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Gasoline prices zip toward $3 mark

Drill baby drill. But how do we get them to drill more when that would drive prices down lowering their profits? The government should force the oil companies to drill more to keep prices artificially low.

That and the devaluation of the dollar doesnt help prices either.

Why do we need to drill?

They can't just drill they also have to build refineries to refine the increased oil.

Since Oil like of other commodities is a heavily speculated market, when news gets out that the US is drilling for oil in places that we know has oil prices would come down little by little.
 
Drill away baby. But you better start using solar and wind power as well, because we haven't produced enough oil to meet our needs for decades.

Wind will not work. It can't produce enough to meet our needs
 
They usually run 85%. They need the reserve capacity in case of an unforeseen problem and also so the supply doesn't get too far ahead of demand. Prices would drop and so would their profits. It's funny how people forget that oil companies are for profit companies and their main goal is to maximize profits, not provide us with cheap, abundant energy.

You have a link?

Minnesota Energy : Gasoline Pricing Facts for Consumers


Three refineries supply the bulk of our refined products (such as gasoline), Flint Hills and Marathon-Ashland in the southeast metro and Murphy Oil in Superior, Wisconsin. We also get products via three pipelines.

Our refineries are running at full capacity nearly all the time.

* Because we rely on a "full order" of gasoline from the refineries, pump prices will rise if there is any disruption in refinery operations due to fires or maintenance.
* The costs of adding new refineries and pipelines are very high. In addition to dollar costs, there are also environmental costs to consider.
 
You have a link?

[.

http://www.nytimes.com/2009/12/24/business/energy-environment/24refining.html?_r=1&emc=eta1

We have too much capacity,” said Lynn D. Westfall, the chief economist at the Tesoro Corporation, a midsize refiner, who estimated that the industry’s capacity of 18 million barrels a day must be cut 5 to 8 percent. “We need refineries to be shut down.”

Refineries, especially smaller ones, have been closing for many years. The number of refineries in the United States fell to about 150 in recent years from more than 300 in 1982. At the same time, the nation’s refining capacity grew by about 13 percent, as companies expanded their most efficient refineries.

But the shutdowns are now coming so fast that the United States is losing capacity as refiners struggle to match their output to falling demand. Some energy experts have said that gasoline consumption most likely peaked in 2007, when it reached 9.7 million barrels a day, and will not rise to that level again.
 
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Wind will not work. It can't produce enough to meet our needs

No one said wind by itself. We already know enough about passive solar design to cut energy needs for buildings by 50%, freeing up energy for other uses. We've known how to do that for 35 years.

Increasing the mileage standards for new vehicles will save more oil than the drill baby drill folks can come up with. Other countries are passing us by while we whine about how much it costs to fill up our hummers.

The only thing lacking is the will to do it, so don't expect a lot of sympathy from me for those that continue to rely on a declining fossil fuel.
 
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Well,you're changing the topic a bit now--you stated that presidents have "very little ability to create uncertainty in the market". This is the one no economist would agree with. The president in fact can create uncertainty in the market in a variety of ways. For example, by promising to cap CEO salaries, or raise taxes, or impose universal healthcare, or by rewarding failure and punishing success, or by championing cap and trade legislation, etc.

None of those things will create very much uncertainty in the market. They might or might not affect the long-term state of the economy, but the stock market is not going to move up or down very much at all if Obama goes on television tomorrow and says he wants to cap CEO salaries.

pendulum_jaw said:
The prices of both these would rise in uncertain times. Increasing your inventory of oil would be akin to increasing your inventory of gold, or cigarettes, or liquor, or ammunition....these things will all remain in strong demand in a bad economy.

Cigarettes, liquor, and ammunition are produced, not extracted, making their value much more stable. Oil and gold are highly volatile in terms of price...not stable commodities at all. If your primary goal is to avoid economic uncertainty, I can't think of very many worse ways to invest your money than oil and gold.

pendulum_jaw said:
This smiley was in response to my saying that the Obama administration understands little about economics. One example would be Obama's insistance that government can "create" jobs--perhaps one of the greatest economic fallacies of all time. This idea was falsified in the 19th century by Frederick Bastiat, yet here we are in the 21st century with the POTUS repeating it every time he's in front of a microphone.

