentages quoted above is extreme partisanship. That is the politics of the past which works to divide America. We need to put more hope in honest working Americans to provide us with resources and less fear from Algore.

We are going to use this transformational moment in American history to transcend politics and advance the interests of working class Americans by unleashing the wealth of American natural resources. That wealth is our national wealth and it is due time that we started spreading it around.

[Cheesehead]

I filled up for $1.72 today and since I recently downsized vehicles, I'm liking this even more right now. However, I do not think it will last.

[Juice]

I don't know. But something just isn't right. Right after the wind storm prices went from $3.99 to $4.19 per gallon. Now they've dropped to $1.86. And like I said, they are still making a profit. Over the last year plus, someone has been making incredibly astronomical money.

I've always said follow the money. Something smells afoul.

If those are your thoughts, that is fine but what about companies like Apple? Hippies seem to hate Big Oil but love Apple. Well their precious company has a profit margin of 56% for every Iphone they sell. Maybe Congress needs to start looking at Steve Jobs and his dirty employees.

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9026178

[xu95]

MadX, they can sell it for less when they are paying $63 a barrel vs $140 a barrel. They are making no more per gallon now than they were at $4 and some change. LaRosas makes more profit on a pizza but I don't hear you complaining about them price gouging.

xu95

[DC Muskie]

I like how when gas skyrocketed food costs went up as well and I got hit with fuel surcharges. Now that gas has dropped, food has remained the same and I continue to get hit with those fuel surcharges. Good times!

[GoMuskies]

I like how when gas skyrocketed food costs went up as well and I got hit with fuel surcharges. Now that gas has dropped, food has remained the same and I continue to get hit with those fuel surcharges. Good times!

So it isn't just "Big Oil" that are a bunch of evil, capitalist fat cats?!? Interesting.

[Snipe]

When they make money they are evil. When they lose money like the Big 3 we need to subsidize them. Isn't the theme that they are going to screw us either way?

[MADXSTER]

How is it gouging?

How is it Altruism? If the profit margin is the same.

I'm obviously over my head here. I don't follow this stuff like you guys do and I'm not trying to pretend that I do. If anything, I would consider myself the average ignorant American who is simply asking questions. And my guess is that there are more of us than there are of you.

I don't complain about LaRosas or other companies simply because their product doesn't seem to affect the entire national economy.

Question: If oil was $140 per barrell and is now $63.00 per barrell then who was making the $77.00 per barrell when it was being sold at $140.00. I ask because I assume the cost to produce this barrell was the same.

Thank you for your patience.

[Raoul Duke]

As a side observation, it's interesting to recall how many news items you'd see when the gas was skyrocketing, compared to the absence of any news of the price plummeting. I filled up on 92 octane for $1.83 yesterday. I think it was $2.39 a week and a half ago. Without having a graph in front of me, I'd suspect the price fall is more drastic than the price increase.

[American X]

How is it Altruism?

If the cause of prices shooting up was the greed of evil oil corporations, then the cause of prices falling drastically must be altruism. Right?

[Raoul Duke]

Recent decrease was more drastic

http://66.70.86.64/ChartServer/ch.gaschart?Country=Canada&Crude=f&Period=12&Areas=USA%20Average,Canada%20Average,&Unit=US%20$/G

Source (http://www.gasbuddy.com/gb_retail_price_chart.aspx)

[MADXSTER]

If the cause of prices shooting up was the greed of evil oil corporations, then the cause of prices falling drastically must be altruism. Right?

I'll give you that. But in all fairness, I wasn't part of that conversation.

[Kahns Krazy]

Recent decrease was more drastic

http://66.70.86.64/ChartServer/ch.gaschart?Country=Canada&Crude=f&Period=12&Areas=USA%20Average,Canada%20Average,&Unit=US%20$/G

Source (http://www.gasbuddy.com/gb_retail_price_chart.aspx)

There was an interesting guest editorial this weekend about the declining gas prices, pondering if the recent changes in energy additudes will be chucked out the window now that gas is "cheap" again. That chart just reinforces the fact that the US pays less than everywhere else when it comes to gas.

The editorial revisited an idea that I guess was floated around in the 70's - a gradual increase in gas taxes until our pump prices are on par with the rest of the world. It is an interesting idea. The idea was to add half a cent to a cent per month over a period of time so that the economy and energy use and such would have time to react naturally.

