Comments
Another three things that should be done.

1) immediately repeal the ethanol mandates which are driving up the cost of corn and grains.
2) immediately repeal any impediments to the amount of ethanol imported from South America.

Part of the current bout with inflation is the rise in prices of corn and grain. Which is jacking up the price of nearly everything we eat.

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
I’m sure hydrocarbon fuel prices have absolutely nothing to do with the increasing cost of corn & grain.

Written By: jpm100
URL: http://
1) immediately repeal the ethanol mandates which are driving up the cost of corn and grains.
2) immediately repeal any impediments to the amount of ethanol imported from South America.
Agreed, Keith ... but for an immediate impact which will effect the pocketbook of all, across the board, the gas taxes are a smart way to go.

Written By: McQ
URL: http://www.QandO.net
Dropping the federal gas tax is about as useful as putting lipstick on a pig.

Written By: Nobrainer
URL: http://neubranderinc.com/blog
This would have been a much better use of deficit spending towards a stimulous strategy than the tax rebate, imho.

Written By: jpm100
URL: http://
McCain was calling for Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day.
Now that’s how to campaign for president!
Another three things that should be done.

1) immediately repeal the ethanol mandates which are driving up the cost of corn and grains.
2) immediately repeal any impediments to the amount of ethanol imported from South America.
Obama? Clinton? Nader? Barr? Anybody?

And, Keith, what happened to 3)?

Written By: Linda Morgan
URL: http://
I forgot, got interrupted, had a senior moment...

#3 would be getting rid of farming subsidies, but that doesn’t have anything to do with the price of gas (I don’t think.) Other then being related to #1.

And I agree, a federal gas tax holiday would be great. Indiana has done that a couple of times and it does help.

But really, all it does is lull people into a false sense of security. Oh, prices went down so we don’t have to do anything else. Like drive slower, car pool, or anything else that might change our behavior the tiniest bit.

The holiday would only be good if it led to permanent change in the playing field.

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
How about ending the ridiculous plethora of botique blends of oxygenated gas? One would be sufficient for uban areas.

Ethanol is a useful agent for oxygenating gas, but I’d rather see the issue addressed by subsidizing production of ethanol from cellulose and ending any subsidies for ethanol made from corn.

Written By: MarkD
URL: http://
Do you mean that another co-equal part of the US government (hint: Congress) could actually do something about energy policy ?

I mean, they passed an "energy bill" (N.B. quotes because is creates no new oil) that smothers the economy with ethanol, conservation, and new CAFE standards.

Perhaps Congress should adopt a 40mpg rule for the Congressional parking lots to "lead" (N.B. fat chance) the nation (and create more green space around the Capitol).

Written By: Neo
URL: http://
there are three kinds of people.
1: Those who can count, and
2: those who can’t.

Did you gys see the article in the Telegraph?
The UN is now complaining that kids are stariving and dying because of ethenol.
guess the only moral thing to do is to drill more oil and refine more oil.
After all, this is an emergency and it’s for the kids.




Written By: Bithead
URL: http://bitsblog.florack.us
Keith has good ideas, but I for one don’t think the problem is that oil or gas has been too expensive — quite the contrary! Perhaps we shouldn’t try to encourage consumption by reducing price. Also, without spending cuts to compensate for the lost revenues, the economic impact could create other unintended consequences. McCain hasn’t thought this through, I suspect he’s just doing the typical politician thing — appeal for votes by promising people stuff.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
If I remember correctly, supply/demand processes have driven the price of gasoline up by more than 19 cents in the last three months. That hasn’t seemed to lower demand significantly. Lowering the price by reducing taxes will, according to theory, increase demand which will in turn increase the price. The net savings will be less than 18.4 cents/gallon. It probably makes great politic gimmick, but saving the price of a Big Mac every week for a couple of months doesn’t impress me all that much. I am a believer in the permanent income hypothesis.

Written By: timactual
URL: http://
I suspect he’s just doing the typical politician thing — appeal for votes by promising people stuff.
The difference is that this is doable - without a lot of hand waving and VooDoo Economic BS. You can sit down and approximate what this would mean in lost revenues versus trying to figure out the cost of Universal Healthcare, for example. Barack and Hillary are promising the sun and moon and have given very little credible evidence they have any clue what the costs will be. I’m not saying I agree with McCain’s proposal, but I will give McCain some credit for an interesting and doable proposal.

PS - The Democrats plan is to put additional taxes on the Oil Companies. Anybody here think that is going to bring prices down? Anybody?

Written By: SShiell
URL: http://
Personally, I’m of the mind that if people don’t want to change their habits, they ought to suffer for driving alone in big trucks and SUV’s. I drive a Neon to work everyday, 31 MPG average. We drive the truck only when we really need to haul stuff around. I changed my habits back before Katrina hit.

Anyone who truly requires a truck for their work, ought to be passing the pain along to the consumer of their work.

As a short term fix for some of our economic woes, the gas tax holiday is an idea worth merit.

It doesn’t address the underlying issues.

Oil prices are up because of world demand, not a shortage of supply. But it’s easier to demagouge BIG OIL, then it is to solve these problems.

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
Also, without spending cuts to compensate for the lost revenues, the economic impact could create other unintended consequences. McCain hasn’t thought this through
He is proposing spending cuts as an offset.

Written By: Is
URL: http://

Oil prices are up because of world demand, not a shortage of supply. But it’s easier to demagouge BIG OIL, then it is to solve these problems.
It’s interesting to look at the production curves for Saudi Arabia. At http://www.theoildrum.com it notes that crude production for Saudi Arabia has been flat since early 2004, declining in 2007. This is true for other liquid fuels as well. This makes no sense. With record oil prices and danger of a recession that will limit demand, Saudi Arabia should not be having a decrease in production, or even flat production. Moreover, it appears that most OPEC countries are producing at capacity, sometimes even below their quota. World oil production seems to have peaked in 2005 and declined slightly (not enough to know if its a real trend) by 2007.

