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Obama Strikes Back?!
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OAW
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Jun 23, 2011, 05:20 PM
 
Thursday’s surprise release of 60 million barrels of crude reserves is not about keeping oil consumers well supplied. It’s about chasing oil speculators out of the market.

And it seems to be working.


“This is the straw that breaks the camel’s back — this is the tipping point,” said Fadel Gheit, oil analyst for Oppenheimer, a leading investment bank. “The speculators will have to change their positions. Instead of betting on higher prices they have to bet on lower prices."

In a coordinated move, U.S. and European energy officials announced they would release 60 million barrels of oil from strategic stockpiles over the next month after OPEC failed this month to agree on an increase in production. Those extra OPEC barrels were supposed to replace crude output lost when civil war in Libya shut down production.

"This supply disruption has been underway for some time and its effect has become more pronounced as it has continued," said the International Energy Agency in a statement. It said expectations were that Libyan production would remain off the market for the rest of 2011.
"Greater tightness in the oil market threatens to undermine the fragile global economic recovery," it said.

But independent analysts said the move was aimed more at bursting the speculative bubble rather than substantially improving market supply. Lowering oil prices further would help boost the weak U.S. economy at a time when both the Fed’s monetary stimulus and the government’s spending stimulus are winding down.

Based on the market's immediate response, the plan seems to be working.

News of the oil release sent gasoline tumbling 14 cents a gallon in the futures markets.
That’s the equivalent of about $56 million a day in savings at the gas pump — or about $20 billion a year, according to Peter Beutel, and oil analyst a Cameron Hanover. In New York trading crude oil was down $4.01 to $91.40 a barrel, more than 20 percent below peak levels of $114 hit in early May.

“It’s a shot in the arm for the economy,” said Beutel. “It acts like a massive tax rebate to the American consumer.”
Surprise oil release targets speculators - Business - Going Green - msnbc.com

The Obama Administration in coordination with other major western powers have just cost those investors who were simply betting on a contango in the oil futures market a nice chunk of change. As opposed to those investors who were using futures contracts to hedge against their physical positions in the oil market who will essentially be unaffected. I imagine this may not go over very well with certain small, but powerful monied interests. However, it will certainly provide a boost to the overall economy that recently hit a speed bump in the last month or so due to oil prices being way higher than market fundamentals would dictate.

OTOH, the Strategic Oil Reserve is only supposed to be tapped for major disruptions in the supply of oil. While the conflict in Libya has done just that, that supply disruption is more of a European issue since that is where Libyan oil goes for the most part. The US buys very little oil from Libya. So I'm admittedly I'm a little concerned about the precedent this sets.

Overall I think this is probably a good move given the fragility of the US economic recovery. Especially if the reserve is restocked in relatively short order. Thoughts?

OAW
     
turtle777
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Jun 23, 2011, 05:52 PM
 
F*cking idiots. Obama and Ben, and the whole Washington gang.

Do they really believe that releasing the Strategic Reserves will have a LONG-TIME effect ?
This temporary downward price relief will last for a few weeks or months. That's it.

The oil market is in serious trouble, because demand grows much faster than supply. Demand has been growing every year, conventional (i.e. cheap) oil production has plateaued since 2004.
Sacrificing the Strategic Oil Reserves to relief the upward price pressure is a completely moronic move, born out of an administration that has the economic intelligence of an amoeba.

If they want to kill speculation, how about stopping to bail out the TBTF banks, for starters.

-t
     
BadKosh
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Jun 24, 2011, 10:34 AM
 
1 and a half day of oil.
Big deal.

This is just as lame and poorly thought out as the rest of Owe-Bamas' BS. How about DRILLING? The faster we get on it the faster we get relief. Standing around doing nothing(Democrat plan) isn't working.
     
OAW  (op)
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Jun 24, 2011, 12:06 PM
 
^^^^^

I know you guys want to believe this .... and it sounds plausible on the surface. Unfortunately, it's still wrong.

