NationStates Jolt Archive

Okay simple question is the price of oil too high?

People are grumbling that it's too expensive and costs are going to rise...so people of the message board do you think government should act now, cut fuel tax.

Discuss people.

cutting fuel tax would only ever be a short term solution, as crude is only going to get more expensive.

i think this is mother nature / father economics' way of telling people that the age of the car is coming to an end.

Yeah its way too high - record highs as a matter of fact.

fuel tax cut? nah, the oil companies aren't hurting - ExxonMobile makes like 9 billion in pure profits every three months. What we need to do is push for much more funding in alternative energy. Slowly move away from oil and into more viable renewable and environmentally friendly energy sources.

And the age of Futurecars has arrived!

And the age of Futurecars has arrived!

Hydrogen cars are years away (like 20) I think we could all find our selves living in much more compact cities. With much better public transport.

Might make a better society. Having everyone living so close to each other...oh and the air might be cleaner. :)

Bicycles anyone? :D

First off, hydrogen cars aren't really viable... hybrid cars are.. and they have several hybrid cars on the market already. Sales are way up for these cars. They typically do like 50 mpg I believe.

http://www.rednova.com/news/display/?id=198382&source=r_science

"In most regions, IEA sees declines in the growth of oil demand this year. Therefore, the Paris-based agency forecasts that in 2005, average worldwide oil demand will grow 2.2% to 84.3 million b/d (Table 1). Last year's worldwide oil demand growth is pegged at 3.4%."

"After setting a record high in 2004, total US energy demand will climb slightly this year. But the amount of energy consumed per dollar of GDP will decline, continuing a trend of annual efficiency gains (Table 7)."

There will be no oil shortage.. why?

http://www.rednova.com/news/display/?id=201179&source=r_science

"Yet this fear is not borne out by the fundamentals of supply. Our new, field-by-field analysis of production capacity, led by my colleagues Peter Jackson and Robert Esser, is quite at odds with the current view and leads to a strikingly different conclusion: There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day - from 85 million barrels per day to 101 million barrels a day - a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand."

And we aren't having the shortfalls..

http://money.cnn.com/2005/08/02/news/international/china_economy.reut/index.htm?section=money_latest

"Economists said the sharp slowdown in China's oil import growth was partly explained by the growing availability of coal, fewer shipping bottlenecks and weakening energy demand in general.

The Commerce Ministry's survey showed China was likely to have a crude oil shortfall this year of 2.6 million barrels per day. That implied a 6 percent increase in crude imports this year, well down from last year's 35 percent surge. "

Oil is getting scarcer. Demand from nations like China and India is growing. Prices were bound to rise sooner or later. It just makes alternative energy technologies more economically feasible.

If you are talking US. Suck it up or buy a fuel-efficient car.

If you are talking Uk/EU, get on your bike and ride <guitar solo>!

Oil is getting scarcer. Demand from nations like China and India is growing. Prices were bound to rise sooner or later. It just makes alternative energy technologies more economically feasible.

You bother reading any of the articles I posted? I'm saying that much of the oil fears are misfounded.

I think the government should be pushing car companies to come out with hydrogen fuel cell-powered cars and look for alternative fuels. I think the government should also encourage wider use of public transit, perhaps giving tax breaks to commuters who use public transport or to companies who provide public transit as a benefit (such as Metrochek in the Washington D.C. area), and perhaps providing encouragement (including tax breaks) to encourage telecommuting.

But the biggest problem we have in this country is that we still have not adequately addressed our excessive reliance on foreign oil. It seems the lessons of the '73 gas crisis have still not been learned.

I think the government should be pushing car companies to come out with hydrogen fuel cell-powered cars and look for alternative fuels. I think the government should also encourage wider use of public transit, perhaps giving tax breaks to commuters who use public transport or to companies who provide public transit as a benefit (such as Metrochek in the Washington D.C. area), and perhaps providing encouragement (including tax breaks) to encourage telecommuting.

The US government is pushing for hybrid cars which have on average, a 50 mpg efficency. Fuel efficiency is also improving annually.

But the biggest problem we have in this country is that we still have not adequately addressed our excessive reliance on foreign oil. It seems the lessons of the '73 gas crisis have still not been learned.

That's funny because the US produces 40% of its own oil unlike many European countries. Our reliance on middle east oil is overstated at best.

