Oil Companies Defend Profits To Congress

[Paulie]

What we need is much more efficient vehicles. Only those who have a legit need for a gas guzzling vehicle should be driving one. 16 mpg SUV's are obscene.

On a certain level, I agree, mostly with what I bolded. But who's going to be telling me I don't have a legit need for an SUV? Or better yet, who's going to be telling me I can't own one if I want?

 

[Ravi]

Hybrid batteries are nickel/lithium and are recycled.

 

[jff.law]

We live in a free market world, if demand goes down dramaticly, the prices will fall.

 

[BaronVonBigmeat]

I agree that higher prices will make us reduce OUR consumption....WHICH IT HAS....our consumption in the usa the past few months has been REDUCED GREATLY......but the prices of gasoline and oil and has STILL NOT come down in price...even with less demand from us....????

A lot of it is just inflation. There are more dollars in circulation. This is why it's not just oil, it's copper, nickel, steel, etc. too. Adjust for inflation, and we are paying the same amount we were in 1950.

Also, we don't know where prices would be if everyone stubbornly continued their driving habits. You may be convinced that conservation did nothing, but in an alternate universe with no conservation, we are all paying $8/gallon for gas--if we can get it!

Do you really think that everyone in the usa could even FIT in all the cities that we have...? Would you really want us all to be all rounded up in one place? Do you really think that this growth outside of cities with businesses and individuals really hurt us instead of being one of the major contributors to the gdp growth of the USA?

Well, it's not about cramming everyone into a New York lifestyle, with highrise apartments. In fact, New Urbanist building codes actually forbid buildings over a certain height. Think of the old part of your nearest small/medium town, the part built before WWII. Or for larger cities, think of Paris. That's more like it.

Keep in mind, there is nothing actually "new" about allowing builders to put apartments on top of retail, for example. This is how we've done towns for thousands of years. It puts workers closer to work and shopping. Not that apartment living is necessary, mind you. There's plenty of free-standing houses in classical town planning. It's just that apartments/retail/office space are utilized much less stupidly.

A family of four can get by with one car, instead of four cars. This in turn frees up parking, for even more space savings, without being claustrophobic; and the shorter distances make mass transit and electric cars viable. Sure, we can talk about GDP, but when so much income goes towards car expenses, which many people tolerate only grudgingly, can we really say we're better off?

Anyway, I don't want to force anyone into anything; I simply want to let the free market do it's thing. If you want to live in isolated housing pods and drive to strip malls, I don't care, as long as it isn't subsidized and as long as your building style isn't mandated by government. That's not the case, currently.

 

[Zoomie1980]

The price of crude has shot up because of huge increases in demand, thanks to the exploding economies of India and China.

The reality is that 77% of the world's oil reserves are exclusively controlled by foreign national oil companies (NOCs). By contrast, Lukoil controls 1.21%, Exxon-Mobil controls 0.62%, and Chevron controls 0.59%. In total, independent oil companies control about 6% of the known reserves. That's far from a monopoly, and would make it pretty difficult to price gauge.

But just for fun, what sort of profit is US big oil turning? As an industry, 8.3%. Of course, keeping that same profit percentage as input costs rise results in higher profits from a nominal standpoint. So yes, the companies now turn 30 cents a gallon in profit instead of 10 cents a gallon.

How does 8.3% compare? The beverage and tobacco industry turns 21.6%. Pharmaceuticals? 18.8%. Computers? 14.5% Even the apparel industry turns 8.5%! How unreasonable is 8.3%??

Furthermore, who owns these huge profits from independent oil companies? Well, as you may know, shares of public companies can be bought and sold by all Americans! The oil industry is no different - 14% are held in IRAs, 23% by individual investors, 27% in pension plans, 29.5% in mutual funds and 5% is held by other institutional investors.

Those greedy corporate insiders? 1.5%

It's the demand, stupid!

