Oil is rising at almost a dollar or more a day...

[banquo's_bumble_puppy]

Oil is rising at almost a dollar or more a day...economists are saying that it has stepped out of the realm of supply and demand...see my thread on economic depression. There's a perfect storm coming/maybe it's already here.

[Disinfo Agent]

I thought the high prices were precisely because of high demand and troubled supply...

[davidlpf]

Oh I wonder why that is, that is all I can say without getting political.

[banquo's_bumble_puppy]

wonder what gas will cost this summer....$1.50 or more/litre???

[geonuc]

Oil is rising at almost a dollar or more a day...

Ordinarily, statements like this should be accompanied by a time frame to put things in perspective and avoid misleading. Oil has not, for example, been rising a dollar a day for the past year.

[davidlpf]

Ordinarily, statements like this should be accompanied by a time frame to put things in perspective and avoid misleading. Oil has not, for example, been rising a dollar a day for the past year.
Good point and a recession is when there is decline for six months or longer, but as soon as there is a small dip in the markets the newscastors start making it sound like the great depression is coming.

[Doodler]

Oil is not getting more expensive. The dollar is tanking. I'm half tempted to start buying Euros or loonies.

[banquo's_bumble_puppy]

will your local gas station accept Euros?

[NEOWatcher]

Good point and a recession is when there is decline for six months or longer, but as soon as there is a small dip in the markets the newscastors start making it sound like the great depression is coming.
I heard 3 months recently... but, that could be the newscaster picking thier own definition.

Oil is not getting more expensive. The dollar is tanking. I'm half tempted to start buying Euros or loonies.
Huh?
Oil has increased nearly fourfold in around 5 years (http://en.wikipedia.org/wiki/Oil_price_increases_of_2004_and_2005). The dollar has not gone down that much in the same timeframe.
Both are problems.

[Damburger]

This has already had an impact on global food prices. If it gets worse the process of mechanising the worlds agriculture may go into reverse, with horrific consequences. Human and animal muscle power simply isn't productive enough to feed everyone.

What is needed is a radical plan to spread nuclear power over the entire globe. The entire fuel cycle from mining to reprocessing needs to be run on hydrogen generated by nuclear power, thus completely disconnecting it from oil. This is the only way we can have a power source sufficient to maintain and increase our food supply.

[Argos]

Oil is not getting more expensive. The dollar is tanking. I'm half tempted to start buying Euros or loonies.

Well, yeah. Yesterday, for the first time in my life, I saw a woman interviwed on a TV news show saying that she preferred the local currency to the dollar, which is sinking [parity 1:1.5]. There´s also the so-called 'Giselle effect', after this fashion model who´s exchanging her assets into Euros. The bright side is that it is good for American exporters.

[Argos]

What is needed is a radical plan to spread nuclear power over the entire globe. The entire fuel cycle from mining to reprocessing needs to be run on hydrogen generated by nuclear power, thus completely disconnecting it from oil. This is the only way we can have a power source sufficient to maintain and increase our food supply.

Call it 'caught between Scylla and Charybdes'... :)

[soylentgreen]

What is needed is a radical plan to spread nuclear power over the entire globe. The entire fuel cycle from mining to reprocessing needs to be run on hydrogen generated by nuclear power, thus completely disconnecting it from oil. This is the only way we can have a power source sufficient to maintain and increase our food supply.

We tried Atoms For Peace already. Didn't pan out well thanks to the very country of it's origin focusing more on it's very profitable Atoms For War program.

Ironically, the current administration here does in fact want to spread it's nuclear power over the entire globe. Just not quite the way you intend. :(

[Noclevername]

The only "supply and demand" going on with gas prices is that everyone who rides the Black Gold Gravy Train, from the whitest of white collar executives to the gas pumpers, is saying "pay what we demand or we'll cut off your supply".

[banquo's_bumble_puppy]

Here's a question- if the value of the US greenback is tanking- does that mean that the relative "value" of things like gold/oil is essentially not increasing- it's just that the US currency (which these things are pegged at) is falling so much? Does my question make sense?

[korjik]

Here's a question- if the value of the US greenback is tanking- does that mean that the relative "value" of things like gold/oil is essentially not increasing- it's just that the US currency (which these things are pegged at) is falling so much? Does my question make sense?

Yes your question makes sense, and yes, some of the rise in price of oil can be attributed to the reduced price of the dollar.

[banquo's_bumble_puppy]

So...what if the "value" of oil/gold was pegged in Euros or somethong more stable?

[korjik]

So...what if the "value" of oil/gold was pegged in Euros or somethong more stable?

Depending on where you are, and what currency you use, the cost of oil is only changing with respect to the value, not value+currency deflation. Pretty much anywhere but the US should be seeing a smaller effective rise in price of oil when compared to the USA.

Basically, the oil may cost more dollars, but the dollars cost less.

[banquo's_bumble_puppy]

okay...so if the US dollar is worth less than the Canadian dollar, why is the cost of gasoline in Canada still rising??? If our dollar is gaining value against the US greenback, shouldn't the cost of oil be going down for us?

[Noclevername]

okay...so if the US dollar is worth less than the Canadian dollar, why is the cost of gasoline in Canada still rising??? If our dollar is gaining value against the US greenback, shouldn't the cost of oil be going down for us?

It's not the only cause, just a small part of it. Also, the international oil companies still use the U.S. dollar as their mainstay.

[Torsten]

okay...so if the US dollar is worth less than the Canadian dollar, why is the cost of gasoline in Canada still rising??? If our dollar is gaining value against the US greenback, shouldn't the cost of oil be going down for us?

Well, look at recent US dollar / Canadian dollar exchange rates:
http://i259.photobucket.com/albums/hh315/TKphotofolder/BAUT/US-CDNExchangegraphforBAUT.gif

[Ara Pacis]

okay...so if the US dollar is worth less than the Canadian dollar, why is the cost of gasoline in Canada still rising??? If our dollar is gaining value against the US greenback, shouldn't the cost of oil be going down for us?

Gas is refined from petroleum. Where is the gas refining at?

[Cookie]

Gas is refined from petroleum. Where is the gas refining at?Somehow, i feel as though i should know the answer to that question... :think:

[Damburger]

So...what if the "value" of oil/gold was pegged in Euros or somethong more stable?

Some people have suggested that the trading of oil in Euros would be so bad for the US, that preventing this was one of the main motivations for the Iraq war. But thats a long story...

[Disinfo Agent]

I may be naive, but my impression is that the high oil prices and the falling dollar that we've been seeing caught both the White House and political leaders abroad by surprise.

The trouble with war is that you know how it begins but you never know how it ends.

[Noclevername]

I may be naive, but my impression is that the high oil prices and the falling dollar that we've been seeing caught both the White House and political leaders abroad by surprise.

