The Specter of Gasoline At $5 a Gallon 1205
Hugh Pickens writes "The NY Times reports that gas prices are already at record highs for the winter months — averaging $4.32 in California and $3.73 a gallon nationally. As summer approaches, demand for gasoline rises, typically pushing prices up around 20 cents a gallon. But gas prices could rise another 50 cents a gallon or more, analysts say, if the diplomatic and economic standoff over Iran's nuclear ambitions escalates into military conflict or there is some other major supply disruption. 'If we get some kind of explosion — like an Israeli attack or some local Iranian revolutionary guard decides to take matters in his own hands and attacks a tanker — than we'd see oil prices push up 20 to 25 percent higher and another 50 cents a gallon at the pump,' says Michael C. Lynch, president of Strategic Energy and Economic Research. A sharp rise in the prices of oil and gas would crimp the nation's budding economic recovery would cause big political problems at home for President Obama, who is already being attacked by Republican presidential candidates over gas prices and his overall energy policies. On the other hand, environmentalists see high gas prices as a helpful step toward the development of alternative energy. Secretary Treasury Steven Chu notably said in 2008 'we have to figure out how to boost the price of gasoline to the levels in Europe' to make Americans trade in their 'love affair with the automobile' for a marriage to mass transit. In the meantime President Obama is in a bind because any success in tightening sanctions on Iran could squeeze global oil supplies, pushing up prices and causing serious economic repercussions at home and abroad."
This is an americano-centric joke (Score:5, Insightful)
$5? that's nothing (Score:2, Insightful)
In Europe we already pay around €1.60 per litre, which is almost $9 per gallon. Get over yourselves America. You are 4% of the world population using 25% of it's oil. There's your problem right there.
Shale is coming (Score:5, Insightful)
The idea of spurring development of clean alternatives such as solar-charged fuel cells and the like is very appealing, but these technologies are simply not up to speed yet and likely won't be for at least several years.
Meanwhile, U.S. firms are busily building infrastructure to extract oil and gas from shale deposits estimated to hold 1.5 trillion barrels, or about 5 times the current Saudi reserves of 300 bbls. There's an additional 60 bbls in the Gulf of Mexico and another 30 in Alaska. Fully exploiting these deposits would cause the U.S. to become an energy exporting giant in about ten years, even as the Middle East oil supplies begin to wane, leading to a dramatic shift in global geopolitical priorities.
Environmentalists like Treasury Sec. Chu obviously won't approve of this trend, but the hard reality is that fossil fuels are not going away soon, thanks to technological advances such as "fracking" (hydraulic fracturing using horizontally injected water).
I really don't think it's a good idea for the Treasurer of the U.S. to advocate high gasoline prices. For gasoline to rise above $5 may make sense from the point of view of encouraging conservation and alternative systems like hybrid electric and plug-in electric cars, but in the short term it would cause tremendous hardship to the people. As transportation costs rise, so does the cost of basic necessities such as food, clothing, and daily commutes. Airlines would suffer as well. The economy will probably sink back into recession, and you can just picture Mr. Obama calling the Secretary into his office: "What were you thinking, Steve? It's election year!"
Personally speaking, as a solar buff, I would love to see a massive conversion to cleaner and more efficient methods of transportation and heating/electricity. It would also be nice to encourage more use of bicycles (and even walking) as an alternative to the almighty automobile in the U.S. From that point of view, high gas prices are great.
But when it comes to jobs in an already shaky economy, it's going to be disastrous, and may in fact change the electoral outcome this November.
Wind, solar (Score:5, Insightful)
One problem is the disingenuous "all of the above" stuff you hear them spouting in the media. Wind and solar are not anywhere near being able to reduce our dependence on foreign oil. Rather than massively investing in building out wind and solar we should be spending all that money researching ways to make it viable instead of a gimmick designed to enrich campaign donors and their startups' poor business plans.
It's the same with ethanol - it's not viable as an energy source, but it's quite profitable as a political source.
Yet another point of dishonestly is even using the phrase "reduce our dependence on *foreign* oil" when really they mean any oil. This is not bad in itself, but it's also weasel wording to imply they'd like to leverage more domestic oil sources when really, they want nothing of the sort.
We're never going to get anywhere on energy policy until we make honest efforts and have honest discussion.
Public transit sucks (Score:3, Insightful)
trade in their 'love affair with the automobile' for a marriage to mass transit.
Mass transit is great until they go on strike [www.cbc.ca].
I took the bus for a long time. It was always a miserable experience (crowded busses, never on time, routes that made no sense, etc..), and this strike was the final straw. Went out an bought a gas guzzling car.. and will probably never use the bus system again.
(Just felt like venting that...)
Welcome to fascism (Score:2, Insightful)
This is what economic recovery looks like.
George orwell was wrong in that any new words and language patterns were needed. We need no doublespeak. We just define salvation as a pretty word, such as "economic recovery" "lowering unemployment" and then repeat that everything is going as intended towards salvation, time and time and time again. Of course a lot of independent people will put out graphs, essays and arguments that state the opposite. But you're the goverment or some other big, powerfull and connected, so you ignore everything, and paint your own rosy picture. If someone wants a graph, why use real numbers? just fabricate the shit as some kind of bullshit weighted numbers, and repeat the bullshit mantra; salvation is coming, everything is going as planned, our internvetions are effective.