That is hardly a unanimous economic view. What you really mean is that the Obama Administration and their economists have a different view than Bastiat...not that they don't know anything about economics. I'd be the first to agree that dollar for dollar, the private sector is better at creating jobs than government in the long term. But if you're deficit spending (i.e. not raising taxes) you aren't taking any money out of the economy, so you can create government jobs without destroying private jobs in the short term.

pendulum_jaw said:
And it's not just talk, his belief has radically been implemented--just look at the growth of employment in government relative to inustry in the past year.

That is hardly surprising and not particularly radical, since private sector employment has fallen off a cliff in the past year.

pendulum_jaw said:
Your recognition that price caps create shortages makes my day. I was really glad to see that. Unfortunately, the vast majority of citizens do not understand it and that's why I believe we may see price-capping under the guise of some populist sentiment (like "controlling the evil, price-gouging oil companies").

Any political gain would be VERY short-lived...probably no more than a few days. If you implement policies that create shortages, people are going to be pissed off even if they think that's what they want. Just ask Jimmy Carter.

pendulum_jaw said:
For example, the citizenry is largely in favor of another moronic price-capping threat--capping CEO salaries.

Meh, that wouldn't have quite the drastic effect that capping gasoline prices would, as CEOs aren't a commodity. But in any case, no one is seriously planning to implement this as a general policy. Even capping the CEO salaries at companies that accepted bailouts is very tricky.

pendulum_jaw said:
Incidentally, I'm curious to know if you also understand the converse principle--that price floors create surpluses. For example, what's your position on the minimum wage issue? Do you agree that the minimum wage creates a surplus of low wage workers (that is, increases unemployment)?

Yes.
 
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What nobody realizes is that the day that Obama announces that he has lifted all restrictions on domestic drilling the price of oil, and thus gas, would go down because of the future prospect of a higher supply thus the current oil not being worth as much. How long it takes for the actual oil to be pumped is irrelevant because oil prices are all based on future demand estimates anyway. Trust me I live in a state that is built around oil and offshore drilling and yes, it IS Obama stopping the drilling thus keeping prices high.
 
What nobody realizes is that the day that Obama announces that he has lifted all restrictions on domestic drilling the price of oil, and thus gas, would go down because of the future prospect of a higher supply thus the current oil not being worth as much. How long it takes for the actual oil to be pumped is irrelevant because oil prices are all based on future demand estimates anyway. Trust me I live in a state that is built around oil and offshore drilling and yes, it IS Obama stopping the drilling thus keeping prices high.

:rofl And was it Obama stopping it during the 12 years the Republicans were in control of Congress? The truth is we passed peak oil decades ago in this country, and the Republicans just use "drill baby drill" for a campaign slogan now. Otherwise they would have done it themselves when they were in charge.
 
What nobody realizes is that the day that Obama announces that he has lifted all restrictions on domestic drilling the price of oil, and thus gas, would go down because of the future prospect of a higher supply thus the current oil not being worth as much. How long it takes for the actual oil to be pumped is irrelevant because oil prices are all based on future demand estimates anyway. Trust me I live in a state that is built around oil and offshore drilling and yes, it IS Obama stopping the drilling thus keeping prices high.

:rofl And was it Obama stopping it during the 12 years the Republicans were in control of Congress? The truth is we passed peak oil decades ago in this country, and the Republicans just use "drill baby drill" for a campaign slogan now. Otherwise they would have done it themselves when they were in charge.

You are aware of the finite availability of fossil fuels are you not?

"Of the 65 largest oil producing countries in the world, up to 54 have passed their peak of production and are now in decline, including the USA in 1970"

Peak oil primer and links | Energy Bulletin
 
Nixon imposed price controls, Carter lifted them

:confused:

Just one week after taking office, Reagan removed price and allocation controls from crude oil and refined products. In other words, with a stroke of the pen, Reagan ended the energy crisis.
 
In other words, with a stroke of the pen, Reagan ended the energy crisis.

