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Discussion Starter #1
....and as usual, it's on "supply worries."

I think there's a good chance it'll be above $60 by year's end. I think 87 octane could well exceed $3.00 per gallon by then.

What say you? Can you afford to spend upwards of $36 to fill an average 12-gallon tank several times a month?

Here's a link for you prodigious readers: http://cbs.marketwatch.com/news/story.a ... iteid=mktw
 

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In some parts of the country, $3 gas is basically here.

A few weeks ago I took a trip across Yosemite; up the east side of the California Sierra Nevada's, to the Reno Air Races, and then back to Oregon. I noticed that the price for premium in the small town stations on 395 north of Yosemite was over $3; regular was 20 cents or so under $3. And the stations in one town didn't even bother posting prices... (e.g. if you need to ask the price, you can't afford it...)

btw, my Prius did fine going over the Tioga pass in Yosemite; better than my previous car (a 98 Saturn SL1).
 

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Some people I'm sure will make sure they are able to afford to drive around in a gas hog because of its perceived status symbol nature or others can afford $3 a gallon of gasoline and don't care about it or won't really notice.
 

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Discussion Starter #4
Oil broke above $53 today.

Yes, some people can afford it at whatever price it may go to, but this stuff does not all work in a vacum. My concern is that increasing fuel costs will produce an ever greater drag on the economy. If the economy is hurt badly enough, then there will be slower growth, and fewer new jobs.

If the economy begins to reverse and contract, then investment opportunities and jobs may also contract.

Toyota Prius and H2 drivers have more in common than some of us might be willing to admit: Most of us (from both camps) are not "the idle rich." We all need money so that we can house, clothe, and feed ourselves and our families, and also to make our car payments, insurance premiums, and fuel costs. Kind of hard to do it if it's hard to find customers for our businesses, or to find somebody to work for.

It's food for thought, anyhow...
 

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The paranoid schtzophrenic side of my personality (read, the dominant part) can't help but think that these shortages are artifical in nature:

US: Invade
OPEC: Cut Prodcution
US: Buy Japanese Hybrids, Build Hybrids
OPEC: Cut Production - More
US: No choice but to pay
 

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I think the price of oil is high because of good old supply and demand. The supply has been shaky for various reasons and the demand is high because waste in developed countries (especially the US) and growth in developing countries like China.

If the US had imposed a hefty gas tax years ago we would be much better off now. Because the demand would be lower the price of oil would be less and the gas price would be about the same. The difference is that the money would be staying in the US rather than filling of coffers of questionable parties overseas.

Then there are the national security, environmental, and human suffering benefits of using less oil to consider as well.
 

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You certainly are not advocating that we use less oil! Don't you realize that there are a lot of countries in the middle east who rely on our purchase of this commodity to survive. There is a limited demand for rugs you know and we don't want to hurt our friends in Saudi Arabia, Iran, or Iraq. If we are not carefull we could destroy their economies!
 

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Actually, the biggest factor causing tight oil supplies is increasing demand, especially in China. OPEC limits (to the extent there have been any) have been mostly symbolic, with many OPEC countries exceeding quotas. From latest reports, Russia may have reserves that could challenge the Middle East, assuming they can solve production/delivery challenges.

From what I've read, many OPEC countries are close to their physical limits on oil production. Some could increase production with significant capital investment.

Given both the tight market for oil, and world political conditions, an OPEC paper found by a Wall Street Journal reporter a couple years ago is interesting. That paper basically explains why the Middle Eastern countries have never really tried since the '70s to use oil as a "weapon", and have generally cooperated in keeping oil production relatively high.

The basic points in the paper were...

1. as long as oil (petrochemicals as a whole) was the cheapest energy alternative, oil would provide most of the worlds energy
2. there are other alternatives
3. if OPEC raised prices too much (so that the alternatives were significantly cheaper) or if the US got too annoyed at OPEC, the US (at least) would start converting to alternatives
4. the US could probably complete a conversion in about 3 years. There would be significant economic problems during those years, which would serve as a break. But get the level of discomfort high enough, and it would happen
5. once the US converted, every other country in the world would convert
6. and if that happened, OPEC no longer has any signficance
 

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Discussion Starter #12
Show me how we're going to be able to fly without oil, and I'll consider your assertions that we can convert. One-person and two-person light aircraft won't cut it. My country still has to move thousands of people and millions of tons of cargo EVERY DAY.

Show me how we're going to make plastics in great quantities without oil, and I'll be much happier about the prospects for a continued high-tech society.

Show me how our "alternative" will allow us to be able to generate the intense HEAT necessary to manufacture, shape, and deliver aluminum and steel, and I'll have more confidence that we can reduce our dependency on oil (all oil, not just "foreign" oil) and still be able to repair old bridges and make new ones.

Show me how our "alternative" will let us power our electricity plants and produce the SAME total wattage that we do today, and show me how the new power source will outlive our economic growth for generations, and I will jump for joy.

Somebody please show me SOMETHING, I beg you!
 

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BIF said:
Show me how we're going to be able to fly without oil
Giant, Geneticly Engineered, African Swollows.

BIF said:
Show me how our "alternative" will allow us to be able to generate the intense HEAT necessary to manufacture, shape, and deliver aluminum and steel
A really, really, big magnifying glass.

BIF said:
Somebody please show me SOMETHING
CENSORED

But enough foolery, all of the above can be done without dependance on fossil fuels. Perhaps not to the same level we're used to today, but that's part of the picture as well. To not only increase the amount of engergy delivered by alternative forms, but to decrease our usage requirements.

