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The Magic Cafe Forum Index » » Not very magical, still... » » Gas Prices. A Pain in the Gas!!! (0 Likes) Printer Friendly Version

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Dustin Baker
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On 2008-06-07 21:46, balducci wrote:
Quote:
On 2008-06-07 21:00, Dustin Baker wrote:

If you're in the US, you can write your representatives about allowing drilling in A.N.W.A.R. We might not get the physical gas for 10years, but a huge boost in available supply will massively reduce the percieved scarcity - reducing the price at the pump.

In fact, according to the Energy Information Administration (EIA) of the U.S. Government, the reduction at the pumps would be expected to be nominal at best.

It might reduce the price of a barrel of oil by about 75 cents in 2025! The best case scenario leads to a reduction of $1.44 per barrel in 2027. None of this would have a significant effect at the pump.

Excerpted from the just-released EIA study at

http://www.eia.doe.gov/oiaf/servicerpt/anwr/index.html

"With respect to the world oil price impact, projected ANWR oil production constitutes between 0.4 and 1.2 percent of total world oil consumption in 2030, based on the low and high resource cases, respectively. Consequently, ANWR oil production is not projected to have a large impact on world oil prices. Relative to the AEO2008 reference case, ANWR oil production is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light (LSL) crude oil2 prices of $0.41 per barrel (2006 dollars) in 2026 in the low oil resource case, $0.75 per barrel in 2025 in the mean oil resource case, and $1.44 per barrel in 2027 in the high oil resource case. Assuming that world oil markets continue to work as they do today, the Organization of Petroleum Exporting Countries (OPEC) could neutralize any potential price impact of ANWR oil production by reducing its oil exports by an equal amount."


And the EIA said that gas would be at $4.00 a gallon last summer, during which time it dropped below $3.00 in many areas.

The EIA doesn't know jack about economics, and this is a purely economic issue.

The price of gas has nothing to do with how much there REALLY is - it has to do with how much people THINK there is. As stated, "gas futures" determine the price at the pump, not the current supply. 'Anticipation of future supply' determines price.
Think inside the box. . . it's less crowded.
balducci
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"The EIA doesn't know jack about economics, and this is a purely economic issue."

Dustin, come on, saying that the EIA knows 'jack about economics' is ridiculous.

The EIA is staffed with many excellent economists.

And nitpicking about whether a particular one of their predictions is off by some months is silly. Their broader prediction, that gas prices would skyrocket in the near term, was essentially correct.

But, fine, if you reject EIA as an authoritative voice on the matter, how about legendary oil billionaire T. Boone Pickens?

He also is on record as saying that 1.4 million barrels a day from ANWAR would have next to no impact on price. Listen to this great interview with him:

http://bigpicture.typepad.com/comments/2......ens.html

Dustin, what specifically do you know about economics or oil that the experts I've referred to above do not? I mean, you are entitled to your opinion, but COME ON! You truly think they are all ignorant that future supply determines / influences price?

What you simply fail to see here is that the amount of oil in ANWAR - even according to many optimistic estimates - is nominal given the world level of demand. It simply does NOT represent "a huge boost in available supply" as you seem to think.
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
kregg
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According to Texas oilman Boone Pickens, "...oil will become $150 per barrel" and "... we should use natural gas for transportation." He went on to say, "use of nuclear power and wind turbines should be expanded."
POOF!
balducci
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Yes, Boone Pickens is a very smart man - at least on matters of energy (which are the only opinions of his I know anything about).

Here is another interview with him, talking about renewable energy:

http://www.fastcompany.com/magazine/126/......ge=0%2C1
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
kregg
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As I recall the oil companies turn away from domestic oil during the 1970's boom/bust, then, increased oil imports because the cost of getting it out of the ground exceeded the incentive to drill for more. The more capitalism flourishes globally, the more expensive oil will be to drill, ship and process.
POOF!
Decomposed
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Quote:
On 2008-06-07 22:53, kregg wrote:
According to Texas oilman Boone Pickens, "...oil will become $150 per barrel" and "... we should use natural gas for transportation." He went on to say, "use of nuclear power and wind turbines should be expanded."


