CigTech

A lot of folks can't understand how we came to have an oil shortage here in our country.

Well, there's a very simple answer.

Nobody bothered to check the oil. We just didn't know we were getting low.
The reason for that is purely geographical.

Our OIL is located in
ALASKA
California
Coastal Florida
Coastal Louisiana
Kansas
Oklahoma
Pennsylvania
Texas




Our DIPSTICKS are located in Washington, DC


Any Questions?

Jarery

I got a question. What has it got do with cycling to work ?

late

We should get Dem prez this time and that person should light a bonfire
under the butts of the oil corporations. I am looking forward to hearing them squeal.

CommuterRun

Very true. Unfortunately the situation will remain substantially unchanged if either major party wins the next Presidential race, and the dipsticks can also be found on the local political level.

DataJunkie

There is a shortage?

Our local news had a report regarding gas prices last week. Basically with the government pushing for alternative fuels and a variety of other factors, oil companies are no longer planning on upgrading refineries or building new ones. Consequently this will result in higher gas prices permanently. I keep thinking about purchasing a second car when our family car is paid off but the gas prices keep throwing me off. Anyways.....

late

The oil companies figure they can get away with it. They let their refineries age and slowly crumble, and when there is a hurricane or major accident they get to make an extra hundred million. Perhaps the most profitable passive agressive maneuver in history...

Ngchen

That may be true in the short run... however, if market economic theory is correct, someone will buck the trend by being the guy with the well-maintained refinery that keeps running when other peoples' have crumbled. The reason is simple. If you're the guy with the working refinery when other people's refineries are down, you get to make the money. Probably the reason the oil companies haven't made further investments in this area is that they aren't yet convinced that the demand will still be there say 5-10 years down the road.

Jarery

I dont know where you live, but where I live i still have more gas stations than bike shops. So it IS still a choice. If you want to go around running in circles screaming the sky is falling, there is a separate forum for that.

CommuterRun

If you want to believe one of CR's conspiracy theories, and I don't particularly, they have the upper hand on knowing when the easy oil is going to run out, so they see no point in sinking money into refineries.

Old Dirt Hill

Am I allowed to be confused by this thread?

late

Sure, you are even allowed to ask questions.

kmcrawford111

How much will that really help? Are the oil companies greedy? Of course. But the real problem is our massive, essentially unchecked consumption, with emphasis on the US. Even if legislation will lower prices a little temporarily, they'll still continue climbing. It's simple supply and demand. Production is now starting to decline, as there simply isn't as much to pump out now, and what can be pumped out now has to be refined more and is also more difficult to extract, all adding up to additional expense. If production can be increased, it will only accelerate our demise. Since we have nothing close to a replacement for oil, and from what I've read, probably never will, we're essentially screwed. Do you see a hydrogen economy coming? Me neither. President Bush was completely irresponsible for promising one. Is he going to solve the many obstacles preventing it from becoming possible? I don't think so. Even more irresponsible is Dick Cheney's statement that "the American way of life is non-negotiable". Now those of us on bikes will be at a bit of an advantage, and get *****-slapped slightly less hard, but EVERYTHING is going to be hurting here because our entire way of life is based on cheap oil. The public is going to be the one squealing once it finally realizes the consequences of what we've been doing. Our sense of entitlement has been completely fabricated (and irresponsible). It has to be understood that we may very well not have the means to continue life as is.

I don't have much faith that Democrats will have the balls to tell people the way things really are. They seem more consumed with keeping our way of life intact. It's all about being popular. Do you think Americans want to hear, and much less elect, someone telling them they may have to start biking to work and living differently? We already know that's not true. Instead, they want to keep driving the Chevy Suburban 20 miles to Wal-Mart to save $5 on a Chineese-made alarm clock... with a stop at McDonald's along the way.

For more, read this:

https://www.energybulletin.net/31191.html

Watch this excellent movie on YouTube (which I understand is a condensed version of the DVD):

https://youtube.com/watch?v=Q3uvzcY2Xug

I agree that this is the wrong place to discuss this, but I'd be glad to talk about this with anyone in private.

cooleric1234

As someone else said, this is probably not the place to be discussing this, but I can't resist. Let's not make the mistake of thinking that because we all commute by bike that it's all for the same reasons. Personally, I do it for the exercise, and that's pretty much it. But this is one of those issues that makes me upset when people don't try to understand just the basic economics behind the problem.

