September 03, 2005
We can never run out of oil
Katrina hit our oil infrastructure hard. Coming at a time of already tight supply, this will mean higher prices and talks of the end of oil. But this too will pass and if we don’t repeat the price control debacles of the 1970s it will pass quickly.
We almost ran on of oil on many occasions. The first time was just after WWI; Many of us remember the last time in the 1970s. Of course we never ran out of oil. We never run out of anything. What we really mean is that we don't have a particular resource at a price we are willing to pay. By the time we reach this price with oil, we will have moved to different energy sources.
The long term is too uncertain to predict, but we have a good handle on the short and medium runs. In the near term prices will rise. In the medium term, we can expect a drop in oil prices. Why? During the low prices of the 1980s and 1990s, we invested less in energy. It takes many years for an investment to begin to produce results. Much of the capacity that will be available very soon was planned and begun back in 2001 or 2002. What is being started now will be ready in 2008 or 2010. This supply will be supplemented by the development of alternatives and conservation provoked by today's high prices.
Bad news for the Bush haters is that cheap gas will be upon us by 2008 and people will be feeling pretty good about Bush.
The prospect of cheap oil is not something I eagerly anticipate. The longer the price stays high, the faster we will develop alternatives. I would like nothing more than to reduce the grip of oil on our country. Each price spike makes us less dependent, but the subsequent drop takes off the edge. A higher tax at the pump is one of the few taxes I approve, especially if it replaces other taxes. As the price comes back down we should offset at least some with a higher gas tax. But we won't have to think about that for a couple of years.
Interesting. The thesis of Matel’s post comes down to this:
“Bad news for the Bush haters is that cheap gas will be upon us by 2008 and people will be feeling pretty good about Bush.”
Yet the thesis of virtually very Katrina-based post on both the Dem and Indie blogs comes down to this:
“Now is not the time to say that you are doing all you can. Now is the time to take heroic measures.”
Pretty much sums up the differences between the two parties, dontcha think? One cares about Bush. The other cares about the American people.
Posted by: Mister Magoo at September 3, 2005 01:15 AMJack,
Why is it that the price of gas goes up sooo fast, but it comes down sooo slow?
Why is it that I am now paying .30 more a gallon when the gas I am paying for was delivered before the crisis in the south.
Posted by: Rocky at September 3, 2005 01:16 AMJack,
In all honesty I have to say that those were retorical questions.
I only wish to demonstrate that the price of fuel is often driven by other than market forces.
Here is an honest question for you.
Why when the oil companies have shown record profits for a quite a few years does the recent energy bill include loans to the oil companies?
It just doesn’t look good on the surface.
Posted by: Rocky at September 3, 2005 01:27 AMMagoo
I read the blogs on the other sides. Some started by saying that we should help the people in New Orleans, but they quickly degraded into blaming Bush. The only one who tried to be fair was Stephen but by the second post he the others had piled on the blame train.
The trouble with the Dem side is that no matter what anyone writes, they take it back to Bush. Whether I write about the baby boom generation or freedom fighters in Poland, it quickly comes back to criticism of Bush.
You will forgive me if I try to preempt the imminent threat - at least a little of it.
Rocky
The price drops as fast as it rises. We just don’t perceive it that way. I remember when gas was 87 cents. That was only five years ago. I remember when it was over $2 and that was about thirty years ago. If you translate that into today’s dollars, it is higher than now. You must remember that too, but doesn’t it seem like gas only goes up even if we know the facts. Our memory is selective.
I think the government should stay out of the energy business. I won’t defend this bill. It is too much like a Jimmy Carter bill. You remember. Nixon started the foolishness; Ford continued it and Carter developed it to a fine complexity. When Reagan threw most of it out, the crisis was over.
Sometimes the best plan for government is no plan at all.
Although I would tax a little, as I wrote.
Posted by: jack at September 3, 2005 01:44 AMJack,
Actually I was talking about the price “spikes” we have had in the last few years.
The price goes up 20 cents in one day and takes the next month to slowly come back down. Usually the price settles a penney or two above where the price was before it went up.
Sorry this isn’t my imagination. I still travel a lot but now it is in my car, so I notice these things more. Mainly because when I fill up I write things down for tax purposes.
Posted by: Rocky at September 3, 2005 01:57 AMJack —
Not to derail the subject, but I’m glad to hear of a desire for alternate energy sources from the red side of the page. Freedom from a dependency on oil would change a whole lot of things in this world, mostly for the better.
Posted by: Alejo at September 3, 2005 02:49 AMI wonder what it will take before Republicans DO start blaming Bush. As far as I can tell, to the GOP mind Bush is blameless for everything.
It’s not Bush’s fault that the budget for the levees were cut three straight years in a row.
It’s not Bush’s fault that despite knowing about a Category 4 Hurricane on Thursday, it wasn’t until Wednesday that he stopped having a vacation.
It’s not Bush’s fault that the Director of FEMA who he appointed is a complete idiot.
It’s not Bush’s fault that the nearly three full Divisions were never activated until wednesday. One division is the 101st AirMobile that has HUNDREDS of Helicopters.
I suppose we should be thankful this was not a Terrorist Attack. Think of the disaster THAT would have been!!!
Posted by: Aldous at September 3, 2005 02:54 AMJack,
Thanks for pointing to that interesting article about oil prices. However, linking any of that to Bush’s popularity is misguided. A growing contingent of people detest the man not due to oil or Iraq or New Orleans but simply because he is an inept leader. That opinion will only be reversed if by 2008 the nation’s wages are no longer stagnant, health care costs are no longer a growing burden, the poverty rate is no longer rising, people feel more secure politically and economically, the debt and deficits no longer loom, and Iraq becomes a stable nation. Oil will not really fit into the equation at all unless the new technologies, production capacities and the fate of New Orleans prevent a dip in prices from occurring.
Iraq will still be a basket case in 2008 but we have to hope it will at least be a relatively stable basket case. As for the other problems, they will only grow worse, simply because so many of this administration’s policies are wrong-headed to an absolutely astonishing degree. Oil prices may well be down a bit, for all the good it does us.
Posted by: Reed Sanders at September 3, 2005 03:37 AMIT RAINED THE OTHER DAY.…I’m waiting for a liberal to blame President Bush for that.
Posted by: tomd at September 3, 2005 05:44 AMI am tired of all these liberal dems always being so self centered about issue and problems in the USA only. It makes me feel ashamed to be an American when people from other cultures and nationalities read these remarks. Most people outside of the USA really think President Bush is a remarkable man for wanting peace and prosperity to the unfortunates of the world. It would do the dems some good to broaden their horizons and remember that this is one earth that we all share.
Posted by: Everett Hatton at September 3, 2005 06:14 AMJack said “Bad news for the Bush haters is that cheap gas will be upon us by 2008 and people will be feeling pretty good about Bush.”
You are making some Superman leaps of assumptions in a single bound, here Jack. Since crystal balls are backing up your statement, it is just as rational to predict the Bad news for the Bush lovers is that increased numbers and force Hurricanes in the GULF will be hitting our infrastructure again and again before 2008, in addition to the virtually unstoppable increasing demands and consumption of available oil supplies between now and 2008 by China, Malaysia, India and other industrially developing nations which will continue to pressure prices for oil upward inexorably. GOP may face an entire 8 year Republican President’s tenure accompanied by increasing oil prices topped only by ever increasing profits for the Bush Family and company oil industrialists.
Posted by: David R. Remer at September 3, 2005 07:20 AMI am tired of all these liberal dems always being so self centered about issue and problems in the USA only.
Everett,
This is quite a comment!
Traditionally, “liberals” are supposed to be the bleeding hearts who want to steal your money and give it to the have-nots, including have-not countries. “Conservatives” are supposed to be the people who say that life is unfair, and that we should not throw away money on the have-nots. Now conservative foreign policy rhetoric is almost going in the exact opposite direction.
I think this started when it became clear that there were no WMD in Iraq. It was easier to say that Bush was a great humanitarian than an incompetent.
I think that once we get out of Iraq (which may be a while, alas), conservatives will revert to type. We shall see…
Posted by: Woody Mena at September 3, 2005 07:27 AMBad news for the Bush haters is that cheap gas will be upon us by 2008 and people will be feeling pretty good about Bush.
A while back someone predicted here that oil was going to $80 a barrel, you said it was just as likely to go to $20. Now it is pushing $70. So with all due respect, I don’t think I will put money on your energy price forecasting.
