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An oil 'crisis'?, Part II
http://jewishworldreview.com ^ | Thomas Sowell

Posted on 08/24/2005 7:04:48 AM PDT by manny613

Soaring oil prices have revived the old bogeyman that the world is running out of oil. Economics is a great field for nostalgia buffs because the same old fallacies keep coming back, like golden oldies in music.

(Excerpt) Read more at jewishworldreview.com ...


TOPICS: Editorial; News/Current Events
KEYWORDS: doomsdayagain
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To: newgeezer
Even at $60 a barrel, most of the oil that is known to exist is too costly to extract. How much will be extracted depends on how much higher the price of oil goes -- and how much new technology can recover more oil at lower costs.

--------------------------------------------

That is the crisis and that is what will hurt us over the next decade.

21 posted on 08/24/2005 8:13:37 AM PDT by wtc911 (see my profile for how to contribute to a pentagon heroes fund)
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To: MNJohnnie

The station I mentioned hasn't been so kind. All it's done is increase, increase, increase. It's like watching the Voyager spacecraft. Always heading higher and higher.


22 posted on 08/24/2005 8:16:03 AM PDT by NCC-1701 (ISLAM IS A CULT!!!!! IT MUST BE ERADICATED FROM THE FACE OF THE EARTH.)
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To: NCC-1701
There hase been a 40 cent increase since July 22. Extrapolating that foreward, pump prices would be $4.oo a gallon in January

False assumption. You assume the rate of increase since July 22nd will continue at the same rate for ever. In fact, the reason for the big jump in July, according to Oil experts, was a major accident at a refinery. With out that, the domestic price would of dropped in July. There is no reason that continued increases need be the case. It should drop in Sept since the summer driving season comes to a close and the kids go back to school. Gas consumption always drops after Labor day. It will probably start back up in Oct or Nov because the refiners covert to more heating oil then gas production then.

23 posted on 08/24/2005 8:17:02 AM PDT by MNJohnnie (If you try to be smarter, I will try to be nicer.)
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To: richardtavor
As soon as the world economy starts slowing down, gasoline, oil and natural gas prices will start to drop rapidly.

Or as soon as the price makes it cost effective to switch to other sources of energy. The rising price will force some demand off the market into other eenrgy markets

24 posted on 08/24/2005 8:18:32 AM PDT by MNJohnnie (If you try to be smarter, I will try to be nicer.)
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To: MNJohnnie

I was just running a worst-case scenario. There's a part of me that says that may not be out of the question. Maybe a victim of sticker shock. I haven't seen it yet in Memphis, but before the year is out, I expect to see $3.00 gas somewhere. To qualify that, $3.00 at a station that is well away from an expressway, whose prices are always higher because of location and need.


25 posted on 08/24/2005 8:23:50 AM PDT by NCC-1701 (ISLAM IS A CULT!!!!! IT MUST BE ERADICATED FROM THE FACE OF THE EARTH.)
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To: brownsfan
"We really need to focus on alternatives as a matter of national security"

I happen to agree, and would further say that the national security aspect of the matter brings the thing legitimately into the domain of the federal government.

Unfortunately - since the chances are very good that the feds could make things worse instead of better.

26 posted on 08/24/2005 8:24:35 AM PDT by Sam Cree (absolute reality)
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To: NCC-1701

Don't believe much of what you hear from the media. Watch for changes in the economy--if the economy starts to drop, you will see the prices drop like a rock...unfortunately, the prices are sometimes controlled by emotion. In the year 2000, we were getting less than $10 per barrel (very short spot price.,) and less than $1.50 per MCF of gas. That is because the economy tanked right at the end of Clinton's presidency and the beginning of Bush's. When the world economy turned around, then oil and gas prices went through the roof. It really is fairly simple, when you think about.


