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View Full Version : Oil companies make BILLIONS and still receive BILLIONS in subsidies


Duck Dog
04-01-2008, 09:21 AM
Government subsidies for huge business is BS. We need new refineries, we need to tap our reserves, we need to drill ANWR. The environmentalists and congress are as much to blame for high oil prices as anyone but these GD subsidies have to stop.

Another dog and pony show from congress.

http://www.foxnews.com/story/0,2933,344193,00.html

JBucc
04-01-2008, 09:29 AM
BILLIONS!

Duck Dog
04-01-2008, 09:39 AM
I didn't figure this would be too political for the front page. It's just news. :shrug:

BucEyedPea
04-01-2008, 09:42 AM
I don't agree with subsidies to them either.
Then again our military costs and adventures are part of keeping them in business too.

patteeu
04-01-2008, 09:44 AM
I'm not in favor of subsidies, but OTOH, I think we should be reducing the tax burden on business across the board.

chasedude
04-01-2008, 09:45 AM
Plus ca change
Plus c'est la meme chose

(The more that things change
The more they stay the same)

BucEyedPea
04-01-2008, 09:47 AM
Plus ca change
Plus c'est la meme chose

(The more that things change
The more they stay the same)

I knew what it said. So I didn't need the interpretation. I would have liked to have done it instead though. So be more considerate next time. Geez! ;)

Delano
04-01-2008, 09:52 AM
How many refineries are being built or are close to construction?

In SD, there is a Hyperion refinery that just cleared the zoning red tape and I suppose is working on the environmental permits. Within the next ten years it should be producing fuel for the Midwest.

banyon
04-01-2008, 10:01 AM
How many refineries are being built or are close to construction?

In SD, there is a Hyperion refinery that just cleared the zoning red tape and I suppose is working on the environmental permits. Within the next ten years it should be producing fuel for the Midwest.

Oil refeneries haven't even tried to file applications for permits in the last 20+ years. Environmentalists have almost nothing to do with it.

chasedude
04-01-2008, 10:02 AM
I knew what it said. So I didn't need the interpretation. I would have liked to have done it instead though. So be more considerate next time. Geez! ;)

I don't know French so I'm helping the ignorant ones :D oh and... Beat ya to it!

Duck Dog
04-01-2008, 10:13 AM
I'm not at all for big government but there are times when it needs to step in and these out of control oil prices are one of those reasons. We need to start releasing our strategic petroleum reserves. It's insane not to. Hopefully the Bakken oil formation study in Montana/North Dakota will be complete soon. The first study estimated it could contain up to 900 billion barrels oil.

mlyonsd
04-01-2008, 10:17 AM
Oil refeneries haven't even tried to file applications for permits in the last 20+ years. Environmentalists have almost nothing to do with it.

Why would big oil look to build refineries? All that would do is cost them more and drive down the cost to the consumer.

They are currently in a no lose situtation. How they did it is actually brilliant.

BigOlChiefsfan
04-01-2008, 11:47 AM
As I drove to work I think I saw the stormtroopers who prevent any of us from buying stock in Exxon. That big oil gravy train has got to be just for the gentry. Regular folks can't buy a few dozen shares of Big Oil common stock and take advantage of it, letting their yearly stock profits offset their yearly energy bill. Can they?

Amnorix
04-01-2008, 12:05 PM
I'm not at all for big government but there are times when it needs to step in and these out of control oil prices are one of those reasons. We need to start releasing our strategic petroleum reserves. It's insane not to. Hopefully the Bakken oil formation study in Montana/North Dakota will be complete soon. The first study estimated it could contain up to 900 billion barrels oil.


Why? What's the extreme emergency? What's the strategic risk? How long are you going to fight the price of oil by releasing oil reserves?

BucEyedPea
04-01-2008, 12:10 PM
Thinking of mama's oil well again.

Oh and grammy's canadian mineral rights to my daughter.

Duck Dog
04-01-2008, 12:15 PM
Why? What's the extreme emergency? What's the strategic risk? How long are you going to fight the price of oil by releasing oil reserves?

I acknowledge it's only a temporary fix, but it would translate into lower prices at the pump, and my F250 and Ranger bass boat drink a lot of damn gas.

tiptap
04-01-2008, 12:15 PM
I'm not at all for big government but there are times when it needs to step in and these out of control oil prices are one of those reasons. We need to start releasing our strategic petroleum reserves. It's insane not to. Hopefully the Bakken oil formation study in Montana/North Dakota will be complete soon. The first study estimated it could contain up to 900 billion barrels oil.

Oh god. I have heard optimistic estimates for the Bakken of 200 to 400 million barrels. But that number does not point to the barrels that can be captured. Most fields full estimates are designed to attract attention but the amount of oil you can get is at 20% of those numbers at best.

We already had Donger dodge the Hubbert question in the US by applying the profitable angle. If only prices were higher than the amount of oil that could be pumped out of the ground would increase. Production drop is only about the cost of recovery of the oil. Production has moved out of the US because easier fields can be found outside the US. But as prices rise the fields and production in the US will again boom. This overlooks the relationship between the amount of energy required to get the oil verses the amount of energy you can get out of the oil.

This is the "oil is inexhaustible argument." There are no limits because capitalistic economics has no limits.

tiptap
04-01-2008, 12:17 PM
Thinking of mama's oil well again.

Oh and grammy's canadian mineral rights to my daughter.

Feel like Ima Hogg?

Duck Dog
04-01-2008, 12:17 PM
If the independent truckers strike. In four days our grocery shelves could be bare.

Duck Dog
04-01-2008, 12:32 PM
Oh god. I have heard optimistic estimates for the Bakken of 200 to 400 million barrels. But that number does not point to the barrels that can be captured. Most fields full estimates are designed to attract attention but the amount of oil you can get is at 20% of those numbers at best.

We already had Donger dodge the Hubbert question in the US by applying the profitable angle. If only prices were higher than the amount of oil that could be pumped out of the ground would increase. Production drop is only about the cost of recovery of the oil. Production has moved out of the US because easier fields can be found outside the US. But as prices rise the fields and production in the US will again boom. This overlooks the relationship between the amount of energy required to get the oil verses the amount of energy you can get out of the oil.

