Posted on 05/24/2007 5:21:39 PM PDT by K-oneTexas
Oil is a fungible commodity. The world market will determine its price. If we pass laws dictating a low price, oil companies will not invest here to keep up production, they will invest in other countries. Just as the Alaska oil/gasoline price is determined by the West Coast market, the average US price is going to be a function of the world market.
If we have our own supply then OPEC cannot collude to cut production to raise prices.
If the oil co’s were refining oil they drilled they then get money through the whole process instead of buying at grossly inflated prices.
The price of oil now has a huge terrorisn surcharge. Take that away and oil goes back down below 40/bbl.
With over a trillion barrels of shale oil in the conus we would be smart to begin supplying China and India.
Are we smart enough?
That would real a free trade market.
You are not understanding how a what a fungible commodity is priced. If Iowa has 10 times the corn it needs, the price of corn in Iowa is still going to be high if the nation has a drought and total corn production is way down.
If the oil co’s were refining oil they drilled they then get money through the whole process instead of buying at grossly inflated prices.
Each step of the process produces a fungible commodity. Some companies are crude oil producers only, some are pipeline companies only, some are refiners only. They all buy and sell at different steps along the way.
The price of oil now has a huge terrorisn surcharge.
Agreed, not just terrorism but too large a percentage controlled by OPEC. If more non-OPEC oil production comes online, we will limit OPEC's ability to impact oil prices and we should do so. But we will not take oil pricing off the global market. But we could reduce the ability of OPEC to diminish the World's Oil Supply without them taking a very large hit in cash flow.
With over a trillion barrels of shale oil in the conus we would be smart to begin supplying China and India.
I do not know what the conus is, but the US will never be again a net export of petroleum, at least not in the next 50 years.
If your job completely ended tomorrow, would you starve to death, or would you find a way to have a new employment?
It may not be a financial choice you want or even should make today, but the claims of no choice are not believeable.
If my job ended tomorrow, I’d have to drive even farther than I do now. I already cut my commute in half.
Doesn't this mean they do get to control the price?
So in reality there are price controls on oil already. Just OPEC gets to make the price as high as possible. Add that to the lack of refining expansion, 32 blends of gasoline and high taxes and we are really in a pickle.
The mass of Democrats have low mental ability and lack of critical thinking skills. Some have IQ’s above 110, but this is rare. Some Democrats display false signs of higher intelligence - for example, the professor who has written a 500 page book about the evils of capitalism and the benefits of socialism, or about “global warming”. Most Congressional Democrats would fit in the “false signs of intelligence” category. The average Democrat believes everything the media says, never reads books, and knows all about the latest TV shows and movies.
Me, too. I remember those days clearly. If I hadn't worked for a car dealer, whose employees were given preference when a load of fuel was delivered, I would have been up a creek.
Carolyn
P.S. That was also when we learned that you could use unleaded gas in an engine that used regular leaded if you put some top cylinder lubricant in it. Very useful info back then.
Not a person, and not anyone's conscience determine the value of products and services --- only the market.
In 1980, Detroit had the slowest production lines in the word (autoworkers demanded not to sweat). An 18-year-old with no education was earning $40,000/year -- roughly what an engineer with a Master's degree and some experience.
Should those workers have pinches of conscience, should have they asked, Maybe we are "taking too much?"
The point of this example is that you never apply the "conscience" argument to bus drivers, teachers, or autoworkers. Those people must get as much as they can. But it is "filthy rich" executives that must somehow restrain themselves. Nor do you apply the same standards to basketball players or movie stars -- 30 million in six weeks is OK because he is talented.
To be a CEO of Exxon requires talent as well -- of star caliber. And, like workers and teachers, those CEOs go on the market and sell their talent, just like you and I. It is the market that determines compensation.
The market determines also the price of the stock. Oil companies make large profits only because oil prices have been rising for years. When they were dropping, those companies lost money. I don't remember people feeling sorry for them.
