Gas-price plot runs on empty: The Swamp
The Swamp
Posted September 26, 2006 3:05 PM
The Swamp

Posted by William Neikirk at 3:04 p.m. CDT

During a weekend trip from Washington, D.C. to Irvine, Ky. for a high school reunion, I began to take note of gasoline prices. I filled up in Arlington, Va., paying $2.29 a gallon. I filled the tank again in Ashland, Ky., just across the road from an Ashland Oil refinery, and paid $2.07 per gallon. I stopped in Morehead, Ky., for the night, where the lowest price was $1.95 a gallon. On my way home, I filled up at Harrisonburg, Va., where the price was $1.99 a gallon.

At my reunion, several of my classmates said they thought the decline in oil prices represented manipulation by the oil companies to help the Republicans retain control of Congress in November. The notion of political manipulation is a fairly strong one in America these days, since the prices of oil and gasoline have plummeted in recent weeks. A recent Gallup Poll showed that 42 percent of those questioned believed the drop in prices was political in nature.

I asked two energy economists, Andrew Weissman of FTI Consulting in Washington and Philip Verleger of Aspen, Colo., for their opinions on the political manipulation issue.

Weissman said no and Verleger said probably not (although he had a question about the fact that current refinery utilization does not appear to have been cut back dramatically in the face of dropping prices). Both men thought that we might see softer gasoline prices for perhaps a year or two. Verleger there is a chance that gasoline could fall reach $1.15 a gallon before rising again.

Weissman said gasoline prices have plunged in the fall for the past two years. They are very seasonal in nature, he said. In each of those two years, he pointed out, energy facilities in the Gulf of Mexico took large hits from hurricanes.

In 2006, refiners had built large stockpiles of oil and gasoline in anticipation of more hurricane-related damage, he said. When it didn't happen, a surplus began to develop. In addition, Weissman said higher prices created more production. We are also getting more synthetic fuel from Canada, he said, and that drove down prices in the Midwest and had an impact on oil prices.

Verleger said refining margins (the difference between the price of oil and wholesale gas) collapsed in August when it became clear that a decision by refiners to use clean-burning ethanol rather than MTBE to meet environmental regulations didn't cause as much of a squeeze as expected. In fact, more ethanol came onto the market as more ethanol plants opened. "There's a lot of ethanol out there now," Verleger said. A new ethanol plant can be built in a year or so, he said, while it takes years to build a new refinery. In addition, Verleger said crude oil stockpiles held by refiners continue to grow as OPEC did not cut back production.

Also, Verleger said some large institutional investors like pension funds have invested in oil as a hedge against inflation. They essentially invest some of their money in oil futures contracts. When investors start to sell their holdings, he said, that could cause another big collapse in the price of oil. He said it is possible that oil prices could go down to single-digit levels (under $10 a barrel) before going higher. Like Sen. Richard Lugar (R-Ind.), he favors a floor price for oil in the range of $50 to $60 a barrel in order to stabilize a highly volatile market.

Weissman said he saw oil and gasoline prices heading up sharply in a year or two. Verleger said he was unsure of the long-range picture. But neither man is much of a believer in political conspiracy theories when it comes to manipulation of prices, although Verleger hestitated when asked. The price drop has been a big help to President Bush and the GOP, and could help the U.S. economy, too.

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Comments

I know the libs won't understand because there is nothing they do understand. However, a barrel of oil has fallen from $77 in mid summer to around $60 to $61 now. Gas always falls in the fall as well after the summer driving season. As Niekirk points out here, there were no hurricanes. Earlier predictions had another active hurricane season so speculators drove up the price of oil per barrel. The hurricanes did not happen so the price per barrel went down.

OPEC, however, is talking of cutting production because they like oil selling at over $60 a barrel. If OPEC cuts production then prices will rise again.

Bush has nothing to do with it.

Understand?


Beleive what you want,but this Administration is in the hip pocket of BIG OIL.

To suggest that the prices are dropping like a rock for the reasons stated above,are as ludicris as the war in Iraq over WMD's.

Ask Dick Cheney,while OBL was readying his attack on the US,the Chief NEO NUT was having secret meetings w/BIG OIL.

