The real question here though is this: are they going to do anything about it?
http://www.tulsanow.org/forum/topic.asp?TOPIC_ID=9666
quote:
WASHINGTON - Top executives of the five largest oil companies tried to shift anger over high prices to a debate over supplies Wednesday, leading a senator to accuse them of acting like "hapless victims" while racking up record profits.
Patrick Leahy, D-Vt., told the executives there's "a disconnect" between normal supply and demand and the skyrocketing price of oil — surpassing $130 a barrel even as the oil leaders testified — that the industry has yet to explain.
J. Stephen Simon, executive vice president of Exxon Mobil Corp., said profits have been huge "in absolute terms" but must be viewed in the context of the massive scale of the industry." He also said high earnings are needed "in the current up cycle" to pay for investments in the long term when profits will be down.
"'Current up cycle,' that's a nice term," replied Leahy with sarcasm, "when people can't afford to go to work" because gasoline is costing close to $4 a gallon.
He asked Simon what his total compensation was at Exxon, a company that made $40 billion last year. Simon replied it was $12.5 million annually.
Two other executives, John Lowe, executive vice president of ConocoPhillips Co., said he didn't recall his total compensations as did Peter Robertson, vice chairman of Chevron Corp. John Hofmeister, president of Shell Oil Co., said his was "about $2.2 million" but was not among the top five salaries at his company's international parent. Robert Malone, chairman of BP America Inc., put his compensation at "in excess of $2 million."
Sen. Arlen Specter, R-Pa., said Exxon's annual profits increased from $11.5 billion to $40.6 billion in the past five years and there was no explanation for "why profits have gone up so high when the consumer is suffering so much."
The five companies earned $36 billion in the first quarter of this year.
The executives, appearing under oath before the Senate Judiciary Committee, said they know high prices are hurting people, but they said the cause is not company profits but global supply and demand. And they sought to use their appearance before Congress to argue against new taxes on their industry
"I urge you to resist these punitive policies," said Hofmeister.
Senate Democrats recently announced an energy package that would tax "windfall" profits of the five companies. That might have public appeal, Lowe told the senators, but oil companies should not be viewed as "a scapegoat" for high prices.
That was not what many senators wanted to hear.
You have "just a litany of complaints that you're all just hapless victims of a system," Sen. Dianne Feinstein, D-Calif., told the executives. "Yet you rack up record profits ... quarter after quarter after quarter."
"I'm sorry to sound like a victim. I don't feel like a victim at all," replied Robertson of Chevron, saying that he was proud of his company's investments in future supply.
Sen. Richard Durbin, D-Ill, accused the corporate executives of ignoring the plight of people suffering because of high energy prices. "Where is your corporate conscience?" he asked them.
"The issue is simple," said Leahy. "People we represent are hurting, the companies you represent are profiting."
I find in interesting that all of the Senators who are complaining in this article are Democrats. They complain, in a capitalist system, that certain companies make too much money. How many of those same Senators have investments in those same companies who are making too much money? Why do they complain that a certain industry is making too much money? Where were these same Senators when the energy industry was in the tank? Where? Granting tax exemptions, which now they complain is unfair. Pass a tax increase, and that increase gets paid by the end user, which is you and me!
quote:
Originally posted by Wilbur
I find in interesting that all of the Senators who are complaining in this article are Democrats. They complain, in a capitalist system, that certain companies make too much money. How many of those same Senators have investments in those same companies who are making too much money? Why do they complain that a certain industry is making too much money? Where were these same Senators when the energy industry was in the tank? Where? Granting tax exemptions, which now they complain is unfair. Pass a tax increase, and that increase gets paid by the end user, which is you and me!
++1
The current Oil company profit stands at 4 cents a gallon (as testified yesterday). They are attacking a hand full of CEOs for their salaries. Nothing but a political circus. It's just sad! [:(]
+1 Wilbur.
My favorite moment was when Feinstein said:
"So you are just helpless victims here, that's what I'm hearing."
Really Senator? And you are what... powerless to influence energy policy? YOU MAKE THE RULES THEY PLAY BY!
A dog and pony show, nothing more. Actually doing anything would sap billions from pension funds and raise the price of fuel. Just talking about it has driven oil prices hire... so thanks for the show.
The quickest way to double your money is to fold it in half and put it back in your pocket
Yep, I just heard oil hit $135.00 a barrel today. We need to drill for our own oil, OPEC is cutting back production to keep prices high plus the falling dollar = $5.00 a gallon gasoline very soon. We have cut back oil use but OPEC just cuts back production to keep supplies tight the only answer is to drill for our own oil.[:)]
and I just realized that I copied and pasted the link for the forum instead of the article. Doh!! Guess I've got to dig to find the right link now.
quote:
Originally posted by Gasper The current Oil company profit stands at 4 cents a gallon (as testified yesterday).
The problem I've got with this is this
quote:
Sen. Arlen Specter, R-Pa., said Exxon's annual profits increased from $11.5 billion to $40.6 billion in the past five years and there was no explanation for "why profits have gone up so high when the consumer is suffering so much."
The five companies earned $36 billion in the first quarter of this year.
Now this is interesting, came across this one while looking for the other.
http://us.rd.yahoo.com/dailynews/fc/Business/oil_and_gas/news_stories/SIG=124d11i63;_ylt=Al6ymid58NQ3Jz4QPVoBpGlv24cA/*http://money.cnn.com/2008/05/21/news/economy/oil_hearing/index.htm?postversion=2008052112
quote:
NEW YORK (CNNMoney.com) -- Amid increasing public outcry over record-shattering oil and gas prices, senators on Wednesday hauled industry executives in to testify about the recent runup.
The Senate Judiciary Committee called the hearing to explore the skyrocketing price of oil, which jumped over $4 a barrel to a new record of over $133. The committee grilled executives from Exxon Mobil (XOM, Fortune 500), ConocoPhillips Co. (COP, Fortune 500), Shell Oil Co. (RDSA), Chevron (CVX, Fortune 500) and BP (BP) as to how their companies can in good conscience make so much money, while American drivers pay so much at the pump.
"You have to sense what you're doing to us - we're on the precipice here, about to fall into recession," said Sen. Richard Durbin, D-Ill. "Does it trouble any one of you - the costs you're imposing on families, on small businesses, on truckers?"
The executives said it did, and that they are doing all they can to bring new oil supplies to market, but that the fundamental reasons for the surge in oil prices are largely out of their control.
"We cannot change the world market," said Robert Malone, chairman and president of BP America Inc. "Today's high prices are linked to the failure both here and abroad to increase supplies, renewables and conservation."
Malone's remarks were echoed by John Hofmeister, president of Shell.
"The fundamental laws of supply and demand are at work," said Hofmeister. The market is squeezed by exporting nations managing demand for their own interest and other nations subsidizing prices to encourage economic growth, he said.
In addition, Hofmeister said access to resources in the United States has been limited for the past 30 years. "I agree, it's not a free market," he said.
The executives pushed the idea that large parts of the U.S. that are currently closed to drilling - like sections of Alaska, the Rocky Mountains and the continental shelf - should be opened.
"The place to start the free market is in our own country," said one executive. [The drilling ban] sets the stage for OPEC to do what we are doing in our own country, and that is effectively limiting supplies."
John Lowe, executive vice president of ConocoPhillips, said Congress should enact a balanced energy policy. In addition to lifting the drilling ban, such a policy could include measures to encourage alternative energy sources, remove the ethanol tariff, promote energy conservation, cut regulations around refining.
