2
   

Oil, will it be the last straw for America?

 
 
Montana
 
  1  
Reply Fri 21 Apr, 2006 08:56 am
paull wrote:
Cavolina, another try:

WHAT escalating cost of supplies?


You are making two arguments, first that oil producers are facing rising costs that you imply are equal to their increased sales. Second that there is NO competition among them.

Leave your credentials behind, since they cannot be proven (and become more doubtful as your arguments become more circular), and do some convincing.

Or the thread can end now, lacking anything but opinion.



Since Cavolina is a friend of Joe Nation, his word is as good as gold to me, so excuse us if we choose to continue.
0 Replies
 
okie
 
  1  
Reply Fri 21 Apr, 2006 09:16 am
Montana wrote:
At 1.16 a liter it's now around 4.70 a gallon and if it goes up to 1.60 a liter this summer, we're looking at aprox 6.40 a gallon.


How come your prices are over $4 in Canada, which is more than 30% higher than here in U.S.? What are the gas taxes tacked onto every gallon there? Or maybe the taxes on business which require them to raise prices to make a profit?
0 Replies
 
Montana
 
  1  
Reply Fri 21 Apr, 2006 09:29 am
I have no idea. All I know is that our gas prices are always higher here than they are in the states and when the prices go through the roof over on your end, it blows up the whole house over here.
0 Replies
 
Montana
 
  1  
Reply Fri 21 Apr, 2006 09:32 am
When the cost is not shooting up like it is now, we usually pay around .89 a liter, which I still think is way too high at around 3.60 a gallon. But I can at least survive with it at 3.60 a gal.
0 Replies
 
Montana
 
  1  
Reply Fri 21 Apr, 2006 09:37 am
I was watching the news from the states last night and they were talking about the crazy prices over there and it's only around 3.60 and people are freaking out, while we're now paying 4.60 a gal.
0 Replies
 
engineer
 
  1  
Reply Fri 21 Apr, 2006 09:43 am
cavolina wrote:
Chapter 2

While it was true that as more children left home to go to college, many more women went to work. But the key is that many of these women didn't have families. They were twenty somethings just starting out.

My woman was a mother accustomed to staying home and running a household. She was forced into the workplace to keep the family afloat financially.

This is a signal change in culture for our society. Working mothers was not the norm it was the exception. It happened in WWII because we needed the workers. It was not the norm during the 50's and it's my contention that it only happened in the numbers it did because of economic necessity.

An outgrowth of this change was an marked increase in divorce rates. Momma found out she could take care of herself and didn't have to put up with an abusive husband. Having the freedom to make economic choices women didn't have before changed alot of things.
Quote:


So at the end of chapter 2, we see some women forced into the work place and others going there voluntarily. Women in general have more options on the home front since they have an income, but staying home is increasingly not one of them since the late seventies are marked by extreme inflation, including in the price of energy. The .30/gal price in the early 70's that became the .50/gal price during the '73 oil embargo is $1/gal price in 1980 as the hostage crisis comes to a close, a 10% year over year increase. As we enter 1980, we are at odds with Iran in particular and much of the Middle East in general, but groundwork laid down by Nixon, Ford and Carter is starting to pay off as relations with Saudi Arabia improve. Americans are fairly energy conscious, driving small cars, etc. Oil companies are taking their profits and investing in new exploration and there is significant growth in production in hard to get places like under the Gulf of Mexico and the North Sea.

I'm with you so far, what's next?
0 Replies
 
cavolina
 
  1  
Reply Fri 21 Apr, 2006 09:45 am
Paull

In case you haven't noticed the price of a barrel of oil has gone from $20 to $70 in a very short time.

There is nothing circular in pointing out that in the face of this rise in the cost of a barrel of crude oil, the oil companies are making record profits.

Perhaps, while my credentials are in question, you might consider that I am not the only one complaining that the cost of gasoline and home heating oil and the profits made by the oil companies do compute.