Aircraft, arguably the most difficult prospect, can be converted to run on grain alcohol, or even bio-diesel fuel. Heat is easy to find, and can be electricly transferred. (The same technology in peltiers and thermocouples)

I don't doubt that things would get *real* rough if we were suddenly cut off, but I'm pretty sure we (as a species) would get over it.

As for the country's need to move cargo and people... How much of that is really necessary. How much cargo is shipped around because it's cheaper than buying it local? If that were to change, it might make it possible for local suppliers to return to business. How many people really need to travel to make our economy work?
 

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In general there are alternatives; though many have never been seriously examined because they currently would cost more than oil. That includes electricity generation, alternative vehicle and heating fuels, etc. In research labs they've demonstrated petrochemical like molecules from renewable sources (which would enable plastics, and other artificial materials).

You could definitely argue that the economy, in the long term, would be better off as a whole if we moved away from an oil dependence. There would definitely be a HUGE disruption in the middle.

If this was forced; say by some event making Middle East oil unreachable or unusable; you can predict some things...

A "World War II" like effort; the conversion has priority over everything in the economy

Immediate civilian gas/diesel rationing; to keep urban areas functiioning, food supplies, etc. must be maintained. Unless you can prove to the government a real need to drive long distances, don't expect to be able to.

Environmental rules might be temporarily suspended; known deposits of coal, oil, etc. would be accessed. More nuclear plants might be built.

If switching away from "just in time" inventories or outsourcing might save some oil, govennment might push for it...

etc.
 

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Let's start the process of preparing to drill in Alaska and increase
drilling in this country. That and just the threat of opening our oil
reserves would be enough to reduce oil prices. We probably do not
even have to actually do anything. Just the threat will cause the prices
to fall.
 

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Discussion Starter #16
faqsman said:
Let's start the process of preparing to drill in Alaska and increase drilling in this country. That and just the threat of opening our oil reserves would be enough to reduce oil prices. We probably do not even have to actually do anything. Just the threat will cause the prices to fall.
I agree that we cannot expect to reduce our dependence on foreign sources of oil simply by driving less. I'm willing to start riding a horse, but lots of people are not. Not yet, anyhow. There are too few places to water him and tie him up for the night.

And the penalties for stealing a man's horse are not harsh enough like they were in the good old days.

But horse-keeping logistics aside, changing our driving habits alone won't be enough. We use far more oil for our manufacturing and power supply needs. So in the interim, I wholeheartedly agree with your statement that we should be seeking oil in remote parts of Alaska and other parts of the world where there are few people and fewer wildlife.

After all, it makes great sense from a strategic (and military) standpoint. It is also the very reason we have the SPR, so that we could still operate a petroleum-driven military or economy in the event of a worldwide disruption of crude oil production and/or deliveries. Fast fact: SPR stands for "Strategic Petroleum Reserve." It can hold upwards of 700 to 900 million barrels of oil (I've seen different numbers, and I think the actual number is probably only known by a few), and is mostly stored in underground salt caverns in various states in the US.

It really does make great sense. Why have all of our "eggs in one basket?" Lots of companies try to have more than one supplier of raw materials, or else they end up with a Toyota/Panasonic supply problem, albiet maybe for different reasons. If it's good for companies, it's good for the US.

And yes, we should probably be considering some operations in the Gulf of Mexico. Again, it is the most sensible thing to do.

A couple of weeks ago, President Bush did say we would tap the reserves. But that hasn't helped reduce the market price of oil. Hmmm, could it be because of the strike in Nigeria, the terrorist attacks in Iraq, and the fact that OPEC is already producing at least 2 million barrels more per day than their originally agreed-upon limit (and only a couple million barrels below their theoretical maximum)?

We need to keep in mind that the oil reserves only contain a VERY limited amount of oil. 900 million barrels won't last long; certainly not for more than a couple of months. And because of the way we get oil out of those salt caverns, it takes time to draw it up (we use water to make the oil rise so that we can suck it out with a big straw).

I submit to you that the world markets know these things, and that's why oil is above $53.00 today. They know that the Saudis and other OPEC nations CANNOT make more. That's different than "will not" make more. They know about the strikes. And about the rampant terrorism. And about the growth of China. And about America's thirst for oil to fuel our H2s and Escalades. And our jet airplanes.

Where are those Star Wars' hovercraft? What do they use as a fuel source?
 

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First off, if you are really serious about the horse I am still a member of the oldest recognised active club in the U.S.A. "The Society in Dedham for the apprehension of horse theives" Been active since 1625. Need help? maybe we could give you a hand. As for the price of oil and it's been supposedly traced to the possibility of a "shortage" just forty five minutes ago I heard the Saudi Ambassador to the United States tell Bill O'Reilly that they have offered an additional million barrels of oil a day to the U.S. and have received "no takers" O'Reilly did not ask him what the price was. I don't know why question wasn't asked. You guess.
 

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hyperion said:
I am still a member of the oldest recognised active club in the U.S.A. "The Society in Dedham for the apprehension of horse theives"
What exactly do you do at meetings and for fund raisers?
 

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faqsman said:
Let's start the process of preparing to drill in Alaska and increase
drilling in this country. That and just the threat of opening our oil
reserves would be enough to reduce oil prices. We probably do not
even have to actually do anything. Just the threat will cause the prices
to fall.
Isn't it better to keep those Alaskan reserves for an emergency? ($3/gallon gas is an annoyance, not an emergency.) So long as we are buying and burning other people's oil we still have ours for when the crunch really hits, if it ever does.

Leave our oil in the ground.
 
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Speculation

I've been reading that the rise in oil prices has to do primarily with the speculators. There's PLENTY of oil out there! Oh.. btw.. my horse has lowjack. Never had a problem when I tied him up at the local 7/11.
 
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