"We must work together to find a real solution," said Lowe. "U.S. oil companies should be viewed not as scapegoats, but as assets."
The executives also named several things that Congress should not do, first among them being a hike in taxes or an undoing of the mergers of the late 1990s.
"Americans need companies that can effectively compete for access to new resources," said Peter Robertson, vice chairman of Chevron. "Punitive measures that weakened us in the face of international competition are the wrong measures."
The executives also frowned on a recently passed House bill giving the Justice Department the power to sue OPEC, saying it would have little effect in boosting production.
The testimony was colored by a few outbursts of protest from members of the public. Before the hearing even began, a heckler in the crowd shouted: "Stop ripping off the American public - bring these oil prices down."
The panel took issue with the amount of money oil firms are investing in finding oil, and investing in renewables.
"You know how much cash you have on hand compared to capital investment," said Durbin. "They are begging us for more refineries, for more exploration, when their refineries are only operating at 85 percent."
Chevron's Robertson said the issue wasn't really one of refining, and more just the price of crude.
We are investing all we can [in finding new oil] given the limitations of access and our own human capacity," he said. "We have adequate refined capacity, inventories are at an all time high. The issue is the price of crude."
Committee Chairman Sen. Patrick Leahy, D-Vt., likely summed up the feeling of many senators on the panel.
"The people we represent are hurting, while your companies are profiting," he said. "We need to get some balance."
Congress: Familiar ground for execs
The hearing marked the second time in as many months that top oil industry officials have been called before Congress.
In April, roughly the same lineup defended their firms before a House committee. The hearing was ostensibly called to ask the executives why they needed some $18 billion in federal subsidies in light of their record profits, but quickly became a Q&A on bigger questions in the energy business.
Lawmakers criticized the firms for not investing enough in finding new oil and developing renewable resources and told them, in thinly disguised terms, that they'd be forced to enact extra profit taxes if Big Oil continued to post such large earnings.
The oil men said they're making business decisions in the best interest of their shareholders. They repeated their often-stated position that the best way to lower prices and bring more oil to market is to open up wide swaths of the U.S. that are currently off-limits to drilling.
Although lawmakers don't vote on energy issues strictly along party lines, Democrats generally want to increase taxes on Big Oil and use the money to fund renewable energy research.
Republicans generally favor opening up the Alaska Wildlife Refuge, large parts of the Rocky Mountains, and areas off the east and west coast that have been closed to drilling since the 1970s following a public backlash after several big oil spills.
The parties are widely apart on the issues - a Republican effort to expand drilling recently failed in the Senate - and a compromise is not expected soon.
But both the Democrat and Republican proposals are long-term solutions that would have little impact on the nation's energy picture for several years, if not decades.
In the short run, experts say there's little politicians can do to bring down the price of gas.
Recent proposals to suspend the gas tax from the Democratic presidential contender Hillary Clinton and presumed Republican nominee John McCain were roundly criticized for leaving the government with a cash shortfall while possibly encouraging more driving, and by extension higher prices.
A measure to stop filling that nation's Strategic Petroleum Reserve was enacted last week with wide bipartisan support, but has done nothing so far to stem surging crude prices.
Are you feeling the pinch of gas prices? Tell us how gas prices are affecting you and what you're doing to cope. Send us your photos and videos, or email us to share your story.
First Published: May 21, 2008: 10:17 AM EDT
quote:
Originally posted by custosnox
The real question here though is this: are they going to do anything about it?
http://www.tulsanow.org/forum/topic.asp?TOPIC_ID=9666
quote:
WASHINGTON - Top executives of the five largest oil companies tried to shift anger over high prices to a debate over supplies Wednesday, leading a senator to accuse them of acting like "hapless victims" while racking up record profits.
Patrick Leahy, D-Vt., told the executives there's "a disconnect" between normal supply and demand and the skyrocketing price of oil — surpassing $130 a barrel even as the oil leaders testified — that the industry has yet to explain.
J. Stephen Simon, executive vice president of Exxon Mobil Corp., said profits have been huge "in absolute terms" but must be viewed in the context of the massive scale of the industry." He also said high earnings are needed "in the current up cycle" to pay for investments in the long term when profits will be down.
"'Current up cycle,' that's a nice term," replied Leahy with sarcasm, "when people can't afford to go to work" because gasoline is costing close to $4 a gallon.
He asked Simon what his total compensation was at Exxon, a company that made $40 billion last year. Simon replied it was $12.5 million annually.
Two other executives, John Lowe, executive vice president of ConocoPhillips Co., said he didn't recall his total compensations as did Peter Robertson, vice chairman of Chevron Corp. John Hofmeister, president of Shell Oil Co., said his was "about $2.2 million" but was not among the top five salaries at his company's international parent. Robert Malone, chairman of BP America Inc., put his compensation at "in excess of $2 million."
Sen. Arlen Specter, R-Pa., said Exxon's annual profits increased from $11.5 billion to $40.6 billion in the past five years and there was no explanation for "why profits have gone up so high when the consumer is suffering so much."
The five companies earned $36 billion in the first quarter of this year.
The executives, appearing under oath before the Senate Judiciary Committee, said they know high prices are hurting people, but they said the cause is not company profits but global supply and demand. And they sought to use their appearance before Congress to argue against new taxes on their industry
"I urge you to resist these punitive policies," said Hofmeister.
Senate Democrats recently announced an energy package that would tax "windfall" profits of the five companies. That might have public appeal, Lowe told the senators, but oil companies should not be viewed as "a scapegoat" for high prices.
That was not what many senators wanted to hear.
You have "just a litany of complaints that you're all just hapless victims of a system," Sen. Dianne Feinstein, D-Calif., told the executives. "Yet you rack up record profits ... quarter after quarter after quarter."
"I'm sorry to sound like a victim. I don't feel like a victim at all," replied Robertson of Chevron, saying that he was proud of his company's investments in future supply.
Sen. Richard Durbin, D-Ill, accused the corporate executives of ignoring the plight of people suffering because of high energy prices. "Where is your corporate conscience?" he asked them.
"The issue is simple," said Leahy. "People we represent are hurting, the companies you represent are profiting."
What's congress going to do about it? This is nothing more than a political circus to try and keep their elected seats. Thats it. The oil companies dont control the price of oil anyone with any semblence of knowledge knows this. Which means the politicians must be doing one thing....pandering...
Who would have expected that? Pandering in an election year on an issue they have no control over? The real problem is the way the people and our government got relaxed with cheap energy in the 1990s. Now its biting us in the donkey and instead of taking the blame we're trying to pass the buck...
Also when did it become a crime to make money? If thats the precedent being set in this nation it wont last another 50 years.
Revenues are up because the price of oil is up... oil execs don't set the price. Profits are up because their inventory, oil in the ground, is carried at cost. As revenues increase and the cost of the inventory stays the same then profits go up. While the cost to get oil out of the ground has increased it has not increased by the amount that the end orice of the commodity has increased. The oil companies are merely reaping the benefit of the "market" setting a higher price for oil they already have.... the reverse has been true in the past and mey very well be true again at some point in the future.
One other point, if it is so damn easy, and riskless, to make these "obscene" profits then just get out there and do it yourself. Like Western Oil used to say, "if you don't have an oil well, get one"
If you hate oil companies, lets put that hate to good work and make them bid for their own destruction.
