get ready for very expensive diesel

[Redbug]

I understand what Ductape says and agree. I guess I am ignorant, too. Just trying to make sense out of something bigger than my little world. The falling American dollar overseas is certainly a big factor in these rising gas prices. It's inflation.

The Arabs, (OPEC), do have us by the nads. But I do not blame them for not turning loose more oil. It's just business. And that's the way the world works. It's money that makes the world go around.

One day, the price of oil will reach a point where it will become productive to start converting all this coal, shale, and oil sands we have here into oil. I have read that we have some of the largest coal fields in the world. I don't know where gas prices have to be to reach this point.

When that happens...the businessmen in the Middle East...(and here too), just like businessmen everywhere, will have invested in other things and places and moved on. That's what is going on now. The oil profits are being reinvested into other things besides oil and the oil industry. Diversifying. Among things, Dubai is becoming the world's leading banking center and the Saudis, (among other smart businessmen), are buying up American companies and properties, (and who knows...maybe coal). It's because they have the foresight to see what is going to happen and be there to make it happen. That's pretty smart. It's just business. There's plenty of money to be made on oil in the near future, but the grandkids of the sheiks will have to be into other things after the Middle East oil goes down.

This green thing we have going on is just a fad. It takes a lot of oil and diesel to make corn. I wonder how much of that corn is subsidized by our government...not much free market corn floating around here. I don't blame the farmers for cashing in on it. Just like any other businessman with a crop. Peanuts, tobacco, etc. Even more corn is planted, the price goes up because of govt subsity demands. The Mexicans go hungry, (no can afford tortillas muchacho), because of the artificial price set by our govt. and demand. Then my bread costs more because not enough wheat has been planted because everybody is cashing in on the corn. That's business, too. All because of oil.

Sorry for the oil rant...one thing lead to another...that's the way I see the whole scheme of things...and I hope it makes you think...

 

[kmdigital]

A couple of points,
The falling $ = more expensive oil for the US, but not so much for others, because oil is bought and sold in dollars. This is one of the major reasons that oil keeps going up. There is some talk about switching oil to some other currency, but that is very difficult to do because the whole system is set up for $ trading. But if the $ continues to fall, then it will become worth while to make the change, and oil may start trading in Euro, or some other currency. That doesn't mean it will be cheaper for us, unless the $ strengthens against the other major currencies again.

Canada is already working flat out on their oil sands/shale. Just go to northern Alberta, and it is very, very easy to get a very high paying job, but most people can't stand living there too long. It is a desolate area, colder than an icebox in the winter, and the cost of living is extremely high. But other than that, there isn't much to spend your money on! Some people I talked to in Canada recently say that construction workers are making enough money that they will work for 4 - 5 months, and then go back to their families for the rest of the year.

When it comes to coal, the US is the Saudi Arabia of the world. We have enough coal to power everything we need for the next 150+ years, but due to massive (and probably overrated) concerns about polution, global warming, etc, we aren't allowed to do very much with it, other than run power plants. And if the greenies have their way, those will all be shut down.

We could easily make plenty of diesel fuel from coal if we were allowed to, and I suspect it will come to that some day, but for now, global warming is a much bigger concern to many Americans. However, sometime in the not so distant future, when our economy crashes due to horrendous energy costs, and people become more worried about survival then global warming, we will start using some of our own resources again, and the heck with CO2 emissions!

Coal can be gassified, and then either used as a substitute for natural gas, or run through a catalytic process and converted into a very good diesel fuel, but not in America. To much concern about CO2 and global warming.

Currently, the majority of Americans believe that global warming is a fact, and are willing, to a certain extent, to sacrifice a little bit out of their lifestyles to "help the environment". But if their lifestyles are cut too much, or worse, if energy costs increase greatly and the economy collapses, the majority won't give a rip about global warming anymore. This will in particular be true if unemployment approaches or exceeds typical European rates of 8% - 10%, because we don't have the socialist support systems they do. Add to that things like $2+ per therm natural gas, $6+ gas, $8+ for heating oil, and we will have a full scale revolt.