A story that was in the newspapers in the 1970's might bolster my position that the more a barrel of crude cost, the more profit the oil companies make. Amerada Hess was cited for what would seem a bit of silliness. They changed the country of origin on transit papers of a shipment of crude oil in mid-ocean. The change was from Nigeria, the actual country of origin of the oil, to Saudi Arabia. On the surface it would seems academic where the oil came from, until you factor in that at the time, Nigerian oil was selling for $9 a barrel and Saudi oil was about $27.

The question is why would they do that? My answer is simple: the more a barrel of crude costs, the more profit the oil companies make.
0 Replies
 
engineer
 
  1  
Reply Fri 21 Apr, 2006 09:52 am
Quote:
Paull

In case you haven't noticed the price of a barrel of oil has gone from $20 to $70 in a very short time.

There is nothing circular in pointing out that in the face of this rise in the cost of a barrel of crude oil, the oil companies are making record profits.


Paull's point, and I've made it also, it that if oil has gone up $50/barrel, and Exxon is selling barrels of oil, then it makes sense that its profit is up. It is not counter-intuitive. We should all expect Exxon to have record profits and if they don't, we should investigate the company to see where that money is going. Of course, oil is also a raw material for Exxon's refining operations, so those parts of the company are being hurt, but since all of their competitors are also facing rising costs, they are able to pass those costs on to their customers.
0 Replies
 
Montana
 
  1  
Reply Fri 21 Apr, 2006 09:57 am
I'm in a panic over this because the gas prices are expexted to be very bad this summer and it's going to cost me dearly. I just did the math and at 1.30 a liter, it'll cost me $115.00 a week in gas just to go to work.
My job is only a half hour away, so that's only an hour of driving a day, 6 days a week. So 6 hours of driving (less than one full day), is going to put me in the poor house.
Now, if the gas prices shoot up to 1.60 a liter, like the rumours say, I'm totally screwed, because it'll cost me over 130.00 a week to get to my 9.00 an hour job.
When the gas prices just up and double, it's pretty darn devistating for some of us.
I have investments, but I can't touch those for another few years without taking a huge loss, as in many thousands, but there are people who have absolutely nothing to fall back on and I wonder how they get by.
My house and car are paid, so I'll always manage, but there was a time when money was extremely tight and I wouldn't have been able to make it.
There are single parents out there who need every penny they make just to keep a roof over their childrens head and food in their mouth and these are the people who suffer the most.
The gas and oil prices go up so quickly that it's impossible for someone who doesn't have the means to cover the major burden, so what are they to do.
I may be stressed and pissed off, but I'll manage. My son is grown and I only have myself left to provide for, but what about the ones who can't manage? What do they do?
0 Replies
 
okie
 
  1  
Reply Fri 21 Apr, 2006 10:08 am
Go find an old Honda Civic or Toyota Corolla or something that is maybe 1990 to 95 vintage for maybe $1,000 to $2,000 or so. Then you could get maybe 30 miles per gallon and save yourself tons of money if that is your main worry.

Another question. If your government is ripping you off by causing the price of gas to be so much higher than here in the U.S., how come you aren't mad at them as much or more than the greedy dirty oil companies? Pet peave of mine: how come 60 minutes or the press in general picks on legitimate businesses that are actually doing something and producing something for their money? Where are the hit pieces on government that sit around and do nothing, produce nothing, but tax everybody to the hilt for what, more red tape and paperwork? Kind of like leaches that attach themselves to a body. Now thats what I call "greed."
0 Replies
 