[Cheesehead]

Kroger (which I have always believed to have high prices) had a 12- pack of Diet Coke at $5.09 and a loaf of Arnold butter-top bread at $3.59 today. That seems ridiculous to me. Bigg's is so much better; I just wish it was closer to my house.

[Juice]

Kroger (which I have always believed to have high prices) had a 12- pack of Diet Coke at $5.09 and a loaf of Arnold butter-top bread at $3.59 today. That seems ridiculous to me. Bigg's is so much better; I just wish it was closer to my house.

But Bigg's does not hire union workers.

Which company is controlled by greedier, corrupt, corporate fat cats: Kroger and their price gouging ways or anti-union Bigg's?

[boozehound]

Kroger (which I have always believed to have high prices) had a 12- pack of Diet Coke at $5.09 and a loaf of Arnold butter-top bread at $3.59 today. That seems ridiculous to me. Bigg's is so much better; I just wish it was closer to my house.

Kroger employs a pretty aggressive high-low strategy. Their every day price points are quite a bit higher than the rest-of-market average, however their sales prices are often quite competitive. You would most likely save money in the long run at Biggs, unless you are very careful to buy things only when they are on sale at Kroger.

There is a familiarity and convenience factor that Kroger employs as well. They have many stores, set up similarly, and set up well, in an effort to foster customer loyalty.

Food prices in general are inflating however. The drop in gas prices should help some, but expect to see average food prices increase at least 10% in 2009.

[Cheesehead]

I don't care if a grocery store is union or not. Does that type of workplace really need a union? Maybe this is why Kroger's prices are generally higher across the board than Bigg's. The concept of a union is really outdated at this point in time (for the most part).

I hit Kroger on the way home to pick up a few things but I do my major shopping at Bigg's. Also, the Kroger by me is outdated and they don't have enough room in the store, so they cram as much nonfood crap as posible in the aisles.

[Juice]

I hit Kroger on the way home to pick up a few things but I do my major shopping at Bigg's. Also, the Kroger by me is outdated and they don't have enough room in the store, so they cram as much nonfood crap as posible in the aisles.

You obviously have not been to the biggest Kroger's in the world located in Anderson. I get lost in the damn thing and can't find a thing.

[xu95]

But Bigg's does not hire union workers.

Which company is controlled by greedier, corrupt, corporate fat cats: Kroger and their price gouging ways or anti-union Bigg's?

Don't even get me started on what I think about unions.

xu95

[GoMuskies]

Obama is to blame.

[Kahns Krazy]

Don't even get me started on what I think about unions.

xu95

Why? Because you think they're so awesome? I agree.

[Raoul Duke]

Don't even get me started on what I think about onions.

[Stonebreaker]

Why? Because you think they're so awesome? I agree.

Awesome if you're in one....not so much if you're the company who used to have the competitive edge, but watches foreign competition come into the market leaner and meaner. Unions used to be good for the worker, but now it means the companies who employ union workers struggle far more than those who don't.
Example....supermarkets, carmakers, airlines, heck.......especially the teachers union.
I've worked in a union, and the only thing they cared about was getting the 'donation' to support their political candidates.
If it works for you..wonderful, but the major industries (like carmakers) have become nothing more than making revenue to pay off their employee benefits.....past, present, and future.

The grocery store I worked for was bought out. That store was later bought out. Being union meant we made a little more money, but........not if we don't have a job to go to. Hell......the carmakers are going bankrupt. Would it be better if the company survies with union-less workers......or not survive just for the sake of holding onto the past.

[American X]

Don't even get me started on what I think about onions.

http://statsheet.com/images/articles/2008/3/200803272122769488537-p2.jpeg

ONIONS???

[Raoul Duke]

http://statsheet.com/images/articles/2008/3/200803272122769488537-p2.jpeg

ONIONS???

Nice. It won't let me rep you.

[American X]

Oil may be at $47 per barrel, but Obama still better get those speculators.

He should get them when oil hits $45, when they least expect it. I want to see speculators in cages at the front of the coronation parade.

[MADXSTER]

Coming back from Florida I stopped at "Loves" truck stop and got gas for $1.50 a gallon somewhere around Louisville. Interesting thing was that the farther south you go, the higher the prices. Up to $1.89 per gallon. I figured they would be lower the closer you got to the refineries. Wrong again.