$5 gallon gas prices? claim it's a myth, deny it as far as you can, then blame it on terrorists, speculators and iran. Just never admit that the retards and their friends in charge fucked up severely, at every single point they could.
Gas Prices (Score:5, Insightful)
1) stop the massive systemic subsidies to petro-firms (including tax breaks and hidden subsidies like free/cheap land use fees, etc.)
2) apply a DIRECT user-tax to vehicles, based on their mileage at registration (ie you buy your annual tabs, report your mileage, pay a tax). This would be based on road maintenance costs.
3) tax gas like any other sale.
I drive 100 miles a day, I don't mind paying a user tax on those miles, because I'm using the shared resource of roads. But it's bullshit that they can apply a gas tax (ostensibly for highway maintenance) and then steal that money for other purposes in government, then come back saying the tax isn't high enough.
With a tax code that (depending on who you talk to) is 50k pages and 5 million words long, we really need to stop social engineering in our tax code. It's a crazy idea, but maybe taxes could just be about, oh, covering the cost of government, and not about incentives or disincentives decided by some dude in an office somewhere.
I know, crazy ideas.
let's normalize and remove taxes from discussions (Score:5, Insightful)
Let's stop the influx of "get over it" comments from Europe by removing the taxes from the price discussion. Then we can all equally complain about the cost of refined petrol instead of how much our governments like to add to the fees.
America is a BIG Country (Score:3, Insightful)
Unlike the tiny countries in Europe, the US is a huge place. How would you like to have to drive 150 miles round trip just to see a doctor? Well, there are lots of people here in the states that have to do exactly that. They can't get on a bus or a train, they have no choice but to drive. Again, our country is huge, so expensive fuel has a large impact on everything we purchase because it all needs to be transported around this big country.
Re:Welcome to our world (Score:2, Insightful)
So much this.
I took the bus for many years and it sucked. It was poorly run, the busses were crowded, always off-schedule, and the routes made no sense at all. Then at the beginning of February they went on strike and have been since. I went out and bought a car last week and will probably never use the transit system again. My 1:30 hour commute is now about 25 minutes .. it's like having 2 hours of extra free time a day. And as a bonus my car doesn't smell like onions and feet!
I like the idea of public transit, but in practice (aside from a few notably well run system) is is usually something people put up with until they can afford a car.
Re:This is an americano-centric joke (Score:2, Insightful)
The cost of everything you buy goes up as a result though, so you still get shafted.
Cognitive dissonance (Score:5, Insightful)
What's really mind-blowing is the GOP candidates (except Paul) attacking Obama for both
1) not being tough enough with Iran [nytimes.com]
2) and for high gas prices [nytimes.com] (!)
In what universe do they live in where they don't realize pressuring an oil-producing country is going to raise oil prices (and hence gas prices, it doesn't fall from the sky)?
The "speculator" boogieman has already come out (Score:5, Insightful)
I've already seen some of my Facebook friends grousing about how speculators are gouging them. They have a hard time understanding how much the world has changed in a decade. Most of it is due to static oil supply meeting rapidly rising oil demand, coupled with extremely inelastic demand for gas. Within a few years we have another billion or so people competing with us for the same barrel of oil.
It's actually hard to speculate in oil, simply because there's no place to store enough to make a huge difference. Most "speculators" are sovereign countries, who are wagering that oil left in the ground today would be more expensive tomorrow.
Iran produces about 5% of the world's oil. If Israel and Iran go at it, the price of oil would go through the ceiling. The price of oil is set by the cost of extracting the last barrel of oil, and tapping those deep-sea oil wells and Canadian oil sands for that last barrel of oil is extremely expensive. If it costs $100 to produce that last barrel of Canadian oil, why would Saudi Arabia sell their oil for $20 instead of $100 too? They'd be leaving money on the table. That's why the last barrel sets the price.
And if a country expects a barrel of oil to shoot up $50 in the event of war, it makes sense to either charge more for pumping it today, or leave it in the ground until the price goes up naturally.
To put this in Slashdot terms, supposed you had a complete set of Babylon 5 collector plates that were worth $100 today, and you expected them to be worth $1000 next year from now, would you sell them now or wait? The smart thing to do is either wait until next year, or require the buyer to pay you a premium today above the $100 asking price. Expectations affect the price. And if you wait until next year, you have reduced the global supply of collector plates on sale, so the price goes up a bit to compensate. Supply and demand also affect the price.
If you're really worried about speculators, buy a Prius, Leaf, or Volt. Last time I checked, no one's been able to form a cartel on sunshine and wind. And if you drive a big SUV, stop whining about how speculators, government, Democrats, or "The Man" is screwing you, and take a long, hard look at how you are screwing yourself.
Re:Wind, solar (Score:5, Insightful)
In the UK they've used HUGE prices. So solar power starts to break even very soon. when it gets to about 7-10 years I think about it. The problem now is i don't want to install stuff and 15 years later have to pay for obsolete stuff to be removed, just as it breaks even.
Re:Welcome to our world (Score:5, Insightful)
Re:America is a BIG Country (Score:4, Insightful)
That is a valid point but it seems a little vacuous to basically say "we live in a big country therefore we must live quite far from work". Living 75 miles from your doctor and complaining about the round trip of 150 miles is a bit lame.