Posted by: Woody Mena at September 3, 2005 07:31 AMHold on to you hat for a second. I’ve got a hot one for you. I believe the price of oil and gas has risen much further than the oil industry wants it to go. If gas remains over $3 a barrel a whole host of alternate fuel technologies begin to become cheaper. Whole entire industries can start up very quickly once the alternative fuel becomes cheaper than conventional fuel. Biodiesel becomes cheaper than conventional gasoline for example. Solar power becomes more economical. Heck even heating with electric gets proportionately cheaper. Let’s not forget that in new construction the cheapest heating system to put in a house is electric.
No I don’t think the oil producing nations and the oil industry want to see prices this high. They fear the competition that will result.
Posted by: alzare enzyte extagen at September 3, 2005 09:19 AMJack?
Sometimes the best plan for government is no plan at all.??? WOW
But the ambitious man flatters himself that, in the splendid situation to which he advances, he will have so many means of commanding the respect and admiration of mankind, and will be enabled to act with such superior propriety and grace, that the lustre of his future conduct will entirely cover, or efface, THE FOULNESS OF THE STEPS BY WHICH HE ARRIVED AT THAT ELEVATION!!!!!!!! In many governments the candidates for the highest stations are above the law; and, if they can attain the object of their ambition, they have no fear of being called to account for the means by which they acquired it. They often endeavour, therefore, not only by fraud and falsehood, the ordinary and vulgar arts of intrigue and cabal; but sometimes by the perpetration of the most enormous crimes, by murder and assassination, by rebellion and civil war, to supplant and destroy those who oppose or stand in the way of their greatness.
http://www.econlib.org/library/Smith/smMS.html
A brave man ought to die, rather than make a promise which he can neither keep without folly, nor violate without ignominY
Breach of chastity dishonours irretrievably. No circumstances, no solicitation can excuse it; no sorrow, no repentance atone for it.
It is the same case with the violation of faith, when it has been solemnly pledged, even to the most worthless of mankind.
EVEN TO THE MOST WORTHLESS OF MANKIND SAYS IT BEST. However, I doubt you may understand or comprehend morality and justice and/or the big picture.
And what about our refining capacity? The oil companies have refused to invest in greater amounts of that, instead piling on greater and greater supplies on fewer and fewer refineries.
They could have invested, but they were too busy making profits, which new investment in refineries would have cut down on.
Posted by: Stephen Daugherty at September 3, 2005 09:59 AMPrice controls (like what Hawaii did) will almost guarantee shortages.
It’s foolish to meddle with the laws of supply and demand.
To say we can never run out of oil is untrue, since it is a finite natural resource.
Also, extracting oil takes time and money and access.
And, we are now competing with China and India for that resource, creating an increased demand, and decreased supply.
Thinking that price controls will resolve the problem will only guarantee shortages.
Also, if the governments really cared about the high cost of fuel, they could reduce the tax on each gallon.
But, instead, they’ll probably tax is some more …
Jack,
The question is not if we run out of Oil, but when and what is in the inherent best interest of the Market. For like the Whaling Industry tried to fight a political war against the Oil Companies in the late 19th Century so will Renewable Energy win against the Oil Companies today.
Why? Because once the Market and Consumer realize that the technology exist that would eliminate the Family Energy bill every month, Free Entrprise will take it over. The only problem is the Public has to get mad enough to demand it as a Society. For that is what is meant by being Unalienable Right Regardless.
Besides how many products can be made by Oil and would not that lengthen the life of the industry? Because that is where the Money is. Plastics are just one item that can be recycled and sold for a profit.
Posted by: Henry Schlatman at September 3, 2005 10:30 AMAll
One thing I have learned from blogging is how much some people will concentrate on a side bar comment. My comment about Bush in 2008 is such a comment. You might want to say it isn’t true – none of us can know after all – but it is NOT the focus of the article.
I also put that in as a preemtion. I know that people like to blame Bush. I would direct Aldous to the comments on the blue side where I quote the Washington post and Democrats who say that no matter what investment in levees, it would not have been completely to change the outcome. In other words, if you want to blame Bush in 2010, you probably have more justification than doing it now.
Oil prices don’t go in only one direction. They go up but they also go down. We build more capacity when prices are high, but since investments take years to come online we tend to suffer big price variations because the increase in capacity tend to come when the price is already dropping.
There are lag times between any action and the result. This is something many people (and some on this blog) don’t seem to understand. I tried to explain it to Aldous up above. I have told people about it in economic activity, in industrial planning, in movements of supplies etc.
I think the problem comes from computer games. No really, in this case I am not being facetious. The person playing makes a move and something happens. He doesn’t order production and have to come back three weeks later to follow up. He doesn’t have to depend on the infrastructure investments made by previous players. Result just follows action. This is not the way of the real world.
The other thing about the games is the player makes all the decisions. He doesn’t have to get his friends to agree, nor can his enemies come in and change his plans.
Leaving the world of computer games, I would say this to everyone. The free market system allows everyone to invest and essentially put their money where their mouths are. Those who are so good at predicting the past, might try their luck at the future. You won’t be right all the time, but you don’t have to be. If you are right a lot of the time, you will do okay. So just do it.
Stephen
The problem with refineries has not been a reluctance to invest. It is nearly impossible to get a new refinery through the regulatory process and past the local nimby people.
Dan
I adapted long ago. I ride my bike to work in summer, take the metro in winter and own a Honda Civic hybid that gets 48 mph in the city. YOur energy exposure is based on your choices.
Posted by: jack at September 3, 2005 10:37 AMJack,
In response to your response: “I read the blogs on the other sides. Some started by saying that we should help the people in New Orleans, but they quickly degraded into blaming Bush. The only one who tried to be fair was Stephen but by the second post he the others had piled on the blame train.”
To be fair, a lot of finger pointing continues. And yes, we should move beyond that to keep helping those poor souls whose lives were ruined by Katrina. But before we do, SOMEONE needs to take responsibility for taking 5 days to get real relief to the people of NO. And because this is a national tragedy, don’t you believe that national accountability makes sense? If so, it appears that the buck stops with Bush. After all, he was the only one who had the power to mobilize a national response.
Unfortunately. Mr. Bush has a rather sketchy history of assuming responsibility for very little — except for tax cuts for the wealthy, his unfunded mandate of No Child Left Behind, and obscene new energy legislation that does nothing to reduce our dependence on foreign oil while rewarding oil companies whose profits are already at record levels. Indeed, when something (or a part of something) can be spun as “good,” Bush takes responsibiltiy. But when things are obviously bad, he runs for cover. No responsibility. No accountability.
Remember, this is a president who bestowed the Medal of Freedom to “slam dunk” Tenet — yet there is still no accountability for the lack of WMDs in Iraq. Amazing. This reason, and many others (including NO), are the very reasons why the finger-pointing at Bush continues. And deservedly so. Because in a country where accountability in the nation’s highest office is supposed to mean everything, it too often means nothing. Thus, when you point your own finger at the Dems for jumping on the “blame train,” you are doing precisely what Bush continues to do: pretend that responsibility doesn’t matter.
I know I won’t change your mind, as you think all Dems do is point fingers at this administration. But as Aldous correctly points out, Repubs never point fingers at this administration. And that is the real national tragedy.
Posted by: Mister Magoo at September 3, 2005 11:04 AMJack,
Life is like a computer game; however, it is not a single player game. Try 6.4 Billion Humans and countting make up the game noard and one’s actions has a direct or indirect action on the other over the Natural Course of Human Events. Known 40 years ago was an Oil/Energy Shortage that was just/is waiting to happen.
True, raising prices and improving gas mileage in cars lengthen the life of Oil, but it will not stop the world form someday pumping the last barrel of oil. So put away the toys and explain to me what the Republicain Leadership is going to do to eliminate America’s need on Oil as a primary source of Energy.
Posted by: Henry Schlatman at September 3, 2005 11:16 AMSo put away the toys and explain to me what the Republicain Leadership is going to do to eliminate America’s need on Oil as a primary source of Energy.
Yes, anybody familiar with the ins and outs of the new energy bill? I’ve heard some modest amounts were set aside for alternative energies but that these are mostly a side-show. It should would be nice to have some of those R&D bucks flowing into alt energies right about now.
I ride my bike to work in summer, take the metro in winter and own a Honda Civic hybid that gets 48 mph in the city.
Good job there, jack. It’s the kind of responsible action that can give conservatives a good name.
Posted by: Reed Sanders at September 3, 2005 11:33 AMThank you, Adrienne.
And I still think you should run for President.