The Repukeicans love the fact that BIG OIL steals from the average citizen,who is struggling to make ends meet.

Another fine Repukeican got sentenced to jail today,Slick Andy Fastow.Sure,energy co's don't screw the Americans!

Mr.Weissman sees prices heading up sharply,yeah like November 8th if these crooks atay in power.

The BIG OIL Co's aren't the only crooks getting away w/ fleecing Americans,Health Insurance rates have gone up 70% since,you guessed it,Bushie became Prez.

Now, let's hear from all the BIG OIL fleecing enablers who support the crooks stealing from Ma & Pa.

I know,it's Clinton's fault!

PS when Bubba left office,$1.48 per gal.!!!!!


Really, what liberals have been, and should be talking about is how when oil reaches peak production, prices have nowhere to go but up. This is no joke and it will happen in our lifetime. This should cut through the partisan rhetoric - we need to develop alternative energy and quick, or suffer the massive consequences.

And what should be disconcerting to everybody is how our gas prices are wholly dependent on the whims of OPEC. Repubilcans have proved that they are unwilling to address this problems, so it's time to vote them out.


John D.,
OPEC also has nothing to do w/ prices. Thats been true since the early 80s. They are determined by futures traders.


John D you are right. Bush had nothing to do with the rise in prices or the drop


I love that raving loon thinks the leaders of the oil companies - all competitors fighting each other tooth and nail for market share - get together with the Bush administration and make decisions as "Big Oil."

That's like saying America's trial lawyers, again all fighting daily against each other for a bigger slice of the pie, got together with John Edwards when he was in office to figure out how to relax legal rules to increase their collective haul of court decisions despite the fact that most of them hate each other.

It's clear to me the man has no perception of the reality of competitive business and, in this case, hasn't even read the original post. Like Rodney Dangerfield said to his clueless college professor character in "Back to School," where is this true? "How about Fantasyland!"


Gas prices always go down after Labor Day. I'm surprised, though, that people in a red state like Kentucky are that quick to blame the guy they most likely voted for. I think the GOP is in real trouble.


JohnD...I understand and I'm a liberal...you are a ranting buffoon! You start every post of yours with some put down.Why don't you make a point without trying to make yourself feel better. Don't give me that I only give what I get crap.
Be a real man and speak like someone who can control themself instead of some whacko.


Yes, but how do you explain the Downing Street Memos!!!?!?!?!?


Hey, anyone got any Sox playoff tickets?


Raving Loon,Crude oil is traded by markets all over the world by "open outcry." Not only is gasoline cheaper here, but everywhere around the world.
From Jan.to Nov.2004,gasoline went up 35% before the presidential election...would it not have been in Bush's favor to call his "buddies" at "BIG OIL" and have them lower the price?
It didn't happen, because he has no control over it!
Not only are you a raving loon,but a dumb raving loon,but I still like ya......you're nut.
Paulo


The mentally lame and/or pschologically disturbed Conspiracy Theorists will of course have their say. How can they not? It is no small irony that the greatest strength of the blogosphere is also its greatest drawback: absolutely anybody can freely express their opinion, however cogent or just plain silly it may be. Alas!

The people who understand how the market works (that is, normal adults) don't need to have it explained to them. And there's no point in trying to explain it to those who pretend not to in order to mouth their inane, insane The-Republicans-Are-Manipulating-the-Prices scenario.

All I can say is that you people have a pretty low regard for the mentality of the American electorate if you think they are so often and so easily manipulated.

Every election cycle we hear "the Republicans have done [fill in the blank] to dupe the voters!"

Every election cycle it's the same mantra from the Democrats -- "What can you do when Bubba is too dumb to vote in his own best interest?" Well, you might try coming up with an agenda, guys. That might work for you.

Bubba is smarter that you think


Oh, here's another way to deal with rising petroleum prices. Brace yourselves, this is really radical -- STOP WASTING THE STUFF!

(In this case the ALL CAPS were meant as shouting.)