Without getting political, all I can say is that their being surprised comes as no surprise. If you surround yourself with yes-men, it'll always come as a shock when reality comes along and delivers a big NO. :doh:

[HenrikOlsen]

The only "supply and demand" going on with gas prices is that everyone who rides the Black Gold Gravy Train, from the whitest of white collar executives to the gas pumpers, is saying "pay what we demand or we'll cut off your supply".
As is the right of any producer in a free economy.

You're free to switch so something else if you don't like the prices.

[Disinfo Agent]

You're free to switch so something else if you don't like the prices.The prices are set by transnational factors. You're free to not like them, or to stop buying oil (yeah, right), but you're not free to switch to something else.

[HenrikOlsen]

Something other than oil, no some other oil source.

[The Supreme Canuck]

The prices are set by transnational factors. You're free to not like them, or to stop buying oil (yeah, right), but you're not free to switch to something else.

Well, yes. Yes, you are. Don't like paying for gas? Buy an electric or hybrid car. Oh? You don't want one? It costs too much? It's too much of a bother?

Well. I guess you really don't mind the gas prices after all. But if prices were to go up enough, I bet you'd reconsider.

[Disinfo Agent]

Tell that to your government, your armed forces, and your industry.

[The Supreme Canuck]

Why? What do they have to do with it? The issue here is that people don't find alternatives to gasoline attractive enough to switch. If the costs of using gas were to rise, or the costs of alternatives to lower, a switch would occur when alternatives become cheaper. It is the simple economics of rational utility maximization.

[Disinfo Agent]

Why? What do they have to do with it?They consume oil, too, lots of it. And they can't "switch" just like that, either.

[Delvo]

People who say supply and demand doesn't apply because we don't have the choice to not use it don't understand what supply & demand is. The "we have no choice" situation simply describes a very very high demand, so very very high prices would fit the law of supply & demand perfectly.

[The Supreme Canuck]

They consume oil, too, lots of it. And they can't "switch" just like that, either.

But if alternatives become cheaper, they will switch. That is, in areas where they can. You won't find an electric main battle tank. But that doesn't detract from my point. Government, armed forces, and (especially) industry will also be looking for the most bang for their buck. They ask two questions - Does it do what I want? And, is it the cheapest option for doing what I want?

If gas wins, gas wins. If it doesn't, it doesn't. As gas prices increase and the prices of alternatives decrease, you'll see a slow shift to alternatives. Again, simple rational economics.

Edit: Delvo - precisely.

[Noclevername]

As is the right of any producer in a free economy.
Just because someone can get away with something doesn't make it a good thing.

You're free to switch so something else if you don't like the prices.
I'd build a still, but it's illegal. ;)

[davidlpf]

but still you could use biodiesel.

[Noclevername]

but still you could use biodiesel.

I do live in soybean country. Hmm, how much does an oil press cost? :think:

[Van Rijn]

Just because someone can get away with something doesn't make it a good thing.


What would you suggest as an alternative? I remember the '70s when there were lines at the gas stations because there was rationing and price controls. That was both a pain, and slowed down the improvement in supply.

There is currently an increase in oil exploration and movement towards production of other resources. Back in the '70s the U.S. saw the start of oil shale and coal synthetic fuel plants, but that all dried up with the drop in world oil prices in the '80s. If prices stay high long enough, we'll see serious development of those things again.

[Noclevername]

What would you suggest as an alternative? I

I have no suggestion. I was just complaining. ;)

[Ara Pacis]

What would you suggest as an alternative? I remember the '70s when there were lines at the gas stations because there was rationing and price controls. That was both a pain, and slowed down the improvement in supply.

There is currently an increase in oil exploration and movement towards production of other resources. Back in the '70s the U.S. saw the start of oil shale and coal synthetic fuel plants, but that all dried up with the drop in world oil prices in the '80s. If prices stay high long enough, we'll see serious development of those things again.

Well, they have been mining and refining tar sands in Canada and Venezuela. I'm not sure how much of Canada's petroleum is in Tar Sands, but they are currently supplying 2/3 of US imports. IIRC, the US is one of the few countries with the ability to refine the Heavy Crude extracted from Tar Sands. Far from lagging, I'd say that the US is probably in the forefront of real light sweet crude petroleum replacement technology, perhaps right up there with Brazil's sugarcane ethanol effort.

[Van Rijn]

From here:

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

Is the top 15 list of total petroleum imports in thousands of barrels as of Dec. 2007. I've added percentages, assuming it adds up to 100% (so actual percentages for these countries should be a little lower) :

CANADA 2360 21.32%
SAUDI ARABIA 1686 15.23%
VENEZUELA 1387 12.53%
MEXICO 1322 11.94%
NIGERIA 1271 11.48%
ALGERIA 600 5.42%
ANGOLA 439 3.97%
VIRGIN ISLANDS 387 3.50%
IRAQ 378 3.42%
RUSSIA 306 2.76%
UNITED KINGDOM 238 2.15%
ECUADOR 201 1.82%
BRAZIL 178 1.61%
KUWAIT 158 1.43%
NETHERLANDS 157 1.42%
Total: 11068 100%

The top 5 add up to about 3/4 of the total.

[Argos]

A brief comment: a flex fuel Corvette will be opening the Indy 500 in May, piloted by Emerson Fittipaldi, who´s now an ethnaol producer in Brazil. All new cars down here are flex [able to run on any mix of ethanol and gas].

[Ara Pacis]

From here:

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

Is the top 15 list of total petroleum imports in thousands of barrels as of Dec. 2007. I've added percentages, assuming it adds up to 100% (so actual percentages for these countries should be a little lower) :

CANADA 2360 21.32%
SAUDI ARABIA 1686 15.23%
VENEZUELA 1387 12.53%
MEXICO 1322 11.94%
NIGERIA 1271 11.48%
ALGERIA 600 5.42%
ANGOLA 439 3.97%
VIRGIN ISLANDS 387 3.50%
IRAQ 378 3.42%
RUSSIA 306 2.76%
UNITED KINGDOM 238 2.15%
ECUADOR 201 1.82%
BRAZIL 178 1.61%
KUWAIT 158 1.43%
NETHERLANDS 157 1.42%
Total: 11068 100%

The top 5 add up to about 3/4 of the total.

Hmmm, I've heard the 2/3 number bandied about a lot on websites and documentaries and news. Maybe they're all basing it off of one source or as a comparison to Saudi Arabia.

[Trebuchet]

Is that import list for oil alone, or does it include natural gas?

I can easily imagine Canada supplying 2/3 of the US's natural gas imports. Oil is another story.

[The Supreme Canuck]

No, I can see it being oil as well. We have more than Saudi Arabia. It's just harder to get to.

[Ronald Brak]

Well, they have been mining and refining tar sands in Canada and Venezuela. I'm not sure how much of Canada's petroleum is in Tar Sands, but they are currently supplying 2/3 of US imports.