How did Reagan affect the declining US oil reserves???

And how did he encourage less US consumption?

And how did he encourage the development and use of alternative energy?

Reagan should be called the father of the US energy crisis!
 
:confused:

Just one week after taking office, Reagan removed price and allocation controls from crude oil and refined products. In other words, with a stroke of the pen, Reagan ended the energy crisis.

Carter had already phased out most of Nixons price controls on oil by the time Reagan took office. It's funny how revisionist blame price controls on Carter when in fact Nixon did it. I guess if a lie is repeated enough everyone starts believing it.

"Richard Nixon had imposed price controls on domestic oil, which had helped cause shortages that led to gasoline lines during the 1973 Oil Crisis. Gasoline controls were repealed, but controls on domestic US oil remained. The Jimmy Carter administration began a phased deregulation of oil prices on April 5, 1979, when the average price of crude oil was US$15.85 per barrel (42 US gallons). Over the next 12 months the price of crude oil rose to $39.50 per barrel (its all time highest real price until March 7, 2008.)[6] Deregulating domestic oil price controls allowed domestic U.S. oil output to rise sharply from the large Prudhoe Bay fields, while oil imports fell sharply. Hence, long lines appeared at gas stations, as they had six years earlier during the 1973 oil crisis."
 
http://www.nytimes.com/2009/12/24/business/energy-environment/24refining.html?_r=1&emc=eta1

We have too much capacity,” said Lynn D. Westfall, the chief economist at the Tesoro Corporation, a midsize refiner, who estimated that the industry’s capacity of 18 million barrels a day must be cut 5 to 8 percent. “We need refineries to be shut down.”

Refineries, especially smaller ones, have been closing for many years. The number of refineries in the United States fell to about 150 in recent years from more than 300 in 1982. At the same time, the nation’s refining capacity grew by about 13 percent, as companies expanded their most efficient refineries.

But the shutdowns are now coming so fast that the United States is losing capacity as refiners struggle to match their output to falling demand. Some energy experts have said that gasoline consumption most likely peaked in 2007, when it reached 9.7 million barrels a day, and will not rise to that level again.

Is that because of the oil that comes here that is refined in other countries?

Where Does the US Oil Supply Come From?


Canada, Saudi Arabia, Colombia, Nigeria, Angola, and Iraq all contribute sizable amounts to the US oil supply. America also imports oil from Kuwait, Norway, the United Kingdom, Venezuela, Equatorial Guinea, and Algeria. Numerous other countries ship refined oil products to the United States to supplement the output of American refineries. The diversity of the US oil supply makes it difficult to cut off the country's supply of oil altogether, although wrinkles in the supply chain could be problematic.
 
No one said wind by itself. We already know enough about passive solar design to cut energy needs for buildings by 50%, freeing up energy for other uses. We've known how to do that for 35 years.

Increasing the mileage standards for new vehicles will save more oil than the drill baby drill folks can come up with. Other countries are passing us by while we whine about how much it costs to fill up our hummers.

The only thing lacking is the will to do it, so don't expect a lot of sympathy from me for those that continue to rely on a declining fossil fuel.

You have proof for these statements?
 
You have proof for these statements?

Of course:

"The term passive house (Passivhaus in German) refers to the rigorous, voluntary, Passivhaus standard for energy efficiency in buildings. It results in ultra-low energy buildings that require little energy for space heating or cooling."

"A similar standard, MINERGIE-P, is used in Switzerland.[2] The standard is not confined only to residential properties; several office buildings, schools, kindergartens and a supermarket have also been constructed to the standard. Passive design is not the attachment or supplement of architectural design, but an integrated design process with the architectural design.[3] Although it is mostly applied to new buildings, it has also been used for refurbishments."

"In the United States, a house built to the Passive House standard results in a building that requires space heating energy of 1 BTU per square foot per heating degree day, compared with about 5 to 15 BTUs per square foot per heating degree day for a similar building built to meet the 2003 Model Energy Efficiency Code. This is between 75 and 95% less energy for space heating and cooling than current new buildings that meet today's US energy efficiency codes. The Passivhaus in the German-language camp of Waldsee, Minnesota uses 85% less energy than a house built to Minnesota building codes."

