[stupendousman]

Originally Posted by CreepDogg 

'Sweet spot' = Supply/demand equilibrium, which sets the price and quantity demanded.

Yes. Once speculators are convinced that there will be some competition for supply.

As for the $2 statement, this is the most flawed statement I've yet seen. Show me any non-oil-producing country where the price is at this level (oil-producing countries defined as those who produce more than they consume - they tend to heavily subsidize). What evidence do you have to suggest this should be the price today? It is not just because you say so.

I didn't say it SHOULD be. I said it COULD be. There are several countries paying well under $3. Again, we are dealing with an artificially inflated price. The thing causing that artificial price is insecurity among speculators that we'll never have any real bargaining leverage in the equation that we'd have if we could just increase production. Increased production on our part would cost OPEC billions.

Europe pays twice what the US does. Canada pays more. Japan pays more. Australia pays more. China, Venezuela, and the Saudis subsidize. What's the magic about $2?

Actually, I know China pays less ($2.60 I think I saw it quoted). Many countries pay more because they are taxed higher.

How so? We still need their production. The only way to take power away from OPEC is energy independence.

Energy independence would take total power from OPEC. That's not likely to happen though. RIght now, we've got to settle for whatever we can do to convince OPEC it's in their best interest to do what we want. A real threat of an increase in production and better hybrid technology would do that. Again, we are talking about things that would cost them billions.

[stupendousman]

Originally Posted by CreepDogg 

I've conceded that speculation is contributing to the price. What's not clear is how much. You're conjecturing that speculators are going to quiver in their boots and sell off upon hearing of an effort to start up drilling. Again - what makes your conjecture more valid than the DoE estimates?

I"m taking into account the political realities of the situation, the same as speculators. The DoE is simply doing a traditional supply/demand equation which doesn't take into account the irrationality of artificially set prices. It's like trying to figure out what a business was REALLY worth back during the tech stock boom. One day, the experts would tell us a company was worth millions of dollars, the next KAPUT.

Of course, my idea wouldn't work either if there are a few investors with billions who are playing with the market to intentionally set prices higher for political reasons. We won't know that unless the price stays artificially high even with added output.

What's changed is we have more competition in that consumption - i.e. worldwide demand is increasing significantly. China's consumption has about tripled in the timeframe you specify (10-20 years) and is expected to double again. That would make it a bit more than half of US consumption - no small shift. Other countries have seen less-severe bumps as well.

China doesn't pay what we do for gas. The Saudis give them a deal. Overall increases in demand are said to be about 1.8% a year, based on the latest numbers I saw and demand just dropped 2.6 percent over the past month.

What's also changed is that the US dollar has been devalued by continuing low interest rates. This also impacts the price of a world commodity.

True, but the dollar is also another thing that has been effected by speculation in ways it hadn't in the past, and that's a funny thing. The two biggest economic hurtles the US face seem to be artificially high or low in ways that would hurt the US. True there are other factors which add to the extreme, but there's a broad consensus amongst many that there is really no justification for the extreme. I do know of one guy who is very powerful, who would gain to see the US economy hurt for political reasons, who has shown a willingness to use his vast fortune to achieve his political desires (unsuccessfully for the most part) and who is very prominent in both currency speculation and oil speculation. I think that's kind of fishy, myself.

You keep saying speculation is the singular cause for the run-up in prices.

Not the singular cause for an increase in prices. The primary cause for them to be at this extreme. Even without the artificial rise, gas prices probably would be higher than a year ago due to OPEC's handling of supply. But even they know that there are factors even them adding to the supply won't cure. They have no control over irrational speculation.

[villalobos]

I think oil prices going up is the best thing that has happened to the US and the rest of the world in a long time. Will help conservationism and alternative energies. Hurts on the short term, helps on the long term. Don't drill!!!!!

[ebuddy]

Speculators pear out over 5 years from now, see the "green movement" underway, and they hear a bunch of people calling for $5.00/gallon to discourage usage. So... they're helping the environment now by getting as much money as they can before we buy into the GW hype and eliminate the internal combustion engine.

You know it's all about GW and the environment. There are many who don't care about alternatives because they still "burn". They don't entertain discussions about jatropha and domestic drilling and nuclear energy because it's not really about energy independence to them. It's about the environment.

Whether it's speculators, supply/demand, or environmental concern doesn't matter as they can all be addressed in tandem. Sell a substantial portion of our strategic reserve back to the market, invest the money in domestic drilling including shale extraction in places like Wyoming that could be online in short order, jatropha, hydrogen, etc... You'll let OPEC know you're serious about domestic supply, you'll ease the supply tension manifest in speculation, funnel additional funding into truly alternative sources of energy, bring fuel prices down in the meantime, and occupy the 8% unskilled labor currently unemployed. Win-win-win and win.

I'm ebuddy and I approve this message.

[stupendousman]

Originally Posted by tie 

Okay, so let's assume that speculation is responsible for the high prices (for this one post). Then why do you advocate drilling for oil?

Should I just start copy/pasting my replies from former posts? Which of the times I've pointed out that the threat of ANY increased production is power the US has at their disposal (but is not using) which would cost OPEC billions and take away some of their power to totally control supply?

I agree that the US drilling for oil will affect OPEC. The US expanding its hybrid initiatives will affect OPEC by much, much more. But why would the US drilling for oil affect the speculators?

It's as much about politics as it is true supply/demand. We know that OPEC will react if they think there is even the slightest threat to demand for THEIR oil, or an increase in production from a third party. It's happened in the past, and will happen in the future. If we have nothing to use against OPEC to get them to increase production in this way, then speculators can keep justifying their actions since OPEC has shown an unwillingness of late to do it on their own. If you shake a big stick at the dog, often times they'll go away like you tell them. If you aren't even allowed to use your little stick, it's apparent that you're going to let the dog bite you.

Saudi Arabia has already announced a production increase nearly equal to the projected peak production at ANWR, and it did almost nothing to affect the speculators.