The U.S. imports about 15 million barrels a day net. Canada exports only 1.6 million barrels a day total. (And imports about a million barrels a day.)

[The Supreme Canuck]

And so I'm wrong. Whoops.

[Ronald Brak]

And so I'm wrong. Whoops.

Canada does have a huge amount non-conventional oil (kerogen), but it's locked up inside rock and sands and is much harder and more expensive to extract than the oil in Saudi Arabia, which is a very low cost producer (although their costs are increaseing), so it's not really right to compare Canada to Saudi Arabia. But if you count expensive to extract kerogen as oil, then Canada has a huge amount. The fact that both kerogen and coal can be turned into liquid fuel means there isn't going to be any sudden civilization collapse from peak oil. However, the stuff is still bad for the environment.

[Torsten]

Yes, the near-surface deposits of Tar Sands (http://en.wikipedia.org/wiki/Athabasca_Tar_Sands) in Alberta are economic sources of oil. Over time, as these deposits are processed, the deeper deposits will be increasingly tapped using steam assisted gravity drainage (SAGD) (http://en.wikipedia.org/wiki/Steam_assisted_gravity_drainage), which is itself an energy intensive method of recovery. There has been a suggestion that nuclear power plants be built in that area to supply the steam and electricity for all the activity.

[Van Rijn]

Here's an interesting article on Shell's work with U.S. oil shale:

http://money.cnn.com/2007/10/30/magazines/fortune/Oil_from_stone.fortune/index.htm

Apparently, they've come a long way with with in situ production research. It is supposed to be much cleaner and more effective process than old style oil shale production, though, of course, it still would have significant environmental issues. Like Canada, the U.S. has a lot of "unconventional" oil, but it did take years for Canada to develop tar sands and it would take the U.S. years to seriously develop oil shale, assuming oil prices stay high enough.

[Ara Pacis]

So, about the time the Middle east runs dry, the US/Western Civ will have it's own unconventional oil, ANWR if needed, and Canada. In a way, it makes sense to buy up all the competitor's oil, then be left with your own supply when everyone else is lacking. It's long range balance of power planning.

[Ronald Brak]

So, about the time the Middle east runs dry, the US/Western Civ will have it's own unconventional oil, ANWR if needed, and Canada. In a way, it makes sense to buy up all the competitor's oil, then be left with your own supply when everyone else is lacking. It's long range balance of power planning.

That's an odd plan. Use up something that's cheap now so we can pay Canadians more for it in the future while transferring huge amounts of money to OPEC and peaking our own oil reserves by 1974, while massively increasing the value of the remaining OPEC oil. Very odd.

[Ara Pacis]

It's called "Have your cake and eat it too".

[Ronald Brak]

It just seems to me that exactly the same results could be achieved by not having any coherent plan whatsoever.

[HenrikOlsen]

It's called long term investment in a belief that usage patterns won't change with price,

[The Supreme Canuck]

That's an odd plan. Use up something that's cheap now so we can pay Canadians more for it in the future...

Sounds good to me!

[Ronald Brak]

Sounds good to me!

Trouble is Canada has no monopoly on non-convential oil, so there are no exceptional profits to be made by Canadians. But the plan does seem to benefit Japanese car manufacturers who own a lot of patents for and are best positioned to sell highly economical and electric cars. Chinese and Indian low cost micro and electric car manufacturers may also be able to do well in the lower end of the market. So maybe it was a long range plan by the Japanese.

[Torsten]

I'm not entirely certain of this, but I think an increasing number of Albertans are beginning to question the environmental cost of oil sands development. Also, the present pace of development is creating labour shortages, and there are not enough people in the Maritimes to supply the labour needs in some of the forecasted development scenarios. (That's a bit of joke - a large proportion of the people employed in these massive oil sands developments have migrated from the east coast provinces.) We used to have some Albertans regularly posting here. It would be interesting to read their perspective.

[The Supreme Canuck]

there are no exceptional profits to be made by Canadians.

Tell that to Alberta.

[davidlpf]

Tell that to Alberta.
And Newfoundland, soon instead of being of have not province they will be a have province because of oil coming from the offshore platforms.

[Ronald Brak]

Tell that to Alberta.

Those are normal profits. An example of exceptional profits would be if Canada had the only source of non-conventional oil in the world, then they could charge high prices. But nothing is stopping other countries from investing in developing non-conventional oil and competeing with Canada, bringing the price down, resulting in normal profits.

This is not to say Alberta isn't a boomtown, well boomprovince, but it's a boom based on normal profits. Oil can have large swings prices which makes profits unpredictable, but an upswing in price still results in what is technically normal profits, even though it may be a boom for the people in the industry. You can think of it as being balanced against the risk of a drop in oil price that could have killed the boom or prevented it from ever taking off.

[Trebuchet]

So, about the time the Middle east runs dry, the US/Western Civ will have it's own unconventional oil, ANWR if needed, and Canada. In a way, it makes sense to buy up all the competitor's oil, then be left with your own supply when everyone else is lacking. It's long range balance of power planning.

The US also has the greatest coal reserves of any country, which total far more energy than all known oil reserves. It's tough to burn it in your car but liquid fuels can be made from it if you're sufficiently desperate.

The largest coal reserves in the US are in my native state of Montana. It's not the best coal, however.

[RalofTyr]

Why drive when you can bike?

[closetgeek]

Why? What do they have to do with it? The issue here is that people don't find alternatives to gasoline attractive enough to switch. If the costs of using gas were to rise, or the costs of alternatives to lower, a switch would occur when alternatives become cheaper. It is the simple economics of rational utility maximization.

It's not necessarily a choice for a lot of people. Much like the people who couldn't afford get out of Louisianna before Katrina, they were simply trapped. Only recently have I seen advertisements for larger hybrid and gas free cars (don't know if chevy is being misleading about the gas free part). I bought my car two years ago and I fully own it but the resale value would not cover the full cost of a new hybrid and at the present time, I am not in a position to take a chance on being able to afford monthly payments on a new car.

[NEOWatcher]

It's not necessarily a choice for a lot of people.
That's the biggest problem. With most other commodities, you can instantly switch. Coffee futures go through the roof, you can drink tea, and you don't need to spend $15000 for a teapot.
With oil, you are stuck with the technology that uses it. If you bought a car anytime up to about a year ago, odds are pretty good that it only runs on an oil based product.
and gas free cars (don't know if chevy is being misleading about the gas free part).
I saw that one too. And yes, it is misleading. They say it runs on E85 and explain that it's 85% plant based, but don't mention anything about the other 15%.

I bought my car two years ago and I fully own it but the resale value would not cover the full cost of a new hybrid and at the present time, I am not in a position to take a chance on being able to afford monthly payments on a new car.
Even if you could afford one, what are the options? You're still using oil, and E85 is difficult to find (it is around here). Other technologies (hydrogen, NG, plug in, etc) don't even exist or have no infrastructure available to use it.