1. Any new domestic drilling won't start impacting the global oil supply for at least a decade.

2. The price of oil is set by a global market. So even if the US drilled for more oil domestically it is still bought/sold globally. In many instances we have oil that is more suited to be refined in other countries. And vice versa. Moreover, the overall increase in global demand for oil ... driven primarily by the rise of China and India .... will keep the price of oil relatively high for the foreseeable future.

3. US refineries are operating at near total capacity. And a new one hasn't been built in three decades. Blame that on the NIMBY phenomenon. The bottom line here is that even with more domestic crude oil production we simply don't have the capacity to refine it into useful products. So we'll continue to import it instead.

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Jun 24, 2011, 12:06 PM
 
Selling $6b in oil to get $80m ($56m/day * 1.5 days) in savings at the pump?

Let me know how long that works out for you.
     
turtle777
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Jun 24, 2011, 12:57 PM
 
Originally Posted by OAW View Post
^^^^^

I know you guys want to believe this .... and it sounds plausible on the surface. Unfortunately, it's still wrong.

1. Any new domestic drilling won't start impacting the global oil supply for at least a decade.

2. The price of oil is set by a global market. So even if the US drilled for more oil domestically it is still bought/sold globally. In many instances we have oil that is more suited to be refined in other countries. And vice versa. Moreover, the overall increase in global demand for oil ... driven primarily by the rise of China and India .... will keep the price of oil relatively high for the foreseeable future.

3. US refineries are operating at near total capacity. And a new one hasn't been built in three decades. Blame that on the NIMBY phenomenon. The bottom line here is that even with more domestic crude oil production we simply don't have the capacity to refine it into useful products. So we'll continue to import it instead.
I don't get your point, other than that you confirmed Peak Oil. *shrug*

-t
     
sek929
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Jun 24, 2011, 01:41 PM
 
Originally Posted by BadKosh View Post
1 and a half day of oil.
Big deal.

This is just as lame and poorly thought out as the rest of Owe-Bamas' BS. How about DRILLING? The faster we get on it the faster we get relief. Standing around doing nothing(Democrat plan) isn't working.
THis is just as idiotic as releasing the reserve for a short-term price drop. Domestic drilling will have no effect on the long term price of oil, but what effect will it have on poisoning our own backyard?

Seriously, the shortsightedness being shown here is really appalling. How about dumping trillions into developing hydrogen fuel cell cars and then we can let the middle east wither and die without those trillions lining their corrupt pockets.
     
imitchellg5
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Jun 24, 2011, 11:50 PM
 
I agree with sek, it's INCREDIBLY short-sighted. Like, astoundingly so. It's funny too, because this seems like a very Republican move. It's just a move that gets you to the bottom of the oil-supply more quickly instead of actually trying to find a solution.
     
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Jun 25, 2011, 12:06 AM
 
Originally Posted by BadKosh View Post
1 and a half day of oil.
Big deal.

This is just as lame and poorly thought out as the rest of Owe-Bamas' BS. How about DRILLING? The faster we get on it the faster we get relief. Standing around doing nothing(Democrat plan) isn't working.
I wonder, even IF domestic drill could produce enough oil to appease domestic demand, do you honestly think it would be enough to pull down global prices? Or, are you proposing to restrict oil companies to be allowed to only sell domestically extracted oil to Americans at prices regulated below global prices?
     
turtle777
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Jun 25, 2011, 10:27 AM
 
Drilling is not a solution, it will only buy you more time.

We're at the peak of cheap, conventional oil, we gotta face the reality that energy will be much more expensive in the future.

New sources of oil will be much more expensive than the cheap oil rom the Middle East, so drilling will NOT help to keep the prices down. Drilling will, however, help that we don't get as fast into a situation of oil rationing.

What the US really needs is a energy master plan that explores and implements long-term solutions.

-t
     
Wiskedjak
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Jun 25, 2011, 10:47 AM
 
Originally Posted by turtle777 View Post
Drilling is not a solution, it will only buy you more time.

We're at the peak of cheap, conventional oil, we gotta face the reality that energy will be much more expensive in the future.

New sources of oil will be much more expensive than the cheap oil rom the Middle East, so drilling will NOT help to keep the prices down. Drilling will, however, help that we don't get as fast into a situation of oil rationing.