You will understand my lack of sympathy when I explain that I live 6 miles from a city centre (the UKs second city) and I whine when my trip takes more than 30 minutes. It's all relative I suppose. ;-)
Re:Shale is coming (Score:5, Insightful)
Nuclear is ready. But everyone is scared of it. And no one wants to deal with the waste (even if you plan [wikipedia.org] to bury it it the middle of the desert, 2,000ft underground).
Inflation (Score:5, Insightful)
I hope you all recognise that the prices of gas are being moved up by inflation, not by any increase in demand (demand in US is lower than 5 years ago), not by any decrease in supply (supply is greater now, with the demand being lower, and shale oil came online, there is more output).
It has nothing to do with any speculation on oil prices - speculators only discover the price that the economy sets for the underlying asset in whatever currency that is being speculated in. There are always 2 sides in every speculative action - some bet that prices go up and some bet that prices go down, you don't see politicians come out and blame speculators for LOWER prices, politicians like to take credit for lowering prices themselves, but speculators are always blamed by the politicians for higher prices.
In totalitarian nations (like former USSR), speculators were actually sent to prison, if not worse, all while government was printing billions of worthless paper and fixing prices, which always creates black markets and causes prices in the devalued currency to spike.
USA will not see lower prices as long as the Fed keeps printing, and the Fed will keep printing to prevent interest rates from spiking during T-bill and bond auctions, Feds promise to keep interest rates down for years, and this is done by buying up the Treasury debt with fake money.
I had a funny thread going on here [slashdot.org], the guy can't understand basic inflation and that his house price is falling in terms of real money and in terms of his purchasing power, he expects the value of his house to go up, believe it or not.
Real values of the houses cannot and should not go up, the Fed is trying to preserve the nominal values, so money supply is inflated, real prices are falling, while nominal prices are staying up pumped by inflation that the Fed creates. This will cause all nominal prices to go up, but real prices are falling because of under-consumption, but not because people are saving. USA is using less energy than before (even less electricity), this is inconsistent with any recovery, it's not a recovery, people cannot afford to spend. But they can't afford to spend because they are not producing anything themselves, and they are not producing anything, because manufacturing left the country and manufacturing left because money is not good, inflation is killing savings and investment and taxes are historic high.
They'll tell you that taxes are very low based on % of GDP, but that's nonsense, GDP has been falling for 2 decades as real inflation is 11-15%, and so the deflater that is applied to the GDP is fake. USA is in a real depression, not a recovery, not a recession even. This is all done with fake money. The banks' earnings are fake, they are moving Fed's money and Treasury debt around, that's all they do. You can't have real investment credit because there are no savings, savers are being wiped out or pushed out of the country, all while the politicians are using every tool in their arsenal to gain popular vote, it's called class warfare and it's being used against you to destroy your economy.
Re:Welcome to our world (Score:4, Insightful)
Exactly. Those who say the US can use mass transit have never been here.
San Francisco is not like Denton, is not like New York City, is not like Kansas City, is not like Conshohoken, is not like Phoenix, is not like Columbus, etc.....
You also can't use mass transit in farming communities.
Re:$5? that's nothing (Score:5, Insightful)
Ah, the old "we're the richest therefore we're entitled to waste the most" argument. And it's not even true. [wikipedia.org]
Re:$5? that's nothing (Score:4, Insightful)
And how much of the excess $5/gallon we don't pay at the pump goes towards environmental stewardship?
It's a chicken-and-egg problem here in the US. We have cities and surrounding suburbs built for long commutes on cheap gasoline. Mass transit is expensive to build and even more expensive when it's unused. Mass transit is unused so long as it's less convenient than driving. The problem is we don't see a need to invest until gas gets around $5/gallon to $10/gallon but when it's at $5/gallon it'll be $10/gallon or more by the time decent transit options are built /if we start building them immediately/.
We're definitely opening up ourselves to an oil-based recession.
Re:Welcome to our world (Score:5, Insightful)
I was going to say - if I only payed $5.00 a gallon I'd throw a party. Right around $8.50 (give or take based on the exchange rate) a gallon is what I consider normal.
I assume you realize that your high gas prices are the result of high taxation and not natural market forces. You live in a democracy, right? Maybe you should do something about your own high gas prices rather than criticizing those of us that do. Unless, of course, you like paying more, then good for you. Stop berating those of us who like to pay less.
Re:This is an americano-centric joke (Score:5, Insightful)
It's hard for the average person to accept such a large swing in gas prices in such a short time especially when there are little alternatives. In Europe you have a good mass transit system. You even have Ryan Air for cheap air travel. The US doesn't have nearly as good system of trains and buses.
So when gas prices change like the following:
http://www.randomuseless.info/gasprice/gasprice.html [randomuseless.info]
It puts a strain on people's budget especially during hard economic times.
BTW, I'm a Republican and am no defender of Obama, but I would love to ask the Republican candidates who was in charge when gas prices started to ramp up in the year 2000 and why it did so.
Re:Cognitive dissonance (Score:5, Insightful)
Not only that, but these people who love the free market are complaining that the president isn't playing dictator and directly controlling gas prices. They want an open market for oil, which is exactly what we have today, yet blame the president for how that open market acts. I'm not shocked at their own hypocrisy, I'm just always surprised at how many people fall for it.