This is the "oil is inexhaustible argument." There are no limits because capitalistic economics has no limits.

You'll have to wait another 30 days for a new report that is supposed to be the final assessment. The estimates I'm now reading about are right on target with yours. Anywhere from 175-400 Bbls of usable oil. I've also seen where horizontal drilling will only cost anywhere from 20-30 bl.

Chiefmanwillcatch
04-01-2008, 01:59 PM
Farm subsidies are never discussed. Those are REAL subsidies. Our paychecks helping out millionaires because they vote in big blocks. Do any working people get subsidies? NO.

patteeu
04-01-2008, 02:03 PM
Farm subsidies are never discussed. Those are REAL subsidies. Our paychecks helping out millionaires because they vote in big blocks. Do any working people get subsidies? NO.

Yes. Earned income tax credits and the upcoming stimulus rebate are just two obvious examples.

Duck Dog
04-01-2008, 02:43 PM
Farm subsidies are never discussed. Those are REAL subsidies. Our paychecks helping out millionaires because they vote in big blocks. Do any working people get subsidies? NO.

Farm subsidies are a joke. They never helped who they were intended to help, the mom and pop farm. Instead it created a monster in the form of corporate farming.

It's all right here.

http://farm.ewg.org/sites/farmbill2007/

Amnorix
04-01-2008, 03:04 PM
I acknowledge it's only a temporary fix, but it would translate into lower prices at the pump, and my F250 and Ranger bass boat drink a lot of damn gas.


TFB -- buy something other than a gas sucking monster.

I have no sympathy for you, and really don't care about the price of gas. Unless the oil companies are engaging in shenanigans (and their ability to do so is much more limited than people think), then it's a fair market price. Trying to fight it is a waste of time and energy, and likely to have worse consequences down the road.

Amnorix
04-01-2008, 03:06 PM
If the independent truckers strike. In four days our grocery shelves could be bare.


I don't understand this -- aren't the truckers able to pass the higher cost of fuel onto their customers? If not, why not?

Carlota69
04-01-2008, 03:16 PM
So, lets see, oil companies have been boasting record profits the last few years. On top of that, they recieve 18B in tax subsidies, paid for by YOU and ME. So we pay at the pump, at the grocery stores, the clothing stores, hell everywhere we buy goods that have to be shipped, and we also pay in taxes....

Oh, and Congress wants to do something that makes sure WE dont pay the 18B, and our prez has announced he would veto any attempt to make sure WE didnt have to pay the OIL companies the 18B.

Where did Dubya make all his money again? Where did his family make all their money again? :rolleyes:

Carlota69
04-01-2008, 03:18 PM
I don't understand this -- aren't the truckers able to pass the higher cost of fuel onto their customers? If not, why not?

Not necessarily. The news ran a story on it this morning. The "buyers" (especially Mom and pop operations) can't afford the increased cost either.

Duck Dog
04-01-2008, 03:22 PM
TFB -- buy something other than a gas sucking monster.

I have no sympathy for you, and really don't care about the price of gas. Unless the oil companies are engaging in shenanigans (and their ability to do so is much more limited than people think), then it's a fair market price. Trying to fight it is a waste of time and energy, and likely to have worse consequences down the road.

I shouldn't have to alter my driving habits, boating habits or anything else in my life and neither should anyone else. I'm not asking for sympathy from you or from anyone. I just want to enjoy my life without breaking the bank every weekend.

Amnorix
04-01-2008, 03:23 PM
So, lets see, oil companies have been boasting record profits the last few years. On top of that, they recieve 18B in tax subsidies, paid for by YOU and ME. So we pay at the pump, at the grocery stores, the clothing stores, hell everywhere we buy goods that have to be shipped, and we also pay in taxes....

Oh, and Congress wants to do something that makes sure WE dont pay the 18B, and our prez has announced he would veto any attempt to make sure WE didnt have to pay the OIL companies the 18B.

Where did Dubya make all his money again? Where did his family make all their money again? :rolleyes:


We should elimintae the tax subsidy. That I agree with.

Amnorix
04-01-2008, 03:24 PM
Not necessarily. The news ran a story on it this morning. The "buyers" (especially Mom and pop operations) can't afford the increased cost either.


I missed the story, obviously, but unfortunately businesses do go out of business during recessions.

Duck Dog
04-01-2008, 03:27 PM
I don't understand this -- aren't the truckers able to pass the higher cost of fuel onto their customers? If not, why not?

You sound just like a big business/Republicans talking piece with this statement. We know you don't care about me but I never thought you'd be so quick to toss the independent truckers and the mom and pops under the bus.

Or is 'independent' the operative word here? We all know the unions have deep enough pockets and aren't afraid to 'pass' the expense onto the American consumer.

Amnorix
04-01-2008, 03:28 PM
I shouldn't have to alter my driving habits, boating habits or anything else in my life and neither should anyone else. I'm not asking for sympathy from you or from anyone. I just want to enjoy my life without breaking the bank every weekend.

I missed the Constitutional right to cheap gas, and/or for you to enjoy the gas sucking monsters that you not so cleverly bought if you couldn't afford the gas.

Seriously, I have zero sympathy. You knew you were buying gas hogs, and just hoped/assumed that nothing would ever change on the price of gas front, even though the price of gas has been obviously volatile for many, many years (since the 70s).

I'm not happy to pay $50 per visit at the pump either, but I bought a large vehicle that was a boring balance between family requirements and economical requirements. My minivan is big, but takes regular unleaded. Every time I see my idiot brother-in-law with the big premium-gas sucking SUV that he can't really afford, I shake my head at his stupidity.

Carlota69
04-01-2008, 03:29 PM
I missed the story, obviously, but unfortunately businesses do go out of business during recessions.

Yeah, but its more than that. These truckers are losing their ability to provide for their family. So it not just Kohls doesnt get a new shipment of pots and pans. These guys have mouths to feed. Its a tragedy whats happening to our economy, and the oil companies are experiencing 'record breaking" profits. Yet, we are experiencing back breaking losses.

It seems like a crime to me.

Stewie
04-01-2008, 03:31 PM
And who bought $4 billion of Lehman's stock offering today? (A hint, you did... BUT ALL IS WELL ON WALL ST.) They're all the same bunch of crooks, just in a different business. At least the oil companies provide us something we need and aren't money changers - making money for doing nothing but shuffling paper.