What the US really needs is a energy master plan that explores and implements long-term solutions.

-t
THIS is exactly what people on both sides of the argument need to realize. Oil and energy has become so politically polarized that the arguments are typically "More oil! Nothing other than oil!" and "No more oil ever! Starting immediately!", and are incapable of seeing anything in between.
     
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Jun 25, 2011, 11:20 AM
 
This only demonstrates how desperate this Administration is to stimulate the economy. This is all they've got left and seeing as how the cost of fuel had already been dropping; the move, like most others this administration has made, was a day late, purely political, and in terms of appreciable progress entirely in vain.
ebuddy
     
sek929
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Jun 25, 2011, 12:02 PM
 
Originally Posted by turtle777 View Post
What the US really needs is a energy master plan that explores and implements long-term solutions.

-t
Exactly, it's not like we can stop using oil entirely. We use it for lubricants (even electric cars need those) and plastics, not to mention thousands of other applications that are more useful than simply burning it.

I'm all for supplementing the grid with wind and solar, but that alone will not cut it. As much as I don't find Electric cars to be the holy grail, I think we must develop new nuclear power plants, decommission the old inefficient ones, and start moving large cities towards electric-only cars.

I hate the notion that drilling is somehow the savior of the United States. Our other greatest resources include fresh water and fertile land, and those are innumerably more important than a couple extra drops of oil, IMO.

Edit: I'd also like to point out this one of the few topics in the PWL that seems to get unanimous agreement from both conservatives and liberals. Which means the only reason Washington hasn't made any major moves is because to many people are making to much damn money.
     
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Jun 25, 2011, 12:03 PM
 
I think this is a good idea with a caveat. The ups and downs of the market isn't based on anything rational really - just perceptions.

Back when Bush talked of releasing the reserves and Congress started making moves to open up offshore drilling, the price of oil ::GASP ::went down dramatically.

The problem is, people in positions to speculate or control supply (George Soros, OPEC, etc.) know that he's really not all that interested in getting more product out and increasing competition. It's just show.
     
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Jun 25, 2011, 03:47 PM
 
Originally Posted by stupendousman View Post
I think this is a good idea with a caveat. The ups and downs of the market isn't based on anything rational really - just perceptions.

Back when Bush talked of releasing the reserves and Congress started making moves to open up offshore drilling, the price of oil ::GASP ::went down dramatically.

The problem is, people in positions to speculate or control supply (George Soros, OPEC, etc.) know that he's really not all that interested in getting more product out and increasing competition. It's just show.
This is not evidence that the movement of the market is not rationally connected to reality, just that the connection between actions and effects is not always obvious or intuitive. One possible explanation for this is price manipulations by supplier/OPEC. They don't want new wells that they don't control being drilled, so if they can take steps to even temporarily reduce the price of oil (for example by releasing stockpiled oil, or even just indicating that they might do so) they are siphoning off some of the motivation that would lead to drilling those new wells. Tip the balance back to the point where people are willing to stick with the status quo and they can return to business as usual, for a little while at least.
     
turtle777
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Jun 29, 2011, 03:09 PM
 
Well, that whole thing was a gigantic FAIL.

About a week later, and prices are back up where they were before the usual mix of idiotic politicians and corrupt businessmen started their "kill the speculators" spree.

What a waste of SPR. It was never meant to be used for market manipulation.

-t
     
OAW  (op)
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Jun 29, 2011, 03:17 PM
 
Originally Posted by turtle777 View Post
Well, that whole thing was a gigantic FAIL.

About a week later, and prices are back up where they were before the usual mix of idiotic politicians and corrupt businessmen started their "kill the speculators" spree.

What a waste of SPR. It was never meant to be used for market manipulation.

-t
"The average U.S. gasoline price dropped by more than 11 cents per gallon over the past three weeks as an oversupply of gasoline worked in consumers' favor, according to a new nationwide survey.

The price of self-serve regular dipped to $2.72 per gallon in the latest edition of the Lundberg Survey, a drop of 11.26 cents per gallon from early May 21, survey publisher Trilby Lundberg told CNN Sunday.