When oil goes up,it's Bush's fault.
When oil come down ,it's a Bush conspiracy.
When Gore lost....conspiracy.
When Kerry lost....conspiracy.
When the Republicans keep beating the dems....
Lower taxes,safety at home and abroad,low interest rates,bull stock market and a safer world,plus,plus,plus.
******Put on your tin foil hats and have fun at the U.F.O. convention next month...remember the grey's are the good aliens*****
Paulo


Yes Bill (Mr Transient) Big Oil does get together with the Cheney admin. Remember the secret meetings,when "Big Dick" was supposed to be working on a terrorism plan.

And yes Mr Yuppyville,I do know how business works. I own my business and it's one of the most competitive fields in the country.

Un-like you,I'm not a copy boy at some publisher.
The payroll checks are made out and signed by me.

And as for you Paulo Boy,I'm smart enough to know when oil co's are knocking down record profits every quarter and little old ladies are paying to much for gas,somebody is getting screwed.

But that would be to much to ask of you Repukeicans,you guys don't even give a shite when Americans are coming home in boxes because of your lying Prez.


...and the really funny thing is that some bug wits here COMPLAIN about a price drop, and in the very same breath rattle off their standard disingenuous twaddle about "little old ladies paying too much for gas."

Do you actually believe that that ANY sense at all?


The largest threat to the stability of oil prices
comes from the possibility of a U.S military conflict with Iran over Irans nuclear ambitions.
Russia, as supplier of nuclear fuel and technology to Iran, has not been held accountable for their role by the administration.
It is so, so damn strange that at a time when any country abetting terrorist or rogue nations finds itself in the crosshairs of the U.S military, Russia has been effectively given a get-out-of-jail card from Bush. Why?
Remember when George gazed into Putins eyes and declared him to be "a good man". Could it be Bush didnt want to endanger the lucrative contracts U.S energy firms have with the Russians to process and transport LNG globally by objecting to Russias blatant support of Irans nuclear ambitions? Strange, and entirely possible.
Today the Heritage Foundation, released this report admonishing not Russia, but the CHINESE for
abetting Irans nuclear ambitions.
And all along I thought it was Russia.
How stupid of me.

http://www.heritage.org/Research/AsiaandthePacific/bg1974.cfm

The rumblings of a military conflict with Iran are beginning to be heard quite clearly now.
No doubt, it is in the best interest of the U.S to stop the nuclear capability of Iran, but wouldnt the obvious non-military strategy be to get the Russians to cease supplying Iran?
Apparently not, if you think like the administration and the brains at the Heritage Foundation.
The administration is handily setting up the
Chinese, rather than the deserving Russians, as the fall guy in their war gaming.
I hope the administrations intent is to neutralize
Iran with sanctions (again, what about the Russians?) , but reports like this indicate otherwise.
Say hello to $200.00/barrel crude oil.


Because Cheney had a meeting to try and outline an energy policy that automatically means price collusion that an entire industry would agree to? Even though NONE of the commodity traders who are very important to the process were there? Keep dreaming, loony. Keep dreaming.

Listen to him whine and throw around names like a petulant child. Hysterical! We must have really hit a nerve, huh? Maybe next time he'll hold his breath until he turns blue.

Can you all imagine what the loon's business is? I wonder what the most competitive field he's talking about is. I bet it's failing with his business philosophies, whatever it is.

If he did know anything about business he'd know that those record profits by AMERICAN oil companies are great for the economy because it means more corporate taxes paid to the government on earnings and more profits for the companies which means a larger budget for exploration to help cut our dependency on foreign oil. It's no coincidence that the Gulf of Mexico oil field was found when it was.

Economics 101 says the best way to create prosperity is through creation of wealth. I, for one, am glad the oil companies are creating wealth.


Raving Loon,We give you "facts" and you can't handle it,so you come back at us with the death of our brave soldiers.
You are one sick human being!
Paulo


John D.

I see that you're posting under your alias "JD" some of the time lately.

You are so smart,you really have pulled one over on all us "loony libs" again,how do you do it,...oh great neo-con???

Gas pices are going to sky rocket back up on Nov.8,2006.

Big Oil company's know that their bread is buttered by the neo-cons in the W. administration,and they don't want to see their boy W. in prison any sooner than necessary.