When they can't afford to heat their houses, buy groceries and many don't even have jobs anymore, one of two things will probably happen. One, either Americans will start doing what we've done in the past, and do whatever is needed to change things, whether they're legal or not. Or two, liberals who are more concerned about the environment and world over population than about people in general, will enforce existing laws through the courts and law enforcement, and even their much hated military, and prevent people and businesses from responding with other than "green" solutions. In this case, we will soon be a has been, third world nation.

Of course, it probably won't be exactly like this, but my point is that most Americans will only care about global warming until their lifestyles are seriously threatened. Unfortunately, by then it will take 2-3 years to turn things around, and things will probably get worse before they get better. I hope not, but the way things are going, it could happen sooner than most people realize.

 

[hdbikercouple]

i read one of the big oil companies makes 2.9 billion every 3 weeks profit. does that sound like over pricing or just good business.

 

[joerocker]

A couple of points,
The falling $ = more expensive oil for the US, but not so much for others, because oil is bought and sold in dollars. This is one of the major reasons that oil keeps going up. There is some talk about switching oil to some other currency, but that is very difficult to do because the whole system is set up for $ trading. But if the $ continues to fall, then it will become worth while to make the change, and oil may start trading in Euro, or some other currency. That doesn't mean it will be cheaper for us, unless the $ strengthens against the other major currencies again.

Taking the dollar off as the official "oil currency" would kill this country. It's the ONLY thing that allows us to go farther and farther into debt. Having the dollar as the "oil currency" is like having the dollar on a "gold standard". It pegs the dollar to something of value.

I've heard the talk too...Venezuela, Iran, some other OPEC countries...want to take the dollar off as the oil currency to hurt us, to teach us a lesson. I think it would destroy us. Just another reason we kiss the Saudi's butts. Another reason we keep those sheiks in power. If they fall, so do we.

The world is a complicated place. Everyone and everything is becoming interwoven through business transactions. Hopefully, the businessmen throughout the world will realize the consequences of any large countries economic collapse. We're not the powerhouse we once were. We don't manufacture much anymore, we're not the educational institution we once were, we do however BUY a LOT of stuff. And that's why the world loves us. Everyone needs to sell us stuff. You NEVER want anything to happen to your BEST customer...

Again, we're in Iraq and Afghanistan ONLY because of the oil. We must protect the Saudi's (our only "real" friends in the region) or, failing that, take over the Iraqi oil, for our own survival. We're only there for the oil.

You think it's tough to BUY fuel? Wait until the trickle down effects start showing up. Inflation is close at hand folks. If oil doesn't go down quickly, we're in for a world of hurt...

 

[Z-Michigan]

i read one of the big oil companies makes 2.9 billion every 3 weeks profit. does that sound like over pricing or just good business.

Don't know if that's true or not, but be aware that Exxon Mobil is now one of the largest corporations in the US (depending on year and stock price, it may be the largest) yet it is much smaller than most of the national oil companies owned by OPEC nations. Without size, our private oil companies don't have any leverage with the state-owned oil companies. Also, the profit margins of the US oil companies are quite average, and in fact lower than most banks... their total profits look huge simply because the companies are huge.

 

[HappyCPE]

Energy is a commodity. For large industries, it often doesn't matter what the source is; many large commercial buildings I build have dual-fuel boilers [oil or nat gas] so the owner can burn whatever's cheaper. Presumably propane would work too if it was cost effective.

To throw another wrench in the works, just try to use coal for something anymore. The US is the Saudi Arabia of coal, but can we build a new coal burning powerplant? No. Even the clean-coal plants get killed by the greenies because of the CO2 emmissions. I think - my opinion, not a conspiracy theory - that environmentalists want the whole country to bleed over energy costs just so we use less. That might be good except we'd be living in the stone age in order to save the planet. Meanwhile, China and India burn astounding amounts of coal to fuel their economies. They aren't worried about the Earth, are they?