Spurred in part by falling crude prices, gas prices fell 20.51 cents in the past five weeks."

U.S. gas prices down 11 cents over past three weeks - CNN

OAW
     
The Final Dakar
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Jun 29, 2011, 03:19 PM
 
Did the news travel back in time two weeks?
     
OAW  (op)
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Jun 29, 2011, 03:31 PM
 
Originally Posted by The Final Dakar View Post
Did the news travel back in time two weeks?
Fair enough. Upon closer inspection of the article I cited it's clear that it was written prior to the release of oil from the SPR. It does, however, indicate that gas prices are on a downward trend and President Obama's decision to release a whopping 4% of the oil from the SPR will either continue that trend at best or simply be ineffective at worst.



I don't know where turtle777 lives, but in my neck of the woods prices have fallen over the last week. As they have across the country apparently.

Gas Price Historical Price Charts - GasBuddy.com

OAW
     
The Final Dakar
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Jun 29, 2011, 03:35 PM
 
I would imagine he's referring to the futures market.
     
turtle777
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Jun 29, 2011, 03:43 PM
 
OAW, my dear friend, I'm gonna spell it out for you, even in terms of gas prices:

Well Thank God That At Least The Price Of Gasoline Is Under Control... | zero hedge



-t
     
OAW  (op)
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Jun 29, 2011, 03:48 PM
 
Originally Posted by turtle777 View Post
OAW, my dear friend, I'm gonna spell it out for you, even in terms of gas prices:

Well Thank God That At Least The Price Of Gasoline Is Under Control... | zero hedge



-t
From the linked article ....

Following a barrage of letters from sellside "economists" who used the strawman of lower gasoline prices as the catalyst for either keeping their Q3/4 GDP projections, and in some cases even hiking them, we wonder: after looking at the chart below (which shows the price of NY gasoline), are we going to get some tiny, very modest retractions?
Another graph showing that this is in reference to NY gas prices.:



I'll simply reiterate the point I made earlier about the price of gasoline being on a distinct downward trend nationwide.



OAW
( Last edited by OAW; Jun 29, 2011 at 03:54 PM. )
     
turtle777
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Jun 29, 2011, 04:03 PM
 
Ok, I see. let me find a nationwide chart.

However, WTI prices are (more or less) back to the pre-manipulation level. It usually takes some time to show in the end-user gasoline prices.

-t
     
OAW  (op)
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Jun 29, 2011, 04:07 PM
 
Originally Posted by turtle777 View Post
Ok, I see. let me find a nationwide chart.

-t
That's cool. All I'm saying is that the chart you listed is in reference to NY gas prices. So I listed a chart from gasbuddy.com for NY that also reflects the same uptick that you see in your chart. I then re-posted the chart from gasbuddy.com for the National Average that shows that nationwide prices are still falling from their peak in mid-May.

Again, it's debatable how much of this can be attributed to the release of oil from the SPR because prices were on a downward trend anyway. But it certainly hasn't hurt. And given how it was only 4% it wasn't any sort of threat to national security. In fact, I think it was more to benefit the Europeans who are more impacted by the Libyan supply disruption more so than the US. If it does impact prices I imagine that we'll continue to see this downward trend further into the summer. But we're coming up on the July 4th holiday weekend when prices tend to have an uptick. So we shall see.

OAW
( Last edited by OAW; Jun 29, 2011 at 04:13 PM. )
     
turtle777
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Jun 29, 2011, 04:20 PM
 
It's pretty clear what's happening. The time it takes to get oil out of the SPR, refine it and distribute it is about 30d.
So the release of the SPR really isn't showing yet in gasoline prices. The downtrend in gasoline is the same that started in crude two months ago.

I'd say right now, WTI and Brent is a much better indication that the SPR release had no lasting effect.

-t
     
turtle777
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Jun 29, 2011, 05:17 PM
 
http://www.gasbuddy.com/gb_retail_pr...tme=3&units=us

Thinking about it, I doubt that the gasoline prices will ever see that breakdown that crude had for a week after 06/23. The gas stations are going to conveniently pocket the difference.