Re:Welcome to our world (Score:4, Insightful)
I was going to say - if I only payed $5.00 a gallon I'd throw a party. Right around $8.50 (give or take based on the exchange rate) a gallon is what I consider normal. Between this and the Americans I heard complaining yesterday that the Raspberry Pi boards didn't look to be available in the US -- I have to say that it comes across as petty whinging to the rest of the world.
The rest of the world can go pound sand then, because the reason you have expensive fuel is your own fault. You elect governments that keep the price artificially high in order to discourage cars and shovel people into mass transit. A huge chunk of your price is taxes. If you don't like this, then it's fully in your power to change it by changing your governments. If high gas and mass transit is what you want, hey, have at it. But quit telling us we're "whining" because we want to do it differently, and actually notice when prices go up.
Obama's Fault? (Score:5, Insightful)
Are the high gas prices because Obama decided not to give more subsidies to gas companies? Is it because Obama has somehow magically started a secret war in Iran that nobody knows about but Republican candidates? Or is Obama literally 51% or more of the oil speculators?
I'm all for making your opponent look bad, but I have a hard time seeing how Obama is to blame for current gas prices. Feel free to enlighten me.
Re:America is a BIG Country (Score:5, Insightful)
You choose where you live. The percentage of Americans living in remote areas is tiny. I live in Oregon, one of the least populous places in the US (and possibly the civilized worlds - where else do you have densities of 1 person per square mile????) But the vast majority of our population lives in Willamette Valley. So you could point to Joe in Wheeler County having to drive 150 miles to see the doctor, but the fact is that even in Oregon the majority of Joes live where they could potentially walk to their doctor's office.
We chose to live where we are within 2 miles of most of our daily trips. Our kids can walk to school until they graduate high school. We go to the local rec center rather than drive across town.
The problem is that most Americans want to live in the exurbs in large homes outside of the cities, and then bitch and moan about "killer commutes" and high price of gas. Give up that fancy home 30 miles outside of town, and buy an older home in the City center where things are within walking distance.
Re:Welcome to our world (Score:5, Insightful)
I think this is why younger people are focusing their lives in the urban centres where possible. The benefit of mass (cheap) transit and shorter commutes trump rural idylls. Eventually it will be come untenable to live in the countryside unless you have work there.
Who cares? (Score:5, Insightful)
The writing's been on the wall for years. If your car gets 35mpg and you live within 15 miles of your job, an increase of $2 a gallon hits you with a whopping $5.80 increase per week -- what's that, a big mac? A latte and a half?
And if you *haven't* got a fuel-efficient car and tried to live where you work or close to transit, given how long we've known that gas prices fluctuate in response to world events, well, you've done it to yourself. Shut up.
Free market, y'all. You asked for it, you got it, and you demanded a house with a lawn and an SUV anyway, and now you've got the nerve to cry about gasoline prices? I believe the french refer to this sort of thing as 'yo problem'.
Re:Mass Transportation in America (Score:5, Insightful)
Washington, DC is the size (in area) of London with the "Mass Transit" system of a city one-tenth the size. (And that would be denigrating all the European transit systems for cities that size.) So, Trans. Secretary X, I will happily give you my car when, and only when you arrange "Mass Transportation' in America, but not until then. In the meantime, it would be a good start to take all the current "Mass Transit Planners" out and shoot them. They haven't done "SQUAT" in the last 30 years.
Re:Welcome to our world (Score:5, Insightful)
If everyone world wide consumed like the US does - gas would be a lot more expensive in the U.S.
And you don't have to like it - or care how it looks - I'm just telling it like it is. Feel free to revel in the position of wasteful jerk that's proud of his excess and complains at every inconvenience.
Re:Welcome to our world (Score:3, Insightful)
Most of us would love to use a viable and convenient mass transit system, and thus use as little fuel as you are able, but it's simply not practical.
I've tried to use the bus system in my city - I can drive 15 minutes to work, or I can bus for about an hour and fifteen minutes. It's not worth losing an hour each way.
You don't have viable mass transit in your city, and you shouldn't look at it as an example of mass transit. What you have is a bus system to provide poor people with a way to get around as a way to assuage the guilt from completely ruining the city to make driving everywhere as convenient as possible.
Around here we have the same issues. The problem is that the city is built for driving. To the point where you can't walk, even if something is 3 blocks away you'll have to walk around a few cul-de-sacs and end up with a 12 block walk. Try running a bus system when people can't move across the block in an efficient manner!
And the city is willing to give up nothing to make the bus work better. They won't even tie them into the traffic light grid to allow them to run as efficiently as possible (and maybe give drivers a reward for "being stuck behind the bus"). They certainly won't return to streets with grids, mixed use, and encouraging apartments. Instead they get in bed with single family home developers, and oggle the property taxes from each $500,000 home.
Then people tell me that transit doesn't work. Transit works fine, but the reality is that you either choose cars, or you choose everything else. And around here we chose cars. So walking, transit, bicycling, segways, etc are forced to try and survive between the cracks of the motor vehicle system.
Re:Welcome to fascism (Score:5, Insightful)
I wouldn't necessarily call what the Obama admin is doing on energy fascism. I would call it central planning though. High prices? They want this. His own energy secretary has long had a crusade to artificially jack up fuel prices in order to get Americans out of cars [wsj.com]. Things are proceeding as hoped for:
“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” - Steven Chu, 2008
What was it that Obama's former Chief of Staff Rahm Emmanuel said? Ah yes. "Never waste a crisis". And if you have to make one... do it.