Posted by: Mister Magoo at September 3, 2005 11:41 AMReed Sanders,
What i find so strange in the Energy bill is the willingness of the Republican Leadership to promote building more nucular energy plants which will produce more fuel for WMD’s.
Today, exists the Technology (ie Electromagnetic Fusion) to save every Consumer about every penny they spend on Energy on a personal level. Power plants for Commerce and Government would still have to come from Renewable plants like Tidal Wave Generators, Wind Trubines, and Nano Motors. So who is zooming who and when will the All Powerful Market push the Oil Companies off the top of the mountan.
Posted by: Henry Schlatman at September 3, 2005 11:46 AMjack wrote: Dan, I adapted long ago. I ride my bike to work in summer, take the metro in winter and own a Honda Civic hybid that gets 48 mph in the city. YOur energy exposure is based on your choices.jack, I admire that. A major part of the problem in this country is the urban sprawl. Thus, in Dallas, and many other cities, it’s hard to not spend 1.5 to 2 hours per day in traffic, to and from work.
I currently have a small Frontier Crew Cab pick-up (it averages about 20 miles per gallon).
But, I’m planning on getting a hybrid or something much more fuel efficient next time.
Lately, I’ve been going back and forth between home and a customer site in Fort Worth, and fuel is now costing $15.5 per day. Ouch !
Posted by: d.a.n at September 3, 2005 12:03 PMHalliburton has temporarily stopped charging the US military for meals until they agree on a better method for regulating contracts
BBC NEWS Criminal probe into Halliburton
they won’t let me give the link
Jack,
Bush has already been President longer than Jimmy Carter was. If it isn’t realistic to hold Bush responsible right now because of a lack of prior investment, does Carter get a free pass too?
Posted by: Woody Mena at September 3, 2005 12:30 PMSame here:September 3, 2005
A “major oil spill” has been spotted near two storage tanks southeast of New Orleans, the state Department of Environmental Quality said Friday
Homeland Security officials were restricting access to the area, and Kelly said the state agency had notified both the Coast Guard and the Environmental Protection Agency so that they can begin clean-up.
Crude Surges Above $70 a Barrel as Katrina rips through US Gulf
Oil prices hits new record 68$ on storm
“Basically I could spill a can of oil at my local gas station and you’d see the price of crude go up by $1 per barrel,” he said.
Jack, the era of cheap oil is over. According to the former head of Aramco, supply is outpacing demand no matter how much more capacity comes on line in the next few years,
“Everybody is looking at the producers to pull the chestnuts out of the fire, as if it’s our job to fix everybody’s problems,” Husseini told Maass. “It’s not our problem to tell a democratically elected government that you have to do something about your runaway consumers.”
He pretty much puts it this way: The Saudis couldn’t care less if the United States doesn’t get all the oil it needs.
Saudi Arabia has enough for itself, and they’ll sell to whoever can pay for it no matter how much or how little they pump. That’s one of the pluses of being totally reliant on oil for state revenue. They don’t have to plug into the global economy, and they don’t really care what the global economy does — for as long as it lasts, Saudi Arabia will always get paid for its oil.
The rest of the article is pretty interesting, too.
It’s also interesting to note Chevron’s new ad campaign, “The era of easy oil is over.”
Which probably explains why both Dick Cheney and John Snow are touring Canada’s tar sands. At $80/barrel, that crap starts to look extractable.
The problem with refineries has not been a reluctance to invest. It is nearly impossible to get a new refinery through the regulatory process and past the local nimby people.
No Jack, there actually is a reluctance to invest. We went through this argument during the California energy scam, and it turns out that if a new refinery opened, it would go out of business the next day. In fact, in California, Shell is closing down a refinery,
“once potential buyers take a close look at the facility and its available crude supply, they will reach the same conclusion that we have. That this refinery is not economically viable going forward for a number of reasons, including the cost and availability of the crude needed to run the facility.”Posted by: American Pundit at September 3, 2005 01:05 PM
Henry
Re oil – the best thing the Republican (and American) leadership can do to avoid energy shortages is to facilitate the creation of infrastructure of energy production and conservation and after that do nothing. The price mechanisms of the free market will deliver energy, just like it delivers apples, oranges, Big Macs, building materials and everything else.
The worst thing they could do is try to predict and choose winners and losers. You are right that people predicted forty years ago that we would run out of oil. As I recall, those predictions usually said something like within ten years or within twenty years. Still waiting, are we?
We will never run out of oil. At some time in the future oil will become a much less important part of the energy mix and it won’t cause any particular problem. We don’t need oil – we need energy.
BTW – the recently passed oil bill smells like Carter. It manipulates markets (or tries to) I don’t care for it, but my reasons are probably different than yours.
Magoo
Often nobody is particularly to blame, no Bush not the Dems. It is always easy to point out less than optimal results, but that is what you get in the real world. As I wrote in my challenge above. If you guys think you can predict the future over the broad range of the economy, make the proper investments and prove it. I have found through experience that it is a lot easier to find fault than it is to do something good and useful. And the criticism often begins before you could reasonably expect a result. Dems started criticizing Bush on the economy in March 2001 – before anything he could have done could have done anything. They are on his back about money for levees, when even they admit none of his cuts made any difference to the outcome.
Let me make a perceptual statement and you can disagree. I think things are pretty good now. Unemployment is low; the economy is growing; air pollution is lower; more Americans own homes than ever before. The market has recovered from the drop at the end of the Clinton Administration. I don’t know who to blame for this. I guess it wouldn’t be George Bush.
DAN
The hybrids are great. Not only do they get good gas mileage, but they are also really quiet. When I come to a stoplight, the engine shuts off entirely. When I start up there is no roar of the engine. It takes some getting used to actually. Even with $3 gas, my wife and I drove around all we needed to for two weeks and the last fill up cost only $30.
Woody
The problem for Carter was not lack of investment, it was the controls on energy. Carter didn’t start it. Nixon was the one responsible. But Carter made them even more complex and (somewhat unfairly) took all the blame.
AP
I don’t care about oil; I care about energy. I am in favor of higher oil prices if it pushes oil into a less important place in our energy mix.
I agree with you that the Saudis are not our friends. Their goal is to keep oil in a price band that is maximizes their revenues while remaining low enough NOT to encourage the development of alternatives. Again, we are talking lag times and energy technology investments.
QWERTY – I am sure you know the story. That is what the line of your keyboard says. The placement of the keys we are using now was meant to SLOW typing in the days when it was possible for a fast typist to jam manual typewriters. We still use the QWERTY now because we used the QWERTY then and we all are invested (our time) in learning it. It would be better to change the system, but none of us wants to retrain. The same is true of energy investment.
Henry sometimes talks about good alternatives to oil. We will use them only when forced to move out of the comfortable (and paid for) technologies geared to oil. There will come a tipping point. That is what the Saudis hope to postpone and what higher prices will facilitate.
Jack,
Consider that each corporation has a minimum of 10 vechiles that consumes $40.00 dollars worth of fuel a day. That $400.00/day times 5 days a week times 52 weeks a year or $104,000.00 each and every year that adds to the cost of a product or service and the minus to the profit if the corporation.
That being said, how much of that $104,000.00 dollars would the corporation be willing to pay for a set of vechiles that do not consume fuel? If profits to the Stockholders is paramount to the Corporation, isn’t it in their, the Stockholder and the Customers inherent best interest. Because I would almost bet that the Labor don’t care what they drive.
Web search “Gray’s Electromagnetic Motor” and ask yourself if only one test was done. True, the Oil Companies have tried their best to stay on top, but the higher prices is a last ditch effort to maintain the status quo.
Posted by: Henry Schlatman at September 3, 2005 02:18 PMRocky, Yesterday, the friday before the last big trip day of the summer, gas dropped 20 cents a gallon (from 2.99 to 2.79) all accross the northern Twin Cities. MN
Today you can findit as low as 2.74 in St Paul
http://twincitiesgasprices.com/
Posted by: George at September 3, 2005 02:24 PMI don’t care about oil; I care about energy.
Of course, but you yourself argue that alternative energy is more expensive than oil. Perhaps I should have said, the era of cheap energy is over..?
Posted by: American Pundit at September 3, 2005 02:28 PMAldous wrote:
[It’s not Bush’s fault that the budget for the levees were cut three straight years in a row.}
You are right this is congresses fault.
[It’s not Bush’s fault that despite knowing about a Category 4 Hurricane on Thursday, it wasn’t until Wednesday that he stopped having a vacation.}
Actually on Tuesday he made arrangements to get on the ground toward the end of the week, because on Tuesday that was not possible.
