What is Digg?138 Comments
- northwestchimp, on 06/20/2008, -8/+35Peak Oil is an observation that individual oil fields reach maximum production then rapidly deplete. Countries and regions also peak (the U.S. peaked in 1971, Mexico, our largest supplier, peaked last year). Logic says that a finite world must also have peak production. Three years of flat worldwide oil production would lend credence to the world being at peak.
- BlankVerse, on 06/21/2008, -4/+28Gawd! What an sketchy description of the reasons for current oil prices. It doesn't even cover half the problems involved.
What about the risk premium added for all the saber-rattling in the Middle East (just look at today's jump in prices for an example of the influence of that!). Add to that the instabilities in many oil producing counties (e.g. Nigeria), inefficient policies from state-owned oil companies (e.g. Mexico), oil leases that are being stockpiled and not even explored let alone exploited (e.g. off-shore leases in the US), subsidized gas prices (e.g. China, Iran, etc.), Enron-style gaming of supply and demand using refinery maintenance, etc. as excuses, ad infinitum.
Then what about the demand side of the equation, such as US auto makers fighting tooth and nail to prevent any increase in gas mileage standards so that they could keep making large profits on their gas-guzzling Urban Assault Vehicles (I refuse to call them SUVs).
We need more research into alternative energy and into greater energy conservation. We need to have people driving less and driving slower when they do drive. - chrisinsocalif, on 06/21/2008, -6/+26I got the AAA deluxe membership, with free towing. So now I tow my car places to save money on gas.
- inactive, on 06/21/2008, -2/+14Oil jumped dramatically in the last year at the same time that banking institutions took a major hit from their mortgage crisis. They then borrowed massive amounts of cash from the Feds (about $1 trillion & counting) & invested in oil commodities driving the price thru the roof, trying to recuperate their losses using Fed emergency loans to gamble with. But when you invest a trillion dollars into any market, you'll drive it sky high, in effect manipulating the market.
Plus you have oil companies jumping on that bandwagon too (reinvesting their massive profits), as well as every other investor now too.
Plus the weak dollar, the wars, the threat of an Iran war, & fear tactics to drive it up even further (China needs more, we don't have enough refineries, peak oil, not enough drilling, biofuels, etc).
Read the article "The Great Oil Swindle", it does a pretty good job of putting the evidence together.
There is manipulation happening like never before on many levels.
- inactive, on 06/21/2008, -1/+12lets look at the last few years.
2001 oil about $25/barrel, gas about $1.50/gallon, oil companies profiting about $11B
2008 oil about $125/barrel, gas about $4.00/gallon, oil companies profiting about $13B
Now the oil company profits dont consider the weaker dollar, since they do a lot of international buying and selling that matters to them more than to someone who doesnt. Regardless they see roughly a 20% gain without adjusting. Oil saw a 500% gain, and gas saw about a 250% gain.
Oil 1 year ago was half what it is now.
So the oil companies arent seeing the huge gains that oil prices saw, who is? Could it be speculators on wall street and not that production is capping? Many OPEC nations claim they could increase production they just dont want to as long as the speculators are driving the price up like that. Could they actually be right and that its speculators and not alarmist papers diverting attention from the real people in an alarmist way? - Berkana, on 06/21/2008, -4/+15If Bush has us attack Iran, expect oil to reach price levels we never imagined possible. A hike in fuel prices, not nukes, would be Iran's biggest defensive weapon against US aggression. All they would have to do is to cause an oil spill in the strait of Hormuz and light it up, and Saudi oil tankers would pretty much be stuck in the gulf. They could do even worse.
- cambob76, on 06/21/2008, -1/+9Canada is the US's largest supplier, eh.
- mCanada, on 06/21/2008, -1/+9Must be great for a hot night on the town with the girlfriend.
- BlankVerse, on 06/21/2008, -1/+9I forget to add the effect the very weak dollar has on the price of oil. With the huge US deficit, as well as large trade imbalance, I guess that there's not much we can do about that in the near term.
- inactive, on 06/21/2008, -4/+11We haven't even come close to production issues. Hell, there is a lot of oil right now that isn't even being pumped off the coasts of the United States and Canada.
