OT/NT Increase prices with less complaints

I was watching a show about trains the other day and it had a segment on trains going over the Cajon Pass in CA. I wondered why they couldn't have a hand full of locomotives set up to take the trains over that was equiped with an overhead wire system like electric locos. That way they could put the power from the dynamic brakes into the lines and use it to help power trains up the other side instead of just wasted heat. Wouldn't it be nice if hybrid cars could use power off the grid while making long trips on interstates using a wire system in the road? You could just pay your bill when you got off the system like a toll road. You could drive hundreds of miles for very little cost. No one really knows for sure what the oil reserves are. All the wells in Saudia Arabia and Iraq and such places in that area are around 1600' deep and almost no deeper drilling has ever been done there. The 60% to 70% easily recoverable oil in fields in TX and other fields in the US has been removed and the other little bit of recoverable oil left is very expensive to produce but can be at todays prices.

Is the time right for Hemp? Henry Ford knew ethanol was the fuel of the future back in the 20's. He built a car out of hemp and ran it on ethanol made form hemp in 1941 here is a video of it

http://www.youtube.com/watch?v=4rgDyEO_8cI

Also one acre of hemp produces more paper than four acres of trees and the process is not as bad on the environment. The first drafts of the Constitution were written on paper made from hemp. Hemp can be grown in all 50 states and in southern states you can get up to three crops per year! It takes around 10 years to produce a stand of trees for pulp. I was reading on the net that if 11% of farmland in the US went into hemp production we coulld produce all the ethanol needed for fuel. That could be a net statistic as they are not reliable at times.

just my 0.02 cents

Hey Kevin, I like the idea of buying oil stock. However, I'm retired and don't have the extra money to mess around in the stock market, and I'm sure the same applies to most of us.

I'm interested in the environment, like most are, but I also believe in common sense too. I think we ought to drill for oil where necessary, including in ANWAR and the gulf, etc. Of course that would include being careful. Remember all the crying about how the Alaska pipeline would harm the animals and environment? Did that happen? NO! I find that along the same lines as the gun control people screaming about blood running in the streets and Dodge City shootouts if people are allowed to carry. What has happened in every case? Lower crime rates. But God forbid anyone mention that! (The FBI records prove this out in every case.) If the oil companies had been allowed to drill several years ago when they found sources, we wouldn't be in the fix we are in now.

Now for the REAL problem. Overpopulation of the planet. As well as India and China's huge growth in the marketplace. If you are to believe the "experts" the population is 6 1/2 billion at present and within 30-50 years it will be 9 billion. Without some sort of control, there will be famine all over. You and I know there will never be any control, especially in this country where individual rights has become more important than the whole. In my opinion, liberalism and political correctness is ruining this country. And lack of common sense.

Off the soap box, and tucked away.

I have watched with some interest the commentary of Americans on drilling for oil in Alaska in ANWR. I can appreciate fully Ron's (blackburn)comments on the fundamental economic boost it would give to the state and those who live there. But I cannot understand the remarks of those who think it will help lower the cost of gas in the US.

Here in Canada, there are huge reserves of oil - in the Beaufort Sea, in Hibernia and of course in the Athabascan Tar Sands. But in extracting this crude oil, no consideration is given to subsidizing it to provide low cost gas to Canadians. It would be absurd and economically stupid to sell oil to ourselves cheap when we can sell it at world prices to Americans. I assume the same would apply to oil from Alaska.

The oil is a natural resource occurring mainly under land in Canada held by the Crown. The Crown (government) sells the rights to the oil and takes its cut that way. Taxes are levied on the sale of gas to pay ostensibly for roads - the governments are actually in surplus. The capitalist market is working about the way one would ex[pect.

In terms of environment and electricity, no one in this country laments California's decisions to not generate power for themselves - we make a huge multibillion dollar annual windfall selling power to California and some other states too. Again, electrical utilities here are governmkent run so that windfall profit goes straight to reducing the tax burden. Most Canadians have no qualms about nuclear power though the acid rain debacle has pretty much convinced us that coal is a terrible answer.

Nuclear power is the low cost option available now - I can only say to the environmentalists who oppose it that it helps to have the government run it. Would you trust nuclear power in the hands of the typical private sector firm cutting every cost to maximize profit?

Regards ... Doug

Doug,

Coal is an option provided you install a wet limestone scrubber to neutralize the SO2 and the mercury in the flue gas. The new scrubbers remove 97% (or more) of the SO2 which in the past has been linked to acid rain. Tighter federal requirements have resulted in many power stations installing wet scrubbers. This is especially true of the Ohio river valley. Low sulfur coal is available from the Powder River Basin, but it is expensive. Many of the power plants in the Ohio River valley have access to West Virginia or Kentucky medium and high sulfur coals at much lower costs (either by rail, barge or truck). The company I work for sells the

Then there is IGCC, coal gassification which creates electricity and gas in the same process. Buku bucks, and the tax structure is not in place to give investors a confident return yet, so that's down the road a piece.

