High gas prices

[chrisallenhogs]

Just so you know the headquaters of Wal-Mart is in Bentonville, not Batesville, totally different parts of the state.

[Bobby Light]

The commodities market is global. If we start drilling ANWR (which doesn't even have all that much oil) that oil will be sold on the world market and China has the same opportunity to buy it as domestic refiners. It would be the proverbial drop in the bucket to our gas prices. And don't argue that we should make the producers just sell crude domestically, they owe a fiduciary duty to their shareholders, which means selling to the highest bidder. The only way to break our dependence on fossil fuels, or at least become more efficient, is to have a situation like we are in, which will spur more development because the demand for energy and transportation, instead of being demonstrated by buying expensive oil, will spur new technology, which will be the better long-term solution anyway. The biggest impact right now is the value of the dollar, the economic explanation for which is for another day.

Well that's not really all that true. Compared to Saudi Arabia no, but for what we have for oil deposites here in the US it's quite a bit. Over 50 year supply. Technology is getting better with drilling. Oil companies are creating new ways to get heavy viscous oils that were once thought to be to expensive to extract. The price of oil will never go down with countries like China and India in their industrial revolutions and consuming the way they are. Much like the US in the 70's.

[Addictedto6]

The commodities market is global. If we start drilling ANWR (which doesn't even have all that much oil) that oil will be sold on the world market and China has the same opportunity to buy it as domestic refiners. It would be the proverbial drop in the bucket to our gas prices. And don't argue that we should make the producers just sell crude domestically, they owe a fiduciary duty to their shareholders, which means selling to the highest bidder. The only way to break our dependence on fossil fuels, or at least become more efficient, is to have a situation like we are in, which will spur more development because the demand for energy and transportation, instead of being demonstrated by buying expensive oil, will spur new technology, which will be the better long-term solution anyway. The biggest impact right now is the value of the dollar, the economic explanation for which is for another day.

What he said.

[Addictedto6]

The commodities market is global. If we start drilling ANWR (which doesn't even have all that much oil) that oil will be sold on the world market and China has the same opportunity to buy it as domestic refiners. It would be the proverbial drop in the bucket to our gas prices. And don't argue that we should make the producers just sell crude domestically, they owe a fiduciary duty to their shareholders, which means selling to the highest bidder. The only way to break our dependence on fossil fuels, or at least become more efficient, is to have a situation like we are in, which will spur more development because the demand for energy and transportation, instead of being demonstrated by buying expensive oil, will spur new technology, which will be the better long-term solution anyway. The biggest impact right now is the value of the dollar, the economic explanation for which is for another day.

Well that's not really all that true. Compared to Saudi Arabia no, but for what we have for oil deposites here in the US it's quite a bit. Over 50 year supply. Technology is getting better with drilling. Oil companies are creating new ways to get heavy viscous oils that were once thought to be to expensive to extract. The price of oil will never go down with countries like China and India in their industrial revolutions and consuming the way they are. Much like the US in the 70's.

I agree with the second half of your statement re: extracting and price not going down, but Where do you get 50 years supply in ANWR?

From wikipedia based on the USGS survey results:

"A 1998 United States Geological Survey (USGS) study indicated at least 4.3 billion (95% probability) and possibly as much as 11.8 billion (5% probability) barrels (0.9 to 2.5 km³) of technically recoverable oil exists in the Arctic National Wildlife Refuge 1002 area, with a mean value of 7.7 billion barrels (1.7 km³)"

"The U.S. consumes about 20 million barrels daily. If the Arctic National Wildlife Refuge oil reserves were used to supply 5% of the U.S. daily consumption -- most is imported from Canada (19%), Mexico (15%), Saudi Arabia (11.5%), Nigeria (10.5%) and Venezuela (10.5%)[11] -- the reserves, using the low figure of 4.3 billion barrels, would last approximately 4300 days, or almost 12 years. Using the high estimate, the reserves would last approximately 11800 days, or 32 years. If the Arctic National Wildlife Refuge was used to meet 100% of U.S. demand, it would last for 215 days under the low estimate, and 525 days or just 1.4 years if it contained 10.4 billion barrels."

