Oil Vs. Alternative Energy

@okie,

Renewable energy certainly has a certain "bottom up" quality to it in Germany. Many farmers have put photovoltaic panels on the roofs of their barns and stables here. In fact, new barns are often built in an angle that allows optimum "harvesting" of sunlight. It definitely seems that it's easier to go "off the grid" when you're living in a rural area.

In this region, you get the impression that virtually every farm has photovoltaic panels somewhere. The local school has installed a a biomass plant that generates electricity and heat. It's actually quite a funny sight.... a school building with a rather large chimney... A town not far from here is starting a up geothermal project to provide heat for thousands of houses locally. Another geothermal project has gone online not too far from here a while ago.

Wind power, on the other hand, only plays a minor role in this region. And the "bottom up" approach is probably more difficult for people living in metropolitan areas. You'll need a lot of electricity for a whole city, or for industrial use... and relying on individuals to build huge off-shore windparks is maybe also a bit difficult...

... unless we're talking about individuals like Boone Pickens, of course!

0 Replies

@Cycloptichorn,

Cycloptichorn wrote:

How does drilling in America, but not forcing the oil to be sold in America and used here, lower prices significantly? Adding 1-2% to world supply will NOT significantly reduce the price of oil and you know it!

Your two propositions here defy both common sense and what we do know about markets generally and the petroleum market in particular.

In the first place petroleum produced in America will almost certainly be consumed somewhere in North America, simply because the local demand is so great and the cost of transporting it to another continent would make the economics infeasible for any buyer/seller. Moreover, as noted by others here, whether the product is sold here or in China, the economic effect will be the same. No control of any sort is required, and any suggestion to the contrary is, frankly, laughable.

I'm tempted to ask you to provide proof to support your assertion that increasing the world supply by 1-2% will certailly not lower prices significantly. However, I'm confident you will simply finess the demand and evade the question. Still, if you have the courage to try......

OPEC exerts its only moderately effective control of petroleum prices mostly by seeing to it that production capacity is held as close as possible to demand, and not by simply throttling down on operating wells (mostly because they can't trust other cartel members not to pump what they can to increase their revenues and thereby create a buyers market). Instead they carefully defer investment and development of new extraction capability until there is a need for it. The development of new, additional extraction capability by non-cartel members upsets these calculations and plans for a fairly extensive period, since new capacity is an expensive thing to install and once installed the incentives to use it and pump more product are so great. Historical data on world prices provides ample confirmation of this proposition. When the North Sea extraction came online in the 1980s the price of petroleum plummeted. There are many other correlations as well, including our own North Slope production. Even small marginal additions to capacity can have powerful and disproportionate effects in turning a market from one dominated by sellers to one dominated by buyers.

Today with the continuing economic development of China and India, each with their huge populations, we face the prospect of continuously rising demand at rates greater than occured in decades past. As a result new capacity may end up reducing the growth of the price, rather than lowering it absolutely. However, the basic principle outlined above still applies.

Frankly I am a bit amazed that you feel able to advance these nonsensical propositions and expect others to simply accept them as truth.

2 Replies

@georgeob1,

U.S. oil demand has dropped I think around 4% in the first half of 2008, if my calculation is correct, and it has indeed affected prices rather significantly, alot more than 4% here in the U.S. of late. Prices have dropped at least 10%, and crude prices worldwide have seen larger declines from the high. So, I think it goes without much argument that only a 1 or 2% increase in supply can affect the market in a significant way. Probably more than 1 to 2 % in the price. Price is largely determined at the margins of the supply and demand. A slight over supply as compared to a slight under supply can bring about a significant swing in price, that would seem to be just common sense.

"WASHINGTON (Reuters) - U.S. oil demand during the first half of 2008 fell by an average 800,000 barrels per day (bpd) compared with the same period a year ago, the biggest volume decline in 26 years, the Energy Information Administration said on Tuesday."

http://news.yahoo.com/s/nm/20080812/us_nm/usa_oil_demand_dc_2

1 Reply

@okie,

It also shows the far-reaching consequences simple energy conserving measures like carpooling, using public transportation, switching to more economic cars, etc. can have...

