Okay, here's hoping we can be civil. I saw this topic touched on in the "energy independence" thread - but really that thread seems devoted to ways to become "energy independent". I'd like to discuss the international financial implications of world oil demand.
Perhaps this will even touch on Russ Logan's first topic here of "alliances" when we talk about OPEC as a modern financial alliance as opposed to Old War/Cold War military alliances.
Gasoline costs vary greatly in the world. US costs are relatively low for a Western/European country. I'm not sure how much it costs consumers in China or India or Japan.
Oil costs are also a very volatile commodity due to supply and demand and speculation, not to mention international relations with countries like Venezuela and especially Iran.
I'll throw out a question. What do YOU see happening in a year, 5 years, 10 years, to the international price of oil and the US price of gasoline? More importantly, why? What 'decision points' do you see within that period that may affect those predictions into a "Case A" and "Case B" scenario?
Full Version: Oil & Gas
Boy, I really wish I didn't have to work. This has great implications and none too many easy answers. I read good posts on energy from gtessex and Rene in the last day or so. In the news all we get is the politics, but there are some heavy technical nad trade issues going on, and they have little to do with partisan politics.
The short answer is gas is likely to go up regardless of what we do. Let's hope science has some answers we can shift to when the market is ready.
The short answer is gas is likely to go up regardless of what we do. Let's hope science has some answers we can shift to when the market is ready.
QUOTE(cptrev @ Apr 26 2006, 12:21 PM) [snapback]201333[/snapback]
I'll throw out a question. What do YOU see happening in a year, 5 years, 10 years, to the international price of oil and the US price of gasoline? More importantly, why? What 'decision points' do you see within that period that may affect those predictions into a "Case A" and "Case B" scenario?
I'll link this site again......One of the better sites out there for explaining in detail the future prices of Oil.
A wealth of information to digest...but with a few exceptions within the report...I agree with most of it!
http://www.lifeaftertheoilcrash.net/Introduction.html
From my perspective, we will be paying dearly for our inaction on developing energy resources over the last 3 decades. The chickens have come home to roost. And today's gasoline prices will seem 'cheap' as opposed to what they will be only a short time down the road.
The link explains all about 'peak oil' and how it effects prices.
The fact is....we wouldn't have reached this point at this time, if we had started developing our own resources during the early warning signs that occured during the gas crunch of the 70's. Instead we have done the following.
1. Put restrictions of developing known oil reserves. ANWR and both coastlines are the first that come to mind.
2. Over regulated smaller....less profitable refineries that lead to these refineries being shut down. If one can't make a profit, then what is the sense of staying in business?
3. Not building any new refineries....PERIOD! Not one since 1977. And they wonder why refineries are running at full capacity.
4. Not developing existing technology. Nuclear power comes to mind. The last one to come online was Seabrook in 1990.
Here is a good link to Nuclear power.
http://www.world-nuclear.org/info/inf41.htm
I am encouraged by the development of alternative energy resources....however none of them at this point in time can provide enough energy to reverse the 'Peak oil' curve.
Plus it still takes oil to develop alternative energy resources.
We as a country have fallen so behind in the development of our own resources that it will take years if not decades to reverse the trend of rising oil prices.
It's amazing that the US won't drill it's own oil, but has no problem buying oil from people with little or no concern for the environment.
Now I see Chuck Schumer wants to break up the oil companies, for some reason I still can't fathom. As if our oil companies hold much sway over OPEC, refinery capacity, world demand, seasonal driving habits, hurricanes, and stupid decisions regarding developing our own natural resources.
But somebody has to take the blame, so they'll investigate the oil companies, find out prices are a symptom of low supply and high demand, the driving season will end and prices will go down a bit, and everyone will forget about gas prices until the next spike.
http://www.cato.org/pub_display.php?pub_id=5352
Economic Amnesia: The Case against Oil Price Controls and Windfall Profit Taxes
by Peter Van Doren and Jerry Taylor
Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute.
Executive Summary
The recent rise in gasoline prices has led many observers to call for government price controls and special taxes on oil companies. Yet policies that restrain prices result in less supply and conservation. Additional taxes reduce the incentive to invest in new supply. Because price controls and profit taxes can be levied only by the U.S. government on U.S.-based companies, such policies also increase the economic attractiveness of foreign relative to domestic oil. The U.S. experience with price controls from 1971 to 1980 and the Crude Oil Windfall Profit Tax from 1980 to 1988 amply demonstrates the problems.
There is no evidence to suggest that recently reported oil company profits are particularly large when contrasted with the profit margins of all public companies. Profits in the oil sector have historically been lower than profits in the rest of the U.S. economy, so profits would have to be quite large for some time before they equaled returns in other sectors of the economy. Restricting profit opportunities now would amount to a form of one-way capitalism in which meager profits are allowed but more robust profits are punished. Intervention under those conditions would certainly reduce the incentive to invest in the oil business.
Now I see Chuck Schumer wants to break up the oil companies, for some reason I still can't fathom. As if our oil companies hold much sway over OPEC, refinery capacity, world demand, seasonal driving habits, hurricanes, and stupid decisions regarding developing our own natural resources.
But somebody has to take the blame, so they'll investigate the oil companies, find out prices are a symptom of low supply and high demand, the driving season will end and prices will go down a bit, and everyone will forget about gas prices until the next spike.
http://www.cato.org/pub_display.php?pub_id=5352
Economic Amnesia: The Case against Oil Price Controls and Windfall Profit Taxes
by Peter Van Doren and Jerry Taylor
Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute.
Executive Summary
The recent rise in gasoline prices has led many observers to call for government price controls and special taxes on oil companies. Yet policies that restrain prices result in less supply and conservation. Additional taxes reduce the incentive to invest in new supply. Because price controls and profit taxes can be levied only by the U.S. government on U.S.-based companies, such policies also increase the economic attractiveness of foreign relative to domestic oil. The U.S. experience with price controls from 1971 to 1980 and the Crude Oil Windfall Profit Tax from 1980 to 1988 amply demonstrates the problems.
There is no evidence to suggest that recently reported oil company profits are particularly large when contrasted with the profit margins of all public companies. Profits in the oil sector have historically been lower than profits in the rest of the U.S. economy, so profits would have to be quite large for some time before they equaled returns in other sectors of the economy. Restricting profit opportunities now would amount to a form of one-way capitalism in which meager profits are allowed but more robust profits are punished. Intervention under those conditions would certainly reduce the incentive to invest in the oil business.
QUOTE(Arturo_Vandelay @ Apr 26 2006, 02:14 PM) [snapback]201341[/snapback]
Now I see Chuck Schumer wants to break up the oil companies, for some reason I still can't fathom. As if our oil companies hold much sway over OPEC, refinery capacity, world demand, seasonal driving habits, hurricanes, and stupid decisions regarding developing our own natural resources.
I heard 'Mad Chukkie's' remarks....and {{{{shaked my head}}}} in disbelief....and asked myself this question!
How does anybody that stupid get to become a US senator?