[xu95]

http://statsheet.com/images/articles/2008/3/200803272122769488537-p2.jpeg

ONIONS???

Everytime BJ took a 3 pt shot on Saturday I yelled "onions". He was consistently missing them and my wife told me I better quit yelling it when he was shooting.

xu95

[xu95]

Coming back from Florida I stopped at "Loves" truck stop and got gas for $1.50 a gallon somewhere around Louisville. Interesting thing was that the farther south you go, the higher the prices. Up to $1.89 per gallon. I figured they would be lower the closer you got to the refineries. Wrong again.

It was explained to me that it is cheaper to get the gas here because of the pipelines than it is to get it to say the panhandle of Florida where it has to travel by truck the whole way. Don't know the accuracy of that though.

xu95

[American X]

Barack Nixs Windfall Profits Tax on Oil (http://online.wsj.com/article/SB122843615613281339.html)

Nooooo! You've got to get them, Barack. This $100 drop in oil is just a clever subterfuge by those evil oil corporations.

[XU 87]

Barack Nixs Windfall Profits Tax on Oil (http://online.wsj.com/article/SB122843615613281339.html)

Nooooo! You've got to get them, Barack. This $100 drop in oil is just a clever subterfuge by those evil oil corporations.

I was thinking the same thing. Now that gas is so low, I guess the oil companies aren't so evil now. Their executives probably had some sort of epiphany and ordered that prices go down by 60%. According to congress, that's how the oil market works.

But with prices so low, I wonder when Shell and Exxon will be asking for a government bailout.

[Kahns Krazy]

The short answer to the title of the thread is: China, oil speculators and the weak dollar. The tech stock, housing bubble and oil prices all have similar curves. Will there be an oil bubble burst? I sure hope so.


Wishful thinking, I'm afraid.

In this case, I don't see where the massive change on the demand-side comes to force that to happen. Blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah.


Investors are looking to hedge the weak dollar, and oil is a prime target. As long as oil prices are increasing at the rate they are, investors will speculate, driving up the cost of oil. Just like in the housing market and internet stock, there is nothing fundamental about oil supply, demand or production that justifies the current run-up in price.


I just don't think the three sectors are particularly similar, and so it's not safe to assume their curves will react similarly. I just want to know what your specific reason/event might be that will cause oil to do what tech stocks did...because I sure don't see the trigger with oil.

As I stated before, I think this is mostly an effort to see if the increasingly energy-dependent world will deal with a new aggregate price point. blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah

I also don't think speculation is making that much of a difference. Oil is an options business...so there'd be people lining up around the block in order to short if the price was due to bounce. It's going up because because people keep buying the stuff at $130+.


Kahns: 2
Billy: 0

[xu95]

Barack Nixs Windfall Profits Tax on Oil (http://online.wsj.com/article/SB122843615613281339.html)

Nooooo! You've got to get them, Barack. This $100 drop in oil is just a clever subterfuge by those evil oil corporations.

Hes decided not to tax the wealthy or the oil companies. Is he going to keep any of his promises?

Change my ass.

xu95

[JimmyTwoTimes37]

I thought it was appropriate to bring back this thread. Gas in Ohio will be over the $3.00 mark once again with no signs of looking back

http://news.cincinnati.com/apps/pbcs.dll/article?AID=/AB/20101108/BIZ01/311080092/

'Peak Oil' and the German Government
Military Study Warns of a Potentially Drastic Oil Crisis

http://www.spiegel.de/international/germany/0,1518,715138,00.html


Goldman Sachs predicts oil price jump
"Global investment firm, Goldman Sachs Group, says oil prices will “substantially” rise in the second half of 2011 and 2012, as global inventory surplus is exhausted."
http://dailymessenger.com.pk/business/2010/10/15/goldman-sachs-predicts-oil-price-jump/

Alaska's untapped oil reserves estimate lowered by about 90 percent
http://articles.cnn.com/2010-10-27/us/alaska.oil.reserves_1_undiscovered-oil-national-petroleum-reserve-exploration-wells?_s=PM:US

US military warns oil output may dip causing massive shortages by 2015
"The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel."
http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply

There are some serious questions for our future with not many answers

[XU 87]

Don't worry. Obama said today that we're investing in green jobs. So we should have cars powered by wind by the end of the year.

[BandAid]

Don't worry. Obama said today that we're investing in green jobs. So we should have cars powered by wind by the end of the year.