How does this assuage them that OPEC is not still in total control? They didn't do this because of a threat of competition, which is one of the reasons I believe speculators are doing what they are doing (in addition to some playing politics with their billions).

If speculators are really driving the price, then certainly only OPEC has the production capacity to burst the bubble. You claim that OPEC wants to cut prices in half.

I never claimed that. I claimed that they know that artificially high prices are not good. They cause a drop in demand.

I know you hate it when I pick a sentence you wrote and ask you to explain it in English, because so far you've never replied when I've done that. I guess you don't stand behind your posts. But I'll do it one more time.

From the Washington Post:

"Hedge funds and big Wall Street banks are taking advantage of loopholes in federal trading limits to buy massive amounts of oil contracts, according to a growing number of lawmakers and prominent investors, who blame the practice for helping to push oil prices to record highs.

The federal agency that oversees oil trading, the Commodity Futures Trading Commission, has exempted these firms from rules that limit speculative buying, a prerogative traditionally reserved for airlines and trucking companies that need to lock in future fuel costs.

The CFTC has also waived regulations over the past decade on U.S. investors who trade commodities on some overseas markets, freeing those investors to accumulate large quantities of the future oil supply by making purchases on lightly regulated foreign exchanges."

[CreepDogg]

[QUOTE=stupendousman;3680197]Yes. Once speculators are convinced that there will be some competition for supply.[QUOTE]

Why would a speculator care where the total supply is coming from? If our addition to the pot is negligible, why would it matter when OPEC can easily increase supply to those levels anyway. A smart speculator would be looking at worldwide supply, not that from any one provider. As previously stated numerous times, OPEC already has competition.

I didn't say it SHOULD be. I said it COULD be. There are several countries paying well under $3. Again, we are dealing with an artificially inflated price. The thing causing that artificial price is insecurity among speculators that we'll never have any real bargaining leverage in the equation that we'd have if we could just increase production. Increased production on our part would cost OPEC billions.

Name one country, and please offer come evidence that perception of competition is driving speculator's behavior. So far all we have is your opinion.

Actually, I know China pays less ($2.60 I think I saw it quoted). Many countries pay more because they are taxed higher.

Actually, I know you don't read. The Chinese government subsidizes oil for their population.

Energy independence would take total power from OPEC. That's not likely to happen though. RIght now, we've got to settle for whatever we can do to convince OPEC it's in their best interest to do what we want. A real threat of an increase in production and better hybrid technology would do that. Again, we are talking about things that would cost them billions.

Which is exactly why your policy will fail. It will not lead us to energy independence. We will always be at the mercy of OPEC until the supply runs out.

[CreepDogg]

Originally Posted by stupendousman 

I"m taking into account the political realities of the situation, the same as speculators. The DoE is simply doing a traditional supply/demand equation which doesn't take into account the irrationality of artificially set prices. It's like trying to figure out what a business was REALLY worth back during the tech stock boom. One day, the experts would tell us a company was worth millions of dollars, the next KAPUT.

Of course, my idea wouldn't work either if there are a few investors with billions who are playing with the market to intentionally set prices higher for political reasons. We won't know that unless the price stays artificially high even with added output.



China doesn't pay what we do for gas. The Saudis give them a deal. Overall increases in demand are said to be about 1.8% a year, based on the latest numbers I saw and demand just dropped 2.6 percent over the past month.



True, but the dollar is also another thing that has been effected by speculation in ways it hadn't in the past, and that's a funny thing. The two biggest economic hurtles the US face seem to be artificially high or low in ways that would hurt the US. True there are other factors which add to the extreme, but there's a broad consensus amongst many that there is really no justification for the extreme. I do know of one guy who is very powerful, who would gain to see the US economy hurt for political reasons, who has shown a willingness to use his vast fortune to achieve his political desires (unsuccessfully for the most part) and who is very prominent in both currency speculation and oil speculation. I think that's kind of fishy, myself.



Not the singular cause for an increase in prices. The primary cause for them to be at this extreme. Even without the artificial rise, gas prices probably would be higher than a year ago due to OPEC's handling of supply. But even they know that there are factors even them adding to the supply won't cure. They have no control over irrational speculation.

OK - let's forget the price assumption for the moment. Worldwide oil production is about 76M barrels a day. The Energy Information Administration says we would get a peak production from drilling in ANWR, in 2025, of about 876,000 barrels a day. Even at peak production, the US would still need to import 2/3 of its oil.

What speculator, who is looking to make his numbers in the next quarter, is going to dramatically change his behavior looking at a potential 1% increase in supply in 17 years?

Sorry, the cost/benefit just isn't there. Why should we take your speculation and start ripping up land and using up more of a precious natural resource?

[stupendousman]

Originally Posted by CreepDogg 

What speculator, who is looking to make his numbers in the next quarter, is going to dramatically change his behavior looking at a potential 1% increase in supply in 17 years?

Your assumption is that we could increase supply (or show a real threat to do so) in a way that would cost OPEC billions without there being action on their part to compete for those billions.

Is it your assumption that OPEC will sit around and allow that money to slip through their fingers and that competition for those billions will not make price better for consumers? They just increased production after saying they wouldn't after it became clear that we were seriously discussing options for increased drilling in the US after years of regulations that wouldn't previously allowed us to. They increased that much just on word that we were giving it serious thought. The idea that they wouldn't significantly increase more and the price go down if they REALLY thought we'd do it makes no sense. They know once we start down the road to increased production, it's probably not going to stop.

[stupendousman]

Originally Posted by CreepDogg 

Why would a speculator care where the total supply is coming from?

If it's coming from one place, then there is no competition. With no competition comes high prices and lower supply.

If our addition to the pot is negligible, why would it matter when OPEC can easily increase supply to those levels anyway. A smart speculator would be looking at worldwide supply, not that from any one provider. As previously stated numerous times, OPEC already has competition.

..and they'll do what they need to in order to ensure there is no more.