{It’s not Bush’s fault that the Director of FEMA who he appointed is a complete idiot.}
no comment. Acctually on Wed. Bush could have sent C130 full of food to New Orleans airport or if that was unsafe, to the nearest safe airport and called Louisiana Governor to have the National Guard meet the food there.
{ It’s not Bush’s fault that the nearly three full Divisions were never activated until wednesday. One division is the 101st AirMobile that has HUNDREDS of Helicopters.}
You are right. Bush does not command the Louisiana National Guard, The Governor does.
Stephen Daugherty Wrote:
{And what about our refining capacity? The oil companies have refused to invest in greater amounts of that, instead piling on greater and greater supplies on fewer and fewer refineries.
They could have invested, but they were too busy making profits, which new investment in refineries would have cut down on.}
The last U. S. went online in 1976. I could be wrong but I don?t think any are in construction at this time. It takes 20 years to successfully hurdle all the regulations and very few communities want them around.
Stephen, do you have a couple of hundred acres near your house? If Clinton and the Greens would not have nixed ANWR in 1995 we would have another million barrels of oil a day, but would probably have to send it to China to get refined.
Our congress is also our enemy because of their mandate that we produce some 13 special boutique blends of gasoline. I heard that gasoline refined in northern Ill. can not be used in Chicago. The FTC says the mandates add up to 8 cents to a gal.
Posted by: George at September 3, 2005 03:08 PMGeorge,
“Today you can findit as low as 2.74 in St Paul”
Fuel in Phoenix went from $2.69 to $2.99 on Tuesday. Today it went to $3.19.
I don’t think that I want to drive to St. Paul for cheaper fuel.
BTW, I installed the 3D theatre at the Science Museum of Minnesota in St. Paul.
Posted by: Rocky at September 3, 2005 03:40 PMMister Magoo the Democrates(communist) dont care about any one let alone this nation.
Posted by: Norman L Evans at September 3, 2005 03:46 PMNorman,
“Mister Magoo the Democrates(communist) dont care about any one let alone this nation.”
But they do care about spelling and punctuation.
Posted by: Rocky at September 3, 2005 03:55 PMJack,
In response to your perceptual statement: Yes, we’ve been hearing for some time that the economy is on the rebound, that things are getting better, etc. Frankly, I don’t see it. And neither do millions of other Americans.
If I were in the top 2% of U.S. wage earners (the real beneficiaries of Bush’s tax cuts), perhaps I would agree, as you do, that the economy is a-ok. But most normal citizens such as myself certainly do not feel that way, a fact borne out by The American Research Group. In August of 2005, only 29% of Americans believed that the economy was doing better, while 53% said it was getting worse. (17% said it was the same, and 1% were undecided).
Whis is this? Well, two weeks ago, CNN reported that while personal income grew by 24% over the past 6 months, inflation grew at 29% during the same period — meaning that most people just aren’t making ends meet, regardless of what the White House has been stating. Yes, the economy is growing. But inflation is growing faster.
I’m no economist, but I do believe the main reason for the prolonged boom in homebuying (which is a great thing; don’t get me wrong) is directly attributable to prolonged boom in low interest rates. I think it’s great that low rates make homeownwership a reality for millions. But why doe we have these low rates? As a hedge against inflation — which again, is growing.
And please don’t blame Clinton for the stock market bottoming out. You are smarter than that. All I know is that when Clinton left office, we had a $5 trillion surplus, and now we have a $3 trillion deficit.
So how is the economic “recovery” benefitting me again?
Sorry, guys, about the bad punctuation. I’m a bad typist.
Posted by: Mister Magoo at September 3, 2005 04:05 PMMister Magoo the Democrates(communist) dont care about any one let alone this nation.
Posted by: Norman L Evans at September 3, 2005 03:46 PM
Ummm…what the hell is this supposed to mean?
Posted by: Magoo.
Posted by: Mister Magoo at September 3, 2005 04:08 PMPerhaps I should have said, the era of cheap energy is over..?
AP,
I doubt this is right, either. Technically, Jack is right, though practically he’s wrong. Obviously, we won’t run out of every drop of oil on the planet but that’s only because at some point the price of it will exceed the price of alternative sources of energy. Oil prices may drop over the course of the next three to five years, but they’ll again climb to much higher prices in the mid-term future. It will get a lot higher over the long run. Even Daniel Yergin’s article, to which Jack provides a link, stresses that we aren’t running out “yet” and that “the growing supply of energy should not lead us to underestimate the longer-term challenge of providing energy for a growing world economy.”
But I’d argue that as we perfect new technologies in other areas - solar, fusion, geothermal, etc. - the price of energy will again shrink substantially, possibly to very low, if not negligible, levels. The key here is economies of scale. The government shouldn’t bet on specific technologies (though it might provide some R&D dollars if we want to maintain the U.S. eroding edge in innovation) but it can provide incentives for a broad base of alternative energy sources.
For example, consider the deal that SoCal Edison made with Stirling Energy. That startup, which uses heat antenna technology, has faced the economies of scale problem. As Business Week reports,
“Our dilemma has always been how to get costs down,” says [CEO] Osborn. The dish generators are costly beasts — $250,000 each. But that’s because most have been hand-crafted in sporadic lots of one or two units. Building a group of 40 or 50 would trim the cost to $150,000 apiece, Osborn says, and the company has estimated that mass production could slash dish costs to $80,000, or perhaps just $50,000.
The price SoCal Edison is going to pay for this kind of energy has got to be approved by the California Public Utilities Commission but it’s looking like a done deal. And Cal’s Republican Gov. Arnold S. appears to have played a constructive role in all this. Anyway, the point is that government can work with business to create the kind of economies of scale to make alt energies less expensive over time. I think it’ll happen if we can just keep the world intact in the meantime. Truly good government would help us buy that time.
Posted by: Reed Sanders at September 3, 2005 04:28 PMReed Sanders,
Neat idea! However, I still want one which can take a family or individual off line. If Kartina and other power outages have taught us one thing it should be the need for Electricity is paramount to Civil Authority. So how much would a dish cost for a house?
Magoo
I don’t blame Clinton for the stock market. Clinton was a good president. I just don’t give him (or any president) too much credit for economic growth. The economy began to grow in 1991 before he was elected. The stock market decline started in 2000 when he was still president. The mythology about the golden Clinton age is just that – mythology. The economy is in about the same condition it was in 1997/8. Some people like to use 1999-2000 as the base, but that was an unsustainable bubble.
A couple of things in the 1990s were very helpful and they have been reversed now. One was the low price of energy (gas reached an inflation adjusted lowest price ever in 1998) and the other was the low amount of money we could spend on the military and homeland defense. Energy prices are higher now because of the cyclical thing a talked about above and from greater demand from China and India. It is hard to blame Bush for either of those things. Defense spending was low in the 1990s because we convinced ourselves that the world was a much safer place. That is what most people thought, so it is hard to blame Clinton. I don’t enjoy the blame game as much as most others.
I am just into the upper half of wage earners in the U.S. and I saved a couple thousand dollars as a result of the Bush cuts. I don’t believe in lower taxes to save myself money, however. I think we have to have them to try to control government spending. The only time we have any discipline at all is when money is tight (even then not always). It makes perfect sense, when you think about it. There are always “good” projects if the money can be found. The tax cuts have also expanded the economy, and if you raise taxes you will cause some pull back. Liberal and conservative economists disagree about how much, but nobody disagrees that a dollar in additional taxes will not yield a dollar in additional revenue for that reason.
AP
Some of the above re energy. Even with today’s very high prices for gas, they are only about the same as the inflation adjusted price in 1980. After that, we say a steep and sustained drop for the next twenty years.
Another important adjustment to make is energy as a percentage of income. That number is even lower and that is the true measure of “cheap energy”.
Back in the 1950s, people were willing to pay a nickel for a cup of coffee and a quarter for a gallon of gas. Today many people routinely splash out $3-4 for a cup of coffee (and stand in line to do it) and complain about $2.50 dollar gas. If we used the same multiplication factors, gas should be selling for around $15.
Maybe we should worry about cheap coffee and give up the on cheap gas.
Jack,
“Today many people routinely splash out $3-4 for a cup of coffee (and stand in line to do it) and complain about $2.50 dollar gas. If we used the same multiplication factors, gas should be selling for around $15.”
But do they sell designer gas to the masses, and even they did, how many people would stand in line for it?