Re:$5? that's nothing (Score:4, Insightful)
Well, our 4% of the population has the largest GDP per capita than anyone else in the world. In other words, yeah, we use the most energy, but we also produce the most stuff with that oil.
How can you be so proud of wasting natural resources ?
It took nature millions of years to create them, and we'll finish them in less than 200 years.
Using the GDP as an excuse just shows your arrogance: me, myself and I before the rest of the world ! I have money, so I can piss on the rest of the world.
The real problem is how we'll be able to maintain our current level of life.
1) Either we let the resources deplete, and we'll be forced to find new energy methods.
2) Either we try to reduce our consumption, but China is coming and will probably beat US GDP in 5-6 years.
In either cases, the resources are limited, so the price will continue to increase, and once there are no more resources, the change will be hard to handle. A lot of large companies will disappear and we'll need to rethink our way of life.
Personally, I don't think that the government should hide the real cost of gas, by subsiding it.
At a given price, new alternatives will become cheaper than using oil, so let's just wait.
Re:Welcome to our world (Score:5, Insightful)
You are probably right about the reason for the higher price - though if Europe consumed at the same rate as the US - then prices would be quite a bit higher for everyone. So is isn't as simple as - "You chose higher prices."
Secondly - it's a democracy - though right now the EU and US are making lots of noise about it being less of one. (Hungary) But more importantly, for simplicity, let's say it's a democracy just like the USA. Why do you think the people who feel the pain of high gas prices are in favor of them? Any American should know that democracy does not equal 'regular people' getting a fair hearing or equitable level of influence in government. In my case specifically it doesn't really matter at all as I'm an ex-pat and I can't vote here.
But I'm not berating you for liking to pay less. I'm berating people who complain about the fact that they live some of the most priviliged lives on earth and still feel wronged. You just need to step out of the little bubble, see it from the outside for a bit, and it becomes painfully clear. (And rather embarassing)
Re:Welcome to our world (Score:4, Insightful)
It's not smug and superior. They simply have a different world view. It's your xenophobia and myopia that lead you to make that comment. If I could pay $8.00 a gallon for gas in exchange for the kind of mass transit they have in countries like London, Sweden, France, I would take that deal in a heartbeat. Right now, I have a 1.5 hour commute each way into Boston. I take the commuter rail and subway, both of which are great examples of crumbling infrastructure in the US. I suspect that diverting money from the morons driving up route 3 into boston every morning into cleaner, more efficient mass transit, would do a load of good for everyone involved.
Re:Welcome to our world (Score:1, Insightful)
I assume you realize that your high gas prices are the result of high taxation and not natural market forces.
I assume you realize that your cheap gas prices are due to spending a couple of trillion invading Iraq.
Also ... even though you pay less per gallon over there you use way more of it by driving gas guzzlers more miles. The monthly bill for "getting around" probably isn't much lower.
Add it all up and "cheap gas in the USA" becomes an illusion. In real terms you're probably paying way more than a European. The fact that it's getting worse is just icing on the cake.
Re:This is an americano-centric joke (Score:5, Insightful)
If I remember correctly, there was a change at the end of the 90's that changed the way that the oil market was traded, and it decoupled the price of oil from the actual supply and demand model to a speculative model. The reason oil prices jump dramatically whenever Iran sneezes is not because the actual supply changes, but because speculators think it will change. The oil market is very happy when the price goes up now but the supply doesn't actually decrease, because in that window between the 2 events they make a crap-ton more money.
Gas and Oil (Score:3, Insightful)
First of all, the reason why gas is at the price it is, is because of Oil companies monopoly control of the market. It has nothing to do about peak oil bull crapola or political issues, beyond the ones of artificially creating shortages.
The energy sector is reknown for creating and building into markets artificial scarcity to jack up prices. It happens all the time. For example, when Enron was around they had people shutting off energy supplies to California to jack up prices. Who cares if little old ladies couldn't afford air conditioning, they got killed outright.
Anyone care? Nope.
Nobody got prosecuted either.
There really is no reason for high gas prices. The earths crust has so much hyrdrocarbons as the Russian's found out, that there is no way we will ever exhaust the supply of hydrocarbons in the form of Oil or Gas.
There is _literally_ oceans of the stuff throughout the entire solar system, so it is abundant and naturally produced.
(No Plants or Dino's required.)
This all has to do with deals made by a few people in the 1950's with the Arab's for Oil. Henry went over and had a discussion with them, and said, "We will not develop the US Oil reserves and we will buy all of our Oil from you. In return, you have to invest some of that money in Federal Reserve notes."
Get it now?
Federal Reserve Notes are valued in Oil. That is how the world works. That is why the US Dollar seems to be almost "Undead" like, because no way in the world, could we wage wars like we are doing in all these different countries and pay for them with a fiat currency.
Secondly the United States has so much Oil, it is almost unimaginable. These evil people have plotted for 50 years to work with environmental groups, government to insure laws are passed so no drilling can happen.
Now ask yourself, why would you not drill on one of the largest Oil reserves known on the planet in your own back yard, yet get the same resource from politically unstable areas? Put it into tankers which are incredibly harmful to the environment if they run aground in the ocean off coastlines, and ship it here?
All when they could be transported much more cost effectively with refineries and local trucking on American soil without gigantic Oil spills every decade off the coastlines from Oil rig platforms or tankers running aground?