Basically what happened was in 2003 China and India's demand went through the roof, than a few years later Katrina hit and destroyed a lot in the gulf. Since than speculators have been having a hard time figuring out where the balance between supply and demand is.
Supply has been remaining around the same, demand has gone up 10% and prices have doubled. That doesn't sound like a supply issue, it sounds like a speculator.
If you'd like another word, "bubble". The price is growing at fast levels that can't be sustained. Like all bubbles, they pop. That's why oil companies aren't looking to increase oil production because they had another time when oil prices skyrocketed (the 70's). Guess what happened there, the bubble popped, they over produced oil and it was $10/barrel.
This story is getting buried for promoting more of the hysteria and misinformation about oil. - Tenlow, on 06/21/2008, -2/+8Inflation is nearly all of the reason oil is so expensive. The administration of GWB is to blame for most of, if not all of, our current problems. And we're still no safer from terrorists. In fact, I'm positive it was never something that needed to be worried about to begin with.
- mlhams, on 06/21/2008, -1/+7Yes but think of all the money the Bush/Cheney cronies and their companies will be able to earn on both supplying the war and profiting from the oil!!! Think Big!
- imbob, on 06/21/2008, -0/+61. Ban futures trading on oil.
2. Tax,Regulate or Subsidize OPEC.
Tax,Regulate or Subsidize??
WERE DOING THAT RIGHT NOW! - cambob76, on 06/21/2008, -0/+6I get the feeling that people are waking up to the problem. I don't seem to go a day without hearing gas prices mentioned... but also in my city, more people are riding bikes, there are more scooters and mopeds around... and the streets seem much emptier on weeknights. I'm pretty sure most people are willing to make changes... we just have to get industry to cooperate by changing our spending habits. Of course there will be unfortunate consequences to this... like the closure of GM truck plants in Ontario but important and necessary change will cause hardship. To not act would be much, much worse for the future.
- Stryder81, on 06/21/2008, -2/+8Simple...
http://www.youtube.com/watch?v=kFrJvMWMdLY - Hawk2007, on 06/21/2008, -0/+6Wow, you have no idea how things actually work.
- scarz99, on 06/21/2008, -0/+6Holy ***** its supposed to be a comment not a short essay.
- pbd1637, on 06/21/2008, -0/+5You nit wit.
OPEC is Saudi Arabia, Iran and the rest. We can't tax them or regulate them and we already subsidize them by buying their oil instead of getting our own here in North America. - spunkmyer, on 06/21/2008, -0/+5Isn't goldman sachs and morgan stanley one of the largest holders of oil futures contracts? Funny I have never seen a filling station with their name on it. I wonder where they are keeping all the product they buy ?? /sarcasm
- inactive, on 06/21/2008, -0/+5Higher oil prices is also one of the reasons why inflation is so high.
- masterm1nd, on 06/21/2008, -4/+9Maybe because... we haven't reached peak oil yet?
- CanTheSpam, on 06/21/2008, -1/+5Do you realize how retarded you are? Not to be offensive, but taxing and subsidizing are opposites.
And you're an idiot.
You can't eat your cake and sell it, too. - Barackalypse, on 06/21/2008, -4/+8"The oil shale re-sources of the Nation total 2 trillion barrels."
http://www.fossil.energy.gov/programs/reserves/npr ...
"Senate panel retains oil-shale moratorium"
http://www.rockymountainnews.com/news/2008/may/15/ ...
Gee, I wonder why the US isn't the world's largest oil producer. - inactive, on 06/21/2008, -0/+4http://www.wtrg.com/oil_graphs/oilprice1947.gif
see the sharp jump from 2007? What in the supply/demand model caused such a jump in 2007? While it may influence it some, I do not see a doubling of demand over hte last year to justify the doubling of the price.
Further the dollar hasnt halved during that time, and a combination of the two doesnt really justify a doubling either.
When the feds anounced a probe into illegal speculation practices on wall street regarding oil, the price dropped 10% instantly - a bunch of speculators were selling so they could try to wash their hands.