First of all, look at the profit margins of oil companies, they are a very reasonable 10%. Compare that to how much we're taxed on each gallon of gasoline (I should say contrast, it's much more). If you want to talk about windfall profits you should look at the government first, not the oil companies. Next look at the restrictions placed on oil companies. Building new refineries and drilling for oil has become very difficult. This is obviously interfering with the free market and preventing new players from entering the market and the competition from existing companies driving the prices down. Also, you may want to consider the cartel that is OPEC and how they influence the supply of crude oil. Finally, it's a good idea to take inflation into account when considering the price of gasoline.

Are the oil companies out to make a profit? Yes. Are they out to make as big of a profit as possible? Probably. Would it be such a problem if there weren't so many restrictions in the form of taxes, regulations, and prevention of tapping into existing oil rich territories? Probably not. The free market works when we let it.

Part of me recognizes I should just shut up and let this thread die, but maybe my response will serve as nothing else to make people realize that what we have in common on this forum is that we commute by bike, let's keep the conversation to that (and to make many of the readers hate me). Unless, of course, you're fine with a little bit of disagreement on a topic like this and we can discuss it civilly.

kmcrawford111

I agree, but since production is declining, there really isn't a whole lot of incentive for new companies and new refineries.

cooleric1234

Maybe I'm missing something but that seems a little bit of a circular argument. Production is in decline so let's not build new refineries. But we can't produce more oil because we don't have the refining capacity.

Unless, that is, you're referring to Peak oil. I don't know too much about it, but based on the Wikipedia page it seems like it's definitely not a given that we've hit the peak. We won't know until well after it's happened. Plus that doesn't consider new, alternate means of extracting other sources of oil. Of course, you might be right, I'm not trying to argue otherwise, I'm just saying it's not clear to me.

late

By itself it won't help at all. But I am hoping for a Dem president to get the ball rolling on a number of fronts.

That was a great article, thanks.

late

by Cooleric1234...
Next look at the restrictions placed on oil companies. Building new refineries and drilling for oil has become very difficult.

<> Tough, but the reason they aren't doing it is because they don't want to do it. Leaked documents show an intent to drive the price up by limiting supply <>

This is obviously interfering with the free market and preventing new players from entering the market and the competition from existing companies driving the prices down.

<> Oil and free market in the same sentence? Oil and politics are never far apart. <>


Are the oil companies out to make a profit? Yes. Are they out to make as big of a profit as possible? Probably. Would it be such a problem if there weren't so many restrictions in the form of taxes, regulations, and prevention of tapping into existing oil rich territories? Probably not.

<> But they are making huge profits, and they are not investing much in refining capacity. I find the conclusion hard to avoid <>

JeffS

Honestly, I am a little curious about why oil prices remain as low as they are.

Just considering the US, I'm not sure if competition between the refiners or government pressure is holding prices down. Yes profits per gallon are increasing quickly, but not as much as they could. With capacity held intentionally low and small refiners driven out of business what's to stop the big companies from charging as much as they want?

I'm personally torn. On one hand, I think the business should be free to maximize their profits. On the other, I would guess that the entire oil industry is colluding to maximize profits, and most likely with other industries (such as US auto-makers) to keep usage high.

The problem is, these are international companies and global demand is increasing. Government pressure could result some of these companies withdrawing from the market. China will be glad to step in and take up our slack. The industry is simply beyond the control of single government, especially as demand begins to surpass supply.

kmcrawford111

I am referring to peak oil, and I'm sorry, let me make a correction. I meant extraction was declining. Of course, without as much extraction, you can't have as much production. Here's another link:

https://www.energybulletin.net/primer.php

pedalMonger

Americans are paying a lot more then 3-4$ per gallon of gas, unless you believe the tax money going to the War on Terra/Iraq/Middle-East, has nothing to do with oil.

Tapeworm21

Problem is, if we drill for oil here... the hippies go nuts. We get oil somewhere else... the hippies go nuts. I blame the hippies.

pedalMonger

Oh yeah, those damn hippies control everything. The Executive Branch, Congress, the Judiciary, they are most powerful lobbying group in the beltway, thats why hippies stink, they can't afford soap because they spend all their money buying off politicians.

Tapeworm21

No.... hippies don't control anything. But they whine constantly. I live in Berkeley, CA.... trust me, I know.

JeffS

What's your point? You say the "problem" is hippies... yet they control nothing.

I understand that threads like this are just a way for people to rant a little, but you're entirely off-topic.

Tapeworm21

My point is... no matter what they do to get more oil and get it cheaper, there's going to be an uproar. Damned if you do, damned if you don't... so why even bother arguing. Believe me, if you're a right wing conservative, you're a kook too.