You bother reading any of the articles I posted? I'm saying that much of the oil fears are misfounded.
No, sorry.

I haven't seen the numbers displayed in your thread yet. I want to say that comparing prices per gallon of gasoline to other items (such as premium coffee) are irrelevant. It is a simple numbers game designed to provoke an emotionally soothing response. So what if your favorite blend costs 12 bucks to the gallon versus 2.50 or 3.00 for gasoline? If the price of something like milk increased to six dollars a gallon (triple the current price) over two years, it would frustrate families and cause changes to the budgets of every business and government. There would be articles in the news every day about who controls all the cows.
Local statistics here show gasoline has risen from 1.28 two years ago to 2.49 (averages will vary).
In a market driven economy prices are always too high if you're buying.

Buy a hybrid car. The gas milage is great. I'm sure Americans can survive without SUV's. Maybe.

Buy a hybrid car. The gas milage is great. I'm sure Americans can survive without SUV's. Maybe.
Ford's going to make a hybrid SUV. They're using the "Escape" model.

Look, your not going to get much support for public transportation. Why, because the American Culture is about independence. Cars respsent that Independence. Millions of people in the USA builds car, race cars, and collect cars. Face it, cars are a part of our culture. So if you think they're all going to switch over to Mass Trans, because of a few cent rise in gas prices. You better think again. Anyways those Mass Trans, bus, trains, and cab are so nasty. Most of them have bums that use them for rest room.

Ford's going to make a hybrid SUV. They're using the "Escape" model.

A hybrid SUV? Sounds like a contradiction.

A hybrid SUV? Sounds like a contradiction.
It'll probably sell pretty well. People like to sit up high and have a roomy car, but they don't want to pay so much to gas it up.

Ford's going to make a hybrid SUV. They're using the "Escape" model.

what's the MPG rating on it?

what's the MPG rating on it?
36 city, 31 highway

36 city, 31 highway

That's much better then regular SUVS.. it is about time... I don't really like Ford tho.. i think they are moving much too slowly. I like Subaru, BMW (3 series are lovely), and Hyundai..

The price of oil is total bullshit. There is no crude oil supply problem; the huge reserves under the Gulf, in Canada's oil sands, and in the Middle East are extremely large and more than enough to supply us for the forseeable future. There is no incentive to lower prices, and so speculators bid it up and up without reason. They are trying to find the highest price they can without hurting the economy.

The other real problem is that we can't build new refineries. There hasn't been a new one in the US in 30 years because of endless lawsuits and ridiculous regulations. That drives up the price of gasoline and tightens the supply, which has an effect on oil prices. The other major problem is the $10 to $15 dollar "terror premium" which drives up oil on any hint of terrorism.

The solution to get cheaper oil is: build new refineries, cut gas taxes and redouble anti-terrorism and security. Chances are, catching Zarqawi and Bin Laden would knock off at least $10 per barrel. The government should also put price controls on it to keep it reasonable; oil is not an ordinanry commodity, it is vital to the economy and needs to be kept affordable. This is an example of market failiure at its highest, and even as a free market capitalist I support price controls on oil.

It's ridiculous to see oil company profits going up 40 or 50% and nobody wondering if they are intentionally bidding them up to make more money.

The other real problem is that we can't build new refineries. There hasn't been a new one in the US in 30 years because of endless lawsuits and ridiculous regulations. That drives up the price of gasoline and tightens the supply, which has an effect on oil prices. The other major problem is the $10 to $15 dollar "terror premium" which drives up oil on any hint of terrorism.


Well the president has outlined a plan to convert former military bases into oil refineries. Oil capacity (not production) is expected to increase by 20% by 2010. That means demand will be met. Yes, this spike is bullshit in my opinion. Gas efficiency is increasing in the United States greatly, and soon demand will start to fall. The thing is if demand starts to fall it will most likely be because of people buying hybrid cars and ditching their old ones...

The price of oil is total bullshit. There is no crude oil supply problem; the huge reserves under the Gulf, in Canada's oil sands, and in the Middle East are extremely large and more than enough to supply us for the forseeable future. There is no incentive to lower prices, and so speculators bid it up and up without reason. They are trying to find the highest price they can without hurting the economy.