Open up the drilling in ANWR to competitive bidding. That is worth nearly a BILLION in direct revenue to the federal government. Take that money towards green initiatives, inducement prices, and other research to make alternative energy sources more viable. A win win.
And if the oil companies catch on and try to get their money back by forming a "green" division then they can come out WAY ahead in the bargain.
BUT, that makes too much sense. Economically. Short term energy policy and long term energy policy. Plus, it doesn't blame all the problems on anyone.
quote:
Originally posted by cannon_fodder
If you hate oil companies, lets put that hate to good work and make them bid for their own destruction.
Open up the drilling in ANWR to competitive bidding. That is worth nearly a BILLION in direct revenue to the federal government. Take that money towards green initiatives, inducement prices, and other research to make alternative energy sources more viable. A win win.
And if the oil companies catch on and try to get their money back by forming a "green" division then they can come out WAY ahead in the bargain.
BUT, that makes too much sense. Economically. Short term energy policy and long term energy policy. Plus, it doesn't blame all the problems on anyone.
your major energy companies already have green divisions in some cases quite large. COP and XOM both have large renewables divisions that are fully funded.
On principle I'm in favor of ANWR drilling but we've probably got a lot more oil off the continental shelf and in the shale formations. ANWR is a big question mark at this point. There's only been one well ever drilled in ANWR and its pretty secretive.
I love how reality and logic starts to creep in when quiet thought-full discourse takes place.
In an attempt to pander, the senate hurled insults and blame on some of the worlds most successful capitalists. The result was that the american public (including the distinguished members of our own TulsaNow forum) learned the difference between profit, and profit-margin.
Now Durban, Leahy, Specter and Feinstein all look like fools. They were relying on an ignorant constituency praising them for taking on "big oil."
What they got, was a very inquisitive, intelligent american public, turning their anger on the policies that are actually responsible for causing market shortages and allowing the inflation of prices.
I think we will start supplying and refining our own oil soon. The very people who have spent a lifetime fighting against it, have now made it inevitable.
I salute you!
quote:
Originally posted by Gaspar
I love how reality and logic starts to creep in when quiet thought-full discourse takes place.
In an attempt to pander, the senate hurled insults and blame on some of the worlds most successful capitalists. The result was that the american public (including the distinguished members of our own TulsaNow forum) learned the difference between profit, and profit-margin.
Now Durban, Leahy, Specter and Feinstein all look like fools. They were relying on an ignorant constituency praising them for taking on "big oil."
What they got, was a very inquisitive, intelligent american public, turning their anger on the policies that are actually responsible for causing market shortages and allowing the inflation of prices.
I think we will start supplying and refining our own oil soon. The very people who have spent a lifetime fighting against it, have now made it inevitable.
I salute you!
We will never be able to meet our own demand for oil...however I think your point is spot on. Why did CAFE standards go unchanged from 1987 till 2006? Oh yeah because policy makers didn't give a **** from 1987 to 2002 because oil was cheap. Now that its expensive and it may cost them their jobs they're being overzealous pricks and will destroy incentive for companies to make money.
We desperately need to increase mileage requirements on vehicles and the new CAFE standards will help a lot but may require upward revisions if we truly want to minimize the effect oil has on our daily lives. I do not think we'll ever see 2 dollar a gallon gasoline again. 2.50 or 2.75 may be possible in 2012 if world production capacity catches up with world demand. Otherwise we may be at 4 bucks a gallon for the rest of our lives. The solution? Be more efficient, get some mass transit and minimize our use of oil and fossil fuels.
I fail to see how a windfall profits tax would benefit the consumer unless the government confiscates the profit as a tax and uses the revenue to subsidize pump prices for gas and diesel.
Anyone care to chime in and explain what this would accomplish, because I don't see there being any benefit to the average consumer.
Drill all you want....We have limited refining capacity.....
quote:
Originally posted by Conan71
I fail to see how a windfall profits tax would benefit the consumer unless the government confiscates the profit as a tax and uses the revenue to subsidize pump prices for gas and diesel.
Anyone care to chime in and explain what this would accomplish, because I don't see there being any benefit to the average consumer.
Windfall profits tax hurts the consumer and decreases investment incentives which decreases supply...it does help politicians get re elected by the uneductated masses.
quote:
Originally posted by Breadburner
Drill all you want....We have limited refining capacity.....
At this point in time refining capacity isn't the issue. 2 years ago it was, but gasoline demand has fallen quite a bit since then and we went from running at 96% capacity to roughly 88% capacity due to decreased demand. This fall in demand has hurt th margins of several energy companies quite drastically.
I had to laugh at the guy filling up beside me that started cussing to anyone within earshot, but no one in particular, about the high cost of gas.... as he filled up his Ford Excursion!
I drive an 04 Nissan Maxima... good performance with enough room for my 6'6" frame. I drove to Dallas yesterday and got 28.6 miles to the gallon with the a/c on... without a/c I get 30mpg. And that's with QT gas!
I find it hypocritical of these democrats and RINOs to piss and moan about high oil and gas prices when they refuse to let new oil refineries be built,refuse to let them drill in ANWAR and refuse to let any hydro-electric dams and nuclear power plants be built.If I was these oil company execs I would remind the politicians of this fact,remind them that we can always take our business elsewhere and remind them that if they want to piss and moan about salary to get all the actors and actresses in Hollywood and entertainers and ***** about their salaries and 20 million a for a movie.
quote:
Originally posted by jamesrage
I find it hypocritical of these democrats and RINOs to piss and moan about high oil and gas prices when they refuse to let new oil refineries be built,refuse to let them drill in ANWAR and refuse to let any hydro-electric dams and nuclear power plants be built.If I was these oil company execs I would remind the politicians of this fact,remind them that we can always take our business elsewhere and remind them that if they want to piss and moan about salary to get all the actors and actresses in Hollywood and entertainers and ***** about their salaries and 20 million a for a movie.
Energy of any kind is a negative topic to Liberals. I say liberals because there are many good democrats, republicans, libertarians, and independents that recognize energy independence as what promotes liberty in a country.
Abundant, cheep energy causes prosperity. Prosperity leads to conservatism. It's as simple as that. The biggest threat to liberalism is prosperity.
Without poor people, disenfranchised people, racism, sickness, and prejudice, the causes that fuel liberalism fail to exist. This is actually to the credit of liberals, that they fight for justice (The Good Fight). However, they also find themselves fighting the solutions as hardily as they fight the problems, because the solutions threaten the existence of their philosophy.
To their great credit, Solar, Wind, and Fuel Cell technologies have been boosted by their efforts. But as these technologies get closer to reality and they threaten other liberal causes, i.e. 8,000 trees cut down to build a solar facility that generates enough power for a small community, or birds threatened by windmills, they will again mobilize against the solutions (those are both real examples taking place in California now).
Be aware that in a 10 sq.ft. of todays office space, we use more energy than 500 sq.ft. of solar or wind farm. It may be possible for us to live with diminished power environments, but it still is not possible for us to work in such an environment without taking up considerably more space to meet the energy requirements, or decreasing productivity considerably.
I heard some nut groups are now fighting to bring back the 55 mph speed limet to save fuel and all that other nonsense. There is talk about doing that in Congress. It will likely pass this congress because of all the democrats in Congress, and if we get a democrat president it's even more likely to happen-- beware, the return of the "double nickle".[xx(]
But I can't drive...
I hadn't seen this thread. Sounds like a lot of animosity is being vented but very little discussion using real facts. Makes me wonder, how many of you work in the oil industry? Not pumping gas or driving a fuel truck[;)].
