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Gasoline: The new big U.S. export
CNNMoney ^ | 12/5/11 | Steve Hargeaves

Posted on 12/05/2011 8:21:41 AM PST by illiac

NEW YORK (CNNMoney) -- The United States is awash in gasoline. So much so, in fact, that the country is exporting a record amount of it.

The country exported 430,000 more barrels of gasoline a day than it imported in September, according to the U.S. Energy Information Administration.

That is about twice the amount at the start of the year, and experts and industry insiders say the trend is here to stay.

The United States began exporting gas in late 2008. For decades prior, starting in 1960, the country used all the gas it produced here plus had to import gas from places Europe.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Business/Economy; Chit/Chat
KEYWORDS: business; economy; gasoline; gasprices; obama; oil
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And our prices are at nearly all-time highs.....
1 posted on 12/05/2011 8:21:49 AM PST by illiac
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To: illiac

It’s about time we got back in the export business.


2 posted on 12/05/2011 8:25:43 AM PST by Oberon (Big Brutha Be Watchin'.)
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To: illiac

Gas prices seem to have dropped. Diesel however........


3 posted on 12/05/2011 8:26:09 AM PST by Paladin2
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To: illiac
There's nothing keeping the Chinese or anyone else from buying the oil right out from under our feet. And if we're not actually at peak oil, we're definitely approaching it. Both supply and demand are becoming less elastic, leading to increasing prices.


4 posted on 12/05/2011 8:28:58 AM PST by CowboyJay (Generic Republican - 2012. He's the only 'electable' candidate.)
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To: Paladin2
“Gas prices seem to have dropped”

Not where I'm from. They seem to be inching upward by pennies now. When Iran shuts down the Straits of Hormuz, well, we will see were gas goes from there. n/s

5 posted on 12/05/2011 8:29:41 AM PST by cameraeye (A happy kaffir!)
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To: Paladin2

Get rid of Obama and see how fast gas prices drop.


6 posted on 12/05/2011 8:30:27 AM PST by NCC-1701 (In Memphis on January 20, 2009, pump price were $1.49. We all know what happened after that.)
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To: illiac

It is a commodity that is easily transported. Thus, the price is influenced by the global market. Producers will sell to whoever will pay the highest price. Thus when gasoline is high overseas, they will sell into that market to maximize their profits. The good news is that gasoline prices are coming down and hopefully the trend will continue.

The area where we need more production is diesel. When the price of diesel comes down, it has a much larger impact to the overall market as much of our transportation of costs is tied to the cost of diesel.


7 posted on 12/05/2011 8:31:06 AM PST by taxcontrol
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To: illiac
Find your local prices before you go for fuel.

Gasbuddy.com


8 posted on 12/05/2011 8:39:12 AM PST by deport
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To: illiac

“And our prices are at nearly all-time highs.....”

I suspect you’re thinking that if we restrict gas exports that the price of gas will fall. Let’s suppose that the government decides to lower domestic gasoline prices by doing that. Go to this link to compare world-wide gas prices with taxes:
http://hosted.ap.org/dynamic/files/specials/interactives/_business/gallon_gas/index.html?SITE=ILBLO&SECTION=HOME

What you’ll notice is that the price of gas without taxes is pretty close except in Russia, China and India.

If you go to this link: http://business.whatitcosts.com/refine-oil-pg3.htm
You’ll see…
• 74% - Cost of the crude oil
• 11% - Taxes
• 10% - Refining costs
• 5% - Distribution and marketing
So, 74% of the cost of a gallon of gas is made up from the cost of buying crude oil. So, the idea of forcing oil companies to keep gas here rather then exporting it comes down to them eating some of the costs above. The paragraph below is from the article on costs. It says the oil company profit per gallon is already down. This may sound conter-intuitive to a gas buyer, but we WANT the company to make a proft as that is their motive for supplying the gas.
“As of 1999, for every gallon of gasoline refined from crude oil, U.S. oil refiners made an average profit of 22.8 cents. By 2004, the profits jumped to 40.8 cents per gallon of gasoline refined. In the specialized California market where the gasoline must conform to the requirements of the California Air Resources Board, refinery margins were even higher. In fact, this helped Exxon, the largest company, report a profit (as of February 2008) of $40.6 billion. Nevertheless, one financial tracking institution reported that the profit-margins have now dropped to about 29.6 cents a gallon or around 60 percent lower than a year ago.”