Amnorix
04-01-2008, 03:33 PM
You sound just like a big business/Republicans talking piece with this statement. We know you don't care about me but I never thought you'd be so quick to toss the independent truckers and the mom and pops under the bus.

Or is 'independent' the operative word here? We all know the unions have deep enough pockets and aren't afraid to 'pass' the expense onto the American consumer.


I do feel bad for them, but I don't know what can be done that isn't likely to cause far more harm in the long run. Tapping ANWR is like dribbling a drop of water on the tongue of a man about to die in the Sahara Desert. And it would take years to develop anyway. It's also not good national strategy.

Price subsidies (or more likely eliminating the gas tax) might not be a bad short term fix, but that too has costs. I could support that for short term relief, however.

Releasing from the strategic reserve is unlikely to do much for more than a week or two, and the purpose of the reserve isn't really to monkey with prices -- it's for extreme national emergencies, which this really isn't.

Oh, and the Teamsters are usually working for companies that are better able to pass costs onto consumers, but honestly, that's pretty irrelevant to this analysis. It has nothing to do with teamsters. Heck, for all I know independents can and do sign up to join the Teamsters. :shrug:

Amnorix
04-01-2008, 03:36 PM
Yeah, but its more than that. These truckers are losing their ability to provide for their family. So it not just Kohls doesnt get a new shipment of pots and pans. These guys have mouths to feed. Its a tragedy whats happening to our economy, and the oil companies are experiencing 'record breaking" profits. Yet, we are experiencing back breaking losses.

It seems like a crime to me.

As long as there's no collusion amongst the oil majors, it's not illegal.

The subsidies should be scrapped.

And, by the way, this isn't the 60s. The oil majors really do not have as much control over the price of oil per barrel, or the price of gas at the local gas station, as people think. Oil is a huge international business, and there are a hell of alot of countries and businesses with huge $$$ stakes in this game -- so many that the oil majors are no longer THE dominant players like they were 30+ years ago.

Amnorix
04-01-2008, 03:38 PM
And who bought $4 billion of Lehman's stock offering today? (A hint, you did... BUT ALL IS WELL ON WALL ST.) They're all the same bunch of crooks, just in a different business. At least the oil companies provide us something we need and aren't money changers - making money for doing nothing but shuffling paper.


You apparently have no concept of what banks and financial institutions do. Without credit, businesses don't grow and in the current environment, if the credit crunch gets bad enough, then we're talking Depression instead of Recession.

Money is the grease that makes business run, and the banks and financial institutions are the ones holding it. Without them, it all grinds to a halt.

Duck Dog
04-01-2008, 03:40 PM
I missed the Constitutional right to cheap gas, and/or for you to enjoy the gas sucking monsters that you not so cleverly bought if you couldn't afford the gas.

Seriously, I have zero sympathy. You knew you were buying gas hogs, and just hoped/assumed that nothing would ever change on the price of gas front, even though the price of gas has been obviously volatile for many, many years (since the 70s).

I'm not happy to pay $50 per visit at the pump either, but I bought a large vehicle that was a boring balance between family requirements and economical requirements. My minivan is big, but takes regular unleaded. Every time I see my idiot brother-in-law with the big premium-gas sucking SUV that he can't really afford, I shake my head at his stupidity.

Relax, again with the 'sympathy' thing. Don't overreact because you aren't out playing with the big boys on the weekend. But you're right, in '99 when I payed cash for my gas guzzling F250, gas prices weren't a concern.

You see my dad taught me few things. Buy cheap vehicles and expensive real estate early in life and one day you'll be able to pay cash for an expensive vehicle. He was right.

But just because I don't have vehicle payments or a house payment doesn't mean I want to burn through hundreds of dollars every weekend on gas, maybe you do. Maybe you really don't care that billionaires are getting rich off of us at every turn. I do and it has nothing to do with what vehicle I drive.

pikesome
04-01-2008, 03:43 PM
Yeah, but its more than that. These truckers are losing their ability to provide for their family. So it not just Kohls doesnt get a new shipment of pots and pans. These guys have mouths to feed. Its a tragedy whats happening to our economy, and the oil companies are experiencing 'record breaking" profits. Yet, we are experiencing back breaking losses.

It seems like a crime to me.

One of the downsides of being independent is running these kinds of risk. You trade in the "safety of numbers" for "being your own man".

Carlota69
04-01-2008, 03:44 PM
As long as there's no collusion amongst the oil majors, it's not illegal.

The subsidies should be scrapped.

And, by the way, this isn't the 60s. The oil majors really do not have as much control over the price of oil per barrel, or the price of gas at the local gas station, as people think. Oil is a huge international business, and there are a hell of alot of countries and businesses with huge $$$ stakes in this game -- so many that the oil majors are no longer THE dominant players like they were 30+ years ago.



Like most people, I dont know the ins and outs of the oil biz. But I know this, in the last few years, I have paid wayyy more $$ for gas than I ever have. I also know, that gas didnt go up a $1 a tank every year. For many years, I paid between $1.38 and $1.78. It almost never went up more than a buck a gallon in one year. Now, thats the norm.

I also know our current Prez is an Oil man. A guy who is unwilling to get rid of the tax subsidies for Oil companies.

And I also know, that Exxon and others are recording "record breaking" profits. Profits they have never seen in the past.

2+2=4

So, my perception, and perception is reality, that I am paying more $$ for gas becasue I am getting ripped **** off.

Stewie
04-01-2008, 03:44 PM
You apparently have no concept of what banks and financial institutions do. Without credit, businesses don't grow and in the current environment, if the credit crunch gets bad enough, then we're talking Depression instead of Recession.

Money is the grease that makes business run, and the banks and financial institutions are the ones holding it. Without them, it all grinds to a halt.


So, tell me, who bought the Lehman offering today? It sure as hell wasn't banks or investors. Lehman is toxic with toxic holdings.

Duck Dog
04-01-2008, 03:44 PM
I do feel bad for them, but I don't know what can be done that isn't likely to cause far more harm in the long run. Tapping ANWR is like dribbling a drop of water on the tongue of a man about to die in the Sahara Desert. And it would take years to develop anyway. It's also not good national strategy.