Mark

Mark

All good stuff and I really do hope that you guys use the technology to keep the acid rain off us. Canada has little coal and none in the east so it is not an option I would expect to see here. In any case, nuclear is a well developed technology, uranium is readily available and a lower investment needed to produce very clean power - cold water is no problem for the cooling requirement.

Ontario was a bit shortsighted over the last couple of decades in not building new power generation but the Churchill Falls project in Labrador and the James Bay project in Quebec permit the export of billions of dollars annually in electricity ... similarly BC generates and exports several billion dollars of electricity.

Exporting energy, whether electricity, crude oil or natural gas, to the US is one of our biggest industries. And while it is of enormous benefit to Canadians generally (because natural resources are generally owned by the Crown) and specifically for those employed in the business, it is primarily there because for a number of reasons, Americans cannot or will not produce their own energy.

Regards ... Doug

I know that I'm going to be bucking the current trend in "conventional wisdom" with this.

However, as far as I can see the main cause of the current rapid rise in the price of gasoline in the U.S. has more to do with the devaluation of the U.S. dollar. Rather than any increase in demand on the world crude oil market, supposedly caused by China and/or India.

For example, take a look at how the Canadian & U.S. dollar compare over approx. eight years. Then cross reference that with how both the Canadian & U.S. dollars compare to the Euro over the same period.
02-JAN-2001 1 CD = 0.67 USD
14-MAY-2008 1 CD = 1.00 USD

02-JAN-2001 1 CD = 0.71 Euro
14-MAY-2008 1 CD = 0.65 Euro

02-JAN-2001 1 USD = 1.06 Euro
14-MAY-2008 1 USD = 0.65 EuroNotice that the Canadian dollar hasn't changed much at all against the Euro, But the U.S. dollar has reacted almost the same to the Canadian dollar & Euro (i.e. lost close to half its value), and that isn't the result of increased demand on the world crude oil market. But it darn sure is going to effect the price we pay for everything.

The above is courtesy of the financial mess we've allowed to develop in the U.S. and the recent actions of the U.S. Federal Reserve. You remember, pumping all those wonderful little pieces of paper printed with such nice colored ink, into the economy, and repeatedly dropping the interest rate. Trying to compensate for the lousy economics we've practiced.

Heck, if the U.S. started drilling in all those areas that are currently taboo, and by the grace of GOD hit the mother-load of all crude oil deposits. It wouldn't do much, because the fact is there hasn't been any investment in increasing our refining capacity so we couldn't do much with it. Don't know, but you might be surprised if you go take a look at the increase in the volume of gasoline (note that is gasoline, not crude oil) that the U.S. now imports.

Posted By Dougald on 05/15/2008 11:16 AM

Exporting energy, whether electricity, crude oil or natural gas, to the US is one of our biggest industries[/b]. And while it is of enormous benefit to Canadians generally (because natural resources are generally owned by the Crown) and specifically for those employed in the business, it is primarily there because for a number of reasons, Americans cannot or will not produce their own energy. Regards ... Doug


That is a fascinating  and most-revealing observation coming from outside the US--one with which I heartily agree.  It sure says a lot about us American (USA) citizens and our own foolishness.   I don't know about how the development of ANWR would affect the price of gas at the pump, if at all. What I do know is it makes absolutely no sense not to produce it domestically to the extent that we can as opposed to purchasing crude oil elsewhere. This is especially the case when the opposing arguments are based on junk science. 

I personally think its only a matter of time befoere ANWR gets opened up, its inevitable unless drastic major shifts occur in our energy priorities, and that dont look likely.

The trouble with the ANWR argument is that even they had OK'd drilling yesterday, it would still be 3-5 years at least to get in there and gear up and maybe another 3-5 years before any meaningfull production came out of there, so the short term effect is still zip, nada and zilch. Gas will still be on the closer to $4 a gallon side for the foreseeable future, maybe much higher. To me, the question is how are people going to deal with it for the next 2 to 3 years? I've already changed my habits with the Scion, and I'm looking at that Smart car eyeingly, because I know not to expect either Detroit, the Guv'ment or the oil companies to ride to the rescue...its left up to yourself, and thats just the way its going to be.

Posted By terry_n_85318 on 05/13/2008 4:14 PM
One thing to consider -- In the 70's the cost of gas was 0.50 / gal and the hourly wage was $5 and hour. Wages have gone up faster than the cost of gas and the ratio is lower now.
The government makes a very large profit on a gallon of gas -- much more than the oil companies.
Terry




That's a line of bull! As long as you ignore inflation everything was cheaper. Adjusted for inflation the price of gasoline in 1972 was over $2.00 per gal in today's dollars. That same year the minumum wage was 1.60 per hour or $6.20 per hour in today's dollars. WaGES HAVE NOT GONE UP FASTER THAN THE PRICE OF GAS.

Mark

Thanks for the information Dug and Mark! I'm always interested in adding to my knowledge, and never too old to learn.