0 Replies

@georgeob1,

Quote:

I'm tempted to ask you to provide proof to support your assertion that increasing the world supply by 1-2% will certailly not lower prices significantly. However, I'm confident you will simply finess the demand and evade the question. Still, if you have the courage to try......

Bravely forward I go, into the breach!

Let me ask you: how much do you think adding 1-2% would take off of the price? Of course, the pat answer is 'there's no way to tell.' But certainly you don't think it will be 5, or 10%? What would you consider 'significant?' For when the price of a product has gone up 300% in the last ten years, reducing the price by 5 or 10% of its current price truly is not significant. It is a tiny reduction. Gas and oil prices have walked back from their highs this year, but they are nowhere near reduced to the levels we saw in the past. That isn't going to happen and those politicians who lay out domestic drilling as a way to get gasoline prices down are never going to save people more then a few percentage points.

Domestic drilling isn't going to solve our energy problems, at least from the prism of lowering gasoline prices.

Cycloptichorn

2 Replies

@Cycloptichorn,

Politicians always over simplify an issue. I believe drilling may not decrease the price, adjusted for inflation, however, I believe it would likely delay or soften the seriousness of further price increases. Put another way, it will decrease the price as compared to what it will otherwise be if we don't do everything we can to enhance our own supply. Nor will it make us oil independent, but it will make us marginally less dependent, and less susceptible to the political impacts and national security risks that are inherent in being almost totally dependent on foreign oil.

I keep trying analogies on you. Oil is the bridge to tomorrow, that may look alot different than now, in regard to energy sources. Bridges need to be made as strong and as safe as possible, until they are totally replaced. I like that analogy, I should call McCain and give him the suggestion.

1 Reply

@okie,

That wouldn't be a bad idea, 'cept he voted against (or didn't show up for) spending extra money on fixing up our ailing bridges here in the States in this past cycle. d'oh.

Would you support a bill which forces oil drilled in America to be sold in America?

Cycloptichorn

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

That wouldn't be a bad idea, 'cept he voted against (or didn't show up for) spending extra money on fixing up our ailing bridges here in the States in this past cycle. d'oh.

Would you support a bill which forces oil drilled in America to be sold in America?

Cycloptichorn

No, cyclops, for obvious reasons, and George explained about that issue, and I 100% agreed with that explanation. Primarily, it makes no difference,whether we use that oil, or sell it and use the money to buy different oil, and the main reason why that might or could happen is because for the type of crude produced, it may be more efficient in regard to transportation and refining. Perhaps it would make sense to refine it in Canada, and buy different oil from Canada, although I doubt that would be the case, but it could happen in the future. Would you be against the efficiency factor that I just outlined?

Also, any national security consideration or crisis could change that scenario, obviously, and at that point, at least we have the production capability within our borders. Perhaps you don't think that is important?

0 Replies

@Cycloptichorn,

Cyclo, Okie is right - your argument or would be "proof" doesn't make the grade. Recent history has already confirmed that small additions to new petroleum extraction capacity, outside OPEC control (North Sea and Alaska sources are prominent examples), can disrupt the caretel's plans and contribute to enormous reductions in the world market price, transforming a seller's market to a buyer's one, and lowering the price for long periods by as much as 50%. Moreover, this isn't even an unusual or novel phenomenon in economic activity.

This is a loser argument for the Democrats and a loser argument for you.

1 Reply

@georgeob1,

Okay, fine - lower the price by 50% for protracted periods, and we're still looking at gas which is double what it was ten years ago. Not exactly a return to parity, and not a situation which is a stable one - the prices could go up at any time the Middle East explodes into war.

Domestic renewable sources (such as nuclear) do not depend on world politics for their pricing. The truth is that you have no idea how much the price of oil will rise or drop if we add supply (in the future); to claim that this is some sort of solution to our energy problems is folly. It is not. It is nothing but keeping us chained to the same horses, ones which we have very little control over the direction of.

Cycloptichorn

2 Replies

@Cycloptichorn,

I didn't know nuclear was renewable? When did you reclassify that, cyclops?

1 Reply

@okie,

I always count nuclear with renewable energy sources, for it is by far the cleanest and most powerful energy source we have available today.