Great, after that all we need is to get them to run on water...and then we'll have a boat!

[Kahns Krazy]

Don't worry. Obama said today that we're investing in green jobs. So we should have cars powered by wind by the end of the year.

That's not fair. Obama will have the fastest car on earth.

[vee4xu]

Actually the weak dollar is the reason for this gas price increase this time around. The result is that it takes more dollars to buy a barrel of oil.
http://www.commodityonline.com/futures-trading/technical/Crude-Oil-trades-up-on-weak-dollar-19757.html

[Snipe]

http://goldnews.bullionvault.com/files/oil_gold_inflation_1.png

Vee is right on. The weak dollar is inflating the prices of all the goods we buy, not just gas. Democrats and the White House have spent an incredible amount of money in the past 4 years of Pelosi, and the Fed just dumped another 600 billion onto the fire.

You look at the chart above when it compares oil to gold and over time it is pretty consistent. They are commodities that hold their value. Oil and Gold aren't getting more expensive, our national currency is getting worthless. If we ever experience hyper-inflation may God save us all.

[madness31]

There is no doubt that legislation against drilling doesn't help lower gas prices but it is a very small factor. The more important factors are increasing demand from emerging markets, declining production from mature wells around the globe, risk premiums created during mid east wars (republican caused) and most importantly the weak dollar created by Bernanke and deficits.

Check the price of oil since Bernanke anounced his QE2 and you will see prices going straight up. Check the price of oil when Bush took the country to war with Iraq and you see the same thing.

Oil prices will never be as cheap as they were both because of the expanded money supply and because the easy to get oil has been pumped. Add in the increased demand from emerging markets and cheap energy is over. There is plenty of oil in the world but it is expensive to extract because you have to go into harsh climates or under miles of ocean water. The untapped land wells are small and won't impact price. There are also tar sands but it too is expensive to extract.

The US should take advantage of resources but if the country is serious about energy independence and about cheap energy the country will swith from gasoline powered cars to natural gas. The US has incredible supplies of natural gas waiting to be mined. There are some concerns over some extraction methods causing gas to enter water tables but the Bush & company prevented regulation of this by the EPA. I'm all for taking advantage of the country's resources but this type of action seems a bit dangerous. Water is a very valuable commodity so destroying the water supply in an effort to extract energy doesn't appear to be sound policy.

[Snipe]

Bush? Again with Bush? It has been four years of Pelosi, and you give me Bush again and again. What is the statute of limitations?

I didn't care for Bush Mr. Madness. I didn't like his spending either. I will freely admit that. He was a big government liberal in my opinion. He "worked with democrats", which is your standard of what a Republican should always do. Why don't you like him?

We are four years into the Pelosi Congress. How come you never mention that? How come you never mention Obama? In 2006 George W Bush lost control of Congress. It has been four years. You never seem to reflect on that time.

And to be honest, Bush didn't take us by himself into the war to Iraq. Congress had to approve of it. That is part of something called the Constitution of the United States of America. Congress had to approve and he couldn't go without their approval. Hillary Clinton took this country to war. John Kerry took this country to war. Congress overwhelmingly took this country to war. It could not have happened without them. You need to let it go. What is done is done. Why not look at the last four years of Democratic rule? They have been a disaster. Would you not agree?

Focus your talents and tell me something more interesting than blather.

[JimmyTwoTimes37]

Here we go again. Gas is averaging $3.11 in the state of Ohio with no signs of settling down. For comparison purposes, its $.25 higher than this time last year. The price has risen $.09 from last week.

http://news.cincinnati.com/apps/pbcs.dll/article?AID=/AB/20110103/NEWS01/301030004/

"Oil prices may soar to $200 a barrel if the world doesn’t move more rapidly to a clean-energy economy"
http://www.bloomberg.com/news/2010-12-05/branson-says-oil-may-hit-200-a-barrel-without-new-clean-energy-policies.html

"Oil will run out 90 years before alternatives are widely available, UC Davis study says"
http://latimesblogs.latimes.com/technology/2010/11/oil-will-run-out-90-years-before-alternatives-become-widely-available-study.html

"Oil at two-year high on demand expectations"
http://www.marketwatch.com/story/crude-oil-remains-near-91-a-barrel-2010-12-23?reflink=MW_news_stmp

The price for heating oil is rising rapidly as well.
http://www.reuters.com/article/idUSN2824851920101228

Ex-CEO of Shell predicts $5/gallon by 2012
http://money.cnn.com/2010/12/27/markets/oil_commodities/index.htm

Average price of Gas heading toward $4/gallon in the spring
http://www.cleveland.com/business/index.ssf/2010/12/average_price_of_gasoline_head.html

This region will be hit particularly hard. Ohioan's spend 11.6 billion on motor gasoline in 2009(6th in the country). Cincinnatian's spend an average of 20% of their income on transportation related costs(among the highest percentage of cities in the country). That will only get worse.

