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Gas Prices...


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#1 1972vet

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Posted 13 September 2008 - 01:25 PM

Not surprisingly have hit the roof. So have we as a result and I'm sure that's no surprise either.

What I DO find surprising is that just recently, the price per barrel has dipped below the $100 mark. Now, I understand there are some complicating issues that factor into the mix but that aside, the supply and demand concept (in this country) will (should) always prevail.

That said, there exists then a disparity when in reality there are indications that the supply side should be nearing the "low" end and the demand side should most certainly be approaching the "high" end.

With those indicators in place, and especially highlighted by all the recent panic runs on service stations by citizens who've been told to "run for their lives", then I would expect a news flash that says something exactly opposite of what we are seeing.

Has anyone else noticed that bizarre coincidence?...that along with the hurricanes in the gulf that don't seem to be going away any time soon, the price is down, rather than up? Oh, sure at the pump you'll see what looks right...in fact there have been reports of prices nearing the $6 per gallon mark, but the price per barrel is making headlines. Could this be some government subterfuge intended to pacify our anticipated shouting by showing us there are "silver linings" somewhere within those storm clouds?

Whatcha'll think?
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#2 Wildabeast

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Posted 16 September 2008 - 12:08 AM

That said, there exists then a disparity when in reality there are indications that the supply side should be nearing the "low" end and the demand side should most certainly be approaching the "high" end.


I think the supply is greater than the demand right now, I mean, I drive a lot less since the price of gas went up. I see tons of SUV's in the used car lots from people trading them in for more fuel efficient cars so there is less fuel being used...
But I also believe we are being screwed by the oil companies, here in the USA the price of gas doubled 3 years ago when the hurricane Katrina hit New Orleans. They said because the refineries were shut down, and the tankers could not get in. OK, it's 3 years later, most of those problems no longer exist, (if anystill do) and the price of gas has not gone down more than 10 cents. The oil companies are posting record profits, so why is the price still so high? And with all the profits they are making, why don't they build another port that the Super Tankers can get in to in case New Orleans gets shut down again? And why can't we drill for oil off our shores, China is going to. Oops, kinda straying there.. Sorry.. :thumbsup:
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#3 groovicus

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Posted 16 September 2008 - 07:58 AM

Simple. We have already hit world peak production. There is no more easy and inexpensive oil to extract from the ground. Can you imagine how hard and expensive it is to pull oil up from 6 miles under the ocean? Significantly more than just punching a hole in the ground somewhere. Oil shale costs two barrels of oil for every three extracted. The major oil fields are running out. The world uses 32 billion barrels of oil a day. A bigger port won't do shinola if there is no oil to fill it, which there isn't. A 15 billion barrel oil field will not even last 6 months.

The cost of gas is not going to come down because oil companies need to finance future production, which is going to cost way more. And production is going to start decreasing as there is less and less oil to bring up.

The oil companies are posting record profits

Simple economics, If I have 1000 barrels of oil that costs me $10 to produce, and I can sell it for $110 per barrel, and I have 100 customers willing to pay it, I make $100 per barrel. If I have 100,000 customers willing to pay $210 per barrel, then my profit on that same 1000 barrels is $200 per barrel. Simple math. Is it my fault that people are willing to pay more per barrel? I don't meant to sound like I am apologizing for oil companies, but every business has a right to make profits, and we don't get to decide what is reasonable. If we start setting limits on how much oil companies can make, then how long before we start dictating how much web developers can make, or software engineers, etc. What we can do is remove subsidies though, since it is apparent that there is no longer any need for them.

Some of these websites are a bit sensationalist, but the science is fairly accurate:
http://www.lifeaftertheoilcrash.net/
energybulletin.net

#4 ryan_w_quick

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Posted 16 September 2008 - 11:29 AM

Simple. We have already hit world peak production. There is no more easy and inexpensive oil to extract from the ground. Can you imagine how hard and expensive it is to pull oil up from 6 miles under the ocean? Significantly more than just punching a hole in the ground somewhere. Oil shale costs two barrels of oil for every three extracted. The major oil fields are running out. The world uses 32 billion barrels of oil a day. A bigger port won't do shinola if there is no oil to fill it, which there isn't. A 15 billion barrel oil field will not even last 6 months.

The cost of gas is not going to come down because oil companies need to finance future production, which is going to cost way more. And production is going to start decreasing as there is less and less oil to bring up.

The oil companies are posting record profits

Simple economics, If I have 1000 barrels of oil that costs me $10 to produce, and I can sell it for $110 per barrel, and I have 100 customers willing to pay it, I make $100 per barrel. If I have 100,000 customers willing to pay $210 per barrel, then my profit on that same 1000 barrels is $200 per barrel. Simple math. Is it my fault that people are willing to pay more per barrel? I don't meant to sound like I am apologizing for oil companies, but every business has a right to make profits, and we don't get to decide what is reasonable. If we start setting limits on how much oil companies can make, then how long before we start dictating how much web developers can make, or software engineers, etc. What we can do is remove subsidies though, since it is apparent that there is no longer any need for them.

