Oil prices shot up more than $11 to a new record above $139 Friday

EJFB1029, the control is learning to get along across party lines and do what is important and good for the country.. I agree with you that the condition you outlined has been in play since Bush One got in office. The last President that had any across the isle success was Ronald Regan. Like him or not, at least he was able to work with Tip O'Neil back then to get through legislation without gridlock. Since Bush One, Clinton and Bush Two, we have had this condition. Let's kick these guys in the butt and get them moving to help the country. Put partisan politics aside.. Maybe wishful thinking...

 

GWB and the Republicans have have 6, actually 7+ years of creating the situation we are in, they went heavy and strong into making sure everything was in place to destroy the economy and increase gas prices, its going to take a real good president and a congress with power to reverse the Republican destruction. And yeah that means reaching across the aisle, but its going to take Americans voting change to accomplish that.

 

The first thing Congress has to do is to regulate oil futures--which is mainly a problem here in the U.S., from the testimony I heard. That will get the price of oil back to supply/demand reality, and ease gas prices back closer to $3.
Right now, 80% of the cars coming out in 09 are priced out of the market with $4 gas. You know the car companies don't like that. And small gasoline and heating oil people are going out of business.

Is cheaper gas a good thing? Yes, I think so. The economy depends on it. We have a gas intensive transport system. And heating oil. That's the reality. The government needs to change that, of course, and they will--soon--as a matter of survival. The reactionaries in the government are on their last legs. Big changes around the corner when Bush leaves office.

 

Only if its the right changes though, if McCain, Gramm (the evil behind the current problem) and his lobbyists get in power, expect more of the same, and maybe worse.

 

That will *not* bring down the price of oil. I provide consulting to the petrochemical industry, and a lot of folks fail to realize the sources you mention are currently the most expensive-to-extract on the planet. That is, the EROEI is under 15:1, whereas Mid East oil is usually +100:1

Oil extraction off the eastern seaboard of Canada has been such a steep money loser that the Canadian government had to set up a Crown Corporation just to fund the losses. Oil must be priced $70/barrel for it to break even

Shale/tar sands is an even bigger money pit. The tar sands of Alberta were nothing more than a curiosity and an expensive taxpayer-funded boondoggle until a couple of years ago. Only in the last year have they suddenly had money flow in, as oil must be above $100/barrel for them to break even

One thing the proponents of shale don't tell you is that the process water consumption is many times higher than for regular crude. A normal refinery will have around 1:1 consumption of water to crude. The shale must be "washed" due to metals, sulfur, and other issues, so water consumption of 5:1 to syncrude

What you have left over is a toxic soup of arsenic, cadmium, and RRO's/PAH's that you must deal with. The current "best practise" for syncrude in Alberta is to put the stuff in giant retention ponds and try to figure out what the hell to do with it

Factor in the cost of eventual treatment of the syncrude sludge, and you're probably talking about $125 a barrel just to break even. Unless we should just dump it into a river somewhere

 

Good call jayman!

We are indeed at the end of cheap oil. From an economic perspective, this will finally enable migration of the transporation infrastructure to electricity, which means we will need to get serious about beefing up the grid. Now more than ever solar thermal holds a lot of promise (http://priuschat.com/forums/prius-h...ce-build-solar-power-plants-2.html#post629058), as do other renewables.

 

Rybold - I did indeed. Thank you for that insight. It was what spurred me to post the article with Samuel Bodman's quote (see post#13 in this thread), since it struck me as so out of whack with everything else I've been reading and hearing.

I'm a bit late in getting back on top of this thread. But since that post there's been some hefty debate here on the role of "speculation" and "speculators" in the price of oil. I read the articles that were posted dismissing the role of "speculation", and it's pretty clear to me the debate here has missed the subtle semantics around the term "speculation" and/or "speculators", which is a shame, because the premise of the debate hinges on it.

