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What If - Gasoline is $5 a gallon in 2010?
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Comments
Then watch the news reports and read the articles about it after you've formed your own opinion.
Truth is, Greenspan puts so many hedges and qualifications in what he says that I'm fairly sure you can claim he said whatever you'd like him to.
There's only one thing that matters where he's concerned: interest rates. Movements talk, speeches walk. Some people get paid to guess what the Fed will do based on those speeches. I don't envy them.
If there is a nugget of useful opinion in there, it's that he might agree with those who think the price bubble may be headed for a burst. I'm sure he didn't say that unequivocally, but that's what the first paragraph of the report you posted suggests to me.
"we're not talking stock market crashes and disasters which can wipe out people's savings; we're talking about a commodity that is not going to disappear tomorrow or next year"
When the stock market crashed in 1929 what commodity or thing disappeared? None. The sun came up that day the same as every day. Give or take a few the same number of birds filled the skies and trees. The same mean spirited people gave the same scowls to the same shoe shine boys on their way to their office.
You don't have to run out of a single thing for a reversal of fortune to take place except confidence. Confidence is what keeps the whole ball spinning. We don't have to run out of gas tomorrow or the next day or 50 years from now for things to get real nutty in a hurry.
We (myself included) have been acting in ways that remove the means for confidence to continue. We (individuals) are collectively carrying levels of debt that are frightening. We owe more and save less than any developed country on earth. I read recently that the entitlements promised Americans (examp. medicare(caid), social security, etc.) currently exceed SIXTY-THREE TRILLION dollars.
In today's news its reported that bonds issued by General Motors have been categorized as "junk." Ford's bond status is under review and faces a similar fate. That means that GM will have to pay higher yields to get additional investors to finance future improvements. (Thereby exacerbating the likelihood of ever being able to turn things around)
What I have been hearing and continue to hear on this post is nothing more than smugness. With very few exceptions I'm hearing people say, "Such and thus won't happen because its unpleasant and because I said so." If the fit hits the shan, "Cause I said so" ain't gonna cut it.
I didn't use the term Chairman the person who wrote the article did. It was a quote. Moron? Hardly. Greenspan is a genius and on balance has been a tremendous Chairman of the Fed. But he is also a master at saying nothing. You have to remember his speech was given to the National Petrochemical and Refiners Association. These are the guys that punch the holes in the ground for kerssake. They would have gotten more content out of a Daffy Duck cartoon.
My problem wasn't with what I heard my problem was he didn't say anything.
Of course, it then states that the remainder would be imported primarily from OPEC. What? No OTHER domestic crude oil production by 2015? ALL of our other crude oil sources would go dry?
Besides, oil sands are simply another place from which CRUDE oil is taken. Shale oil is completely different (and is yet ANOTHER very large source for domestic oil which remains virtually untapped.
Below is partial article. Full article at: http://www.energybulletin.net/3315.html
Shale is a sedimentary rock containing kerogen, which is then converted into synthetic oil by processing, according to the World Energy Council. Environmentalists argue that the process produces high greenhouse emissions.
"U.S. companies have developed and patented new technologies to develop oil shale that are both economical and environmentally friendly," Lonnie said.
The oil shale boom took Colorado by storm in the 1970s. "One of the things we learned from the oil shale prototype leasing in the 70s was that there were some technologies that could recover oil shale, but they just weren't economical," BLM's Edwards said.
Unocal Corp. was one of the major energy companies that tried to drill oil shale, but pulled out and sold all its properties, spokesman Barry Lane said.
http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050404/RATHA04/TPBusiness- /Canadian
For centuries; the sticky bitumen of northern Alberta was good for little more than caulking Chipewyan Indian canoes - and leading entrepreneurs astray.
The first attempt to exploit the oil sands came nearly a century ago, when oilmen tried drilling conventional wells in the area, convinced that the bitumen on the surface must be welling up from gigantic pools of crude deep in the Earth. Two dozen wells were drilled over 11 years, with zero success
Small-scale operations producing asphalt popped up in the ensuing decades, but cheper sources of the product elsewhere in the world eventually bankrupted every one of those efforts.
It was not until 1967 that the oil industry began to make a business out of bitumen, when the Great Canadian Oil Sands Project, which eventually became Suncor Energy Inc., began production.
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Swings in oil prices, particularly the collapse of the mid-1980s, left the sector's viability in continual question. In part because of shrinking opportunities for conventional exploration, interest in the oil sands grew, with tens of billions of dollar sinvested in the 1990s.