Edited April 22, 2008 by Addictedto6

[JohnDoe]

The commodities market is global. If we start drilling ANWR (which doesn't even have all that much oil) that oil will be sold on the world market and China has the same opportunity to buy it as domestic refiners. It would be the proverbial drop in the bucket to our gas prices. And don't argue that we should make the producers just sell crude domestically, they owe a fiduciary duty to their shareholders, which means selling to the highest bidder. The only way to break our dependence on fossil fuels, or at least become more efficient, is to have a situation like we are in, which will spur more development because the demand for energy and transportation, instead of being demonstrated by buying expensive oil, will spur new technology, which will be the better long-term solution anyway. The biggest impact right now is the value of the dollar, the economic explanation for which is for another day.

Well that's not really all that true. Compared to Saudi Arabia no, but for what we have for oil deposites here in the US it's quite a bit. Over 50 year supply. Technology is getting better with drilling. Oil companies are creating new ways to get heavy viscous oils that were once thought to be to expensive to extract. The price of oil will never go down with countries like China and India in their industrial revolutions and consuming the way they are. Much like the US in the 70's.

I agree with the second half of your statement re: extracting and price not going down, but Where do you get 50 years supply in ANWR?

From wikipedia based on the USGS survey results:

"A 1998 United States Geological Survey (USGS) study indicated at least 4.3 billion (95% probability) and possibly as much as 11.8 billion (5% probability) barrels (0.9 to 2.5 km³) of technically recoverable oil exists in the Arctic National Wildlife Refuge 1002 area, with a mean value of 7.7 billion barrels (1.7 km³)"

"The U.S. consumes about 20 million barrels daily. If the Arctic National Wildlife Refuge oil reserves were used to supply 5% of the U.S. daily consumption -- most is imported from Canada (19%), Mexico (15%), Saudi Arabia (11.5%), Nigeria (10.5%) and Venezuela (10.5%)[11] -- the reserves, using the low figure of 4.3 billion barrels, would last approximately 4300 days, or almost 12 years. Using the high estimate, the reserves would last approximately 11800 days, or 32 years. If the Arctic National Wildlife Refuge was used to meet 100% of U.S. demand, it would last for 215 days under the low estimate, and 525 days or just 1.4 years if it contained 10.4 billion barrels."

And that's if it was JUST used in the US, which it would not, it would be on the global market, further reducing the "real-world" effect on our prices.

[Bobby Light]

That survey is more than 10 years old and doesn't take into account new technologies used. Plus I have my resources.

[Addictedto6]

That survey is more than 10 years old and doesn't take into account new technologies used. Plus I have my resources.

Is there a newer survey/estimate out there?

[UWSkier]

Between ANWR, the gulf coast around Florida, and the western US, we have enough oil to make ourselves truly energy independent. A few years ago, it was said that the break even point for extracting a barrel of oil from the shale under the western US was about $65/barrel. Well, we're way above that now! Let's go get it! We have more than enough of our own oil (twice what's under Saudi Arabia in the western US alone) to get us by while we work to develop better, cleaner technologies. Hell, let's get it, surcharge it, and use the dollars to invest in quality energy research programs. I'd gladly pay $2.50/gal if $0.50 of it was going towards exploring new tech.

Edited April 22, 2008 by UWSkier

[JohnDoe]

Between ANWR, the gulf coast around Florida, and the western US, we have enough oil to make ourselves truly energy independent. A few years ago, it was said that the break even point for extracting a barrel of oil from the shale under the western US was about $65/barrel. Well, we're way above that now! Let's go get it! We have more than enough of our own oil (twice what's under Saudi Arabia in the western US alone) to get us by while we work to develop better, cleaner technologies. Hell, let's get it, surcharge it, and use the dollars to invest in quality energy research programs. I'd gladly pay $2.50/gal if $0.50 of it was going towards exploring new tech.

There is NO such thing as "energy independence" when the price of oil is driven by global commodities markets. Why would you "gladly" pay .50 per gallon in your scenario when you don't even support the gas taxes we already have in place to pay for current infrastructure, etc.? I'm more for paying high gas prices and letting the market develop new technologies than subsidizing anyone's business plan. Here's a better idea using your numbers. Get a vehicle that gets 20% better mileage and use the money saved to invest in a renewable energy technology mutual fund.

Twice as much oil in western US than in Saudi Arabia? Site please.

[curtisco24]

Why is oil on the market? Why should a few get to fatten their wallets at the expense of everyone else? Gas is not a luxury, rather a needed resource by everyone. So why not take it off the market?