Actually, I know you don't read. The Chinese government subsidizes oil for their population.

Har Har!

OPEC is planning on spending lots of money subsidizing their oil (essentially giving discounts to some). As I've stated, they'll do whatever they have to in order to keep control of supply and keep demand up.

Which is exactly why your policy will fail. It will not lead us to energy independence. We will always be at the mercy of OPEC until the supply runs out.

I"m not saying my policy will given energy independence. Simply lower prices than you would get otherwise.

[CreepDogg]

Originally Posted by stupendousman 

If it's coming from one place, then there is no competition. With no competition comes high prices and lower supply.

Again with the not reading. IT IS NOT COMING FROM ONE PLACE TODAY. What we are discussing is the perceived impact of additional supply from one provider.

Har Har!

OPEC is planning on spending lots of money subsidizing their oil (essentially giving discounts to some). As I've stated, they'll do whatever they have to in order to keep control of supply and keep demand up.

Still haven't seen a country named where gas is $2.

I"m not saying my policy will given energy independence. Simply lower prices than you would get otherwise.

Then your policy is ineffective.

[stupendousman]

Originally Posted by CreepDogg 

Again with the not reading. IT IS NOT COMING FROM ONE PLACE TODAY. What we are discussing is the perceived impact of additional supply from one provider.

Well then, who else is currently working on increasing supply? Where is the increased competition coming from?

Still haven't seen a country named where gas is $2.

Could you quote for me where I said there was a country currently paying $2 for gas? Though, it's apparently .80 in Saudia Arabia.

Then your policy is ineffective.

Your opinion is noted.

[CreepDogg]

Originally Posted by stupendousman 

Well then, who else is currently working on increasing supply? Where is the increased competition coming from?

Dunno. Who has the potential to increase supply in way where the benefits exceed the costs?

Could you quote for me where I said there was a country currently paying $2 for gas? Though, it's apparently .80 in Saudia Arabia.

You said the price could go to $2. So what we'd look for is evidence that the market would sustain that kind of price somewhere. It doesn't exist.

Again, without evidence, your opinion has about as much value as my dirty socks.

Your opinion is noted.

Good - to clarify - any policy that does not lead to energy independence is ineffective. It would bring us right back to the place we are now, and worse.

[peeb]

Originally Posted by CreepDogg 

Good - to clarify - any policy that does not lead to energy independence is ineffective. It would bring us right back to the place we are now, and worse.

Any policy that just postpones the date when we switch away from carbon as our primary fuel source is bad. All you're doing is letting others build the post-carbon economy. Bring on $20 gas.

[CreepDogg]

Originally Posted by peeb 

Bring on $20 gas.

I'm not there (although am prepared if it happens). I would support a policy that keeps carbon flowing as we need it while building new infrastructure and technology. Obviously that's a big challenge and history hasn't proven that those can happen simultaneously yet. But there are also a lot of things we haven't tried.

[peeb]

We are not going to get serious about the new infrastructure until carbon is unaffordable as a daily fuel. Unfortunately, that's capitalism, and without leadership from the government high gas prices are the only viable solution. I'd love it if you could come up with something that would replace gas at the same time as keeping it at $3, but I'm skeptical.

[CreepDogg]

Originally Posted by peeb 

We are not going to get serious about the new infrastructure until carbon is unaffordable as a daily fuel.

That's not entirely true. What's true is that we are not going to get serious until alternatives are neutral to or cheaper than carbon. Again - a major challenge, but expands the game a bit.

Saying that we won't do anything until carbon is unaffordable suggests that all alternatives are unaffordable. What we need is the right incentives to spur investment in alternatives. So far carbon has been cheap enough to deter any incentive to invest, and obviously there have been no external prompts to change the incentives.

[peeb]

Originally Posted by CreepDogg 

That's not entirely true. What's true is that we are not going to get serious until alternatives are neutral to or cheaper than carbon. Again - a major challenge, but expands the game a bit.

Well, I don't disagree, but that seems like just a different way of saying the same thing. Since large scale adoption is what will drive price reduction in post-carbon fuels, it's a chicken and egg problem.

Originally Posted by CreepDogg 

Saying that we won't do anything until carbon is unaffordable suggests that all alternatives are unaffordable.

Not quite - I think they are affordable right now, it's just that carbon is still subsidized enough to make it cheaper at the pump. That's preventing large scale adoption.

Originally Posted by CreepDogg 

What we need is the right incentives to spur investment in alternatives. So far carbon has been cheap enough to deter any incentive to invest, and obviously there have been no external prompts to change the incentives.

Yes Sir. Fully agree.

[Uncle Skeleton]

I thought that the bottleneck for US-source gasoline was refineries, not crude. If true, this seems to make this entire thread moot, and we would need to increase domestic refining in order to have any impact on the domestic supply directly. Can anyone confirm or deny?

[peeb]

The whole concept of 'domestic supply' is a little naive, frankly, oil is a commodity traded on global markets - the idea that US oil companies have US consumer interests at heart any more than OPEC does is frankly odd.

[kido331]

US oil companies pay US workers and US taxes. OPEC does not.

[peeb]

Originally Posted by kido331 

US oil companies pay US workers and US taxes. OPEC does not.

That's really not particularly true. While US oil companies do employ some US employees, so do companies based in OPEC countries. While US companies pay taxes on their US revenues, so do OPEC companies. US corporations are global, and operate largely out of the reach of US law. Even making the assumption that they do provide employment and pay more US tax than non-US companies though, so what? Why do you think that will lead them to take the interests of US oil buyers into consideration?

[Uncle Skeleton]

Originally Posted by peeb 

The whole concept of 'domestic supply' is a little naive, frankly, oil is a commodity traded on global markets - the idea that US oil companies have US consumer interests at heart any more than OPEC does is frankly odd.

But the US government potentially could take control over US oil companies, much more so than they could foreign oil companies, if the nation's security depended on it (read: oil embargo). That's the only way that what stupendousman's saying makes sense to me. Speculators could see a difference between domestic and foreign products, in that domestic products could be influenced to serve our country's immediate needs. But not if the product depends on foreign refineries no matter how much we drill.