A conspiracy theorist would suggest that it was political, drive the price up to force the election a certain way. But I am not a conspiracy theorist, so I wont suggest that. - Tenlow, on 06/21/2008, -1/+5What could they do? He'd just issue an executive order making it against the law to be a democrat if anyone stood up to him.
- Snowdizzle, on 06/21/2008, -0/+4Does not mention the number 1 reason: the out of control printing of money by the Fed.
Buried as inaccurate. - scarz99, on 06/21/2008, -1/+5Its only going to get worse before it gets better.
- fr0ng, on 06/21/2008, -7/+11Why is it so hard for people to understand? Gas and oil are more expensive because:
1. Emerging countries like China and India have increased their demand for oil. (Demand goes up, price goes up.)
2. The US dollars purchasing power has decreased. (It takes more dollars to buy the same thing)
3. Futures traders practically control the price by creating a big hype about the limited supply, while making huge profits.
4, All those SUV driving soccer moms.
What really gets me is the lack of R/D in alternate energy. The people who figure out how to get energy in other ways will be disgustingly wealthy people, yet nobody seems to want to jump on this opportunity. - KMartSheriff, on 06/21/2008, -0/+3Very true. And even the US automakers are FINALLY changing though (thank God). They see that people are tired of low mpg's (the consumer's buying power is speaking to them) and are going green. Ford has been doing this for a while. GM is considering selling off its Hummer brand, and even its GMC brand (the truck/SUV devision). If you notice, pretty much every auto company is investing heavily into hybrids/fuel cell/etc, and are all pushing concepts and vehicles out that take advantage of these technologies.
The consumer has spoken. We hate gas prices. Auto companies are listening VERY closely now and doing everything they can to answer us. - Dysarthria, on 06/21/2008, -3/+6-Canada is indeed our largest supplier.
-Finite is "finite" because we are not exploring or drilling in new places - some say we have the potential to rid ourselves of foreign oil completely for 25 years if we did so.
-But ultimately, I think we all have to accept that oil is not going to be the fuel of choice in the future. I hope that plug-hybrids or hydrogen fuel cells make their way to us soon. - BillE3, on 06/21/2008, -1/+4How easily people fall prey to the propaganda of the government and media. Peak production is a misnomer and it is a changing phenomena. They simply match a reduced production to their own desired income level according to increasing prices. The middle east was given a huge loophole by Clinton secretly changing the rules on trading in "OUR" commodity oil market. They are solely responsible for reporting "false" or illegal oil contracts on our market. Mysteriously trading went up 8,000%, but oil production declined. Before Clinton opened the market to them, "BP and Dubai" to be exact, oil traded at $18 a barrel and I hope you remember the price of gas at that time. Cost of producing a barrel of oil was between $10 to $12. Todays cost of production is $25 to $40 a barrel. At the most the oil contracts should be around $60. Our government through its own action and supported by the environmentalists has reduced pumping on government land by 60% and has reduced our refining capacity by closer to 75%. Any and all exploration has been sucessfully halted on government land since the Clinton administration, this is nothing new. And by the way the government is the largest land holder in America, it owns just over 60% of all land, by Federal, State and Local government bodies.
- NotClever, on 06/21/2008, -0/+3I'd say the American people are beginning to do something about it. Truck sales in the US have plummeted. Chevy Silverado sales down over 40% compared to prior year, Dodge Ram 37%, Ford F-150 down 30%. The Big 3 are scrambling to change their manufacturing lines away from big trucks to cars. Hummer sales are in the toilet, small car sales are going up up up. Check out http://www.thetruthaboutcars.com/by-the-numbers-ma ... for a good rundown.
Miles driven in the US are plummeting as well. For the first time in decades, fewer miles will be driven this year than last year. Trips are being put off, errands are being consolidated, people are being smarter with their fuel usage.
These things take time. The main risk is that prices will plummet and we'll go back to our old ways (like the 70's), but hopefully this time it won't happen. - laserdog, on 06/21/2008, -1/+6If you believe in Peak Oil go buy oil futures.