[ame=http://en.wikipedia.org/wiki/Passive_house]Passive house - Wikipedia, the free encyclopedia[/ame]

In addition to the historical record, I built my own passive solar house in 1984 and have never achieved less than 50% reduction in energy needs for heating and cooling. And it costs me no more than conventional construction.


"We cannot drill our way out of reliance on unstable oil sources. The Persian Gulf holds 65 percent of the world�s oil reserves, the U.S. only three percent. In order to curb our dependence on foreign oil, we must reduce our consumption overall.

Since cars and light trucks account for 40 percent of all petroleum use in the U.S., the best way to cut our dependence on oil is to make vehicles go farther on a gallon of gas. Miles-per-gallon (mpg) standards enacted in 1975 doubled the fuel economy of new American cars and continue to save the United States 2.8 million barrels of oil per day. Unfortunately, fuel economy is now at a 21 year low as auto-makers sell more SUVs and other light trucks, which are allowed to meet lower miles-per-gallon standards than cars."

Increasing Auto Fuel Economy Standards
A report by the National Academy of Sciences shows that each automaker could produce a fleet of cars and light trucks that meets a fuel economy standard of 37 mpg within 10-15 years using cost-effective existing technology. In 2002, the Senate missed an opportunity to increase the fuel economy of cars and trucks to 35 mpg by 2013. This standard would:

* Conserve one million barrels of oil each day in 2013; this is more than 12 times the projected daily yield from the Arctic National Wildlife Refuge in the same year.
* Conserve 2.5 million barrels of oil each day by 2020�as much oil as we currently import from the Persian Gulf.
* Save consumers a net of $4 billion annually at the gas pump starting in 2013, and the savings will increase as cars with higher fuel economy replace older vehicles.
* Create more than 40,000 jobs in the auto industry, according to an analysis by the Union of Concerned Scientists of a slightly higher fuel economy standard.
* Cut global warming pollution from transportation sources by 16 percent by 2020.

Protecting The Arctic Refuge
Drilling in sensitive areas such as the Arctic National Wildlife Refuge would do virtually nothing to reduce America�s dependence on foreign oil. In contrast, increasing fuel economy standards would have far-reaching benefits for our energy security.

* The U.S. Geological Survey estimates that there are only six months worth of economically recoverable oil in the Arctic Refuge, which would not be available for at least ten years.
* The Arctic Refuge would reduce U.S. oil imports by only two percent�from 64 percent to 62 percent of total oil consumption in 2020.
* By 2017, the cumulative oil savings of a 35 mpg fuel economy standard would be greater than the total projected yield from the Arctic Refuge over its 50-year lifetime."

New Energy Future

Until we start using the renewable resources we already have available to us, any "energy crisis" we have is of our own making.
 
Of course:

"The term passive house (Passivhaus in German) refers to the rigorous, voluntary, Passivhaus standard for energy efficiency in buildings. It results in ultra-low energy buildings that require little energy for space heating or cooling."

"A similar standard, MINERGIE-P, is used in Switzerland.[2] The standard is not confined only to residential properties; several office buildings, schools, kindergartens and a supermarket have also been constructed to the standard. Passive design is not the attachment or supplement of architectural design, but an integrated design process with the architectural design.[3] Although it is mostly applied to new buildings, it has also been used for refurbishments."

"In the United States, a house built to the Passive House standard results in a building that requires space heating energy of 1 BTU per square foot per heating degree day, compared with about 5 to 15 BTUs per square foot per heating degree day for a similar building built to meet the 2003 Model Energy Efficiency Code. This is between 75 and 95% less energy for space heating and cooling than current new buildings that meet today's US energy efficiency codes. The Passivhaus in the German-language camp of Waldsee, Minnesota uses 85% less energy than a house built to Minnesota building codes."

Passive house - Wikipedia, the free encyclopedia

In addition to the historical record, I built my own passive solar house in 1984 and have never achieved less than 50% reduction in energy needs for heating and cooling. And it costs me no more than conventional construction.