Price subsidies (or more likely eliminating the gas tax) might not be a bad short term fix, but that too has costs. I could support that for short term relief, however.

Releasing from the strategic reserve is unlikely to do much for more than a week or two, and the purpose of the reserve isn't really to monkey with prices -- it's for extreme national emergencies, which this really isn't.

Oh, and the Teamsters are usually working for companies that are better able to pass costs onto consumers, but honestly, that's pretty irrelevant to this analysis. It has nothing to do with teamsters. Heck, for all I know independents can and do sign up to join the Teamsters. :shrug:

So your saying if we want cheap gas we should invade a mid east country and claim it's oil for ourselves?





BTW, that's TIC, before you pounce all over me.;)

Amnorix
04-01-2008, 03:45 PM
Relax, again with the 'sympathy' thing. Don't overreact because you aren't out playing with the big boys on the weekend. But you're right, in '99 when I payed cash for my gas guzzling F250, gas prices weren't a concern.

You see my dad taught me few things. Buy cheap vehicles and expensive real estate early in life and one day you'll be able to pay cash for an expensive vehicle. He was right.

Yes, so why are you complaining?

But just because I don't have vehicle payments or a house payment doesn't mean I want to burn through hundreds of dollars every weekend on gas, maybe you do. Maybe you really don't care that billionaires are getting rich off of us at every turn. I do and it has nothing to do with what vehicle I drive.

Capitalism is all about companies positioning themselves to make money for their shareholders. The oil majors take huge risks, and reap huge rewards. When the price of oil goes up, it has a huge positive impact on them. And you can share in it by buying some of their stock.

It's not a systemic problem that needs to be "fixed".

Duck Dog
04-01-2008, 03:46 PM
Like most people, I dont know the ins and outs of the oil biz. But I know this, in the last few years, I have paid wayyy more $$ for gas than I ever have. I also know, that gas didnt go up a $1 a tank every year. For many years, I paid between $1.38 and $1.78. It almost never went up more than a buck a gallon in one year. Now, thats the norm.

I also know our current Prez is an Oil man. A guy who is unwilling to get rid of the tax subsidies for Oil companies.

And I also know, that Exxon and others are recording "record breaking" profits. Profits they have never seen in the past.

2+2=4

So, my perception, and perception is reality, that I am paying more $$ for gas becasue I am getting ripped **** off.


What do want sypathy? It's not the oil companies fault you don't ride a moped./Amnorix :D

Amnorix
04-01-2008, 03:47 PM
Like most people, I dont know the ins and outs of the oil biz. But I know this, in the last few years, I have paid wayyy more $$ for gas than I ever have. I also know, that gas didnt go up a $1 a tank every year. For many years, I paid between $1.38 and $1.78. It almost never went up more than a buck a gallon in one year. Now, thats the norm.

I also know our current Prez is an Oil man. A guy who is unwilling to get rid of the tax subsidies for Oil companies.

And I also know, that Exxon and others are recording "record breaking" profits. Profits they have never seen in the past.

2+2=4

So, my perception, and perception is reality, that I am paying more $$ for gas becasue I am getting ripped **** off.

I'll agree with the subsidies.

But as for the rest, there' no evidence of a giant conspiracy, and even I'm not so cynical of BushCo (though I hate them) to think they launched the Iraq war just to drive up oil prices or anything like that.

Oil is barely more expsnive per gallon than milk. Think about that when you consider how expensive it is. We're just spoiled, to be honest.

pikesome
04-01-2008, 03:49 PM
Like most people, I dont know the ins and outs of the oil biz. But I know this, in the last few years, I have paid wayyy more $$ for gas than I ever have. I also know, that gas didnt go up a $1 a tank every year. For many years, I paid between $1.38 and $1.78. It almost never went up more than a buck a gallon in one year. Now, thats the norm.

I also know our current Prez is an Oil man. A guy who is unwilling to get rid of the tax subsidies for Oil companies.

And I also know, that Exxon and others are recording "record breaking" profits. Profits they have never seen in the past.

2+2=4

So, my perception, and perception is reality, that I am paying more $$ for gas becasue I am getting ripped **** off.

It also has a lot to do with those pesky Chinese using more and more gas at an increasing rate.

That's a big part of this, the "Developing World" has been developing. Gas production isn't increasing with use, prices go up. That also means those people in the oil business make more money.

I don't like it but we (The US) don't control big parts of the problem.

pikesome
04-01-2008, 03:50 PM
I'll agree with the subsidies.

But as for the rest, there' no evidence of a giant conspiracy, and even I'm not so cynical of BushCo (though I hate them) to think they launched the Iraq war just to drive up oil prices or anything like that.

Oil is barely more expsnive per gallon than milk. Think about that when you consider how expensive it is. We're just spoiled, to be honest.

Bottled water.

Amnorix
04-01-2008, 03:50 PM
What do want sypathy? It's not the oil companies fault you don't ride a moped./Amnorix :D

Now you're catching on. ;) :p

Amnorix
04-01-2008, 03:52 PM
It also has a lot to do with those pesky Chinese using more and more gas at an increasing rate.

That's a big part of this, the "Developing World" has been developing. Gas production isn't increasing with use, prices go up. That also means those people in the oil business make more money.

I don't like it but we (The US) don't control big parts of the problem.


Precisely. The former third world countries are guzzling this stuff up like mad as they come off bicycles and candles and modernize. China especially.

There are a host of other issues too, but the increase in oil prices is systemic and almost certainly here to stay. I'd be shocked if we EVER see gas at <$1.50/gal at best again, and it will probably stabilize at much higher than that.

Duck Dog
04-01-2008, 03:52 PM
I'll agree with the subsidies.

But as for the rest, there' no evidence of a giant conspiracy, and even I'm not so cynical of BushCo (though I hate them) to think they launched the Iraq war just to drive up oil prices or anything like that.

Oil is barely more expsnive per gallon than milk. Think about that when you consider how expensive it is. We're just spoiled, to be honest.

That's a great analogy if I drank 50-100 gallons of milk a week. I agree we are spoiled to a certain extent but our society has developed into what it is because oil prices have been so low. We can't just change the way conduct our daily lives, jobs and culture. Our towns, cities, rural areas, subdivisions, everything is based on the fact that we can easily get from point A to point B.