I suspect that we have both a demand and a supply problem, demand is rising and supply is stagnant, or even starting to fall. And, unlike 1979, this is not a short term thing, this is likely to continue.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Keith has good ideas, but I for one don’t think the problem is that oil or gas has been too expensive — quite the contrary! Perhaps we shouldn’t try to encourage consumption by reducing price
Heh.
Tell us, Erb... has there bene a serious drop-off in gasoline consumption of late, given the price increases? then on what basis can you suggest that the reverse will be true? And under what conditions would a lowering of prices ever be undesireable?

Oh, right. I forgot; that lowers he amount of governmental control. can’t have THAT, nw can we?
It’s interesting to look at the production curves for Saudi Arabia. At http://www.theoildrum.com it notes that crude production for Saudi Arabia has been flat since early 2004, declining in 2007. This is true for other liquid fuels as well. This makes no sense. With record oil prices and danger of a recession that will limit demand, Saudi Arabia should not be having a decrease in production, or even flat production
That assumes their primary motivation is keeping us afloat, which is a conclusion very much at question. That point aside, however, the Saudis are not our majority supplier. Not even close. You also ignore that there’s a few issues with getting oil out of the place just now.





Written By: Bithead
URL: http://bitsblog.florack.us
That assumes their primary motivation is keeping us afloat, which is a conclusion very much at question. That point aside, however, the Saudis are not our majority supplier. Not even close. You also ignore that there’s a few issues with getting oil out of the place just now.
I’ll try to help you through this bithead. Oil markets are world wide. When production increases lead to price reduction, that affects everyone. Saudi Arabia increasing production has an impact on world markets which affects us just as much as if we were buying directly from Saudi Arabia. Who we get our supplies from is irrelevant. Capice?

Also, Saudi Arabia is said to be the one country with excess production capacity. If you’ve ever taken a course on the economics of non-renewable resources, you’d realize that it was in Saudi Arabia’s interest to avoid a world recession. You’d also know that price increases like the ones’ we’ve seen create opportunities for short term profits by increasing production (recognizing production can go back down if prices decline). The fact is, there are many reasons to think world production has probably peaked, and this suggests we could be facing a serious, long term energy crisis.

Also, recent price increases have caused sales of SUVs to fall, and it does indeed appear that the recent price increases are causing gasoline usage to decline.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Also, Saudi Arabia is said to be the one country with excess production capacity. If you’ve ever taken a course on the economics of non-renewable resources, you’d realize that it was in Saudi Arabia’s interest to avoid a world recession.
And why I have no doubt that, if demand in the US goes down significantly, they (and others) will be increasing production to better met demand.

Currently, we aren’t yet in a recession, and they have no incentive other then making profit.

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
And why I have no doubt that, if demand in the US goes down significantly, they (and others) will be increasing production to better met demand.
If they can. Most of OPEC is already producing at capacity. I think the Saudis are the only ones who can really claim to have excess capacity, but I’m not sure I believe them. I especially doubt they can increase oil production enough to make a fundamental difference in price. We’re probably seeing as much oil produced as is possible, and if it follows a bell curve (like US oil production has) then we may even see declines.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
I’ll try to help you through this bithead. Oil markets are world wide.
Yep... and our freinds the Saudis onle deal in a small percentage of that.
Pray, Continue...
Saudi Arabia increasing production has an impact on world markets which affects us just as much as if we were buying directly from Saudi Arabia. Who we get our supplies from is irrelevant. Capice?
Yep. I don’t agree with all points, but... you’ve just made a very strong argument for increasing domestic oil production. You know that, right?
Also, Saudi Arabia is said to be the one country with excess production capacity. You’d also know that price increases like the ones’ we’ve seen create opportunities for short term profits by increasing production (recognizing production can go back down if prices decline). The fact is, there are many reasons to think world production has probably peaked,
Well, again, there are a few issues with getting shipments safely out of the place, just now. A point which I note, you seem to be ignoring. You also ignore the idea that, even under the assumption that SA’s oil output has peaked, that does not mean that of the remainder of the world has done so. Given recent finds, such production hasn’t even come close to a peak, under the concept of a global amrket you yourself pointed to.
Also, recent price increases have caused sales of SUVs to fall, and it does indeed appear that the recent price increases are causing gasoline usage to decline.
You’ve not made your case, Erb. Forget the traditional knee-jerking at the SUV, and come up with some real consumption numbers.

Written By: Bithead
URL: http://bitsblog.florack.us
Personally, I’m of the mind that if people don’t want to change their habits, they ought to suffer for driving alone in big trucks and SUV’s.
I rise to take offense, sir.


My reputation as being rich and great looking to one side, I’m really not rich.

I don’t have the kind of money required, to keep three cars in the family, nor do I have the room in the driveway. We have two... one for me, one for my wife. I tow a camper, so a suitable tow vehicle is a requirement. I drive a Rainer..(Buick’s version of the Trailblazer) which is listed as not being a gas guzzler. Gets about 17/22. My wife and I both work, so the Buick is my fulltime ride, since she also drives to work. Around here Winters are a real issue,and the Buick helps there, too, so its worth it for that alone. It always amazes me... the California and Florida liberals screaming about SUV’s and how everyone up here has em, invariably leaves a winter visit behnd them wondering how people drive anything else. The look on their faces as they get educated is amusing.