9 posted on 12/05/2011 8:40:40 AM PST by Gen.Blather
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To: cameraeye
http://www.api.org/aboutoilgas/gasoline/upload/Whats_Up_With_Gasoline_Prices.pdf

The Diesel/Gas price spread seems ridiculous at the moment to me.

10 posted on 12/05/2011 8:44:03 AM PST by Paladin2
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To: illiac
And our prices are at nearly all-time highs.....

????


11 posted on 12/05/2011 8:51:34 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

Although the chart is interesting, here in N. Idaho, we are not seeing nearly that low a price....


12 posted on 12/05/2011 8:55:22 AM PST by illiac (If we don't change directions soon, we'll get where we're going)
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To: illiac
The country exported 430,000 more barrels of gasoline a day than it imported in September, according to the U.S. Energy Information Administration.

That number is very deceptive. It is only counting finished motor gasoline and is not counting the gasoline blending components that are most of our imports. We blend in multiple components to meet our different gasoline specifications. If you count the total of imports that goes to the gasoline tanks in our cars, we import over 240,000 barrels per day more than we export.


13 posted on 12/05/2011 9:00:57 AM PST by thackney (life is fragile, handle with prayer)
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To: illiac

Thanks. NOW I know why oil is up but prices have been drifting down.

Since the beginning of Oct oil has gone from around $80 a barrel to $100 and yet gas around here has gone from around $3.50 to $3.15 a gallon. Couldn’t figure out why. Well, from my novice point of view at least :-)


14 posted on 12/05/2011 9:06:35 AM PST by VeniVidiVici ("Si, se gimme!")
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To: illiac

I had been confused over the price of oil going up recently, but gas has been steadily coming down for most of the year. It was pushing close to $4ga, but now can be found under $3


15 posted on 12/05/2011 9:08:59 AM PST by rightly_dividing (1Cor. 15:1-4)
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To: illiac
I don't have a breakdown for norther Idaho, but the state average is very similar.

AAA is reporting slightly higher for Coeur D' Alene but similar pricing.

ID Metro Averages
http://fuelgaugereport.opisnet.com/IDmetro_print.html

16 posted on 12/05/2011 9:09:08 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

AAA statistics may be off....paid $3.59/gal for regular on Friday.....


17 posted on 12/05/2011 9:11:58 AM PST by illiac (If we don't change directions soon, we'll get where we're going)
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To: Paladin2

Don’t know where you are but here in CT gas has dropped almost fifty cents a gallon in the last two months but diesel is still at $4.09. Almost everywhere. A few cents difference but not enough to chase it.


18 posted on 12/05/2011 9:12:21 AM PST by raybbr (People who still support Obama are either a Marxist or a moron.)
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To: illiac

Gas prices in Greenville, SC, area are coming down. Actually started going down from $3.04/gal the day before Thanksgiving. Now we’re in the $2.85 range.

All that notwithstanding, if we’re awash in petroleum and likely to remain so for a while tell me why alternative energy usage now is necessary.

I was in San Francisco a couple of years ago and passed one of those busses that run on overhead electricity. A sign on the vehicle said the bus was reducing SF’s carbon footprint or some such. Do those Marxist walking dead out there on the left coast really believe the fossil fuel power plant necessary to produce the power that runs the busses is carbon footprint neutral—let alone negative?


19 posted on 12/05/2011 9:14:18 AM PST by dools0007world
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To: Oberon
It’s about time we got back in the export business.

