Gas Prices: The Oil Well Has Blown Its Top!
64Update: Oil Prices Drop
Since writing this hub gas prices have fallen as crude oil prices fall in wake of the global economic slowdown. Will they go up again? Well, increased demand usually eventually spurs increased costs for anything, so I would say: stay tuned!
I am now paying at the pump more than I pay for a really good meal in my favorite restaurant. I even took to replying to all of my friends who, some years back, told me not to bitch and complain about the high cost of gas because milk and bottle water were more expensive. Well, the chickens have come home to roost on this matter: milk and bottled water are less expensive than a gallon of gas!
What got us here? Some people say the dollar is weak, and that is why we pay more for oil. I doubt that. The U.S. dollar is globally down about 10%, but gas is up a whole lot more than that!
Some people say there isn't enough oil on the market, now that China and India are buying huge amounts, but I don't buy that either. Actually, there seems to be a more-than-adequate supply of oil out there right now.
Some people say lower the taxes on gas at the pump (Hillary Clinton & John McCain each propose variations on this idea). I think that would lead to two disasters. First, the taxes pay for infrastructure, and as we all know, bridges and roads in the U.S. are generally in deplorable condition. Second, lowering the taxes would at best be a temporary solution that would lead to higher consumption, adding to the problem and making it potentially even worse.
Some people want to drill in ANWR, and Arctic National Wildlife reserve, where it is said enough oil exists to keep us humming along in our Hummers for quite a long time. Of course, there are oil shale fields, off-shore sites and other places we could also drill and find oil, so why not use those resources now?
Lastly, some people want to reopen old, low-producing wells, such as those in the Midwest. Well, that is already being done, although the oil is pumped more slowly than molasses on a cold January morning. It's just not a huge supply, and is only worth the effort when oil prices are very, very high.
Increase the availability of bio-fuels, ethanol. OK, but it costs a lot of money and takes forever to get new plants on-line, doesn't it? And there is that nasty ethical issue of taking food that could feed starving millions and putting it use as fuel. Ouch, bad form, guys.
All of these sound reasonable, in order to keep our automobiles moving us from point A to point B, but I am a skeptic when it comes to easy (or even not so easy, but quick and seemingly expedient) solutions to huge problems. To tell the truth, most people do not seem to have a really good idea about why gas prices are up, but we do know that oil supply is not necessarily low. It seems, according to my friends at NPR, who interviewed Vijay Vaitheeswaran, correspondent for The Economist and co-author of Zoom, The Global Race to Fuel the Car of the Future, that the real reason behind the high prices has nothing to do with supply and demand, but a shift in investments and rising oil nationalism, coupled with a reluctance on our part to separate ourselves from our over-dependence upon oil at a fuel.
Those people who seek to make money off investments have fewer choices these days than they did, even, for example, a year or two ago. Housing markets are down, so real estate is not a wise investment for turning a quick buck. Many have turned to the volatile oil sector, where trading can often change dramatically, with huge swings in oil prices, from one minute to the next. Speculators have been helping drive the cost for oil up and down; that much is quite true, but is that enough to cause these higher prices?
In my opinion, greed is at the heart of most of this. We, as consumers, just can't get our heads around the fact that we need to reduce our need for oil. I have even heard some of my friends say that it is our God given right to drive gas-hungry vehicles. Well, that type of twisted logic usually leads to a sudden downfall. As for the rest of us, until we get there, none of us should complain about how high gas prices are. We are in a free market situation, and demand drives up prices like nothing else can.
Our stock market is also fueled by greed in a sense, in that nobody enters the market hoping to lose money. The higher the price of crude oil goes, the better for speculators. I'm all for making a profit, within the rules of the game, of course.
I'm not out to change the way we do business, but I am certain that greed, (or monetary ambition if you prefer), can also be put to better use. Where are the entrepreneurs creating new energy systems? This would be a huge and profitable market in the right hands. Where is our great national genius and leadership in this field? Why isn't President Bush, and every candidate hopeful of truly making change happen in our nation, delving into ways of creating profitable markets for alternative energy sources, sources which do require huge input of energy to make a pittance of return?