Big oil is also a HUGE,FatCat $$$ donor to the Republican party.

The end is near NEO-CONS,...... most of the moderate republicants are now running away from George W.and Co. as fast as they can.

I guess PauloGirl,and that JD/John D. guy didn't get the memo.


01.30.2007.

Oil @ $85 per barrel.

Offered $10 on that before, and I'll offer it again.

Any takers?


Juanito....What does this say about American politics now a days? When a great deal of people can actually entertain the possibility that this is true. It is the attitude of the country, and attitude reflects leadership. Where winning elections has become more important than whats good for the country. At this point I would not be to proud to be part of either party. It would be nice to see the people who wave their banners for one party or the other, think for themselves,
and not follow so blindly. Demand more from those we have trusted our future with. I think we deserve it.


Conspiracy Theorists the world over -- lissen up!

Yes, it IS possible that the White House and CEOS of major oil companies COULD HAVE gotten together and plotted to set gas prices to maximize their mutual interests. Yes, it IS possible for a major political organization like the Republican party to act nefariously to set elections in its favor. The POSSIBILITY EXISTS that this COULD BE the reason for what we see now.

But logic and the real world tell us over and over (and over) again that the simplest and most mundane answer, as long as it accounts for all the questions, has the overwhelming likelihood of being the correct answer.

Although my theory that Britney Spears has decided to leave KFed and make me her next kept boytoy (even though she's never met me) and that she's using the mail delivery person at my office her agent in this plan (he's instructed to use code to indicate her plans, based on the order of the envelopes as I receive them, from top to bottom, the code being located within the return addresses of the envelope) IS POSSIBLE, if I have any hold at all on common sense I must come to terms with the fact that the most reasonable explanation for the whole thing is that Britney doesn't have much interest in me (despite the fact that I'm altogether adorable) and that the order of the envelopes as I receive them from the mail guy is totally random and means nothing.

And that skritchy, skritchy noise I hear on my window at 3 in the morning, although it COULD BE Dracula, risen from the grave and trying to gain entry to my home for the purpose of turning me into another soldier in the Army of the Undead, is PROBABLY that branch I've been meaning to trim since last October.

I hope that doesn't shatter anybody's bubble. If it makes you feel better, BY ALL MEANS, watch for evidence of those theories of yours. Please, please, though -- wait until there's solid evidence BEFORE you spout the theories in public. I say this from totally selfish motives because watching you get torn apart by the riffraff in these blogs is NOT pretty and I'd like to avoid the carnage as much as possible.


First of all this article did not state whether any of these people who suggested there's an oil conspiracy where democrats or republicans so for all of you to turn this into a partisan argument, that was your choice. Being a democrat and knowing the GOP's DEEP ROOTED ties to the oil industry, I have hard time believing there's no tie. I mean come on people, our Prez is a former oil tycoon, to think there's absolutely no correlation would be naive. Just like it would be naive to think our government wouldn't hand subsidies to oil companies AS they are making record profits AS gas prices hit record highs and AS we are fighting a very costly war on terror.

Second of all, it's nice to come on here and read other's opinions and post my own occasionally but some of you need hobbies.


hey, John E., I see you aren't taking your meds again.

And Bill r.p., please read the posts of those on the left in this particular item, then re-read my post. I think you will then understand why I wrote my comment the way I did. Just read raving loon, John E., and even John F. They are whacked out. I'm hoping you are not.

By the way, John F., John E., John D., and JD are not all the same people, no matter how much John E. wants to think so.



KEEP IN MIND.....

I've never considered myself a "conspiracy nut" but I have come to question most every thing that the present Bush Administration says and does. The latest news about the possibility of the price of gas dropping close to $2.00 a gallon between now and November has me wearing my "conspiracy hat" and wondering.

Keep in mind that this is an election year. Keep in mind that the Bush Administration is in bed with BIG OIL. Keep in mind that the Republicans will do most anything to maintain their control of the government. Keep in mind that most Americans have short memories and seldom connect the dots when it comes to such things as winning elections, the price of gas at the pump, and the war in the Middle East.