Some of these websites are a bit sensationalist, but the science is fairly accurate:
http://www.lifeaftertheoilcrash.net/
energybulletin.net



you are right that every company has a right to make they're profits, but is it right that the huge companies can easily pay off and lobby our congress? is it right that the government always uses the lowest bidder? is it right that the government steps in to save certain companies and industries, while just letting others crumble? I don't blame our system of economy for all these problems, i think capitalism is great.

but when you have a government that discourages fair competition, and will break the countries back for a couple of rich CEOs, and you have huge companies that will not hesitate to take huge losses, just to put the smaller companies under.......it just seems, unfair. And the oil market is no exception to these corruptions, in fact, it is at the forefront.

i mean, most in congress and the whitehouse are making relatively nothing off their salaries in comparison to their gains from stock in businesses. and it doesn't take a genious to understand that these individuals are "going to work for those that pay them." and the salaries they get from tax payers is just not enough for them to be on our side.
"To do less than your best is to sacrifice the gift." Steve Prefontaine

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#5 groovicus

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Posted 16 September 2008 - 12:44 PM

I don't blame our system of economy for all these problems, i think capitalism is great.


But everything you just described is what capitalism is all about. Companies are allowed to spend as much as they want to lobby government.

Personally, I don't agree with government saving business, but in the overall picture, I understand the necessity of doing so. I wasn't really trying to address that issue as much as I was trying to address the fact that the world is running out of oil, not later, but now. There is no amount of increased production that is going to do anything more than delay the inevitable. High fuel prices are going to be a fact of life, along with high prices for everything that depends on fuel.

#6 arcman

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Posted 16 September 2008 - 01:02 PM

Keep in mind also, oil companies are part of a cartel. They're operating in an unrestricted free market, more or less outside of the US's jurisdiction. They work in collaboration specifically to ensure that supply and demand works in their favor.

It emphasizes our need to find and develop truly renewable, cost-effective energy sources. If simply drilling for more oil would help us I would say to do it, but honestly opening up more oil sources will take a decade at the very least before it would impact the prices at the pump, and its impact would not be overly significant. We're better off dedicating that time, money, and resource at putting sustainable alternate energy infrastructures in place.
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#7 groovicus

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Posted 16 September 2008 - 02:48 PM

They work in collaboration specifically to ensure that supply and demand works in their favor.


Really, there is not much sense in being in business otherwise, is there?

but honestly opening up more oil sources will take a decade at the very least before it would impact the prices at the pump,

It will never impact prices at the pump. One would have to find the resources necessary to fulfill the estimated demand in ten years.

#8 Guest_Abacus 7_*

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Posted 16 September 2008 - 03:25 PM

One of the remarkable things about Humans is to be able to adjust and adapt to changes.

For example during WW2 Gasoline was in short Supply in Australia, so the Charcoal Burner was used quite successfully to power Cars and Trucks. I don't know whether they were used in America?

Here is a Link to a Museum in Australia that is interesting to say the least. Just scroll down until you find Charcoal Burners. Remember Charcoal is a renewable resource and can be made from many things besides Trees.

http://www.albury.net.au/~tim/chmus3.htm

There are a few other things that have produced the equal to Gasoline as well one of which is Coal, found abundantly all over the World.

http://www.downtoearth.org.in/full6.asp?fo..._id=4&sid=8

These are very old Ideas that MUST be investagated NOW. Actually in Lithgow many years ago before the Petrol Engine was invented, Australia used to ship Thousands of tons of Coke, (Product from Coal, not the Drink) to England. One of the Waste products that noone had any use for was, you guessed it,
Petrol or Gasoline.

Many other Ideas have merit as well.



:thumbsup:

Edited by Abacus 7, 16 September 2008 - 03:38 PM.


#9 jesus420monkey

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Posted 16 September 2008 - 03:48 PM

I find it interesting that the topic is on gas prices and how they're fluctuating in the market and has rarely touched on the real issue. It's not so much that we've hit peak oil production, or that the supply is down and the demand up, or that Congress needs to intervene... it's because they can and we keep letting them!

It is highly unlikely that any attempt at boycotting major oil companies would have any real effect because they can just as quickly and easily shift their market to another region or country.

Another rarely discussed aspect of gasoline prices is petroleum production in general. Oil is drilled not only to create petroleum for gasoline, but also lubricants and petroleum based plastics. It doesn't really matter how much less we drive, but how much less we consume as a whole. Consider the following scenario... a family decides to reduce their use off gasoline by riding bikes, using the bus, etc, thereby increasing their disposable income. What do they do with their disposable income? They buy things - new TV's, toys, household items, cleaners, school supplies, clothes, etc... etc... etc...

So, the petroleum saved by reducing driving and money spent at the pump is instead transferred to other petroleum based industries, keeping the production levels at their current and possibly increasing need. Hence, demand may even go up, while supply slowly dwindles. It's not so much that we're running out of gasoline, it's that we depend on it for way too many things in our modern convenient lives.