Read the article. We still import half of our crude, which is processed into gasoline and diesel, some of which is exported. This is a good thing for the U.S., but the EPA and the administration will find a way to screw it up.

20 posted on 12/05/2011 9:17:45 AM PST by Lonesome in Massachussets (Ceterum autem censeo, Obama delenda est.)
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To: Gen.Blather
So, IMHO, whatever the fed & state/local taxes are for the state where that crude is refined to gasoline needs to be added to the export price.

After all, it is the US consumer that is paying for all the envro regs & monitoring as well as the ports for shipping (channel dredging), etc. w/ our domestic consumption.

21 posted on 12/05/2011 9:19:47 AM PST by RSmithOpt (Liberalism: Highway to Hell)
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To: illiac

Have you ever used this tool to zoom into your area and look at competing prices?

http://www.gasbuddy.com/gb_gastemperaturemap.aspx


22 posted on 12/05/2011 9:20:20 AM PST by thackney (life is fragile, handle with prayer)
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To: illiac

No they’re not. They’re about a dollar less now than at their all time high but I wonder why we’re still importing Saudi oil if we can thumb our noses at them.


23 posted on 12/05/2011 9:22:22 AM PST by Conservativegreatgrandma
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To: thackney

Did this morning....we are running 3.49 and up....


24 posted on 12/05/2011 9:22:22 AM PST by illiac (If we don't change directions soon, we'll get where we're going)
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To: illiac

So if you are near Coeur D’ Alene, AAA would be reasonably accurate reporting $3.46


25 posted on 12/05/2011 9:25:19 AM PST by thackney (life is fragile, handle with prayer)
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To: Paladin2

Dec. 26, 2008—Gas prices were$1.64 a gallon. Some areas saw prices as low as $1.45 a gallon. Crude oil was just a little over $40 a barrel.

3 years later we’re at almost 3 times that. Not sure what you mean by dropped but when folks see gas at $3.25 vice $3.60 and get excited then there’s a problem. We shouldn’t be exporting ANY fuels until we can satisfy our own needs first.


26 posted on 12/05/2011 9:27:02 AM PST by maddog55 (OBAMA: Why stupid people shouldn't vote.)
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To: thackney

Shift that curve up by $.50 at least in Alaska.


27 posted on 12/05/2011 9:31:19 AM PST by strongbow
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To: Lonesome in Massachussets
Read the article.

I did read the article, and I also understand that importing oil and exporting gasoline is better than importing oil and not exporting gasoline. Even if the trade is still out of balance, it's at least a step in the right direction.

28 posted on 12/05/2011 9:35:10 AM PST by Oberon (Big Brutha Be Watchin'.)
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To: RSmithOpt

Taxes and tariffs charged on both ends of any transaction are determined by the applicable trade agreement with the receiving country. If any product is so burdened with additional taxes then all products should be so burdened; or so any lawsuit would hold. The cost of regulatory compliance is built into the products (including gas) as an expense. To that extent they are represented in the export price. But if tomatoes are exported from the same port, should they not also be subject to a dredging tax?

Additional taxes would interfere with existing trade agreements and the ramifications would be far ranging. Why not tax oranges and tomato exports because they must also use roads and follow environmental regulations? Would this not drive down the price of oranges and tomatoes?
I’m in favor of letting the market work. The freer the market the lower the consumer price.


29 posted on 12/05/2011 9:42:05 AM PST by Gen.Blather
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To: strongbow
Yep.


30 posted on 12/05/2011 10:15:43 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

Thackney,

Please, O wise one explain to me why regular unleaded gasoline here in NH is now $3.19 but home heating oil is $3.29 or more.
Keep in mind that there is State and Federal tax on gasoline and neither on heating oil. Also, heating oil up until a few years ago was typically half the price of gasoline. lastly, #2 heating oil is a low grade petroleum product which is far less expensive to refine than either gasoline or desiel.