Reason: Maximize the value of the Federal Reserve note, and number 2 keep the energy sources away from the people who use them, in a political sense.
(i.e. People complain about the price of Oil, the powers that be are effective insulated because they can say we can't do anything about it, its the middle east you know...blah blah blah.)
What you have is a gigantic transfer of wealth using energy from the masses to the political class with absolutely no accountability.
It is the _perfect_ political system. You get to get screwed, and the politicans and oil companies can set any price they like, and claim it isn't there fault.
No doubt, a war in the middle east just might force them to open drilling in the US. Not for the reasons you are thinking of though. (i.e. political pressure.)
No, you see, by the time they start drilling in the USA, they are going to get probably $8 dollars a gallon for it at the pump.
That would be the ONLY reason why they would open up Oil drilling in the USA.
_GREED_
-Hack
Re:Welcome to our world (Score:5, Insightful)
I do 500 miles in a standard working week, doing one journey a day to/from a bog-standard 9-5 job at a single site.
Where do I live? London.
Where do I work? London.
How much would it cost on public transport? More than my (expensive UK) petrol costs, mainly because of a very efficient engine, in a 15-year-old car. That's not counting my extra lost-time travelling, though.
How much more hassle is it to rely on the Tubes, Buses, etc. instead of a car in London? Add about 2-3 hours onto my working day on a PERFECT day with no stoppages or delays (which I've never witnessed on the London Underground) and where I catch everything just as it leaves the station. Some days, it's actually technically impossible to do that journey by public transport because of all the outages.
Direct, my place of work is half-as-many miles from me, involving THE worst roads in London and hours of queues every morning. A 7 mile detour onto the orbital motorway around London saves me over an hour every day and stops me crawling at 20mph along miles of main "A" road.
I do *not* live on the very outskirts. If you do, you can drive much more than me (about 30% more I'd estimate). Going North/South is even worse because of the direction of most traffic through London at that time of the day (and you can burn more petrol than a 100 mile a day in a single journey just queuing through everyday queues).
Now multiply that up by people who *can't* afford to live near London and/or commute in from Oxford, etc. and it soon gets just-as-crazy.
The American disease is thinking you're worse off than everyone else and making a bigger fuss than everyone else. The English disease is *knowing* you're not worse off than others, but moaning like you are anyway.
Re:Welcome to our world (Score:4, Insightful)
Re:Welcome to our world (Score:4, Insightful)
I assume you realize that your high gas prices are the result of high taxation and not natural market forces
You think natural market forces have anything to do with road transportation in the USA? How much subsidy - state and federal - does the highway system get? What about the car makers (and I'm not just talking about the recent bailouts, look at tax breaks for factories at the state level too)? And that's before you even look at the cost of wars to secure the oil supply.
A little while ago, someone posted a complete breakdown that showed that car travel receives, in total, something like three times as much subsidy as tail travel per passenger mile in the USA.
Re:Welcome to our world (Score:5, Insightful)
Americans don't have to pay what they pay either - there are taxes in US fuel prices, just not as many as in some countries. The cheapest fuel is not in the US.
Some countries actually subsidize fuel for their citizens. I think that's a dumb choice, but it's their choice.
An interesting side effect of higher fuel taxes in Canada and especially in Europe is that vehicles tend to be smaller and more fuel efficient. That allows for denser parking (since vehicles don't take up as much space) and easier visibility for drivers on the roads, not to mention making our limited supplies of oil last longer.
Re:Welcome to our world (Score:5, Insightful)
Mass transit is better suited to the higher population densities of European cities, much of the USA is too spread out.
While true, it is important to remember that the lower population densities and sprawling suburbs of the USA are an intentional creation of the auto industry, not just an accidental development or a law of nature.
Re:Welcome to our world (Score:5, Insightful)
I agree. Voters and governments in Europe have made the choice to tax themselves up the wazoo on fuel. It's more tolerable there given their denser population, better public transit and "leaner" lifestyles.
And do you think this is a coincidence?
If prices had been higher in the US, perhaps the urban sprawl would be less since people would not be as willing to throw money out the tailpipe. If there were higher densities "suburbs", then mass transit would be more practical and cost effective. If higher density developments were the norm, then it would be easier to roll out things like high speed Internet (a la Korean and Japan). Lower density housing also corresponds to higher rates of obesity (cf. multiple studies).
So the choice to tax gas may be painful in one way, but it has (IMHO) ended up benefiting European citizens in many others. And now that oil prices are set to rise due to pure market forces (supply/demand), the Europeans are also in a better absorb the shock of it compared to the sprawling 'burbs of the US.
You reap what you sow.
Re:Welcome to our world (Score:3, Insightful)
And I find it offensive, to be honest, that you are fine with it becoming "untenable" to live where you want and work where you want. This is a basic tenet of existence to me. One more freedom I plan on fighting for from you change agents, when and if the time comes, my personal freedom to be able to live where I want and work where I want. I will not be forced to live in a walk-in closet in a controlled compact city, to be taxed and poisoned to death.
People who "focus their lives in the urban centres" (centers in the USA, btw) are, by and large, some of the most spiritually and emotionally empty, uninformed sheep I have ever met in my life. I want to be as far away from them as possible when it becomes "untenable" to live there.
