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I will say this...
As of yet, I haven't seen a complicated mathematical equation that explains how U.S. oil companies continue to make record profits as we get raped at the pump. Does that mean their operating costs aren't rising nearly as fast as the price at the pump - even tho they keep singing the Song of Lament over oil prices??
here's a 2005 story responding to claims of price gouging by oil companies
the shorter answer is that the oil companies don't set the price, for one.
and their major use of funds is not in operating costs but in exploration and development.
the big outlays for this exploration and development was made years and years ago in most cases, and high demand has driven oil prices MUCH higher than anticipated. they made their investments with a much lower return built in, and now they are reaping the benefits.
they have a duty to shareholders to allow this to continue. so they could make significant and costly investments in other areas, but that would cut into the profits.
they are operating exactly as they were designed to and exactly as any rational company would.
precisely the right thinking.
we've set up an insane housing and planning system in this country that assumed cheap gas and ready access to cars. when gas is not $5 but $10 or $15 a gallon our society actually breaks.
hotlanta is a hot mess when it comes to this. No planning whatsoever. sprawl and 15 lanes of highway and no mass transit. that's a bad mix.
there are things we can do on an individual level, but we need national and even international level planning to deal with the most severe impacts.
pricing will change our behavior where goodwill and news reports could not. it's always been that way.
if you're in the market for a car, maximize that fuel efficiency or avoid the purchase altogether.
living anywhere that depends on a drive is a no-go.
expanding roadways and airport runways is a complete waste.
Here is the intro to an article describing their plans.
from http://dantoujours.blogspot.com
<b..., mai 29, 2008
Following Sweden...
This isn't a new article, but is something we need to be thinking about in North America. In Canada, the Liberal Party is proposing a carbon tax, but a carbon tax that isn't part of a bigger initiative to wean the country off of fossil fuel dependency is incomplete.
Both Canada and the US should follow the Swedes and set a national goal like theirs below. Bring committees of industrialists, academics, farmers, car makers, civil servants, MPs, Congressmen and women and others together and work up a plan that includes huge expenditures towards rail and public transportation, incentives to develop and convert to alternative fuels, both on a macro and micro scale, urban planning initiatives to encourage density and mixed use neighbourhoods and carbon taxes and other taxes on heavy polluters. We need to set a target date, benchmarks and then move forward..........."
So true, Jack... even for those of us who are astute and concerned. I drove the car of my dreams for seven years -- a 1993 Lexus SC300 5 speed. I bought it in 2000, and put an additional 100,000+ miles on it. I love to drive, and to drive fast. I simply refused to look at the conflict between my political/environmental stance and my "go-fast" car. C'mon ... I LOVED my car. However, in mid December, 2007, a repair bill of $1400, and weekly gas bill pushing $100 (it took premium gas) was an epiphany... in two weeks I sold the Lex and leased a Prius. I fill up every 7-10 days for $27-31. I drive slower and I drive less. I live in an urban center and limit my long drives to necessity. I feel good contributing a little less to oil company profits, oil dependence and global warming. Sacrifice was easy for me in a lot of other areas--even though I'm in the middle of the city, I heat my home with a pellet stove and am considering future solar conversions; but it took pain at the gas pump to really hold me accountable. Sometimes, as much as we appeal to higher motives... change is motivated by economics.(and no, i'm not ready to change my identity to PriusOakland! LOL.. just not the same panache...)
I did find it interesting that there are no longer tax credits for hyrbrid vehicles (at least for Toyotas), nor is California allowing any more hybrids in the HOV lanes. It seems there were caps on both those incentives. Makes you wanta go ... hmmm...
Syncrude from the Tar Sands is three times more concentrated than Saudi Arabian sweet oil. One of the reasons why the USA gets the majority of its oil from Canada is because of just that.
In fact, the reason why the price is so high is that every person driving is paying for the US national debt. Kissinger made a deal with the Saudis in the 70s that if they kept it flowing, he would make sure they got a high price for their oil PROVIDED they used their profits to purchase US national debt. That's why Saudi money makes up 20-21% of all the money in US banks. Now, that is the story you should be pursuing.
Meanwhile, I am stuck in Texas Where a car is a necessity.
They will figure it out one day.
Oil prices fell back Thursday ahead of a report expected to show U.S. inventories of crude and petroleum products grew last week.
Prices remained volatile, though, buffeted about by threats against Nigerian oil facilities, worries about falling gasoline demand in the U.S. and a strengthening U.S. dollar.