-t
     
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Jun 30, 2011, 02:48 PM
 
… .
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turtle777
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Jun 30, 2011, 03:30 PM
 
Originally Posted by el chupacabra View Post
By the way as much as everybody likes to throw the "speculators" word out there; does the average man actually know who the speculators are? I'll tell you. It's the investment firms and big oil companies who have entire departments dedicated to trading, who do the bulk of speculative trading.
That's for the most part correct.

Anyone who wants to learn about this should listen to the following interview with Dan Dicker, a former oil commodities trader.

Dan Dicker, Oil's Endless Bid | FINANCIAL SENSE

-t
     
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Jun 30, 2011, 04:27 PM
 
I just payed $3.79/gallon for mid-grade two days ago Where are these $2.72 coming from?
     
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… .
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BadKosh
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Jul 1, 2011, 03:01 PM
 
Originally Posted by sek929 View Post
THis is just as idiotic as releasing the reserve for a short-term price drop. Domestic drilling will have no effect on the long term price of oil, but what effect will it have on poisoning our own backyard?

Seriously, the shortsightedness being shown here is really appalling. How about dumping trillions into developing hydrogen fuel cell cars and then we can let the middle east wither and die without those trillions lining their corrupt pockets.
OK, so you piss away trillions on Hydrogen energy. Give us a timeline to completely develop a new source, while doing nothing about oil needs RIGHT NOW. do you think Hydrogen power will be able to replace oil i 10 years? 50? WHEN?

Talk about short sighted!
     
sek929
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Jul 2, 2011, 11:03 AM
 
Converting a car that burns gasoline to run on Hydrogen is fairly simple, more so them converting the entire mass of cars to electric motors and batteries. Also, what oil needs right now? Is 4 dollars a gallon that crippling to everyone? I drive a truck that gets 19MPG and I still don't see much of a difference at the pump. Why are Americans such pussies when it comes to price of gas?

If the government had my attitude 20 years ago we could all be driving hydrogen fuel cell cars right now, but due to the extreme greed of oil companies that have lobbied back any competing technology (including electric cars) they continue making obscene profits, which is all they give a shit about. The electric powered car existed before the internal combustion engine, the fact we still burn oil in cars is idiotic, as is the notion that releasing a few days worth of oil is somehow going to solve any of our consumption problems.

Hydrogen is the most abundant element in the universe. oil is not. We need to stop thinking that our current gasoline fueled lifestyle is in any way sustainable. This means that fools like you need to realize drilling in our own backyard or releasing our emergency reserves for a month or two of cheaper gas is completely retarded.
     
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Jul 4, 2011, 09:02 AM
 
Originally Posted by BadKosh View Post
Give us a timeline to completely develop a new source, while doing nothing about oil needs RIGHT NOW. do you think Hydrogen power will be able to replace oil i 10 years? 50? WHEN?

Talk about short sighted!
Cannot compute

Logic error
Mankind's only chance is to harness the power of stupid.
     
imitchellg5
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Jul 4, 2011, 10:48 PM
 
Originally Posted by sek929 View Post
Converting a car that burns gasoline to run on Hydrogen is fairly simple, more so them converting the entire mass of cars to electric motors and batteries. Also, what oil needs right now? Is 4 dollars a gallon that crippling to everyone? I drive a truck that gets 19MPG and I still don't see much of a difference at the pump. Why are Americans such pussies when it comes to price of gas?
Let me just go fill up my car with hydrogen. Oh, I can't, because, even if I had a hydrogen-powered car, the closest station is in California.

I drive a car that gets 30 mpg, and what's my second largest expense besides school? Petrol. I pay about $50/week to fill up my car. That's a new car payment! That seems like a pretty big investment to pay for something that ends up as CO2.
     
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Jul 5, 2011, 01:32 PM
 
Originally Posted by sek929 View Post
Converting a car that burns gasoline to run on Hydrogen is fairly simple, more so them converting the entire mass of cars to electric motors and batteries. Also, what oil needs right now? Is 4 dollars a gallon that crippling to everyone? I drive a truck that gets 19MPG and I still don't see much of a difference at the pump. Why are Americans such pussies when it comes to price of gas?