Duck Dog
04-01-2008, 03:53 PM
Now you're catching on. ;) :p

Your a fine teacher and I'm a fast learner.

Stewie
04-01-2008, 03:53 PM
BTW, Amnorix is acting like he knows what's going on and then says:

You apparently have no concept of what banks and financial institutions do. Without credit, businesses don't grow and in the current environment, if the credit crunch gets bad enough, then we're talking Depression instead of Recession.

Dude! That's not at all what the credit crunch is about.

Duck Dog
04-01-2008, 03:56 PM
It also has a lot to do with those pesky Chinese using more and more gas at an increasing rate.

That's a big part of this, the "Developing World" has been developing. Gas production isn't increasing with use, prices go up. That also means those people in the oil business make more money.

I don't like it but we (The US) don't control big parts of the problem.

Which is why we need to start producing our own oil. We have new reserves in the gulf of Mexico, we have ANWR, we have the Bakken Formation. Using your same logic (which I agree with) if we can produce more oil and put more oil onto the market the prices should drop. It's also my understanding that Iraqs oil hasn't started hitting the market yet either which should help.

pikesome
04-01-2008, 04:06 PM
Which is why we need to start producing our own oil. We have new reserves in the gulf of Mexico, we have ANWR, we have the Bakken Formation. Using your same logic (which I agree with) if we can produce more oil and put more oil onto the market the prices should drop. It's also my understanding that Iraqs oil hasn't started hitting the market yet either which should help.

It'll drop some but part of the price of oil is what producers/buyers think oil will do in the future. And no one thinks oil production is going to be able to shadow usage. Even with drilling the piss out of everything.

Stewie
04-01-2008, 04:13 PM
It'll drop some but part of the price of oil is what producers/buyers think oil will do in the future. And no one thinks oil production is going to be able to shadow usage. Even with drilling the piss out of everything.

Here's my 2 cents.... while I'm waiting for Amnorix to explain the credit crunch.

The oil companies are making billions in DOLLARS! The U.S. DOLLAR is dismal and going lower. It looks like alot of money to you, but on a global scale it's not out of line.

As an example. When the DOW peaked at 10,000 around 1/1/2000 it was a record. With the devaluation of the dollar the DOW would have to be around 19,000 to equal the 10,000 level in 2000.

Oh, and I'll give the Stewie gospel this weekend. I bet you can't wait.

pikesome
04-01-2008, 04:19 PM
Here's my 2 cents.... while I'm waiting for Amnorix to explain the credit crunch.

The oil companies are making billions in DOLLARS! The U.S. DOLLAR is dismal and going lower. It looks like alot of money to you, but on a global scale it's not out of line.

As an example. When the DOW peaked at 10,000 around 1/1/2000 it was a record. With the devaluation of the dollar the DOW would have to be around 19,000 to equal the 10,000 level in 2000.

There's something to that.

The issue us Americans are/will have the hardest time with is we can't fix this. Involves too many other countries and people for the US to have our way.

patteeu
04-01-2008, 05:35 PM
TFB -- buy something other than a gas sucking monster.

I have no sympathy for you, and really don't care about the price of gas. Unless the oil companies are engaging in shenanigans (and their ability to do so is much more limited than people think), then it's a fair market price. Trying to fight it is a waste of time and energy, and likely to have worse consequences down the road.

I agree completely. It sucks for anyone who has a high gas consumption lifestyle (and to some extent I fall into that category), but this is, to a very large degree IMO, just the market at work. And we have to figure out how to adjust.

patteeu
04-01-2008, 05:45 PM
I shouldn't have to alter my driving habits, boating habits or anything else in my life and neither should anyone else. I'm not asking for sympathy from you or from anyone. I just want to enjoy my life without breaking the bank every weekend.

Why not? Is this an April Fool's joke?

Hydrae
04-01-2008, 07:18 PM
I missed the story, obviously, but unfortunately businesses do go out of business during recessions.

Yep, just like Bear Stearns did last week.


Oh, wait....

CHIEF4EVER
04-01-2008, 09:45 PM
I don't understand this -- aren't the truckers able to pass the higher cost of fuel onto their customers? If not, why not?

Like anything else, the trucking industry is a supply and demand business. In the middle of America where the freight amounts are high and the amount of trucks to pull the freight are low, customers will pay a fuel surcharge to get their freight hauled to the destination. On the coasts (where the situation is reversed) it is MUCH more difficult to get a customer to pay the surcharge because they think that some schmuck will pull the load without it (and they are right in this most of the time). Truckers only make money if the wheels are turning (time is quite literally money) and are loath to sit for days waiting for a load on either coast that pays a decent wage because they lose more revenue waiting than they would gain by getting "the right load". Customers on the coasts take advantage of this situation mercilessly.

Duck Dog
04-02-2008, 07:13 AM
Why not? Is this an April Fool's joke?

We've been used to low gas prices for so long we've become dependent on it. My hobbies and life style take me into different states or at least long distances most weekends a year. I, like other good Americans work hard, pay my bills on time and contribute to society. A society that has been designed and created around the fact that we can consume oil at relatively low prices. Everything about or culture has been built around this fact. Contrary to what some of the so called 'elitists' around here think, not everyone lives in the middle of a big city with mass transit at their finger tips.

BucEyedPea
04-02-2008, 07:15 AM
I don't like it but we (The US) don't control big parts of the problem.

There's one aspect we do control: the war machine. That is also using lots of fuel too. But I'm also surprised that no one has mentioned the existence of a war in itself creating market uncertainties and shakiness regarding supplies so gas companies raise prices to ensure there is something there until things settle down. I mean is any Iraqi oil on the market yet?


This is one reason I can't completely buy into the idea that oil companies want to go to war in the ME for oil. I can buy the idea of the war machine's refueling far more. (especially when you read about that certain polticians want to makeover the world, which means more war.)

Amnorix
04-02-2008, 07:20 AM
That's a great analogy if I drank 50-100 gallons of milk a week. I agree we are spoiled to a certain extent but our society has developed into what it is because oil prices have been so low. We can't just change the way conduct our daily lives, jobs and culture. Our towns, cities, rural areas, subdivisions, everything is based on the fact that we can easily get from point A to point B.