[peeb]

Originally Posted by Uncle Skeleton 

But the US government potentially could take control over US oil companies, much more so than they could foreign oil companies,

So in order to keep oil cheap you want to nationalize US oil companies? Boy oh boy.

Originally Posted by Uncle Skeleton 

if the nation's security depended on it (read: oil embargo).

You know, I find it funny that when people talk about milage minimums and conservation, that's communism and infringing on people's rights, but when you want wholesale nationalization of energy companies, that's reasonable?
The way to make the US able to cope with an oil embargo (the only way) is to move to a post-carbon economy asap and increase efficiency dramatically. The US has nowhere near enough oil to be self sufficient.

Originally Posted by Uncle Skeleton 

That's the only way that what stupendousman's saying makes sense to me. Speculators could see a difference between domestic and foreign products, in that domestic products could be influenced to serve our country's immediate needs. But not if the product depends on foreign refineries no matter how much we drill.

Even if you achieve the self sufficiency in oil goal (which you couldn't) what about manufacturing? You think the US should be self sufficient in that, too? Any scenario which had an effective oil embargo could just as easily involve a Chinese manufacturing embargo. Then what?

[Uncle Skeleton]

Originally Posted by peeb 

So in order to keep oil cheap you want to nationalize US oil companies?

No I don't want it, but it is conceivable. The existence of the possibility could give the US more options, in a worst case scenario, and makes us a little less than mere pawns to OPEC's designs. The speculators could see this and it could change their behavior, and OPEC can see this and it can change their behavior, and speculators can see what OPEC might do, and that could change their behavior even more.

But none of that matters unless we can make more actual gasoline on our own, not just crude oil.

[peeb]

Originally Posted by Uncle Skeleton 

No I don't want it, but it is conceivable. The existence of the possibility could give the US more options, in a worst case scenario, and makes us a little less than mere pawns to OPEC's designs. The speculators could see this and it could change their behavior, and OPEC can see this and it can change their behavior, and speculators can see what OPEC might do, and that could change their behavior even more.

But none of that matters unless we can make more actual gasoline on our own, not just crude oil.

But the reality is that you can't make enough gasoline to solve the problem, and even if you could, you're only buying a few more years. Since we all know that the end-game is a post-carbon economy, why would you continue to prop up this habit and refuse to consider the only practical common sense strategy, which is to move away from gasoline entirely?

[CreepDogg]

Originally Posted by Uncle Skeleton 

No I don't want it, but it is conceivable. The existence of the possibility could give the US more options, in a worst case scenario, and makes us a little less than mere pawns to OPEC's designs. The speculators could see this and it could change their behavior, and OPEC can see this and it can change their behavior, and speculators can see what OPEC might do, and that could change their behavior even more.

But none of that matters unless we can make more actual gasoline on our own, not just crude oil.

How so? We can't even make enough crude to support our consumption (not even worrying about refining). How would it help that if oil companies are nationalized? We'd still have to go outside to get oil to support current consumption, no matter how much and where we drill.

If we were limiting supply to crude produced in the US, refining capacity would not be a problem.

The path to energy independence does not end in a pool of oil.

[Wiskedjak]

Originally Posted by Uncle Skeleton 

The existence of the possibility could give the US more options, in a worst case scenario, and makes us a little less than mere pawns to OPEC's designs.

Ironically, OPEC originated as a pawn in the US's designs to collapse the Soviet Union.

[Uncle Skeleton]

Originally Posted by peeb 

But the reality is that you can't make enough gasoline to solve the problem, and even if you could, you're only buying a few more years.

This isn't about solving the problem, this is about dealing with day-to-day "emergencies."

Since we all know that the end-game is a post-carbon economy, why would you continue to prop up this habit and refuse to consider the only practical common sense strategy, which is to move away from gasoline entirely?

You're thinking too long term. They're thinking too short term. The balance is somewhere in the middle. Your position of ignoring all current technologies depending on various far-fetched pipe dreams, is just as hopeless as their position of ignoring potential diamonds in the rough in favor of the flawed yet working status quo.

Maybe it will help you to think of society as an evolving creature: not only must it be viable today and also viable in its future more-evolved form, but it must also be viable at every step along that progression. If it has gills today and will have lungs tomorrow, it can't lose its gills before its lungs are ready to support it. No matter how less efficient and sustainable gills are than lungs, you need to keep those gills working as best as possible during that period where the lungs aren't ready to support the whole frog yet. If gas went to $20 tomorrow like you advocate, you wouldn't get a frog with lungs, you'd get a dead frog.

Originally Posted by CreepDogg 

How so? We can't even make enough crude to support our consumption (not even worrying about refining). How would it help that if oil companies are nationalized? We'd still have to go outside to get oil to support current consumption, no matter how much and where we drill.

You're thinking too much about happy suburbia getting along the way it is. Happy suburbia is perched on a delicate(ish) equilibrium called the global economy. Some day it's going to come crashing down (maybe), and oil prices won't be the difference between staying home for vacation vs going to Hawaii, it will be the difference between putting food on the table vs going hungry. That's when you really cash in if you're invested in oil, and that's what's got the speculators' panties in a twist (if you buy stupendousman's story). Basically, domestic gasoline doesn't let us be self-sufficient during the good times, but it would let us keep our heads above water during the worst times. Or at least more of us could than otherwise.

If we were limiting supply to crude produced in the US, refining capacity would not be a problem.

That's what I'm asking. Would it? Got a link?

The path to energy independence does not end in a pool of oil.

No, but it might be a stepping stone.

Originally Posted by Wiskedjak 

Ironically, OPEC originated as a pawn in the US's designs to collapse the Soviet Union.

When was the last time we were up against someone who wasn't our own ironic creation?