Cycloptichorn

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

Okay, fine - lower the price by 50% for protracted periods, and we're still looking at gas which is double what it was ten years ago. Not exactly a return to parity, and not a situation which is a stable one - the prices could go up at any time the Middle East explodes into war.

Domestic renewable sources (such as nuclear) do not depend on world politics for their pricing. The truth is that you have no idea how much the price of oil will rise or drop if we add supply (in the future); to claim that this is some sort of solution to our energy problems is folly. It is not. It is nothing but keeping us chained to the same horses, ones which we have very little control over the direction of.

I agree that gasoline is very expensive, and that, even if its price dropped by half, it would still be a little expensive even compared to the normal escalation of other commodity prices over the past 45 years. However a drop, comparable to that which did occur following the OPEC embargo of the 1970s, would be very significant indeed, the claims to the contrary being asserted by the Democrats notwithstanding -- and that, I believe is the question in dispute here.

I also agree that renewable sources and nuclear energy are far less dependent on world politics than petroleum, and that they offer the same economic benefits with respect to our balance of payments problem as does domestic petroleum extraction. Moreover I agree that domestic drilling is not a complete solution to our energy problem - I suspect okie believes that too. However, that does not constitute a valid argument against domestic drilling. That it is not a complete solution does not mean we shouldn't do it, anymore than the simple observation that wind and solar power are not themselves complete solutions either, constitutes an argument establishing that we shouldn't ever use them.

Your candidate, Obama, argues - very compellingly I believe - that there is no panacea, no single solution to our energy problem. Instead he says a complex and comprehensive array of actions will be required to address this very important issue. That he then goes on to argue against important components of this array of solutions, including domestic drilling and nuclear power, is simply a demonstration of his hypocrisy and the fact that, despite the inspiring rhetoric, he is still the captive of the single issue loonies who make up a large part of the establishment of Democrat politics.

Indeed of late he has begun to hedge his bets - now indicating that he may approve of some domestic offshore drilling if certain conditions are met; and hiding his opposition to nuclear energy behind the ficticious notions that we need a retreivable repository for the spent fuel (we already have one at Yucca Mountain, though Reid & Pelosi have prevented its opening) and the unattainable proposition that we need a new worldwide anti proliferation agreement, thus in a truly daffy way giving Iran power over our domestic energy policy.

1 Reply

@georgeob1,

Interesting; you must also feel that McCain is hiding his opposition to Domestic drilling as well, or hedging his bets, as he was against it until a few weeks ago.

Cycloptichorn

1 Reply

@Cycloptichorn,

I don't for a minute think McCain is above politics or hypocrisy (certainly his earlier proposal for a gas tax holiday demonstrates that). However, while oil was under $60/barrel there was a pretty good argument for the proposition that keeping our offshore reserves and those in ANWER in reserve (while petroleum prices were low) was advantageous to us. Whatever might have been his reasons for opposing it then, he has reached what I regard as the right solution now, under current conditions. The issue just wasn't that important while oil was under $60/barrel.

By contrast, Obama at first clung to the notion that both domestic drilling and nuclear were wrong in principle. Then he moved on to simply dismissing any potential benefit from drilling with the absurd and contemptuous assertion that it wouldn't "affect prices for the next 10 years"; and simply ignoring nuclear. Now he indicates he might approve some drilling if certain unspecified conditions are met, and masks his continuing opposition to nuclear behind laughably impossible (and false) preconditions.

Who here is being deceptive and who forthright? Who has demonstrated a willingness to make pragmatic choices appropriate to changed conditions; and who has demonstrated that he is still a prisoner to the fixed ideas of close-minded zealots?

4 Replies

@georgeob1,

A lot of that depends on perception, George. I think you are starting with a picture of the two in your mind, and looking for facts to confirm it; for I could just as easily assert that McCain has sold out nearly every position he ever held to win the nomination of your party, and that 'pragmatism' to him means never actually holding a position on anything at all. In fact, I think it would be difficult to find an issue he hasn't flipped on to get where he is today. That's honorable, or desirable in a candidate - that his views are based on what is most popular?

