We Need an Oil Glut

In view of the current oil company hearings in the US Congress

Some thoughts and perspective:

There are a couple of things we know for certain that will bring down the price of gasoline and gasoline related price increases:

Increased supply of oil and gasoline

Less demand for oil and gasoline

Politicians (in their current dramatic high profile hearings in the US Senate and US House) admit that greater supply of oil (and energy) would bring down prices, while on the other hand diminished supply of oil (and energy) acts to raise the price American pay.

Ten years ago US oil companies were making 10 cents a gallon on gasoline and are now making about 4 cents per gallon. For perspective US taxes on that gallon are more than 18 cents and state taxes are on average even more throughout the country.

Virtually all of the profits US oil companies earn not paid as dividends to stockholders are reinvested in exploration, and for research and development of future energy capacity. This is not necessarily true of foreign oil companies either corporate or national in type.

30 years ago the US used about 18 million barrels of oil a day.

Today the US uses about 18 million barrels of oil a day.

Yet we are told we are doing nothing about our demand for oil.

Since that time 30 years ago China and India have become huge in their demand for oil as their economies have come into global play. They will only become greater. China has almost all (92%) of their rivers dammed for hydro-electric power. When they are no longer able to tap that resource, or they decide the cost of damming rivers is too great as their capacity for river transport is lost, or seismic activity in that region raises questions about the efficacy of that source of power, as pools are drained to allow for repairs, their demand for oil will grow apace. Presently China is drilling for oil less than 90 miles from Miami, while we ban much such drilling. Both of their oil/energy needs will drastically increase and they will become more aggressive in pursuit of their own sources of oil.

The high price of oil provides more capital for and encourages development of new energy sources and exploration, if not here in the US then outside the US.

Some indications of the burden of high prices (among many others are)

A one dollar increase in the price of gasoline will add $166.00 to the cost of 3,000 mile road trip vacation for an American family. (Is that prohibitive?)

Shipping cost of freight in a tractor drawn Semi Trailer, capable of hauling more, but only loaded with 25,000 pounds driving 2,000 miles to deliver that freight, at 4 miles per gallon, with a fuel increase of $2.00 per gallon might increase the cost of shipping, if calculated proportionally, only by about four cents a pound; a 100-pound product about $4.00 for fuel alone. (One must consider how important getting that 100 lb delivery made is)

Far more drastic: false starts in solutions like (American) government mandated and subsidized ethanol is resulting in food riots, hunger, death, and hardship overseas and even in this hemisphere by taking food grains off the market, decreased efficiency in fuel usage, and increases in air pollution. (not even taking into account the subsidies)

Are any of the solutions of the recent (109th

Even if the true impact of supply were not effected for several years, just the idea of increasing domestic oil production and refining would put downward pressure on the speculative pricing per barrel.

The US consumption of oil per capita it's twice that of France without a significant gap in lifestyle. How about driving smaller cars with more efficient engines and develop the efficiency of nuclear technologies that France has? Despite the price raise my 1.2 l engine car does not kill me with a 7l/100 km incity consumption.

The high oil prices are here to stay because the increase in demand and the throwing off of other technlogies. For example Germany, the greatest EU consumtion country, does not allow more nuclear power plants while the costs of coal power plants are huge because of ecological restrictions. This only means that the energy it's produced, whatever the means, elsewhere in neighbouring countries like Poland or Cehia.

quote name='Kosmo' date='May 22 2008, 07:47 PM' post='84868']

The US consumption of oil per capita it's twice that of France without a significant gap in lifestyle. How about driving smaller cars with more efficient engines

I believe the difference in those figures can be mostly credited to their use of nuclear power.

As for the smaller gas efficient cars, that happens in the cities where many more people do a lot of stop and go city driving, but there's a lot of country outside the cities to move around in, and people here want larger cars for many good reasons. They are willing to pay for them and the fuel to provide the luxury of driving them. However people do like to complain, and the p.m. (popular media) exploits that day in and day out. They have a political interest in doing that, for we certainly get tired of being told how bad things are in the US. Consider some of the gasoline costs and the trivial amounts they translate into mentioned in the pilot post.

and develop the efficiency of nuclear technologies that France has?