He's a law talkin' guy, and as such has never had a real job. Things are done by decree and profits are evil. Scapegoats must be found, and blame must be laid, but it's never the government's (especially legislator's) fault. It's always the businessman, the worker, the consumer or some other poor schmuck just trying to get by.
To fix the problem always requires a new law, the legislator's only solution to anything.
http://www.npr.org/templates/story/story.php?storyId=5361088
Morning Edition, April 25, 2006 · An e-mail chain letter floating around the Internet urges people to boycott ExxonMobil in an attempt to bring down gas prices. Renee Montagne talks to Tim Haab, associate professor of agricultural, environmental and development economics at The Ohio State University, about the idea. He says it wouldn't work.
http://www.npr.org/templates/story/story.php?storyId=5352427
High Cost of Crude Drives Up Prices at the Pump
Morning Edition, April 20, 2006 · The price of crude oil climbed higher into record territory Wednesday, topping $72 a barrel. The high cost of crude oil, along with seasonal refinery outages, is driving up prices at the gas pump.
The Energy Department's weekly report on petroleum carried a headline Wednesday, asking "$3 per gallon?" That question has already been answered in Los Angeles and some other parts of the country, where gasoline prices hit the $3 mark this week.
"The bad news is the numbers are going to keep going up. We expect that gasoline over the next few weeks could go, on average, to $3.10, $3.20 a gallon," says spokeswoman Carol Thorpe of the American Automobile Association.
These high prices are coming weeks before the busy, summer-driving season. But it's no longer predictable that gas prices will peak at the same time the thermometer does.
"It used to be sure that every holiday, the gas prices would go up. Every summer the gas prices would go up," Thorpe says. "But what we've seen is gas prices go up at odd times: down on holidays, maybe down in the summer, then up over Labor Day. So it really is dependent on what's happening in the oil markets, what's happening in the world, what's happening to supply."
What's happening in the world right now has pushed oil prices to an all-time high. That's partly a result of tensions with the big oil-producing countries of Iran and Nigeria.
"This market seems to be on a track to continue to move higher, and there doesn't seem to be anything in the near term that's going to stop this momentum," says analyst Phil Flynn of Alaron Trading in Chicago.
With the stock market rallying this week, there's no sign of the kind of economic slowdown that might cut into demand for oil. And drivers are still using more gasoline than they did a year ago, even though it now costs them more than 50 cents a gallon more.
The Energy Department says it's not a foregone conclusion that the average price of gasoline nationwide will hit the $3 mark this year. The Department expects many refineries that are now shut down for maintenance will soon begin pumping gas again. That should boost supplies and perhaps lower prices just in time for Memorial Day. The Energy Department expects gas prices to remain about 25 cents a gallon higher than they were last year, though. And that's assuming there are no major disruptions in oil or gas supplies.
To fix the problem always requires a new law, the legislator's only solution to anything.
http://www.npr.org/templates/story/story.php?storyId=5361088
Morning Edition, April 25, 2006 · An e-mail chain letter floating around the Internet urges people to boycott ExxonMobil in an attempt to bring down gas prices. Renee Montagne talks to Tim Haab, associate professor of agricultural, environmental and development economics at The Ohio State University, about the idea. He says it wouldn't work.
http://www.npr.org/templates/story/story.php?storyId=5352427
High Cost of Crude Drives Up Prices at the Pump
Morning Edition, April 20, 2006 · The price of crude oil climbed higher into record territory Wednesday, topping $72 a barrel. The high cost of crude oil, along with seasonal refinery outages, is driving up prices at the gas pump.
The Energy Department's weekly report on petroleum carried a headline Wednesday, asking "$3 per gallon?" That question has already been answered in Los Angeles and some other parts of the country, where gasoline prices hit the $3 mark this week.
"The bad news is the numbers are going to keep going up. We expect that gasoline over the next few weeks could go, on average, to $3.10, $3.20 a gallon," says spokeswoman Carol Thorpe of the American Automobile Association.
These high prices are coming weeks before the busy, summer-driving season. But it's no longer predictable that gas prices will peak at the same time the thermometer does.
"It used to be sure that every holiday, the gas prices would go up. Every summer the gas prices would go up," Thorpe says. "But what we've seen is gas prices go up at odd times: down on holidays, maybe down in the summer, then up over Labor Day. So it really is dependent on what's happening in the oil markets, what's happening in the world, what's happening to supply."
What's happening in the world right now has pushed oil prices to an all-time high. That's partly a result of tensions with the big oil-producing countries of Iran and Nigeria.
"This market seems to be on a track to continue to move higher, and there doesn't seem to be anything in the near term that's going to stop this momentum," says analyst Phil Flynn of Alaron Trading in Chicago.
With the stock market rallying this week, there's no sign of the kind of economic slowdown that might cut into demand for oil. And drivers are still using more gasoline than they did a year ago, even though it now costs them more than 50 cents a gallon more.
The Energy Department says it's not a foregone conclusion that the average price of gasoline nationwide will hit the $3 mark this year. The Department expects many refineries that are now shut down for maintenance will soon begin pumping gas again. That should boost supplies and perhaps lower prices just in time for Memorial Day. The Energy Department expects gas prices to remain about 25 cents a gallon higher than they were last year, though. And that's assuming there are no major disruptions in oil or gas supplies.
Artie and gt, I'm a big fan of the free market. But it my belief (and I think I'm in pretty good company) that monopolistic situations are almsot as damaging to the free market as central management.
I'm NOT a big fan of Schumer, but I have to question the role that huge mergers in international mega-corporations play in US pricing and availability.
BUT - it's not just "breaking up" large companies. As you stated, the capital to build a refinery today is in the BILLIONS of dollars and the time required is measured in years. It takes HUGE corporations to be able to enter that market... hence the monopolistic conditions when entering the market is almost impossible.
But that's just gas and refining capacity... and that's largely a US discussion.
Internationally, demand for oil continues to spike.
Even with our constrained refining capacity - we still pay less than many Westerners.
To what extent does the US drive the international market? To what extent could the US affect speculation, if at all?
I'm NOT a big fan of Schumer, but I have to question the role that huge mergers in international mega-corporations play in US pricing and availability.
BUT - it's not just "breaking up" large companies. As you stated, the capital to build a refinery today is in the BILLIONS of dollars and the time required is measured in years. It takes HUGE corporations to be able to enter that market... hence the monopolistic conditions when entering the market is almost impossible.
But that's just gas and refining capacity... and that's largely a US discussion.
Internationally, demand for oil continues to spike.
Even with our constrained refining capacity - we still pay less than many Westerners.
To what extent does the US drive the international market? To what extent could the US affect speculation, if at all?
QUOTE(cptrev @ Apr 26 2006, 12:25 PM) [snapback]201354[/snapback]
Artie and gt, I'm a big fan of the free market. But it my belief (and I think I'm in pretty good company) that monopolistic situations are almsot as damaging to the free market as central management.
Yet there isn't a monopoly. If anything resembles one it's the total control the government takes over allowing drilling on US soil.
