Why gas prices are so high - Mountain Buzz
 



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Old 04-13-2006   #1
 
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Why gas prices are so high

Someone asked why gas prices are so high. The answer is basically that the world is starting to run out of oil. It will take 50-150 years to fully run out of oil, but the start is now and the hurt will probably be in 20-50 years.

Oil has been really cheap until 1-2 years ago. If you adjust for inflation, it's been about as cheap as it ever was. Oil is 3x cheaper than bottled water at the store.

But, we are now at the end of cheap oil. Oil prices will probably go up to $200 a barrell in 5-10 years, which will probably mean $7 a gallon or so. Then we will wonder why we wasted so much oil 5-10 years ago with our SUV's and other habits. The government should have the foresight to even out price between the past and the future and to start conversion away from oil by taxing cheap oil in the past. The future shock won't be fun. But, this isn't the first time government didn't have foresight.

In 50 years we'll have all these cool 4 lane freeways that will be mostly empty. There will be all these expensive rural homes (Castle Pines, etc.) that noone wants. Then our kids will say "what were they thinking?" Why didn't we use the gas more wisely rather than blow it so quickly?

There really isn't an alternative to oil for mobile transport. Ethanol and bio diesel will dent the shortage by 5-10%, but they can't replace the volume we are using. The thing that will keep us from running out of oil entirely in 50 years is the massive heavy oil deposits in Venzuala and the tar sands in Canada, but it will be expensive, say $500+ a barrel.

The reason we are running out of oil is that the Mideast can't keep up oil production. It's a secret that's starting to come out. All these massive reserves the Mideast claimed are exaggerated.

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Old 04-13-2006   #2
 
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Quote:
There really isn't an alternative to oil for mobile transport.
No? How about the velomobile? Need to travel farther? Try an electric vehicle (likely fuel cell). Now you say, "where's the electricity/hydrogen going to come from?" Likely it will be nuclear, solar, wind, geothermal, hydro, and tidal generation plants. Not one or the other, but all the "alternative" technologies we have, working together to meet our needs. Oil's heyday has come and gone; now it's time we let it go and move on.

As for a more immediate answer to "why are gas prices so high," we need to look at the "state of the world." A barrel of oil costs nearly $70 now. This has to do with several factors: production has been reduced in the Gulf of Mexico by last years hurricane season, political unrest in Nigeria (a major oil exporter), uneasiness over Iran, and a shift in winter to summer fuel mixes. On top of the fuel mix shift, refiners are eliminating the use of MTBE (the additive in summer mixes). They are replacing MTBE with ethonol which is more expensive and more of it (volumetricly) needs to be added to gasoline to have the same effect as MTBE. And finally, what basil said: we are running out. Oil, like everything else, is a supply and demand problem. We are moving into a prolonged period of high demand and weakening supply. With that comes higher prices. It turns out, also, that the oil companies want one last huge profit margin. They have been turning-in the highest profit gains ever lately.

So what's the solution? First, conserve. Don't drive so much. Drive a more fuel efficient vehicle. Use mass transit. Carpool. Ride your bike. Die (mostly kidding, for "moral" reasons). Do what you can to "be a part of the solution, not the problem." Live in a smaller home, closer to where you need to be every day. The list goes on and on, but most importantly, support the companies and poloticians that are honestly trying to make a difference.
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Old 04-13-2006   #3
 
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Seems like a good place to point out that after the fiscal quarter when prices spiked to over $3/gallon Exxon-Mobile reported record profits not just for them, but for any incorporated entity in history.

Sure there's a more organic problem. But the immediate high price of gas is due mostly to corporate greed.

"Yeah, capitalism." --Austin Powers

Doc Brown's Delorian ran on banana peels...I don't understand why my honda can't.
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Old 04-13-2006   #4
 
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A velomobile??? Is that a bike?

I think we are on the same page, but I'm not sure about this:
Quote:
Try an electric vehicle (likely fuel cell). Now you say, "where's the electricity/hydrogen going to come from?" Likely it will be nuclear, solar, wind, geothermal, hydro, and tidal generation plants. Not one or the other, but all the "alternative" technologies we have, working together to meet our needs.
Except for nuclear, the others can't practically produce enough electricity to replace the energy we use with oil. Don't kid yourself. Nuclear may, but that will be expensive. Also, making hydrogen from electricity is very inefficient. I think you waste 3x the energy you produce. Battery powered cars cost $40K, are small and slow, and go only 150 miles at best.

I don't see a cost effective substitute for oil. Our lives will change, as you point out.

I like the volunteer spirit, but that will amount to 10% of the population doing the right thing. Life is hard when you aren't in school. People hate it, but getting people/society to change their habits requires strong action by the government.
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Old 04-13-2006   #5
 
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Thought this was a good article. Its not big oil's fault. $4.00 + per gallon will be the best thing to ever happen to efficiency and alternative technologies.

It would be interesting to know how much the average kayaker/skier/outdoor enthusiast drives compared to the average person and what type of car they own. I bet its significantly higher and I don't see alot of hybrid shuttle rigs. I am not trying to knock us as a group (I contribute as bad as anyone), but I just think its interesting that most of us would like to consider ourselves as greener than the average individual.

http://money.cnn.com/2006/04/12/maga...ex.htm?cnn=yes
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Old 04-13-2006   #6
 
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Fidel Castro is gonna drill for oil 45 miles of the coast of Lousianna. We can just buy it from him.
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Old 04-13-2006   #7
 
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Originally Posted by mescalimick
Fidel Castro is gonna drill for oil 45 miles of the coast of Lousianna. We can just buy it from him.
Sweet.
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Old 04-14-2006   #8
 
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Re: Why gas prices are so high

Quote:
Originally Posted by basil
Someone asked why gas prices are so high. The answer is basically that the world is starting to run out of oil. It will take 50-150 years to fully run out of oil, but the start is now and the hurt will probably be in 20-50 years.
There are an estimated one trillion barrels locked up in the lagest energy reserve on the planet do you know where that is they pumped 1500 barrels two months ago

Oil has been really cheap until 1-2 years ago. If you adjust for inflation, it's been about as cheap as it ever was. Oil is 3x cheaper than bottled water at the store.