"We cannot drill our way out of reliance on unstable oil sources. The Persian Gulf holds 65 percent of the world�s oil reserves, the U.S. only three percent. In order to curb our dependence on foreign oil, we must reduce our consumption overall.

Since cars and light trucks account for 40 percent of all petroleum use in the U.S., the best way to cut our dependence on oil is to make vehicles go farther on a gallon of gas. Miles-per-gallon (mpg) standards enacted in 1975 doubled the fuel economy of new American cars and continue to save the United States 2.8 million barrels of oil per day. Unfortunately, fuel economy is now at a 21 year low as auto-makers sell more SUVs and other light trucks, which are allowed to meet lower miles-per-gallon standards than cars."

Increasing Auto Fuel Economy Standards
A report by the National Academy of Sciences shows that each automaker could produce a fleet of cars and light trucks that meets a fuel economy standard of 37 mpg within 10-15 years using cost-effective existing technology. In 2002, the Senate missed an opportunity to increase the fuel economy of cars and trucks to 35 mpg by 2013. This standard would:

* Conserve one million barrels of oil each day in 2013; this is more than 12 times the projected daily yield from the Arctic National Wildlife Refuge in the same year.
* Conserve 2.5 million barrels of oil each day by 2020�as much oil as we currently import from the Persian Gulf.
* Save consumers a net of $4 billion annually at the gas pump starting in 2013, and the savings will increase as cars with higher fuel economy replace older vehicles.
* Create more than 40,000 jobs in the auto industry, according to an analysis by the Union of Concerned Scientists of a slightly higher fuel economy standard.
* Cut global warming pollution from transportation sources by 16 percent by 2020.

Protecting The Arctic Refuge
Drilling in sensitive areas such as the Arctic National Wildlife Refuge would do virtually nothing to reduce America�s dependence on foreign oil. In contrast, increasing fuel economy standards would have far-reaching benefits for our energy security.

* The U.S. Geological Survey estimates that there are only six months worth of economically recoverable oil in the Arctic Refuge, which would not be available for at least ten years.
* The Arctic Refuge would reduce U.S. oil imports by only two percent�from 64 percent to 62 percent of total oil consumption in 2020.
* By 2017, the cumulative oil savings of a 35 mpg fuel economy standard would be greater than the total projected yield from the Arctic Refuge over its 50-year lifetime."

New Energy Future

Until we start using the renewable resources we already have available to us, any "energy crisis" we have is of our own making.

It is all nice but there is no oil shortage we have trillions of barrels the democrats will not let us have.

U.S. HAS MASSIVE OIL


There is an estimated 2 trillion barrels of oil buried beneath parts of Colorado, Utah and Wyoming. Geologists, petroleum companies and the federal government have known about these massive deposits for nearly a century. The trouble has always been: how do you get at it?

It is believed that the shale deposits in the Green River region of Colorado, Utah and Wyoming are holding the equivalent of approximately 1.5 trillion to 1.8 trillion barrels of oil. Called �oil shale� or �shale oil,� according to scientists and petroleum companies, much of it cannot be recovered with current technology due to the costly processing involved and the depth of the deposits buried beneath the Rocky Mountains.

Still, if only half can be extracted, scientists believe the amount is nearly triple the oil reserves of Saudi Arabia.
 
It is believed that the shale deposits in the Green River region of Colorado, Utah and Wyoming are holding the equivalent of approximately 1.5 trillion to 1.8 trillion barrels of oil. Called �oil shale� or �shale oil,� according to scientists and petroleum companies, much of it cannot be recovered with current technology due to the costly processing involved and the depth of the deposits buried beneath the Rocky Mountains.

Still, if only half can be extracted, scientists believe the amount is nearly triple the oil reserves of Saudi Arabia.

That oil is extremely expensive to extract. Only when gasoline is back over 5 bucks a gallon will it be profitable to produce.
 
Carter had already phased out most of Nixons price controls on oil by the time Reagan took office. It's funny how revisionist blame price controls on Carter when in fact Nixon did it. I guess if a lie is repeated enough everyone starts believing it.

Price controls are wrong no matter who does it.