I agree. We are extremely oil dependent. But what is the solution. ANWR wouldn't reduce prices for years because it would take that long to come online. And even when it does, it's not like we're opening up another Saudi Arabia. It would hardly significantly increase worldwide oil production enough to make a significant dent in prices.

The answer is alternative fuels, and unfortunately, one way to encourage alternative fuels is to make them COMPARATIVELY cost effective compared to oil. And if gas is a buck a gallon, then nothing is comapratively cost-effective.

The other way to do it is to develop previously untapped oil sources, most of which were untapped becasue it was unecono0mical to tap them (higher costs of production). Well, with $100 per barrel, now more of them are economical to produce.

It's hard, and I imagine prices will come down somewhat, but I don't think we'll see $30/barrel ever again...

Amnorix
04-02-2008, 07:23 AM
Like anything else, the trucking industry is a supply and demand business. In the middle of America where the freight amounts are high and the amount of trucks to pull the freight are low, customers will pay a fuel surcharge to get their freight hauled to the destination. On the coasts (where the situation is reversed) it is MUCH more difficult to get a customer to pay the surcharge because they think that some schmuck will pull the load without it (and they are right in this most of the time). Truckers only make money if the wheels are turning (time is quite literally money) and are loath to sit for days waiting for a load on either coast that pays a decent wage because they lose more revenue waiting than they would gain by getting "the right load". Customers on the coasts take advantage of this situation mercilessly.


You seem to know far more than I, but based on this, independent truckers will stop working because too many of them are too stupid to pass along a fuel surcharge. That may be cynical, but instead of stopping work, why don't they all agree to pass on fuel surcharges?

BucEyedPea
04-02-2008, 07:24 AM
Yes. Earned income tax credits and the upcoming stimulus rebate are just two obvious examples.

How is getting one's own money ( stimulus rebate) back a subsidy? I remember a self-avowed communist telling me getting such is a subsidy.

Amnorix
04-02-2008, 07:24 AM
Stewie -- pressed for time at the moment. I **will** get back to you on the credit crunch. I short-handed it, and maybe it didn't come across well.

CHIEF4EVER
04-02-2008, 07:42 AM
You seem to know far more than I, but based on this, independent truckers will stop working because too many of them are too stupid to pass along a fuel surcharge. That may be cynical, but instead of stopping work, why don't they all agree to pass on fuel surcharges?

The sad truth is that getting 2 truckers to agree on where to stop and eat is like getting Dems and Reps to agree on the war in Iraq. Leave out collaborating on fuel surcharges. Unfortunately, when drivers are stuck on the coasts and bills are staring them and their families in the face, many drivers will cut their losses and pull the crappy loads with no surcharge to get out of there. They simply can't afford to wait. Customers know this and refuse to pay the surcharge because the customers know they can get away with it. I personally think (and I could be wrong but I don't think I am) the market will force an adjustment with the following reasoning:

As the price of fuel continues to skyrocket, most truckers are going to be resistant to running East - West routes that will take them to the coasts because of the higher fuel prices on the coasts vis a vis the fuel prices in the middle of the country. They simply won't be able to afford to pull freight out of the coasts anymore. The customers on the coasts are going to see that their goods aren't getting to market in a timely manner because of the dropoff in available transport and will adjust their freight rates and attitudes toward fuel surcharges accordingly to attract drivers to pull their freight. The side affect is that the cost of goods to the American consumer are going to increase commensurately.

Just my take on it.

banyon
04-02-2008, 07:44 AM
How is getting one's own money ( stimulus rebate) back a subsidy? I remember a self-avowed communist telling me getting such is a subsidy.

That's not how the Earned Income Tax Credit works. patteeu is right. To be fair, I don't know if this is required reading on the Mises site or not.

patteeu
04-02-2008, 08:11 AM
How is getting one's own money ( stimulus rebate) back a subsidy? I remember a self-avowed communist telling me getting such is a subsidy.

Why didn't you object to the oil company "subsidies" on this ground in post #4? What people are talking about when they say that big oil is getting subsidies are really targeted tax incentives. I oppose targeted tax incentives as a matter of principle but normally I wouldn't describe them as a subsidy (even though mathematically there isn't a significant difference). However, since that was the nomenclature being used in the thread, I accepted it and used the same word in the same way.

Duck Dog
04-02-2008, 08:12 AM
I agree. We are extremely oil dependent. But what is the solution. ANWR wouldn't reduce prices for years because it would take that long to come online. And even when it does, it's not like we're opening up another Saudi Arabia. It would hardly significantly increase worldwide oil production enough to make a significant dent in prices.

The answer is alternative fuels, and unfortunately, one way to encourage alternative fuels is to make them COMPARATIVELY cost effective compared to oil. And if gas is a buck a gallon, then nothing is comapratively cost-effective.

The other way to do it is to develop previously untapped oil sources, most of which were untapped becasue it was unecono0mical to tap them (higher costs of production). Well, with $100 per barrel, now more of them are economical to produce.

It's hard, and I imagine prices will come down somewhat, but I don't think we'll see $30/barrel ever again...

I agree 100%. I can't argue with this at all. But, if we keep putting off drilling ANWR it never will produce. If we would have started a decade ago, we'd be close to reaping it's benefits. But perhaps I'm over optimistic that the Bakken formation and the reserve, I believe Chevron found, in the Gulf Of Mexico last year will provide the enough.

patteeu
04-02-2008, 09:09 AM
We've been used to low gas prices for so long we've become dependent on it. My hobbies and life style take me into different states or at least long distances most weekends a year. I, like other good Americans work hard, pay my bills on time and contribute to society. A society that has been designed and created around the fact that we can consume oil at relatively low prices. Everything about or culture has been built around this fact. Contrary to what some of the so called 'elitists' around here think, not everyone lives in the middle of a big city with mass transit at their finger tips.

You've got to be joking. Haven't you been one who (IMO rightly) criticizes redistributive social welfare programs in the past? What about all the people who have become dependent on those programs for their sustenance, leave alone hobbies and life styles?