27 posted on 08/24/2005 8:29:53 AM PDT by richardtavor (Pray for the peace of Jerusalem in the name of the G-d of Jacob)
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To: MNJohnnie

"No you have it backwards. "

My observation stands, and I think it's valid. But I understand your reply. What I said does have some of the sound of what the left is crying about. Don't cast me in that lot.
I understand the evolutionary process. I realize the market is important in the process. I have followed, cold fusion, electric, solar, and hydrogen fuel cells. I understand there is no magic fix. If it weren't for the security aspect, (making Venezeula and Saudi Arabia wildly wealthy), I'd be content to drain all oil reserves and let necessity be the mother of invention.
Where the profit is going is the problem. Government, AND the market can influence research and development. True, there is no magic fix, but there are alternatives. With refinement, the alternatives become better, and more reasonable.
The market is important, but it is not god. (I know that's practically heresey here).


28 posted on 08/24/2005 8:33:13 AM PDT by brownsfan (It's not a war on terror... it's a war with islam.)
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To: manny613

The interesting thing about the alternative actions available in the peak oil scenario is the chance for failure and success of each of them.

On the face of it, if oil in the free market becomes much more expensive due to shortages or increased costs of extraction, the world economy will be hurt. OTOH, if the Left gets to implement its solution, more regulation, rationing and price control, the result will also be that the world economy will be hurt. Probably hurt more and damaged longer, due more layers of regulations that will probably inhibit recovery.

I'll take my chances on the free market, if the choice is between the two.


29 posted on 08/24/2005 8:35:35 AM PDT by Sam Cree (absolute reality)
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To: NCC-1701
The station I mentioned hasn't been so kind. All it's done is increase, increase, increase. It's like watching the Voyager spacecraft. Always heading higher and higher.



Keep your eyes open. I never use to even look. I just pulled off and filled up when the E light came on. I have found a lot of the time certain stations are the first to rise their prices and the last to drop them. If you see a jump in price at the usual suspects, keep your eyes open for someone who is still selling at the old price stop and top off your tank. Also, don't get in the habit of always filling up at the same place. Go to where the price is cheapest as long as you don't drive out of your way to get there. Doesn't do much go to burn a gallon of gas to save $.45! Punish the up and up and up people by taking your business elsewhere. Over time you get a feel for who does what. My favorite is this little Ma&Pa Citgo francise I go by on my way home from work. Off the main drag, they have a manual sign. Since the lady who opens the place each morning is there by herself, she has to wait for "Pa" to show up to change the price. They don't seem too worried about it so it can sometime stay lower a whole day after everyone goes UP.

IF you happen to think of it, let me know if the price stays up after Labor day. Curious to see if this follows the pattern. BTW, what are you paying and your state didn't just increase the gas tax did it? That seems to be one of the Politcal favorites Pols always want to "raise the gas tax" or "index it for inflation". Anyone who tells you that, fire them at the next election. The only thing more stupid then a gas tax hike is a VAT.

30 posted on 08/24/2005 8:36:07 AM PDT by MNJohnnie (If you try to be smarter, I will try to be nicer.)
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To: liberallarry
Do not look for the transition to be cheap or easy.

You know, the downfall of you liberals is always your negativity, pessimism, and lack of faith. This is a can-do kind of country. If we can go from a horse-and-buggy, rail, dirt road economy to an automobile economy with a massive Interstate Highway System, send men to the moon, develop the modern information age infrastructure, etc., I can think we can find a way to make any additional transitions that we need to.

31 posted on 08/24/2005 8:37:48 AM PDT by jpl
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To: jpl
You know, the downfall of you liberals is always your negativity, pessimism, and lack of faith

Are you referring to the Great Depression followed by WWII? As I remember that was the culmination of an era of unrestrained optimism.

The idea is to be realistic - and that's a lot harder than either pessimism or optimism

32 posted on 08/24/2005 8:47:17 AM PDT by liberallarry
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To: wtc911
Even at $60 a barrel, most of the oil that is known to exist is too costly to extract


I do not who told you that but it wasn't an oil man. It's an absolutely false statement.
33 posted on 08/24/2005 8:51:45 AM PDT by MNJohnnie (If you try to be smarter, I will try to be nicer.)
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To: liberallarry
Do not look for the transition to be cheap...

