Skip to comments.There's No Oil Shortage
Posted on 05/03/2005 5:06:37 PM PDT by gogipper
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Is it all relative? Maybe oil prices aren't so bad, after all.
Yes, gas prices have soared, but they're still 34 percent below 1980 levels. Housing and baseball tickets are another story.
| Staff writer of The Christian Science MonitorHOUSTON We groan when our grandparents go on about Coca-Cola costing only a nickel in their day. How did things become so much more expensive, they always want to know?
Here's the short answer: With inflation factored in, that same bottle of Coke during World War II would cost roughly what we pay for it today. Eggs, milk, and bread now cost less.
But when the subject of gasoline comes up, we sound like our elders. How did it get to be so much?
The fact is, oil is still relatively inexpensive. By one measure tracked by Dow Jones, we are still far from matching an April 1980 spike in US oil prices. The $39.50 per barrel price that month exceeds $90 in today's dollars.
We remain a long way from that, with oil easing below the $50 mark in trading Monday.
That's not to say that energy costs aren't hitting families and corporations in the pocketbook. Even as oil prices have softened in recent days, there's been new concern about energy dampening economic growth. But a broader view - looking at oil over a longer period and against other goods and services - puts the impact in a less dire perspective.
"Gas is actually cheap right now," says Timothy McMahon, editor of InflationData.com. "Up until a year ago, oil was at a historic low, and they were giving this stuff away. And so to go from $20 a barrel to $50 a barrel looks like a big increase in a small period of time. But if it were spread out over those 25 years, nobody would say a thing."
Even with the rising costs, economists say, energy still makes up a small percentage of a family's budget, about 4 percent. That's half what it was in the early 1980s.
In fact, lots of goods and services have gone down in price during that time, including clothes, electronics, and food. But don't dismiss your grandparents that quickly. Certain things like new cars, new homes, healthcare, and a college education are considerably more expensive today.
AAA, the nation's largest organization for motorists, is quick to point out that most families try to stick to some kind of household budget and do feel the pinch when oil prices fluctuate.
"AAA's view for a long time has been that inflation-adjusted prices for energy are probably helpful to economists and policymakers, but not for the typical family that has to pay a gasoline credit-card statement every month," says Geoff Sundstrom of AAA. "The prices are paid with real dollars or current dollars."
Consumers seem to be taking the rapid rise in oil prices in stride. Many aren't cutting out that weekend movie to make up for the damage at the pump.
Jeff Stepanik, for instance, says gas prices over $2 a gallon have not had any impact on his family's budget (or lack thereof). He is still tinkering around with motorcycles and his wife is still happily hitting the mall. "We don't live any differently than we did before," says the Houston account manager. "It's not like we're going without a meal because of gas prices." But he is considering a life with routinely higher gas prices - as witnessed by his family's most recent purchase.
Three weeks ago, Mr. Stepanik sold his wife's "gas-guzzling" Ford Expedition and bought a hybrid Nissan. "This vehicle made more financial sense, because we are not going to stop driving," he says.
He estimates that gas prices would have to exceed $10 a gallon before he considers changing his driving patterns.
That's not an uncommon attitude in the United States. Even during the oil embargo of the 1970s, it took a while before consumers began buying smaller, more fuel-efficient cars or moving closer to where they worked.
"It's going to take a lot higher gas prices for people to consider using mass transit or carpooling again," says Mark Baxter, director of the Maguire Energy Institute at Southern Methodist University in Dallas. "It is really difficult for Americans to give up the freedom they have with the automobile."
He sees it happening perhaps first with the younger generation, who are more shocked by the rising prices because they have grown up with cheap gas. For instance, he knows a college student who took a lower-paying summer job because it was 20 miles closer to where he lived.
"They are doing the math," says Mr. Baxter.
But Michael Solomon, consumer behavior expert at Auburn University in Alabama, calls the frenzy over rising gas prices "a tempest in a teapot," considering the amount of money people spend on small indulgences.
"The same people who are complaining about gas prices don't blink when they pay $3.50 for a latte," he says. "That's different somehow."
What's different is the changing perception of certain goods and services, he says. The necessities, such as food, clothing, and energy, are supposed to stay relatively constant, so that every year consumers are able to afford a little more of the "good stuff."
"We learn that a loaf of bread is $2.29 and we base our expectations on that. The usual becomes the right," says Dr. Solomon. "But the 11th Commandment is not that bread shall be $2.29."
When you say that the abiogenic theory of hydrocarbon fuels
being "debunked" by the "scientific community", you should specify the "western" or english-speaking scientific community.
The abiogenic theory is alive and well in much of the rest of the world, and in fact, is gaining adherents.
For those who want a more in-depth look at the abiogenic theory, I recommend Gold's book "The Deep Hot Bioshere".
make that "The Deep Hot Biosphere".
I think by now we should have cheap desalinization of oceans for fresh water supplies and we should have alternative sources of cheap energy.
For heaven's sake, all this talent and America can't get this done?
I don't know about that or decades more being needed.
See post #54 where I say that...
The only adherents to Gold's (ond others) theories are those who also subscribe to global warming... Science and FACT over theory...
Preach it, sister. It has never been about the environment or oil.
Interesting you should mention desalinization. A few years ago My wife and I were on a cruise. One of the destinations was Aruba. There is no natural water supply on Aruba other than rain, and that apparently is sporadic althought enough to supply the population.
What they did was turn the roofs of their buildings, houses, etc, into drain systems ending up in large cisterns. That was the water supply until the government went into the desalinization business, building a large plant to supply the island.
In the process they required everyone to be on the system, destroy the previous water works, and make having one of the old ones illegal. Brilliant, now why didn't I think of that. I shoulda had a patent. NOT!
Speaking of technology, when one considers all involved in replacing the present energy source, and its manufacturing and distribution channels, one can quickly see there is not going to be a quick fix for the present source, unless the discovery is so cheap, and so available as to be instantly useable on a national scale.
On a list of things nearly impossible, this one shall remain very near the top. I'm sure all of us would welcome cheap, clean, and unlimited, but the laws of physics, science, economics and reality, cannot so easily be ignored.
The "fossil" theory of oil is just that....a theory. Many reputable scientists say that the abiogenic theory answers more questions about the origins of oil than the "fossil" theory.
The theory that answers more questions is usually considered the best theory.
I am not familiar with the facts supporting your statement that "the only adherents to Gold's(ond others)theories are those who also subscribe to global warming...(sic)".
I, for one, see the abiogenic theory as more informative than the fossil theory, and I certainly do not subscribe to man-made global warming scenarios. Global warming AND cooling, however, are well established.
It is inevitable that there is strong resistance to any new idea, notwithstanding the fact that the abiogenic theory is not new, only new in the West. New ideas unsettle the status quo with all the implications thereof. Heck, careers come into question!!! People have to retool thinking processes, never a painless process. Why some people have to admit they were wrong. And we all know how painful that can be. Heck, I know people who would never, under any circumstance, admit they had been wrong!! LOL!!!
Oil, Oil Everywhere
The Wall Street Journal Opinion Journal ^ | Sunday, January 30, 2005 12:01 a.m. EST | PETER HUBER AND MARK MILLS
Posted on 01/30/2005 10:24:37 AM CST by Woodworker
Also, another idea:
Anything into Oil(solution to dependence on foregn oil?)
DISCOVER Vol. 24 No. 5 ^ | May 2003 | Brad Lemley
Posted on 04/21/2003 7:57:41 AM CDT by honway
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