The other real problem is that we can't build new refineries. There hasn't been a new one in the US in 30 years because of endless lawsuits and ridiculous regulations. That drives up the price of gasoline and tightens the supply, which has an effect on oil prices. The other major problem is the $10 to $15 dollar "terror premium" which drives up oil on any hint of terrorism.

The solution to get cheaper oil is: build new refineries, cut gas taxes and redouble anti-terrorism and security. Chances are, catching Zarqawi and Bin Laden would knock off at least $10 per barrel. The government should also put price controls on it to keep it reasonable; oil is not an ordinanry commodity, it is vital to the economy and needs to be kept affordable. This is an example of market failiure at its highest, and even as a free market capitalist I support price controls on oil.

It's ridiculous to see oil company profits going up 40 or 50% and nobody wondering if they are intentionally bidding them up to make more money.
According to some experts the oil production in the middle east, the world's largest reserves, has peaked. That means they're going to be able to pump less and less oil out until it goes dry. The oil in oil sands is less cost effective. You get alot less useable oil out for every dollar spent extracting and refining. Oil won't be here forever.

Personally I think the higher prices are good because they'll provide an incentive to find alternate means of energy production before we start running out of oil and get desparate. Plus when cost-effective alternate sources of energy come online they'll help cushion spikes in oil prices.

Well the president has outlined a plan to convert former military bases into oil refineries. Oil capacity (not production) is expected to increase by 20% by 2010. That means demand will be met. Yes, this spike is bullshit in my opinion. Gas efficiency is increasing in the United States greatly, and soon demand will start to fall.

I like that idea as well because it increases our capacity and also alleviates the economic damage of base closings. I'd like nothing more than oil to plunge back to 30 or 40 dollars per barrel; the economic effects would be huge.

The thing that bothers me is that there is no real reason for energy companies to increase their capacity. Most companies are seeing revenues up 60 or 70% on flat production; they don't increase production, which drives up prices further, and thereby reduces incentive to increase it again. This oil situation is nothing more than a market failiure; furthermore, it didn't even begin until September of 2004, with prices up 60 or 70% since that time last year. There's something more going on than supply, because this move was not gradual, but immediate.

Oil production may be close to peaking in the middle east, however that is not the case in other parts in the world that makes up for that, including Russia.

According to some experts the oil production in the middle east, the world's largest reserves, has peaked. That means they're going to be able to pump less and less oil out until it goes dry. The oil in oil sands is less cost effective. You get alot less useable oil out for every dollar spent extracting and refining. Oil won't be here forever.

Personally I think the higher prices are good because they'll provide an incentive to find alternate means of energy production before we start running out of oil and get desparate. Plus when cost-effective alternate sources of energy come online they'll help cushion spikes in oil prices.

In some countries, it is. But in others like Saudi Arabia, Libya, and Iran, they've got more oil than previously thought. Oil sands cost effectiveness is rapidly increasing; the surge in oil sands accquisitions by larger companies suggests this as well. Oil sands contain 315 billion barrels of oil; at current consumption they could singlehandedly supply the world with oil for the next 3,539 years! The Gulf of Mexico is untapped, and Venezuela has plenty (too bad Chavez is a megalomaniac who hates the US) to offer. The problem isn't supply, it's that there is no incentive to drill more. High prices mean more profits with less expenditure, so why invest in more production when you could get a better ROI with less?

Higher prices actually hurt alternative energy, because the companies that are funding research are oil companies, and so they aren't going to invest in something that is less profitable than their current source. The same with government, because the oil lobby has too much money to throw around and could easily deter alternative energy.

But the amount of energy consumed per dollar of GDP will decline, continuing a trend of annual efficiency gains

But isn't that a distored way of looking at things? If a country GDP increases but it's oil use stays the same then the amount of energy consumed per dollar will decrease but the amount of oil still stays the same. In the case of the USA that would still mena it burns a shit load of oil...the problem is still there. If we measure any sort of oil use it should be measured in absoulte terms.

Fact is people we fact two problems the first is global warming, where all the oil companies now say it's happening and it's the burning of fossile fuels that's causing it, the second is that there is only so much oil in the world. Both are obviously interlinked.

We have to solve both and the only way to do that is reduce our dependency on oil and oil based products. Other wise when we do run out of oil we will be well and truely f**ked.