And even assuming I could go with the third vehicle, and wanted to take the small car risk, both with winter roads and lesser crash-worthiness, (the buick has a real ladder frame under it) the gas and money savings wouldn’t nearly be enough to compensate for the operating costs and taxes a third vehicle would impose. Even assuming current prices, which I do not think will be with us for long, the gas milage wouldn’t be nearly enough in nearly any small car, to pay for the difference I’d pay in the overall. And most of them I wouldn’t want to drive, anyway. Thanks, I choose LIFE.



Written By: Bithead
URL: http://bitsblog.florack.us
Yep. I don’t agree with all points, but... you’ve just made a very strong argument for increasing domestic oil production. You know that, right?
There isn’t a lot of oil left to increase production. Even if we exploited all the fields we could in Alaska and Montana, we’d not really be able to make much of a dent in the global market or increase our productive capacity much.

Saudi Arabia isn’t having trouble exporting oil, it could export more if it produced more. And the argument about a peak looks at world production, it’s leveled off, and the Saudis are the ones said to have the largest reserves and only excess capacity. So I’m not sure what you’re arguing here, you don’t seem to be making any real points, and you certainly aren’t countering mine.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Funny, there was not 1 time in the past 3 winters where the Neon didn’t get me through. OK, there was that 1 time I drove the Landrover we also own, because we were getting 4-8 inches while I was at work. But, on the flip side, there was another time on ice when the Landrover ended up off-road with a blown tire, where 30 minutes later I was able to drive through with the Neon.

I used to drive 100 miles a day, and now only drive about 74. Once good weather and full daylight get here, I’ll be taking my motorcycle out for commuting. At least, that’s the plan.

And obviously, you don’t care about the environment, since you drive an SUV. How many times do you tow with it, or really need AWD in the winter???

...just kidding.

As long as you’re willing to pay to play, I don’t care what you drive. But, I don’t want to hear any moaning from you at the gas pump. You drive what you choose to drive, as does everyone else. Problem is to many people just don’t see cause and effect with their own choices. "Well, everyone else is driving a big honking truck, so I must drive one to be safe from them."

One BIL just about a Dodge Journey, why I don’t know since any number of other vehicles that get better gas mileage would have been sufficient. My other BIL and SIL insist on driving Dodge trucks, because they like them. Personally a truck is not a good commuting vehicle. It may have it’s occasional uses, but there’s no good reason to commute with a truck. But then, I’m not saying we need to legislate them off the road, just that people can stuff it about having to fill them up.

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
There isn’t a lot of oil left to increase production.
Bull cookies.
Even if we exploited all the fields we could in Alaska and Montana, we’d not really be able to make much of a dent in the global market or increase our productive capacity much
.

Again, Bull cookies. Would you say 500 billion barrels is a bit to add to the pile? Oh.. and take into consideration that USGS estimates historically lowball finds. That just one discovery of a number of them. Sorry, Erb, but your vision of short oil supplies, doesn’t mesh with the reality.
Saudi Arabia isn’t having trouble exporting oil, it could export more if it produced more
Again, bull cookies. Are you really suggesting that the place is politically stable and has no security concerns as regards oil production and shipments? Read and learn.
And obviously, you don’t care about the environment, since you drive an SUV. How many times do you tow with it, or really need AWD in the winter???
Well, I have to tell you, that the AWD works a great deal better in just about every situation than does 4wd and certainly better than 2wd. THing handles like no SUV has a right to... it’s unreal. It’s not set up for offroading, though it’ll do it OK. It’s real forte is rain, and snow, and hard corners, in any combo you’d like.
Personally a truck is not a good commuting vehicle.
I’ve found the Buick to be a great over-the roader, for comfort, and a pretty fair comuter, particularly in the winter. With the air ride, the leather, etc etc, that it’s comfortable enough for both duties. And it’s the quietest thing I’ve ever driven in the class.

As for the safety factor you mention, well, all I know is the frame required to haul nearly 7000lbs, which this can do, is heavy enough to attract the attention of whoever hits me.

I commute perhaps 15 miles one way... just a short hop, really. But in the winter time, it’s a mess because my route takes me right along the south shore of Lake Ontario. In case you’re not aware, I’m east and a little north of Buffalo... The city famous for shipping snow from it’s blizzards and plowed from the streets, out of town, in ostensibly empty coal trains. So you can imagine we see some deep stuff several times per year.

But now, we come to it:

As long as you’re willing to pay to play, I don’t care what you drive.
Ya know, that’s one thing I’m objecting to here, Keith. I have to ask you, why on earth you’d get satisfaction from someone paying large amounts of money?












Written By: Bithead
URL: http://bitsblog.florack.us
Oops. Hiccuped the quote block. Sorry.

Written By: Bithead
URL: http://bitsblog.florack.us
Sorry, Bithead, you can’t back up your claims. The oil in Montana and Alaska is not enough to alter the basic production potential (seriously 3 or 4 billion barrels isn’t a major difference). Even if we drilled all of Alaska, we’d hardly make a difference. And if you’re trying to claim Saudi Arabia would ship more oil if it wasn’t for security concerns your link doesn’t even come close to doing it (in fact your links are pathetic, they don’t even address the points you make). I have to conclude you are utterly ignorant of the situation in the oil market. Oh well, I chuckle to think of you having pay out more $$$ to fill up that truck. Get used to it. You can fantasize about oil resources elsewhere, but reality is going to keep biting you in the wallet, like it or not!