Cause some of the facts of the industry seem to be lacking. Some of you (Gas goes gassy again) need to turn of Rush, pull a recent book off the shelves about the fallacy of energy independence in a global economy and pick up some real insights there.
Then some of you need to digest what has been said. For instance if refineries are operating at 88%, (and that is a good level which allows for maintenance and repair of equipment), and the demand for fuel has decreased....what is making the price of gasl. rise? Many in the industry are perplexed as well. I think the answer is in the multiple uses for and global demand for oil. Gasoline just gets dragged along. Because oil is a mature industry the profit margin for gasoline is small but mandatory. If it were another industry they would drop the product altogether.
Then when government employees respond to citizen demands to have the same question answered they are accused of ignorance, demagoguery and (shudder, shudder) being LIBERALS!
Lastly, even though energy independence has been argued and promised since Nixon, it hasn't happened and won't. Some of you are libertarians.. Listen to the industry. If they wanted more domestic refineries they would have pushed Bush/Cheney and a republican congress to get them. Refer to 88% figure above.
However if this is just a partisan venting of bile. Well, carry on.
At the risk of breaking up this Rightie chest-thumping exercise, I thought I might add something this wretched liberal found in the papers yesterday. Doubters please be advised, I unearthed this article (//%22http://online.wsj.com/article_email/SB121139527250011387-lMyQjAxMDI4MTIxMjMyOTI1Wj.html%22) from the notably skeptical, notably conservative WSJ.
quote:
Energy Watchdog Warns Of Oil-Production Crunch IEA Official Says Supplies May Plateau Below Expected Demand
The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.
The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought.
(snip)
But the direction of the IEA's work echoes the gathering supply-side gloom articulated by some Big Oil executives in recent months. A growing number of people in the industry are endorsing a version of the "peak-oil" theory: that oil production will plateau in coming years, as suppliers fail to replace depleted fields with enough fresh ones to boost overall output. All of that has prompted numerous upward revisions to long-term oil-price forecasts on Wall Street.
(snip)
In Paris, analysts at IEA also fret that a lack of investment in many OPEC countries, combined with a diminished incentive to ramp up output, casts serious doubt over how much the cartel will expand its production in the future. The big OPEC producers have been raking in record profits, creating a disincentive in many countries to sink more billions into increased oil production.
Meanwhile, politics and other forces are delaying projects that could bring more oil on-stream. Continued fighting in Iraq has stymied efforts to revive aging fields, while international sanctions on Iran have kept investments there from moving forward. Rebel attacks in Nigeria and political turmoil in Venezuela have cut into both countries' output. Big non-OPEC producers such as Mexico and Russia, which have either barred or sidelined international operators, are seeing production slump. The U.S., with a legal moratorium barring exploration in 85% of its offshore waters, is struggling to keep its output steady.
While this may seem like an opportune time to jump and say "ANWR! ANWAR!", ANWR's probable total possible output is somewhere near 15 billion barrels of oil, while in 2006, the US consumed 7.55 billion barrels of oil. So if consumption levels in the US stay the same as 2006 levels, we'll get about 2 years worth of quality oil out of ANWR. Of course, those two years of oil won't come online for another decade at least, because of survey and construction time.
Point of all this is, even if we found ten ANWRs out there on the continental shelf tomorrow, we're not going to see any effect on current oil supplies, and hence pricing. And it's even questionable as to, at our current consumption, what kind of time ten ANWRs would provide us.
The only real path to energy security and independence is to start pushing hard for renewables now.
On ANWR the argument is not that shallow.
1. Reserves are not mass pumped. We will not drain ANWR in 2 years, it will take many decades. So the effect will be significant on a real time as well as accrual basis. At 15 BBL the government estimates are a life of 32 years (5% consumption rate, similar to the North Slope).
2. Currently the US has 3 years of reserves if we cut off foreign oil (which we couldn't pump fast enough of course). So ANWR would be a 67% increase. ANWR has more oil in it than any other NATION on the planet but for the 10 richest oil nations. At current values about $3.6 TRILLION worth of assets. How do you write that off as insignificant?
3. And now it sits empty, with an estimated 4,500 people visiting annually.
4. I have no imaginary math that it will alter the global supply/demand curve, but you and I both know that curve is not the driving force in the oil market. It is a speculation market, FEAR and uncertainty in supply are as important as the actual curve. Friendly sources of oil remove those factors and drive prices down (Venezuela has never stopped selling oil, but the threat has altered prices), and there is no friendly source that our own back yard.
5. The footprint is tiny. Of the entire 20 million+ acres of ANWR, only 8% is even open for drilling. The other 92% is not even open for consideration. Of the 1.5 Million acres open for drilling, about 2,000 acres would have an oil footprint on it (road, air strip, pond, camp or pad). If ANWR were Tulsa, we'd want less than 1 block of land.
So for $3+ TRILLION in assets, hundreds of thousands of jobs, tens of billions in revenue for the government, another notch of stability and a reprieve from volatile foreign sources... I'd say it's worth "ruining" less than 1% of a "pristine wetland wilderness area" (prior generations would have called it a swamp, DDT'd all the bugs, drained it, and built Disney). And, btw, that's what we are talking about. If ANWR was a football field, we want about as much land as is taken up by the kickers X for drilling and infrastructure. Would Tulsa sacrifice
Just look at the impact even a small amount of oil has: Oklahoma producing only 70 Million barrels per year, yet it is considered a boom for our economy.
- - -
Positives:
$3.2 Trillion in assets added to our economy
~ 200 Billion in government revenue
hundreds of thousands of new jobs
Stable source of energy (threat to cut us off less effective)
Ease tension on spec markets (oil prices)
Negatives:
> 1% of a wildness reserve (the portion which was protected in the first place for oil drilling) would be disturbed
Just the $200 BILLION to the fed would be worth it. That's TWICE the amount of the recent "rebate" check and I don't have to do anything to get it.
I just don't see it. A bit of a ramble, but I just don't see it.
quote:
Originally posted by cannon_fodder
On ANWR the argument is not that shallow.
1. Reserves are not mass pumped. We will not drain ANWR in 2 years, it will take many decades. So the effect will be significant on a real time as well as accrual basis. At 15 BBL the government estimates are a life of 32 years (5% consumption rate, similar to the North Slope).
2. Currently the US has 3 years of reserves if we cut off foreign oil (which we couldn't pump fast enough of course). So ANWR would be a 67% increase. ANWR has more oil in it than any other NATION on the planet but for the 10 richest oil nations. At current values about $3.6 TRILLION worth of assets. How do you write that off as insignificant?
3. And now it sits empty, with an estimated 4,500 people visiting annually.
4. I have no imaginary math that it will alter the global supply/demand curve, but you and I both know that curve is not the driving force in the oil market. It is a speculation market, FEAR and uncertainty in supply are as important as the actual curve. Friendly sources of oil remove those factors and drive prices down (Venezuela has never stopped selling oil, but the threat has altered prices), and there is no friendly source that our own back yard.
5. The footprint is tiny. Of the entire 20 million+ acres of ANWR, only 8% is even open for drilling. The other 92% is not even open for consideration. Of the 1.5 Million acres open for drilling, about 2,000 acres would have an oil footprint on it (road, air strip, pond, camp or pad). If ANWR were Tulsa, we'd want less than 1 block of land.