No the price of oil has shot up because of exploding demand in AMERICA not China and India. China and India COMBINED consume less than a THIRD of the oil the US does. The increase in demand comes mostly from US not China or Inida, although their RATE of growth is higher, their actual raw growth is only FRACTION of the US.

And actually right now, more than anything, the collapsed dollar has fueled the run up, not demand.

The world today produces roughly 86M barrels a day. Consumes about 84M or so. However oil production has been FLAT since 2004. Starting in 2009 it will begin to DECLINE roughly 2-3M barrels a day a year as ALL the worlds oil fields are IN DECLINE now. Gas should run about $10.00 by 2012 and $15.00 gallon by 2015. So best be doing something like learning to drive an electric golf cart by then....

 

[Zoomie1980]

A lot of it is just inflation. There are more dollars in circulation. This is why it's not just oil, it's copper, nickel, steel, etc. too. Adjust for inflation, and we are paying the same amount we were in 1950.

Also, we don't know where prices would be if everyone stubbornly continued their driving habits. You may be convinced that conservation did nothing, but in an alternate universe with no conservation, we are all paying $8/gallon for gas--if we can get it!



Well, it's not about cramming everyone into a New York lifestyle, with highrise apartments. In fact, New Urbanist building codes actually forbid buildings over a certain height. Think of the old part of your nearest small/medium town, the part built before WWII. Or for larger cities, think of Paris. That's more like it.

Keep in mind, there is nothing actually "new" about allowing builders to put apartments on top of retail, for example. This is how we've done towns for thousands of years. It puts workers closer to work and shopping. Not that apartment living is necessary, mind you. There's plenty of free-standing houses in classical town planning. It's just that apartments/retail/office space are utilized much less stupidly.

A family of four can get by with one car, instead of four cars. This in turn frees up parking, for even more space savings, without being claustrophobic; and the shorter distances make mass transit and electric cars viable. Sure, we can talk about GDP, but when so much income goes towards car expenses, which many people tolerate only grudgingly, can we really say we're better off?

Anyway, I don't want to force anyone into anything; I simply want to let the free market do it's thing. If you want to live in isolated housing pods and drive to strip malls, I don't care, as long as it isn't subsidized and as long as your building style isn't mandated by government. That's not the case, currently.

Oil is priced in dollars, dollar collapses like it has, ALL dollar priced commodities go up sharply. Hyperinflation is alive and well until the dollar stablizes. Right now, if the dollar were trading where it was a year go, oil would only be about $2 more today than last year, not $25 more.

But get used to it, starting next year oil output, no matter how much drilling we do, will begin DECLINING as demand continues to climb. Gas should make $10.00 in a few years, $15.00-$20.00 a GALLON inside of 7-10. Bottom line we are going to have to have a Manhattan project X10 in this country in the next five or we will go back to horse and buggy days real fast....

 

[BaronVonBigmeat]

The whole electric car thing is a joke. These cars are not more energy efficient, they are less efficient, they just change the source from the pump to the power plant. You still have to generate the power to charge the batteries. If the power plant is burning oil, and the loss through transmission is over 50% (which it is), this is a big looser.

I don't where you got this idea, but it's incorrect. Battery (or, ultracapacitors, potentially...) powered electric cars are the most energy-efficient cars per mile, hands down. That's why an electric car company like Tesla can claim 135 mpg equivalence, even though it's a sports car. Popular Mechanics did a survey of future-tech cars, and not surprisingly, battery EV's are the cheapest per mile. Second was CNG powered cars. Then diesel, then gasoline. Hydrogen was dead last.

The industrial turbine that generates electricity will typically be 40%~60% efficient, compared to a gasoline engine's 25% (and that 25% is at a very narrow peak efficiency range, usually wherever the engine produces peak horsepower. So unless you drive hard/coast, drive hard/coast...you'll never see that 25%). Then the power goes through the grid, where it loses a lot less than 50%. There's a little bit of loss charging the battery, and another loss turning battery power into mechanical power, (10%~15% each iirc), but those are both very minor. Plus, you recapture braking energy. Eventually, EV's will not even have mechanical brakes. Or differentials. Or transmissions, or clutches, or leaking fluids.