[peeb]

Originally Posted by Uncle Skeleton 

This isn't about solving the problem, this is about dealing with day-to-day "emergencies."
You're thinking too long term. They're thinking too short term. The balance is somewhere in the middle.

We need to solve the underlying problem. The 'gray fallacy' is just that, a fallacy. The longer we put off solving the problem, the more expensive it gets.

Originally Posted by Uncle Skeleton 

Your position of ignoring all current technologies depending on various far-fetched pipe dreams

Whatever makes you think that's what I'm doing? Conservation, efficiency, solar, wind, biofuels etc are all current technologies that work. They are not pipe dreams, and all that is needed to transition is political will to stop propping up a dying technology.

Originally Posted by Uncle Skeleton 

If gas went to $20 tomorrow like you advocate, you wouldn't get a frog with lungs, you'd get a dead frog.

If politicians had the balls to make sure gas went up by a predictable 10c a month for the next 10 years we would have a rapid, relatively pain-free transition. Sure, we'd need to help certain groups make it through, but we're doing that anyway.

Originally Posted by Uncle Skeleton 

When was the last time we were up against someone who wasn't our own ironic creation?

It's like a Batman movie.

[Uncle Skeleton]

Originally Posted by peeb 

Conservation, efficiency, solar, wind, biofuels etc are all current technologies that work. They are not pipe dreams, and all that is needed to transition is political will to stop propping up a dying technology.

None of those, either individually or in combination, work well enough that they could be scaled up to meet all our energy needs.

If politicians had the balls to make sure gas went up by a predictable 10c a month for the next 10 years we would have a rapid, relatively pain-free transition.

That claim is easily as speculative as stupendousman's claim that simply expanding US oil drilling would send just the right message to speculators and bring the price of oil down. What if your plan causes a panic, a run on oil, revolution and anarchy? It could make things worse instead of better.

[OldManMac]

Originally Posted by Uncle Skeleton 

None of those, either individually or in combination, work well enough that they could be scaled up to meet all our energy needs.



That claim is easily as speculative as stupendousman's claim that simply expanding US oil drilling would send just the right message to speculators and bring the price of oil down. What if your plan causes a panic, a run on oil, revolution and anarchy? It could make things worse instead of better.

I doubt anyone is claiming that the alternatives would meet all our needs, but they would certainly help get us started on weaning ourselves off oil that comes from people who just pretend to like us.

[Uncle Skeleton]

Originally Posted by OldManMac 

I doubt anyone is claiming that the alternatives would meet all our needs, but they would certainly help get us started on weaning ourselves off oil that comes from people who just pretend to like us.

Which means that for the near future we are still dependent on oil, and the currently inflated price of it is a serious problem. Research and development of these alternatives is going to depend on a healthy economy just as much as Joe Gaspump is.

[stupendousman]

Originally Posted by CreepDogg 

Dunno.

Exactly.

Good - to clarify - any policy that does not lead to energy independence is ineffective. It would bring us right back to the place we are now, and worse.

That's why my policy would work. We would implement plans to increase production (which would put a kick in the pants of OPEC - one of the only thing that will get them producing like they can - and speculation) for the short term, and increase investment in things like hybrid technology for the long term. You aren't going to get energy independence any time soon, I'm afraid. The technology simply isn't there yet to do away with oil entirely. We need to find ways to ensure production meets supply and the markets don't over-react until then.

Originally Posted by Uncle Skeleton 

You're thinking too long term. They're thinking too short term. The balance is somewhere in the middle. Your position of ignoring all current technologies depending on various far-fetched pipe dreams, is just as hopeless as their position of ignoring potential diamonds in the rough in favor of the flawed yet working status quo.

Maybe it will help you to think of society as an evolving creature: not only must it be viable today and also viable in its future more-evolved form, but it must also be viable at every step along that progression. If it has gills today and will have lungs tomorrow, it can't lose its gills before its lungs are ready to support it. No matter how less efficient and sustainable gills are than lungs, you need to keep those gills working as best as possible during that period where the lungs aren't ready to support the whole frog yet. If gas went to $20 tomorrow like you advocate, you wouldn't get a frog with lungs, you'd get a dead frog.

Well said.

[CreepDogg]

Originally Posted by stupendousman 

Exactly.

So we're resorting to taking statements out of context? How very swift-boat of you...

That's why my policy would work. We would implement plans to increase production (which would put a kick in the pants of OPEC - one of the only thing that will get them producing like they can - and speculation) for the short term, and increase investment in things like hybrid technology for the long term. You aren't going to get energy independence any time soon, I'm afraid. The technology simply isn't there yet to do away with oil entirely. We need to find ways to ensure production meets supply and the markets don't over-react until then..

What evidence do you have that supersubsidized cheap oil and investment in alternatives would coexist? That has never happened. Investment in alternatives will only happen if said alternatives appear more attractive, at least on a run-rate basis, economically. We need either unsubsidized oil or communism-level subsidies on alternatives to make that work.

We're not ready to send oil consumption to zero. The technology is there, however, to significantly reduce it if we have the political will.

Implementation of your policy will bring us full-circle, right back to where we are now and beyond. It will not work.

[peeb]

Originally Posted by Uncle Skeleton 

None of those, either individually or in combination, work well enough that they could be scaled up to meet all our energy needs.

As long as efficiency is part of the package, they could certainly meet the majority of our energy needs.

Originally Posted by Uncle Skeleton 

That claim is easily as speculative as stupendousman's claim...

Nonsense. A predictable increase in oil price over a 10 year period would produce pretty predictable results - a massive investment in alternatives.

Originally Posted by Uncle Skeleton 

What if your plan causes a panic, a run on oil, revolution and anarchy? It could make things worse instead of better.

I hardly think that the things you mention would be worse than what we have right now, but to be serious, I don't think that panic is likely if it is planned over a long enough period of time. Look at the case of CFCs - there was no panic fridge buying. When people have certainty over what will happen they don't panic, they invest.