[grnautique]

I always here people complain about how much profit the oil companies are making but I rarely hear people complain about the group that makes the biggest profit, the government. Oil companies make about ten cents a gallon profit while the government (federal/state/local) makes about 45 cents on average. It makes me sick to see our legislators talking about how we need to regulate the oil companies because they are making too much money when in reality its them that are really raking us over the coals.

[JohnDoe]

Why is oil on the market? Why should a few get to fatten their wallets at the expense of everyone else? Gas is not a luxury, rather a needed resource by everyone. So why not take it off the market?

So is food. There has to be a market for buyers and sellers. Are you talking about the commodities market or stock market?

[UWSkier]

Twice as much oil in western US than in Saudi Arabia? Site please.

About 1.8 trillion barrels of shale oil are thought

to reside in deposits greater than 15 gallons per

ton in the Colorado, Utah, and Wyoming.

That's the economically recoverable stuff. Estimates put quantity around 6 trillion barrels if you include the stuff that's locked up in lower concentration shale that's harder to extract from.

http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf

Edited April 22, 2008 by UWSkier

[JohnDoe]

Twice as much oil in western US than in Saudi Arabia? Site please.

About 1.8 trillion barrels of shale oil are thought

to reside in deposits greater than 15 gallons per

ton in the Colorado, Utah, and Wyoming.

That's the economically recoverable stuff. Estimates put quantity around 6 trillion barrels if you include the stuff that's locked up in lower concentration shale that's harder to extract from.

<a href="http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf" target="_blank">http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf</a>

I really am interested in reading about that, but was unable to do so using that link.

[UWSkier]

Twice as much oil in western US than in Saudi Arabia? Site please.

About 1.8 trillion barrels of shale oil are thought

to reside in deposits greater than 15 gallons per

ton in the Colorado, Utah, and Wyoming.

That's the economically recoverable stuff. Estimates put quantity around 6 trillion barrels if you include the stuff that's locked up in lower concentration shale that's harder to extract from.

<a href="http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf" target="_blank">http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf</a>

I really am interested in reading about that, but was unable to do so using that link.

The link was abridged when I edited the post. Try this one.

http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf

At a 20m/day burn rate, the oil that's economically recoverable today under Wyoming, Colorado, and Utah would last an estimated 246 years.

[Addictedto6]

Twice as much oil in western US than in Saudi Arabia? Site please.

About 1.8 trillion barrels of shale oil are thought

to reside in deposits greater than 15 gallons per

ton in the Colorado, Utah, and Wyoming.

That's the economically recoverable stuff. Estimates put quantity around 6 trillion barrels if you include the stuff that's locked up in lower concentration shale that's harder to extract from.

<a href="http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf" target="_blank">http://fossil.energy.gov/programs/reserves..._Fact_Sheet.pdf</a>

Link is broken, but the estimates you cite are accurate. There are a number of issues that have prevented the investment so far (including the fact that the technology hasn't yet been proven as a large scale, commercial viable option....but that might just be a first adoption thing, not a true barrier).

More DOE info:

http://www.fossil.energy.gov/programs/rese..._Fact_Sheet.pdf

http://www.fossil.energy.gov/programs/rese...Fact_Sheet1.pdf

http://www.fossil.energy.gov/programs/rese..._Fact_Sheet.pdf

[UWSkier]

Yes, there are hurdles that need to be overcome. That much is definitely true. However, I think the consequences of not exploring domestic production and doing it soon are dire. Imagine the leverage this would give us on an international scale...

[Gordo]

I always here people complain about how much profit the oil companies are making but I rarely hear people complain about the group that makes the biggest profit, the government. Oil companies make about ten cents a gallon profit while the government (federal/state/local) makes about 45 cents on average. It makes me sick to see our legislators talking about how we need to regulate the oil companies because they are making too much money when in reality its them that are really raking us over the coals.

Excellent point!! The "government" makes more than the oil companies.