Now consider the NIMBY's. There's a planning board fight in Wayne, NJ about someone who wants to put a small windmill on their lot. The windmill will "damage the views" of the neighbors! If you've been to Wayne you would know there are NO pleasant views. In High Bridge NJ they have a dam that was originally constructed to generate electricity back in the early 1900's. The state wants the dam fixed, and in order to pay for it, there's a proposal to replace all the hydro machinery and start making juice again, to pay for repairs. Great idea, right? No! Some people want the dam blown up, the lake drained, and the river "restored" to its original condition. Lunacy!

Should we all freeze in the dark? Ride a horse to work? This country is heading for a recession, a bad one, and one major cause of it is the inflation caused by energy prices. The paths out of it are being closed by the environmentalists; no renewable energy, no oil and gas exploration, no wood burning, no coal burning. This is going to come to a head soon and I don't think the situation is going to be pretty.

 

[kmdigital]

Again, we're in Iraq and Afghanistan ONLY because of the oil. We must protect the Saudi's (our only "real" friends in the region) or, failing that, take over the Iraqi oil, for our own survival. We're only there for the oil...

This is a popular liberal misconception. If this were true, we would be appropriating Irag's oil for our own use, but we're not doing that. And there is no oil in Afghanistan, so how can we be there for the oil? Don't get me wrong, we shouldn't have gone into Iraq, but it definitely wasn't for the oil!

Some oil companies are making a lot of money, but it's ONLY because they have the rights to the oil they are pumping, have their own refineries and can sell the gas and diesel at market rates. The refineries and oil companies that have to buy oil on the open market from the Saudi's etc, aren't making anywhere near that kind of money. Last year, the crack spread, or difference between crude oil's cost and the refined value of the fuel was higher than normal for several months, so the refiners made good profits. But the crack spread is now back in normal territory, and the refiners that buy crude on the open market and sell the refined products on the wholesale market aren't making that much money anymore. The primary beneficiaries of high oil prices are the countries and companies who OWN the oil in the ground BEFORE it is pumped.

 

[ray66v]

The worst of this will be when there is a major disruption of the supply of oil. We are walking a very fine line. If you can't get any fuel, the price is no long an issue. Then, there will really be economic trouble. Gearing up to pump our own oil, in the places the environmentalists have blocked, will take years. By then, I believe, this would be a much different country.

I am afraid that it will take something like that to change the system.

 

[joerocker]

kmdigital,

Let me explain it better...try anyway...

No, we're not there RIGHT NOW to take the Iraqi oil. We're there to keep the oil flowing and priced in dollars. We MAY eventually HAVE to take more aggressive action...but not right now.

We're there to restrain Iran and shore up the Saudi king.

IF the "**** hits the fan", then we MAY (will...if it gets REALLY bad) actually "take over" the Iraqi oil. We're TRYING to do this diplomatically.

You KNOW that ****** wasn't a "friend" anymore to the US, he would have been a VERY POWERFUL (because of Iraq's HUGE reserves), member of OPEC. There are other members of OPEC who want to price oil in "other than dollars" because of the dollars weakness because of Americas debt, if ****** were there, in OPEC, right now, it would have already been done. And that would be a very bad thing for you and I.

Right now the Saudi's are the ones "sticking up for us".

The ONLY thing keeping the dollar valuable is it's being linked to oil. Take that away and it's value will fall dramatically.

Military fear is about all we have left besides the corporatization of the world. Thankfully we have a lot of people making money throughout the world who know this and don't want to lose everything. Greed CAN be good. When people know that their actions will end everything that we've become accustomed to, they tend to mellow out a bit. That is what makes the Islamists so dangerous. Their religion teaches against "western values", "infidels", and through their control of oil...they make things difficult.

 

[dive2diver]

I like to say this why do we still have three grades of Gas and one grade of diesel at on time. When I was stationed overseas in Japan you could only buy midgrade gas, A vast majority of cars can run one grade and the ones that can only run 92 octane make them pay just like race cars that run at the tracks on the 99 octane. Make a switch to one grade would have to ease the supply and demand of gas and low to cost involved