If the government had my attitude 20 years ago we could all be driving hydrogen fuel cell cars right now, but due to the extreme greed of oil companies that have lobbied back any competing technology (including electric cars) they continue making obscene profits, which is all they give a shit about. The electric powered car existed before the internal combustion engine, the fact we still burn oil in cars is idiotic, as is the notion that releasing a few days worth of oil is somehow going to solve any of our consumption problems.

Hydrogen is the most abundant element in the universe. oil is not. We need to stop thinking that our current gasoline fueled lifestyle is in any way sustainable. This means that fools like you need to realize drilling in our own backyard or releasing our emergency reserves for a month or two of cheaper gas is completely retarded.
They don't make a large profit as a percentage of gas/oil sold.

Again, WHEN will these other energy sources be available?

Seems the big energy companies don't see any potential for greater profits with those new energies.

Any little guys gonna try something?
     
The Final Dakar
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Jul 5, 2011, 01:36 PM
 
Originally Posted by BadKosh View Post
They don't make a large profit as a percentage of gas/oil sold.
I love this argument. Yeah the margin isn't crazy. However the amount moved is. How often does it ever go down?

Originally Posted by BadKosh View Post
Any little guys gonna try something?
When they can afford the national infrastructure required to make such technology commercially viable.
     
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Jul 5, 2011, 01:55 PM
 
$3.56 spotted yesterday.
     
The Final Dakar
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Jul 5, 2011, 01:57 PM
 
It's cratered to $3.29 here.
     
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Jul 5, 2011, 02:38 PM
 
Originally Posted by The Final Dakar View Post
It's cratered to $3.29 here.
Same in my neck of the woods.

OAW
     
sek929
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Jul 5, 2011, 02:51 PM
 
Originally Posted by imitchellg5 View Post
Let me just go fill up my car with hydrogen. Oh, I can't, because, even if I had a hydrogen-powered car, the closest station is in California.
I never said switching the entire infrastructure of pumping gas would be easy, but it's damn necessary.

Electricity splitting water molecules seems to be the most viable way of producing large scale hydrogen on-site, of course in areas that can spare the water....so Vegas will have to import hydrogen.

What I'd like to see is small-scale power generation within most homes that already make use of a natural gas line for heat and hot water. Coupled with water service you could generate your own hydrogen at home and your own electricity to power the grid.

Or we could take the lazy route and continue to burn through fossil fuels at an exponential rate, funding terrorism against our own soldiers, and raping our wilderness until we finally just stop driving anywhere once gas skyrockets.
     
The Final Dakar
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Jul 5, 2011, 02:55 PM
 
Originally Posted by sek929 View Post
IWhat I'd like to see is small-scale power generation within most homes that already make use of a natural gas line for heat and hot water. Coupled with water service you could generate your own hydrogen at home and your own electricity to power the grid.
This won't happen in corporate America, unless they make it that you can only lease whatever technology is necessary for the fuel creation.

Self-sufficiency = evil
     
nonhuman
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Jul 5, 2011, 03:24 PM
 
Originally Posted by andi*pandi View Post
$3.56 spotted yesterday.
I saw $5.09 yesterday in DC. Filled up for $3.29 a couple days before in Taos, NM.
     
sek929
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Jul 5, 2011, 03:30 PM
 
Originally Posted by The Final Dakar View Post
This won't happen in corporate America, unless they make it that you can only lease whatever technology is necessary for the fuel creation.

Self-sufficiency = evil
Exactly, but I'd envision a system where the utility company owns, cleans, and regulates the unit in your home...much like the electric meter we already have. They can charge you a flat rate for natural gas consumption (or the home fuel of choice) and regulate how much hydrogen you use and how much electricity you create.
     
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Jul 5, 2011, 03:42 PM
 
Originally Posted by sek929 View Post
Exactly, but I'd envision a system where the utility company owns, cleans, and regulates the unit in your home...much like the electric meter we already have. They can charge you a flat rate for natural gas consumption (or the home fuel of choice) and regulate how much hydrogen you use and how much electricity you create.
I may have already mentioned this, but there is one gigantic flaw in my "corporate america is evil" thought: What about Europe? By all accounts they have it twice as bad as us when it comes to oil prices, so how is it no one over there has come up with some viable alternative fuel in the time I've been alive (granted hydrogen fuel-cell is Mercedes, IIRC, but that's past 5 years). I suppose it could be because of their smaller engines and lack of aversion to diesel, but really, you'd think if anyone would have done it, they would have.
     