[xu95]

I'm going to guess that George Bush is to blame.

xu95

[Emp]

http://goldnews.bullionvault.com/files/oil_gold_inflation_1.png

Vee is right on. The weak dollar is inflating the prices of all the goods we buy, not just gas. Democrats and the White House have spent an incredible amount of money in the past 4 years of Pelosi, and the Fed just dumped another 600 billion onto the fire.

You look at the chart above when it compares oil to gold and over time it is pretty consistent. They are commodities that hold their value. Oil and Gold aren't getting more expensive, our national currency is getting worthless. If we ever experience hyper-inflation may God save us all.

More "post hoc ergo propter hoc."

Oil is priced in dollars. It is true that oil-producing countries do not like a declining dollar, but they really cant boost prices if no one is buying, and cant hold down the price if demand is expanding faster than they can supply crude.

How you blame Pelosi for the declining dollar is beyond me. Bush, as a matter of policy, let the value of the dollar decline without interventing in currency markets in the way that the US had traditionally done. Congress does not control currency price intervention, the executive branch does.

Look at your graph chart. The highest rise in the price of oil occurs during Bush's watch, during a conscious choice to let the dollar slide against other major currencies. Bush's economic theory was that the market should set the price of the $, oil, and everything else.

How is is so hard to admit that as the third world economies grow, they should want autos, trains and energy as much as we do? And that increased demand makes the price go up. Pelosi, Bush and Ombama, not to mention Boehner, will not be able to control that market, or the price of crude and gasoline.

Get used to higher prices for the luxury of personal transportation. This is just the beginning.

[Kahns Krazy]

This region will be hit particularly hard. Ohioan's spend 11.6 billion on motor gasoline in 2009(6th in the country). Cincinnatian's spend an average of 20% of their income on transportation related costs(among the highest percentage of cities in the country). That will only get worse.

I find this depressing.

One encouraging piece of news was that the city is at least looking into ways to make the existing bus system more user friendly and speed up bus transit times.

http://news.cincinnati.com/article/20110102/NEWS0108/101030317/-1/WAP&template=wapart

At some point, public transportation will lose its stigma in this town.

[JimmyTwoTimes37]

I find this depressing.

One encouraging piece of news was that the city is at least looking into ways to make the existing bus system more user friendly and speed up bus transit times.

http://news.cincinnati.com/article/20110102/NEWS0108/101030317/-1/WAP&template=wapart

At some point, public transportation will lose its stigma in this town.

People will have to adapt out of necessity. I really like the rapid bus idea. I don't know why that hasn't been an option earlier. It's a shame metromoves was shot down in 2001 because our region would have been much more prepared

Here is every chart imaginable from China to the US:

http://www.theoildrum.com/node/7282

Here's a few samples:

http://www.theoildrum.com/files/33k8ves.gif

http://www.theoildrum.com/files/Auto%20Sales.jpg

[bobbiemcgee]

Americans love their cars. We sold one of our cars 10 yrs. ago just to see if we could do without 2. We learned to consolidate trips, errands, etc. and get the weekend rent a car deals for $9 a day when we went different directions. Kids grown up, of course, or it wouldn't have worked. Still have the one old workhorse Honda. Do the routine maint. myself and it keeps purring along. Full coverage Ins. 38 a month. $4.00 gas would push me to a $80-90 a month for gas but a fraction of the AAA estimate to own a car:

http://www.aaaexchange.com/main/Default.asp?CategoryID=16&SubCategoryID=76&ContentID=353

[vee4xu]

Wow, Jimmy just turned up the heat Snipe. I don't think I've ever seen a graph like he has in his post. Get to work buddy, you have some catching up to do. ;)

[GuyFawkes38]

How is is so hard to admit that as the third world economies grow, they should want autos, trains and energy as much as we do? And that increased demand makes the price go up. Pelosi, Bush and Ombama, not to mention Boehner, will not be able to control that market, or the price of crude and gasoline.