I don’t know what if any kind of coffee you drink, but coffee in the 50’s and 60’s tasted like crap. I occasionally will indulge myself in a “good” cup of coffee just to know what I am missing.
How much of the price of gas is taxes, how much is additives for emissions. Lead was added to gasoline, yet we were charged extra for unleaded fuel.
I think you all are taking a too narrow view of how much our economy and our way of life depends on oil. We do much more with oil than burn it in SUV’s or generate electricity. Take a look and notice all the plastic things around you. They were crude oil at some point. What percentage is made from recycled plastic? Not much. According to the EPA only 5.4% of plastics discarded anually are recycled.
The computer you’re looking on was mostly crude oil at some point. The drug you take for your high blood pressure was made with crude oil. The paint on your walls came from crude oil. Oil has worked its way into every facet of our lives, not just transportation.
Sounds like coming up with alternatives for all these applications will not happen overnight, right? In reality, many industries have been forced to ween themselves off of oil because of environmental regulation. Research into cleaner ways of doing things with less solvent (derived from crude oil) has been going on for the last 20 years in order to comply with more and more stringent environmental regulations on emissions. Coming up with the most efficient way of complying with regulations became a competitive advantage. I suppose we could have waited for the free market to drive industry in the inevitable direction, but that didn’t seem to work too well in the case of transportation. Maybe if we had held GM’s feet to the fire in the early 80’s we wouldn’t find ourselves where we are today.
Posted by: DRA at September 3, 2005 06:04 PMHenry,
It appears to me that these particular types of dishes are more useful on a massive scale that allows dish energy to hook directly into the energy grid. But who knows? If the tech and the economics improve, perhaps one day there could be smaller ones for home usage. In the meantime, technologies allowing for solar panels on roofs or “solar shingles” seem to be improving. And California has the Million Solar Roofs Initiative, though I don’t really know if it’s going to fly. We’ll see. This seems more like the kind of idea you’re talking about, potentially giving people the option of “getting off the grid” even while making the grid less dependent on centralized resources. Others here may know more about the initiative than I do.
Posted by: Reed Sanders at September 3, 2005 06:40 PMEven with today?s very high prices for gas, they are only about the same as the inflation adjusted price in 1980.Even with today?s very high prices for gas, they are only about the same as the inflation adjusted price in 1980.
Jack,
I love this argument, which has been used by the likes of George Will. What you fail to say is that 1980 came during a period of very high oil prices, as a history of oil prices will show. So, the comparison is misleading. You’re comparing today’s high prices to a spike rather than to most of the 20th century. Prices feel high because they are pretty high by historic standards, because so many people drive glorified trucks today, and because wages are rising more slowly than inflation.
Posted by: Reed Sanders at September 3, 2005 07:03 PMOn your graph, it shows that the price of oil was near an all time low as late as 1998. Also oil price is not the same asprice of gas . I found this graph.
Oil per barrel will eventually become more expensive. That is not the argument. It is that we will never run out of it. AND that we will come up with better energy alternatives. I repeat that I want oil to become a smaller part of our energy mix. Hypothetically (not real figures) if today a BTU of wind produced energy costs $2 and a BTU of oil costs $1, we should use more oil. If oil goes to $2 we would use both equally and if oil goes to $3 we should go with wind. What that means is in the long run oil can’t become more expensive than the next alternative. But it is not such a zero sum.
As oil becomes more expensive, people figure out ways to use it more efficiently (the U.S. uses a 30% LESS energy
“>per unit of GDP than we did in 1970) AND they develop alternatives, which become cheaper. Oil wasn’t always so cheap until Edwin L. Drake figured out how to drill for it and John D. Rockefeller organized the industry. Technology changes scarcity.
I am tired of all these liberal dems always being so self centered about issue and problems in the USA only. It makes me feel ashamed to be an American when people from other cultures and nationalities read these remarks. Most people outside of the USA really think President Bush is a remarkable man for wanting peace and prosperity to the unfortunates of the world. It would do the dems some good to broaden their horizons and remember that this is one earth that we all share.
Posted by: Everett Hatton at September 3, 2005 06:14 AM
Everett, I don’t believe this. I am stunned!!!! As someone who is outside the US, I don’t recognise this President you describe. Wanting peace and prosperity for the unfortunates of the world? He doesn’t even want that for the unfortunates of the USA, never mind the World!!!
Posted by: Paul in Euroland at September 3, 2005 09:04 PMJack,
Technology is not the issue, the fact is to move our Society off Oil the price must be made high enough to harm The Market. In doing so Alternative fuel and Hybrids (sp) can quickly come into play. The reason is two-fold. First is Air Pollution and the need to lower Global Warming. The second and most important is that Oil can make enough other products that in the long run will be more profitable.
Also oil price is not the same as price of gas
Thanks for the graph, Jack, but it more or less shows the same dynamic as the oil graph and supports my point. Yet, I think we agree on two things: one, the price of oil is likely to take another dip in several years before it begins rising again and, two, we shouldn’t let that dissuade us from seeking out and developing other sources of energy.
Posted by: Reed Sanders at September 3, 2005 09:59 PMHenry
Yes.
Reed
I just meant to show that the price of gas as dropped slightly in relation to the price of oil. That shows that they can diverge based on the efficiency of refining etc.
I am advocating development of other sources. I am just not much worried about it. The market works very well. Price rises in oil will make us use less of it and develop alternatives. We use 33% less energy per unit of GDP than we did in 1970. It wasn’t planning that got us there (the synthetic -fuels initiative was just a horrible waste of money and destructive to the environment); it was the higher prices.
It wasn?t planning that got us there
Jack,
Of course it was planning, if by “planning” you mean governmental interventions and policies. I know you’re not so naive as to think Congress’s actions don’t effect the degree to which the U.S. uses one source of energy creation over another. France, for example, is highly dependent on nuclear power. We are not. The difference is largely governmental rather than economic.
I’m a fan of markets and self-organizing systems in general, but I’m well aware that truly “free markets” exist more in our heads rather than in our economic systems.
As for the need to move away from oil in particular and fossil fuels in general, there are other imperatives besides markets at work, especially military (obviously) and environmental (global warming). I’ve lived along the gulf coast and suspect that the global warming is already influencing the intensity of storms, though I recognize there’s an ongoing and legitimate debate about this. (That is, I think the debate about the human impact on global warming is pretty much over except in the field of politics, but the debate about whether or not it affects the intensity of hurricanes is quite legitimate.)
Anyway, my feeling is that since governmental interventions are ongoing and inevitable (and I, like you, am not a fan of price controls), we should do it as wisely and well as possible.
Posted by: Reed Sanders at September 3, 2005 11:01 PMBut I’d argue that as we perfect new technologies in other areas - solar, fusion, geothermal, etc. - the price of energy will again shrink substantially, possibly to very low, if not negligible, levels.
Maybe. But my point was to do a little judo throw on Jack’s (and the Republican’s) argument that cheap oil is what’s keeping us from adopting alternative energy. You’re absolutely right that the only reason alternative energy is so expensive right now is that there isn’t a nationwide initiative to commercialize it.
We’ve been focused on alernative energy research but, now is a really good time to put that research to work. Make some decisions, and build infrastructure and processes that would make alternative energy use widespread and cheap (and create millions of new jobs in a brand new alternative energy industry).
We use 33% less energy per unit of GDP than we did in 1970. It wasn?t planning that got us there
Yes it was, Jack. In the 70s, after the OPEC embargo, the United States embarked on a massive national program to use less energy. I don’t think you can even buy a non-Energy Star compliant appliance anymore. And CAFE standards had a huge effect. It’s time to ramp it up again.
Here’s the problem with your market solution. Once oil production hits peak — as it is expected to do within the next 15 years, if it hasn’t already — production drops off very, very fast. If we wait until then to reduce our dependency on oil, we’ll be building quick and dirty coal power plants just to keep the refrigerators running.
It’s better for business AND the environment (and national security, for that matter) to be proactive in significantly reducing this country’s dependence on oil right now.
BTW Jack, your basic premis doesn’t take into account the alarming surge in worldwide demand for oil. Supply will never again meet demand no matter how many new refineries are built or new wells dug.
Worldwide, we pump two barrels for every new barrel discovered. Current production isn’t sustainable, and oil producers will never be able to keep up with exponentially growing worldwide demand. As Chevron says, “The era of easy oil is over”. And hard oil ain’t cheap.
