July 29, 2008 at 8:04 am
PS. You've had *24* cars??? Wow. I'm on my third and at the rate I'm going will probably have fewer than 10 in my lifetime.
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July 29, 2008 at 8:04 am
Speculative buying IS the reason oil is so high. Did you notice that when President Bush lifted the Executive ban on offshore drilling that the price per barrel dropped $10? I have heard conservative estimates that if Congress will follow suit and allow the congressional ban on offshore drilling to expire in September, prices will drop $20-$30 per barrel.
It essentially boils down to supply. If supply is abundant, the futures pricing drops since the potential future profit does not exist. Only when supply is restricted do the prices go up. Investors know that people will still purchase gas and petroleum products, regardless of price. We have to since our economy is built on it. Since the laws of supply and demand will cause prices to increase when supply is short, this also causes the futures market to raise the prices.
I know this will cause some lashback from folks but at this very point in time, we MUST start drilling and producing more oil to get the prices down. We must ALSO understand that this is only temporary. Alternative energy sources must be developed as quickly as possible but the only way to get the prices to start going back down immediately is to increase supply.
Thoughts/retaliations?
July 29, 2008 at 8:06 am
steve quinn (7/29/2008)
I've noticed throughout this discussion that no one has mentioned the real reason for the currently high fuel costs - speculative buying by financial institutions to try and make up for their cockup in the mortgage markets.A US Senate committee recently reported that oil is overpriced by as much as 30% because of their actions.
Comments?
It's true that's the main reason why prices have leapt by as much as they have. In the short to medium term we can look forward to them slowly subsiding (they've already started at my local petrol stations).
However, the underlying reasons that made oil so attractive to those speculators will come through again in the longer term, leading to even higher prices: increasing demand (particularly from China & India), diminishing supplies & more expensive extraction costs for the oil that remains. In short, most of the easily & cheaply extractable oil has been used up. The remainder is either hard to extract and/or hard to process to a usable state.
When it gets to the point that the oil that remains would require more energy to extract & process it than it contains, we're really screwed 🙂
July 29, 2008 at 8:12 am
the real reason for the currently high fuel costs - speculative buying by financial institutions to try and make up for their cockup in the mortgage markets
To be fair, it is 2 issues: the cost of a barrel of oil (plus all the intricacies of how that translates to petrol/gas prices) versus how much energy we use.
The politicians and the media seem to pick and choose which issue to discuss, and rarely talk about both together. When talking about "fuel poverty", only the price of oil is blamed; never what quantity of fuel is used and why. When talking about the price of petrol, only the outrageous profits of the oil companies are talked about, never how much less fuel you could use if you tried.
The one significant advantage of high fuel prices is the improved cost-savings of renewable energies.
July 29, 2008 at 8:12 am
Ethanol (at least in the US) is heavily subsidized right now so it's "cheaper" in some respects to the people buying it. However, if we were to remove those subsidies, I think that people would stop using it pretty quickly because the cost would add up quickly. It's also highly inefficient. IIRC, ethanol from corn takes more energy to make than it actually gives back or if it is the other way, it's not by enough to make it worthwhile.
Also agreed that the US Congress has a lot to do with prices. Every time they opened their mouths and said that we absolutely would not consider opening up internal exploration, the price of oil shot up. Now that they're finally talking about some options, the price has dropped a little bit. Sadly, they're also trying to throw in some unrealistic caps on exploration of the land/potential with forfeiture of all money/resources if they go through that time and don't start production. With all of the government mess they have to go through, if they speed things through as much as possible, they just MIGHT be able to make it before their lease expires. Ugh.
For my part, I never was into buying huge cars - didn't see the point then, don't see it now. Even when gas was < $1/gallon about 6 years or so ago, it didn't make sense to me. I pretty much knew the price would go up, even if wrong by how much. Of course, now that the prices have shot up, people are finally taking fuel efficiency a little more seriously and looking into alternatives. That's great. However, until we have realistic alternatives, it doesn't make sense to stop oil exploration. I love how the laws are passed saying that we have to use so much alternative energy and be this efficient when the technology doesn't exist yet to make it happen and just may not exist by that time. It would be one thing if it existed but was cost prohibitive, but in this case it's just not there.
I look forward to seeing what the next couple of years will bring to the automotive industry. It's great that we have all of these alternatives starting to really take hold now. I just feel for the average person who really can't afford to switch to a more fuel efficient vehicle and still has to drive around from place to place in an older car. Those are the ones hit hardest by all of the laws made by people who can afford to drive cars that get < 5 MPG if they so choose.
July 29, 2008 at 8:12 am
icocks (7/29/2008)
In short, most of the easily & cheaply extractable oil has been used up. The remainder is either hard to extract and/or hard to process to a usable state.
Not entirely true. There is plenty of oil that is easy to extract and readily available. We just have to get the government to let us get at it and get the idiot environmentalist groups to back down. The shallow OCS off of California has more than 10 billion barrels just waiting to be tapped. Maginudes more are waiting in ANWR in Alaska.
July 29, 2008 at 8:23 am
Alan, thanks for the reply. I've reviewed my sources, one from Consumer reports. I can't give a link because you need a membership in many parts of their site. The article I was thinking about ("Sizing up the savings and costs") was a little dated (sept 2006). Summary: Most hybrid models offered in America have standard-engine counterparts, so CR did comparisons of 7 models. At the time, there was usually not a savings over the life of the vehicle. However, with gas prices doubling since then, the numbers will surely change. They quoted an 80k number, but did mention later that many manufacturers are seeing longer battery life in the 150k k area. However, manufacturers still don't offer warranties over 100k. For me that's a concern because I like to buy vehicles new and drive them until they fall apart. I think that ultimately the most eco friendly policy is to make things last a long time; less resources consumed in manufacturing.