I think this is the correct answer.

Sure, in the short term, inflationary policies like the one the Fed has adopted the past couple years does increase gas prices.

But this is a long trend phenomenon. Hundreds of millions of people from Asia have moved from the farm to the city where they use oil. And the anticipation of this trend increasing in the future increases prices right now.


I find this depressing.

One encouraging piece of news was that the city is at least looking into ways to make the existing bus system more user friendly and speed up bus transit times.

http://news.cincinnati.com/article/20110102/NEWS0108/101030317/-1/WAP&template=wapart

At some point, public transportation will lose its stigma in this town.

Sounds great to me. It works in Europe.

[boozehound]

Interesting to read through this thread again.

It seems we are again reaching a tipping point for gas prices. At what point will we start to reduce our consumption this time? How rapidly? Will it have any effect on gas prices? If it does will we resume our old habits?

My wife and I are looking to buy a new car in the summer. We originally wanted an Honda Pilot or similar mid-size SUV. We are now reconsidering our needs due to the increased gas prices.

It will be interesting to see if they stay elevated this time or if they eventually 'crash' down to around $2.50-$3.00 per gallon.

Also, it really pissed me off when I read through this thread and look at what we were paying for gas just a few short years ago.

[spazzrico]

Current energy trends scare the bejezus out of me. I am not a Neo-Malthusian, but I see some really challenging (perhaps largest ever) coming along side peak oil. People don't realize right now just how much oil we "eat". Our entire food system is built around oil, from the fertilizers we use to the, planting, plowing, and transportation of final product. Looking down the road the world is in for some serious growing pains. We've outsourced a great deal of our agricultural production to other places like Chile (which on one hand gives us greater food security by allowing us to source food from multiple places and not be overly dependent on one, but in another makes us much more vulnerable to fuel shortages and rising gas prices). At some point, food prices are going to skyrocket along with gas prices (as happened in 2008). And of course we have been losing local farmers over the past half century so that very little of the food in most cities comes from anywhere nearby. Those farms are now housing developments that are 100% dependent on cars. And the cycle continues. Arguments that blame one political figure or another for monetary policy are just red herrings. The real issue is geology (finite supply) and rising demand (China, India, et al). Politicians that should receive any blame are those that don't start dealing RIGHT NOW with creating real alternative energy sources. I'm talking huge investments in education, technology and transportation to deal with what is coming down the pike.

[X-band '01]

Part of the current situation is OPEC using the unrest in countries like Libya and Egypt for their own personal gain; that and a supposedly rebounding economy in the eyes of oil speculators and of course you're going to have rising oil prices.

This is the time of year where oil usually rises to begin with, so I'm not going to act shocked that oil is nearing $4 a gallon again.

[SixFig]

Part of the current situation is OPEC using the unrest in countries like Libya and Egypt for their own personal gain; that and a supposedly rebounding economy in the eyes of oil speculators and of course you're going to have rising oil prices.

This is the time of year where oil usually rises to begin with, so I'm not going to act shocked that oil is nearing $4 a gallon again.

It's darn near $4.50 in L.A.

Hopefully this will push people towards not only driving less and use more fuel efficient cars but also consider moving to mixed use and urban neighborhoods. I recommend reading "The Geography of Nowhere" by James Kunstler for a real eye opening look at what suburban lifestyle has done to our economy and culture.

[GuyFawkes38]

It's darn near $4.50 in L.A.

Hopefully this will push people towards not only driving less and use more fuel efficient cars but also consider moving to mixed use and urban neighborhoods. I recommend reading "The Geography of Nowhere" by James Kunstler for a real eye opening look at what suburban lifestyle has done to our economy and culture.

It feels so automatic in America. When a couple has a kid, they move to the suburbs.

I think safety is a big issue. Here in Cincinnati, Hyde Park has a lot of families. But it's safe. Most neighborhoods within the Cincinnati city limits (dense areas) are perceived to be unsafe. Parents would rather move 50 miles out into the country if its perceived to be safer for their kids.

And people like new stuff. New houses have better, more efficient layouts. They heat and cool more efficiently. Their general upkeep is cheaper.

So making it cheaper to tear down and build in dense areas would be helpful.