[peeb]

Originally Posted by Uncle Skeleton 

Which means that for the near future we are still dependent on oil, and the currently inflated price of it is a serious problem. Research and development of these alternatives is going to depend on a healthy economy just as much as Joe Gaspump is.

Nonsense. We will be dependent on oil until we stop subsidizing it and make a decision to switch to alternatives. We won't do that while we keep it artificially cheap. We also won't count the full cost of inefficiency while we continue to subsidize it.

[stupendousman]

Originally Posted by CreepDogg 

So we're resorting to taking statements out of context? How very swift-boat of you...

You said that there were others besides the US or OPEC which were going to provide supply for increased demand. I disagreed. I asked you who. You said "dunno" which helps prove my point. OPEC at this time is seen as the single provider of increased supply. They will only provide that increase if they see added competition and/or decreased demand. Speculators have no reason to believe that there will be an increase in competition IF THERE IS ZERO INCREASE IN COMPETITION and they can see there is no political will for increasing supply.

What evidence do you have that supersubsidized cheap oil and investment in alternatives would coexist? That has never happened.

An increase in production in order to encourage others to do the same isn't "supersubsidized cheap oil" and we currently do invest in alternatives. We've invested in alternatives for years - even before the current artificial run-up on price. How did current hybrid technology come about? The current crisis will only serve to better illustrate why we have to continue and increase research.

We're not ready to send oil consumption to zero. The technology is there, however, to significantly reduce it if we have the political will.

We are already significantly reducing it. Just this month it was apparently reduced 2.6 percent. Hybrid cars are more and more popular. Technology is just not yet at a point where it can replace oil as efficiently that is appealing to the marketplace.

Implementation of your policy will bring us full-circle, right back to where we are now and beyond. It will not work.

Not at all. If we increase production now for the short term, it will cause reduction in price (OPEC will react), and as long as the price is high and other alternatives look better and better demand will go down. Either way, you get lower prices until the technology is there to replace oil with something as efficient. You can't drill your way out, nor can you conserve your way out.

[CreepDogg]

Originally Posted by stupendousman 

You said that there were others besides the US or OPEC which were going to provide supply for increased demand. I disagreed. I asked you who. You said "dunno" which helps prove my point. OPEC at this time is seen as the single provider of increased supply. They will only provide that increase if they see added competition and/or decreased demand. Speculators have no reason to believe that there will be an increase in competition IF THERE IS ZERO INCREASE IN COMPETITION and they can see there is no political will for increasing supply.

Dunno if it's intentional or not - but yes, you took my statement out of context. I said there were others besides the US and OPEC who are significant suppliers of oil. Canada, for example. Competition is important from an overall supply standpoint, not from a marginal supply standpoint. A marginal increase means nothing to the competitive landscape if it's not a significant portion of the overall supply. The US and Canada, for example, still supply lots of oil every day and are free to sell their supply at a lower price than OPEC.

An increase in production in order to encourage others to do the same isn't "supersubsidized cheap oil" and we currently do invest in alternatives.

How does that increase in production come about? The government gives public land to the oil companies to drill on for a nominal fee. That's a subsidy. 1/300,000,000th of that land is mine - where's my cut? I don't get one because the government is giving it to the oil companies to produce cheap oil. So if your plan works (which it won't), the benefit I'd get is cheaper gas. Sounds like a bad deal to me.

We've invested in alternatives for years - even before the current artificial run-up on price. How did current hybrid technology come about? The current crisis will only serve to better illustrate why we have to continue and increase research.

Investments for years, and yet alternatives are still not viewed as 'ready'. And carbon consumption still dwarfs consumption through alternatives. Seems to me there hasn't been enough incentive to create effective substitutes. Look at the total picture of results, not just the fact that 'we have hybrids'.

We are already significantly reducing it. Just this month it was apparently reduced 2.6 percent. Hybrid cars are more and more popular. Technology is just not yet at a point where it can replace oil as efficiently that is appealing to the marketplace.

And what might have caused that reduction in the quantity demanded? What might happen to it if the price goes down significantly? Say it with me now...

Not at all. If we increase production now for the short term, it will cause reduction in price (OPEC will react), and as long as the price is high and other alternatives look better and better demand will go down. Either way, you get lower prices until the technology is there to replace oil with something as efficient. You can't drill your way out, nor can you conserve your way out.

Do you see the contradiction in the bold statement above? Let's review: cheap oil = alternatives don't look attractive = inadequate investment and development.

[stupendousman]

Originally Posted by CreepDogg 

Dunno if it's intentional or not - but yes, you took my statement out of context. I said there were others besides the US and OPEC who are significant suppliers of oil. Canada, for example.

The debate isn't about what CURRENT output is. It's about where additional output is going to come from in the future. Right now, there is no real competition for that additional output other than OPEC. It's the lack of competition for increased output that makes future prices look ominous, and therefore excessive speculation.

How does that increase in production come about? The government gives public land to the oil companies to drill on for a nominal fee. That's a subsidy.

Nominal? How much are they getting for it now? How much will they charge if we drill offshore?

1/300,000,000th of that land is mine - where's my cut?

Part will go into the treasury when the fees are paid. Part you will see at the pump. Right now, you aren't getting a dime from that land.

Investments for years, and yet alternatives are still not viewed as 'ready'.

Exactly. That's why you're not going to be able to rely on alternatives for the short term.

And carbon consumption still dwarfs consumption through alternatives. Seems to me there hasn't been enough incentive to create effective substitutes. Look at the total picture of results, not just the fact that 'we have hybrids'.

I agree. We need to do more in that regard. My plan would require both increased production and increased investment in alternatives. We could take the money we make off of drilling fees and put it into incentives and the result of those incentives is where you'll see the payoff for the use of your 1/300,000,000th of th land.

And what might have caused that reduction in the quantity demanded? What might happen to it if the price goes down significantly? Say it with me now...