When people say we need to lessen our dependence on foreign oil - they are only half right. We need to lessen our dependence on oil. period. Alternatives exist, and anyone who says that they're not viable solutions is short sighted and a roadblock to real progress. Candles worked for centuries to light the countryside and the cities... lightbulbs were not a viable alternative. That is until there was investment in infrastructure. Essentially, the created need has created inflated and false pricing that has no real link to the reality of the supply vs the demand.

#10 groovicus

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Posted 16 September 2008 - 03:53 PM

It's not so much that we've hit peak oil production, or that the supply is down and the demand up, or that Congress needs to intervene... it's because they can and we keep letting them!

That is just not accurate.
http://en.wikipedia.org/wiki/Peak_oil

Essentially, the created need has created inflated and false pricing that has no real link to the reality of the supply vs the demand.

need= demand. Same thing, no matter what it is called.

We need to lessen our dependence on oil

I can't disagree with that.

#11 jesus420monkey

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Posted 16 September 2008 - 04:09 PM

It's not so much that we've hit peak oil production, or that the supply is down and the demand up, or that Congress needs to intervene... it's because they can and we keep letting them!

That is just not accurate.
http://en.wikipedia.org/wiki/Peak_oil

I would normally agree with this... but it's not inaccurate either, it depends on the source... from within that same article there are those mentioned who believe there is no peak oil production. In addition, if demand were to decline considerably due to some extreme discovery of a readily available energy source, then the numbers would all have to shift accordingly (yes, i understand i am mixing reality with fantasy here, but the possibilities are endless)

Essentially, the created need has created inflated and false pricing that has no real link to the reality of the supply vs the demand.

need= demand. Same thing, no matter what it is called.

I quite disagree - Need is created. Demand is actualization of the need. For instance, look how the demand for CD's went up once the need for casette tapes was dissolved in conjunction with the increased supply of CD players and media. Even now, the need for digital convertor boxes is being created in lieu of analog antennaes, thereby increasing demand of digital convertor boxes.

We need to lessen our dependence on oil

I can't disagree with that.


Score! Then how do we convince everyone else of this very simple concept?!

#12 Guest_Abacus 7_*

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Posted 16 September 2008 - 04:35 PM

Score! Then how do we convince everyone else of this very simple concept?!


Maybe something like this Might help the General Public to do their bit?

http://www.recycleoil.org/


It is Big Business in Australia with full Government Support as shown.

http://www.oilrecycling.gov.au/what-happens.html

http://www.oilrecycling.gov.au/faqs.html

Edited by Abacus 7, 16 September 2008 - 04:54 PM.


#13 arcman

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Posted 16 September 2008 - 11:31 PM

They work in collaboration specifically to ensure that supply and demand works in their favor.


Really, there is not much sense in being in business otherwise, is there?

I dunno, other corporations seem to do OK without being anti-competitive and fixing prices. Pure capitalism rarely works to the full benefit of society, monopolies and cartels serve only to gauge the consumer, so we don't permit it if it can be helped.

but honestly opening up more oil sources will take a decade at the very least before it would impact the prices at the pump,

It will never impact prices at the pump. One would have to find the resources necessary to fulfill the estimated demand in ten years.

Probably so! I was trying to be an optimistic devil's advocate, even then the outlook ain't hot lookin'.
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#14 ryan_w_quick

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Posted 17 September 2008 - 11:56 AM

I don't blame our system of economy for all these problems, i think capitalism is great.


But everything you just described is what capitalism is all about. Companies are allowed to spend as much as they want to lobby government.

Personally, I don't agree with government saving business, but in the overall picture, I understand the necessity of doing so. I wasn't really trying to address that issue as much as I was trying to address the fact that the world is running out of oil, not later, but now. There is no amount of increased production that is going to do anything more than delay the inevitable. High fuel prices are going to be a fact of life, along with high prices for everything that depends on fuel.



well, i dont quite think you can call what we have at the current moment capitalism.

here: http://en.wikipedia.org/wiki/Capitalism reading the first paragraph should be enough

the part about "By definition, production and distribution in a capitalist system are governed by the free market rather than state regulation"

It does not take a genius to realize that the government has more than intervened with production and distribution in our "capitalist free market"

Individuals that try to start businesses in this country fail ALL the time. its often very hard for them to succede because of big business, competition, and often times they just dont have the resources.

Yet, when a bunch of engineers, ceo's with doctorates, and many other specialist fail, the government steps in and keeps them afloat (the automobile industry) Why? my tax money is paying salaries for a bunch of incompetent fools whos business should sink if they cant figure it out with all the resources they have

you think the government would help me out if i started a car company? lol

well yes, i guess if thats capitalism, then we have it
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#15 arcman

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Posted 17 September 2008 - 02:53 PM

I myself wouldn't want a Laissez-faire capitalist system, if you have no restrictions on the free market there isn't much you can do when you find yourself exploited by a large corporation. Officially, our market system is a "mixed-economy", which offers many social benefits I don't think most people would want to go without, minimum wage for example.
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