Yes - the end of cheap oil is upon us - but now that it is here, a number of things start to happen:
1) Fischer-Tropsch synthesis - this is a process, developed by German chemists in the late 1800s, that converts coal to gasoline, diesel, aviation fuel, etc. - it also produces the fuel much cleaner than refineries, because sulfur compounds can be removed as part of the process. It was used extensively in Germany during WWII and in South America - it becomes affordable when Oil prices rise above $30/barrel. Montana alone sits on enough coal to provide all America’s oil needs for 40 years – then add the rest of the western states, West Virginia, etc.
2) The Canadian Tar Sands (mentioned above)- a huge source of oil that becomes cost-acceptable at the current oil prices. Watch Cheney come back from Canada with announcements of a mega-deal on tar-sand extraction industries - stabilizing oil prices and taking the wind out of the “we’re in Iraq for the oil” theories.
3) The US Western oil-shale deposits - these are estimated to hold more oil than the Saudi Arabian reserves ever did. Again, higher oil prices now make extraction economically feasible.
4) Non-functioning oil wells in the US - that have been shut down because it’s cheaper to import than process from those wells. Watch them start to become active again.
The key to all of those is that it will be more expensive - but doable.
To all that blame Bush for everything,the libs, Clinton and all his, Why Can’t We Understand Those Who Hate Our Way Of Life”. Yeah right,lets depend on the government for everything. Bite me. They need to get it right. To say we’re to cater to their socialist ways, and that big government is the answer is absurd. I don’t like what the republicans are doing as far as spending, but at least they have made good with the hand they were dealt. Eight years of Clinton, which did nothing for our military, and everything for China, Korea, and AlQueda. If you don’t like it here, get lost. They need you more than we do.
Posted by: John at September 4, 2005 04:54 AMsorry about the grammer. It’s early and I didn’t proof read it.
Posted by: John at September 4, 2005 05:16 AMJohn,
Blaming the Democrats for the Weakness of Republican Leadership reminds me of 1992 when they did the same thing. Besides the question that Americans must face in 06 & 08 is if “We the People” still believe in continuing to strive and build The Most Righteous Nation on Earth. Or are you like the President and want to oppresse the American Public from what is known to be Unalienable Right Regardless according to The Laws of Man & Nature’s God?
A Clean Energy Source and a positve Environmental Economy is paramount if America plans to remain the Biggest and Badest Dog on the block during the 21st Century.
Posted by: Henry Schlatman at September 4, 2005 06:07 AMSpartacus, as Jack points out, we’re never going to run out of oil completely, but all the methods you describe are expensive — and dirty. Every one of those “solutions” generates more carbon and greenhouse gasses than current methods.
If we’re not going to turn the Earth into a hothouse extracting oil from shale, tar, and coal, we’re going to have to get really good at carbon sequestration — which is an additional cost.
And this is what I’m talking about. If we don’t enact a massive plan for commercializing clean, alternative energy now, we’ll be torching anything that burns just to keep our refrigerators running.
The end of cheap oil isn’t the end of the world, but we need to decide right now what a post-petroleum world should look like and work backwards from there. Otherwise, when oil prices sharply increase to the point where most people can’t afford petroleum-based energy, we’re going to burn whatever it takes to keep things running; screw acid rain, screw climate change, screw air quality, we’re going to do whatever it takes.
Posted by: American Pundit at September 4, 2005 07:50 AMAP,
You know we should let Jack and other Republicans believe that Oil is King at least until 06. At that time, I expect the Democrats of a Third Party could gain plenty of Seat in the House and Senate with a sound and doable Clean Energy Bill.
Although I do not now right off hand what the total number of Local, State, and Federal Government vehicles, but replacing just half of the entire fleet with alternative fuel engines would have a major effect on the Oil Companies to invest in the newer technology or be consumed by The Bull of The Market.
Posted by: Henry Schlatman at September 4, 2005 08:27 AMWas a time it was laughable for someone to say America might run out of virtually free potable water. Was a time when it was laughable if someone said we would run out of free unpolluted air. Now that multi-billion dollar industries have sprung up to provide us with unpolluted air and water, I guess the last laugh is on Jack, who thinks we will never run out of oil.
For the person that can no longer afford it, they have run out.
Some people just never learn…
Posted by: David R. Remer at September 4, 2005 09:27 AMDuring Bush’s 2002 State of the Union address, he promised $2 billion for fuel cell and hydrogen fuel R&D. Does anyone here know whatever happend with that pledge — and to that money?
Posted by: Mister Magoo at September 4, 2005 10:12 AMMister Magoo, hydrogen pilot programs have already sprung up here and there. Hydrogen cars have existed for years.
The peanuts the administration throws out for alternative energy research is just an excuse to put off weaning the country from oil. The technology already exists, but the private sector needs seed money to commercialize it and make it cheaper to produce and more affordable and practical for consumers.
We need a program to commercialize alternative energy, not funds to research already existing technologies.
In the 70s, after the OPEC embargo, the United States embarked on a massive national program to use less energy. I don’t think you can even buy a non-Energy Star compliant appliance anymore. And CAFE standards had a huge effect. It’s time to ramp it up again.
Good point.
Posted by: Reed Sanders at September 4, 2005 12:44 PMAnnie…
I’ve just got to say that I hope, someday, to hear YOUR opinion on a matter. Do you do anything but quote other viewpoints from books and still misspell some of the words?
There are too many powerful people, in both the public and private sectors, that have a substantial interest in us being tied to oil for our fuel needs. They think of themselves only in their selfish short term interests. If there was a real interest in finding someother source of fuel to free us from the middle east and the possibility that our own reserves will run out, it would have been done 2 decades ago. The politicians, as well as the captains of corporate America with an oil interest, know that they will only have to weather short storms of the voters ire on most issues. People have so many other issues to deal with in their lives that they do not have the time to devote to continually holding these people to task. So you hunker down and do some public relations speeches loaded with a bunch of less than half hearted promises and wait … it will blow over and then business will go on as usual. You will make money and the average Joe and Josphine will turn back to thier smaller worlds and its problems
Posted by: RJ at September 4, 2005 01:13 PMHenry
Why won’t you just let me agree with you?
We will never run out of oil. That is just true. But it may become more expensive than we are willing to pay. That doesn’t make oil king. On the contrary, high oil prices will push it off the throne.
Your statement about alternative energy is close to a tautology. If alternatives become cheaper than oil, people and firms will be eager to use alternatives. You can see that even in this short term. Car dealers can’t keep hybrids on their lots, but they are having a hard time selling SUVs. Several people in my office who used to drive have begun to take public transportation and/or ask to telecommute a couple days a week and this is happening all over. Read between the lines. In recent days, articles in many local papers have featured local officials complaining that their taxes on gas are not raising as much revenue – BECAUSE PEOPLE ARE USING LESS.
David
Oil will always be available at some price. That is what I said and I am right. The same is true of air and water. You can buy chemically pure water or oxygen, if you want. Of course, you don’t have to. The air in most American cities in much cleaner than it was a generation ago and you can drink local water, as before. The bottled water is a marketing ploy and much of the bottled water comes from “municipal sources” anyway. Sometimes I am amazed at how clean things have become. The idea that the environment in the U.S. is declining is just a really big myth not supported by any objective information or observation.
Magoo
An update on Bush’s hydrogen initiative can be found here.
Most major energy and car firms are working on hydrogen fuel cells. The technology is improving and it will burst on the market much like hybrid cars have done. It will not – and should not - be primarily a government responsibility.
RJ,
Although theres was some very wealthy and politically connected citizens of the Whaling Industry in this Country in the 19th Century, the Public won out with the cheaper Crude Oil. Today is no different because no amount of PR can stop the growing effect Gas prices have on every Consumer. Point in fact, a $.30 increase per gallon may sound small, but when the math is done on the average increase per fillup is about $6.00. That money is less money Mr. Wal-Mart and Company get to line their pockets.
Yes, the Oil Barons in America and elsewhere beter be glad for having Prsident Bush in office; however, given his job approval rating and the events of the past week, the Barons may want to rethink their marketable & political position.
Posted by: Henry Schlatman at September 4, 2005 03:28 PMJack,
Thanks for finally agreeing with me, now the problem is to show The Market Leaders that it is in their Inherent Best Interest to eliminate the Energy Bill of Individual Consumers.
Hydrogen Fuel is needed for Space Exploration and is why it is being pushed so hard in Public, but the real money belongs to Nano Motors and other such inventions that do not require replacing the energy source everyday. Because unless Ford gets a dollar of of each gallon of gas, does the Stockholders care about how much or little profit Exxon or Mobile makes off the sale of their vehicle? Surely Small Business does not care and that is Bush’s base.