If your only exposer to global warming is "inconvenient truth", you owe it to yourself to type the words "global warming" and "myth" into google and spend an hour reading. You might disagree, but you'll at least see that there is not a "consensus" about the topic as you were led to believe. For those with shorter free time periods, see the ABC news article by John Stossel: http://abcnews.go.com/2020/Story?id=3061015&page=1
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July 29, 2008 at 8:24 am
jim.powers (7/29/2008)
The shallow OCS off of California has more than 10 billion barrels just waiting to be tapped. Maginudes more are waiting in ANWR in Alaska.
Sounds a lot, but a somewhat unrigorous investigation into the figures (ok, I looked it up on Wikipedia & haven't yet verified the source), puts worldwide consumption in 2006 at 86 million barrels a day.
If true, that means the California fields amount to around 3 months worth of supply at most. As you say, the Alaska fields are potentially much larger, but they'd have to pretty vast to make a real difference.
July 29, 2008 at 8:34 am
Very interesting comments and thanks for the debate and interest. A few notes.
Winters aren't too bad down here in SE Denver. I think the Springs and especially Woodland Park in the mountains get more snow, and are a little colder. Seems like we have plenty of 50 and even 60 days in Jan and Feb.
The price of oil is supply and demand, but there's a lot of speculation and emotion in there driving the buying and selling of futures, so it can heavily fluctuate away from reality. Not sure it will go down, and not sure I want it to. We need to get people thinking about being more efficient in everything. We need to start a 30 or 40 year transition, IMHO, away from mostly gas, oil, and coal as our energy sources.
I did a bunch of research and it seems that even the early Prius models are getting over 150,000 miles with no batter replacements. I've only found 3 reports of battery replacements (outside accidents), and all were > 200,000 miles, so the batteries wear well. From what I've learned, not sure how accurate it is, the gauge in the Prius display shows 40-80% of charge. So it's not getting completely emptied or recharged, contributing to a longer life.
A battery backed hybrid may have a larger carbon footprint, but I'm not sure it's that much worse than other cars. We do a lot of shipping of all sorts of raw materials all around the globe, trading carbon for cheaper labor. Not sure that's a great idea either, but it's what we have. Diesels have a fairly large carbon footprint with pollution, which is one reason we haven't had them in the US as much. Not sure why car emissions are a bigger deal than large truck/lorry emissions, but they are.
We considered a diesel, but didn't want to spend the time looking for a used one and there weren't a lot available new or on lots when we looked nearby. Plus I lobbied to "try" the Prius after researching our habits, its size, and wanting to experiment a bit in our lives. It's paid off well and given our other "new" alternatives at the time, it was the best choice and I still think that. For my son, who's about to drive, I'd recommend an older, high mpg car, either diesel or gas, depending on the car.
Yep, 24 cars, a few were family cars, but I used to trade cars about every year for a long time, and we've had a few years where we traded two as a family.
July 29, 2008 at 8:45 am
Ethanol is one of those trick products, at least corn ethanol. The cost at the pump does not reflect what we really pay for it. Government subsidies were about 7 billion in 2006. According to zfacts, that comes to about "$1.45 per gallon of ethanol (and $2.21 per gal of gas replaced)". The reason there is a difference in replaced gas is it takes almost as mush petrol to create as gas you get out of it. It's mostly subsidized for the hype and special interest government lobbying. It also plays havoc with food markets.
I heard switchgrass can give a 5:1 return on energy investment, versus corn's 5:4 return, but given today's politicians, we may stay with corn.
http://www.sciam.com/article.cfm?id=grass-makes-better-ethanol-than-corn
July 29, 2008 at 8:47 am
I saw a feature on the news recently about the supply and demand of electricity in the US. I don't remember the timeframe (I believe it was like 10 - 20 years out), but they were saying that electricity demand would exceed supply resulting in power blackouts and such. Much of this had to do with there not being enough (any?) new power plants being built in the US.
So if we are already on a crash-course with electricity, what will the advent of plug-in electric cars (Chevy Volt, etal) have on electricity demand? Sure, energy is consumed in the production of fossil fuels, but how does it compare with the electric demand that could potentially result if we have wide-spread use of electric (plug-in) vehicles? This would be an interesting analysis.
If it was easy, everybody would be doing it!;)
July 29, 2008 at 8:48 am
Remove me from your email list. I want info on sql server not car fuel prices.
July 29, 2008 at 8:51 am
Sugar has done well in Brazil, though they are cutting down forests to grow it. I think it's better than corn as well.
Hard to know with Ethanol if it's good. The gas argument isn't great since you could use Ethanol to process Ethanol. If we had higher compression engines, we'd get better mileage as well.
July 29, 2008 at 8:51 am
Geeks can ramble sometimes. Anyway, click unsubscribe if you don't like the topic.
July 29, 2008 at 8:55 am
I don't know why we use petrol to make it. Either way, 4 gallons of gas to 5 return is pretty bad, when you consider the water and all the other work that goes into it, which is why it needs so much continous subsidizing.
I heard sugar cane and others are better as well. I really do think it is a corn industry lobby thing, when you look at the major politicians and the money they get.
Scientifically, there are better options than corn.
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