P.S.
I know the rules of supply and demand so the people who would like to add their 2 cents, please refrain I am addressing this question to thackney because he seems to be our FR energy expert.


31 posted on 12/05/2011 10:19:50 AM PST by woodbutcher1963
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To: CowboyJay

Yes, but who’d’ve thought that “Peak Oil” would be brought about by prohibiting oil development? If our masters decide to permit us oil, they will find no lack.


32 posted on 12/05/2011 10:21:53 AM PST by dangus
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To: woodbutcher1963

I don’t think any one item is going to explain it all away.

Going back a few years the EPA regulations for ULSD greatly impacted pricing on distallates. The home heating oil does not have that requirement, but gets impacted by the regulation.

http://www.ilta.org/LegislativeandRegulatory/MVNRLM/ULSDinfo.htm

Keeping the fuels separate in the refinery adds cost and some smaller refineries may not be economically able to do so. The result will be that the home heating oil will compete with the ultra low sulfur diesel market.

But I have to question the claim that it was half the price of gasoline a few years ago.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPD2F_PRS_NUS_DPG&f=W


33 posted on 12/05/2011 10:37:25 AM PST by thackney (life is fragile, handle with prayer)
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To: woodbutcher1963
forgot to mention, #2 heating oil and diesel are essentially the same product. Today we have a difference of sulfur requirements but they are often the stream in the refinery.

The road diesel may have some small amount of additives added to it, but in a pre-2007 either would run just fine using the other except in some extreme conditions.

34 posted on 12/05/2011 10:43:08 AM PST by thackney (life is fragile, handle with prayer)
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To: dangus
"Yes, but who’d’ve thought that “Peak Oil” would be brought about by prohibiting oil development? If our masters decide to permit us oil, they will find no lack."

There's no lack of oil. But there is not enough economically recoverable oil to maintain the kind of growth in world supply it would take to keep up with demand. The low hanging fruit is gone. What's left out there requires increasingly more investment and costs more per barrel in both capital and energy investment to bring up out of the ground. Production cost per barrel has quadrupled in the last 12 years.

I'm all for domestic drilling, but I think an increasing amount of it will just end up making its way out of the country to meet demand in emerging markets.
35 posted on 12/05/2011 10:55:24 AM PST by CowboyJay (Generic Republican - 2012. He's the only 'electable' candidate.)
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To: CowboyJay
there is not enough economically recoverable oil to maintain the kind of growth in world supply it would take to keep up with demand

I don't agree, certainly not for the next several decades. As the demand puts price pressure on the commodity, it becomes more economical to reach the more difficult sources. At the same time, the price pressure slows the demand growth.

The increased prices funds more technology for items like horizontal steerable drilling and make more sources economical to produces.

36 posted on 12/05/2011 11:02:57 AM PST by thackney (life is fragile, handle with prayer)
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To: Paladin2
Gas prices seem to have dropped. Diesel however........

Yeah...really pissing me off. Seems like it should be dropping as well.

37 posted on 12/05/2011 11:07:41 AM PST by 6ppc (It's torch and pitchfork time)
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To: illiac
paid $3.59/gal for regular on Friday.....

What part of the country? Running about 3.10 around here (Alabama) and I've seen it at 3.01 (10% ethanol) within the last week.

38 posted on 12/05/2011 11:13:28 AM PST by 6ppc (It's torch and pitchfork time)
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To: CowboyJay

I’ll give you this much: There’s something to be said for not depleting a appreciating resource. All those trillions of untapped gallons of oil under our soil represents future wealth, if we ever do use it.


39 posted on 12/05/2011 11:28:16 AM PST by dangus
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To: thackney

Heating oil may not have been half the price of gasoline on average throughout the year. However, we would typically buy heating oil at its lowest price in August and lock in the price of the contract for the heating season.

It may not have been half, but it was always cheaper than gasoline. Even if heating oil could be exchanged for diesel, they still need to add the federal and state taxes onto the price. That alone is atleast a $.40/gallon difference.