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Jul 5, 2011, 05:21 PM
 
Better trains instead?
     
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Jul 5, 2011, 05:35 PM
 
I think the monetary gains are simply to long-term when compared with profits that can be made now on existing systems.
     
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Jul 5, 2011, 08:29 PM
 
Originally Posted by The Final Dakar View Post
I may have already mentioned this, but there is one gigantic flaw in my "corporate america is evil" thought: What about Europe? By all accounts they have it twice as bad as us when it comes to oil prices, so how is it no one over there has come up with some viable alternative fuel in the time I've been alive (granted hydrogen fuel-cell is Mercedes, IIRC, but that's past 5 years). I suppose it could be because of their smaller engines and lack of aversion to diesel, but really, you'd think if anyone would have done it, they would have.
They have: they don't drive as much.
     
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Jul 5, 2011, 08:42 PM
 
Originally Posted by OAW View Post
^^^^^

I know you guys want to believe this .... and it sounds plausible on the surface. Unfortunately, it's still wrong.

1. Any new domestic drilling won't start impacting the global oil supply for at least a decade.

2. The price of oil is set by a global market. So even if the US drilled for more oil domestically it is still bought/sold globally. In many instances we have oil that is more suited to be refined in other countries. And vice versa. Moreover, the overall increase in global demand for oil ... driven primarily by the rise of China and India .... will keep the price of oil relatively high for the foreseeable future.
No, but just as a political move to draw from the Strategic Oil Reserve has temporary impacts on the price of a barrel; domestic production of oil does this + produces jobs yesterday + the necessary, subsequent wealth generation that can support an appreciable push for innovation. I'm seeing ideas, but I'm not really seeing the necessary funding for them in our current economic condition.

3. US refineries are operating at near total capacity. And a new one hasn't been built in three decades. Blame that on the NIMBY phenomenon. The bottom line here is that even with more domestic crude oil production we simply don't have the capacity to refine it into useful products. So we'll continue to import it instead.

OAW
I don't buy the NIMBY argument. There are plenty of towns across the country not only welcoming refineries, but offering specified tax breaks to lure them. The problem is the defense fund necessary to combat the initial environmentalist legal assault falsely assuming a "grass-roots" voice and ongoing challenges to their operations. This combined with the bureaucratic hurdles of regulation makes the prospect of anemic growth understandably less appealing.

Not necessarily directed at you OAW, but there are commonalities in the sentiment among those ardently opposed to domestic production;
  • Distaste for their caricature of Corporate America. It is evil and they are the ones squelching self-sufficiency. Trust me, if there is a cigar-chomping entity more interested in meddling with the production of renewable energy from your basement, it is the government.
  • The profit motive. The painful fact of the matter is that the avg profit margin of an oil company is less than the avg municipal power utility. Otherwise yes, the profit motive. I've yet to hear any more consistent, sustainable, or effective motivators. Supporting or not supporting terrorists, peak oil, AGW, yadda-yadda. Drill. Why? Because we need more friggin' jobs right now and their collective resources and creativity are necessary for driving innovation toward long-term energy solutions. It's more difficult to lead when your head is buried in groceries and rent... or an election.
  • NIMBY vs NIMFY. We're not afraid of infusing the economy with billions of dollars we either don't have or must borrow from Guido the shark, but we're scared to death of mining a readily available resource.
ebuddy
     
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Jul 6, 2011, 10:58 AM
 
Originally Posted by nonhuman View Post
They have: they don't drive as much.
Don't be a dick, that's not an alternative fuel.
     
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Jul 6, 2011, 11:50 AM
 
Originally Posted by The Final Dakar View Post
Don't be a dick, that's not an alternative fuel.
It is. They burn calories instead of burning petrol.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
- Thomas Paine
     
 
 
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