QUOTE
Even with our constrained refining capacity - we still pay less than many Westerners.
My guess is we pay less because of lower taxes, I doubt much has to do with anything else.
QUOTE
To what extent does the US drive the international market? To what extent could the US affect speculation, if at all?
As a major player I'm sure we affect it a lot, but others are getting into the game too. If we cut usage China or India will probably take up the slack. That means oil prices aren't likely to ever come down again.
Time to start gearing up some nuclear plants.
QUOTE(cptrev @ Apr 26 2006, 03:25 PM) [snapback]201354[/snapback]
To what extent does the US drive the international market? To what extent could the US affect speculation, if at all?
The US drives the international market.....A GREAT DEAL...since we use the most oil of any country.
I can't see where the US has much affect on 'speculation'. Right now, it's the countries where lunatics are in control... 'Iran. Nigeria, Venezuela' that have oil speculators 'nervous'......plus the main fact that anyone in the oil business knows that we are SOON to reach a point where the world is using oil at a faster pace than what can be extracted from the earth.
I keep hearing from those (I am not getting political here) that thinks that conservation is the answer. I am afraid that we are even beyond that point. Whatever we can conserve here in the US will be more than offset by increases in demand from India & China. It's not if....but when?
The only solution IMHO, is to develop our own energy resources which includes......EVERYTHING and put as much effort as possible into developing alternate energy resources.
QUOTE(Arturo_Vandelay @ Apr 26 2006, 03:37 PM) [snapback]201358[/snapback]
Time to start gearing up some nuclear plants.
Couldn't agree more!
However....as long as we have idiots like this running around...it's going to be damn hard to
build anymore Nuclear power plants for the forseeable future!
QUOTE
Nestel, a resident of Athol, Mass., and a member of an anti-nuclear group that has targeted Vermont Yankee nuclear power plant in recent protests, is one of four people who plan to drink only water until Friday in an effort to tip public support away from the 34-year-old Vernon reactor.
Accompanied by two Buddhist monks and Paki Weiland, another member of the Shelburne Falls, Mass.-based Citizens Awareness Network, Nestel banged on drums, meditated and waved to curious drivers Tuesday at a small park at the top of Brattleboro's Main Street.
Nestel, who was arrested this month during a protest at the corporate offices of Entergy Nuclear, the owner of Vermont Yankee, said she and the three others will remain at the fountain from 10 a.m. to 4 p.m. for each day of the fast.
"I remember walking to the (Yankee) plant in 1978 with our babies in strollers," she said. "Now our babies have babies and we are still in danger."
Accompanied by two Buddhist monks and Paki Weiland, another member of the Shelburne Falls, Mass.-based Citizens Awareness Network, Nestel banged on drums, meditated and waved to curious drivers Tuesday at a small park at the top of Brattleboro's Main Street.
Nestel, who was arrested this month during a protest at the corporate offices of Entergy Nuclear, the owner of Vermont Yankee, said she and the three others will remain at the fountain from 10 a.m. to 4 p.m. for each day of the fast.
"I remember walking to the (Yankee) plant in 1978 with our babies in strollers," she said. "Now our babies have babies and we are still in danger."
http://www.rutlandherald.com/apps/pbcs.dll.../604260362/1003
QUOTE
"I remember walking to the (Yankee) plant in 1978 with our babies in strollers," she said. "Now our babies have babies and we are still in danger."
Almost 30 years without a problem? It looks like they were wrong in 1978.
QUOTE
Rob Williams, a spokesman for the 34-year-old Vernon-based Vermont Yankee, stressed in a prepared statement Tuesday that nuclear design standards in the former Soviet Union are "fundamentally" different than in the United States.
The Nuclear Regulatory Commission said the plant, which resumed its 20 percent power boost this past weekend after a second delay, operated safely in in 2005, according to a report issued last week.
"Western reactors are fundamentally different in that they are designed for stable power output and with safety features such as containment buildings," Williams said. "US nuclear plants are operated conservatively with constant improvements in designs, training and safety culture."
The Nuclear Regulatory Commission said the plant, which resumed its 20 percent power boost this past weekend after a second delay, operated safely in in 2005, according to a report issued last week.
"Western reactors are fundamentally different in that they are designed for stable power output and with safety features such as containment buildings," Williams said. "US nuclear plants are operated conservatively with constant improvements in designs, training and safety culture."
QUOTE(Spot @ Apr 26 2006, 05:11 PM) [snapback]201382[/snapback]
Almost 30 years without a problem? It looks like they were wrong in 1978.
Yes, that's the same conclusion I would draw.
QUOTE(gtessex @ Apr 26 2006, 02:20 PM) [snapback]201374[/snapback]
Couldn't agree more!
However....as long as we have idiots like this running around...it's going to be damn hard to
build anymore Nuclear power plants for the forseeable future!
Doesn't that apply to almost anything, gtessex? The "as long as we have idiotis like this running around" (i.e. exercizing their citizenship rights?) it's going to be damn hard to do whatever x,y,z it is that we each thing we know we're not 'idiots' about, part, I mean.
QUOTE(gtessex @ Apr 26 2006, 01:26 PM) [snapback]201345[/snapback]
I heard 'Mad Chukkie's' remarks....and {{{{shaked my head}}}} in disbelief....and asked myself this question!
How does anybody that stupid get to become a US senator?
Why do you think that they don't want to let go of their monopoly grip on gubmint schools?
Just watched the idiot Schumer on O'Reilly and though I couldn't hear him since I was on the phone I STILL wanted to heave a brick through the screen.
He's going to lower prices by raising taxes, breaking up our oil companies and leaving what's left to compete with national oil companies like Citgo?
He's going to lower prices by raising taxes, breaking up our oil companies and leaving what's left to compete with national oil companies like Citgo?
Gentlemen, in the interest of only "mildly" moderating this thread - I'd gently remind you to stay on topic and at least marginally respectful of the politicians you despise. (And I'll try to do likewise!)
QUOTE(Arturo_Vandelay @ Apr 26 2006, 07:39 PM) [snapback]201418[/snapback]
Just watched the idiot Schumer on O'Reilly and though I couldn't hear him since I was on the phone I STILL wanted to heave a brick through the screen.
He's going to lower prices by raising taxes, breaking up our oil companies and leaving what's left to compete with national oil companies like Citgo?
I wouldn't worry too much about a state run company as a competitor - unless of course, it's the PLA.
QUOTE(SpaceCowboy @ Apr 26 2006, 05:42 PM) [snapback]201421[/snapback]
I wouldn't worry too much about a state run company as a competitor - unless of course, it's the PLA.
I worry that some states might actually try helping their oil companies instead of trying to limit or destroy them. (of course the reality is that most state run companies don't do very well, and Schumer micromanaging ours is likely to lead down the same path)
QUOTE(Arturo_Vandelay @ Apr 26 2006, 07:48 PM) [snapback]201424[/snapback]
I worry that some states might actually try helping their oil companies instead of trying to limit or destroy them. (of course the reality is that most state run companies don't do very well, and Schumer micromanaging ours is likely to lead down the same path)
Well, yeah, that's just it.