In that regard the US Navy operates 103 reactor plants in 81 nuclear-powered ships, and has totally safely since 1955 starting with the USS Nautilus. Nuclear power presently provides upwards of 90% of electrical capacity in France. In the US the percentage is at 19% and no new plants have been built since the early 80s This plant at (Marble Hill), Indiana was slowed to a halt and never got beyond about 1/3rd completion, finally bankrupting the utility company, with the plant finally lying abandoned. Construction began in 1977 and by 1984, costs had skyrocketed and production was shut down. $7-$8 billion had been put into the project. The main problem with the project was the financing. Huge loans were taken out and the interest grew rapidly. Any delay cost millions of dollars, since more time literally meant more money. This was early in the "Green movement". By bringing lawsuit after lawsuit they have effectively stopped any new plants being built in this country, by slowing work and bringing it to a virtual halt individually and in general. In planning the waste burial site in Nevada, the objectors want signs to be made that will provide warniing placards that will inform people wandering by or doing mining operations nearby for a half million years. That can be a daunting project in communications. They are deadly serious.

"does not kill me with a 7l/100 km incity consumption."

Is that expression: 7 liters per 100 km? If so, doesn't that work out to only 14.3 km per liter? (couldn't be. . .)

"The high oil prices are here to stay because the increase in demand and the throwing off of other technlogies. For example Germany, the greatest EU consumtion country, does not allow more nuclear power plants while the costs of coal power plants are huge because of ecological restrictions. This only means that the energy it's produced, whatever the means, elsewhere in neighbouring countries like Poland or Cehia."

They are importing their energy and exporting their "pollution"; Similarly California does that here in the US. Both will pay for that down the line. California was beset by summertime electrical "brown-outs" in a huge way a few years back, and weather has been milder since. But those will be back and businesses will have to close. Those business will eventually move out of California (Nevada perhaps) where government is more responsible.

I believe the difference in those figures can be mostly credited to their use of nuclear power.

As for the smaller gas efficient cars, that happens in the cities where many more people do a lot of stop and go city driving, but there's a lot of country outside the cities to move around in, and people here want larger cars for many good reasons. They are willing to pay for them and the fuel to provide the luxury of driving them. However people do like to complain, and the p.m. (popular media) exploits that day in and day out. They have a political interest in doing that, for we certainly get tired of being told how bad things are in the US. Consider some of the gasoline costs and the trivial amounts they translate into mentioned in the pilot post.

You still have cheaper gasoline then around here.

and develop the efficiency of nuclear technologies that France has?

In that regard the US Navy operates 103 reactor plants in 81 nuclear-powered ships, and has totally safely since 1955 starting with the USS Nautilus. Nuclear power presently provides upwards of 90% of electrical capacity in France. In the US the percentage is at 19% and no new plants have been built since the early 80s This plant at (Marble Hill), Indiana was slowed to a halt and never got beyond about 1/3rd completion, finally bankrupting the utility company, with the plant finally lying abandoned. Construction began in 1977 and by 1984, costs had skyrocketed and production was shut down. $7-$8 billion had been put into the project. The main problem with the project was the financing. Huge loans were taken out and the interest grew rapidly. Any delay cost millions of dollars, since more time literally meant more money. This was early in the "Green movement". By bringing lawsuit after lawsuit they have effectively stopped any new plants being built in this country, by slowing work and bringing it to a virtual halt individually and in general. In planning the waste burial site in Nevada, the objectors want signs to be made that will provide warniing placards that will inform people wandering by or doing mining operations nearby for a half million years. That can be a daunting project in communications. They are deadly serious.

They can not be serious about CO2 emmision warming the planet and stopping nuclear energy in the same time. This is where Angela Merkel proved herself a pathetic politician.

"does not kill me with a 7l/100 km incity consumption."

Is that expression: 7 liters per 100 km? If so, doesn't that work out to only 14.3 km per liter? (couldn't be. . ..

For heavy city traffic this is fairly decent

"The high oil prices are here to stay because the increase in demand and the throwing off of other technlogies. For example Germany, the greatest EU consumtion country, does not allow more nuclear power plants while the costs of coal power plants are huge because of ecological restrictions. This only means that the energy it's produced, whatever the means, elsewhere in neighbouring countries like Poland or Cehia."

 

They are importing their energy and exporting their "pollution"; Similarly California does that here in the US. Both will pay for that down the line. California was beset by summertime electrical "brown-outs" in a huge way a few years back, and weather has been milder since. But those will be back and businesses will have to close. Those business will eventually move out of California (Nevada perhaps) where government is more responsible..