No matter what, the world is changing all around us, and if we are to keep our place at the top of this global energy chain, we had better get busy right now and make a better future than that which is being predicted for us.
- Gas Prices around the World
- Texas Oilman Invests in Huge Wind Farm
CNN story about how Billionaire Texas Oilman T. Boone Pickens sees wind farms as one solution for our petro-narcotic addiction.
Gas Prices March, 2008
Peak Oil, What It Means to You
A Crude Awakening
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Good hub! I've switched from driving an 11mpg truck to a 30+mpg econo-box thanks to fuel prices. If everyone who drove a Hummer or suburban as a daily commuter did this, I wonder how much attention it would grab from the oil barons running our country and banks?
Great hub, I enjoyed reading it from top to bottom and I better understand the situation. Why do you think someone of genius hasn’t solved this problem? Of course most people are going to say Bush and Chaney, they get way to much credit for the earth’s misery. So what’s the real deal?
GREED - is all it is. We need to revolt by coming up with viable, alternatives that don't use oil products. And, I do wonder, if people have come up with those alternatives and been shut down. Those who have all the money have all the power. It's a scary situation we are in right now.
Tough call food or energy. There must be other ways. We have wind farms up here and maybe they need to install a few more of those and figure out other ways to create energy. Would love to be an inventor right about now.
Donna
As it stands the world has all that it needs to power itself. Solar, tidal and wind power provide in a day enough energy to power the world for a year; it’s simply a matter of return on investment and capacity. When the price of renewable energy drops below that of fossil fuels there will be a paradigm shift that will see electrical infrastructure replace holes in the ground.
Blangrehr, Bush & Cheney are the current culprits, and so they get most of the attention. We Americans typically have short memories, so we forget some of the doozies we've elected in the past. I generally am an Independent, but I break from center to left more often than from center to right. But I have yet to believe that any president, or congress, has ever been elected (within my lifetime) that puts nation first and party second.
OK, there were a few individuals. I am old enough to remember a Democrat named Scoop Jackson, who had the courage to vote conscience and nation first, party second. I didn't always agree with him, either, but at least he could back up his votes with a reasoned argument. And in Illinois we had Everitt Dirkson, who helped LBJ champion the Civil Rights movement,yet who remained a staunch hawk on the Viet Nam war.
In past years the Democrats have generally fielded either very popular and strong candidates, or some very strange and unpopular ones. Clinton, for all his faults, was very strong. Gore was not quite as strong, although he is stronger now, and he was popular and is now more popular, although in the Electoral College he lost. Yes, I understand how that can happen, and that's the system we have, so I accept that one can win the popular vote yet lose the electoral vote. It's just a quirk of the system.
But even in the last election John Kerry was NOT the best choice, yet he won. For the Republicans, G.H.W. Bush was a weak choice, too "liberal" for the base of the party, just as I see McCain now - too "liberal" for hard-core Republicans. Still, I remember a day when the base of the Republican Party was more moderate, and when the farther-Right Goldwater Republicans were just a noisy sub group.
I backed Joe Biden in the early Democratic candidates' race. I felt he was more in tune with my own ideas. I knew he couldn't win, though. And I did like McCain in the early portins of the Republican candidates' race. I don't know now if i could support him: Obama has his Rev. Wright to answer for, and McCain has his Hagee/Robertson/Falwell connections to answer for.
Anyway, thanks for the reply and hope you have agreat day!
Dobsc400, if I remember it correctly, the Netherlands has a tidal power system in place. Do you have any info about how that is doing? I would be curious, because although I believe tidal systems do harm to the coastal ecosystem, it still may have merit because the harm may be less than petro-chemical fumes.