We're here from the government.
We're here to help you.
QUOTE(SpaceCowboy @ Apr 26 2006, 05:56 PM) [snapback]201429[/snapback]
Well, yeah, that's just it.
We're here from the government.
We're here to help you.
Get the lube.
QUOTE(cptrev @ Apr 26 2006, 11:21 AM) [snapback]201333[/snapback]
Okay, here's hoping we can be civil. I saw this topic touched on in the "energy independence" thread - but really that thread seems devoted to ways to become "energy independent". I'd like to discuss the international financial implications of world oil demand.
Perhaps this will even touch on Russ Logan's first topic here of "alliances" when we talk about OPEC as a modern financial alliance as opposed to Old War/Cold War military alliances.
Gasoline costs vary greatly in the world. US costs are relatively low for a Western/European country. I'm not sure how much it costs consumers in China or India or Japan.
Oil costs are also a very volatile commodity due to supply and demand and speculation, not to mention international relations with countries like Venezuela and especially Iran.
I'll throw out a question. What do YOU see happening in a year, 5 years, 10 years, to the international price of oil and the US price of gasoline? More importantly, why? What 'decision points' do you see within that period that may affect those predictions into a "Case A" and "Case B" scenario?
As a (former) bond trader, I would caution that when standing on the upside of the graph, most folks tend to see prices increasing forever. That’s trading fever.
So when I look out ten years, I see oil prices both higher and lower than prices today. The ongoing wars in the ME will add considerable volatility.
QUOTE(SpaceCowboy @ Apr 26 2006, 06:07 PM) [snapback]201436[/snapback]
So when I look out ten years, I see oil prices both higher and lower than prices today. The ongoing wars in the ME will add considerable volatility.
I'm not sure bond availability ever peaks. All the Peak Oil and increasing demand talk seems to be pointing nothing but up in the next ten years. Though adjusted for inflation we aren't at a record high, we've never been in such a tight worldwide demand situation before. Once the Chinese have driven to work, chances are they aren't going back to biking just for the health benefits.
QUOTE(cptrev @ Apr 26 2006, 07:39 PM) [snapback]201419[/snapback]
Gentlemen, in the interest of only "mildly" moderating this thread - I'd gently remind you to stay on topic and at least marginally respectful of the politicians you despise. (And I'll try to do likewise!)
Well welcome to moderating. Let me tell you a story about a man named Jed...
We are rich yet in oil and gas still we see the future coming. (Advantage of human brain over that of some others IMO) We might today be caught up in all the wrangling over prices and scalpers ripping off with profits (remember Pataal) but tomorrow will see a somber sunrise and new determination to rid ourselves of past bad cheap habits. We do invest in new technologies to keep the lights on and plastics flowing but today I look on the bottom of the package to determine if the consumable product I'm buying is truly 'Made in Taiwan'.
QUOTE(roserose @ Apr 26 2006, 06:18 PM) [snapback]201442[/snapback]
Well welcome to moderating. Let me tell you a story about a man named Jed...
All hail the mighty moderator. Please feel free to delete anything off topic (including this post), as I have a tendency to be a bit of a smarty pants. I'd delete it myself, but that's what moderators are for.
QUOTE(Arturo_Vandelay @ Apr 26 2006, 08:15 PM) [snapback]201439[/snapback]
I'm not sure bond availability ever peaks. All the Peak Oil and increasing demand talk seems to be pointing nothing but up in the next ten years. Though adjusted for inflation we aren't at a record high, we've never been in such a tight worldwide demand situation before. Once the Chinese have driven to work, chances are they aren't going back to biking just for the health benefits.
I’m quite familiar with natural resource speculation as well. Take my word for it. Prices will go down as well as up, although the longer term trend is generally up, for the reasons you all have stated.
QUOTE(SpaceCowboy @ Apr 26 2006, 06:55 PM) [snapback]201451[/snapback]
I'm quite familiar with natural resource speculation as well. Take my word for it. Prices will go down as well as up, although the longer term trend is generally up, for the reasons you all have stated.
Nobody expects they won't ever go down, but my guess is that every major rise they'll settle to a new slightly higher base. Last time here it was around $2.25. I bet next time it's around $2.35, maybe even a tad higher. We'll see. I have spare bike tires just in case.
QUOTE(Nomarchy @ Apr 26 2006, 08:24 PM) [snapback]201403[/snapback]
Doesn't that apply to almost anything, gtessex? The "as long as we have idiotis like this running around" (i.e. exercizing their citizenship rights?) it's going to be damn hard to do whatever x,y,z it is that we each thing we know we're not 'idiots' about, part, I mean.
Yup.....you're right, that could apply to almost everything. Classic case of the 'minority' viewpoint overriding the 'majority' viewpoint which = a clusterfrakk that effects everyone!
You got it!
QUOTE(SpaceCowboy @ Apr 26 2006, 09:07 PM) [snapback]201436[/snapback]
As a (former) bond trader, I would caution that when standing on the upside of the graph, most folks tend to see prices increasing forever. That’s trading fever.
So when I look out ten years, I see oil prices both higher and lower than prices today. The ongoing wars in the ME will add considerable volatility.
Yupper...You're a 100% correct. Oil prices will go both higher and lower...but the graph will definitely trend in the upperward position.
FYI, I am having a blast with energy stocks. Buy on the dips and sell on the rises. All one has to do is follow the price of oil. If this keeps up...I'll have to give Uncle Sam enough extra tax money to give some illegal alien free health care for a day!
Dickmo's take. Bush has an opportunity.
http://www.thehill.com/thehill/export/TheH...ris/042606.html
The key is to seize the day. The president’s pathetically weak warning that we are facing a long, hot summer and that gas prices might rise even more sounds helpless and removed. Instead of lamenting high prices, he should pounce on the opportunity to lead America away from an oil-dependent economy.
Using the sense of danger and vulnerability Americans feel as prices drive their family budgets out of whack, he can energize and lead the nation in the way that he did so successfully after Sept. 11.
He should address the nation on television and call on Congress to act quickly on massive new investments to increase the production of alcohol-based fuels and cars that can accommodate them. He should plunge ahead in the development of hydrogen-fueled cars and the conversion of gas stations to provide hydrogen. He should call for major new facilities to produce hydrogen and the rapid production of vehicles that can run on it.
Where private-sector investment is needed — as in the production of the cars — he should incentivize it through tax policy and require it through regulation. Where public investment is involved, he should build up our infrastructure rapidly with a massive outlay of funds.
We live in one of those times when a major public investment is needed. It is time for the same sort of commitment to infrastructure change as animated the canals and railroads of the 19th century and the superhighways and fiber-optic networks of the 20th.
The current slow pace of expansion of alcohol-based fuels will take decades before we are fully converted away from oil. But the science is there and the technology is being refined to make the production of alcohol fuels ever more efficient. And hydrogen is not far behind.