While California and Nevada are "states" within the US, Germany and Poland are states within the EU and it's not the same thing. Germany it's placing her economy at the mercy of sometime hostile neighbours and will pay the price of her extremist green idealism.

You still have cheaper gasoline then around here.

 

The US consumption of oil per capita it's twice that of France without a significant gap in lifestyle.

Consider:

30 years ago the US used about 18 million barrels of oil a day.

Today the US uses about 18 million barrels of oil a day.

Yet we are told we are doing nothing about our demand for oil.

In 1978 US population was 222.6 million and in 2008 US population is 304.2 million, a 37 pct increase. Our demand for oil for all purposes is virtually the same for both situations.

They can not be serious about CO2 emmision warming the planet and stopping nuclear energy in the same time. This is where Angela Merkel proved herself a pathetic politician.

Inconsistencies like this do not matter. The people at Marble Hill in the PICTURE were carrying the flag of their religion: The No-Circle with cross hatch over two nuclear cooling towers. These true believers are first of all idealists, and idealists tend to not recognize practical limitations on their religion.

Germany it's placing her economy at the mercy of sometime hostile neighbours and will pay the price of her extremist green idealism.

We do the same here vis-

In the UK a litre of petrol is around

In the UK a litre of petrol is around

Even though the vast majority of that price is government taxes (something like 85%) it still angers me to hear of record profits for the big petroleum companies.

I wonder why that would be. It seems to me they are scapegoats, not for any crime against the public but for the inadequate policies of politicians. The Oil Companies are doing the hard work of providing the thing you need to fuel the engine of your desire.

Profits of oil companies go to support the industry and into the accounts of shareholders. The fact that an oil company CEO earns $3 million or 30 million a year is irrelevant. Take away his 30 million and give it to 300 million US citizens so as to reduce their bill for one year would only provide them each with $ 00.10 for that whole year. All other earnings go to exploration, research and development, and investment in resources. If the management were being done by some bureaucrat in Washington, there is little doubt that 10-cents savings per individual citizen would result in nothing but a larger annual outlay for transportation costs for individual citizens and businesses as the "business interests" of the Oil Companies would languish.

It

In the UK a litre of petrol is around

when you add it up. For short journeys I boycott the oil barons altogether and walk/cycle. After all, food is fuel and I would sooner expend it on travel rather than store it on my waistline .

It amazes me, as I walk round this humdrum and very working class town of Barrow-in-Furness, how many people from poor backgrounds still use their motor vehicles for journeys of less than a mile, despite their poverty and the high cost of fuel. And - yes. many of them ARE obese.

It is amazing that people fail to make the connection between unnecessary driving and added gasoline charges; better to blame the price of gasoline than cut back on unnecessary driving. Apparently it's not yet painful enough to cause them to seriously consider that option.

Back in December there was a thread titled Gasoline Price Bet

Thursday June 12 Exxon - Mobil Corporation states their intent of getting out of the retail gasoline business in the U.S. because of too tight profit margins.

Does anyone believe, after this happens, the operating costs of gasoline distribution will be reduced or made more efficient?

Even if the true impact of supply were not effected for several years, just the idea of increasing domestic oil production and refining would put downward pressure on the speculative pricing per barrel.

There has been a nine percent drop in the price of a barrel of oil in two days. This is on the cusp of certain members of the US Congress showing signs of weakening on drilling for more oil on American soil. Which party is seen to have a stanglehold on more drilling? Which party seems to be gelded on the subject? Announcements by which party would have that effect?

A US Presidential candidate said in the past few days that by "properly inflating our tires, and tuning up engines" the same amount of oil could be saved that could be produced by all the new drilling of US resources proposed by the other party. SEE HIM HERE

Could these proposals actually accomplish savings of this scale?

What number of automobiles in the US must this policy require to have improperly inflated tires or poorly tuned engines to accomplish this ambitious goal?

A US Presidential candidate said in the past few days that by "properly inflating our tires, and tuning up engines" the same amount of oil could be saved that could be produced by all the new drilling of US resources proposed by the other party. SEE HIM HERE

 

Could these proposals actually accomplish savings of this scale?

What number of automobiles in the US must this policy require to have improperly inflated tires or poorly tuned engines to accomplish this ambitious goal?

Uh...one, Barach's idea is stupid because it appears to be mathematically impossible. Two, why would the consumer want to pay more.