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
The oil in Montana and Alaska is not enough to alter the basic production potential (seriously 3 or 4 billion barrels isn’t a major difference).
If three or four billion can create a shortfall, the reverse must be also true. The estimates currently are that Bakken will double the current US reserves... not an insignificant amount by any stretch, and certainly enough to overcome your "Hurray for gloom and doom" nonsnse.
Oh well, I chuckle to think of you having pay out more $$$ to fill up that truck.
And why is that, Erb?
More class envy?

The bottom line is that the fundamentals right now don’t support $70/bbl, much less $115. All it’s going to take to shake things back to reality is one added source of crude coming online.
(in fact your links are pathetic, they don’t even address the points you make)
It help, Erb, if you actually READ them. Of course hvaing some brainpower, (Which you apparently lack) helps as well. Here’s one point the 2003 article makes:

Over half of Saudi Arabia’s oil reserves are contained in just eight fields, among them the world’s largest onshore oil field — Ghawar, which alone accounts for about half of the country’s total oil production capacity — and Safaniya, the world’s largest offshore oilfield. About two-thirds of Saudi Arabia’s crude oil is processed in a single enormous facility called Abqaiq, 25 miles inland from the Gulf of Bahrain. On the Persian Gulf, Saudi Arabia has just two primary oil export terminals: Ras Tanura - the world’s largest offshore oil loading facility, through which a tenth of global oil supply flows daily - and Ras al-Ju’aymah. On the Red Sea, a terminal called Yanbu is connected to Abqaiq via the 750-mile East–West pipeline. A terrorist attack on each one of these hubs of the Saudi oil complex or a simultaneous attack on few of them is not a fictional scenario. A single terrorist cell hijacking an airplane in Kuwait or Dubai and crashing it into Abqaiq or Ras Tanura, could turn the complex into an inferno. This could take up to 50% of Saudi oil off the market for at least six months and with it most of the world’s spare capacity, sending oil prices through the ceiling. "Such an attack would be more economically damaging than a dirty nuclear bomb set off in midtown Manhattan or across from the White House in Lafayette Square," wrote former CIA Middle East field officer Robert Baer. This "would be enough to bring the world’s oil-addicted economies to their knees, America’s along with them."
Now, we didn’t end up with one huge problem, just a large number of smaller ones. Same effect.

Oh, and did you note the recent find in Brazil? Another in the Gulf? They’;ve even managed to find a huge deposit in Israel, which some call the world’s largest. Yet another in Alaska. Oh, don’t forget Cambodia, Hawaii... and don’t forget China, as well. Wisconsin Austrailia... and...

Oh, well. By now, I’m sure you’re the only one who doesn’t get the point. That being of course, that it’s amazing what you can find once you start looking. Why are you so afraid of the world having success at finding energy supplies?






Written By: Bithead
URL: http://bitsblog.florack.us

The bottom line is that the fundamentals right now don’t support $70/bbl, much less $115.
So you think you’re smarter than the market, eh? *chuckle*

Also, speculation about what terror could do in Saudi Arabia certainly doesn’t mean they are having trouble getting oil to the market now. Your quote doesn’t support your point, not even close.

Finally, yes, I know about new oil finds. Teaching the Syriana course I follow the oil story closely. And these really don’t amount to a major increase in world supplies. This is perhaps something you need some help working through.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
So you think you’re smarter than the market, eh? *chuckle*
No, but several sources are saying exactly what I’m saying; we’re in a bubble, and it’s about to pop shortly.

Also, speculation about what terror could do in Saudi Arabia certainly doesn’t mean they are having trouble getting oil to the market now
Oh, yes it does, because such requires added security measures. You really don;t think out ramifications of what you say, do you?
Finally, yes, I know about new oil finds. Teaching the Syriana course I follow the oil story closely. And these really don’t amount to a major increase in world supplies. This is perhaps something you need some help working through.
Nice Try, Erb. The amounts are listed in those stoires. A few billion here anda few billion therem and eventially you’ve got something, as the phrase goes.

But do keep holding onto that dream of yours, that grand dream of an energy starved America.



Written By: Bithead
URL: http://bitsblog.florack.us
Oil prices will fluctuate, but the era of cheap oil is over. It’s not a bubble, it’s driven by two things: a) supply and demand; and b) a weak dollar. Much of the price increase is due to the decline in value of the dollar. Europeans have not seen the same amount of price increases because their currency is relatively more valuable.

I’ve shown you that world production has stabilized, and in fact declined some in the past few years. Oil will still exist. Saudi reserves are estimated at 200 billion or so barrels, though some experts like Matthew Simmons believes they are less. Canada’s oil sands probably have about 180 billion barrels, but the pace of recovery is slow. World consumption is about 3 billion barrels per year at current rates, so something like the Montana/North Dakota discovery could if completely exploited cover a year’s consumption at current rates. However, if Simmons is right (and I suspect he is, given both the evidence and rates of oil production) and Saudi reserves are less and past peak, then we could be looking at declining production as demand sky rockets.

Right now, the evidence and the markets are on my side here. You are essentially saying "things will change, this isn’t sustainable, there will be enough oil..." Perhpas. But the evidence and the markets are not supporting your position at this point. So keep alive your dreams that nothing will go wrong and we’ll keep swimming in oil. Some of us have to follow the data, even if it leads to unpleasant places.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
bithead - I’m just saying, you made a choice, you have to live with that choice. You’re probably paying roughly the same per gallon as I do. I fill up 1.25 times per week, and right now that costs about $50 bucks. Would I rather the price of gas were less, sure, but I’ve altered my habits just slightly, because it makes economic sense to do that. If I can arrange it again, I’ll be carpooling with someone else here at work again.

Nope, didn’t know you were in Buffalo, so the AWD is probably very useful during your winters. But the rest of the year? Just sayin’...