Montana
 
  1  
Reply Fri 21 Apr, 2006 10:37 am
Okie
Don't think I haven't been tearing my hair out over the car situation. I plan on buying a new car and I have more than one thread going on the subject, but I don't have the financial means to do it just yet. I put a new rebuilt motor in my car when I bought it and that motor has no more than 30,000 miles on it, not to mention the new transmission I recently threw in there, so I'd be a fool to go out right now and dump 2,000 on a car that will "no doubt need work" and end up costing me much more in the long run.
My car may be a pig, but she's reliable and costs me next to nothing to maintain, as the parts for my old girl are a dime a dozen, unlike the Toyota's.
So, you see my problem at the moment.
The gas is just half the problem. My heating oil bills are doing the same thing and it's freaking smothering me.
Increasing prices is one thing, but to double prices almost over night is financially devistating for some people.
I am mad as hell at my government about this and it's surely not the first time I've been pissed at them.
I've sent emails to our mayor about the lack of transpotation in my area, sent more than one to out premier and spoke my mind on the insane car insurance prices we were paying, so don't think I snuggle with my government.
0 Replies
 
okie
 
  1  
Reply Fri 21 Apr, 2006 11:40 am
Cycloptichorn on other threads on this forum claims he or she owns no car, but rides a bicycle. I agree this is not a good option for most people, but think of the savings: no gas, no insurance, no license fees, no repairs, no oil changes. I still think if you do not get into a rush, but keep your eye open for an older car that is well maintained, perhaps from a private owner, that has lower value, but one that is very economical on gas, you might end up better off. That is if you could sell your car and end up with a more economical car without losing any money in the process. The savings in gas could fund any minor repairs for a while. Of course, you would not want any car that will need major repairs in the way of motor or transmission.

Buying a new car is not a good idea in my opinion, or even a car up to 3 or 4 years old, unless you have the money to waste. Most people just look at the payment they can afford, but after the salesman completes his sales job, then here come the higher license and tax fees, higher insurance, you name it. The minute you drive a new car off the lot, you are then upside down on what you owe vs. what the car is worth.

P.S. How about telephones? Do you have both cell and land line? If so, get rid of the land line.
0 Replies
 
Steve 41oo
 
  1  
Reply Fri 21 Apr, 2006 12:03 pm
To me everything revolves around oil. We all know how important it is, but its so ubiquitous we dont notice how we use it. But try fuelling an aeroplane with coal...?

At his state of the union address the president of the united states, one George W Bush said that America and the west was addicted to oil. Note the use of that word, not dependent or needful but addicted.

There is a frightening symettry linking the worlds problems to oil.

Short term. Terrorism. US troops are in Saudi Arabia to protect the oil fields...from people like Osama bin Laden.

Medium term. War. Oil supply is about to peak (some say it has already). Does anyone seriously believe the various conflicts in the middle east did not have oil at their root? Demand for oil grows. Supply becomes curtailed by geology. We are fighting to control the remaining reserves.

Long Term. Climate change. Oil is just so damn easy. It spews out of the ground...or used to. We have nearly doubled the CO2 concentration in the atmosphere compared with pre industrial times. And aircraft? They dump the stuff straight into the stratosphere.

But addicts dont change do they?
0 Replies
 
Cycloptichorn
 
  1  
Reply Fri 21 Apr, 2006 12:09 pm
okie wrote:
Cycloptichorn on other threads on this forum claims he or she owns no car, but rides a bicycle. I agree this is not a good option for most people, but think of the savings: no gas, no insurance, no license fees, no repairs, no oil changes. I still think if you do not get into a rush, but keep your eye open for an older car that is well maintained, perhaps from a private owner, that has lower value, but one that is very economical on gas, you might end up better off. That is if you could sell your car and end up with a more economical car without losing any money in the process. The savings in gas could fund any minor repairs for a while. Of course, you would not want any car that will need major repairs in the way of motor or transmission.


It's 'he' but thanks for not assuming.

I think that the optimal solution is not for everyone to get rid of their cars and trucks, but to own a variety of vehicles and use the one which is appropriate to the situation.

I envision myself owning a light truck (hopefully electric or at least hybrid), an electric scooter, and a bicycle or two. Use the appropriate vehicle, mandating the lowest possible, ie if you can use the bike, use it; if not, use the scooter; only as a last resort use the car.