As for wind and solar, on an individual basis I really believe solar could take houses, one-by-one, off the major power grids. In some places Solar would be great. I have a blog that talks about Masdar in Abu Dhabi, where that nation is building a brand new city that will be carbon-emission free. You can read about it at http://mrspacecase.blogspot.com Bu be aware, I have a lot of political rants there as well.
Now as for wind, that is also a possibility, butonly if one can (a) find a place where it's windy all or most of the time, or (b) create energy storgae systems (batteries) that will capture and hold excess power generation for those times when the wind doesn't blow.
I can think of some places where wind power would be very favorable, and the last I went to Spain I saw new wind generators in place and operational. Not far from where I live west of Chicago there are also wind generators cranking out power. You can see them from I-39.
I've written to some of you to join your fan clubs, so I am going to condense a few ideas I had.
1: I have been working most of my life to convince people to get off the petro-drug that oil has become.
2: I remain open to new ideas about energy production, and I believe we need to change our energy using patterns right now, starting today, and that individual as well as large-project ideas are needed.
I have been trying with changing my home over to an individual solar power grid, using the same ideas as those found in trailers and cars - lower power lights, lowered power refigerator & appliances, etc. This current economic crisis, however, has driven near to being bankrupt, so the plans are on hold.
I want to thank you all for reading my hub and replying.
I guess that I saw this coming. Eight years ago I bought one of the first hybrids commercially available. Last week a guy stopped me in a parking lot and offered me about 50% of what the old hybrid cost. Not bad for 8 years depreciation; maybe our love affair with gas guzzlers has lost its luster.
And as you say, "greed, (or monetary ambition if you prefer), can also be put to better use." However, that takes capital --- Only the "status-quo" people seem to have the capital to make a difference and status quo people don't usually want progress.
Incidentally, the US$ is down a lot more than 10%. If you're interested, drop me an E-mail (bw@chartimages.info)and I'll E-mail a chart that shows about 80% drop in purchasing power since 1950.
Like Robie, I thoroughly agree with everything you said. However, the U.S. is only now experiencing the high gasoline prices that Europeans have been paying for years. I thought this must be an urban myth until, on a visit to England in 2003, I saw a petrol point advertising gas for £1.88 - per LITER. The exchange rate at that time was about $1.75 to £1.00, so they were already paying well over $5.00 a gallon. (On the other hand, groceries were extremely cheap compared to here...i.e. a box of cereal that would be $4.50 here was only $1.00 there, and a loaf of bread was about 65 cents.) Anyway, due to the price of gas, Brits had already switched to small...very small...cars. A Ford Taurus, for instance, was a "full-size" vehicle.
As for wind power, drive down most any street in the Midwest and you'll see at least one round "thingie" on every roof. The fan inside, every on a calm day, will be turning. On a windy day, it'll be spinning. The purpose is to suck warm air out of the home's attic. About 10 years ago, a cousin and I wondered why these little wind turbines...which is what they are...couldn't be used to generate at least part of the electricity for the house it sat on. We picked a few techno brains and were told the apparatus needed to utilize this "free" power would be too complicated and costly for homeowners. Well, guess what? The Brits are building a model village of self-sufficient homes, powered partly by solar collectors and partly by...you guessed it...those roof-top wind turbines that we have long ignored. While we're crying at the pumps, other countries are actually finding ways to wean themselves off oil. And btw, I just read somewhere that car dealerships can't give away SUVs these days.
Anyway, a great hub!
Excellent hub. Gas prices are definitely an issue in my line of work. I spend a lot of time driving to and from jobsites, sales calls, etc. but my reimbursement has not changed. I believe we're starting to feel the crunch more and more each day. Oil prices seem to hit records like kids hit the ice cream truck. Wherever the cause lies (and it is in many places), a new political regime will not supress it. The only way to loosen price is to loosen demand. That is a monumental task for sure. Thanks for the great hub.
