Skip to comments.An oil 'crisis'?, Part II
Posted on 08/24/2005 7:04:48 AM PDT by manny613
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That is the crisis and that is what will hurt us over the next decade.
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.
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.
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
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.
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.
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.
"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).
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.
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.
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.
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
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.
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.
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.
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.
Thanks for the ping. Dr. Sowell is the Man.
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.
Gee, did I write that or was I replying to an earlier post?
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