40 posted on 12/05/2011 11:31:59 AM PST by woodbutcher1963
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To: 6ppc

North Idaho....


41 posted on 12/05/2011 11:34:19 AM PST by illiac (If we don't change directions soon, we'll get where we're going)
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To: thackney
"The increased prices funds more technology for items like horizontal steerable drilling and make more sources economical to produces."

Supply has become increasingly inelastic. We have the same level of world supply we did 7 years ago despite the change in price. All that production from new technology isn't enough to replace the traditional plays that are going offline. They're more expensive than traditional recovery methods in terms of money, time, and capital invested and have a lower EROI. Higher prices make those sources marginally profitable for the producers. They don't make oil any more economical for consumers or from a macro perspective. And if there is no demand above a certain price level, then there is no increase in production.

Peak oil isn't a question of whether or not we have the technological capability to produce more. It's about whether we can increase our overall economic output enough to afford the increasing marginal costs of production, refinery, and distribution.

This chart obviously needs updating, but you can see what has happened to our economic output since 2000 in terms of being able to afford more oil.


42 posted on 12/05/2011 11:49:13 AM PST by CowboyJay (Generic Republican - 2012. He's the only 'electable' candidate.)
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...
The country exported 430,000 more barrels of gasoline a day than it imported in September... about twice the amount [as] at the start of the year... began exporting gas in late 2008. For decades prior, starting in 1960, the country used all the gas it produced here plus had to import gas
Thanks illiac. Blast from the Past sidebar:
OPEC Has Already Turned to the Euro
GoldMoney Alert
February 18, 2004
...The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.
US Imports of Crude oil
(1)
(2)
(3)
(4)
(5)
(6)
Year
Quantity (thousands of barrels)
Value (thousands of US dollars)
Unit price (US dollars)
Average daily US$ per € exchange rate
Unit price (euros)

2001

3,471,066
74,292,894
21.40
0.8952
23.91
2002
3,418,021
77,283,329
22.61
0.9454
23.92
2003
3,673,596
99,094,675
26.97
1.1321
23.82
We can see from column (4) in the above table that in 2001, each barrel of imported crude oil cost $21.40 on average for that year. But by 2003 the average price of a barrel of crude oil had risen 26.0% to $26.97 per barrel. However, the important point is shown in column (6). Note that the price of crude oil in terms of euros is essentially unchanged throughout this 3-year period.

As the dollar has fallen, the dollar price of crude oil has risen. But the euro price of crude oil remains essentially unchanged throughout this 3-year period. It does not seem logical that this result is pure coincidence. It is more likely the result of purposeful design, namely, that OPEC is mindful of the dollar's decline and increases the dollar price of its crude oil by an amount that offsets the loss in purchasing power OPEC's members would otherwise incur. In short, OPEC is protecting its purchasing power as the dollar declines.

43 posted on 12/05/2011 11:57:00 AM PST by SunkenCiv (It's never a bad time to FReep this link -- https://secure.freerepublic.com/donate/)
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To: Gen.Blather
Image and video hosting by TinyPic

44 posted on 12/05/2011 12:00:41 PM PST by SunkenCiv (It's never a bad time to FReep this link -- https://secure.freerepublic.com/donate/)
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To: CowboyJay
We have the same level of world supply we did 7 years ago despite the change in price.

Only if you are ignoring some sources of petroleum like Canadian Oil Sands. We have reached back up above 87 MMBPD. We were several million BPD less in 2004.

http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=53&aid=1&cid=ww,&syid=2004&eyid=2011&freq=M&unit=TBPD

All that production from new technology isn't enough to replace the traditional plays that are going offline.

Your opinion, not mine and many (not all) agree with me. Some of those old resources will go through many decades of enhanced production methods. The recoverable reserves from a typical field rises with the price as well.

And if there is no demand above a certain price level, then there is no increase in production.

That is a different concept than supply not meeting demand, as you first discussed.