If you don't think you know enough about the global energy market to invest in oil futures, than you don't know enough about the global energy market to believe in Peak Oil. - mousky, on 06/21/2008, -1/+4Because it doesn't have to be. There is plenty of oil for sale around the world.
Besides, it makes sense to save that domestic oil for when you actually need, like when foreign supply is seriously curtailed. - inactive, on 06/21/2008, -0/+3Fortunately Iran relies on petro-dollars to keep their economy afloat. Iran and the USA saber rattle to save face, nothing more.
- inactive, on 06/21/2008, -2/+5Yeah, that would solve things. Not! Yeah, tax OPEC lol. Not sure how you get away with that, since OPEC isn't a business to tax lol.
- WiseAcre, on 06/21/2008, -0/+2Unintelligible?
- joeanon, on 06/21/2008, -0/+2The solution is Algae Fuel... go write your congressmen until they commit to a domestic fuel strategy and stop important.
Carter told the US to NOT IMPORT A DROP OF FOREIGN OIL... and instead you voted him out and put the great actor President in, who ushered in an age of consumption.
Nixon, Reagan and now Bush have brought you here. If McCain wins, it will be the end of the GOP. - FairDinkumMate, on 06/21/2008, -2/+4The comments here outline the issue for the US better than anything else.
FIX SUPPLY, INCREASE SUPPLY, someone ELSE is screwing the US!
Not a single comment about DEMAND(you know - the other side of the equation)
The US uses 25% of the world's oil produced daily. Half of that is used for gasoline. The MPG figures of the US vehicle fleet is HALF of Europe's(& most of the rest of the developed world). The quickest way to improve the supply/demand balance is for the US to catch up to the rest of the world with regard to fuel efficiency. This would create a 10% reduction in DEMAND. Stop blaming everyone else for the problem & do something about it! - 3Den, on 06/21/2008, -0/+2"just dont want to as long as the speculators are driving the price up like that."
That doesn't really make sense to me - if we're looking at a bubble, with prices based on speculation and not real demand, it's in the best interest of producers to produce and sell as much as they can as fast as they can to take advantage of the situation. - inactive, on 06/21/2008, -1/+3I know what peak oil is and I believe in peak oil production. Come on, 118 m barrels/day? We are struggling to find oil right now. It is like only Saudi Arabia can squeeze out 200, 300k out when they choose to. But I try to remain optimistic and hope peak oil won't eventuate.
I think we are just going to have to make the most out of what we have now until we find a suitable substitute(if we do at all). - secrity, on 06/21/2008, -0/+2If McCain wins, it will be the end of the US.
- Leadman584, on 06/21/2008, -0/+2Domestic production is not good for America. The FED is printing money 24/7, and they need to trade it for something of value, like OIL.
- inactive, on 06/21/2008, -0/+2http://www.wtrg.com/oil_graphs/oilprice1947.gif
- poidh, on 06/22/2008, -0/+2The point I was trying to make is that we know what "petrol" and "gasoline" are, whereas "gas" could well refer to something which is not solid, liquid or plasma.
- insanebrain, on 06/21/2008, -0/+2The only way it will get better is if we start using our brains. There is NO energy shortage. There is enough energy for the next million years. The big ***** problem is the fact the we don't use them. We let ourselves be trapped be economics.
- fixty, on 06/21/2008, -2/+4The "Enron Loophole" and deregulation of energy speculation play a part too...
http://www.msnbc.msn.com/id/3036677#25252591 - Raphae1, on 06/21/2008, -0/+2If "supply has been remaining around the same, demand has gone up 10%" as you say, we are indeed facing a production issue. Prices might still be inflated, but the production issue is real.
- kaplanfx, on 06/21/2008, -4/+6Actually "Peak oil is the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters terminal decline." Because it specifically relates to global production, there would never be a point when the U.S. or Mexico independently reached peak oil.
http://en.wikipedia.org/wiki/Peak_oil - TheSkinsFactory, on 06/21/2008, -1/+3Wrong. It doesn't "rapidly decline". It's a bell curve. It steadily declines, while global consumption increases.
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