Just my opinion, so don’t hold it against me. What I see on the road are people commuting long distances, by themselves, in pickups and large SUV’s. They bought them because they were cheap, or they liked the size, and now they’re upside down on their payments, so they can’t sell them for something else. Now gas is higher and their b!tchin’ that it costs so freakin’ much to fill them. Maybe they should of thought of all that before they took that "deal" on the pickup in the first place.

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
bithead - I’m just saying, you made a choice, you have to live with that choice
Well, if you want to tow anything bigger than a very small pop-up, it’s kind of required. But your response struck me as similar in nature to Erb’s glee.
Nope, didn’t know you were in Buffalo, so the AWD is probably very useful during your winters. But the rest of the year? Just sayin’...
Well, as I say, the AWD isn’t just for snow, being as it really does help the handling under just about all situations. You’d have to drive an all-wheel to understand the difference,I guess. As an aside, my wife is looking at an all-wheel Ford Fusion. The Fusion is a fabulous handing car to begin with, so the all wheel has to be flat out spectacular.
They bought them because they were cheap, or they liked the size, and now they’re upside down on their payments, so they can’t sell them for something else. Now gas is higher and their b!tchin’ that it costs so freakin’ much to fill them. Maybe they should of thought of all that before they took that "deal" on the pickup in the first place.
Why? Should they have assumed government would create a shortage situation? And look, let’s be honest, here... even assuming I was driving something like your Neon, welllll... Let’s break this out; I commute ~25 miles per day, RT. So, assuming worst case MPG on the SUV and your stated best case (30mpg) on the Neon, the numbers break out this way:

125 miles/17mpg*$3.40=$25
125 miles/30mpg*$3.40=$14

So, you’re talking a difference of around $10 per week, even at the extremes.

Add to that you’ll not get 30mpg in my commute. More like 22 or 23, which si what my wife is getting around town, so the amount difference in money involved isnt even that large. Sorry, but going to a tincan is not a trade I’m wiling to make, even absent the need fr the trailer. the price advantage simply isn’t substantial enough.

The issue isn’t what’s being driven, but the baseline costs of the fuel. And that problem is caused by government.

I think a lot of the deal is that of percpetion n the part of busybodies like Erb. Witness: Nobody has much in the way of problems with the vehicle this SUV replaced, (A Custom GMC Safari van with All Wheel Drive, pictured here, at Batavia NY’s Lyons Park. At the time the pic was taken, it had 90k miles on it.

In terms of power, torque and MPG, the two rigs are virtually identical. In terms of size, the van is actualy slightly larger. Yet, when you change the vehicle to this Buick,, which, as I say is identical in MPG etc, suddenly the discussion takes on a different tenor. the Erbs of the world seems to love attcking the latter, while the former gets a pass.

Why?

Let’s take this aspect a step further. The Buick is powered by an Inline 6, labeled the "Atlas" engine. The LL8 version. Atlas is a very modular design; there’s a 4 cyl 5 cyl and 6 cyl version, of which what is in the Buick is the largest. Now, let’s look at this unit. That’s a Hummer H3. It’s powered by the Atlas engine... the 5 cyl version, the L52. It gets the same MPG as both the van, and the Buick, and is in fact slightly smaller and less poweful. Yet, watch the reaction by the busybodies.

Why?


The point I’m trying to make here is that there is so much BULL$#!+ attached to this... that I’m inclined to label *all* such objections as BS.

Written By: Bithead
URL: http://bitsblog.florack.us
I’ve shown you that world production has stabilized, and in fact declined some in the past few years. Oil will still exist. Saudi reserves are estimated at 200 billion or so barrels, though some experts like Matthew Simmons believes they are less.
And since that’s the worst case scenario, you cling to it like a drowning man.
You’re not that hard to see through, Erb.


Written By: Bithead
URL: http://bitsblog.florack.us
And since that’s the worst case scenario, you cling to it like a drowning man.
You’re lying. I’m not clinging to a worst case scenario (there are those out there who think civilization is going to fall apart soon — I don’t find that compelling either). I’m going with the evidence, looking carefully at trends, market forces, and data.

You are the one clinging to a fantasy. By now, given what’s happened in Iraq and in the US economy, you should realize that clinging to rose colored glasses fantasies is just as absurd as clinging to a worst case scenario. Wake up and actually crawl out of the filth of ideology and left/right jihadism, and start looking at reality with a clear mind and eyes. But that will take work, I suspect you’ll find it easier to stay in your little ideology-driven understanding of reality bubble.

(BTW, one of our cars is a Honda Pilot that gets about 17 MPG...I have nothing against SUVs, but I suspect the market is going to force us to conserve and rethink our priorities for future car purchases. On the other hand, living in rural Maine on a dirt road, I’ve found good snowtires on my midsize sedan are as effective in snow and ice (more effective on ice) than the SUV’s all wheel drive.)

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
You’re lying. I’m not clinging to a worst case scenario


All your other postings to the contrary, Erb.
(Aside... when liberals come up with ’your lying’ they’ve run out of arguments)

Game’s up.
On the other hand, living in rural Maine on a dirt road, I’ve found good snowtires on my midsize sedan are as effective in snow and ice (more effective on ice) than the SUV’s all wheel drive.)
Sure, assuming no ground clearence issues. Like, for example, snow.

But why would that matter to you? And why spend your time preaching on the subject? Why all the effort to change what OTHER PEOPLE drive? Why would you take pleasure in seeing other people pay more for anything?

When you can seriously address those issues, particularly the last one, get back to us.