In short, the decreasing price of a gallon of gas at the pump may well be a deal worked out by the Bush Administration and BIG OIL. If the price of gasoline nation wide is under $2.20 a gallon prior to November 1st, look for the Republicans to maintain control of both houses of Congress, a majority of the state legislatures and, a majority of the governors mansions as well.

Follow this line of thinking for a bit..... The price of gasoline goes under $2.20 a gallon, the Bushites tell the American voter that their energy policies and their handling of the war in Iraq are responsible for the lower gas prices. The brain-dead electorate then vote to keep the Bushites in office. Once the election is over, the price of gas starts a steady upward movement, and over a 8-12 month period of time, gas reaches $4.00 a gallon. The Bushites are still in control of the government, and BIG OIL has not only recouped its loss of revenue, but has made huge profits with higher gasoline prices.

Does that sound "fishy?" Is that a picture that has been painted by a "conspiracy nut?" Maybe, but is it possible? Some thing to think about.....Never say never, particularly when it comes to George W. Bush, and his group of corporate cronies.


Paulo Boy,the great commodities trader,you wouldn't know a fact if it hit you in your loony head.You're just a goofier version of Little Johnny,The Soda Jerk.

As for you Billie boy,the Conrad Black wannabe,your boss needs another Starbucks,get to it.

So the copy boy likes to see oil co's screw the American people.And Billie boy doesn't like the Dem unions.Except the one his mother belonged to and is home collecting a nice pension.God bless her.


Of course it's not Dubya's doing that gas prices have dropped like the details of his desertion from the Alabama Air National Guard.

He delegated the gas price drop to gas company executives who don't want Democrats to gain control of Congress.

You know, the Democrats who support more fuel effecient cars. The kind of cars that help to rid ourselves of energy dependency on dictator oil. The kind that lessen green house gases. The kind that will help mitigate job losses in the U.S. aoto industry.

You know?


Bill,I'm not done with you yet.You think it's great oil co's screw the American citizen.

And on another post your complaining about Obama's wife making money for being on a board of directors.Hypocite.

As for how John Edwards made his money,defending the little guy against huge corps that you love,why don't you compare him with how little fortunate son made his dough.

Come on Mr.Big Shot editor,you know the facts,lay em out.

Bill,you must have that little man syndrome,come from a working family,and just wanna be a big shot like Dick Cheney.

Un-fortunately,you acquired his thoughts on military service,it's much easier to send someone else's kids to die,I have more important things to do.


Ok, I' don't agree with just about anything Mr. Bush has done since he took office, but to try and blame the falling gas prices on a Republican/"Big Oil" conspiracy is just outright paranoia! How can you believe this is a domestic conspiracy when oil and gasoline are both traded on a world market and the prices which these cammodities are sold are determined not by the oil companies themselves but by the commodities traders? The decrease in gas prices can very easily be attributed to the decrease in World oil prices, the robust stockpile of gasoline, the decrease in tension in the Middle East (the end of the Israel/Lebanon confict),the lack of bad weather in the gulf, and the end of the summer driving season.


Lloyd, you and I may not agree on a host of issues since you stated you're not a Bush fan. But I thank you immensely for your reasoned comment on oil and gas prices. Just be ready to be attacked by the Left Loons like Raving Loon. And thank you for showing the difference between a rational liberal and a Loony Lefter as I like to call them. Your post is far different than one like Raving Loon.


Look at those cogent arguments the loon is throwing out there.

I posted that corporate boards look for "name" directors like Mrs. Obama for PR purposes, and that directors, who are mostly executives and CEOs themselves, almost always vote for pay raises for the company's CEO. How does that have ANYTHING to do with the commodity price of oil? Keep grasping at straws, loon.

If you suggest that all trial lawyers are crusading fighters for the little guy, as you seem to in your above post, then I'll say it again, you're living in fantasy land.

You can keep using kids dying in Iraq as an inflammatory statement to try to drum up support for your side. Good luck with that. This will be my last post answering one of your personal attacks. I only discuss issues and ideas with adults who can post intelligent arguments on this blog. You've shown an inability to do that for quite some time now. Feel free to call me all the names you want.


Bill r.,

I agree with you.