Nuclear power to run my Sentra....nice and clean.
MagiClyde
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Nuclear power to run my Sentra....nice and clean.


That might be just what you need to generate the 1.21 jigawatts necessary to activate your flux capacitor at 88 MPH and go "back to the future!" Smile
Magic! The quicker picker-upper!
kregg
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I keep hearing of $4 per gallon gasoline, but, regular unleaded has only reached $3.98. My father told me it has hit $4.20 in Indiana. Evidently taxes in my location aren't as high as most areas. Perhaps every added tax should be posted on the receipt.
POOF!
EsnRedshirt
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Just paid around $4.65 in Northern CA yesterday. We've got a lot of oil wells around here, too.

Actually, drilling in ANWAR is unnecessary for another reason- oil companies were given drilling contracts in a whole bunch of other areas since 2000- and they haven't done any exploration or drilling in half of them.

The main beef I have with gas prices is that I have to pay up- I live 35 miles from my day job, so bicycling's out of the question, and there's no real public transportation that will take me there. The company doesn't encourage telecommuting, and my old Toyota Corolla gets about the same freeway mpg as many U.S. hybrids. It'd be one thing if gas was a "luxury" expense, like liquor, cable TV, or dining out. Instead, it's a required expense like water and electricity- and there's only so much you can do to reduce its costs. It's rapidly taking a larger and larger piece of my "budget pie", so to speak, and I'm frustrated about that.
Self-proclaimed Jack-of-all-trades and google expert*.

* = Take any advice from this person with a grain of salt.
Chessmann
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I just got back from a trip to Venezuela. Here in the states I drive a VW Jetta, diesel. It costs about $60 for a fill-up.

In Venezuela, I could fill it up for between 1-2 dollars. The whole tank!
My ex-cat was named "Muffin". "Vomit" would be a better name for her. AKA "The Evil Ball of Fur".
LobowolfXXX
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How much would your house be worth in Venezuela?
"Torture doesn't work" lol
Guess they forgot to tell Bill Buckley.

"...as we reason and love, we are able to hope. And hope enables us to resist those things that would enslave us."
Chessmann
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Don't know much about housing prices, but I did see a few that the locals said, "A house like that would go for...." and it didn't sound too far away from what I would consider a similar place in the USA goes for - but bear in mind that prices both here and there vary wildly due to location, etc...
My ex-cat was named "Muffin". "Vomit" would be a better name for her. AKA "The Evil Ball of Fur".
Decomposed
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$3.87 a gallon last fill up but that price will not last long. Wondering when the gigs will slow down. Opps they already have. Smile
rockwall
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Quote:
On 2008-06-07 21:46, balducci wrote:
It might reduce the price of a barrel of oil by about 75 cents in 2025! The best case scenario leads to a reduction of $1.44 per barrel in 2027. None of this would have a significant effect at the pump.


All Bush had to do was mention that he wanted to open up oil drilling in Anwar, off the coasts, and go after oil shale and oil dropped $5 a barrel today. Directly related? Who knows. But I strongly believe that if we actually passed laws saying that we WERE going to start doing those things it would seriously effect the speculative market for the better.

I decided to do a little research last night. It's true that Anwar and the coastal regions 'only' have about 19 billion barrels of recoverable oil each that we know of and at our current rate of consumption we could use all of that in 3 years. (Assuming of course that we didn't use anything else)

However, we also have over 1 TRILLION barrels of oil available in Oil Shale. Now when Oil was less than $60 to $80 a barrel, oil shale was too expensive to extract. However, at the current cost of oil, it's definately economically feasable and the amount of oil there is enough to last us over 100 years at our current rate of consumption.

Also, here's another interesting quote:
Shell Oil Company has successfully conducted small-scale field tests of an insitu process based on slow underground heating via thermal conduction. Larger scale operations are required to establish technical viability, especially with regard to avoiding adverse impacts on groundwater quality. Shell anticipates that, in contrast to the cost estimates for mining and surface retorting, the petroleum products produced by their thermally conductive in-situ method will be competitive at crude oil prices in the mid-$20s per barrel.

