Posted on 08/15/2005 6:06:24 AM PDT by BulletBobCo
Drilling off Cal. and Florida would come on line quick. And this country has been lacking an energy policy for the past 2 administrations.
Not quick enough and never in sufficient quantity to make a meaningful difference.
The high price is a recent phenomenon.
It would do two things. One more oil in the maket is not a bad thing for consumers and two it would at least look like something is being done. And of course GWB needs to jump start his suggestion that new refineries need to be built on old military bases adn else where. This two would hope calm the market.
Oil is now under greater subrosa control than when Rockefeller's noose reined.
No,I guess one could make a case for oil being a few pennies a barrel less dear.
and two it would at least look like something is being done.
LOL, "don't just stand there, pretend you are making a difference".
This two would hope calm the market.
The market is calm.
The media and the uninformed and economically undereducated are agitated.
Prices rise and fall, always have, always will. And price remains the most useful tool for the allocation of resources that has ever existed.
Anyone who believes that the internal combustion engine with petroleum as the energy source is the future, isn't much of a student of the past.
Politics and economics have always been intertwined. Doing something, even if mostly symbolic can calm the market and the buyers. And as for the market being calm it does not look that way from here.
Don't ping me either.
This was not a localized phenomenon (similar prices were seen all over), but as it turned out, the reaction was exactly the wrong one for reality. The Pacific rim demand was far more than the Clinton era agency postulated, and further, they failed to take into account development in India.
Gasoline was $0.87 on the East Coast, and everyone was thrilled with how cheap fuel was.
Domestic oil industry workers were out of work, many 20+ year hands left the oil patch for good after three bust cycles and spending the last of their savings to feed the family--again.
In the meantime, low prices caused many marginal wells to be plugged, wells which will not pay to reopen at $100/bbl., but which produced their 10-20 bbl per day, and in aggregate, were a significant source of domestic oil.
A regime change in Venezuela, coupled with a general strike in the oil industry there cut our supply (actually more oil was coming from Venezuela than Saudi Arabia). The 'shortage', if you will is accentuated by the Chinese buying up oil properties all over, especially in Canada, which is a major exporter to the US as well.
But the real problem, in terms of fuel prices, is the fact that no matter how much crude is available, it must be refined before you can use it, and there have been no new refineries built in the past 20 years in the US, while numerous refineries have been dismantled and shipped overseas or scrapped. Thank the environmnetalists for most of this, the NIMBY contingent gets the rest of the credit.
For those refineries which are in operation (currently at 98% capacity), there are all the different fuel formulations which must be catered to and additives to add, which further adds to the expense of production and makes shortages of a particular fuel entirely possible.
Significant contingents of Americans moving further from work in the last few decades have contributed to the problem as well. I remember "living in the sticks" and dad commuting 35 miles to work in the '60s in a little fiat air cooled roller skate so we could live there (I am glad he did) when no one else wanted to live "down there".
The supply of crude is not restricted, except by past economic factors and past/present environmental policies.
Demand is outstripping supply, on a global basis. Oil is a globally traded commodity, and price is not dependant on our policy alone.
Environmental and other lobbies have combined to restrict our ability to manufacture the petroleum products we use most. This has amounted to de facto manipulation of the available supplies, from an unanticipated (for many not in the industry) and non industry source.
While wartime speculation may cause some of the increase, this is only a small part of the price. The Clinton IEA blew it, plain and simple.
The rest is a synergistic combination of other factors.
For most people, this would not be a significant problem, if they were not leveraged to the hilt. With the era of cheap credit coming to a close, the crunch is on.
So I am waiting for a cheap SUV/1 ton pickup, and a nice outlying home for 20 cents on the dollar.
You'd be amazed how clean and efficient it can be if need be(need be, of course, is determined by the powers that be.)
People see what they want to see. They see things that confirm what they already believe.
How about this for an idea that could lower the price right now? ;
all government taxes on oil or gas be removed.
Then why aren't you? If this was such a crisis, why are people not lining up around the block for such modifications?
Quote: why are people not lining up around the block for such modifications?
Because those mod's would cost $1500-2500.00 depending on car make + labor. Any offset in increase gas milaeage is lost. Now if the factory did it to new cars.
I have done this and know people who have. Why they do not I do not know. But it works. All you are doing is letting more air get into anf out of you engine. It increase the combustion with the same amount of gas. As for the MSD ignition, it fires about 20 times a second verses the usual 10 of stock systems. More firing and more O2 means more effecient burn. More Horse power with every gallon. Most people when they get more power back their foots out of the fuel injectors some. This is what save gas.
Which, at past prices have thus far been uneconomical. That is one of the benefits of price. It allocates efforts and innovation when the need arises.
You'd be amazed how clean and efficient it can be if need be(need be, of course, is determined by the powers that be.)
The "powers that be" are those in the free market. Low prices do not stimulate innovation. Resources are better allocated elsewhere.
Agree with you there on the taxes 100%.
Then if that capital outlay will not justify the fuel savings, then I suggest to you, it is not much of a crisis.
There is no short term solution, only remedies. Remedies (short term political expediency) got us in the mess we are in.
The way 'out' will involve some fundamental changes on an individual basis, but in the end, we will all pay more for fuel.
The equation has changed, there are an increasing number of consumers, and what is more, they are not going away.
Refneries will not be built over night, they take years to construct.
As for government "doing" something, government has been a major contributor to the mess, all we need is for the folks who require a year of study and EIS, etc. to drill on federal land or aome government created buffer area, to muck about more in the process. You would be able to easily DOUBLE what you are paying at the pump.
Drive less, get a smaller lighter vehicle, restructure your debts, and anticipate $3.00 gasoline.
While that may work as an emergency fuel source, it is no long term solution.
Alternatives must show a net energy gain in order to be effective, and the eqution has to include the energy invested in the production of the fuel.
While there will be alternative technologies, for these to remain competetive, the price of petroleum must stay up, and if they are discarded, the price will go back up. Expect the economic equilibrium to happen somewhere at or above current prices.
For the long term, I would structure my household budget for $3.50 gasoline, if it is less, then you have some change in your pocket, if it is more, you will not hurt as bad as the folks who figure on $2.50+/-
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