Re:Welcome to our world (Score:4, Insightful)
Being from Germany myself, I consider it a good idea to use taxes to promote some adaption to a less wasteful lifestyle. And the income from fuel tax could be used to finance tax breaks in other fields (in practice, our government prefers to waste the money).
About the renewable fuels:
In 2008, when mineral oil prices were as high or higher than today, plant oil as diesel fuel had a small boom in Germany. But then mineral oil prices declined, and roughly at the same time (starting in 2008) energy taxes on plant oil used as fuel were introduced. Those taxes have been gradually increased over the last years, and from 2013 they will be just as high as on diesel.
So the cost advantage has been lost with the difference in taxation disappearing, and renewable fuels are no longer attractive from a financial point of view.
An exception is natural gas, which still has a tax privilege until 2018.
Re:This is an americano-centric joke (Score:4, Insightful)
Funny, up until there, it almost sounded like you were a rational, sentient being.
I disagree. I thought the possibility of rational, sentient being went out the window with "Trust me, with our current socialist trends,..."
Re:Welcome to our world (Score:5, Insightful)
We can only cover three quarters of the population economically, I guess we better not bother at all.
Part of the problem is not population density but urban layout - we have designed our cities for cars and not walking, cycling, and mass transit. The sooner we try to fix it the better.
Yes you can. Many people do. They make bikes, clothes, and accessories for this purpose.
People manage to bike in third-world and developing countries in the tropics. Take a nice easy pace and it is no more strenuous than walking, and you create for yourself a nice breeze.
Re:Welcome to our world (Score:5, Insightful)
Well that's just not true.
The US automotive industry certainly didn't discourage the continuation of low population density areas but it had absolutely nothing what-so-ever to do with their creation.
The low density started when farming/fishing and the fur trade was ubiquitous. Earlier than that it started when nomads travelled large distances to track fauna for subsistence living.
You might think that's being overly pedantic on that matter but it isn't. The US had a much different history than Europe did. The US didn't colonize "naturally", it did so very forcefully and quickly by foreign pressures. That history is reflected in the layout of it's population.
Re:Welcome to our world (Score:5, Insightful)
Mass transit is better suited to the higher population densities of European cities, much of the USA is too spread out.
No shit, Sherlock. So your answer to that would be, what? Continuing with the same stupid behavior and hoping for the best? Or should we grow up, and recognize that they way we've been doing things is not sustainable and pursue a course that is?
cheap still (Score:4, Insightful)
We pay $7.5 a gallon NOW.
We are in Europe. In the so called socialist Netherlands.
Your country was designed wrong.
Gas guzzling cars. (still!) Cities with no real transportation infrastructure other than for cars. Large distances, even in cities.
How well will this work when gas hits $8?
Your cities need to be more compact. As do your cars. See the European and Japanese smaller cars. (small: weight is less than 1.5 metric tons)
Consider a diesel!
Re:Welcome to our world (Score:5, Insightful)
Now why would they want to do something like that?
Re:Cognitive dissonance (Score:5, Insightful)
In the same universe where Obama was solely responsible for:
* Invading Iraq and Afghanistan (he voted for it as senator, but so did almost everyone else)
* Causing the financial crisis (he wasn't in the senate when most of the deregulation occurred that caused the problems)
* Allowing illegal immigrants to take over the country (actually, he's deported more illegal immigrants than any other president)
* Taking away your guns (actually, the only gun-related legislation he passed made it legal to carry guns in national parks)
* Massive increases in federal spending (the food stamps and unemployment spending were just the Obama administration following pre-existing law)
But if you listen to the Republican debates at all, you'll find that these are the kinds of things a lot of that party really believe.
Re:Welcome to our world (Score:5, Insightful)
I will not be forced to live in a walk-in closet in a controlled compact city, to be taxed and poisoned to death.
No one is forcing you to live anywhere. What you are whining about is that you can't afford a giant (and yes, 2500 square feet and above is giant) house in the middle of the city, and instead want to be able to afford driving from the suburbs to work in a space and gas wasting oil burner.
What I find untenable is that you're asking others to subsidize your life style. And make no mistake, cheap gas, suburban sprawl and roads to everywhere, including the suburbs, requires money that comes from everyone else.
People who "focus their lives in the urban centres" (centers in the USA, btw) are, by and large, some of the most spiritually and emotionally empty, uninformed sheep I have ever met in my life.
So to top it off, you are insulting the people who are paying for your ability to live in the suburbs. Nice.
Re:Public transit sucks (Score:4, Insightful)
It was always a miserable experience (crowded busses, never on time, routes that made no sense, etc..), and this strike was the final straw. Went out an bought a gas guzzling car.. and will probably never use the bus system again.
(Just felt like venting that...)
Yeah, because every mass transit system must be just as bad as the lame one that you suffered through. Right? There couldn't possibly be any cases where a mass transit system, and a community planned to make efficient use of it, would actually work. Right?
Re:Shale is coming (Score:4, Insightful)
As for Sec. Chu advocating higher gas prices, the time to do that was when prices were lower. Paying extra money to your own government - i.e. to yourself - in taxes is quite different than paying it to OPEC or Venezuela where you will never see it again. The extra gas tax could have been used to provide more efficient transportation options so higher gas prices were more tolerable. But of course this talk is all nonsense - politically, the US is nowhere anywhere near any sort of planning or sacrifice for the future. We're not even close to paying for our own current expenses. Despite all the vitriol, Obama nor Chu haven't done jack to increase gas prices. You can put your finger on a couple things like the Keystone pipeline but the figures don't add up to anything significant.