But, we are now at the end of cheap oil. Oil prices will probably go up to $200 a barrell in 5-10 years, which will probably mean $7 a gallon or so. Then we will wonder why we wasted so much oil 5-10 years ago with our SUV's and other habits. The government should have the foresight to even out price between the past and the future and to start conversion away from oil by taxing cheap oil in the past. The future shock won't be fun. But, this isn't the first time government didn't have foresight.

In 50 years we'll have all these cool 4 lane freeways that will be mostly empty. There will be all these expensive rural homes (Castle Pines, etc.) that noone wants. Then our kids will say "what were they thinking?" Why didn't we use the gas more wisely rather than blow it so quickly?

There really isn't an alternative to oil for mobile transport. Ethanol and bio diesel will dent the shortage by 50-10%, but they can't replace the volume we are using. The thing that will keep us from running out of oil entirely in 50 years is the massive heavy oil deposits in Venzuala and the tar sands in Canada, but it will be expensive, say $500+ a barrel.

The reason we are running out of oil is that the Mideast can't keep up oil production. It's a hidden secret that's starting to come out. All these massive reserves the Mideast claimed are exaggerated.
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Old 04-14-2006   #9
 
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Here's something you can do...

This thread is pretty far off topic, but nonetheless one that is worthwhile.

It's temping to get caught up in thoughts of radical change in our oil situation--$7/gal gas, empty road, universal usage of renewable energy, etc--but these changes will probably take longer than we expect. As gas prices go up, and as high prices begin to seem the norm rather than the exception, alternatives to buying high price gas will become more attractive. Some will drive less; high shipping costs will make products cost more so that people ultimately buy and ship less; etc. And people will once again pay attention to fuel efficiency. Unfortunately, auto makers are slow to react to people's interests. Demand for hybrid cars is outpacing supply. Some American automakers are dragging their feet on hybrids. Their excuse is that they are working towards hydrogen cars...just wait until 2020 or so. No wonder they're losing market share.

Diatribe aside, I think hybrids and plug-in hybrids are one of the more significant ways we can cut our gas use. Plug-in hybrids have all of the advantages of standard hybrids--greater efficiency and longer range than an all-electric car--with one more: you can charge their batteries off of the electric grid at night. They can then run entirely on electricity for the first 20 to 40 miles you travel before any gas is consumed. This means that for most of your around-town trips, you'd use mostly electricity to power your car.

The surprising thing is, with current electric rates, the cost of the electricity equates to about $0.75/gallon. And even if you're utility burns coal to generate electricity, CO2 emissions (the global warming gas) is cut by 40%. Some other emission (NOx and SO2) go up a little. But here's the best part. Most utility's allow you to choose to pay a bit extra to get all of your energy from wind power. If you do this, you're car's emissions on electric power would be zero, and you'd still be saving on your "gas" bill (your effective cost per gallon would be about $1.15). Another benefit is that replacing gas with electricity means we send less money out of the country for oil. Most of our electric fuels come from North America, and wind turbine manafacturers tend to be in the US and Europe.

Unfortunately, you can't rush out and buy a plug-in hybrid. Although the technology works, it's a little expensive. With mass production, the additional cost of a plug is estimated at less than $10,000. Car companies are reluctant to offer this, since the gas cost savings don't pay for the added cost within the typical life of a car. But as gas prices rise, this will become cost effective. And maybe we'd be better off putting some federal funding towards this effort, which can reduce our dependance on foreign oil, rather than funding a military presence in the Middle East in an attempt to keep foreign oil flowing.

For more information, and to sign a list to tell car manufacturers you are interested in buying a plug-in hybrid, check out www.pluginhybrids.org.
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Old 04-14-2006   #10
tk
 
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Quote:
Originally Posted by lagoonia

It would be interesting to know how much the average kayaker/skier/outdoor enthusiast drives compared to the average person and what type of car they own. I bet its significantly higher and I don't see alot of hybrid shuttle rigs. I am not trying to knock us as a group (I contribute as bad as anyone), but I just think its interesting that most of us would like to consider ourselves as greener than the average individual.
Very true lagoonia. I ran across this recently after a day of skiing in Silverton. Some guy drove his work truck (From Williams i think) there to ski and everyone was giving him grief that he worked for a oil & gas company. Then a quick look around the parking lot and I saw no hybrid vehicles or even a vehicle which got over 25 mpg, so in one way we are part of the problem. I know personally I live where i ride my bike to work and most all of my basic every day needs. But where I'm far from green is driving to go kayak or ski. Not because I don't have fun runs close by, but because Escalante, Vallecito, run X, or Y is flowing or something like that. I'm sure most of us are like that

Sheikh Zaki Yamani, a former Saudi oil minister, was quoted saying “The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil” The Economics of supply and global demand will breed new inovation, such as this.

http://cellounge.com/jaminusa/2006/t...o-top-110-mpg/
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