The points I want to make are (1) demand HAS gone up over the last 5-10 years for "oil"...both in the US and worldwide - around 2-3% per year, every year (2) the US still has one the the lowest prices for gasoline in the world - taxes in Europe drive gas prices to the $5-6 range (3) if oil companies could control prices, they would be high all the time! (4) it's supply and demand that determine the price of crude and gasoline...the higher the demand, the higher the price - until price balances demand....and, believe it or not, that will happen again (more later)! (4) we will never, ever, run out of oil......but.....we have run out of $20 oil, and $40 oil, and $60 oil....and we may have run out of $80 oil. But, and listen carefully now - supply and demand will eventually balance (via the pricing mechanism) - and we are at or close to that point today with oil at $117 per barrel. So, saying it simply, when the price gets high enough, people cut demand (more fuel efficient cars, people combining trips, driving less). And when that happens, the price will drop!!! So, this thread will live on for many years, and if someone is reading this in the year 2010, you will probably be looking at an oil price in the $70-80 range.....coming down to that level in a "soft landing" from the highs of $120+ in 2008!!!!

So, thats my forecast, and I'm sticking to it!!!

[oldfooter]

Anybody on here drink bottled water? How many of you purchase a gallon of milk at the grocery store? Ever wonder what the profit margin there is in that industry?

I hate it when my wife thinks that filtered water in not as good as what can be bought in the bottles sold at the grocery store. I try to tell her that the only thing they do is filter and bottle the water. Profits must be unbelievable.

Unlike the oil companies that everyone is down on...water/milk companies don't have to:

1. Explore for water/milk?....oil is not just in ocean pools, rivers, etc. but hidden miles underground...they have to find it first
   
2. Drill 10,000+ ft through the earth's crust or within thousands of feet of water
   
3. Contrary to some people beliefs, oil is not in vast caverns below the earths surface but in tight rock formations
   
4. Oil doesn't just come out of the ground ready to use.....Once oil is brought to the earths surface, it must have the water that is produced along with it separated and disposed of in some way. It can be cleaned up (to a level of 40 parts per million or less and dumped back into the ocean) or if it is not allowed to be dumped back into the ocean it must be pumped back up to a high enough pressure and re-injected into either the same oil reservoir or some other location.
   
5. Oil often comes along with some bad actors.....H2S.....hydrogen sulfide....highly corrosive and deadly in the smallest of quantities.
   
6. Oil is often discovered in the most remote locations or harshest environmental locations. Not easy getting people to work in desert locations, Artic environments, war zones......or third world countries plagued with AIDS, malaria, etc. You pay extra to have people to work in these locations and take the risk. Not sure the water companies build their plants in such locations.
   
7. Once oil is brought to the earth's surface it has to be shipped to refineries and processed to become a useful product such as gasoline. Ever wonder how much it costs to build pipelines, pumping stations,etc.....and to have to lay those pipelines on an oceans floor 1000's of feet deep for hundreds of miles. I'm sure the water companies don't have quite the costs associated with their production.
   
8. Oil companies have to give up a major portion of their production to host goverments for allowing them to tap their resources.
   
9. Oil companies must go in and build infrastructure to support their operations.....roads, buildings, and are often required to build communities, schools, hospitals, etc.
   

The list could go on and on....but the list above probably makes the point.

Now...the next time you drink bottled water ....think of the profit margin that may be generated? Or when you go to the grocery store and guy a gallon milk, consumer cost is comparable, but what about production costs? Which would be more difficult to produce...a gallon of water, milk or oil?

[RTS]

One thing I would like to add...

I would bet a dollar that 80% (or more) of the people on this site share in those profits of the mean nasty oil companies.

Do you have a 401(k) with some mutual funds in it? You likely own oil company stocks.

Are you involved with a pension plan at work? Those that administer the plan would be foolish not to have some of that fund invested in dirty, rotten (but very profitable) Exxon Oil Company. Same with you Unionized folks (or do your pension plan administrators refuse to buy Oil stocks because they make so much profit)

Hillary talks about 'taking away' some of the profits from Big Oil. She'll likely be taking it from you. But if not you, then the profits would be taken from investors...they are publicly traded, dividend paying companies for heaven's sake.

Run Exxon out of business with the crazy 'boycott for a day' plan or the government 'punishing them' for their profits, and you'll be left with LESS competition in the gas business. Any anybody who has sat through the first week of Macroeconomics in college will know that that will mean HIGHER prices.