It's just pathetic to watch us go through this cycle of high gas prices and incessant whining again and again, like clockwork, each time being shocked and outraged, and doing nothing substantial about it.
Re:Welcome to our world (Score:3, Insightful)
I assume you realize that your cheap gas prices are due to spending a couple of trillion invading Iraq.
I'm not going to argue in favor of the invasion of Iraq because it was a horrible idea, but really? How did invading Iraq result in cheaper gasoline? It didn't cause more oil to come onto the market which would lower the price. The US didn't take over the oil wells and direct the oil to only the US. Even if that happened I am skeptical that would result in lower prices as other producers would route oil elsewhere to take advantage of higher prices. Now, if you want to argue that cheap gas prices in the United States are the result of a lenient tax regime on gasoline and on oil production in general, you might have a case. Although.... in the latter case, the various tax breaks that the oil companies receive probably just result in greater profits for them and not lower gas prices.
Re:But this price rise is artificial.... (Score:4, Insightful)
If you don't think the US should sell oil to foreign markets, why do you think Canadians should? Or Saudi Arabia for that matter?
Re:But this price rise is artificial.... (Score:5, Insightful)
I guess you don't realize that oil companies typical profit percentage is in the 6-7% range do you? The reason why they make so much money for their shareholders (who happen to be most people with retirement accounts), is that they sell so damn much of what they produce.
Now, if you want to talk about not paying taxes (which the oil companies did), lets talk companies like General Electric (whose CEO is the POTUS econ advisor) who paid $0 taxes in 2010. Or lets talk about Warren Buffets company (Berkshire Hathaway) which owes almost 1B$ in back taxes.
Or is it excessive profits you don't like? Well why don't we hit Apple on the excessive profit margins? Their PM is close to 30% now, 4-5x that of a company like Chevron or Exxon.
Finally, under what law can the IRS tell Apple what to do with their money? Or are we now living in a country where the federal government is the sole final arbiter on corporate decisions?
Re:Welcome to our world (Score:5, Insightful)
The only difference between europe and the US is that europe never dismantled their transit systems. Most countries were struggling to rebuild after the destruction of WW2 and they needed to repair and maintain their infrastructure.
How do you think people got around US cities before the 1950's?
Every US city and most towns had extensive privately financed and operated mass transit systems before the massive government subsidies to free roads and parking were instituted. Gas taxes only pay for a portion of federal interstates, not the majority of roads, parking and asphalt required to support the car infrastructure.
Once a free government funded socialized road system was ready in the 1950's the auto industry bought up most of the private transit operations (street cars) and replaced them with buses while reducing service.
Many of the costs of driving are also subsidized by product prices and tax breaks. Building codes require minimum numbers of parking spaces. These private parking spaces are paid for by the prices you pay for products. Parking lots pay lower property taxes and employers can deduct the cost of parking provided from their income.
This year congress cut the mass transit tax deduction to $125/mo while increasing the parking tax deduction to $240/mo. In 2010, these were both $230.
Is this in the public interest?
If we could return the true cost of driving to drivers, mass transit would be profitable once again.
Re:Welcome to our world (Score:5, Insightful)
That's not unique to America at all. Neither are long commutes.
Commuting is becoming untenable, no-one is trying to offend you. It's a fact of life. I can't live on the moon because, although pretty, the commute is a bitch and costs a fortune. Your case is a smaller version of that except the parameters are changing. It's getting progressively more expensive due to free market forces outwith your control. There's only so much oil in the ground and sooner or later it will all be gone. Then what? You can't get to work and your house is worth dick.
Cheap fuel created the suburb. Expensive fuel will destroy it.
You might want to read The Town Mouse and the Country Mouse.
Re:Welcome to our world (Score:4, Insightful)
No, it is an active choice to spend more money subsidizing roads then building mass transit. If for instance big rigs had to pay for the road damage they do, all freight would go back to rail.
Re:Welcome to our world (Score:5, Insightful)
My city (pop: 365,000) Will not even put in sidewalks.
It is a 30 mile hike to the nearest Bus or train terminal.
In the last city counsel meeting where it was discussed, the decision was made to maintain the status quo. because Buses, sidewalks, and trains bring in "The undesirable lower class people"
So, I am not sure that the "Auto industry" has a lot to do with it!
Re:Welcome to our world (Score:4, Insightful)
We can only cover three quarters of the population economically, I guess we better not bother at all.
Part of the problem is not population density but urban layout - we have designed our cities for cars and not walking, cycling, and mass transit. The sooner we try to fix it the better.
Yes you can. Many people do. They make bikes, clothes, and accessories for this purpose.
People manage to bike in third-world and developing countries in the tropics. Take a nice easy pace and it is no more strenuous than walking, and you create for yourself a nice breeze.
What he was really trying to say is that Americans are generally too fat and lazy to ride bicycles or walk rather than drive cars. Hell, even on /., I've had Americans claim that walking four blocks to a subway station, riding the subway, and then walking another four blocks to where they need to go was too much work. Personally, I'm American and I'd love a European style train system in the US. However, it seems that most of the US, just want their cars between convience and the idea that only poor people on welfare ride buses.