That’s those big, bad oil companies getting rich on the backs of working Americans, right? Wrong. The problem is the bottleneck at the refinery stage. OPEC can pump oil as fast as they want and the price for each barrel will fall, but refineries are working at full capacity and can’t meet the demand which drives gas prices up.
We haven’t built a refinery in this country since 1977 - our demand for gasoline has increased, but our capacity to meet the demand hasn’t. Last year, the Democrats in Congress could’ve authorized the building of more refinery capacity, but instead, they chose to send back defeatist legislation for the war and focus on healthcare for the rich.
The President in the meantime, did all he could do by authorizing more exploration of domestic sources for oil, but without Congressional approval, he can’t authorize the building of refineries. So, the Democrats, the party of working people, the party that declared in 1979 they’d wean us off of foreign oil and increase our production capacity, has been more interested in undermining the national economy for purely political reasons.
2. I'll ask again...how can a Third World Country like Brazil be on it's 3rd Generation away from dependence on foreign Oil, but the USA can't do it. They have cars run by sugar, but somehow, our scientists can't do the same for us with sugar and/or ethanol?
No, because Brazil's in the tropics and we're not. Ethanol=Alcohol. As in booze. Generally they add stuff to it that makes it un-drinkable (like, say, gasoline; in the US ethanol is mixed with gas, not put into engines just by itself.) They make it from sugar down there, just like they make rum; we make it from corn up here, just like we make whiskey. But you can grow sugar all year round in a tropical climate --- stuff's practically a weed --- you can only grow and harvest corn a few months out of the year, up here. Furthermore, sugar doesn't require as much fertilizer, and sugar plantation rely on more cheap human labor as opposed to big tractors and combines our Midwest farmers use. So since you need natural gas to make fertilizer, and gasoline to run tractors, you're putting a lot of energy into growing ethanol from corn. Further, the best brazillian ehtanol plants use the dried, juiced cane scraps to fuel the boilers for the distilleries; most ethnaol plants up here use natural gas boilers. (The waste product from the corn goes into animal feed.)
But really your biggest problem is that even if we devoted the whole US corn crop to ethanol --- no more tortillas, goodbye corn-flakes, hello $$$-free range chicken and beef --- you would only replace about 15% of the US gasoline consumption.
They're trying to come up with a way to make cheep wood alcohol (that's the stuff that makes you blind if you drink it) out of woody-stemmed weeds and so forth (called cellulosic ethanol, after the cellulose fibers that makes plants woody). Idea being that you could grow a ton of it without using up any crop land. But they're not there yet, and you'd still have to put in a lot of energy harvesting it an distilling it.
P.S. Brazillian ethanol production is destroying the shit out of the rain forest.
P.P.S. Glad I could cheer you up. :)
Firstly, Index Item 325 speaks to Jim Kunstler, who forecasted a societal collapse scenario when the Y2k bug didn't get fixed. He and many, many others just moved right along to the next doomer fantasy du jour, some splitting off to bird flu while others concentrated on Peak Oil. I watched those Y2k doomers while working remediation in the late 90s, and learned how easy it was for good people to get caught up in the hysteria put forth by a few.
Secondly, 355 speaks to this summer's situation and how speculators are creating the appearance of shortages. CNN just reported on these speculators this morning.
Problem is, here in Atlanta we can't get our business and political leaders to think beyond old, petty prejudices.
Most metro Atlantans commute, and most commute from suburban areas that don't want rail transit of any type. Most suburbanites would rather pay $9 a gallon, instead of paying taxes for rail that would expose suburbia to the urban types. And this attitude has been well-adopted by the Georgia legislature.
Suffice it to say that other major cities around the country have a similar problem.
We are seeing big-time inflation (dare I say stagflation) in part because we can no longer export our problems to the world like we used to.
Cheap prices -- starting with energy, but also including labor -- fueled a false sense of American prosperity over the last few decades. The housing bubble only exacerbated it, but maybe in retrospect we'll be thankful that it also revealed the other bubble we were living in, the one in which the US could live beyond its means both at the environmental and ethical level.
Cheap food from: cheap labor, horrible agricultural practices in other countries
Likewise with cheap clothing, toys, etc.
It wasn't sustainable, and now prices are returning to some correlation with fundamentals
As nations become somewhat wealthier, human rights abuses somewhat subside... and prices readjust for what you might call post-slavery conditions
Ironic that those who will be hurt most by the uplifting of people elsewhere in the world will be our own poor.
I've never understood how an economy can function with so much disconnect from fundamentals (food, clothing, shelter). Turns out it can't. We're going back to basics. It's the end of "the new luxury."