Has the price gone down significantly? No. Why? Because we aren't dealing with something just from a basic supply/demand equation. Why would speculators still keep prices high if demand has gone down and output up? Oh..yeah, they don't think that will last long because OPEC has sole control of increases in production. They'll only increase enough to get demand back up and not enough to lower prices long term. Only threat of competition has been an effective tool against them in the past to keep production high.

Do you see the contradiction in the bold statement above? Let's review: cheap oil = alternatives don't look attractive = inadequate investment and development.

That is how it happened in the past, before we ever saw a doubling of prices in a year. I think we are dealing with a new reality now. I think most people understand the scenario at this point.

[peeb]

Originally Posted by CreepDogg 

Investments for years, and yet alternatives are still not viewed as 'ready'. And carbon consumption still dwarfs consumption through alternatives. Seems to me there hasn't been enough incentive to create effective substitutes.

Alternatives are totally ready. We just need to stop subsidizing carbon.

[CreepDogg]

Originally Posted by stupendousman 

The debate isn't about what CURRENT output is. It's about where additional output is going to come from in the future. Right now, there is no real competition for that additional output other than OPEC. It's the lack of competition for increased output that makes future prices look ominous, and therefore excessive speculation.

No - the debate is about what effect marginal supply would have on prices. The best estimate I've seen is $0.75/barrel. You haven't offered a better one. In a worldwide market, it doesn't matter where the additional supply comes from. Again - competition is on the TOTAL output, not marginal output.

Nominal? How much are they getting for it now? How much will they charge if we drill offshore?

A very quick google search shows a figure of $2.4 billion for 5 years. Being generous, that's about the equivalent of the oil companies giving you $10,000 to come and drill in your back yard and keep all the profits for 5 years. Sound like a good deal?

EDIT: Turns out I was REALLY generous. Actual math would be $2.4B/110M households = $21. Yes, $21. So let's be (a little less) generous and say $100.

Part will go into the treasury when the fees are paid. Part you will see at the pump. Right now, you aren't getting a dime from that land.

Nope, but I'm watching its value rise as the price of oil rises. I wouldn't want to sell/lease it off with the intent of depressing prices and destroying its value. If/when it's time, I want TOP DOLLAR for the land and what comes out of it.

Let's look at what goes in the treasury - $2.4 billion over 5 years. That's $500 million a year on a $2.5 TRILLION dollar annual budget. Drop in the bucket. Where's the benefit?

Again - best figure quoted at the pump is $0.02-$0.04. Got a better figure?

Exactly. That's why you're not going to be able to rely on alternatives for the short term.

Where did I say we would?

I agree. We need to do more in that regard. My plan would require both increased production and increased investment in alternatives. We could take the money we make off of drilling fees and put it into incentives and the result of those incentives is where you'll see the payoff for the use of your 1/300,000,000th of th land.

Which is fine if the incentives are adequate. This is the point - THIS is a bad deal. The oil companies get billions off the profits from drilling, and we get $500M a year. I hope I can make a business deal with you someday - I could take you to the cleaners and be rich!

Has the price gone down significantly? No. Why? Because we aren't dealing with something just from a basic supply/demand equation. Why would speculators still keep prices high if demand has gone down and output up? Oh..yeah, they don't think that will last long because OPEC has sole control of increases in production. They'll only increase enough to get demand back up and not enough to lower prices long term. Only threat of competition has been an effective tool against them in the past to keep production high.

Why would the price go down? Price went up, quantity demanded went down along the demand curve. That's how it works. If you've taken Econ 101 as you claim you have, please take out your textbook and review it.

That is how it happened in the past, before we ever saw a doubling of prices in a year. I think we are dealing with a new reality now. I think most people understand the scenario at this point.

So basically what you're claiming is the fundamentals of economics no longer apply.

[Uncle Skeleton]

Originally Posted by peeb 

As long as efficiency is part of the package, they could certainly meet the majority of our energy needs.

Pure opinion. Show me manufacturing infrastructure, show me raw materials abundance, show me one electric car that costs less than $80,000 and holds a family-size grocery load and has a range of 100 miles or more (1/4 the range of the status quo). These are the things we need to replace dino-fuels. If we couldn't use dino-fuels, our society simply would not exist. Not as the alternatives are with today's technology at least.

Nonsense. A predictable increase in oil price over a 10 year period would produce pretty predictable results - a massive investment in alternatives.

You hope. I can do that too, look: "Nonsense. A predictable increase in oil price over a 10 year period would produce pretty predictable results: the American people would reject it and overthrow the sitting government."

Just because giving up fossil fuels is desirable doesn't mean it is possible, with today's technology. You'd like to just cross your fingers and go for it, never mind that you're gambling the lives of all the country's poorest, who will suffer the most from it. Let them eat cake $100,000 Tesla roadsters and $80,000 solar arrays!

but to be serious, I don't think that panic is likely if it is planned over a long enough period of time. Look at the case of CFCs - there was no panic fridge buying. When people have certainty over what will happen they don't panic, they invest.

Sure, just give the people a death sentence and spread it out over a long enough time and they'll eat it right up! I hardly think CFCs are analogous, you didn't even have to turn in your non-compliant fridge did you? People buy gas directly and consume it, but they bought CFCs indirectly, and it lasted the lifetime of the appliance. And even if that wasn't true, the outlay for a car is an order of magnitude bigger than a fridge.

[peeb]

Originally Posted by Uncle Skeleton 

Show me manufacturing infrastructure, show me raw materials abundance, show me one electric car that costs less than $80,000 and holds a family-size grocery load and has a range of 100 miles or more (1/4 the range of the status quo). These are the things we need to replace dino-fuels. If we couldn't use dino-fuels, our society simply would not exist. Not as the alternatives are with today's technology at least.

Well, I like that you responded to a completely different point than the one I made. I suggested increasing the cost of fuel by ten cents a month over the course of 10 years - you go off on an unrelated rant.

Originally Posted by Uncle Skeleton 

"Nonsense. A predictable increase in oil price over a 10 year period would produce pretty predictable results: the American people would reject it and overthrow the sitting government."