The feds need to blaze a path in using natural gas, electrolysis and biomass (including landfill gas) to make hydrogen. Washington should pay gas stations to convert their facilities to make possible the widespread use of alcohol and hydrogen fuels.
In the last analysis, Bush invaded Afghanistan and Iraq after Sept. 11 because the energy and focus that horrible day made it possible to do what had needed doing for decades: to clean out those two cesspools of terror and repression. Now a crisis has again awakened the nation, and the president should seize the moment to lead America toward a solution.
If there is one conclusion all Americans can embrace, it is that only by converting from oil dependency can we hope to tame Middle East terrorism. We must stop paying terrorists at the pump even as we pay to repress them with our taxes. If the logic of global climate change leaves this president unmoved, then at least the dire economics of gas-price inflation and the global realities of petro-politics should push him in the right direction.
http://www.thehill.com/thehill/export/TheH...ris/042606.html
The key is to seize the day. The president’s pathetically weak warning that we are facing a long, hot summer and that gas prices might rise even more sounds helpless and removed. Instead of lamenting high prices, he should pounce on the opportunity to lead America away from an oil-dependent economy.
Using the sense of danger and vulnerability Americans feel as prices drive their family budgets out of whack, he can energize and lead the nation in the way that he did so successfully after Sept. 11.
He should address the nation on television and call on Congress to act quickly on massive new investments to increase the production of alcohol-based fuels and cars that can accommodate them. He should plunge ahead in the development of hydrogen-fueled cars and the conversion of gas stations to provide hydrogen. He should call for major new facilities to produce hydrogen and the rapid production of vehicles that can run on it.
Where private-sector investment is needed — as in the production of the cars — he should incentivize it through tax policy and require it through regulation. Where public investment is involved, he should build up our infrastructure rapidly with a massive outlay of funds.
We live in one of those times when a major public investment is needed. It is time for the same sort of commitment to infrastructure change as animated the canals and railroads of the 19th century and the superhighways and fiber-optic networks of the 20th.
The current slow pace of expansion of alcohol-based fuels will take decades before we are fully converted away from oil. But the science is there and the technology is being refined to make the production of alcohol fuels ever more efficient. And hydrogen is not far behind.
The feds need to blaze a path in using natural gas, electrolysis and biomass (including landfill gas) to make hydrogen. Washington should pay gas stations to convert their facilities to make possible the widespread use of alcohol and hydrogen fuels.
In the last analysis, Bush invaded Afghanistan and Iraq after Sept. 11 because the energy and focus that horrible day made it possible to do what had needed doing for decades: to clean out those two cesspools of terror and repression. Now a crisis has again awakened the nation, and the president should seize the moment to lead America toward a solution.
If there is one conclusion all Americans can embrace, it is that only by converting from oil dependency can we hope to tame Middle East terrorism. We must stop paying terrorists at the pump even as we pay to repress them with our taxes. If the logic of global climate change leaves this president unmoved, then at least the dire economics of gas-price inflation and the global realities of petro-politics should push him in the right direction.
Here is an oppsing view to the peak oil thesis:
Peak Oil Panic
Is the planet running out of gas? If it is, what should the Bush administration do about it?
Ronald Bailey
The Princeton geologist Ken Deffeyes warns that the imminent peak of global oil production will result in “war, famine, pestilence and death.” Deffeyes, author of 2001’s Hubbert’s Peak: The Impending World Oil Shortage and 2005’s Beyond Oil: The View from Hubbert’s Peak, predicted that the peak of global oil production would occur this past Thanksgiving.
Deffeyes isn’t alone. The Houston investment banker Matthew Simmons claims in his 2005 book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy that the Saudis are lying about the size of their reserves and that they are really running on empty; last September he announced that “we could be looking at $10-a-gallon gas this winter.” Colin Campbell, a former petroleum geologist who is now a trustee of the U.K.-based Oil Depletion Analysis Centre, warned way back in 2002 that we were headed for peak oil production, and that this would lead to “war, starvation, economic recession, possibly even the extinction of homo sapiens.” In his 2004 book Out of Gas: The End of the Age of Oil, the Caltech physicist David Goodstein wrote that the peak of world production is imminent and that “we can, all too easily, envision a dying civilization, the landscape littered with the rusting hulks of SUVs.” Jim Motavalli, editor of the environmentalist magazine E, writes in the January/February 2006 issue, “It is impossible to escape the conclusion that we’re steaming full speed ahead into a train wreck of monumental proportions.”
http://www.reason.com/0605/fe.rb.peak.shtml
(Much more)
QUOTE
Peak Oil Panic
Is the planet running out of gas? If it is, what should the Bush administration do about it?
Ronald Bailey
The Princeton geologist Ken Deffeyes warns that the imminent peak of global oil production will result in “war, famine, pestilence and death.” Deffeyes, author of 2001’s Hubbert’s Peak: The Impending World Oil Shortage and 2005’s Beyond Oil: The View from Hubbert’s Peak, predicted that the peak of global oil production would occur this past Thanksgiving.
Deffeyes isn’t alone. The Houston investment banker Matthew Simmons claims in his 2005 book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy that the Saudis are lying about the size of their reserves and that they are really running on empty; last September he announced that “we could be looking at $10-a-gallon gas this winter.” Colin Campbell, a former petroleum geologist who is now a trustee of the U.K.-based Oil Depletion Analysis Centre, warned way back in 2002 that we were headed for peak oil production, and that this would lead to “war, starvation, economic recession, possibly even the extinction of homo sapiens.” In his 2004 book Out of Gas: The End of the Age of Oil, the Caltech physicist David Goodstein wrote that the peak of world production is imminent and that “we can, all too easily, envision a dying civilization, the landscape littered with the rusting hulks of SUVs.” Jim Motavalli, editor of the environmentalist magazine E, writes in the January/February 2006 issue, “It is impossible to escape the conclusion that we’re steaming full speed ahead into a train wreck of monumental proportions.”
http://www.reason.com/0605/fe.rb.peak.shtml
(Much more)
Note the price volatility in nominal dolars.
http://www.marktaw.com/culture_and_media/p.../GlobalOil.html
And an opposing view to the opposing view. I also heard somthing about oil regenerating into some places they thought were running out, but I haven't found a reference to it yet.
http://www.abetterearth.org/subcategory.php/300.html
We Are NOT Running Out of Oil
by Robert Bradley
"This time it's for real," says the cover story of the June 2004 issue of National Geographic. "We're at the beginning of the end of cheap oil."
Books and articles written by geologists, environmentalists, and others regularly announce a new era of increasing oil scarcity. 1 Today's resurrected hero of the depletionists is M. King Hubbert (1903-1989), a Shell Oil Company geologist who a halfcentury ago presented a bellshaped curve depicting oil production over time. But the theory of a little-known twentieth century economist, Erich Zimmermann, suggests this is unsound.
Hubbert's model correctly predicted that U.S. oil production would peak around 1970. A sister prediction, that U.S. gas production would peak in 1970, was errant, however. And his prediction that global oil production would begin an irreversible decline around 2000 is off to a poor start (Hubbert 1956). World oil production in 2003 was about 2.5 percent above 2000 (U.S. Energy Information Administration [U.S. EIA] 2004b).