JohnD..The only difference between a rational liberal and a loony leftist is that for one split moment in time, he agree's with you, then as the moment passes , he's a loon again.


No, Bill R., agreement with me is not the issue. Showing some sanity, showing some intellectual ability, showing some reason. That is the difference.

You can either be lumped with raving loon, John E., John F., Jack, and a few others. Or, you can be lumped with Lloyd and the couple other posters who aren't hysterical.

On one of these Swamp items (I think the one on Clinton), a Peggy, who doesn't display partisanship one way or the other, she just decried the level of debate. The Loony lefters attacked her. What say you, Bill R.?


Bill,

I always try as hard as I might to ignore the infantile who have nothing to say. Every time one of them succeeds in goading me to sink to their level, I feel sullied and nothing is accomplished by it anyway. I'm surprised you even bothered to try to reason with him.


01.30.2007.

Oil @ $85 per barrel.

Offered $10 on that before, and I'll offer it again.

Any takers?

Posted by: OHCD | Sep 27, 2006 5:06:29 AM


OHCD: Things could disrupt the current trend, such as a major natural disaster, some huge 9-11 type terrorist event, or OPEC cutting production.

In such an event, yes, $85/bbl could happen by next january. If not, prices will rise agin in spring.


OMG! How dare the loonies back up the theories with facts:

http://www.opensecrets.org/industries/indus.asp?Ind=E01

Hey, conservatives: do you know what fascism is? I mean like the real poly sci textbook definition. Did you know that it's more than just Hitler- or Mussolini-type dictatorships? The fact is that the entire concept of fascism revolves around the perfect harmony between corporate and state apparati. I suppose the fact that the Moral Lepers (i.e., Republican Party, whose best days were in the 1860's) contribute on average 2.5x more to GOP candidates. I know, I know. That's just another straw man argument, doesn't prove anything, yadda, yadda, yadda.

I got two words for ya: K Street!



Geeze, If I can just get a word in here?

It can be argued that 'If they say it's not about the oil, it's about the oil', borrowing Mencken's quote. (Not paraphrasing!)

Here is why.

The invasion of Iraq shocked prices up, and have never come back down. Attacking Iran would shock them into the strat.

This is good for oil; the oil on our US public lands, parks, and coastal areas, that is.

These record high oil prices make those marginal reserves in the
public domain economically feasible to exploit.


Hey Juanito,

You're right. I shouldn't've given it a shot. Sometimes the more ridiculous posts I see here goad me into responding.


Are the oil companies really "competitors fighting each other tooth and nail"? That sounds like a pleasant free-market fantasy, but it looks like none of these companies cut into their record profits to win market share over the last year. Isn't that what is supposed to happen in competitive markets?

I really don't know whether or not there is any market manipulation, but it seems pretty naive not to consider the question. What do you think it would take if someone wanted to manipulate gas prices? We have seen what happens to oil and gas prices when a major oil producing country is invaded and another major producer is threatened. What do you think would happen to gasoline prices if a company were to report higher than normal gasoline stockpiles at a time when gasoline usage usually declines in a market where the price has been driven up by speculators? Anybody care to hazard a guess?


Loon, the problem you're facing is judging and entire industry and group as one unit. While I'm sure there are some oil execs gouging customers out there I know the industry, as a whole, is populated by good people trying to supply a precious resource to a huge public that needs it. It's a monumental task.

You seem to think I'm against unions per se. I'm not. I'm against corruption in all its forms.

I know that most unions aren't corrupt and anti-business, but I also know that there are some whose leadership is is engaging in theft from both industry and the workers they're supposed to represent. The AFC-CIO learned this the hard way when it lost 1/3 of its membership. When you have a powerful union like that that's corrupt the only option for change is withdrawal and that's what the Teamsters and other big unions did to escape the disease of corruption. They should be applauded.

Hopefully this will show you how to paint with a brush that's not so broad.

If you really question my reasoning that there are some corrupt union officials spending members money unlawfully on campaigns out there, then by all means, read this.

http://washingtondc.fbi.gov/dojpressrel/pressrel06/wfo052306a.htm


Oh, and just so you know, Loon, my mother's pension isn't anywhere near cushy because of union "leaders" like that who stole from their members with impunity. Thanks for bringing it up.