... The issue here is that people don't find alternatives to gasoline attractive enough to switch. If the costs of using gas were to rise, or the costs of alternatives to lower, a switch would occur when alternatives become cheaper. It is the simple economics of rational utility maximization.
I do agree that the cost of oil is the only thing that's going to solve the problem. But; the alternatives aren't there, and the public is [explitive] in the meantime. It's the chicken and the egg.

And; in this case, even the potential supply of the alternative is going to be a major issue. It's already a stretched resource, and any additional use is just going to drive its cost up too.

[The Supreme Canuck]

It's not necessarily a choice for a lot of people. Much like the people who couldn't afford get out of Louisianna before Katrina, they were simply trapped. Only recently have I seen advertisements for larger hybrid and gas free cars (don't know if chevy is being misleading about the gas free part). I bought my car two years ago and I fully own it but the resale value would not cover the full cost of a new hybrid and at the present time, I am not in a position to take a chance on being able to afford monthly payments on a new car.

No, it still works. Either people will switch or they will stop using expensive gasoline cars. It isn't pretty and I'm not saying it's right, but that's how it will happen. Basically, what NEOWatcher said.

[NEOWatcher]

No, it still works. Either people will switch or they will stop using expensive gasoline cars. It isn't pretty and I'm not saying it's right, but that's how it will happen. Basically, what NEOWatcher said.
Yes; but, I also think that it is not the only thing that to consider.

Yes; it's going to be difficult, but how about kick starting one side of the equation to help out?
Where's my flex fuel (and I mean more than just mixtures of E), plug in, solar cell roof car?

Instead, the government is helping us with our switch to digital TV and worried that we are being cheated by our baseball tickets, and coming up with ways to get Hannah Montana tickets. (probably too deep for the board, but I needed to illustrate the public's priority)

If only some of that effort and thinking can be applied, then maybe...

[HenrikOlsen]

<snip>, and coming up with ways to get Hannah Montana tickets. (probably too deep for the board, but I needed to illustrate the public's priority)
Discussed here (http://www.bautforum.com/off-topic-babbling/65424-miley-cyrus-investigation.html), so not too deep.

[The Supreme Canuck]

Yes; but, I also think that it is not the only thing that to consider.

I guess that I'm just more confident a free market solution will be found. Gas prices go up. Demand for alternatives go up - but there are none. Some enterprising young chap sees an opportunity and fills the niche. Supply goes up.

Rinse, repeat.

[NEOWatcher]

Discussed here (http://www.bautforum.com/off-topic-babbling/65424-miley-cyrus-investigation.html), so not too deep.
I was actually refering to the politics of it... but, I think the message got through.

I guess that I'm just more confident a free market solution will be found. Gas prices go up. Demand for alternatives go up...
Normally, Yes; but there are too many pieces that need to fall into place at the same time, and nobody is going to risk putting thier corner piece out there. Again; a catch-22 situation that somebody needs to break.

[Gillianren]

Some enterprising young chap sees an opportunity and fills the niche..

Do you know how much startup money that enterprising chap is going to need? There are going to have to be vehicles made to run on his new idea, and there's going to have to be places anywhere those vehicles are likely to go that can be refueling stations. Or else people are still going to need gas-driven cars. In other words, far more than anyone can make themselves. And I'd rather have the government do it than the oil companies; either way, I think the government is more likely to do it quickly.

[The Supreme Canuck]

I'm not saying it would be an immediate change. Far from it. It would be slow and gradual, with small start-ups slowly growing as they become more profitable. Or mainstream auto companies will do it - if there's a profit motive, you can bet someone's going to try to sell that product.

[Infinity Watcher]

Why drive when you can bike? I never thought I'd see the day when i started to defend motor traffic (okay it's not that bad I acknowledge it has a necessary purpose as I'm about to show, but I do think it could be cut down on significantly without causing long term major problems (that famous officer below general disorder [sorry bad joke]) and in fact presently don't have a car myself, but there are somethings you can't do on a bike, heavy or bulky goods transit is not going to happen by bike.

Then there are those of us who can't bike (in my case for medical reasons) at present I can compensate using public transport but in some places public transport simply isn't up to snuff and walking can only take me so far so quickly, this is something that is likely to be much worse in the states than here since its a much larger place, and if I end up somewhere without decent public transportation I'm not exactly housebound but how could I get about? You'd be looking at a significan quality of life decrease that whilst I and I suspect a lot of other people could suck up if we had to, there are then knock on effects: you then need people to live within walking (or reasonable public transport time) of their workplace, in some inner city areas you're going to hit major problems without substantial overhaul of most public transportation systems to make them much more comprehensive or simply start accepting that low paid workers can't get there, and suddenly you've potentially lost teachers, nurses, students on work experience, janitors all kinds of people who may be vital to maintaining a local economy. In addition if you then housbind (is that a verb?) elderly people and those who are sufferingmajor illnesses you run into issues with depression and it all gets complicated quickly.

What I'm saying is that the situation is much more complicated than simply saying everyone should bike, a lot more people should than currently do but it isn't a panacea.

[Noclevername]

Most older gasoline engines can be converted to run on ethanol with a piece of stiff wire, a pair of needle-nose pliers and a bit of skill. I'm not sure about the newer engines.

[Ara Pacis]

There needs to be a unified effort to fix the problem. Start-ups can only do so much, and they need investor capital, which may not be forthcoming during an economic downturn. The best solution might be a government-industry summit. It may take a Manhatten Project level of committment to overcome the problem.

It's not just about automobiles either, peak power electrical generating plants often use gas turbines. Petroleum is also used in plastics for all sorts of things, of which one wasteful culprit is packaging. These will all need to be revisited.

[Musashi]

Most older gasoline engines can be converted to run on ethanol with a piece of stiff wire, a pair of needle-nose pliers and a bit of skill. I'm not sure about the newer engines.

Are you sure about that?

However, most vehicles cannot use E85 since ethanol corrodes rubber, steel and aluminum, so FFV components are made of stainless steel.

http://www.power-technology.com/features/feature1418/
http://www.seco.cpa.state.tx.us/re_ethanol.htm

[Noclevername]

Are you sure about that?



I know of people who've done it (local moonshiners) but I don't know how long their engines lasted after.

[banquo's_bumble_puppy]

$118.00 today

[Spock Jenkins]

$118.00 today

46 days have passed since your original post. Are we on track?

[tdvance]

yeah, oil was only $72/barrel on March 7--don't you remember? :) we still don't have gas lines like in the '70s, so we're not at the "worst ever" by any means--and the '70s gas lines were pretty short term, especially compared how the media portrayed it as something kind of permanent, declaring that we were almost out of oil. I remember in elementary school getting pamphlets that said we'd be out of oil in 5 years. hmmm....been more than 5 years....