So for $3+ TRILLION in assets, hundreds of thousands of jobs, tens of billions in revenue for the government, another notch of stability and a reprieve from volatile foreign sources... I'd say it's worth "ruining" less than 1% of a "pristine wetland wilderness area" (prior generations would have called it a swamp, DDT'd all the bugs, drained it, and built Disney). And, btw, that's what we are talking about. If ANWR was a football field, we want about as much land as is taken up by the kickers X for drilling and infrastructure. Would Tulsa sacrifice
Just look at the impact even a small amount of oil has: Oklahoma producing only 70 Million barrels per year, yet it is considered a boom for our economy.
- - -
Positives:
$3.2 Trillion in assets added to our economy
~ 200 Billion in government revenue
hundreds of thousands of new jobs
Stable source of energy (threat to cut us off less effective)
Ease tension on spec markets (oil prices)
Negatives:
> 1% of a wildness reserve (the portion which was protected in the first place for oil drilling) would be disturbed
Just the $200 BILLION to the fed would be worth it. That's TWICE the amount of the recent "rebate" check and I don't have to do anything to get it.
I just don't see it. A bit of a ramble, but I just don't see it.
Don't get me wrong. I fully believe that, whether drilling in ANWR is warranted or not, it's going to happen, if only because our objections will start to melt away as the easy sources dry up. In other words, at some point soon, we'll have no choice.
My point is threefold. 1) prices aren't going anywhere but up for the foreseeable future and 2) compared with our consumption level, 15bbl is not the rich haul that's being advertised, and 3) the fact that the richest oil nations are NOT investing in infrastructure and prospecting to keep up with demand seems to point not to a lack of capital to build it but to lack of available resources.
Last statement retracted after we vs us last post. I must agree.
quote:
Originally posted by waterboy
I hadn't seen this thread. Sounds like a lot of animosity is being vented but very little discussion using real facts. Makes me wonder, how many of you work in the oil industry? Not pumping gas or driving a fuel truck[;)].
Cause some of the facts of the industry seem to be lacking. Some of you (Gas goes gassy again) need to turn of Rush, pull a recent book off the shelves about the fallacy of energy independence in a global economy and pick up some real insights there.
Then some of you need to digest what has been said. For instance if refineries are operating at 88%, (and that is a good level which allows for maintenance and repair of equipment), and the demand for fuel has decreased....what is making the price of gasl. rise? Many in the industry are perplexed as well. I think the answer is in the multiple uses for and global demand for oil. Gasoline just gets dragged along. Because oil is a mature industry the profit margin for gasoline is small but mandatory. If it were another industry they would drop the product altogether.
Then when government employees respond to citizen demands to have the same question answered they are accused of ignorance, demagoguery and (shudder, shudder) being LIBERALS!
Lastly, even though energy independence has been argued and promised since Nixon, it hasn't happened and won't. Some of you are libertarians.. Listen to the industry. If they wanted more domestic refineries they would have pushed Bush/Cheney and a republican congress to get them. Refer to 88% figure above.
However if this is just a partisan venting of bile. Well, carry on.
Less demand for gasoline has translated into lower gasoline prices. The fact that refineries are running at 88% capacity and dropping has kept the price of gas from going up with the price of oil. Prices are down because demand is down and gasoline inventories continue to swell.
Refinery capacity at todays usage rates is not necessary. At the usage rates of 2 years ago it was necessary. The ideal rate of refinery usage is 95 to 96% this allows for maintenance of the equipment without disruptions in supply while simultaneously giving the refiner the ability to balance margins and control the margins on gasoline. At 88% where it is today, the biggest refiners, Chevron and ConocoPhillips are making little if any money on their gasoline. As you correctly pointed out, if they could those two companies would start shutting down refineries to boost utilization and return margins to their product. But the political landscape and overall energy landscape dont maket hat possible at this point...
And I do work in the industry as an analyst ;)
Re-reading your posts confirms that. At least the parts that weren't political in nature[;)]. Everyone would be wailing had there been no questions asked at all even if most of them were inane. And I agree that windfall profits is a waste of time and only satisfies the public's anger at something they don't understand and take for granted.
But I don't understand your saying that gasl. prices are not rising. Do you mean in proportion to oil prices? That's certainly true but they are rising. Nearly twice the price of a year ago. Some of the older refineries are not capable of running at 95% for very long. The one I worked at was comfortable with 86%.
As you noted, supply is not the problem, though it may be in the future. Ineficient combustion engines and our thirst for them is the problem. What I believe is being overlooked is the dividend to be reaped from these fast rising prices, which among other things is exploring other sources of energy and more effort to conserve what we have.
I call bull**** on refiners not making money on gasoline. It's the same story retailers and wholesalers are saying. Or that margins are so low, it's really a loss-leader to get people into a convenience store to buy a sandwich and high-profit fountain drink or coffee.
If no one makes money on gasoline, then why make it and sell it in the first place?
quote:
Originally posted by waterboy
Re-reading your posts confirms that. At least the parts that weren't political in nature[;)]. Everyone would be wailing had there been no questions asked at all even if most of them were inane. And I agree that windfall profits is a waste of time and only satisfies the public's anger at something they don't understand and take for granted.
But I don't understand your saying that gasl. prices are not rising. Do you mean in proportion to oil prices? That's certainly true but they are rising. Nearly twice the price of a year ago. Some of the older refineries are not capable of running at 95% for very long. The one I worked at was comfortable with 86%.
As you noted, supply is not the problem, though it may be in the future. Ineficient combustion engines and our thirst for them is the problem. What I believe is being overlooked is the dividend to be reaped from these fast rising prices, which among other things is exploring other sources of energy and more effort to conserve what we have.
Yea, gas prices are not rising in proportion to oil. They're dropping in proportion ot the price of oil. Sorry if I didn't make that clear. Sometimes at work I get in a hurry to finish a thought before I get interrupted.
quote:
Originally posted by Conan71
I call bull**** on refiners not making money on gasoline. It's the same story retailers and wholesalers are saying. Or that margins are so low, it's really a loss-leader to get people into a convenience store to buy a sandwich and high-profit fountain drink or coffee.
If no one makes money on gasoline, then why make it and sell it in the first place?
No one can force you to believe anything you dont want to. The fact is COP and CVX are both struggling to make profits in their refining sectors. For april both broke even...if prices continue to climb and gasoline inventories continue to climb both companies said they could post refining losses for the 2nd and 3rd and maybe even 4th quarters. The capital structure of most of these companies just isn't very effective with prices beyond 100 dollars a barrel. Their capital deployment and ROE/ROC/ROA begin to drop as prices rise...this is especially true of the big refiners like COP and CVX.
For example, ConocoPhillips refines more oil than it produces. Which means it pays very close to market prices (typically a 5 to 10% discount) for oil from Exxon, BP, Shell etc...they run that oil through their refineries and produce gasoline which historically has had higher margins than oil production itself. Mulva made some major plays to make COP a heavy hitter in the refining section of the industry in part because of COP's inability to consistently replace reserves. This seemed fairly smart to many at the time but now that prices are high and we're actually seeing that affect demand for fuel their margins are being hit.
Are you related to Shadows?[:D] I think what you're saying is that in order to keep refineries operating at a comfortable level,95%, some refiners are having to buy increasing amounts of oil at market prices which means they make even less per barrel of refined oil than if they had invested the same money to simply buy oil and sell it to other refiners. Higher volume of refined product but smaller margins as volume rises. So the refiner is not the culprit but speculators that are buying in anticipation of rising crude costs and maybe even artificially forcing them to rise. Like daisy chaining.