The logic behind mineral-resource pessimism is simple. It goes like this: Oil is a finite resource, incapable of being reproduced in human time frames. Any usage reduces the stock, and geometric demand growth, such as the 1.9 percent annual increase in oil demand predicted for the next two decades (U.S. EIA 2004a, 167), will rapidly deplete remaining supplies. Fixed supply plus rising demand equals depletion and increasing economic scarcity.
"But look at the data," expansionists respond. The resource base for different minerals has expanded tremendously over time to meet growing demand-and at steady, and even falling, prices when adjusted for inflation. Resource availability has been positively, not negatively, correlated to consumption when human ingenuity has been allowed free rein.
The expansionist position is often associated with Julian Simon, who in 1990 won the most famous wager in the history of economics. He bet Paul Ehrlich, John Holdren, and others that the inflationadjusted price of mineral resources would be less in 1990 than in 1980, and it was. A similar bet undertaken today would likely be a winner, too. Prices of global oil and North American natural gas in recent years have been higher than their historical average, but supply and demand adjustments promise to bring these prices down over time-given access to reserves and entrepreneurial incentives.
The gulf between the depletionists and expansionists can be better understood-even resolved- by appreciating the insights of the functional theory of mineral resources developed by Erich Zimmermann (1888-1961), an economist at the University of North Carolina and later the University of Texas. His insight provides a theoretical foundation for modern expansionist thought.
Zimmermann rejected the assumption of fixity. Resources are not known, fixed things; they are what humans employ to service wants at a given time. To Zimmermann (1933, 3; 1951, 14), only human "appraisal" turns the "neutral stuff" of the earth into resources. What are resources today may not be tomorrow, and vice versa.
"Resources are highly dynamic functional concepts; they are not, they become, they evolve out of the triune interaction of nature, man, and culture, in which nature sets outer limits, but man and culture are largely responsible for the portion of physical totality that is made available for human use" (Zimmermann 1951, 814-15). Zimmermann concluded that "knowledge is truly the mother of all resources" (10).
Zimmermann drew a clear distinction between the ways in which natural scientists and social scientists view resources. "To the physicist the law of the conservation of matter and energy is basic. The economist, however, is less interested in the totality of the supply than in its availability" (Zimmermann 1933, 45). He warned: "To those who are used to view resources as material fixtures of physical nature, this functional interpretation of resources must seem disconcerting" since "it robs the resource concept of its concreteness and turns it into an elusive vapor" (4).
Physical to functional; objective to subjective; absolute to relative; static to dynamic; one-dimensional to institutional-Zimmermann's real-word theory was ignored by the economic orthodoxy in its quest to remake their discipline into a "hard" science based on mathematical relationships. Economists embraced deterministic ideas of known, fixed resources that enabled them to calculate the "optimal" extraction rate of a "depletable" resource (Krautkraemer 1998). But it was at the expense of understanding the dynamics of real-word resources.
Depletionists-qua-alarmists err on their own ground by neglecting the vast size of the estimated carbon-energy resource base. The World Energy Council (2001, 161) has concluded that "fossil fuel resources are adequate to meet a wide range of possible scenarios through to 2050 . . . and well beyond." Similarly, the Intergovernmental Panel on Climate Change (IPCC) found that fossil fuels are so abundant that they "will not limit carbon emissions during the 21st century" (IPCC 2001, 4). The IPCC estimates that only about 1.5 percent of the total physical resource base of the Earth's crust was produced and consumed between 1860 and 1998 (236). Such supply represents, potentially, many thousands of years of increasing consumption (Bradley and Fulmer 2004, 91).
Geologists divide the earth's resource base into three categories: "proved" (found and ready to be produced), "probable" (expected to become proved in time), and "speculative" (estimated but uneconomic). Resourceship-that is, entrepreneurial development of resources-turns probable into proved, and speculative into probable (McDonald 1995). What is high cost today becomes lower cost tomorrow. Heavy oils, such as orimulsion in Venezuela and bitumen in Alberta, Canada, are now rivals to crude oil. These are examples of Zimmermann's "resources are not, they become" that he did not live to see.
http://www.abetterearth.org/subcategory.php/300.html
We Are NOT Running Out of Oil
by Robert Bradley
"This time it's for real," says the cover story of the June 2004 issue of National Geographic. "We're at the beginning of the end of cheap oil."
Books and articles written by geologists, environmentalists, and others regularly announce a new era of increasing oil scarcity. 1 Today's resurrected hero of the depletionists is M. King Hubbert (1903-1989), a Shell Oil Company geologist who a halfcentury ago presented a bellshaped curve depicting oil production over time. But the theory of a little-known twentieth century economist, Erich Zimmermann, suggests this is unsound.
Hubbert's model correctly predicted that U.S. oil production would peak around 1970. A sister prediction, that U.S. gas production would peak in 1970, was errant, however. And his prediction that global oil production would begin an irreversible decline around 2000 is off to a poor start (Hubbert 1956). World oil production in 2003 was about 2.5 percent above 2000 (U.S. Energy Information Administration [U.S. EIA] 2004b).
The logic behind mineral-resource pessimism is simple. It goes like this: Oil is a finite resource, incapable of being reproduced in human time frames. Any usage reduces the stock, and geometric demand growth, such as the 1.9 percent annual increase in oil demand predicted for the next two decades (U.S. EIA 2004a, 167), will rapidly deplete remaining supplies. Fixed supply plus rising demand equals depletion and increasing economic scarcity.
"But look at the data," expansionists respond. The resource base for different minerals has expanded tremendously over time to meet growing demand-and at steady, and even falling, prices when adjusted for inflation. Resource availability has been positively, not negatively, correlated to consumption when human ingenuity has been allowed free rein.
The expansionist position is often associated with Julian Simon, who in 1990 won the most famous wager in the history of economics. He bet Paul Ehrlich, John Holdren, and others that the inflationadjusted price of mineral resources would be less in 1990 than in 1980, and it was. A similar bet undertaken today would likely be a winner, too. Prices of global oil and North American natural gas in recent years have been higher than their historical average, but supply and demand adjustments promise to bring these prices down over time-given access to reserves and entrepreneurial incentives.
The gulf between the depletionists and expansionists can be better understood-even resolved- by appreciating the insights of the functional theory of mineral resources developed by Erich Zimmermann (1888-1961), an economist at the University of North Carolina and later the University of Texas. His insight provides a theoretical foundation for modern expansionist thought.
Zimmermann rejected the assumption of fixity. Resources are not known, fixed things; they are what humans employ to service wants at a given time. To Zimmermann (1933, 3; 1951, 14), only human "appraisal" turns the "neutral stuff" of the earth into resources. What are resources today may not be tomorrow, and vice versa.