[Doodler]

The reports that gas prices are rising because the stockpiles of gasoline are percentages lower than expected irritate me in the same way that stock prices that tank because earnings aren't as high as last quarter/year/whatever do. (Stockholders kneejerking because the company only made 300 million in profits instead of 400 million...cripes, they are still making money hand over fist, just not at the same level...call me when you're actually losing money...) Still lots of gas in stock, just not as much as last month, so the powers that be (aka, the refinery owners) jack the prices behind the sham of a sky-is-falling song and dance routine.

[Kaptain K]

$4 by the 4th of July!

[banquo's_bumble_puppy]

works out to about .89 a day if I did my math right

[Spock Jenkins]

works out to about .89 a day if I did my math right

Closed at $105.15 on March 7th. I get about 42 cents a day using round figures of 105 and 118 with 31 trading days. Not pretty, but not $1 a day either.

[tommac]

i certain economic cycles people grasp for commodities ... remember that the dollar, the euro, the CAD, the Yen etc are for the most part just a piece of paper. Certain things hold value better than currency in downturning markets.

[SpaceShot]

What I can't figure out is why oil is a market commodity. I believe it was made a market commodity to prvent monopoly pricing by OPEC but that is completely unconfirmed and I am still researching the issue.

Is bread? Is bread sold on the spot market? Maybe its ingredients are, I don't know.

Either we are in the middle of a massive oil bubble or oil has been massively undervalued for a decade. Is it only now that investors are noticing the increase in world demand or is China and India's 15% per annum growth that remarkable a crunch on supplies?

[The Supreme Canuck]

Bread is a market commodity (or rather, wheat is - you can buy grain futures). Just about everything is a market commodity.

[Maksutov]

I'm still waiting for a Farnsworthian thread by the OP that starts with "Good news, everyone!"

[Ronald Brak]

The characteristic of commodities is consistancy. A ton of Australian grade A wheat is much the same as a ton of Ukrainian grade A wheat for most purposes. This makes commodities easy to buy and sell as you know what you are getting without having to inspect the goods. Things such as pizzas and oil paintings greatly vary greatly in quality and so are not commodities.

[doghater]

economists are saying that it has stepped out of the realm of supply and demand

Can you cite these economists? Every economist I know says the price of oil is rising because of supply and demand.

The reports that gas prices are rising because the stockpiles of gasoline are percentages lower than expected irritate me in the same way that stock prices that tank because earnings aren't as high as last quarter/year/whatever do. (Stockholders kneejerking because the company only made 300 million in profits instead of 400 million...cripes, they are still making money hand over fist, just not at the same level...call me when you're actually losing money...)

So, in your view, the correct value of a stock price depends only on whether the company's profits are positive or negative, and not on the level of those profits? I'm not familiar with this rather peculiar valuation method.

Do you know how much startup money that enterprising chap is going to need?

If allegedly cheap energy sources are so expensive that no one is willing to exploit them without massive government subsidies, what does that tell you?

There are lots of enterprising chaps about. I have to disagree with the Supreme Canuck that they'll come along in the future; they're here now. And many of them are developing new sources of energy. And they are getting funding, if they can convince investors that their ideas have merit. And they're not new; they've been around for a long time. Energy consumption per unit of GDP in industrial countries is much lower now than it was in the 1970s, all due to the efforts of enterprising chaps (and enterprising gals) who have exploited the market incentives provided by higher energy prices. These incentives encourage intensified exploration for existing sources, development of new sources, development of conservation technologies, and so on. Received wisdom in at least a dozen threads at this board is that the world is "doing nothing"; it simply isn't true.

There is an area where enterprising chaps do have trouble raising funds to implement their ideas. That situation arises when their ideas provide energy that is more expensive than current sources. If their ideas provide energy that is less expensive than current sources, they don't seem to have much trouble; to take just a single example, look at the big increase in activity in Alberta.

There are also enterprising chaps who are in the business of milking government subsidies. In fact, they often lobby for alternative energy schemes that don't make any sense. Sell the public some snake oil, reap the profits.

And I'd rather have the government do it than the oil companies; either way, I think the government is more likely to do it quickly.

The oil companies aren't the only businesses out there. But be that as it may, I would say it depends on what your "it" is. If "it" is using the cheapest available source of energy, private industry is pretty good at that. If a cheaper source than the current one is feasible (or becomes feasible due to new technology, or changes in the price of the current source), then there are huge profit opportunities for the people who exploit the source. After all, businesspeople in the popular mind will do anything for profit - they'll lie, they'll cheat, they'll commit fraud, they'll resort to all kind of skulduggery to make a profit. Are we to believe that the only thing they will not do to make a profit is develop an alternative energy source?

If "it" means replace existing sources of energy with more expensive sources, in order to preserve the cheap sources for other countries like China and India, then yes, government probably will do that faster, because private industry never will. But even most governments have too much sense for that. They're in a bit of a bind there; the public demands that they attack the domestic economy, for the benefit of foreign economies, by replacing cheap sources of energy with expensive sources of energy. However, if they do that, the public will immediately blame the worsening of their own economy (which they themselves demanded in the first place) on the politicians, and boot them out of office. The result is pandering. Some rhetoric, say the words, finance a few infeasible projects (which benefit professional subsidy milkers) so the public feels that they are "doing something," but do so on too small a scale to do any real economic damage.

That's what I would do if I were a politician; say some nice high-minded words so everyone in this thread could feel good, but don't attack the economy the way they want me to.

[SpaceShot]

Something may be worthy of being traded as a commodity, but that doesnt mean it has to be. Heck, I believe I have read that DRAM has a spot market somewhere.

If oil were not a commodity, would it be $117 a barrel? More or less? I really haven't thought through the answer. I doubt at the beginning of oil pumping it was a commodity, so at some point a market was created for it.

("Market" in this sense means the "fair" markets where buyers and matched with sellers and there is no insider trading and all sales are public blah blah blah... just so you know what I mean. When I buy cereal at the supermarket, the supermarket set that price and while there is another definition of "free market" that determines that price, it is not the same thing. People don't bid up cereal and it doesn't rally in the late afternoon.)

[doghater]

("Market" in this sense means the "fair" markets where buyers and matched with sellers and there is no insider trading and all sales are public blah blah blah... just so you know what I mean. When I buy cereal at the supermarket, the supermarket set that price and while there is another definition of "free market" that determines that price, it is not the same thing. People don't bid up cereal and it doesn't rally in the late afternoon.)

Perhaps it has something to do with the elasticities of supply of cereal vs. oil?

[Ronald Brak]

Something may be worthy of being traded as a commodity, but that doesnt mean it has to be. Heck, I believe I have read that DRAM has a spot market somewhere.

DRAM can be a commodity because there are set standards for DRAM and within those standards one gig of DRAM is pretty much the same as another gig of DRAM.

If oil were not a commodity, would it be $117 a barrel? More or less? I really haven't thought through the answer. I doubt at the beginning of oil pumping it was a commodity, so at some point a market was created for it.