We should have seen this coming years ago...but we left the solutions to the ones grabbing the money. Not wise. It's like getting mad at a rattler for biting. As a consumer, we can only consume less but it will only help a little, our need is too great. I've read recently that only $56 a barrel is due to supply and demand; the rest is cartel trading. It will be investigated and 10 years from now we might know the outcome of that. lol
one day at a time, til then. Marisue
I agree with Karen its all about GREED. Oil companies made BILLIONS profit last year and now we have to sit here like ducks while they tell us they are raising prices. What BS ! Plus the government is sucking all this up, living large and smiling while they stick it to us !
Some people did see it coming, but their voices were drowned out by pundits who called them unpatriotic or worse. I have a special axe to grind with certain "news" networks & their "reporters" who pander to the people that bring us Big Oil and the Petro-Drug, or as I sometimes call it, Petro-Narcotics.
Using oil, in moderation, may be necessary, but there are so many ways homeowners could and should be using alternative, renewable energy sources. Didn't Jimmy Carter have incentives or tax breaks for this? Wasn’t it Reagan who wiped those out? My memory is not as good as it used to, (and it never was LOL!!!), but I seem to remember something like this.
I bought a Hyundai that gets 32 MPG on average, and still I feel guilty that I couldn't afford a hybrid that gets better mileage. My friend Mike has a hybrid and he routines gets over 50 MPG. I actually believe that a day will come when people have solar-recharged electric cars, since recharging off the power grid still uses some form of hydrocarbon fuel.
I fully support alternative to oil solutions for energy...wind is good, water is good, solar is good, I know we must know how to do this; the oil people did not want to give up their bucks for that solution. makes me feel so helpless.
I enjoyed your point of view on the whole gas price's thing. I agree with you and there are some things we can do about it. This in no way cures the problem but if we will keep our vehicles running smoothly and well maintained that will help a bunch. There are a lot of little things we all can do to contribute to saving gasoline. I currently use a gas additive that increase's my gas mileage. What to find out how you can to? Look for my next hub to come out soon and I will explain it. My ID is drummer boy. Thanks and hope to chat with you soon. I gave you 2 thumbs up.
Shane
Well I do remember that Jimmy Carter warned us about all this. He lowered the national speed limit to 55PH,told us to lower our thermostats, and put solar panels in the white hous--Ronald Reagan ripped them out. Need I say more????
Great hub. We found a place right across the street from my work, so I can walk. It's a huge relief not to be spending so much money on gas. I'm all for reverting to horses, mules, and carriages, too. (kidding)
The illegal, immoral invasion of Iraq is costing us between 3 & 5 billion dollars per week. For the cost of one week of slaughter in Iraq, using currently available technology, we could convert from about 60,000 to as many as 100,000 homes to solar / wind electricity making them completely energy independent.
Every existing home and most commercial buildings could be upgraded within five years if we would just DO IT. All new construction should be energy independent by law. Why won’t we do it? Because it would put the Exxon Mobils out of business.
End of story.
ColdWarbaby - About the cost of the war in Iraq - I thought it especially touching that former service member & POW John McCain and presumed former service member President G.W. Bush said that any inceases to the G.I. Bill would be "too expensive." I wonder if they were ever in dire need of medical care and were refused because the funding wasn't there? Oh yeah, I forget - Bush had daddy's money & McCain has wife's money to back them up.
I have always wondered about the murky netherworld of Big Oil and the Petro-Narcotic we are addicted to. From my readings of history I remember that prostitues in China were kept dazed on opium and that this practice spread to other nations as well. I often think we are being drugged by our dependence upon Big Oil.
As I said I another reply, we may never completely shake off the need for some oil, but our national inability to find a better solution to our transportation & energy needs is a source of national shame. Shame on Big Oil, and shame on us for accepting the current state of affairs. Are you listening, presidential candidates???? Are you listening, voters????
Right on Chef -- we can no longer be passive...all this happened because we allowed our lives to become so busy - that we did not become the watchdogs over our elected officials. People do what is inspected, not what is expected!
Let's Inspect them -- all along the way -- we are in a critical situation...it's time to drain the swamp!!
Coldwarbaby...I am with you!!