In some countries, it is. But in others like Saudi Arabia, Libya, and Iran, they've got more oil than previously thought. Oil sands cost effectiveness is rapidly increasing; the surge in oil sands accquisitions by larger companies suggests this as well. Oil sands contain 315 billion barrels of oil; at current consumption they could singlehandedly supply the world with oil for the next 3,539 years! The Gulf of Mexico is untapped, and Venezuela has plenty (too bad Chavez is a megalomaniac who hates the US) to offer. The problem isn't supply, it's that there is no incentive to drill more. High prices mean more profits with less expenditure, so why invest in more production when you could get a better ROI with less?

Higher prices actually hurt alternative energy, because the companies that are funding research are oil companies, and so they aren't going to invest in something that is less profitable than their current source. The same with government, because the oil lobby has too much money to throw around and could easily deter alternative energy.
High prices don't really hurt alternative energy all that much. Yeah, some oil companies have done research on alternative energies, but so have companies like Changing World Technologies, which specializes in thermaldepolymerization, as well as university science departments, like Princeton's plasma physics' research into fusion.

But isn't that a distored way of looking at things? If a country GDP increases but it's oil use stays the same then the amount of energy consumed per dollar will decrease but the amount of oil still stays the same. In the case of the USA that would still mena it burns a shit load of oil...the problem is still there.
Fact is people we fact two problems the first is global warming, where all the oil companies now say it's happening and it's the burning of fossile fuels that's causing it, the second is that there is only so much oil in the world. Both are obviously interlinked.

We have to solve both and the only way to do that is reduce our dependency on oil and oil based products. Other wise when we do run out of oil we will be well and truely f**ked.


Not really. More efficency does mean we use the same amount, but it keeps inflation and economic damage in check. Effectively, it raises the ceiling price necessary to cause an oil shock and subsequent stagflation/recession.
It's good because it gives us more time to react and control prices.

Here's a solution: put price controls on oil, but give tax windfalls and incentives on alternative energy. That will get them away from oil fast, and keep prices low for consumers. We'll reduce our consumption of oil by motivating companies in the only way possible, and that is hurting their bottom line.

High prices don't really hurt alternative energy all that much. Yeah, some oil companies have done research on alternative energies, but so have companies like Changing World Technologies, which specializes in thermaldepolymerization, as well as university science departments, like Princeton's plasma physics' research into fusion.

Alot of the drive for alternative energy is comming from governments. Who don't really want to subject themselves to another oil shock.

Alot of the drive for alternative energy is comming from governments. Who don't really want to subject themselves to another oil shock.

No, but they don't mind oil being just high enough to avert an oil shock; after all, money pours in to their campaigns from none other than those companies that benefit from high oil. The only way we can control oil right now is price controls, because the market has failed.

Not really. More efficency does mean we use the same amount, but it keeps inflation and economic damage in check. Effectively, it raises the ceiling price necessary to cause an oil shock and subsequent stagflation/recession.
It's good because it gives us more time to react and control prices.

Here's a solution: put price controls on oil, but give tax windfalls and incentives on alternative energy. That will get them away from oil fast, and keep prices low for consumers. We'll reduce our consumption of oil by motivating companies in the only way possible, and that is hurting their bottom line.

Perhaps if we just had a law that said a car could not produce more that 100gm of C02 per mile. That would imporve things me thinks.

Perhaps if we just had a law that said a car could not produce more that 100gm of C02 per mile. That would imporve things me thinks.

That could cause problems, because it would cost companies more to produce them. That would have to be combined with tax incentives, or it would fail. The best ideas are usually the hardest to put in to effect.

Yeah its way too high - record highs as a matter of fact.

fuel tax cut? nah, the oil companies aren't hurting - ExxonMobile makes like 9 billion in pure profits every three months. What we need to do is push for much more funding in alternative energy. Slowly move away from oil and into more viable renewable and environmentally friendly energy sources.

Why do it slowly? Lets do it NOW! The slower we do it the deeper the oil companies will get thier greedy hands into developing alt. energies, and I think we need some new tycoons... soy-farmer tycoons...

CUT FUEL TAX?!?! We should increase it. Americans waste too much gas on SUVs. We need to:
1. Increase government tax on gas and use it for alternative fuel source research and incentives.
2. Reclassify SUVs as cars so they are forced to either get of the road or get better efficiency.
3. Encourage alternative fuel such as biodiesel.