Here I thought you guys were against that; Bush has been saying so for years. Laughing

McCain is completely and totally devoted to special interests, and owned by them; that is, the special interest he has in getting elected. And that's it.

Cycloptichorn

1 Reply

@georgeob1,

George old chap--

Your argument is based on what "low" means.

The issue is always important whatever the price is.

It is a bet. If you think prices are too "high" now you should cash in all your assets and bet the price down and your descendents will be able to whoop it up.

On the other hand.....

0 Replies

@georgeob1,

I'm sorry George. I forgot to say that if you think the price is too high now you should tell everybody that it is too low and if they believe you you'll get better odds and your descendents will be on easy street. (My favourite Warholian epigram.)

0 Replies

@Cycloptichorn,

Probably true to a degree. Though I do find Obama's clinging to increasingly absurd rationalizations for the fixed ideas of his zealous supporters far worse than a bit of pragmatic readjustment.

Indeed I don't regard "flipping" as a particularly bad quality in a politician in a democratic system. There are a few core issues on which principle is immutable, and the others are merely pawns in the game. Lincoln's biography offers several good examples of this view (New England zealots regarded him as a woefully deficient "flip flopper" on the early compromises over the slavery issue in new states. He was willing to compromise to preserve the union, but never willing to abjure the proposition that slavery was an evil thing, perhaps to be endured until a better solution could be found if necessary to preserve the union, but nonetheless evil.)

2 Replies

@georgeob1,

georgeob1 wrote:

By contrast, Obama at first clung to the notion that both domestic drilling and nuclear were wrong in principle. Then he moved on to simply dismissing any potential benefit from drilling with the absurd and contemptuous assertion that it wouldn't "affect prices for the next 10 years"; and simply ignoring nuclear.

This is from On The Issues, regarding Obama's stance on nuclear power:

Quote:

Q: Would you be in favor of developing more nuclear power to reduce oil dependency?

A: I don't think that we can take nuclear power off the table. What we have to make sure of is that we have the capacity to store waste properly and safely, and that we reduce whatever threats might come from terrorism. And if we can do that in a technologically sound way, then we should pursue it. If we can't, we should not. But there is no magic bullet on energy. We're going to have to look at all the various options.

Source: 2007 Democratic primary debate at Dartmouth College Sep 6, 2007

Quote:

Q: What about nuclear power as an alternative energy source?

A: I actually think that we should explore nuclear power as part of the energy mix. There are no silver bullets to this issue. We have to develop solar. I have proposed drastically increasing fuel efficiency standards on cars, an aggressive cap on the amount of greenhouse gases that can be emitted. But we're going to have to try a series of different approaches.

Source: 2007 YouTube Democratic Primary debate, Charleston SC Jul 23, 2007

Quote:

Obama sponsored requiring public notification when nuclear releases occur

[...]

SPONSOR'S INTRODUCTORY REMARKS: Sen. OBAMA: It was recently announced by Exelon Nuclear that an environmental monitoring program discovered higher than normal concentrations of tritium in the groundwater near their Nuclear Generating Station. Indications are that this tritium plume is the result of an accidental radioactive wastewater release that occurred approximately 6 to 8 years ago. Community residents did not receive full or immediate notification of this contamination.

I was surprised to learn, that while Federal law requires notification immediately upon a "declared emergency," Federal law does not require notification of any other accidental, unplanned, or unintentional radioactive substance releases that may occur if those releases do not immediately rise to a public health or safety threat. And while those incidents must be documented with the NRC and made available to the public, accessing that information is contingent upon the public actually knowing that these incidents ever occurred.

When radioactive substances are released into the environment outside of normal operating procedures, notifying State and local officials should not be a courtesy; it should be the law.

It is reasonable--and realistic--for nuclear power to remain on the table for consideration. Illinois has 11 nuclear power plants--the most of any state. The people of Illinois--and all residents who live near nuclear power plants--have a right to know when actions are taken that might affect their safety and well-being.

[...]

Source: Nuclear Release Notice Act (S.2348/H.R.4825) 06-S2348 on Mar 1, 2006

0 Replies

Oil Vs. Alternative Energy

Related Topics

Quick Links

My Account

able2know