[2Tuff]

The reason "don't buy gas for a day" schemes will not work is not because of people not participating. Lets just say that everyone did adhere to not buying gas May 1st for example and not one drop of gas was sold that day. People will either 1.) Fill up April 30th or 2.) Fill up May 2nd and nothing was accomplished. The only way that could work is if you didn't USE gas that day. Even then, I really do not think it would make a difference. Then the schemes for "not buying from Mobil" will all fail as well because the name on the gas station does not necessarily mean the gas in the tank is the same. For instance, I work in the 2nd largest city of Illinois. In the greater Rockford area, there are numerous companies with stations here, including Clark, Mobil, BP, Citgo, Road Ranger, Grand Prix, Marathon, etc. I have an uncle that drove a Mobil gas truck all around N. Illinois delivering fuel. With the exception of Clark - ALL the gas going to ALL the stations - REGARDLESS OF BRAND - came from the Amoco (now BP I guess) holding tanks. While the consumer thinks they are not buying gas from a certain company - they are.

As far as I am concerned, it is all hogwash anyway. You don't need gas - you choose to use it. You can live close enough to work that you can walk or cycle, you don't have to have various power toys that use gas. These are all choices that we make. I could care less if the top spots in the fortune 500 were all oil companies and if they were making trillions of dollars profit per quarter. It is their business - they have the right to set there own prices where ever they want. IMO no one - including the government - has the right to say you are making too much money. Would you be ok with someone going to your boss and telling them they are paying you too much, and they have to cut salaries?

I guess the bottom line for me is that I do not see the sense in complaining. It is something we choose to do, and you have to pay to play.

[RTS]

And I'm NOT saying I am a proponent of this theory, but what do you think?

Is Oil a Renewable Resource

[Bobby Light]

Anybody on here drink bottled water? How many of you purchase a gallon of milk at the grocery store? Ever wonder what the profit margin there is in that industry?

I hate it when my wife thinks that filtered water in not as good as what can be bought in the bottles sold at the grocery store. I try to tell her that the only thing they do is filter and bottle the water. Profits must be unbelievable.

Unlike the oil companies that everyone is down on...water/milk companies don't have to:

1. Explore for water/milk?....oil is not just in ocean pools, rivers, etc. but hidden miles underground...they have to find it first
   
2. Drill 10,000+ ft through the earth's crust or within thousands of feet of water
   
3. Contrary to some people beliefs, oil is not in vast caverns below the earths surface but in tight rock formations
   
4. Oil doesn't just come out of the ground ready to use.....Once oil is brought to the earths surface, it must have the water that is produced along with it separated and disposed of in some way. It can be cleaned up (to a level of 40 parts per million or less and dumped back into the ocean) or if it is not allowed to be dumped back into the ocean it must be pumped back up to a high enough pressure and re-injected into either the same oil reservoir or some other location.
   
5. Oil often comes along with some bad actors.....H2S.....hydrogen sulfide....highly corrosive and deadly in the smallest of quantities.
   
6. Oil is often discovered in the most remote locations or harshest environmental locations. Not easy getting people to work in desert locations, Artic environments, war zones......or third world countries plagued with AIDS, malaria, etc. You pay extra to have people to work in these locations and take the risk. Not sure the water companies build their plants in such locations.
   
7. Once oil is brought to the earth's surface it has to be shipped to refineries and processed to become a useful product such as gasoline. Ever wonder how much it costs to build pipelines, pumping stations,etc.....and to have to lay those pipelines on an oceans floor 1000's of feet deep for hundreds of miles. I'm sure the water companies don't have quite the costs associated with their production.
   
8. Oil companies have to give up a major portion of their production to host goverments for allowing them to tap their resources.
   
9. Oil companies must go in and build infrastructure to support their operations.....roads, buildings, and are often required to build communities, schools, hospitals, etc.
   

The list could go on and on....but the list above probably makes the point.

Now...the next time you drink bottled water ....think of the profit margin that may be generated? Or when you go to the grocery store and guy a gallon milk, consumer cost is comparable, but what about production costs? Which would be more difficult to produce...a gallon of water, milk or oil?

Good post brother!!!!

[WakeGirl]

Maybe we need to schedule a national day of protest, kind of like what was done in the Hispanic community.

You guys do realize that I was poking fun when I said this, right?

[Bobby Light]

How about this one for all you guys. What does it cost to refine the coffee a Latte? How about 3 min of time and about 3 cents tops. You pay $4 for that, talk about getting bent over. What would that cost per gallon ($100+).