Executive Order 12287
Decontrol of crude oil and refined petroleum products

•Signed: January 28, 1981
•Federal Register page and date: 46 FR 9909; January 30, 1981
Ronald Reagan Executive Orders - 1981
 
Than why does Canada do it?

Are you referring to Canada's oil sands?
Production of oil from Canadas oil sands has been cut due to the drop in oil prices.
Oil shale is a different animal. There really isn't oil in oil shale.

Oil shale, an organic-rich fine-grained sedimentary rock, contains significant amounts of kerogen (a solid mixture of organic chemical compounds) from which technology can be used to extract liquid hydrocarbons. The name oil shale is a misnomer as geologists would not necessarily classify the rock as a shale, and its kerogen differs from crude oil
 
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Price controls are wrong no matter who does it.


Executive Order 12287
Decontrol of crude oil and refined petroleum products

•Signed: January 28, 1981
•Federal Register page and date: 46 FR 9909; January 30, 1981
Ronald Reagan Executive Orders - 1981

The deregulation actually began under Carter, not Reagan. Carter deregulated airlines, trucking, railroads, oil and interest rates, and set up much of the deregulation machinery that Reagan would later use.
The bill Reagan signed a week after he took office was initiated by Carter. Reagan did not come up with the deregulation bill in 7 days.
 
In addition to the historical record, I built my own passive solar house in 1984 and have never achieved less than 50% reduction in energy needs for heating and cooling. And it costs me no more than conventional construction.

If this were true for everyone, then why wouldn't every single building be constructed like this?

From your link:

On average, however, passive houses are still up to 14% more expensive upfront than conventional buildings.

Since construction costs run $80-200/sqft, meaning that an average 2,000 sq ft house would cost between $160k and $400k to build, adding 14% to that cost would mean that you'd pay an extra $22k to $56k in order to build a passive house.

So yea - much like windmills or solar panels, "passive houses" are bad investments for the average person who isn't able to spend that extra money upfront to feel good about themselves and save a few hundred dollars a year.

That oil is extremely expensive to extract. Only when gasoline is back over 5 bucks a gallon will it be profitable to produce.

The dominant question for shale oil production is under what conditions shale oil is economically viable. The various attempts to develop oil shale deposits have succeeded only when the shale-oil production cost in a given region is lower than the price of petroleum or its other substitutes. According to a survey conducted by the RAND Corporation, the cost of producing a barrel of shale oil at a hypothetical surface retorting complex in the United States (comprising a mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation), would range between US$70–95 ($440–600/m3), adjusted to 2005 values). Assuming a gradual increase in output after the start of commercial production, the analysis expects a gradual reduction in its processing cost to $30–40 per barrel ($190–250/m3) after achieving the milestone of 1 billion barrels (160×10^6 m3).[9][38] Royal Dutch Shell has announced that its Shell ICP technology would realize a profit when crude oil prices are higher than $30 per barrel ($190/m3), while some technologies at full-scale production assert profitability at oil prices even lower than $20 per barrel ($130/m3).

Much like other technologies, it sounds like it will become quite cheap once its done on a larger scale and the technology is refined.

[ame=http://en.wikipedia.org/wiki/Shale_oil_extraction]Shale oil extraction - Wikipedia, the free encyclopedia[/ame]
 
Much like other technologies, it sounds like it will become quite cheap once its done on a larger scale and the technology is refined.

Shale oil extraction - Wikipedia, the free encyclopedia

I remember studying oil shale in geology class in the early 70s. They were touting then how it would solve our energy problems but the technology still hasn't got there to make it economically feasible. It can not compete with sweet crude coming out of the ground. It just takes too much energy to extract it. Coal liquification and compressed natural gas might be better alternatives.
We have had 60 years to come up with technology to make oil shale profitable and haven't done it..
 
The deregulation actually began under Carter, not Reagan. Carter deregulated airlines, trucking, railroads, oil and interest rates, and set up much of the deregulation machinery that Reagan would later use.
The bill Reagan signed a week after he took office was initiated by Carter. Reagan did not come up with the deregulation bill in 7 days.

..........
 
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