The following articles that were refereenced:

2 of the 3 articles above make a distinction between "speculators" and "big fund money" (or pension funds). These were also referred to as "weak hands" and "strong hands" respectively. - What they're saying is that the influx of big fund money into oil futures doesn't count as "speculation", as if it is somehow more legitimate money. That's the basis of the argument that "speculation" and/or speculators are not responsible for driving up the price of oil. It's semantics. - Come on folks! Money is money and all of it drives the price of oil futures up. The big fund money can inflate a bubble just the same as well hedge fund money. Everyone remember the Telcom bubble? Big fund money certainly inflated that one. Those dollars were no smarter than all the other money that was in the pot.

I'm not saying the price of oil right now is necessarily a bubble. I think there is real demand somewhere down the road behind all the "investment dollars" (notice I didn't use the "s" words) that are currently driving the price of oil up. But some folks are making boat loads of money in the process right now. And, I have to say that I think Rybold called it pretty good.

 

It this a good thing or bad thing? This is a serious question. If the bubble pops, is that good or bad?

Two conflicting points come to mind.

At $4/gal, driving and auto buying habits are changing vastly more than $3/gal. It is obvious that there is a non-linear effect that may have a very negative downside if prices were actually to drop a lot.

A number of posters "complain" about the poor US energy leadership, but their motivation is from high gas prices. However, "good" leadership would be taxing gas (like in Europe) for oil independence.....and this would probably cause the same posters to complain about the "good" leadership overtaxing them.

 

It's not a bubble. It's peak oil. IMO, we've past it; oil production goes down from this decade. It's also rising demand from rising countries. Add in-elastic supply-demand-price.

YES, hedge funds and speculators have plowed into oil futures and that created a spike. But they did that because they could see where oil prices are going in the reasonably short term, and that they could make a nice profit by jumping in early.

It almost seems like everybody likes to blame "speculators". They CAN cause short term upward and downward spikes. But IMO, the weight of huge markets quickly converges on present business realities.

If any person or entity is convinced oil prices are a temporary manipulated spike, they are free to short oil futures and try to make money. Of course many lost their pants shorting Internet stocks, although they were generally correct in their financial analysis.

Point is, relatively free markets can NOT be manipulated indefinitely in one direction, unless it's via such interventions as laws.

 

Hiremichaelreid, forget it, it seems most of the people on this forum refuse to believe the world economy today is not the world economy of 25 years ago.

 

Good leadership would have invested in renewable energies.

... Brad

 

Regardless of the near term retail price of fuel(s) anyone who thinks that long term fuel prices will be lower,,, I have some waterfront property in Florida to sell ya!

Icarus

 

Thanks for the explanation.

Do you know you can have your barbecue plumbed into the natural gas system? Also electric barbecues are cheaper to run than liquid propane fueled barbecues.

 

Come to think of it, we already are using natural gas for our water heater and stove. Wonder what it would take to connect our backyard grill to that. Wonder if the city code would even allow it...

I just bought a solar grill. Haven't had the chance to set it up yet. Should be fun to try.

 

I read the Republicans are stonewalling the Energy Bill--mainly because they are against any windfall profits tax on the oil companies. Seems to me the Democrats are making the Bill too broad--and should separate out the part on regulating oil futures--which is the main culprit right now. A lot of those oil company profits are undoubtedly going into alternative energy sources and oil exploration.

 

Most building codes allow a natural gas bbq. You must buy a Natural gas bbq, or one that can be converted to Nat. Gas. What people don't realize is that even though they smell the same, Nat. Gas and Propane are very different fuels, requiring different operating pressures, different burner orifices and different regulators.

Icarus

 

Sounds like Natural Gas is the way to go if you're looking to upgrade your grill.

Going Natural Gas - Never run out of gas on your grill again

 

I just bought a new LP grill last weekend and needed a new tank for it. Over $50 for filled tank (no exchange) at Home Depot here. Ouch!

 

On most Weber propane grills, you can do a conversion by replacing the manifold with the one for natural gas. Burner tubes can be reused. Cost is about $80.

I was told I could just drill out the orifice in the regulator to get more gas to flow, but I was too chicken to try it.