It's hard to imagine how oil would not be bought and sold as a commodity in much the same way it's hard to imagine how wheat would not be bought and sold as a commodity. But does the current method of buying and selling oil make it more expensive than it would be? All else being equal, no. People are demanding a lot of oil and producers haven't been able to increase supply to match so the price goes up. The fall in the U.S. dollar has also contributed to price increases in the America. The Euro is over $1.60 U.S.

[Ronald Brak]

Perhaps it has something to do with the elasticities of supply of cereal vs. oil?

It's comparing very different things. No one goes into a supermarket and says, "I'll give you $2.20 for a kilo of cornflakes in February."

[Kebsis]

If I'm not mistaken, the extensive list of products that are made with oil will keep oil production up even if cars and other machines changed to alternative fuels.

[Neverfly]

If I'm not mistaken, the extensive list of products that are made with oil will keep oil production up even if cars and other machines changed to alternative fuels.

I know right!
In a couple hundred years- what will folks be using for plastic?

[Van Rijn]

I know right!
In a couple hundred years- what will folks be using for plastic?

Plastic - though I expect they will use more sophisticated materials than we do today. Fossil fuels are handy because they are an energy source, but that isn't necessary for making plastics.

[Ronald Brak]

Only about 4% of world oil production is used for plastic. Oil is certainly useful for making plastic, but it isn't required.

[Kebsis]

I see. How would it be made without oil?

[Maksutov]

I see. How would it be made without oil?Here's how. (http://web-japan.org/trends/business/bus050107.html)

[Neverfly]

Wow.

I had no idea of any of this. I see so much of every danged things made out of plastic these days (Most of which shouldn't be!!!... cheepo's!) that I would have thought that it was more significant.

I also thought plastics were much more dependent on Oil.

[Ronald Brak]

Coal can also be used to make plastic. Coal was used early on, but oil was found to be more convenient.

[EricM407]

Can you cite these economists? Every economist I know says the price of oil is rising because of supply and demand.

I've read several articles like this (http://news.yahoo.com/s/bw/20080422/bs_bw/apr2008db20080421325349) lately.

"This (price spike) isn't an issue of supply and demand," says Joel Fingerman, principal of Chicago-based Oil Analytics, an energy consulting firm. "This is about money flow. It could stop here or at $150."
"As long as the Fed continues to cut rates, traders will keep selling the dollar, buying the euro, and buying commodities like oil," says Peter Beutel, president of the New Canaan (Conn.)-based energy risk management firm Cameron Hanover.
"Traders are relentlessly long (on oil) because there's nowhere else to go," says Phil Flynn, an analyst and vice-president at brokerage firm Alaron Futures & Options in Chicago. "They're heading to oil and other commodities for safety."
Fadel Gheit, senior energy analyst for Oppenheimer, says unless the U.S. government steps in to rein in speculators' power in the market, prices will just keep going up. He says the U.S. has been "unable or unwilling" to regulate oil markets...

[mugaliens]

I know right!
In a couple hundred years- what will folks be using for plastic?

Oak and pine for construction and furniture? With fabric seats with straw and cotton fillers? Steel and concrete for larger structures? Corncob pipes with bamboo stems?

Interesting tidbit: Bakelite (http://en.wikipedia.org/wiki/Bakelite)was the worlds first synthetic plastic.

It was not made from oil. Rather, it was based on the thermosetting phenol formaldehyde resin, polyoxybenzylmethylenglycolanhydride (say that fast three times with your mouth full of ice...) :lol:

[doghater]

I've read several articles like this (http://news.yahoo.com/s/bw/20080422/bs_bw/apr2008db20080421325349) lately.

So of the four quotes, we have one mathematician who says it is not due to supply and demand, and three other people (not sure what they do, although two of them are described as "analysts," who are typically not economists) who don't use the words "supply" and "demand," but cite reasons entirely consistent with supply and demand.

There might be a plausible case that speculators were driving the price way above the level warranted by current demand; let's see if it's true. If that were happening, what would we expect to see happen to oil inventories? Here is today's report:

http://www.chron.com/disp/story.mpl/ap/fn/5723252.html

Note that oil inventories have fallen 6% relative to last year. So there was an inventory level last year. Oil producers delivered more oil, in the quantities they're willing to provide at the prevailing price (supply). But the inventory went down. That means more oil was removed from inventory, then was supplied. Where did it go? A few possibilities.

(i) It was consumed by individuals and business who want a certain quantity of oil at the prevailing price (demand)

(ii) Speculators are buying oil in anticipation of profit from further price rises (also demand, although let's give every benefit of the doubt to the people who don't want to believe in supply and demand, and call it something else)

If (ii), where is the oil? Are they hiding it? Are they breaking it into carbon and hydrogen, and planning to put it back together later?

Oil inventories are lower than they were a year ago because the amount that producers were willing to supply over the past year, at prevailing prices, is smaller than the amount users of oil have demanded, at prevailing prices. Sure, there are speculators who hope to profit from further increases in prices. There are also speculators who hope to profit from future declines in prices. One group of speculators will be right, and one will be wrong; we'll find out which one when it happens. Much such trading would be in the futures markets, which does not result in disappearance of the oil from inventory. Inventories declined because the oil has been consumed.

Although it doesn't appear to be happening, suppose speculators were driving up the price of oil to a point where current supply exceeded current demand, so that inventories were building. Would that be a bad thing? There are many threads on this board where everyone is talking about the need to reduce oil consumption. Then when they think someone (the speculators) is actually doing something to reduce oil consumption (even if it's not true), they think it is awful. Sounds to me like people here want two things:

(i) they want oil to be really cheap

(ii) they want people to consume very little oil

No wonder they don't want to believe in supply and demand.

Supply - we have a commodity that exists in large supply, but much of it is in places where it is difficult and expensive to extract, and many of the cheap sources have largely been tapped, with production declining.

Demand - we have rapid growth in India and China, among other countries, and we have places like the united states, where driving a vehicle the size of a small bus and living in a 400 square meter palace is considered a birthright by a large percentage of the population.

What do they think should be happening to the price of oil, based on supply and demand?

Maybe there are astronomers who think the planets don't move around the sun because of gravity. (Yes, I know there will be cracks about GR on that one.)

[SpaceShot]

I agree that the market is setting the price of oil based on supply, demand, speculation, and even fear (economic and geopolitical).

I guess all I have been wondering is why the fear hit so hard so suddenly? I guess the reality is that is typical of over or underpriced commodities. The larget market finally realizes there is real value or real downside to something and it booms or crashes hard as everyone tries to make their move in our out.

I mean, oil is $117 a barrel or so and rising. It was half of this three years ago, was it not?

Joel Fingerman was quoted above as saying ""This is about money flow. It could stop here or at $150." It could just be that we all metaphorically budget a certain amount of resources (money) for oil (gasoline). And even if we don't like it, we are just budgeting more for $3 and $4 gas and now we're getting used to the budget so we'll pay it.