Just like in previous oil crises', whoever owns "old" oil, that oil that whose costs of discovery have already been long paid for, makes the most money. Having to drill at current prices costs more and is being passed on. Hiding your old oil or disguising it as "new" oil could certainly show up on the books as a small margin when in reality you're cleaning up.
quote:
Originally posted by cannon_fodder
But I can't drive...
OK, then Can ya pay a $300.00 fine if you can't drive 55? ~This group is pushing hard to bring back 55 mph with heavy fines. Funny how little groups in the USA can make the laws for everyone else. The enviromental groups are keeping much domestic oil drilling off limits hurting everyone else. This 55 mph group has a web site too. The democrats in Congress seem intrested in this. Contact your congressman and tell them "No to 55"[xx(]
Gas prices by county:
(http://andrewsullivan.theatlantic.com/the_daily_dish/images/2008/05/23/gasprices.jpg)
quote:
Originally posted by OUGrad05
quote:
Originally posted by Conan71
I call bull**** on refiners not making money on gasoline. It's the same story retailers and wholesalers are saying. Or that margins are so low, it's really a loss-leader to get people into a convenience store to buy a sandwich and high-profit fountain drink or coffee.
If no one makes money on gasoline, then why make it and sell it in the first place?
No one can force you to believe anything you dont want to. The fact is COP and CVX are both struggling to make profits in their refining sectors. For april both broke even...if prices continue to climb and gasoline inventories continue to climb both companies said they could post refining losses for the 2nd and 3rd and maybe even 4th quarters. The capital structure of most of these companies just isn't very effective with prices beyond 100 dollars a barrel. Their capital deployment and ROE/ROC/ROA begin to drop as prices rise...this is especially true of the big refiners like COP and CVX.
For example, ConocoPhillips refines more oil than it produces. Which means it pays very close to market prices (typically a 5 to 10% discount) for oil from Exxon, BP, Shell etc...they run that oil through their refineries and produce gasoline which historically has had higher margins than oil production itself. Mulva made some major plays to make COP a heavy hitter in the refining section of the industry in part because of COP's inability to consistently replace reserves. This seemed fairly smart to many at the time but now that prices are high and we're actually seeing that affect demand for fuel their margins are being hit.
they may have lost money in the refining sector but still managed a meager 18.4 billion in 2007. Who cares if one part of the company is losing money when the other parts are bringing in 18 BILLION DOLLAR PROFIT! Those poor oil companies!
And the answer was right under our nose all along!
http://www.sciencedaily.com/releases/2006/10/061025183256.htm (//%22http://www.sciencedaily.com/releases/2006/10/061025183256.htm%22)
Weight Gain Of U.S. Drivers Has Increased Nation's Fuel Consumption
ScienceDaily (Oct. 27, 2006) — As American waistlines have expanded since 1960, so has their consumption of gasoline, researchers at the University of Illinois at Urbana-Champaign and Virginia Commonwealth University say.
Americans are now pumping 938 million gallons of fuel more annually than they were in 1960 as a result of extra weight in vehicles. And when gas prices average $3 a gallon, the tab for overweight people in a vehicle amounts to $7.7 million a day, or $2.8 billion a year.
The numbers are added costs linked directly to the extra drain of body weight on fuel economy. In a paper to appear in the October-December issue of the journal The Engineering Economist, the scientists conclude that each extra pound of body weight in all of today's vehicles results in the need for more than 39 million gallons of extra gasoline usage each year.
"The reason we looked at this issue was that gas prices hit an average exceeding $3 per gallon in September 2005," said Sheldon H. Jacobson, a professor of computer science and director of the simulation and optimization laboratory at Illinois.
"This was the highest recorded level in the United States. We thought there must be some way that we could determine how to quantify the effect of being overweight on fuel consumption. We felt that beyond public health, being overweight has many other socio-economic implications."
Jacobson presented the challenge to Laura A. McLay, who was a doctoral student in his laboratory at that time and is now on the faculty at Virginia Commonwealth University, and they pursued the issue through his funding with the National Science Foundation.
Their conclusions are based on mathematical computations drawn from publicly available data on U.S. weight gain from 1960 to 2002, a period in which the weight of the average American has increased by more than 24 pounds, according to data from the U.S. Department of Health and Human Services.
By 2002, 62 percent of adults were overweight with a body mass index of between 25 and 30; more than 30 percent were considered obese with a BMI exceeding 30.
The fuel-consumption calculations apply only to passenger vehicles, including cars and light trucks driven for non-commercial reasons. Ruled out were other factors such as increasing the weight of cargo or decreasing fuel efficiency through poor maintenance. Driving data collected in 2003 were used to gauge fuel consumption based on weight gains during the last four decades.
The researchers used three different scenarios that considered not only beefier drivers behind the wheel but also their passengers, accounting for individual characteristics such as ages, numbers of people in the vehicle, and expected weights.
Since 1960, McLay and Jacobson said, the consumption of no less than 938 million gallons of gasoline annually can be attributed to weight gains of drivers and passengers. Of that total no less than 272 million gallons are consumed annually as a result of weight gains since 1988.
"The key finding is that nearly 1 billion gallons of fuel are consumed each year because of the average weight gain of people living in the United States since 1960 -- nearly three times the total amount of fuel consumed by all passenger vehicles each day based on current driving habits," McLay and Jacobson wrote.
"Although the amount of fuel consumed as a result of the rising prevalence of obesity is small compared to the increase in the amount of fuel consumed stemming from other factors such as increased car reliance and an increase in the number of drivers, ... it still represents a large amount of fuel, and will become even more significant as the rate of obesity increases.
The conclusions, Jacobson said, should be considered conservative because they do not consider many indirect consequences of obesity nor the increase in the number of vehicle miles linked to more people living in the United States and owning cars.
--------------------------------------------------------------------------------
Adapted from materials provided by University Of Illinois At Urbana-Champaign.
Drive 55 AND get on a national diet! [:D][:D][:D]
Some more interesting information.
http://www.infoplease.com/ipa/A0004727.html (//%22http://www.infoplease.com/ipa/A0004727.html%22)
quote:
Originally posted by mrhaskellok
Drive 55 AND get on a national diet! [:D][:D][:D]
Done that already and it was a failure. The federal gov't does not really have that power, It's against the 10th amendment. No where in the constitution does it say anything about letting the federal gov't control state speed limits. The 10th amendment is darn clear on that. Speed limits are a state issue. 55 is way to slow anyhoo.
quote:
Originally posted by sauerkraut
quote:
Originally posted by mrhaskellok
Drive 55 AND get on a national diet! [:D][:D][:D]
Done that already and it was a failure. The federal gov't does not really have that power, It's against the 10th amendment. No where in the constitution does it say anything about letting the federal gov't control state speed limits. The 10th amendment is darn clear on that. Speed limits are a state issue. 55 is way to slow anyhoo.
I agree, but we lost that "right" by allowing the fed to pay for our roads...you would have a righteous argument if our states gave the fed the finger every time the offerd funding, problem is they didn't. They sorta bought and paid for our roads, hence they are going to say what you can and can't do on them.
I agree though, shouldn't be a federal issue, I prefer it to even be more local than state level. In some areas of the state, 75 makes sense, in others it doesn't. Problem with this is people don't participate on the local level needed to make these changes occur.