Written By: Bithead
URL: http://bitsblog.florack.us
All your other postings to the contrary, Erb.
Yet somehow you can’t point to any. You’ve got nothing, and you know it. You’re just throwing out vague accusations in order to avoid having to admit you’re wrong. Pathetic.

But why would that matter to you? And why spend your time preaching on the subject? Why all the effort to change what OTHER PEOPLE drive?
I have no desire to change what other people drive; again we have an SUV. I’m not preaching. I’m just noting that it appears that we may be leveling off in oil production as demand continues to increase, and this suggests that prices won’t go down soon, and may continue to rise. This seems to bother you, and you seem to be reading into it a whole plethora of things that aren’t there. You can’t counter my evidence, so you make up false accusations like those above. Again, pathetic.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Yet somehow you can’t point to any
I hardly need to. You keep coming up with new examples, being a rather target- rich environment.
I have no desire to change what other people drive; again we have an SUV.
Which, of course is why you chuckle when you think of me fueling up. See what I mean, Erb? You just can’t help yourself.

Written By: Bithead
URL: http://bitsblog.florack.us
Well, I will say, yes, I’m preaching. And as with all preaching, it’s a take it or leave it proposition. I’m not trying to legislate a solution either.

I don’t laugh at people, I just shake my head at their choices.

And not even your choice. You seem to have good reasons for driving what you drive. And you seem to have thought about those practicalities.

The time of cheap gas is over, and it isn’t likely to return. How it effects our economy and what we do about it, both as individuals and as a country, is the main issue.

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
I guess that to depend on what you call ’cheap’, Keith.
My guess is we’ll be seeing $65-70/bbl by midsummer, barring other major events, like Iran blowing up, for example. This prediction would seem to be borne out by some of the economic wonks I’ve been watching of late, some of which I linked earlier. This would put fuel back down to about $2/gal, which given the state of the dollar at the moment, relatve, that’s actually fairly cheap.





Written By: Bithead
URL: http://bitsblog.florack.us
Which, of course is why you chuckle when you think of me fueling up.
Gee, the fact that that statement bothers you is telling. You hurled those insults and false statements about what I was writing because you were upset that I "chuckle" at the cost of your gas. Psst, Bithead, have a sense of humor!
My guess is we’ll be seeing $65-70/bbl by midsummer,
Your prediction is noted. I assume that to achieve this you also see the dollar appreciating in value vis-a-vis other major currencies? I have a hard time seeing oil getting that cheap even in a volatile market in the middle of the summer travel season with the dollar so weak.

But even $70 a barrel oil, which we could hit again for a brief period of time as market conditions fluctuate, is not the era of cheap gasoline. Also don’t forget that other factors affect gasoline prices, it’s not a direct correlation to crude oil (e.g., refining capacity, etc.)

And I doubt that even if it gets that low at some point it will stay there for long. But at least this debate will have a clear answer depending on market activity moving forward!

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Gee, the fact that that statement bothers you is telling.
Bothers me? No, no more than any of the other class warfare crap you’ve ofered up. I merely point out your liberal knee is jerking again. It’s a reflex for you.
Psst, Bithead, have a sense of humor
So, it was all a joke? Gee.... Where have I heard these claims recently?
I assume that to achieve this you also see the dollar appreciating in value vis-a-vis other major currencies?
I suspect that will in part be a product of the price of crude dropping, not a cause for it. The reasons are simple enough and have to do with the cost of productin and shipping of about everything else, vs the profit margins of international investors.
I have a hard time seeing oil getting that cheap... And I doubt that even if it gets that low at some point it will stay there for long
I think everyone here knows that, Erb.
And I figure they know why, as well.









Written By: Bithead
URL: http://bitsblog.florack.us
Your last post is virtually incoherent, Bithead. Apparently you want to assert that oil prices will drop, this will cause the dollar to rise (why you think that, I’m not sure), and you want to throw out a smokescreen of rhetoric of ’class war’ and the like to hide that you can’t really support your claims, they just FEEL right to you for some reason. OK, we have your prediction, I’ll hold you to it.

If you want to look at reality, though, you might want to read this.

Apparently, the one thing that can cause oil prices to drop would be a dramatic decline in demand from the US due to a recession. Is that what you’re expecting?

Of course, most experts don’t share your opinion that prices will fall. They think otherwise. You don’t give any cites or any arguments for your view, so I guess it must come from your gut, eh?

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Your last post is virtually incoherent, Bithead. Apparently you want to assert that oil prices will drop, this will cause the dollar to rise (why you think that, I’m not sure),
As I said, Erb, it helps when you actually read the post.


American business and individuals alike are under te strain of high fuel prices, Erb. Once those go away, the economy can start growing again. And remember, freinds, we’re not drilling the oil we have here in the states so we can save the snail darter. Or whatever creature or feature it is we’re saving this week.
You don’t give any cites or any arguments for your view, so I guess it must come from your gut, eh?


So, you didn’t see any of the links I put on on the points? As I said, Erb, it helps when you actually read the post. I’ll make it simple for you. AT the moment, prices are not obeying the fundamentals of supply and demand. THe basic fundamentals are not there for $70/bbl, much less 110+/bbl. Gasoline prices, similarly, are at record levels, but so are the stockpiles thereof, being at the most they’ve been in 15 years, now... meaning that those prices are not following the basics of supply and demand, either.

Gee... I wonder if your buddy, Soros could be doing what he SAID he’d do, huh?