[Muskieblue]

I blame Bush and his big oil buddies!

[spazzrico]

It feels so automatic in America. When a couple has a kid, they move to the suburbs.


Don't I know it. My wife is trying like hell to get me to move right now. There are other issues in our case, but she really wants to be in a suburb with other families with kids. To me it is like a cultural death, but it beats divorce. In my situation though it might actually put me closer to work, so that would be good.

[SixFig]

Don't I know it. My wife is trying like hell to get me to move right now. There are other issues in our case, but she really wants to be in a suburb with other families with kids. To me it is like a cultural death, but it beats divorce. In my situation though it might actually put me closer to work, so that would be good.

If I had to move to the burbs it would become my actual death. Who wants to live in a place where you have to drive 20 minutes to get anythings, no sidewalks, no tree lined streets, schools are not even close, and Applebee's is the closest restaurant that has "local atmosphere".

[XU 87]

If I had to move to the burbs it would become my actual death. Who wants to live in a place where you have to drive 20 minutes to get anythings, no sidewalks, no tree lined streets, schools are not even close, and Applebee's is the closest restaurant that has "local atmosphere".

I live in a suburb (Anderson). And I can tell you that everything you say is dead wrong. In fact, your attempts at stereotyping suburbs is a little silly.

So come on over to Anderson tomorrow and we'll have a burger and beer at ATP. The day after that we'll have a beer and a burger at Salem Gardens. On Thursday we'll have a bucket of beers at The Lounge (no food there but the 7 ounce beers are a little different). On Friday I'll meet you for happy hour at Maloney's East (pretty good wings). On Saturday I'll meet you to watch the Reds game at Anderson Bar and Grill. On Sunday, we rest. Next Monday we'll knock a few back at Lebo's. After that, we'll go to Applebee's, a place I've been to twice in the last 15 years since I moved here.

I just remembered it's Lent. So after Maloney's happy hour on Friday we'll head over to Pelican's Reef for some fish. Or maybe we could go to Latitude's- they may serve fish.

[LadyMuskie]

If I had to move to the burbs it would become my actual death. Who wants to live in a place where you have to drive 20 minutes to get anythings, no sidewalks, no tree lined streets, schools are not even close, and Applebee's is the closest restaurant that has "local atmosphere".

My "suburb" has all of the things you listed. I'll grant that I live in a 160 year old house in an old neighborhood, but we do have all of that - except the Applebees. We do, however, have two neighborhood restaurants we can walk to and one that is only 5 minutes away by car (but walking there is dangerous because of the major road we'd have to cross to get there). But, all of these things were what caused us to buy in this neighborhood while all of our friends were building cookie cutter houses in cookie cutter neighborhoods. I wanted something more unique.

[GuyFawkes38]

I definitely think that many people move to suburbs when they have kids because it's better for them (people naturally pursue their self-interest).

But that doesn't make the situation ideal. Ideally, we need more safe neighborhoods in dense areas to attract families.

And it should be easier to build new homes, condos, and apartments in dense areas. In Hyde Park they just built an incredible condo building on Erie. I've heard each condo is worth hundreds of thousands. It seems like there should be more condos available in Hyde Park. Why not buy a couple houses and build a new condo building. Financially, I bet it would be a cash cow. It would increase density, which is environmentally beneficial. But I bet that there are various regulations and zoning law prohibiting that from happening.

[madness31]

Energy is one issue where Democrats are mostly wrong. I would however like to thank the Dems from the cheap energy days for not allowing our natural resources to be sold off at such cheap levels. It is now time for the country to get serious about building out our drilling infrastructure. It is important to protect nature and do the drilling safely but cheap energy is a thing of the past and the US can't function if prices get too high.

Current high prices have very little to do with today's supply and demand but it is a function of future supply issues as many mature drilling areas are in decline. More importantly prices today are driven by Fed policy. To blame speculators is just wrong. These people are taking positions to protect themselves from irresponsible Federal Reserve actions. Add in the fact that most of the easy to get oil has been consumed and the oil left is far more costly to extract and you have a great investment thesis.

Nat gas cars could be a solution to America's energy issues. Combining that with nuclear power would have been great but I doubt nuclear is an option any longer. I'm still for nuclear but against building them on fault lines. The new nuclear technology is far superior to the old both in safety and waste management.

[Strange Brew]

Bump