I am not blaming government. I am not blaming capitalism. I mean, the facts are the facts. I'm just trying to see if there is a solution. Even if you increased supply, I'm not sure it would do anything.

[doghater]

It could just be that we all metaphorically budget a certain amount of resources (money) for oil (gasoline). And even if we don't like it, we are just budgeting more for $3 and $4 gas and now we're getting used to the budget so we'll pay it.

I'm not sure where you are, but from the price, I'll guess the united states? If so, consumption of gasoline is lower than last year. People are responding to higher prices; just not very much. Gasoline demand is not very elastic, at least not in the short term. Perhaps the long term response for energy (not just gasoline) demand will be more significant - people don't move out of their big houses into small apartments instantly when oil prices go up, but definitely, over time, the market responds, in several ways - if energy is expensive, people definitely take that into account in deciding what kind of home/apartment to get, what kind of car to drive. And in the home they already have and the car they already drive, they can use less - they can turn the thermostat down and put on a sweater, they can cancel unnecessary trips in their cars, consolidate other trips (don't go into town every time you need something, go once a week), switch to public transportation for some trips, and so on.

But simultaneously with a slight decline in gasoline consumption in the united states, global demand for energy remains strong.

I'm just trying to see if there is a solution. Even if you increased supply, I'm not sure it would do anything.

High price is the solution - it encourages people to use less, and suppliers to develop more sources.

I don't think many people will like what I have to say, but my advice would be:

(i) get used to high prices, and adapt

(ii) be wary of anyone who has an amazing new technology that will provide energy at lower cost, but can't implement it because this wonderful cost saving technology is so expensive that no private investor can afford it, and is therefore applying for a $500 million government grant

Anyone who is based in a western country, and just can't stand the thought that energy is likely to be more expensive than it has been in the past, might want to consider:

(iii) full scale nuclear attack on India and China

That would decrease demand for a long time. Those in India and China might want to consider full scale nuclear attack on the west (or on each other), but they'll have to improve their nuclear weapons capability first.

[mike alexander]

Re: plastics, it all depends on how you look at it. Bakelite is made, as mentioned, from phenol and formaldehyde, both of which are produced from petroleum or natural gas feedstocks.

Give a chemist enough time and money and she'll turn just about anything into anything else, but as far as the commercial polymers industry goes, there isn't a current substitute for all the ethylene, butadiene and other nice monomers coming out of the cracking towers. The polymer industry runs on petroleum. Arthur Clarke once noted that as a chemical starting point any rational civilization would consider petroleum to valuable to burn.

[mike alexander]

We're also beginning to see that the cost of oil has all sorts of effects beyond filling up the ol' Chevy. If you make $50,000 dollars per year the main effect might be increased grousing. If you make $300 per year the main effect might be starvation.

[EricM407]

So of the four quotes, we have one mathematician who says it is not due to supply and demand, and three other people (not sure what they do, although two of them are described as "analysts," who are typically not economists) who don't use the words "supply" and "demand," but cite reasons entirely consistent with supply and demand.

What reasons do you see them citing that have anything to do with supply and demand, either in those quotes or the rest of that article? Unless you're talking about a supply of dollars that are dwindling in value and a demand for something (oil, in this case, but it could be any commodity) to trade those dollars for.

There are many threads on this board where everyone is talking about the need to reduce oil consumption. Then when they think someone (the speculators) is actually doing something to reduce oil consumption (even if it's not true), they think it is awful.

Those crazy people! I guess they don't see the beauty of worldwide recession and hungry people going without food.

[SkepticJ]

As far as plastics in the future go, if you can make oil, you can make plastic: http://discovermagazine.com/2006/apr/anything-oil

[mike alexander]

But can you make enough? World ethylene production (a basic starting material) is around 100,000,000 tons per year. That's a LOT of turkey gizzards.

[doghater]

What reasons do you see them citing that have anything to do with supply and demand, either in those quotes or the rest of that article?

Continuation of your quote:

Unless you're talking about ... demand for something (oil, in this case, but it could be any commodity)

Bolding mine.

I commented on this issue extensively. I also distinguished between current demand and future demand, if that's what you're getting at; perhaps it was not convenient for you to notice that. And my question for anyone who argues that the price is not driven by current supply and demand remains: if, at current price levels, supply exceeds demand, why are inventories falling instead of rising?

Regarding opinions of economists, I know quite a few real economists. Even the talking head economists on the dumbed-down morning new broadcast I saw today (maybe their target audience consists of scientists) seem to understand what is going on in with respect to supply and demand.

So what's the answer: why are inventories falling, if the price is higher than what is justified by supply and demand?

Those crazy people! I guess they don't see the beauty of worldwide recession and hungry people going without food.

Maybe this is all a great big joke to you, but it's deadly serious business to me. I have spent every day of my life for many years working in the policy arena, and a good many of those days I have to fight people who think a sarcastic quip or two makes up for advocacy of non-fact based policies that reduce people's quality of life and shorten their lifespans. So I hope you will forgive me if I'm not laughing.

Worldwide recession? Probably even people who fall within your definition of an economist can figure out the problem with that one. An increase in energy prices hurts countries that are net importers of energy, and benefits countries that are net exporters of energy. The amount of net exports from energy producers is equal to the amount of net imports by energy consumers.

Starving people going without food? There are a lot of malnourished people in the world, although there are fewer of them now then there were a few years ago when oil was vastly cheaper. (There's an economic term for what's going on there - do you think any of the people you cited know what it is?) But, since they can't eat sarcastic quips, what would you like to do for them? Can you formulate a specific policy proposal that will benefit them, and show with proper economic analysis how it does so?

This is a battle I fight every day. I don't see much of a difference between killing people with guns or bombs and killing people with bad policy, but I'm glad you think it's funny.

[Ronald Brak]

Anyone who is based in a western country, and just can't stand the thought that energy is likely to be more expensive than it has been in the past, might want to consider:

(iii) full scale nuclear attack on India and China

That would decrease demand for a long time. Those in India and China might want to consider full scale nuclear attack on the west (or on each other), but they'll have to improve their nuclear weapons capability first.

That's nuts. When you look at energy consumption per capitia it makes far more sense for Western countries to launch full scale nuclear attacks on themselves. Just think about it. With 90% of its population dead, the U.S. could supply all it's own oil needs without importing oil for generations. In fact, the U.S. could become a net oil exporter. The West nuking itself also makes much more sense than nuking India and China when you look at education patterns. In many Western Countries, particularly the United States, very few graduates are engineers or scientists. However, India and China are producing legions of engineers and scientists and these are people who will develop more efficient industrial processes that use less energy and develop new and more efficient energy sources, lowering the cost of energy in the future. One economist suggests it will take about 15 years for this effect to kick in.