Man, I need a piece of chocolate.
Boss number 1 -- horses, etc would be a gas of a different nature. hahahah
I'm with ya tho. I have a 3 wheel bike....with a big basket on the rear....the bike, not me. LOL I guess I'll have to get it ready soon...sniffle.
robie2 isn't it infuriating that the White House would cut out the solar panels and tell us to put them in???
They should be the first to go green!!
"the bike, not me" - OMG, I am falling on the floor laughing! Great reply, Marisuewrites! I wish in my case it were the bike, however - but that's a story for another hub!
We may want to put things in perspective. When I got out of college (1950), new medium priced cars (which I couldn't afford) were going for between $1,500 and $2,000. Also, as I recall, gas was 25.9 cents and included only modest state taxes (no fed taxes).
Now a medium priced car is between $20,000 and $25,000. Gas is around $3.50 or so (depending on location). According to my figures, gas prices as measured in inflated dollars should be somewhere around $3.00 per gallon. But as that now includes federal taxes and higher sales taxes, the ratio seems to hold.
As an update, the price of gas in our town just jumped to $3.95/ gallon, up 20 cents from two weeks ago, up 30 cents from 3 weeks ago. Any other reports out there?
Greed can be a nasty thing to have to be on the receiving end of. Greed can put people out of their senses (along with a lot of other emotions!)
I agree with everything you said here and believe you. As for gasoline here, $3.64 as of this morning. Just to think, years ago, gas was really cheap. Oh well, the "good old days..." ;)
Greed, unchecked, can ruin a nation, as well as many peoples' lives. I believe greed is a basic human emotion, and as such, has some basis in biology. But like murder, it should have long ago been tossed in the garbage.
Instead, we (generally speaking) worship greed, and love the results. Who doesn't want it all? Who doesn't want enough power tobe looked up to? Who doesn't want everyone to fear him or her?
There are some who do not wish for any of the things, but, unfortunate, as you point out, Naterider, there are enough who do, even if it hurts others.
I believe that greed is a psychopathological disorder. Some few seem to be born with it as a predominant personality trait. For most of us it is part of the indoctrination we are subjected to virtually from birth.
My wife and I have talked a lot about moving to Chicago. One impediment has been the higher cost of living there vs. ability to earn. A year ago, the gas savings for using public transit instead of a car almost evened out the difference. Since then gas has gone from $2.75/gal to $4.00/gal. At nearly $130.00 per week in gasoline, maybe it's time to move.
Great Hub you have here :) please read my new hub about getting free online car quotes...
Great Hub you have here :) please read my new hub about getting free online car quotes...
Hi ChefJeff. I've just read this hub for the first time, and I'm fascinated by all the comments. I'm in England where petrol and diesel prices have been pretty steep for a very long time due to government levies. The net result has been that people really do drive smaller cars here. Just recently prices at the pumps have climbed higher than ever, and the cost of transportation is impacting on our food bills too. I've been reading through all the oil related hubs over the last few weeks, and have also written one of my own. This is such a huge issue, yet I have the feeling that so many people are still not getting their heads around it. Well done for penning such a thought provoking hub.
ChefJeff
April 2009, time to give us an update, from when you created this hub.
Any new thoughts?
sorry it double posted.
We wouldn't have to worry about OPEC raising gas prices if we stop dealing with 'em! I want president Obama to call OPEC and China to ask for our money back so it can be invested in, American made, clean energy. LOL :P
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robie2 Level 6 Commenter 4 years ago
What a well reasoned well written hub--and it doesn't hurt that I totally agree with you:-) It's been piggies at the trough for the past eight years in Washington and on Wall Street--and short sighted piggies too. The chickens are indeed coming home to roost. I keep thinking that the one thing we Americans are good at ( other than consuming stuff) is re-inventing ourselves and it's time. We have a lot to offer the global community if we get ourselves together and think future not past. Greed is not good and we all know what pride goeth before :-) Great hub. Thumbs up.