Free markets have made this country most prosperous in the world. Be proud of them. "Conscience"-driven compensation is Marxism.
Suppose the US bought nothing from OPEC, but OPEC was still selling to China and India. Then by reducing production, the price China and India are willing to pay will go up.
US production companies will then create a shortage in the US by choosing to sell at the higher prices China and India are willing to pay, rather than the lower prices in the US.
Aside from transportation costs, the price of oil will always be very close anywhere in the world.
As long as China and India’s demand grows faster than worldwide petroleum production, anybody that can significantly reduce production as OPEC does will be able to manipulate prices.
I think one smart move on our government’s part would be to guarantee a price for oil produced domestically from any source — new wells for crude, shale, tar sands, coal-to-liquid, whatever — that guarantees a profit to the producer. You mentioned $30/bbl from shale. But development of shale will be slow because the investors know OPEC can pull the rug out from under them by dumping crude on the market and keep market prices below $30/bbl until those investors go broke. What if the government said, “Produce oil from shale, and if you can’t sell it for more than $35/bbl, the government will make up the difference.” The risk of capital investment has just gone away by having a customer that has agreed to pay $35 regardless of what OPEC or other monopoly cartels do. The government may never need to purchase a single barrel under this agreement, if the producers can sell their oil on the open market for more than $35.
I should have said no one makes us drive very far. You move closer to work. You can ride your bike more, walk more, etc.
I did. I got a job closer to where I live, and I only drive to work. I walk pretty much everywhere else.
You assume I do not complain about ball players or movie stars or rock stars.
I do complain about them. they are all way overpaid.
Just the same 51¢ a gallon tax credit offered to blending ethanol would be enough. It is another example where the government should not select the fuel to support, just give support to domestically produced fuel, better yet, measured by the BTU, not the gallon.
Secondly, you should familiarize yourself with Shell’s Shale Oil process. They are one of the approved Pilot projects BLM allowed for expanding into more Shale Oil expansion. It is an In-Situ process, no mining is done, the petroleum liquid is extracted from the ground leaving the solids in the ground.
Seebach: Shell’s ingenious approach to oil shale is pretty slick
http://www.rockymountainnews.com/drmn/news_columnists/article/0,1299,DRMN_86_4051709,00.html
They don’t need subsidies; the process should be commercially feasible with world oil prices at $30 a barrel. The energy balance is favorable; under a conservative life-cycle analysis, it should yield 3.5 units of energy for every 1 unit used in production. The process recovers about 10 times as much oil as mining the rock and crushing and cooking it at the surface, and it’s a more desirable grade. Reclamation is easier because the only thing that comes to the surface is the oil you want.
Welcome to the Mahogany Research Project
http://www.shell.com/home/Framework?siteId=us-en&FC2=/us-en/html/iwgen/leftnavs/zzz_lhn4_4_0.html&FC3=/us-en/html/iwgen/shell_for_businesses/exploration_production_shared/mahogany_shared/dir_mahogany.html
OK, this means that you subscribe to socialist principles. Hardly anyone is a conservative nowadays when it comes to economics.
Because I think most ball players and rock stars are overpaid I am a socialist.
I suppose that makes sense to someone.
Obviously to you.
Yes, to anyone who reads textbooks. I have explained to you that it was Marx's idea that one can CALCULATE the value of one's work. Other than dictators in Cuba and Venezuela, most of the world considers it nonsense. And a dangerous one: we know about mass murders that ensued in every country that embraced that theory.
In reality, only the market establishes the value. If you sell your house for $200,000 --- that's the value of your house on the date of transaction. If a year from then the new owner resells it for $210,000 --- that's the value on the corresponding date.
Either read on your own or listen to someone trying to explain to you. If something does not make sense to you, inquire and think some more before you declare that it does not make sense. It is your sense that looks silly.
Have a good day.
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