Bill,I thought you weren't speaking to me anymore.

You had me at Loon!

Do I sense you're easing up on your oil position.

As far as unions,Bill I know more about unions then you'll ever want to know.We're not in dis-agreement in regards to unions.

I'm happy your mom has her pension,she's earned every dime of it.

As for Juanito sticking his two peso's into our discussion,I'm in a bad mood today Juanito,don't get me started on you.


C. Morris, the Iraq War has nothing to do with higher oil prices.

1. In spring of 2000, gas prices shoot up to $2.20 a gallon as oil per barrel rises.
2. China and India are using more oil than ever before, usage doubling, tripling, quadrupling year to year. More oil demanded puts pressure on oil supplies.
3. Even though the U.S. Senate approved drilling in ANWR in 1995, Clinton vetoes bill and says thec U.S. wouldn't gain from oil there for 10 years. Well, here we are 10 years later. Think it could help?
4. Hurricanes wiped out more than of the Gulf's capacity to produce and refine oil last year, putting further pressures on supplies.

Is ANY of this able to penetrate your thinking process?


Raving Loon is a legend in his own mind. Just let him blow off some steam and save the serious discussion for those with the ability to present a cogent counterpoint.

It's abundantly clear that an overwhelming number of liberals will not accept the "market forces" theory (amongst many others) unless it's tied around a pretty package presented by a liberal. You see, the substance does not matter to them, it's who provides it that matters. If S.Willy presented it, it would be LAW.


Juanito,

You’re right – a world event – be it geopolitical, climate-based or whatever – could – and probably will skew the global oil markets. I don’t have first hand recollections of the 1973 OAPEC-driven embargo, but would observe that military action against – just for example – Iran – would probably cause the motorist’s eyes to water somewhat.

But within all this debate as to whether or not GWB is manipulating the price of oil – and I happen to think he’s a pretty average crook, not smart enough to manipulate the global commodity markets - there are a couple of absolute truths.

Oil is a finite resource. Depending on whether or not you subscribe to the theories of Deffeyes, Hubbert et al or whether you believe what the oil companies tell you, the fact is that oil is nearing peak. Deffeyes thinks we have reached Peak, as does Matt Simmonds – Houston-based investment banker, realist and all-round good egg. There is some very sobering reading to be done at:

www.simmonsco-intl.com

Factor into the growing disequilibrium between supply and demand and a couple of worrisome statistics fall out. OECD countries consume 18.2 barrels of oil per person per year. Non-OECD nations sip a mere 2.3 bppy. Were the non-OECD nations to raise their consumption to the level of the OECD, we would need to find a new Middle East – not just a Saudi Arabia, but also a Middle East – once every 33 months. Not a typo, but about every 2.6 years. We all know the impact of an energy hungry Ch/India.

Auto companies spend around 30 per cent of their R&D budgets in complying with contemporary legislation. That means one third of the budget destined for fuel efficiency – the key demand driver amongst the commercial vehicle sector, and an increasingly important one in the passenger car segment – is being spent elsewhere. This has got to be a problem.

The notion that hydrogen, fresh air, ethanol – whatever – will save us is a crock. Oil produces a return of around 20 barrels of energy potential to one barrel of energy cost. Hydrogen is something like 1:4 – ie a net cost of three barrels. Oil is the mainstay of modern global civilisation – period – and we’re not exactly husbanding our resources very cleverly. The fact that GM feels that a 20 mpg highway cycle for the H3 is worthy of applause probably says much about the depth of the hole that it – and we - are now in.

Someone has to grasp this nettle. There is an increasing view in Europe that this is a non-dodgeable bullet. Enjoy the respite; we may not have reached the end of oil yet, but we’ve certainly reached the end of CHEAP oil. If ever there was need for a non-Partisan approach to something that has the potential to change just about everything, it is now.

NB: There was a good BBC series on just this subject – downloadable at:

http://www.bbc.co.uk/radio4/drivenbyoil/pip/archive.