(James T. Bartis, et. al., "Oil Shale Development in the United States: Prospects and Policy Issues" (Santa Monica: RAND Corporation, 2005), p. x. http://rand.org/pubs/monographs/2005/RAND_MG414.pdf)

There are other alternatives that are also being blocked by Congress. Nuclear energy is probably the cleanest form of energy we have but everyone who doesn't want us to use oil because of the environment doesn't want us using nuclear either. Also, natural gas is very clean to run on and there are many fleet vehicles that use it and you can get a natural gas car from Honda in California or New York but no where else. But guess what. Drilling for additional Natural Gas is also being blocked even though we have essentially unlimited reserves of Natural Gas available.

Other solutions are even farther off but I'm sure Congress will find a reason to block most of them also.
rockwall
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On 2008-06-18 15:32, Chessmann wrote:
I just got back from a trip to Venezuela. Here in the states I drive a VW Jetta, diesel. It costs about $60 for a fill-up.

In Venezuela, I could fill it up for between 1-2 dollars. The whole tank!


And do you know why that is? It's because about 80% of their energy is provided through off shore drilling.
balducci
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On 2008-06-19 17:16, rockwall wrote:
Quote:
On 2008-06-07 21:46, balducci wrote:
It might reduce the price of a barrel of oil by about 75 cents in 2025! The best case scenario leads to a reduction of $1.44 per barrel in 2027. None of this would have a significant effect at the pump.


All Bush had to do was mention that he wanted to open up oil drilling in Anwar, off the coasts, and go after oil shale and oil dropped $5 a barrel today. Directly related? Who knows. But I strongly believe that if we actually passed laws saying that we WERE going to start doing those things it would seriously effect the speculative market for the better.

Um, except that's actually not the main reason it dropped. The main reason it dropped is because China took steps today to dampen demand for oil by cutting subsidies and raising fuel prices. See this link:

http://www.theglobeandmail.com/servlet/s......rgy/home
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
balducci
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Quote:
On 2008-06-19 17:17, rockwall wrote:
Quote:
On 2008-06-18 15:32, Chessmann wrote:
I just got back from a trip to Venezuela. Here in the states I drive a VW Jetta, diesel. It costs about $60 for a fill-up.

In Venezuela, I could fill it up for between 1-2 dollars. The whole tank!


And do you know why that is? It's because about 80% of their energy is provided through off shore drilling.

Well, I have to disagree with you once again.

The overwhelming main reason it is so cheap is because President Hugo Chávez' government subsidizes the price of oil and gas in the country so that it retails for much less than a quarter of its real market price:

http://www.guardian.co.uk/business/2008/jan/18/oil.venezuela

If the U.S. subsidized the price of gas at the pump by 80% or more, you would have cheap gas too!
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
LobowolfXXX
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On 2008-06-19 19:23, balducci wrote:


If the U.S. subsidized the price of gas at the pump by 80% or more, you would have cheap gas too!


If you call that "cheap."

"Why does it have to come from the taxpayers? Why can't the government pay for it?"
"Torture doesn't work" lol
Guess they forgot to tell Bill Buckley.

"...as we reason and love, we are able to hope. And hope enables us to resist those things that would enslave us."
balducci
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On 2008-06-19 19:48, LobowolfXXX wrote:
Quote:
On 2008-06-19 19:23, balducci wrote:

If the U.S. subsidized the price of gas at the pump by 80% or more, you would have cheap gas too!


If you call that "cheap."

"Why does it have to come from the taxpayers? Why can't the government pay for it?"

Well, I know what you mean, but of course us comparing the situation in Venezuela and the U.S. in the first place is like comparing Apples and Oranges.

The government in Venezuela owns (substitute took over or nationalized or stole) most or all of the big oil companies there, so it can use the profits it makes to pay off its citizens.

It should be noted that many low income Americans have benefited from Hugo's largess. If you don't know what I mean, you can google it.
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
kregg
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Americans drive 4.5 billion fewer miles in April:
http://www.breitbart.com/article.php?id=......rticle=1
Must be why gas prices rose in May. Smile
POOF!
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