Well the difference is that what I am suggesting is how economics has always worked in the past, whereas your idea is total nonsense, but apart from that... Erm, no. It's total nonsense.

Originally Posted by Uncle Skeleton 

Just because giving up fossil fuels is desirable doesn't mean it is possible, with today's technology. You'd like to just cross your fingers and go for it, never mind that you're gambling the lives of all the country's poorest, who will suffer the most from it. Let them eat cake 100,000 Tesla roadsters and 80,000 solar arrays!

OK, now we're getting there. You want to subsidize fuel because you want to help the poor. Thankfully economics has already killed that idea - if you want to subsidize the poor, given them money, don't subsidize products.

Originally Posted by Uncle Skeleton 

Sure, just give the people a death sentence and spread it out over a long enough time and they'll eat it right up!

How is switching over to a non-carbon economy a 'death sentence'? Oh, right, because in your Orwell World black means white and death sentence means 'only way to succeed'. You know perfectly well that doing this is essential, and that the sooner we do it the easier it will be. The only 'death sentence' is doing nothing and propping up business as usual.

[Uncle Skeleton]

Originally Posted by peeb 

Originally Posted by Uncle Skeleton

Originally Posted by peeb

Originally Posted by Uncle Skeleton

Originally Posted by peeb

Conservation, efficiency, solar, wind, biofuels etc are all current technologies that work. They are not pipe dreams, and all that is needed to transition is political will to stop propping up a dying technology.

None of those, either individually or in combination, work well enough that they could be scaled up to meet all our energy needs.

As long as efficiency is part of the package, they could certainly meet the majority of our energy needs.

Pure opinion. Show me manufacturing infrastructure, show me raw materials abundance, show me one electric car that costs less than $80,000 and holds a family-size grocery load and has a range of 100 miles or more (1/4 the range of the status quo). These are the things we need to replace dino-fuels. If we couldn't use dino-fuels, our society simply would not exist. Not as the alternatives are with today's technology at least.

Well, I like that you responded to a completely different point than the one I made.

Nope.

Well the difference is that what I am suggesting is how economics has always worked in the past

When? CFCs weren't taxed away, they were prohibited. Try again?

OK, now we're getting there. You want to subsidize fuel because you want to help the poor.

Nope. You want to add fees to the price of oil. That is not reversing a "subsidy," it's simply adding a fee. You can keep saying it hoping to convince people, the same way that Bush kept talking up the Iraq-9/11 "link" until many Americans became convinced, but that doesn't make either of them correct.

How is switching over to a non-carbon economy a 'death sentence'?

Because a non-carbon economy is currently science fiction. There is no functional non-carbon economy to switch to. It would be out of the frying pan, into the fire. Leap onwards, brother. Don't be surprised though if no one follows you.

[peeb]

Originally Posted by Uncle Skeleton 

Nope.

Sublime. Squirm all you want, I'm sorry I'm not the straw-man you'd like.

Originally Posted by Uncle Skeleton 

When? CFCs weren't taxed away, they were prohibited.

They were prohibited because they were so dangerous to the long term viability of the planet - the same is true of carbon. We could ban it if you like, but gradually and predictably increasing the price is a more effective and humane way to do it.

We've been through this before, and you've been proved wrong. Carbon fuels receive massive subsidy, you know perfectly well that that is true. You're making a fool of yourself trying to pretend that that is not true.

Originally Posted by Uncle Skeleton 

Because a non-carbon economy is currently science fiction. There is no functional non-carbon economy to switch to.

So there are no solar plants, no hybrids, no wind farms, no biofuel - no functional non-carbon economy at all? Now you're just in the realm of raving lunacy. Of course there is a non-carbon economy.

[Uncle Skeleton]

Hybrids are not "non-carbon." Biofuel is not non-carbon (they put 80% as much carbon energy into them as they get out, on a good day). Solar plants and wind farms are not advanced enough to be able to replace oil and coal. They're niche. They work in Arizona but not in Iowa. In transportation they wouldn't even replace 0.1% of oil, since there is no working all-electric car that is attainable to anyone below the richest 0.1% of the population.

If you want to help the non-carbon economy, do it by developing the technology, or donating to its development. Simply sabotaging the competition won't be enough. BTW: how much did your solar array cost? You do have one, don't you, because otherwise you're quite the hypocrite.

This is all your pet project though, it's off-topic. On topic: can anyone respond to my question of whether crude oil is not the limiting factor in domestic fuel?

[peeb]

Originally Posted by Uncle Skeleton 

Hybrids are not "non-carbon." Biofuel is not non-carbon (they put 80% as much carbon energy into them as they get out, on a good day).

While you are technically correct, they have elements which are non-carbon, which was my point. They represent part of the non-carbon economy. When I say that bio-fuels are non-carbon, of course what I mean is that they are carbon neutral. Your 80% figure is correct only if you have massive subsidies for inappropriate biofuel crops. But I digress.

Originally Posted by Uncle Skeleton 

Solar plants and wind farms are not advanced enough to be able to replace oil and coal.

Nonsense. Is that what the 'clean coal coalition' or whatever they're calling themselves now told you? Well, I guess all the folks who used to work for big tobacco had to end up somewhere.
You're blowing smoke, trying to wring a couple more years of Corporate Welfare for Big Oil out of the situation.

[CreepDogg]

Originally Posted by Uncle Skeleton 

On topic: can anyone respond to my question of whether crude oil is not the limiting factor in domestic fuel?

US Domestic Crude Production: 5,102,000 barrels/day

US Refining Capacity: 17,443,492 barrels/day

The timing of those two may be off a bit but gives an idea of the order of magnitude.

[CreepDogg]

Oh, and just to illustrate more of the picture, US consumption is about 21,000,000 barrels/day.

[CreepDogg]

Originally Posted by peeb 

You're blowing smoke, trying to wring a couple more years of Corporate Welfare for Big Oil out of the situation.

Wouldn't that be 'Socialized Oil'?