Despite a record of multibillion-dollar cost overruns, that investment has pushed production of bitumen and synthetic crude past one million barrels a day - with capital spending predicted to double that to two million barrels a day over the next five years, and perhaps to three million by the middle of the next decade.
Even with that soaring growth, there are decades, and likely centuries, of production in the oil sands. The best official estimate of oil that can be profitably extracted is 175 billion barrels - second only to the reserves of Saudi Arabia.
The point being that at some price point it IS commercially viable. And when that price point is reached (AND investors are assured that oil prices won't fall below the profitable price point), this source WILL be tapped.
The question then becomes two-fold:
What IS the price point at which shale oil becomes profitable and how can investors be assured the price doesn't fall below that level? I've seen indications that price point is as low as $40-$50/bbl. Personally, I think the level is probably closer to $60/bbl.
The problem that industry faces however is whether they can afford to spend the enormous up front investment to go into production only to have the price for crude fall back to $35-40/bbl.
Forgotten in the mix is the fact that the current administration is expanding on (refilling) the Strategic Petroleum Reserve. This ADDITIONAL demand on the global market is one of the factors driving up costs. However, from what I understand, this is scheduled to end before summer which should decrease demand for oil helping to send prices lower.
Anyhoo I digress ... give up SUV's as prices climb? ... hell, I drive an Accent and it's starting to hurt.
I think that it is in the interests of the very survival of our North American way of life to develope a viable alternative to petroleum as a fuel for vehicles and industry ... and soon ... this being held "hostage" by an expensive, non-renewable resource (most of which resides in the mostly hostile Mid. East) is gettin' on my nerves!
Prices 'fixed' by the government? Hmmmm, and that doesn't ensure you affordable gas? Who wudda thunk it......
"The vast extent of U.S. oil shale resources, amounting to more than 2 trillion barrels, has been known for a century."
"It has been nearly two decades since meaningful federal oil shale policy initiatives were undertaken. In that time technology has advanced,..."
And here's the More Info link which is much more detailed info. It states the good and the bad, and is relatively unbiased. http://www.fe.doe.gov/programs/reserves/publications/Pubs-NPR/40010-373.pdf
I'll check back Oct. 1st to see if I'm paying or collecting on my bet with rorr. Good luck in all you do.
250 MPG Car
http://www.seriouswheels.com/top-vw-1-liter-car.htm
troy
See you Oct. 1. Don't let the sky hit you on the way out.
What disappeared was the debt people had run up to buy stocks. My understanding is that the stock market as a whole back then was less than 10% funded. We have safeguards that don't allow that in the market. Most big changes are caused by electronic selling with the big funds. The worst actual loss of market value was when the Clinton administration attacked Microsoft. Microsoft stock lost 80 billion dollars of it's value in one day. That was worse than even the Enron loss for many Mutual funds.
From an 11:23 AM news story today:
Stocks Move Higher As an Improved Supply Outlook Sends Oil Prices Skidding
Oil futures were down 64 cents at $55.40 on the New York Mercantile Exchange following the government's weekly fuel supply report, which showed a 2.4 million barrel build in crude.
Didn't mean to report good news...heh
Not a word about oil being below $56/bbl on the radio newcasts I'm hearing so far today. They certaily let me know everytime it broke through a dollar value on the way up.
It has gone up 26 cents in the last 30 days in Phoenix, for my HCH a difference of $3.38 cents per fillup for me......or about $101 per year......
You noticed that also. I think the news media is only tuned in to the uptick of the oil prices. Bad new or no news is the way of the media.
April 17, 1977 Regular in WA was .57 a gallon
April 05, 2005 Regular in WA is 2.33 a gallon
If your income has not quadrupled since 1977, the price of fuel is not the problem.
$5 a gallon will be just fine. Today my 4,000 lb car with AOD gets 26 mpg. In 1977 my 4,000 lb car without AOD got 18 mpg.
To keep up, invest in the petroleum industry which has always been good to their stockholders.
would that not be good ? IT is not exactly a rainforest there...where each tree may harbor 1000 species of lifeforms....right ? Just move the few mammals off to the other side...and feed them out table scraps..heheh...
let the drilling begin...and watch gas prices fall ... :P
this will help us determine if prices are actually higher or lower , in relative terms..
what is 20,000 acres if there are 19,000,000 acres for the other stuff...
just do it the right way....drill and take precautions. Yes, some accidents will happen, but the effect should be negligible if they don't let Captain drunk get on the EXXON Valdez again ...