"Resources are highly dynamic functional concepts; they are not, they become, they evolve out of the triune interaction of nature, man, and culture, in which nature sets outer limits, but man and culture are largely responsible for the portion of physical totality that is made available for human use" (Zimmermann 1951, 814-15). Zimmermann concluded that "knowledge is truly the mother of all resources" (10).
Zimmermann drew a clear distinction between the ways in which natural scientists and social scientists view resources. "To the physicist the law of the conservation of matter and energy is basic. The economist, however, is less interested in the totality of the supply than in its availability" (Zimmermann 1933, 45). He warned: "To those who are used to view resources as material fixtures of physical nature, this functional interpretation of resources must seem disconcerting" since "it robs the resource concept of its concreteness and turns it into an elusive vapor" (4).
Physical to functional; objective to subjective; absolute to relative; static to dynamic; one-dimensional to institutional-Zimmermann's real-word theory was ignored by the economic orthodoxy in its quest to remake their discipline into a "hard" science based on mathematical relationships. Economists embraced deterministic ideas of known, fixed resources that enabled them to calculate the "optimal" extraction rate of a "depletable" resource (Krautkraemer 1998). But it was at the expense of understanding the dynamics of real-word resources.
Depletionists-qua-alarmists err on their own ground by neglecting the vast size of the estimated carbon-energy resource base. The World Energy Council (2001, 161) has concluded that "fossil fuel resources are adequate to meet a wide range of possible scenarios through to 2050 . . . and well beyond." Similarly, the Intergovernmental Panel on Climate Change (IPCC) found that fossil fuels are so abundant that they "will not limit carbon emissions during the 21st century" (IPCC 2001, 4). The IPCC estimates that only about 1.5 percent of the total physical resource base of the Earth's crust was produced and consumed between 1860 and 1998 (236). Such supply represents, potentially, many thousands of years of increasing consumption (Bradley and Fulmer 2004, 91).
Geologists divide the earth's resource base into three categories: "proved" (found and ready to be produced), "probable" (expected to become proved in time), and "speculative" (estimated but uneconomic). Resourceship-that is, entrepreneurial development of resources-turns probable into proved, and speculative into probable (McDonald 1995). What is high cost today becomes lower cost tomorrow. Heavy oils, such as orimulsion in Venezuela and bitumen in Alberta, Canada, are now rivals to crude oil. These are examples of Zimmermann's "resources are not, they become" that he did not live to see.
All this chat and not a whole lot on why it is suddenly a problem. Why is it seemingly out of the blue are prices climbing? What are the causes? Are there suddenly more consumers of oil in America?
And as to drilling our own oil, great. Thank God we didnt get too hasty back when about it so we have it to fall back on now.
And as to drilling our own oil, great. Thank God we didnt get too hasty back when about it so we have it to fall back on now.
QUOTE(Mizilus @ Apr 28 2006, 08:55 PM) [snapback]201834[/snapback]
All this chat and not a whole lot on why it is suddenly a problem. Why is it seemingly out of the blue are prices climbing? What are the causes? Are there suddenly more consumers of oil in America?
And as to drilling our own oil, great. Thank God we didnt get too hasty back when about it so we have it to fall back on now.
And as to drilling our own oil, great. Thank God we didnt get too hasty back when about it so we have it to fall back on now.
Plenty of reasons why, though adjusted for inflation it's no record. Katrina, new blends, increasing world demand and insecurity all across the middle east.It isn't out of the blue if you've been paying attention.
China consumes 6 times what they did just 10 years ago.
Katrina maybe. A bit.
Insecurity in the ME? Yeah. Since when isnt it insecure and those oily asssholes always want their cash. What else have they got?
Increasing world demand? Is that why America needs more refining capacity? Oh I know about special blends and all that rot. It's BS and needs to be acceptably standardized and otherwise stopped.
And no, it isnt out of the blue. The price has been creeping up for a few (six or so) years now for some reason.
Insecurity in the ME? Yeah. Since when isnt it insecure and those oily asssholes always want their cash. What else have they got?
Increasing world demand? Is that why America needs more refining capacity? Oh I know about special blends and all that rot. It's BS and needs to be acceptably standardized and otherwise stopped.
And no, it isnt out of the blue. The price has been creeping up for a few (six or so) years now for some reason.
QUOTE(Mizilus @ Apr 28 2006, 09:10 PM) [snapback]201839[/snapback]
Katrina maybe. A bit.
Oh I know about special blends and all that rot. It's BS and needs to be acceptably standardized and otherwise stopped.
Oh I know about special blends and all that rot. It's BS and needs to be acceptably standardized and otherwise stopped.
Good luck with that, but at least MTBE is a thing of the past. There are a couple BILLION people between China and India. I suppose you will find a way to blame their demand on Bush.
QUOTE(Arturo_Vandelay @ Apr 28 2006, 11:14 PM) [snapback]201840[/snapback]
Good luck with that, but at least MTBE is a thing of the past. There are a couple BILLION people between China and India. I suppose you will find a way to blame their demand on Bush.
We'll just use sticky glue for that.
QUOTE(Arturo_Vandelay @ Apr 28 2006, 09:14 PM) [snapback]201840[/snapback]
There are a couple BILLION people between China and India. I suppose you will find a way to blame their demand on Bush.
Yeah its weird they just suddenly discovered the combustion engine. Guess whitey cant keep a secret for squat.
Supply and demand. Wow. Thats new too. All those oil folks never heard of it. They are the last people that would be interested in supply.
QUOTE(Mizilus @ Apr 28 2006, 09:38 PM) [snapback]201845[/snapback]
Supply and demand. Wow. Thats new too. All those oil folks never heard of it. They are the last people that would be interested in supply.
They're interested, but the US government says no, so they go where the government says yes.
QUOTE(Arturo_Vandelay @ Apr 28 2006, 09:50 PM) [snapback]201847[/snapback]
They're interested, but the US government says no, so they go where the government says yes.
They who? We're worried about drilling in ANWR so those commies in China can have their gas?
I'm not being an assshole. I'm just wondering how this is a suprise all of a sudden.
Seems to me one could go down the line of reasons/excuses gas prices in this country in the last few years have gone up and call BS on 2/3 or better of them.
Katrina? Yes, but prices were going up before that.
ME problems? Well hell supposedly everyone that we arent at war with in the ME are our trusted allies, so whats the problem? Isnt the Persian gulf a drydock for half of our navy at any given time? Arent we the best customers, and always have been, of those people that want to sell oil?
China and such? That didnt happen overnight. There always has been millions of them and their streets are always crowded with vehicles. Did this somehow exponetially increase?
QUOTE(Mizilus @ Apr 28 2006, 10:16 PM) [snapback]201850[/snapback]
They who? We're worried about drilling in ANWR so those commies in China can have their gas?
I'm not being an assshole. I'm just wondering how this is a suprise all of a sudden.
Seems to me one could go down the line of reasons/excuses gas prices in this country in the last few years have gone up and call BS on 2/3 or better of them.
Katrina? Yes, but prices were going up before that.