Peak oil isn't a question of whether or not we have the technological capability to produce more. It's about whether we can increase our overall economic output enough

Of course some day we will use less petroleum and more of another source. The stone age didn't end becase we ran out of stones.

I would like to see your same chart ploted in tons of gold. It only proves that some commodities rise faster than the average market. Not really a surprise.

45 posted on 12/05/2011 12:08:18 PM PST by thackney (life is fragile, handle with prayer)
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To: thackney
"The recoverable reserves from a typical field rises with the price as well."

I think I know where we're missing each other here. That doesn't represent a movement along the existing supply curve. That represents a leftward shift of the supply curve, itself. That typically results in a new equilibrium point of a higher price, but the same quantity still being supplied.

"I would like to see your same chart ploted in tons of gold. It only proves that some commodities rise faster than the average market. Not really a surprise.

I'll go a step further. You can plot the same chart in terms of virtually any fungible commodity over the past 12-15 years, and while the amplitude will change and the peaks may move by a few months left or right, the basic shape of the graph does not. What it means is that the only way we can continue to consume at current levels is by taking on increasing amounts of debt, because our actual economic output - indexed to anything real - has been in almost nonstop contraction over that period.
46 posted on 12/05/2011 12:34:45 PM PST by CowboyJay (Generic Republican - 2012. He's the only 'electable' candidate.)
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To: CowboyJay

The recoverable reserves from a typical field rises with the price as well.”

I think I know where we’re missing each other here. That doesn’t represent a movement along the existing supply curve. That represents a leftward shift of the supply curve, itself. That typically results in a new equilibrium point of a higher price, but the same quantity still being supplied.

- - - - - - - - - - -

It also means the predicted decline from the old fields, and the necessary new sources needed to make that difference up, declines.


47 posted on 12/05/2011 12:39:16 PM PST by thackney (life is fragile, handle with prayer)
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To: CowboyJay
What it means is that the only way we can continue to consume

I would also point out it means our GDP is become less a function of commodities and more a function of services and increasing value from the original commodity.

48 posted on 12/05/2011 12:51:17 PM PST by thackney (life is fragile, handle with prayer)
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To: thackney
"It also means the predicted decline from the old fields, and the necessary new sources needed to make that difference up, declines."

It's not a technical issue, so much as an economic problem. One of Saturn's moons might be made of hydrocarbons, and we could technically send a spaceship there to bring some back, but it's not of any value to us, because the cost would be such that it wouldn't produce a net economic surplus. The fact that the oil exists, and that we can technically get at it if we expend enough resources =/= "economically recoverable".

Even with the oil sands production, growth in world supply has flattened considerably in the last decade. It has nothing to do with a physical lack of oil, or because the technology does not exist to get it out of the ground. It's because marginal production costs are going up. And the proportion of world supply available to fuel the US economy is declining - because our economic output in relation to the cost of oil is in decline. I'm not alone in thinking this either. Production costs are already 4X what they were in 2000, and they're predicted to increase by 20%/yr for the forseeable future.

Whether or not we're actually at Peak Oil doesn't matter. The economic effects hit when the supply curve starts to flatten, and that happens ahead of the actual peak. IMO, we're already into the phase where US and world economic growth are starting to stagnate because of increasing inelasticity in energy supply.
49 posted on 12/05/2011 2:03:08 PM PST by CowboyJay (Generic Republican - 2012. He's the only 'electable' candidate.)
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To: thackney
"increasing value from the original commodity"

The problem is, we're getting worse at that as a country, not better. That's why our GDP is in decline in relation to anything real. We're not creating enough real wealth or tradeable value that can be exchanged to afford the basic economic inputs we're using up, so we have to borrow forward against future production.

We've been kiting checks for gas money the last 15 years, and our creditors (individually, and nationally) are starting to put their foot down.
50 posted on 12/05/2011 2:19:03 PM PST by CowboyJay (Generic Republican - 2012. He's the only 'electable' candidate.)
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