But when you consider overall wealth and spending power and not just straight energy prices, no matter how you look at it, we're actually better off economically, that is richer, when we don't nuke ourselves or anyone else. Which I find to be a bit of a relief.

[doghater]

That's nuts.

Just in case it is not obvious - I agree.

When you look at energy consumption per capitia it makes far more sense for Western countries to launch full scale nuclear attacks on themselves.

The assumption behind option (iii) was that people would like to have cheap energy available for themselves, not for other people. If they just want energy to be cheap, and don't care whether they're alive to enjoy it or not, then they could nuke themselves.

But when you consider overall wealth and spending power and not just straight energy prices, no matter how you look at it, we're actually better off economically, that is richer, when we don't nuke ourselves or anyone else. Which I find to be a bit of a relief.

I agree, which is why I included option (i). I just provided options for people who want energy to be cheap, since they believe in a magic wand that will make it so, but they can never seem to find it. I don't claim it's a good goal.

[Ronald Brak]

Just in case it is not obvious - I agree.

I figured as much, but I just thought I would offer a few counter arguments as there are people out there in internet land who would rather commit atomic murder than use public transport.

[geonuc]

Maybe this is all a great big joke to you, but it's deadly serious business to me. I have spent every day of my life for many years working in the policy arena, and a good many of those days I have to fight people who think a sarcastic quip or two makes up for advocacy of non-fact based policies that reduce people's quality of life and shorten their lifespans. So I hope you will forgive me if I'm not laughing.
Just a thought, but I think you might be taking this BAUT discussion a tad personal. We all have things we are passionate about, but BAUT is BAUT and you are in the OTB section. You will get some sarcasm.

How would you characterize your quip about nuking China or India? I know you have later disavowed it as 'nuts', but it sure seemed sarcastic when you posted it.

[Neverfly]

Well, that sarcastic response had been made to this:

There are many threads on this board where everyone is talking about the need to reduce oil consumption. Then when they think someone (the speculators) is actually doing something to reduce oil consumption (even if it's not true), they think it is awful.

Which makes no sense at all.

If it's wrong- it's WRONG. That means it won't work.

Yeah, if it ain't true, it's awful. Tough.

Because those agreeing that we should reduce oil consumption want to see Real Results, not idle speculation of nonsense which is unreal (Perpetual motion, electrolysis of water, whatever...) that will do no good at all and waste everyones time.

[EricM407]

I commented on this issue extensively. I also distinguished between current demand and future demand, if that's what you're getting at; perhaps it was not convenient for you to notice that. And my question for anyone who argues that the price is not driven by current supply and demand remains: if, at current price levels, supply exceeds demand, why are inventories falling instead of rising?

Well, inventories were slightly lower this year than last year for the point of the year you chose. They aren't falling. They've risen every month this year. I suspect they'll fluctuate slightly up and down - just like they always do.

Maybe having more than two points of data will help (http://tonto.eia.doe.gov/dnav/pet/hist/wcestus1w.htm).

Right off the bat, I can see several periods of time with larger drops in inventories that didn't result in the huge increases in price we've seen lately. Current inventories are higher than they were in the first quarter of 2005, 2004, 2003, 2001, and on and on. Forgive me if I don't see market price strictly locked to this variable.

[closetgeek]

Well, yes. Yes, you are. Don't like paying for gas? Buy an electric or hybrid car. Oh? You don't want one? It costs too much? It's too much of a bother?

Well. I guess you really don't mind the gas prices after all. But if prices were to go up enough, I bet you'd reconsider.

I am not trying to sound nasty or confrontation but I think that is rather short-sighted. Hybrid cars still use gas and not everyone can afford fuel cells. Not to mention, if they are already feeling the squeeze, chances are they can't afford to run out and buy a new hybrid car. I am not about status or speed, I drive a mini van for efficiency. I care about getting from point a to point b. But you also have to remember it's not just cars that are getting too expensive. I can't force the local dairy farm to use hybrid cars so I have no choice in how much they raise the price of milk and cheese to make up for delivery. I use electricity in my house and curbed a lot of the luxuries to keep that cost down. Next time I have a few extra thousand laying around, I promise to get solar panels. Whether it be the cost of everything going up or the value of the greenback dropping, either way, there is less and less of it in my pocket every week.

[closetgeek]

I know this is reaching but I saw on a program once that there is an energy source in the moon that could supply us with energy for the next thousand years. I was on one the the discovery channels as I was getting into the shower so I have no idea what they were talking about. Anyone else know what I am talking about?

[NEOWatcher]

I know this is reaching but... Anyone else know what I am talking about?
Probably Deuterium.
Many of these shows like to leave you with a good feeling that things are not hopeless, because the subconscious will make you want to watch further episodes.
This particular point is made a lot, but I never hear the shows accompany it with what it would take to harness or take advantage of that energy.

Just like any other alternative energy, theres a cost involved.

[closetgeek]

Deuterium, that's it. I wasn't thinking of anything that costly, just a space station just outside the Earths atmosphere with a pipeline stretching to the moon to harvest the gas, and a nonstop flow of shuttles going back and forth from the Earth to the space station. Simple enough, right? I was originally thinking that we could just run the tether from Earth to the moon but since the US owns the moon, we did put our flag there, we would always have a moon hanging over us and that would make it difficult to stargaze.

[mike alexander]

I think it's helium-3 trapped in lunar soil from the solar wind. Proposed for use in fusion power plants. Helium-3 is exceedingly rare on earth. On the other hand, deuterium isn't.

[tdvance]

space station just outside the atmosphere, pipeline to the moon?

That's not even science fiction!

[peteshimmon]

Anyone mentioned peak oil yet?

[RalofTyr]

Anyone mentioned bicycles?

[SkepticJ]

But can you make enough? World ethylene production (a basic starting material) is around 100,000,000 tons per year. That's a LOT of turkey gizzards.

Yes, it is, but since the process isn't limited to turkey guts, but to virtually any complex organic compounds (proteins, fat, old plastics and rubber, cellulose, chitin etc.). There's easily that much waste biomass per year from agriculture, sewage and other sources.

If we recycled all disposed plastic (which hasn't been viable in the past, because recycled plastic has degraded properties) via this method, turning it all the way back into oil, a lot less than a hundred million tons of new ethylene would be needed per year.

[Manchurian Taikonaut]

An Economist Who Matters (http://online.wsj.com/article/SB121400327981993375.html?mod=googlenews_wsj)

[Ronald Brak]

Here's an on topic article by an economist on the price of oil and speculation:

http://www.econbrowser.com/archives/2008/06/how_big_a_contr.html

[Spock Jenkins]

http://www.foxbusiness.com/story/markets/futures-jump-oil-decline/

Oil at $113 a barrel. It has declined rapidly since the peak. Using bbp's forcasting models - it should be free by the end of the year!

[tdvance]

And then, it will be negative! You go gas up, and money is credited to your account!