55 is not too slow, been driving it for some time now...went from 21mgp to 28mpg.
quote:
Originally posted by we vs us
. . . .3) the fact that the richest oil nations are NOT investing in infrastructure and prospecting to keep up with demand seems to point not to a lack of capital to build it but to lack of available resources . . .
I've been thinking all weekend about this, and there's another reason why major oil nations might not be investing in infrastructure: they think they've got enough capacity as it is.
While whether or not we're at Peak Oil is a question that seems to obsess the blogosphere, there's another supposition gaining ground, and that's that high oil prices are indication of another speculative bubble. Peak Oil assumes a declining supply and pricing based on increasing scarcity, whereas if we're in a bubble, it's all about investors driving the prices up artificially.
One of the things I found most compelling came from a "This American Life" podcast, (//%22http://www.thislife.org/Radio_Episode.aspx?sched=1242%22) of all places. Titled "The Giant Pool of Money," it's meant as a primer on the housing crisis -- at which it's fantastic -- but at the same time focuses on this giant pool of money, which, according to the podcast is the sum total of international money available for investment. This is a pool that has grown exponentially in the last several years, and yet has fewer places to earn satisfactory yields, since Greenspan kept the US interest rates so low.
In the podcast, the giant pool of money, in looking for a good rate of return, began looking at mortgage and real estate products in the US and Europe, many of which were risky (based on subprime buyers) but offered higher returns. So, the thesis here is that investment money generates its own sort of demand -- demand for a good return -- and it will find that return one way or another, even if the commodity itself is risky and even if the vehicles through which the commodity can be invested in are risky.
Its possible, then, that the giant pool of money has also found the oil markets to be a place for good rate of return. At one of my favorite econo-blogs, Naked Capitalism (NOT written by a free-market hating commie, thank you very much), the author put together an excellent post (//%22http://www.nakedcapitalism.com/2008/05/soros-skyrocketing-oil-prices-bubble.html%22) about oil speculation. He riffs off of a recent interview with George Soros (who also believes, incidentally, that we're in an oil bubble), and brings in several sources -- including the US goverment -- to support his theory.
My take away is this: oil futures -- much like many of the new mortgage securities -- have been pushed off of the regulated markets by our giant pool of money's need for return, and into unregulated and unmonitored exchanges. The unregulated exchanges can bid up the price in order to generate a satisfactory return on the investment capital, but at some point the bubble has to pop, as prices stray too far from reality.
Anyhow, this is a ton of wonkishness, and I may have just enough info to make me dangerous (rather than knowledgable), but it does strike me that there's a loooot of international investment capital looking for a home, especially now that the credit markets have seized up, and commodities (oil, but also grain and corn and beef, etc -- ) are all almost doubling in price . . .
heh, Pyramid schemes at global levels. I could see that. Especially if you look at how local capacity and storage on the West side expanded during the last two years. Its like they knew something.... Now if we could figure out when the bubble is likely to burst.
Its clear that the oil companies are price fixing which is the real problem. Since there are really only three, it makes it easy for them to price signal. This should be clear from the massive profit increases they have seen. An increase in oil price does NOT result in an increase in profits unless they raise their margins.
Free market is the greatest thing in the world but it breaks down when monopolization begins.
quote:
Originally posted by dggriffi
Its clear that the oil companies are price fixing which is the real problem. Since there are really only three, it makes it easy for them to price signal. This should be clear from the massive profit increases they have seen. An increase in oil price does NOT result in an increase in profits unless they raise their margins.
Free market is the greatest thing in the world but it breaks down when monopolization begins.
You are right, but increased consumption DOES drive up profits....if you make 8% on a widget, and I buy twice as many widgets this year than last, your profits are going to double. I don't get the problem with profits rising as their product sales ries faster than ever before.
Since someone already mentioned the consitution and rights, where does it say we have the right to cheap gasoline?
My solution is to simply use less, much less. If we would just do this, prices would come back down...why? Because everyone, including EXXOn likes their profits and they are going to always want our business.
It is no different than McDonalds charging 12 times their cost for soda. Thirsty, didn't bring a drink from home? Ha, they got ya. Don't see congress screaming about that. Oh yeah, gasonline is a national security issue.
Lol, yeah I forgot that we will all get attacked by the cubans if we all have to start taking the train. And after all, once gasoline hit $5 in Europe, everyone went to war.
Please, let the market work a little. I hope the price of gas DOES go to 10 bucks. Then I will be quite confident I won't be using gasoline for much anymore. That will really stick it to the man!
your using a double the sell, double the profit point of view here, which, in gereneral, would make since. However, this just does not add up. In the past few years, the price of gas has doubled (can't quote an actual timeline here, because I honestly don't remember when gas was $1.85, but it wasn't that long ago), but the use of gas has not doubled in this time period. Not only that, but your increased profit by increased use still doesn't hold water because it's not just by the increased sales that they are seeing profit, but by increased margins. In fact, in the past year, I would say that the use of gas, at least in the U.S., has decreased. With the production of vehicles with better gas milage, alternative fuels, and a change of driving habits (everyone is trying to find some way to save money with the cost of gas rising), it stands to reason that fuel consumption is down.
As far as the national security issue, I don't recall hearing that before, however, it is a national economical concern, which can translate into security, in a round about way. We are a petroleum dependant country. Just about everything we do is connected to fuel in some aspect. When the price of fuel rises like it has, the impact goes through every industry. When the economy weakens, the country weakens in a whole. So before you start pandering to the monopoly that these three oil giants have on the market, think a little further then how much it's going to cost to go to work every morning.
As a matter of fact, year on year, Americans are driving much, much less. (//%22http://www.cnn.com/2008/US/05/26/gas.driving/index.html%22)
quote:
. . . Compared with March a year earlier, Americans drove an estimated 4.3 percent less -- that's 11 billion fewer miles, the DOT's Federal Highway Administration said Monday, calling it "the sharpest yearly drop for any month in FHWA history." Records have been kept since 1942.
1. I am not pandering to anyone...my logical argument is just the world as I see it. [;)]Why do people on this forum automatically assume some evil motive when someone disagrees with you? What is wrong with government education these days, did you not learn to just have a conversation? It is like everyone is that bully who likes to ask what's on your shirt and then flick you in the nose when you look down. You don't have to make senseless pokes at me to interest me in a conversation.
2. I spend $400 a month on fuel, I am very aware of the impact of high fuel prices.
3. It doesn't actually work that way...the "double consumption, double the price" isn't what I am implying. Oil companies have always tried to run their operations at "peak" performance. That may be a refinery at 85% capacity, for example. If that refinery is caught needing to refine at a much faster rate, say at 100%, the cost of that increased production is more than an increase of costs of 15%. There are also TONS of other factors here, cost of steel, drilling costs, the need to drill to keep up with future demands, higher HR costs, and more.
4. By monopoly, you are implying that there is some "control" they are exhorting on you to purchase their over-priced products. Again, there are many companies who are the major leading producers in their markets, and there is nothing wrong with that. In this case though, there are several large oil companies...which mean that they all want your business and are willing to "try" for it. If everyone starts to take the bus, or bike to work, don't you think prices will come back down?
5. Saying that we are a nation that should have cheaper fuel because we are dependent on oil is like saying that people in California should have cheap electricity because they live where it is hot. Poor, poor logic. Thankfully we still live in a nation that gives us choices...the Prius is a good one I hear. I personally and ordering a Smart car...they are cheaper to drive and will provide a great advertising opportunity. Everyone can't go buy a fuel efficient car? Sure glad that bus rates are reasonable. Don't live near the bus lines and can't get into a more efficient car? Move or carpool. I had my staff in one of our stores looking at the bus routes online for Tulsa. One of them realized that she could walk a half of a mile to the bus stop and get on a bus all the way to work. She was thrilled.