ME problems? Well hell supposedly everyone that we arent at war with in the ME are our trusted allies, so whats the problem? Isnt the Persian gulf a drydock for half of our navy at any given time? Arent we the best customers, and always have been, of those people that want to sell oil?
China and such? That didnt happen overnight. There always has been millions of them and their streets are always crowded with vehicles. Did this somehow exponetially increase?
Prices didn't exponentially increase, and it wasn't much of a surprise if you'd been paying attention. I don't know what kind of global conspiracy you're hoping to find, but it just isn't there. Oil's gone up and down depending on numerous variables
QUOTE
There always has been millions of them and their streets are always crowded with vehicles. Did this somehow exponetially increase?
Almost. China has many times the amount of autos they did just a few years back.
http://www.peopleandplanet.net/doc.php?id=2484
China's cars on road to ruin?
Posted: 07 Jun 2005
by Yves Engler & Bianca Mugyenyi
In 1990 there were just one million cars on Chinese roads. Fourteen years later that number has rapidly risen to 12 million, and this year alone a further 2.4 million new cars will be added. In itself, that's a lot of new cars, but the figures take on an altogether greater significance when you realise where this trend might lead.
But is it realistic to see such a figure being met, or is it just doom-mongering? After all, 85 million Chinese still live on less than 21 cents a day, and a further 500 million get by on less than $2 a day; it's going to be a long time before they can afford a Hummer.
Motor racing
While these people may not be able to afford cars, however, they are already seeing their lives radically altered by their impact. China has 200 million bicycles, but, in thrall to the motorcar, cities such as Shanghai are banning bicycles from many streets. Traditional ways are being pushed aside to make way for the bright shiny new automotive future.
The automobile vanguard has already arrived. At the end of September last year Shanghai hosted China's first-ever Formula One motor-racing event: 150,000 cheering fans packed the city's recently completed $300 million racetrack. The track is part of the new Shanghai International Auto City racing and automotive complex, which is expected to cost $5 billion to complete.
Magazines such as Autocar now have Chinese editions. The country's radio airwaves have become clogged with commercials as advertisers discover a new audience, both captive and wealthy: motorists. And on TV Ford has produced its own programme, which it distributed freely to 18 Chinese stations. Modelled on the endurance game show Survivor, Ford Maverick Beyond Infinity featured a dozen contestants hunting for treasure on a tropical island in a Ford Maverick SUV. The grand prize was, of course, another Maverick.
Such largesse from Ford is hardly surprising. Just like General Motors, the company has stated its belief that by 2025 China will surpass the US (where 17 million vehicles are sold per year) as the largest car market in the world. The government in Beijing agrees: it estimates that by 2020, there will be 140 million vehicles on China's roads.
New highways
To meet this demand, China has been feverishly laying asphalt. Once completed, its planned new highways will cover an area equivalent to four equatorial laps around the earth. The consequences of this will be far-reaching. Paving 20,000 hectares of agricultural land (the road area needed for a million cars) reduces grain production by 80,000 tonnes. Yet China's agricultural imports increased by 63% during the first half of 2004 to a record half-year agricultural trade deficit of $3.73 billion. For a country where arable land is already in short supply, any reduction in agricultural land will have devastating consequences.
All over China, cars are shaping the physical landscape: historic neighbourhoods have been torn to the ground to build new roads; forests of roadside billboards have sprung up; and the sprawling outskirts of major cities are undergoing makeovers as big-box retailers such as Wal-Mart move in.
Already the country has the highest number of crash deaths in the world, with more than 100,000 people dying last year alone. (And that figure is five times what it was 20 years ago.) In many of China's biggest cities half of all air pollution comes directly from cars, and seven of the world's smoggiest cities are now in China. Despite the fact that Chinese drivers still only generate 3% of the amount of greenhouse gases that US drivers produce, the country's growing thirst for oil is where the real problems of the future lie.
Until the mid-1990s, China was oil self-sufficient, but not any more. The country is now the number-two consumer of oil worldwide (it overtook Japan in 2003). Chinese demand has accounted for 40% of the world's total oil growth since 2000, and by 2020 China is expected to need eight million more barrels of oil per day. With less than 2% of the world's oil reserves, most of this will have to be imported. (Even after this huge increase China will still only consume two-thirds the amount of oil the US guzzles, despite the fact that it is four times the size of America.)
Oil supply
China's Communist Party rulers are becoming increasingly concerned about the security of the country's oil supply, as was demonstrated by last year's launch of the National Strategic Oil Reserves Office. There is similar anxiety in Washington.
Some commentators go as far as to suggest that the invasion of Iraq was a response to China's rapidly expanding appetite for oil. For certain, the invasion annulled a 26-year oil contract China had with Saddam Hussein's regime. The Washington Post reported: 'The US is building a network of military bases and diplomatic missions whose main goal is to protect American access to oilfields in volatile places such as Nigeria, Cameroon, Chad and Sao Tome and, as important, to deny that access to China.'
Elsewhere, China and Japan have been involved in a bitter competition over rival plans to build a pipeline to export oil from Russia's Siberian terminus of Angarsk, causing relations between Beijing and Tokyo to seriously deteriorate. China has also resorted to using arms or 'dual-use technology' to woo oil-rich countries such as Saudi Arabia and Iran. Meanwhile, it has 4,000 troops in Sudan protecting oil interests there, and has also become friendly with the corrupt regime in oil-rich Gabon.
Increased resource requirements have led Chinese companies to scour the globe for more commodities than just oil. Car manufacturing is an industry with a voracious and varied appetite, and automobile companies are among the leading consumers of copper, aluminium, plastics, iron, lead, rubber, vinyl, computer chips and steel. Notably, China recently became the world's biggest consumer of steel, iron ore, copper, aluminium and cement, driving commodities prices to record highs.
I hear Cuba is going to drill for oil right off the Florida coast. That ought to irk Gov. Bush. I looked into the way Norway uses it's oil money and they seem to have the right scheme. They said at first they went wild and just spent and spent and got into financial problems, so now they spend just half of the oil revenues and invest the other half in offshore investments so as to not overheat their own economy. They have the money coming in from the oil and the payoffs from the investments. They still manage to fully fund their medical coverage, birth to death care, schools through university are free, elder care is taken care of, the men are good looking the women are strong and the children are above average, or so I've heard.
I think we have the potential to be an oil rich country or an oil dependent country free from importing to other nations gas. But the problem is the money to dig and to explore. I even heard rumors that the United States is already exploring our natural gas through submarines. I dont know if that is true.
Cost is the key to new energy developments. We have considerable oil available at $80-$100 a barrel. At $20 a barrel, not so much.
I guess a lot of wells are getting capped back off until prices go back up.
Likely.
We would be dependent enuf on foreign oil even if every car on the road were a hybrid methinks. Plenty of oil needs.
Must change the paradigm. New century.
We would be dependent enuf on foreign oil even if every car on the road were a hybrid methinks. Plenty of oil needs.
Must change the paradigm. New century.
bigoil could care less if our cash gets shipped overseas
they get their cut and that's all that matters
they get their cut and that's all that matters
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