Any body against drilling in the Alaska (ANWR ) ? Why ?
The 2000 acres to be drilled on equals a bit over 3 square miles.
Yes, that's right. Three square miles out of an area the size of South Carolina.
For a map of the ANWR area, where it is in Alaska, and the area to be developed (shown TO SCALE) visit here:
http://www.anwr.org/docs/CloseupofareaIII.pdf
thanks for the pics...it is very small area indeed.
I was just wondering, what about the rest of Alaska ? it seems like there are 15 times more land compared to ANWR, in all of alaska...Yes, much of it is inaccessible...I flew over some of it and there are lots of mountain ranges...as far as the eye could see , as I remember....
maybe we can use some hightech gear to detect gas reserves and jsut drill there .......
so far it seems like there are 3 people FOR drilling in Alaska....
anyone else ?
and how about all that land in Canada ? next to ANWR, there are tons of land, most probably like the Prudhoe Oil fields ? Can the canadians start drilling there also.... ?
My objections are based on my understanding of the US Constitution and concepts of social contract between government and the governed. In my experience, debate on these lines tend to get shut down by the moderators.
Without an ok from the moderators, I will just leave it that I object.
but drilling there , which does have good potential for oil reserves, and there is alot of land yet to be explored, may decrease oil prices , or stabilize them, and provide a nice source of gas for us, making us more independent from Middle East. that is good news , and is on topic...with respect to gas prices...in 2010.
I think most Alaskans would agree ? They not only have no state income tax, but also get a dividend from the drilling of oil....kinda makes it nice to live there...and there is still no shortage of bears or wildlife....
This debate would be helpful, if we keep in mind that it is for the oil that we all use, for the security of the US, and to encourage discussion in the Edmunds forum.... (let it NOT be said that edmunds is just a shopping place !!
I agree that the windfarm should go into Nantucket Sound if that is a good windy place, and if there is oil in the ANWR we drill there.
Besides if anyone thinks that if oil runs out or low elsewhere, that the ANWR will not be drilled in, they are pretty naieve. It's not a matter of IF, but WHEN.
If gas hits $5/gallon, ANWR will be opened up for drilling/pumping. As a matter of fact, regardless of what the price of oil is today, 5 years from now, or even 50 years from now, ANWR will eventually be opened up for production. Thinking otherwise is simply unrealistic/naive, regardless of what the objections are based on.
That being said, I've got my own (rather twisted) reasoning for not exploiting ANWR.....at this time. And it has absolutely nothing to do with the environment or Constitutional issues. So, even though I believe I am diametrically opposed to logic1's (unstated) rational for opposing the opening of ANWR, I'll have to come down on the side of those opposed to drilling.
I am a practical environmentalist...and I am all for it, if there can be further measures that would attenuate usage....
care to share ?
Consider the Strategic Petroleum Reserve and it's purpose. Now think of ANWR as just a really, really BIG reserve for the long term.
In other words: oil is a non-renewable strategic resource. In that sense, I would much rather have the option to BUY imported foreign oil now (even if the prices are moderately painful) rather than be forced to pay whatever OPEC demands at a later date. Remember, OPEC doesn't control ALL the oil; they have to compete on the global market with many other producers (the US included). But if we were to turn all our attention to domestic production now (reducing our demand on foreign oil), where does that put us 30,40, 50 years from now?
You gotta think strategically. As long as they're willing to sell it, you want to use up the other guys stuff FIRST, keeping your own stuff as a fallback.
I told you it was rather twisted.
HOWEVER
We should be realistic about the impact on prices that opening ANWR will have. Oil is traded as a commodity in a global market. The impact of added production from ANWR alone will probably be negligible. Global spare capacity right now, depending on who you ask, is somewhere between 1.5 - 2 million bbls/day. ANWR won't significantly add to that, and basides, whatever ANWR adds, OPEC can cut, easily.
When it comes to new oilfields, unless we're talking about some combination of reserves and production capacity that can reduce OPEC's 40% market share by 25% or more, then it won't change anything.
Go ahead and produce there. But don't expect much to change.
but I see your point.
Consider the Strategic Petroleum Reserve and it's purpose. Now think of ANWR as just a really, really BIG reserve for the long term.
I agree with your view point. The big picture is important.