It has NEVER been cheap, as you would understand the term. If it were CHEAP, it would have already been done. If you understood economics, you would not make such a ridiculous statement.

The only people that are impacted by rising prices are those unable (or unwilling) to have their income adjust close to the same rate as prices increase.

People like to do things, like eat and drive cars. The people for whom their ability to eat and drive cars depends upon producing food and gas to sell will figure out substitute products, or another way to keep demand in line with supply. So will consumers. If oil pumped from the ground won't meet the demand for energy at a price the marketplace deems fair, something else will.

Malthus was wrong in the 1820's and he is wrong now.

34 posted on 08/24/2005 8:54:48 AM PDT by L,TOWM (Liberals, The Other White Meat [Quicquid peius optimo nefas])
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To: EagleUSA
Who's doing the gouging? Maybe you're for this?

When the costs are no longer being fully covered by prices, production is likely to be cut back, whether it is the production of oil or anything else. This is not speculation. This is what has been happening for literally thousands of years, going back to price controls in ancient Rome and Babylon.

35 posted on 08/24/2005 8:55:23 AM PDT by BOBTHENAILER (One by one, in small groups or in whole armies, we don't care how we do it, but we're gonna getcha)
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To: manny613

There is a shortage not because we're running out of oil, but because we have not allowed ourselves to find the oil that we have. This country has substantial domestic supplies off California, in the Gulf, in Alaska, Texas, and otehr places. But drilling for that oil has been blocked.

Further, Mexico has a godo bit of oil but has not been able to get at it. Do we go down there and make money together (thus reducing the perceived need for illegal immigration by creating jobs there)?

Instead, the politicians have to make a shortage so they can control the oil industry, and thus extract money from them. Sex, money, and power are the only things most pols care about -- especially the ones who are always screaming about how compasionate they are.


36 posted on 08/24/2005 8:58:07 AM PDT by TBP
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To: liberallarry
Are you referring to the Great Depression followed by WWII? As I remember that was the culmination of an era of unrestrained optimism.

You don't get it. I'm not arguing for "unrestrained optimism", and optimism doesn't mean that everything is perfect or always wonderful all the time.

If anything, the Democrats today seem to have become what I would call the party of "unrestrained pessimism". It's one of the big reasons why you guys have gone from a one-time majority into a now entrenched minority. People just don't want to listen to endless doom and gloom. Democrats weren't always this way you know; FDR and Kennedy never campaigned on the basis of how awful things are going to be.

37 posted on 08/24/2005 8:58:45 AM PDT by jpl
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To: Tolerance Sucks Rocks

Thanks for the ping. Dr. Sowell is the Man.


38 posted on 08/24/2005 9:03:18 AM PDT by Jimmy Valentine's brother ( We need a few more Marines like Lt. Gen. James Mattis)
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To: L,TOWM
It has NEVER been cheap...If it were CHEAP, it would have already been done

Of course, that's not true. Technological advance often brings down prices, and provides new services, and the transition is quite painless. I present, as evidence, computers, communications, airplanes, autos, food processing, shoes, etc. Need I go on?

The only people that are impacted by rising prices are those unable (or unwilling) to have their income adjust close to the same rate as prices increase

And their numbers are miniscule so why even bring it up? Right?

The people for whom their ability to eat and drive cars depends upon producing food and gas to sell will figure out substitute products, or another way to keep demand in line with supply

Like depressions, wars, famines, poverty, sickness, bankruptcy. Ever popular solutions that guys like you always manage to forget or overlook.

39 posted on 08/24/2005 9:08:55 AM PDT by liberallarry
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To: MNJohnnie
Even at $60 a barrel, most of the oil that is known to exist is too costly to extract I do not who told you that but it wasn't an oil man. It's an absolutely false statement.

---------------------------------------------------------

Gee, did I write that or was I replying to an earlier post?

40 posted on 08/24/2005 9:11:20 AM PDT by wtc911 (see my profile for how to contribute to a pentagon heroes fund)
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