Written By: Bithead
URL: http://bitsblog.florack.us
AT the moment, prices are not obeying the fundamentals of supply and demand.
I didn’t realize markets were so dysfunctional that they had the capacity to ignore supply and demand. You must be a socialist if you have such a distrust in markets. Nothing in your links makes your case, I think you really don’t understand what you’re talking about here. Seriously. You’re dodging and weaving, making assertions, but not explaining yourself. That’s very weak.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
I didn’t realize markets were so dysfunctional that they had the capacity to ignore supply and demand
Well, again, had you bothered to read the links, you’d have seen the background.

And Scott;
Face it, your assertions of MY weakness are a nifty little dodge.
Well, YOU think so, at least.




Written By: Bithead
URL: http://bitsblog.florack.us
Well, again, had you bothered to read the links, you’d have seen the background.
No, your links do not support your claims. You’re playing that dishonest game of posting links and then claiming they say things they do not. I challenge you to quote from the links things which support your prediction about oil prices. You’re playing a smoke and mirrors game, and I’ve called you on it. You can’t respond.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
OK, fine. I’ve been waiting for this. You wann play that game?

Here.
Although U.S. crude oil inventories have fallen, gasoline inventories are at their highest since March, 1993, notes Tim Evans, an energy futures analyst at Citigroup’s Futures Perspective. World oil production was up 2.5 percent in the first quarter of 2008 over the same period in 2007 while world oil consumption rose by just 2 percent. In fact, world production is projected to be 3.3 percent higher in the second quarter and 4.1 percent higher in the third quarter than the same periods a year ago. On the other hand, world demand is projected to rise by just 1.6 percent over the next six months.
In fact, demand is falling in some countries. According to economist John Kemp at the commodities firm Sempra Metals, the U.S. consumed 4 percent less petroleum in January 2008 than it did the year before. Evans agrees, noting that the U.S. demand for petroleum products began falling off last July. Interestingly, this drop in U.S. oil consumption began before crude prices turned vertical and before we began to see weakness in the broader economy. Even China’s thirst for oil is abating somewhat. Its demand for oil, which once rose at 10 percent per year, has now dropped to 6 percent per year. In addition, world surplus oil production capacity has gone from a very tight 1.5 million barrels per day a couple of years ago to more than 3 million barrels today, says petroleum economist Michael Lynch
So, demand was down before prices went up? Gee... sounds like it’s not following supply and demand, doesn’t it?

And Again, this time from Toronto’s Globe and Mail:
The flood of speculative investment into oil markets is inflating a price bubble that could pop and send crude prices sharply lower if U.S. petroleum demand continues to slump, analysts warned yesterday.

Crude prices continued their remarkable rally yesterday, rising 95 cents (U.S.) to close at another record high of $105.47 on the New York Mercantile Exchange.

But the boom could be setting the stage for its own undoing, many analysts argue, since it is being fuelled by speculators looking to hedge against a declining U.S. dollar and devalued financial assets. Some analysts are forecasting a sharp correction in the price of crude this spring.

“It’s hard to argue that prices should be higher [now] than they were not too long ago,” said Michael Lynch, president of Strategic Energy and Economic Research Inc., of Cambridge, Mass., who has forecast that crude markets are set for a massive correction that could eventually bring prices as low as $50 a barrel.
and from someone else, commenting on that article:
Most economists have been saying that it’s been speculation, not demand that is driving higher prices. Americans have been using less fuel of late and that alone should have reduced prices by several dollars a barrel.

Hugo Chavez’s saber rattling may have something to do with the price rise but not to the extent we’ve seen. Even OPEC knows the price elevation is a house of cards and has called for maintaining current levels of production—a practice that generally doesn’t happen if demand remains high (this after a debate to reduce production). The oil sheiks seem a bit perplexed as to how to proceed; should they reduce production, the price will go higher ensuring a more serious collapse, should they increase production, the price will stay high as speculators continue to bid it up. It’s lose-lose for OPEC and any people with money invested in oil futures. When this collapse comes, it will be devastating, especially if the price drops rapidly by more than half as predicted.
Now, that’s just two.
You want I should contune beating you about the head and shoulders?

The bottom line is, Erb, that as usual, you have no freakin clue what you’re talking about.





Written By: Bithead
URL: http://bitsblog.florack.us
Oh, by the way, Erb...the first quote was also the first link you said didn’t support my position. Clearly, you dind’t read the link and are trying to lie your way out.

Let’s examine the rest of the links I put up yesterday, shall we?

The first I’ve already posted the text from, in my response above. The Second I put up was from the WSJ, which says, in part:
While rising oil prices have yielded fat profits, the future may not be that bright. Lehman Brothers Holdings wrote in a research report last month about the integrated oil industry that it believes “we have already transitioned to a down cycle that could last through the end of the decade. We anticipate that the sector will continue its downward trend through the summer and will exit the year below its recent lows.”
Must not have read that part, huh?

Let’s try the next one:
JvdV: "For our investment decision we are in any case taking a much lower oil price to see whether projects are worth investing in. The "difficult oil" can easily be produced on a sound financial basis at much lower oil prices than 100 dollars.

The nearly mythical hundred dollars per barrel is based in the perception of a coming shortage of capacity on the oil market. But I think that the demand for oil will react by the present high price, although with some delay. However, this will not lead to a decline in demand, but in lower demand growth. We also know that there is a lot of psychology in the present oil price. The reality is that throughout the chain no one has to wait for any oil: tankers don’t have to wait to be loaded, refineries don’t have to wait for tankers, trucks don’t have to wait at the refinery and consumers don’t have to wait at the filling stations. The physical system is functioning properly.

In addition it is an economic law that demand and supply are always in balance. Apparently not everyone is realizing this. Sometimes there are frictions, which are showing itself in the price, to which supply and demand are both reaction. This law has not been put out of business."
Again, You missed that part, right?