Sure John D. it may help...for a while...but then we'd be in the same boat. Oil is a finite resource and we cannot dig our way out of our current situation. I find it amusing that oil companies largely are not interested in ANWR anymore because they are not convinced that US demand and estimated volume w/in that area would make exploration profitable. The only ones pushing for exploiting that area are fools and their blind followers.


OHCD,

Well said.

My hope is that the Noecons have been chastised enough, and with US military resources being stretched to the limit, a war with Iraq is not in the offing. Not that they wouldn't.

I hope.


Bill:

It looks like RL wants to kiss and make up... YIKES!


Oops! that should read:

"My hope is that the Noecons have been chastised enough, and with US military resources being stretched to the limit, a war with Iran is not in the offing."


(Was that some kind of Freudian slip?)


Juanito,

I knew what you meant....I think!



John D.

Here are some counter-counterpoints to your counterpoints:

1. In spring of 2000, gas prices shoot up to $2.20 a gallon as oil per barrel rises.
* And now that's the floor. Used to be the ceiling.

2. China and India are using more oil than ever before, usage doubling, tripling, quadrupling year to year. More oil demanded puts pressure on oil supplies.
*Yes it does, but the Iraq war is a real component of the rise.

3. Even though the U.S. Senate approved drilling in ANWR in 1995, Clinton vetoes bill and says thec U.S. wouldn't gain from oil there for 10 years. Well, here we are 10 years later. Think it could help?
*I am not willing to destroy the public lands, parks, wilderness, so some idiot can drive a Hummer to work. It might be thinkable if more Americans were getting serious about efficiency. See below for an additional take on that subject.

4. Hurricanes wiped out more than of the Gulf's capacity to produce and refine oil last year, putting further pressures on supplies.
*When our big oil companies lost control of the supply of crude, a long time ago, they looked around for a way to at least have some influence on pump price. The obvious solution was limited refining capacity.

Here is a camping story that relates to the overall problem.

A recent camping trip to Grand Canyon North Rim raises a couple questions; Is the concept of peace and quiet completely dead in America, and secondly, how big is big enough?

We were raised as tent campers in the Fifties and still are, but after seeing some of the huge diesel rigs towing 35 foot bi-levels on wheels, or towing a SUV bigger than the one we camp out of, I have wonder what has happened to the hearty American stock that settled this nation.

You just can’t call this camping. And the stench of diesel and the accompanying ‘valve clatter’ made the otherwise beautiful camp ground sound and smell like a I-94, Indiana truck stop.

Some people are too old, feeble, or otherwise incapable of tent camping, but come on! You can be comfy and warm in a smaller, quieter, more efficient rig.

Suggestions; Downsize, simplify, and please be quite. That campground rated generator is NOT quiet enough, and why are you watching TV!? You're at GRAND CANYON.

One final question; If you require AC/heat, wide screen TV, I-net, cell-yack, and a house on wheels with a queen sized bed to “camp”, why not just stay home and rent a video about Grand Canyon instead?

Enjoy paying for that $3 diesel on the way home.



C.Morris, here are the fallacies of your argument:
1. In 2000, Energy Secretary Bill Richardson said "we were caught with our pants down," when gas prices rose to above $2 a gallon. Since then the Democratic Senate has largely filibustered any comprehensive energy policy and strategy.
2. Iraq is nearly pumping to its capacity since before the Iraq War. it has little to do with the price of oil. India and China have more to do with it than any other factor. More demand, similar supply, higher price.
3. Drilling in ANWR would not harm the countryside in Alaska. I've been to Alaska twice now, from Anchorage to Barrow. No one appreciates the beauty of Alaska more than me. But I also know from my own research that the little drilling necessary in ANWR to attain the oil there would do no harm to the environment.
4. The biggest reason for constant refining capacity has more to do with regulations, laws and not in my backyard, not the oil companies. Also, all the different types of gasolines required around the country, I believe it near 50 different blends, puts pressure on supply.

Finally, as someone who camped regularly from the mid 1960s to early 1990s, i understand the simplicity and adventure. Perhaps there are too many campers and camping rigs, but they are just a small, and very small, part of the equation.


JohnD

Itsy bitsy agreement on the last statement.


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