Posted by: Henry Schlatman at September 4, 2005 04:01 PMHenry:
I don’t know about you but I can’t take too many more extra $6.00s per fillup. I was on vacation one month ago and was choking on the gas at 2.19 per gallon give or take. One month later I see gas between 3.09 and 3.19. The 70’s should have been a wake up call. If they really wanted to devlop an alternative fuel source it woul be done in 30 years. I am so sick of heariung that they are working on it, or that there are the complications of big business intracacies, etc. slowing things down. I remember when gas cracked a dollar I said I would love to see it at 70 cents again. When it hit 1.25 I longed for a 1.oo along with everyone else. And so on and so on. Then we are told we should be happy that we are not paying what people elsewhere pay. No solution, just count your blessings. Be happy. I don’t want to pay what others pay in other coutries and I think it is robbery that I am paying what I do here. I look around I see more and more stations going up, and old ones being torn down and rebuily bigger and better. Business is good for these people and they laugh as they make the $ off our backs. A Speedway not too far from me raised his prices .60 over night. As I drive around I will see a certain named gas station, it applies across the board to all of them so pick a name, and 1/2 to 2 miles away I will see another of the same brand. Same style station, same county, same town in most cases. Yet their gas prices can be anywhere from a dime to 18cents or more. Why? And how is it I can see a tanker pull out of one station and then pull into another just down the road, but a diffeerent manufacturer and fill their tanks? What happened to their independent special blends? Same tanker filling both the knock off stations as well as the big name ones. Another scam being perpetrated on the American public.
I try not to knock the President too much. Horendous conditions he had with 9/11 and same for New Orleans. Government always moves too slow with very few exceptions. I was not opposed to going into Iraq, I am opposed to fighting the war with our hands tied. He needs to unleash the military and especially the Spec Ops people. If you are in a war you fight a war. You have to bring the hardship to the people’s doorsteps. It has to be more uncomfortable for them to conceal information about the guerillas, etc. than the war just passing on around them. WT Sherman and Patton understood this. Yes it is horrible, but so is watching the coffins continue to come home to America when we are trying to help the people. And the thanks we get from those crazy lunatics running things over there is higher barrel prices. If you are in it, you are in it to win it. This gas issue will be a huge blow to this country if it is allowed to continue. Transportation businesses have absorbed all they can and it is now coming to everyones home. So, in essence, the Arab countries have brought the war to our doorsteps. The question now is how uncomfortable are we?
Posted by: RJ at September 4, 2005 10:20 PMyeah, oil is great. but, we all know our dependance on oil is all on the shoulders of “big oil”. We have had technologies since the 50’s that eleminate oil as a source of power all together. Yeah sure, you sound like a quack consiracy theorist if you mention the truth, but it still remains the truth. Ha ha we all have a good laugh at the crazy guy and then go back to debating wether its right or wrong to have our wallets raped, our troops die, and our foriegn policies shaped over oil. You know what I’ll do if gas goes to 5 dollars a gallon… I’ll buy it. I don’t have a choice. but don’t blame me, I’m not making a dime on it. God bless America.
Posted by: Rob Mackey at September 4, 2005 11:11 PMWe should get off our dependency on Arab oil
Posted by: Mike T. at September 4, 2005 11:33 PMI don’t know about you but I can’t take too many more extra $6.00s per fillup.
RJ,
You’re not alone. A lot of people, already shocked by current prices, are likely going to be stunned by the even higher prices we’re going to be seeing.
It’s still too soon to know what’s going to happen as a result of Katrina, but in the worst case it’s going to take months to get things back online. That’s bad news because the Gulf region “accounts for 17% of the country’s refining capacity and one-quarter of its daily crude output,” according to Business Week.
In the worst-case scenario, though, it will take months to get Gulf production and refining back into full swing. That could lead to regional shortages of gas and other fuels and could send oil prices soaring to $90 a barrel or more for an extended period. The result would be a huge drag on the economy, clobbering corporate profits well beyond the energy-intensive sectors such as airlines.Perhaps the biggest danger in the short term are actual shortages. “That could keep people from getting the gasoline they need to get to work and could even result in temporary factory shutdowns,” said that same article.
So hold on your hat and don’t do any joy riding. The idea that, as jack says, “we can never run out of oil” may take on a less theoretical tone in the coming weeks if the situation in Louisianna proves to be as grim from an oil infrastructure point of view as is from a humanitarian one.
Mike T., a goal desired by most of the people in this country on the right and left. How fast to accomplish it is the real issue. Stockholders and CEO’s of oil and oil based processing companies want to go only as fast in the transition as is necessary to keep historical oil profitability intact. Environmentalists and foreign policy peaceniks want to make the transition as fast as possible regardless of costs or shifts in profits from some industries to others.
How fast should this transition take place? Faster than the oil interests would like, and slower than the environmentalists would like. Seems to me a solution could be found between moderate Democrats and moderate Republicans if such species could be found in the Congress and Whitehouse.
Posted by: David R. Remer at September 5, 2005 12:20 AMSeems to me a solution could be found between moderate Democrats and moderate Republicans if such species could be found in the Congress and Whitehouse.
Yes, the scarcity of such people is keeping the nation a house divided against itself. Such a house doesn’t stand any better than New Orlean’s levees.
There are two quick things the government could do if it could find the will:
1) Be more slightly aggressive with the CAFE standards. I’ve read that if our vehicles got an average of 40 miles per gallon, we could save six million barrels of oil per day. That’s apparently a lot more than is being lost to the Katrina crisis right now.
2) Have more states require diversity in terms of where they get energy and how it’s produced. In other words, diversify, diversify, diversify. That prepares us to handle a crisis like this one.
Everett Hatton,
Most people outside of the USA really think President Bush is a remarkable man for wanting peace and prosperity to the unfortunates of the world.
Time to wakeup Everett!
According to World wide pollings, it’s NOT AT ALL the case. Most people over the world think in fact that world is a far more dangerous place since G.W. Bush:
http://www.pipa.org/OnlineReports/BBCworldpoll/html/bbcpoll011905.html
http://news.bbc.co.uk/2/hi/americas/4124164.stm
Do you a favor, would you?
Google a little more overseas to *really* learn about worldwide opinions on your current USA president…
Philippe Houdoin
Jack, we can never run out of bison, the hunter’s said. We can never run out of blue whale the whalers said. According to the logic of your comment, the fact that we still have a thousand or two bison hanging around in Yellowstone proves the 19th century hunter’s right.
But the industries and jobs and ways of life which centered around the bison are gone. For all intents and purposes, they ran out of bison.
That is precisely what is going to happen with oil. And just as the cost of living in the days of bison hunters has increased hundred’s fold since the seas of bison roamed, so too will the cost of living increase as oil becomes more scarce. Oil scarcity need not result from depletion of oil in the ground as you probably know. It can occur as a result of a nation like China with a GDP growth rate capable of ever higher bidding to insure its supply of oil. In fact, that is happening as we speak.
The pricing of oil through supply and demand will render it depleted for all those who can no longer afford it. And that is the issue with oil. Industrializing third world nations which can compensate higher oil prices in competitive bidding with other nations with low wage manpower for production, will get the oil. Nations like ours with increases in poverty and stagnant wage growth due to rising costs of living (partially due to the rising price of oil) are increasingly losing their ability compete for oil supplies at rising prices. One need only look at the steadily rising trade deficits over the last nearly 2 decades as evidence that is true.
China’s sustained GDP growth which has been triple and now double ours, is in a position to afford the increases in oil prices, which is precisely why China has landed numerous oil contracts with various nations just in the last 6 months. China is securing oil contracts, and will be able to out bid nations like ours eventually if their trade surpluses are maintained into the future (an increasinly likely scenario).
So, I concede, the planet may never run out of oil but, one day the oil in the world will be like bison in Wyoming which still has room for what are left. The immensely high priced future oil will be found in a place like China with sufficient export wealth to buy up remaining supplies.
And further into the future what oil is left, won’t be worth acquisition costs, like the few remaining Blue Whale.
Hopefully, fusion, solar, and other energy sources will be established at pricing cheap enough to keep living costs still accessible to all the citizens of the U.S. Current trends don’t seem to indicate that will be the case however. Not with poverty increasing in America and our cost of living per wage dollar earned on this continual decline since the late ‘60’s and 1970’s. It now takes approximately 1.6 times the wage earners to maintain middle class living standards as it did in the 60’s and 70’s.