5. Why should I impose a cost threshold on a commodity because I want to work 30 miles from work? So as long as I don't "notice" the cost of my commute we shouldn't care how much they are profiting? That is exactly what you are saying. Suddenly we as a nation are waking up to our terrible habits because it is starting to cost more and we, like we are very good at, want to blame someone. We are a creative nation, I believe we can address any problem, once we stop crying about it.
Case and point, you make choices and you live with the consequences...if you are like me and didn't sock money away for high fuel prices, you are going to be forced to do what you can. You should also call your elected officials in DC and ask them why they choose to regulate the industry so much too. Why can't we drill off the same shores China is drilling in (south of Florida)? Don't you think we would do a better job than China in our waters?
Good post Mr. Haskell.
To add to that just a touch:
The oil industry is not a monopoly, not even an oligopoly. Here is the short list of worlds largest oil producers in order of production:
Saudi Arabian Oil Co.
Petroleos Mexicanos
Petroleos de Venezuela
China National Petroleum
BP Amoco + Arco
ExxonMobil
Iranian National
Royal Dutch/Shell
Nigerian National Oil Co.
Iraq National Oil Co.
Kuwait Petroleum
Chevron + Texaco
Other major players (the list was from 1999):
Lukoil
Gazprom
ConoccoPhillips
Occidental Petroleum
Devon Energy Corporation
Qatar General Petroleum Corporation
Nigerian Petroleum
(insert every country with oil petroleum, including Mexico, Venezuela, Brazil and Canada)
That is far too many companies to qualify as any sort of collusive entity. Certainly they want to mess with supply and demand to maximize profits - but with that many players it seems unlikely that they would have the global effect of doubling oil prices. Collusion of a commodity has never worked that well before, the urge to cheat to make MORE money is overwhelming.
quote:
Originally posted by mrhaskellok
1. I am not pandering to anyone...my logical argument is just the world as I see it. [;)]Why do people on this forum automatically assume some evil motive when someone disagrees with you? What is wrong with government education these days, did you not learn to just have a conversation? It is like everyone is that bully who likes to ask what's on your shirt and then flick you in the nose when you look down. You don't have to make senseless pokes at me to interest me in a conversation.
2. I spend $400 a month on fuel, I am very aware of the impact of high fuel prices.
3. It doesn't actually work that way...the "double consumption, double the price" isn't what I am implying. Oil companies have always tried to run their operations at "peak" performance. That may be a refinery at 85% capacity, for example. If that refinery is caught needing to refine at a much faster rate, say at 100%, the cost of that increased production is more than an increase of costs of 15%. There are also TONS of other factors here, cost of steel, drilling costs, the need to drill to keep up with future demands, higher HR costs, and more.
4. By monopoly, you are implying that there is some "control" they are exhorting on you to purchase their over-priced products. Again, there are many companies who are the major leading producers in their markets, and there is nothing wrong with that. In this case though, there are several large oil companies...which mean that they all want your business and are willing to "try" for it. If everyone starts to take the bus, or bike to work, don't you think prices will come back down?
5. Saying that we are a nation that should have cheaper fuel because we are dependent on oil is like saying that people in California should have cheap electricity because they live where it is hot. Poor, poor logic. Thankfully we still live in a nation that gives us choices...the Prius is a good one I hear. I personally and ordering a Smart car...they are cheaper to drive and will provide a great advertising opportunity. Everyone can't go buy a fuel efficient car? Sure glad that bus rates are reasonable. Don't live near the bus lines and can't get into a more efficient car? Move or carpool. I had my staff in one of our stores looking at the bus routes online for Tulsa. One of them realized that she could walk a half of a mile to the bus stop and get on a bus all the way to work. She was thrilled.
5. Why should I impose a cost threshold on a commodity because I want to work 30 miles from work? So as long as I don't "notice" the cost of my commute we shouldn't care how much they are profiting? That is exactly what you are saying. Suddenly we as a nation are waking up to our terrible habits because it is starting to cost more and we, like we are very good at, want to blame someone. We are a creative nation, I believe we can address any problem, once we stop crying about it.
Case and point, you make choices and you live with the consequences...if you are like me and didn't sock money away for high fuel prices, you are going to be forced to do what you can. You should also call your elected officials in DC and ask them why they choose to regulate the industry so much too. Why can't we drill off the same shores China is drilling in (south of Florida)? Don't you think we would do a better job than China in our waters?
1. I didn't accuse you of pandering, if someone else did, sorry, I don't remember the post, and don't have the time right now to reread them to find it. I understand you want this to be looked at from all sides (as I try to do), and applaud you for trying to put this view out.
2. At this point, I would be surprised if someone wasn't aware of the high prices.
3. I'm not going to claim to understand oilconimics (really should take the time to really look into it though), but the way you had put it out there, or at least the way I understood it, you were saying that the costs were increasing in tandum with the use. Well, that still doesn't really sound like what it seemed like you were saying to me. And I get that a higher production rate means a higher cost, however, I think the rise in cost goes beyond this increase.
4. Once again, I'll use the ignorant defence. As I said, my oilconomics are bad. It has seemed to me that there are three major oil companies that are in play here. I understand that there are a lot of companies out there, but it seems that when anything comes about, these three area always right there in the front line of fire, making it seem that they set the standard for the industry, hence my assertion of a monopoly. Personally though, I blame OPEC more then the oil companies, but I still think that the companies play a part, but this is, of course, only my opinion, not backed up with any real data.
5. I'm not saying that because we are a oil dependant nation that we should have cheaper oil, just that when the cost rises, the impact is wide reaching. Because of this, I think that we should do what we can to keep big oil from taking advantage of our dependancy, and make sure that they don't make an excessive profit at the sake of our economy. I don't have any arguments against them making a profit, just that there should be a balance there. Keep in mind, also, that there are a lot of people out there (myself included) that can't afford to get a more efficiant vehicle, though I plan on getting a motorcycle as soon as it becomes possible for me, but been planning that for years. And for us, we don't get much of a choice of where we want to work. I despise my job, but keep working it because I can't afford to go elswhere. Which also means that carpooling and public transportation are out for me as well due to location and work schedule. Those that can take these routes have a good advantage that they should take.
5 (again?). I agree, we should do something about it instead of sitting around b****ing about it. However, most of us are a bit limited in our choices of what to do. Those that can, save costs where they can. Lowering the use should, in time, lower the costs. Personally, I only used 1/4 a tank of gas in the past week by cutting out as much driving as I can, and driving smarter when I do.
as voters, whe have chosen officials to representatives to act in our interests in these matters. The downside of this is, once they are in they can do pretty much what they want. While they will try and appease the voters to get re-elected in the next term, ultimatly, it comes down to what they want to do. While contacting our officials can have the effect of making them more aware of what we, as voters, want, and they can act accordingly. On this issue, I can't think that they don't know what we want. So they are limited either by their own personal powers, or personal agendas. In either case, I don't see much changing anytime soon, though I would be jumping with glee if they did. We do need to open up more area's for drilling, but we also need to be aware of the possible enviromental impact of doing so. While some of these area's are closed for what seems no other reason then political gain, others are closed for a good reason. This is an area that needs to be gone over by our government, and revisted to discover reasoning and to open up more options.