I don't have any real gas guzzling hobbies, but I do drive a gaz guzzling pickup that makes each tank fillup feel like a proctologist exam and I do live pretty far out in the boondocks so that my commutes are far longer than they need to be, but I recognize that I'm the victim of my own choices not of some unfair external factor.

Amnorix
04-02-2008, 09:38 AM
BTW, Amnorix is acting like he knows what's going on and then says:



Dude! That's not at all what the credit crunch is about.


I'm not sure where I went wrong, or if you're misreadign what I said.

A credit crunch, generally, is a situation in which banks are unwilling (or less willing) to extend loans to businesses and individuals, and which when extended are generally upon less favorable terms (harsher covenant terms, and higher rates). This is the opposite of an economic environemnt usually described as being one of "loose credit" or "easy credit".

There are a number of effects resulting from a credit crunch, the primary one of which is less liqudity, which restricts corporate growth and/or the ability to refinance debt, and/or increased rates of foreclosure or other drastic measures being taken by banks that are fundamentally acting in an increasingly paranoid fashion (whether warranted or not).

Credit crunches usually coicide with recessions/depressions, and can worsen the downward spiral of the overall economy.

I'm not sure why you thought my statement indicated a lack of understanding on my part regarding these matters. :shrug:

Amnorix
04-02-2008, 09:40 AM
As the price of fuel continues to skyrocket, most truckers are going to be resistant to running East - West routes that will take them to the coasts because of the higher fuel prices on the coasts vis a vis the fuel prices in the middle of the country. They simply won't be able to afford to pull freight out of the coasts anymore. The customers on the coasts are going to see that their goods aren't getting to market in a timely manner because of the dropoff in available transport and will adjust their freight rates and attitudes toward fuel surcharges accordingly to attract drivers to pull their freight. The side affect is that the cost of goods to the American consumer are going to increase commensurately.

Just my take on it.


Right. I agree, the market should adjust. Stores need goods, and if truckers avoid the coasts because of failure to pay increased fuel costs, shortages will convince stores to alter their position.

Amnorix
04-02-2008, 09:43 AM
Why didn't you object to the oil company "subsidies" on this ground in post #4? What people are talking about when they say that big oil is getting subsidies are really targeted tax incentives. I oppose targeted tax incentives as a matter of principle but normally I wouldn't describe them as a subsidy (even though mathematically there isn't a significant difference). However, since that was the nomenclature being used in the thread, I accepted it and used the same word in the same way.


I'd suggest that giving a tax break to one group in comparison to other groups similarly situated is a subsidy. A subsidy is nothing more than financial support of a given program, and that financial support could just as easily be reduced taxes versus a handout. Certainly if Boeing suddenly got a law passed that said it owed no taxes at all, state of federal, employer, FICA or otherwise, the Europeans would rightly be screaming to GATT or whoever that they were getting a subsidy.

But your point is taken.

Amnorix
04-02-2008, 09:44 AM
I agree 100%. I can't argue with this at all. But, if we keep putting off drilling ANWR it never will produce. If we would have started a decade ago, we'd be close to reaping it's benefits. But perhaps I'm over optimistic that the Bakken formation and the reserve, I believe Chevron found, in the Gulf Of Mexico last year will provide the enough.


I prefer holding ANWR in reserve, not because i"m overly concerned about Caribou, but because oil reserves are being reduced daily by millions of barrels. If push ever comes to shove, and we are facing imminent REAL shortages, that is the time to develop ANWR.

I also support nuclear power plants. I'm Green, but not that Green. The economy is important too. Ont he flip side, it's stupid not to tackle greenhouse gases, etc. Taht's a problem that money can fix, and I'm in favor of spending money to prevent catastrophe.

Amnorix
04-02-2008, 09:45 AM
You've got to be joking. Haven't you been one who (IMO rightly) criticizes redistributive social welfare programs in the past? What about all the people who have become dependent on those programs for their sustenance, leave alone hobbies and life styles?

I don't have any real gas guzzling hobbies, but I do drive a gaz guzzling pickup that makes each tank fillup feel like a proctologist exam and I do live pretty far out in the boondocks so that my commutes are far longer than they need to be, but I recognize that I'm the victim of my own choices not of some unfair external factor.


Quoted for truth. I'm more than a bit surprised to see DD Taking htis position.

BucEyedPea
04-02-2008, 09:56 AM
That's not how the Earned Income Tax Credit works. patteeu is right. To be fair, I don't know if this is required reading on the Mises site or not.Yeah, well, if you read what I actually posted, it made note of that intentionally excluding the EITC. I didn't refer to that one by using a parenthetical statement. English Grammar 101. I wasn't logged in so I saw that. And noticed you enjoy talking to yourself when it comes to me these days. LMAO.

Adept Havelock
04-02-2008, 10:04 AM
I prefer holding ANWR in reserve, not because i"m overly concerned about Caribou, but because oil reserves are being reduced daily by millions of barrels. If push ever comes to shove, and we are facing imminent REAL shortages, that is the time to develop ANWR.

I also support nuclear power plants. I'm Green, but not that Green. The economy is important too. Ont he flip side, it's stupid not to tackle greenhouse gases, etc. That's a problem that money can fix, and I'm in favor of spending money to prevent catastrophe.

Great takes across the board, IMO. :clap:

I'd also like to see some serious research into Solar Power Sats beaming power down via microwave, and Solar Mirrors.

BucEyedPea
04-02-2008, 10:37 AM
Great takes across the board, IMO. :clap:

I'd also like to see some serious research into Solar Power Sats beaming power down via microwave, and Solar Mirrors.

Microwaves? I won't even use a microwave in my own home. Do we have to have those in our atmosphere too?

Amnorix
04-02-2008, 10:48 AM
Great takes across the board, IMO. :clap:

I'd also like to see some serious research into Solar Power Sats beaming power down via microwave, and Solar Mirrors.


The single best long term solution to the world's power needs it to somehow harness just a tiny fraction of the sun's power by deployment of satellites or something else in space. We're surely many decades away, but that's the only real permanent solution.

Amnorix
04-02-2008, 10:50 AM
Microwaves? I won't even use a microwave in my own home. Do we have to have those in our atmosphere too?