The problem with how long it would take us to have any gains in drilling in several places including ANWAR, is a good point, BUT the same excuse was used back in the early 90's. Sooo...what if we had gone ahead and drilled then? And so it goes...

California is in a world of it's own, wanting none of the polution etc., but still wants what is gained from having it in someone elses back yard. I can't feel sorry for anyone who uses that type of reasoning, or keeps voting for those that continue to further that philosophy at the cost of everyone else, and still wanting cheaper power.

And now our Senators and House members, in all their wisdom, have passed a huge bill to aid the farmers who are having record profits. Yes, special interest groups are doing well...at our expense.

Anyway, this is an interesting subject and I'm learning a lot.

Along with good driving habits:
http://www.fueleconomy.gov/FEG/driveHabits.shtml

One could carpool, take mass transit, all are good short term help to reduce consumption and lower costs both for individual budgets and market prices. Gas rationing could be a short term enforcer of conversative habits. Additional drilling for oil is a short term bandaid even in the North Dakota fields (projections about the same for ANWAR) it would an additional 5-10 years in offsetting oil from aboard to reach the gas pumps.

Long term there needs to be a shift: more nuclear plants, wind/solar, better and more accessible mass transit, and cars running on electric/H fuel and a redesign with carbon fiber material (yes- cost is a problem at this point to switch from steel in mass production assembly process).

Steve C- Prices are not being control by the "free market" but by unregulated speculators that with a drop of a hat raise the cost of a barrel for very minor situations. Think about it, oil is much higher now that with Katrina. There is nothing (including increase demand) that in the system of supply and demand that justifies the large increase overall and in this past month, weeks or even as of today. If Katrina took off line a large portion of refineries and oil supplies with the resutling "market adjust" that had some rationale then how can the greater increase be justifed with the increase we currently see (no drop in oil production, refineries at full capacity, China/USA has not proportionally changes usage, some adjustment for seaonal fuel)? Simple- greet due to irrational price setting.

Kevin- I like your "back door" rebate but this damn hobby takes all my extra monies!

Posted By Charles on 05/16/2008 7:01 AM

«snip...» Steve C- Prices are not being control by the "free market" but by unregulated speculators that with a drop of a hat raise the cost of a barrel for very minor situations. Think about it, oil is much higher now that with Katrina. There is nothing (including increase demand) that in the system of supply and demand that justifies the large increase overall and in this past month, weeks or even as of today. If Katrina took off line a large portion of refineries and oil supplies with the resutling "market adjust" that had some rationale then how can the greater increase be justifed with the increase we currently see (no drop in oil production, refineries at full capacity, China/USA has not proportionally changes usage, some adjustment for seaonal fuel)? Simple- greet due to irrational price setting. «snip...»
Charles

While all of what you've stated to varying degrees are true, and each in turn has its own affect on the price of crude oil. However nothing in what you've stated invalidates what I've said above

Instead of trying to make straight commentary I'm going at this in a different approach. I have a couple questions.
With all the talk of free-markets, world-markets, demand, supply, yadda, yadda, yadda.....

Why has the price actually increased so much, especially in the last year. From our perspective, demand on a world scale seems to be no greater now than it was even 5 years ago. Then there was 3 years ago when we had Katrina, a serious disruption to the supply, and oil did not increase to the level it is now. Yet even on little to no real issues, oil seems to not stop.
Now as I mentioned there's been a great deal of talk about free-markets. But if you look at the overall state of things today regarding oil and the cascadeing effect that it's increase has had across the board, when did this country move from a Nation to an economy? I mean when did it actually become more important for a select group to make money than ensuring domestic tranquility, providing for the common defense or even promoting general welfare as a country and for it's citizens.

We have the oil. We have the means to get it right here and yet we sell it off since it generates more income for a chosen few all the while the rest of the country is thrown into turmoil and the majoity of it's citizens are fleeced.
Right now refineries are scaleing back production of gasoline because gasoline consumption is actually down. The price has finally caused a close to 25% drop as compared to May of last year. So the theory of supply and demand will be countered by a slow-down in production. Therfore prices will not drop but only increase. The supply will remain constant t the demand. Yet there seems to be no shortage. The real ironic thing is that this doesn't have to be decided in some smoke filled board room, but rather on each refineries books.

Everyone talks about what it was like way back when and makes comparisons about the ratio of oil, gas prices or even the price of tea in China to wages 30-40-50 years ago. It's not then it's now and right now we are in serious trouble all because we allow or contribute to a situation that seems to be nothing more than a selct group of people taking advantage for their own unfair gains. Yet if we do make comparisons, wasn't the crisis in the 70's actually caused in part by a disruption of supply. This is still something we have yet to really see today, but those speculators driving the market sure can create the thought of it.
As far as buying oil stock to as has been suggested, I would venture to say that there are very few people here that could purchase enough oil stock to make a difference in their life. /DesktopModules/NTForums/themes/mls/emoticons/whistling.gif