Also hydrogen is a load of crap because coal has to be burned for the seperation of hydrogen from oxygen through electolysis.

CUT FUEL TAX?!?! We should increase it. Americans waste too much gas on SUVs. We need to:
1. Increase government tax on gas and use it for alternative fuel source research and incentives.
2. Reclassify SUVs as cars so they are forced to either get of the road or get better efficiency.
3. Encourage alternative fuel such as biodiesel.

Also hydrogen is a load of crap because coal has to be burned for the seperation of hydrogen from oxygen through electolysis.

1. That doesn't do anything, because people are still driving cars. All it does is drive up prices and hurt the middle class, with corresponding damage to the economy because it hurts small businesses.

2. I agree, but SUV's couldn't match car efficency. What should be done is make cars more efficent at the same time as SUVs, so the effect is doubled

3. Biodiesel and repolymerization are the best ways of doing it; ethanol is nothing more than useless pork that uses more energy than it produces.

4. Hydrogen can come from water, and the energy for hydrolysis could be produced by solar, wind, or nuclear plants.

But isn't that a distored way of looking at things? If a country GDP increases but it's oil use stays the same then the amount of energy consumed per dollar will decrease but the amount of oil still stays the same. In the case of the USA that would still mena it burns a shit load of oil...the problem is still there. If we measure any sort of oil use it should be measured in absoulte terms.

What? Oil use will start to decline. The only reason it is up right now is because this is a big travel season (summer). I'm also seeing a continue jump in fuel efficency. There is nothing distorted about it. It clearly shows the reality. Fuel demand is declining right now. The US can afford these prices... Asia and other developing countries cannot. China also is suffering from oil shortages.

Fact is people we fact two problems the first is global warming, where all the oil companies now say it's happening and it's the burning of fossile fuels that's causing it, the second is that there is only so much oil in the world. Both are obviously interlinked.

Wishful thinking. Why? Because fossil fuel burning is only a small fraction of global warming. Global warming would happen with or without human beings.

We have to solve both and the only way to do that is reduce our dependency on oil and oil based products. Other wise when we do run out of oil we will be well and truely f**ked.

We already are. It is called hybrid vehicles.

Cutting fuel tax or putting price controls would make the market really screwed up and cause a lot of problems. Especially price controls. That would cause supply discrepencies and even shortages. Not really wise. I suggest pursueing a plan that promotes hybrid vehicles which have an MPG rating of 30-50, whereas many SUVs have 5-15 MPG. This would greatly reduce demand.

Oil companies are already getting involved in alternative energies, because they know the demand is growing.. and they want in that market too.

Also look at this:

http://news.yahoo.com/s/ap/20050810/ap_on_go_pr_wh/bush

Lawmakers backing the [energy] bill say projects were included on merit. They say money for infrastructure is well spent, especially considering that traffic congestion costs American drivers 3.6 billion hours of delay and 5.7 billion gallons of wasted fuel every year. Substandard road conditions and roadside hazards are a factor in nearly one-third of the 42,000 traffic fatalities a year, officials say.

---

That's the road bill.. this is the energy bill that was just signed in recently:

http://www.rednova.com/news/display/?id=203211&source=r_science

Total cost to the government after revenue offsets: $12.3 billion over 10 years.

Tax breaks of $14.5 billion over 10 years for energy companies, renewable energy sources and promotion of efficiency.

Requirement for refiners to use 7.5 billion gallons of ethanol annually by 2012, double current production.

Extension of daylight-saving time by a month, beginning in 2007. (My own tidbit on this: this would reduce demand of oil by 100,000 BPD)

New efficiency standards for commercial appliances, from air- conditioners to refrigerators.

Requirement for utilities to meet federal reliability standards for the electric transmission grid, aimed at preventing blackouts such as the one in the summer of 2003.

Easing the way for more imports of liquefied natural gas by giving federal regulators final say over import terminals.

$1 billion for coastal environmental management in states where there is offshore oil production.

Loan guarantees and other subsidies for clean energy technologies and new nuclear reactors.

A $1.8 billion program to promote clean coal research and development.

Requirement for an inventory of offshore oil and gas resources, including areas now off limits to drilling.