Next:
Mr Forbes, publisher of Forbes magazine, said the price of oil, which peaked at more than $US70 a barrel on Monday as Hurricane Katrina headed for the US Gulf Coast, was unsustainable.
He said factors such as inflation and increased demand for oil from China and India accounted for only a small part of the price hike from $US25-30 a barrel three years ago.

"The rest of it is sheer bubble speculation," he said.

Mr Forbes, who was speaking at the opening of the Forbes Global CEO Conference in Sydney yesterday, said the higher the oil price rose, the harder it would eventually crash, creating more pain for hedge fund managers and their clients.

"I don’t think it’s going to go to $US100 but if it does the crash is going to be even more spectacular," he said.

"It will make the hi-tech bubble look like a picnic — this thing is not going to last."


You missed that part, right? After all, who reads the first few paras of an article?

And the final link I put up in that chain you claim doesn’t support my position
is a crosspost from the Environmental Republican article, already posted, here... a point you’d ahve noticed, and doubtless complained about had yo actually read what I posted.

You’re a liar Erb, and a clueless one at that, and have been exposed as such.

Have fun dealing with it.



Written By: Bithead
URL: http://bitsblog.florack.us
Well, I was talking about cheap gas, which while it depends on cheap oil, has other factors that can keep it high, including tax.

We’re only a hurricane away from our Gulf of Mexico operations being disrupted. Remember what that did after Katrina.

Some enviro-Democrat is always looking to raise the gas tax. Give them a majority in Congress and the President, and they just might do that.

Right now there is a lot of speculation about the oil market. Pick your expert, and you’ll get a different answer.

For my part, I’d rather be pessimistic and plan for the worst.

http://www.reuters.com/article/ousiv/idUSN1742688120080417
Crude oil prices are still headed upward and could top $125 a barrel in the near-term, legendary oil investor T. Boone Pickens said on Thursday.

"It will go up," said Pickens, who heads the BP Capital hedge fund with over $4 billion under management. "Oil is moving to a substantially higher level — say above $125 a barrel."

U.S. crude futures hit a record $115.54 on Thursday. Oil prices have more than quintupled since 2002, propelled higher by soaring demand from emerging economies like China alongside slow increases in global production capacity.
http://biz.yahoo.com/ap/080417/oil_prices.html?.v=10
This expectation of higher summer demand is boosting gas prices now, but prices are also rising because refiners are switching over from winter grade gasoline to the more expensive but less polluting fuel they’re required to sell in the summer. That has pulled supplies lower lately as refiners try to sell off all of their winter fuel. Short supplies of key blending components needed for summer gasoline are exacerbating the problem.

Oil, meanwhile, has spiked higher on concerns about falling supplies and rising global demand, and as a weaker dollar has attracted speculative investors to crude futures. Crude rose to a new trading record of $115.54 overnight as the dollar fell to a new low against the euro, but later pulled back when the dollar strengthened.


Written By: Keith_Indy
URL: http://asecondhandconjecture.com
Well, I was talking about cheap gas, which while it depends on cheap oil, has other factors that can keep it high, including tax.
I suspect that the same issue is keeping them both high at this point.
We’re only a hurricane away from our Gulf of Mexico operations being disrupted. Remember what that did after Katrina.
Oh, sure, it helped in getting this ball really rolling. But the image of our being short on oil was already well established by those who would like us to see it so. Katrina amplified that, but in the end would have had little effect on prices, except for very short term.

As for Pickens, let’s remember that he makes money when oil prices go up. No motivation for him to further the image of shortage, is there?



Written By: Bithead
URL: http://bitsblog.florack.us
Well, Pickens and co. just lost a bundle by betting the oil prices would go down. That’s what I mean by pick your expert.

Well, gas prices fluctuate seasonal, based on demand, and also refining needed, those boutique blends for instance.

I don’t see us having a supply problem, except for temporary disruptions. But we could have longer term disruptions in the rest of the story, especially refineries, and pipelines. More needs to be done there to increase our resiliency to disruptions.

In the long run, we need to move to non-oil based modes of transportation energy.

I still want a little nuclear reactor under my hood. Power the car and the house at night!!!

Written By: Keith_Indy
URL: http://asecondhandconjecture.com
No, Bithead, your links did not prove your case. All you have are opinions from people, some of it talking about the impact of Katrina, that oil might be overpriced. I’ve explained with charts, graphs, links to current articles and the like. You provide only vague opinions. Your name calling at the end suggests strongly that you know your evidence is weak, and you want to try to cover it up.

But you made a prediction. You said oil would be $70 by mid-summer. We’ll see if you were right. If not, we’ll see if you have the intellectual integrity to admit you’re wrong, or if you’ll just make excuses. In short, you think there’s an oil bubble, and you find someone who thinks that.

If I wanted to play your game, I could bury you with links from peak oil websites, that would have detailed analyses and graphs. Here are a few:

http://www.peakoil.com/

http://www.theoildrum.com/
(these two each have links to good stats, and academic papers)

http://www.lifeaftertheoilcrash.net/

I could go on. Now, if you want to say that both futures are possible, I’ll agree — though I think you really don’t understand what’s happening if you really think oil will be down to $70 by midsummer, none of what you quoted show that. Given the weight of the evidence, I think you’re the one caught up in wishful thinking.

But we’ll see. $70 a barrel by midsummer. Your prediction is noted and logged.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
In the long run, we need to move to non-oil based modes of transportation energy.

I still want a little nuclear reactor under my hood. Power the car and the house at night!!!
Nuclear energy is one of the best options, but that also requires fuel. How much uranium do we have? In any event, I think the under-utilization of nuclear energy is almost a scandal.

Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm

 
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