Oil demand outstripping supply and competitive bidding by nations which can turn a dollar’s oil into the largest GDP output, will continue to pressure Americans to work more hours to keep a middle class living standard.
This is why we must lessen our dependence upon oil. We can’t afford the social costs of it pushing more and more Americans into lower standards of living, like those revealed in and around New Orleans this last week.
RJ,
As higher prices squeeze the Little Man (Person to be PC Correct)just imagine how harsh The Market will react when the Reports over the next few months show the American Economy slipping back into a Recession. Watch the price of every itm you buy over the next few months go up steadily. How do I know this? History is repeatting itself. 1973-1982 vs, 2001-? And still Americans do not know what making real money is all about. Because as you and many other Americans have to spend more on “The Basics” our economy falls. Than all that is left are higher wages which cuts into the Profits for the Stockholder.
Annie
Due to your flame baiting and violation of our policy in more than one of your comments here, your privilege to post comments at WatchBlog is removed.
Posted by: Watchblog Managing Editor at September 5, 2005 07:25 AMWe should get off our dependency on Arab oil
Then you need to vote for representatives who will do that, Mike T. John Kerry campaigned on doing it within 20 years. John Kerry was the guy warning that our dependence on foreign oil is a threat to our national security.
Energy independence is part of the bedrock of Democratic policy, and Democrats in Congress are constantly introducing legislation to make it happen — and are always shot down by Republicans.
It’s pretty hypocritical to say that eliminating our reliance on Arab oil is important, then vote for representative who don’t feel the same way.
Posted by: American Pundit at September 5, 2005 08:53 AMThis whole discussion is kind of ridiculous and misses the bigger picture. Prices of oil are going up because of supply and demand. Government intervention only increases prices, because the government (excepting the military) is inept at everything it has ever done.
The Federal Reserve Board has been fueling the inflation scenario and continues to do so with the congresses help and co-operation. An increase in the amount of money PRINTED equals inflation and NOTHING else in the history of mankind has ever caused inflation.
For cheaper oil prices get the government out of the way and do away with the Federal Reserve Board.
How come no one on this blog has talked about ktrina, what can be done NOW, what you expect to see done to help these people, etc. Seems to me that this Blog has been missing the boat for over a week now.
Posted by: Linda Haenchen at September 5, 2005 10:48 AMGovernment intervention only increases prices, because the government (excepting the military) is inept at everything it has ever done.
Interesting, John. I wasn’t aware that government subsidies for the oil industry increase the price of oil. Tell me more…
I actually agree that the price of oil is going up because of supply and demand. Supply will never again meet demand — so prices are going to keep going up.
Posted by: American Pundit at September 5, 2005 10:59 AM I wasn’t aware that government subsidies for the oil industry increase the price of oil. Tell me more…
Of course government subsidies increase the price of oil. Anything that the government subsidizes is run inefficiently and therefore the prices increase. If the programs were run efficiently to begin with they would not need sudsidies AND the government subsidies make it more difficult for competitive forces to develop new techniques and/or products to compete. I DO hope that you were being facetious when asking the question.
Linda, as far as the hurricane and the misfortunate people of the gulf coast, I was greatly saddened by the incompetence of the governments in general. However, there were and are many bright spots with the selfless actions
of the people and Governors of Texas and Alabama particularly and I am sure many others that I am unaware of. In the long run the government will do much, I am sure, but each individual has to help where they can. Living in Connecticut, I am not sure what I can do but any ideas are welcome.
You probably have the most important comment of this entire blog. After all, no matter the price we CAN by oil. Meanwhile people have needlessly died and I am sure are continuing to die, although inlesser numbers. And the displacement and heartache being felt by millions of people may take several life times to dissipate.
Being a sportsfan, I watch with a comical interest as people actually discuss what will happen with the New Orleans Saints. WHO CARES.
What is happening with the children who need an education? What is happening with the families who are separated? What is happening with people with friends and relatives that are missing? And when is a congressional investigation going to look into why the response from the federal government took as long as it did? And, as far as I am concerned needlessly cost lives.
Linda, perhaps they are gathering facts before assigning blame, pointing fingers, or jumping to conclusions as some are want to do about no articles about Katrina so far here. WatchBlog writers are under no obligation to take requests. And no one but each individual writer knows why, what, and when they publish what they do.
Posted by: David R. Remer at September 5, 2005 11:51 AMTo American Pundit,
If John Kerry and the Democrats in Congress are so committed to energy independence, why won’t the and their environmental kooky friends allow us to drill in our own country?
Until other energy sources are developed, we need oil. Even as they are being developed, we will still need oil. We need to use all the resources available to us.
Posted by: mikechet at September 5, 2005 12:24 PMmikechet, The reason that liberals do not support drilling for the possible oil in ANWR is that the wildlife refuge like those across the country were created to be a safe “refuge” for various types of “wildlife” from the impacts of human development.
Despite what you have said, other energy sources have been developed; wind, solar, geothermal and other sources of energy are operating right now in the US, Europe and elsewhere.
Posted by: Warren P at September 5, 2005 03:59 PMIf John Kerry and the Democrats in Congress are so committed to energy independence, why won’t the and their environmental kooky friends allow us to drill in our own country?
I assume you mean in the Arctic National Wildlife Refuge. Because it’s just not worth it. There’s not enough oil there to make any difference, except to add a few more billion dollars to the pockets of some CEOs.
According to President Bush’s own Energy Information Administration, drilling the ANWR would only lessen America’s dependence on foreign oil from 62 to 60 percent.
2% just doesn’t seem worth it.
Posted by: American Pundit at September 6, 2005 03:52 AMThere seems to be some good short-term news on the oil and gas front. Of the ten refineries in the New Orleans area, six have begun some production, according to the New York Times. And CNN reports that the price of a gallon of gasoline has dipped about a penny over the weekend now that people are done with their Labor Day travels.
Posted by: Reed Sanders at September 6, 2005 10:04 AMJack,
This from,
http://www.postcarbon.org/forums/discuss_chevron#comment-101
“Chevron add
Submitted by Shepherd Bliss on Tue, 2005-08-02 16:26.
Chevron, Peak Oil, and China
“It took us 125 years to use the first trillion barrels of oil,” notes Chevron Corporation’s two full-pages ad that began appearing in July in the Wall Street Journal, the Economist, Financial Times and elsewhere. “We’ll use the next trillion in 30,” the ad continues, thus quietly admitting to the Peak Oil that the industry has not previously disclosed publicly.
“One thing is clear: the age of easy oil is over,” the ad reveals in a folksy letter from “Dave,” Chevron’s Chairman and CEO David J. O’Reilly. Most Americans are still unaware of the pending Peak Oil or try to deny the tremendous impact it will have. Chevron proudly presents itself as “the Good Guy” by informing the public of the lessening supply of petroleum at a time when the demand is soaring, especially in China, India, and other industrializing countries.
Chevron’s multi-million dollar global corporate goodwill campaign includes TV teaser ads throughout the US, Asia, Africa, the Middle East, and Latin America. Airport locations in Beijing, Moscow, Washington, D.C. and elsewhere broadcast the ad, also available online. Yet as the prices of crude oil and gasoline soar—symptoms of Peak Oil—so do the profits of Big Oil.
Exxon/Mobil also admitted to Peak Oil earlier this year, but without all Chevron’s fanfare. Their report “The Outlook for Energy: The 2030 View” forecasts a peak in five years. “No oil company has ever discussed peak oil production before,” writes energy consultant Alfred Cavallo in the May/June issue of the authoritative Bulletin of Atomic Scientists. “The public should heed the silent alarm sounded by the Exxon/Mobil report,” he continues.
Chevron and Exxon/Mobil are two of the largest and most profitable oil companies, so they should know a lot about petroleum. They have half the story correct—that Peak Oil is upon us—but they may have the timing off, according to at least half a dozen recent books by oil experts. Peak Oil may be sooner-rather-than-later.
“It is my opinion that the peak will occur in late 2005 or in the first few months of 2006,” writes geologist Kenneth Deffeyes in his new book “Beyond Oil.” Deffeyes was a Shell Oil company engineer and is a retired Princeton University professor.”
Where are the Vanderbilts, the Rockefellers, the Carnegies, the people with the vision, that drug this country kicking and screaming into the twentieth century?
Where are those entrepenurs that will bring energy into this century?
Will we wait until 11:59pm on the day the last drop has been wrung from the last oil well?
Posted by: Rocky at September 7, 2005 04:54 PM