In other words: oil is a non-renewable strategic resource. In that sense, I would much rather have the option to BUY imported foreign oil now (even if the prices are moderately painful) rather than be forced to pay whatever OPEC demands at a later date.
Hey...I agree totally. As a matter of fact, over at the SUV forum, one person mentioned this also... I think it was kernick or brightness....
they mentioned they would rather buy others' resource NOW...since the buying is good...and save our own resource for later use.
You gotta think strategically. As long as they're willing to sell it, you want to use up the other guys stuff FIRST, keeping your own stuff as a fallback.
I told you it was rather twisted
nope...I agree completely with you. It may sound twisted...but it is the reality and very practical now...and strategically very adroit for the future....!!!
Now back to reality ... if we want to keep gasoline prices from going thru the roof, then we really have to adopt more fuel-efficient vehicles and ditch the guzzelers once and for all ... there is really no need of using a big SUV or 4x4 Truck as a "grocery getter" ... it's not responsible ...
Please refrain from commenting about other users, either specifically or generally, and things will run much smoother.
Thanks for your cooperation and participation.
i've driven through ontario province many times(buffalo through windsor or sarnia) many times. i realize this a small portion of canada, but i don't see many drivers conserving gas.
the natural resources of the world (of which crude oil is one ...) belong to all of the human race [i]equally[/i]
that is nice and idealistic...too bad property rights and ownership is most of the law....and all agree that you own what is on your property...well..you did say it was twisted...
if we want to keep gasoline prices from going thru the roof, then we really have to adopt more fuel-efficient vehicles and ditch the guzzelers once and for all .
so you are saying it is only the vehicle ? how about the drivers who drive around a econobox for no reason ? just for cruising around ? just to show off...? or the student who can bike or take public transportation, but gets into a car instead...?
It is the human population's artificial need for the car , that made gas scarce. Witness the explosion of car use in China.... ! Remember, the first privately owned car in China was bought in 1985 !
Pointing fingers at SUVs...while ignoring the real crux of the problem, will not solve the problem , IMO. Likewise, getting rid of all SUVs, large sedans, and sports cars, will not cause a decrease in oil prices.............
just like increasing CAFE may not...or drilling in ANWR...
.. there is really no need of using a big SUV or 4x4 Truck as a "grocery getter" ... it's not responsible
so let me ask you.... is driving to buy groceries in a Toyota Echo better, when all they had to do was walk ?
That is exactly the way it works. If they started drilling and extending feeder lines from ANWR today, it would not be possible to get the oil in the main pipeline. The Pipeline is able to transport just so much oil. The current fields and those currently going into production will keep the line full for several more years. I think the current administration is looking to the future with opening ANWR for use. ANWR is no different than the whole North slope of Alaska. It is too bad that it is being used as a political tool.
i haven't been posting much lately, but you are one of the 'good guys'.
The same effect as getting the little bit of oil in Alaska can be acheived by just raising the average vehicle by 1 mpg. So instead of the average of about 25 mpg we would just need 26. Imagine if we could have 10+ mpg added (hybrids, etc.) That is is the only way to put a dent into OPEC.
SUV's aren't the problem, vehicles that get below 25 mpg are the problem.
I don't consider that twisted in the least. An example of that thinking is the NPR (National petroleum reserve) that is currently going into production. It was discovered by the Navy 60 years ago. It was held as a reserve and is now being developed. I have not seen the figures on it as they are not letting us know too much. I would think there is more oil there than the Prudhoe field that has been on line for close to 30 years. I would say with ANWR in reserve there is no less than 75 years of production at 1 million plus barrels per day.
I'm curious about something... how does one SEE people conserving gas?? LOL
Back to the future of gasoline!
As far as I know, we're well below the inflation adjusted max price we've ever seen. But I think I know a big part of what's driving us crazy about the prices. Not only are we hearing about it non-stop onthe news and noticing it when we fill up, but gasoline is pretty much the only thing we buy that has all those signs displaying the prices everywhere we go! We see grocery prices only when we go to the grocery store, but those gas prices get in our face on the way to get milk and bread as well. No wonder we have this angst!
the decisions you make like; how far do you live from work, or what time do you drive, can make a big difference.
i have a magazine form 1982. on the back, is an advertisement that states that a used mazda glc has the best resale. 106% of the msrp! the manufacturers used to compete over who's used vehicles were worth more that the new ones! :confuse:
pf... if i am driving 85 mph and so is everyone else, i don't see that as conserving.
i admit i am not. luckily, the 'opp' has never pulled me over.