This has several benefits: first, as you say, it is cheaper (repairs and gas go way down); second, it pollutes the environment far less than the traditional method of driving a gas-guzzler everywhere all the time; third, it promotes an active and healthy lifestyle, which not only extends peoples lives, it saves money and brings happiness to one's life; and fourth, it encourages our kids to make responsible choices about the environment and their future.

Quote:
Buying a new car is not a good idea in my opinion, or even a car up to 3 or 4 years old, unless you have the money to waste. Most people just look at the payment they can afford, but after the salesman completes his sales job, then here come the higher license and tax fees, higher insurance, you name it. The minute you drive a new car off the lot, you are then upside down on what you owe vs. what the car is worth.


Yup. I don't believe in credit, so I guess I would pay cash for whatever I bought.

Quote:
P.S. How about telephones? Do you have both cell and land line? If so, get rid of the land line.


Done, here. Those who use high-speed internet should really look into Vonage, or hell, Time Warner offers flate-rate phone service, no long distance fees, for $25 or so a month, here. That's probably better than other options.

Montana,
Quote:
My heating oil bills are doing the same thing and it's freaking smothering me.


Sh*t, yeouch. I've read about how the heating oil increases hurt people, but it's another thing to think about prices doubling in such a short amount of time. We don't even have heating oil here in the South (I'd never even heard of it until gas prices started rising).

Weather-strip those doors and windows! Can't emphasize that enough.

Cycloptichorn
0 Replies
 
Chumly
 
  1  
Reply Fri 21 Apr, 2006 12:15 pm
okie wrote:
Buying a new car is not a good idea in my opinion, or even a car up to 3 or 4 years old, unless you have the money to waste.


In that you can be quite wrong. It entirely depends on where you live and the robustness and "efficiency" of the used and new vehicle market, I live near Vancouver B.C. Canada and the used prices for the more desirable vehicles are very often quite devoid of reality. However I have noted in many places in the US that used car prices for the more desirable vehicles are much lower.

If you are familiar with "The Efficient Market Hypothesis" you should already have an understanding of why and how this can happen, and how the classic presumptions of economics do not always hold true.
0 Replies
 
cavolina
 
  1  
Reply Fri 21 Apr, 2006 01:18 pm
Engineer

It is not what Exxon is selling it for it's what they pay for it. They pay $70 to the arabs or whoever else is selling it on the open market.

When it was $6 they made $42 a barrel. At $70 they make $490.
0 Replies
 
roger
 
  1  
Reply Fri 21 Apr, 2006 01:47 pm
One barrel is 42 gallons. Crack 100% into gasoline, sell it at $3.00/bbl and you get $126.00 less the cost of $42.00. Assuming no costs other that the cost of crude, that leaves $84.00. Where does the $490.00 come from?
0 Replies
 
engineer
 
  1  
Reply Fri 21 Apr, 2006 01:58 pm
cavolina wrote:
Engineer

It is not what Exxon is selling it for it's what they pay for it. They pay $70 to the arabs or whoever else is selling it on the open market.


Exxon has their own reserves. I'm sure they buy some on the open market, but the profit comes from their own oil. In 2003, Forbes reported Exxon was the largest oil producer.
0 Replies
 
Chumly
 
  1  
Reply Fri 21 Apr, 2006 02:04 pm
So, what is their average annualized net cost per barrel of unrefined?
So, what is their average annualized net cost per barrel of refined?
0 Replies
 
Cycloptichorn
 
  1  
Reply Fri 21 Apr, 2006 02:18 pm
Don't be put off by the title, this is the best page for figuring out how the Oil industry works:

http://www.eia.doe.gov/kids/energyfacts/sources/non-renewable/oil.html

From the link:

Quote:
A 42-U.S. gallon barrel of crude oil provides slightly more than 44 gallons of petroleum products. This gain from processing the crude oil is similar to what happens to popcorn, it gets bigger after it is popped.


20 gallons of gasoline, 7 of diesel, 3 or so of heating oil, 4 jet fuel, just under two each of heavy fuel oil and LPG, and some naptha and kerosene.

Cycloptichorn
0 Replies
 
 

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