The universe is filled with cosmic radiation and waves of all types. You're not even aware of it. Heck, the sun emits microwaves. It's not about avoiding rays and radition -- that's utterly impossible. It's about avoiding *harmful* rays and radiation.

Duck Dog
04-02-2008, 11:29 AM
I prefer holding ANWR in reserve, not because i"m overly concerned about Caribou, but because oil reserves are being reduced daily by millions of barrels. If push ever comes to shove, and we are facing imminent REAL shortages, that is the time to develop ANWR.

I also support nuclear power plants. I'm Green, but not that Green. The economy is important too. Ont he flip side, it's stupid not to tackle greenhouse gases, etc. Taht's a problem that money can fix, and I'm in favor of spending money to prevent catastrophe.

Wow, you sound extremely conservative, in a green sort of way. :) This makes a lot of sense if you're the type of person that likes to save for the future. I live a mixed life of saving for the future but I want it all now.

Adept Havelock
04-02-2008, 11:34 AM
The universe is filled with cosmic radiation and waves of all types. You're not even aware of it. Heck, the sun emits microwaves. It's not about avoiding rays and radition -- that's utterly impossible. It's about avoiding *harmful* rays and radiation.

Thanks, and I think you are right about it being the only real long term solution. I can't remember if it was Clarke, Sagan, or another of their colleagues who said "It's raining soup out there...and we don't even know about soup bowls".

FWIW, I think Arthur C. Clarke agreed. His last novel has those that live in the belt reviving the religion of "Sol Invictus". LMAO

Microwaves? I won't even use a microwave in my own home. Do we have to have those in our atmosphere too?

I understand the concern, but we already do. Natural and man-made. Everything I've seen discussed about power sats revolves around a very tight beam. There are a large number of hurdles before we see it applied.

.

BucEyedPea
04-02-2008, 11:37 AM
It's about avoiding *harmful* rays and radiation.
Well that's a good way to paraphrase what I meant.

banyon
04-02-2008, 11:53 AM
Yeah, well, if you read what I actually posted, it made note of that intentionally excluding the EITC. I didn't refer to that one by using a parenthetical statement. English Grammar 101. I wasn't logged in so I saw that. And noticed you enjoy talking to yourself when it comes to me these days. LMAO.

Fair enough, you did clarify that one. (See how easy it is to admit when you've made a mistake, you should try it sometime).

As for this "talking to myself" thing I don't really care if you respond to it or not, but I don't like poorly-source fiction routinely passed off as fact, so yeah, I'll continue to point it out to others who might otherwise mistakenly see a kernel of truth in your consistently misguided posts.

Amnorix
04-02-2008, 12:25 PM
Thanks, and I think you are right about it being the only real long term solution. I can't remember if it was Clarke, Sagan, or another of their colleagues who said "It's raining soup out there...and we don't even know about soup bowls".

FWIW, I think Arthur C. Clarke agreed. His last novel has those that live in the belt reviving the religion of "Sol Invictus". LMAO

The earth captures something like 0.02% of the energy the sun puts out. If we use manmade devices to increase that to 0.03% and channel it into useable energy, then we're pretty much all set forever with our power needs.

I understand the concern, but we already do. Natural and man-made. Everything I've seen discussed about power sats revolves around a very tight beam. There are a large number of hurdles before we see it applied.

.

Right. We're talking geosynchronous orbiting satellites that capture solar power in some form or fashion, and beam it (somewhat), probably tremendously inefficiently, into a receiver that can convert that energy into energy that powers houses and factories.

100 years ago, man was flying for 10 seconds or whatever at Kitty Hawk. 60 years after that, we landed on the moon. Now, we have numerous satellites. Pretty much everything written about astronomy and astrophysics before 1990 is basically useless, obsolete, junk.

100 years ago, the car was barely invented. radios existed, but weren't exactly in every home, and most of America (much less the world) wasn't wired for electricity.

It's hard to envision where we will be technologically 100 years from now.

Amnorix
04-02-2008, 12:33 PM
Wow, you sound extremely conservative, in a green sort of way. :) This makes a lot of sense if you're the type of person that likes to save for the future. I live a mixed life of saving for the future but I want it all now.


I am conservative, with some greenness. I'm also keen on saving economic resources, and my amateur military background tells me that gasoline is a key item for national defense.

I don't worry about $4 gas, I worry about being cut off from ME oil and/or what happens if the entire third world is starting to get seriously developed in 30 years, and oil is an incredibly scarce and expensive resource.

Amnorix
04-02-2008, 12:34 PM
Well that's a good way to paraphrase what I meant.


Then what is your worry. If you don't have microwaves in you rhome and don't want them in the atmosphere, why not? Unless you think they're harmful...

mlyonsd
04-02-2008, 01:10 PM
I think one thing oil companies could do with the extra billions falling out of their pockets is to start building the delivery system for hydrogen based cars.

Especially since I heard one big oil CEO testify to congress their current profits are justifiable because of what they spend in R&D and infrastructure.

Well here's your chance Chachi.....start planning on how to make hydrogen available to bumf**k USA.

Hog Farmer
04-02-2008, 03:07 PM
I wonder if the government is using the big oil companies money somehow to fund the war. It could go hand in hand.

Duck Dog
04-02-2008, 03:33 PM
I wonder if the government is using the big oil companies money somehow to fund the war. It could go hand in hand.

Or the auto makers are controlled by big oil. I can't believe we can't come up with 'just as good' vehicles that get better mileage.

Adept Havelock
04-02-2008, 03:44 PM
I wonder if the government is using the big oil companies money somehow to fund the war. It could go hand in hand.

Nothing new there, if true. The other way around would make a little more sense.

This was written in the 30's by a two time winner of the Congressional Medal of Honor, Major General Smedley Butler (USMC-Ret.).

WAR IS A RACKET

WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

In the World War One a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.

How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?

Out of war nations acquire additional territory, if they are victorious. They just take it. This newly acquired territory promptly is exploited by the few – the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill.

The rest of the text is here:

http://www.horstwisdom.com/wiki/index.php5?title=War_is_a_Racket

While I disagree with several of his conclusions, it certainly makes compelling reading and food for thought, IMO.

Easy 6
04-03-2008, 04:09 PM
http://www.newswithviews.com/Monteith/stanley.htm

Heres one take on the problem.