Also consider that there is loads of excess capacity at night, even in California. Apparently you can't just shut down a gigantic turbine instantly, so power companies are running them at night and literally throwing power away. Most people would be charging their cars at night.

Hybrids are potentially a net gain, although currently the payoff isn't short enough to really grab consumers. As gas gets more expensive, it will make more and more sense. Most all modern locomotives are now diesel-electric, because that is the ultimate in efficiency. (drawing power from overhead lines would be the best, but those type of infrastructure upgrades mean more property taxes for the railroads). Of course railroads' time horizon is a lot longer term than most consumers, so it's not surprising that it hasn't quite caught on yet.

 

[Warner]

On a certain level, I agree, mostly with what I bolded. But who's going to be telling me I don't have a legit need for an SUV? Or better yet, who's going to be telling me I can't own one if I want?

Well, one way to handle this is to impose a gas guzzler tax of some kind and then offer waivers for those who can justify the need for such vehicles. For example someone who needs a 4WD diesel truck because there job requires them to tow stuff. A large family might justify an SUV. A family with a handicapped member might justify an appropriate type VAN.

I would never say someone "can't" own such vehicles, just that it should be discouraged.

 

[Warner]

Hybrid batteries are nickel/lithium and are recycled.

Look into the process used to make them. It is very hard on the environment. And also look into the term "recycled", you will see that this means only a part of the material is actually reclaimed - the rest must be disposed of. Hybrid's are a "feel good" phenomena which in fact are bad for the environment.

 

[Ravi]

Look into the process used to make them. It is very hard on the environment. And also look into the term "recycled", you will see that this means only a part of the material is actually reclaimed - the rest must be disposed of. Hybrid's are a "feel good" phenomena which in fact are bad for the environment.

I did look into it but the information was off of Toyota's website so there could be some bias. They did claim to recycle 100% of the battery.

I disagree that it is a feel good phenomena, but if you can demonstrate that it actually harms the environment more or doesn't alleviate the pressing need to make wars for oil I'll be glad to rethink my position.

 

[Warner]

I don't where you got this idea, but it's incorrect. Battery (or, ultracapacitors, potentially...) powered electric cars are the most energy-efficient cars per mile, hands down. That's why an electric car company like Tesla can claim 135 mpg equivalence, even though it's a sports car. Popular Mechanics did a survey of future-tech cars, and not surprisingly, battery EV's are the cheapest per mile. Second was CNG powered cars. Then diesel, then gasoline. Hydrogen was dead last.

I was talking about purely electric cars, not hybrids. Hybrids are efficient, but current battery technology is not environmentally sound.

The industrial turbine that generates electricity will typically be 40%~60% efficient, compared to a gasoline engine's 25% (and that 25% is at a very narrow peak efficiency range, usually wherever the engine produces peak horsepower. So unless you drive hard/coast, drive hard/coast...you'll never see that 25%). Then the power goes through the grid, where it loses a lot less than 50%. There's a little bit of loss charging the battery, and another loss turning battery power into mechanical power, (10%~15% each iirc), but those are both very minor. Plus, you recapture braking energy. Eventually, EV's will not even have mechanical brakes. Or differentials. Or transmissions, or clutches, or leaking fluids.

I think you underestimate the loss through the grid. While the main line transmission is efficient, the final path transmission usually is not. By the time you get done adding it all up, it takes about 2W of power to deliver 1W to the typical customer.

Hybrids are potentially a net gain, although currently the payoff isn't short enough to really grab consumers. As gas gets more expensive, it will make more and more sense. Most all modern locomotives are now diesel-electric, because that is the ultimate in efficiency. (drawing power from overhead lines would be the best, but those type of infrastructure upgrades mean more property taxes for the railroads). Of course railroads' time horizon is a lot longer term than most consumers, so it's not surprising that it hasn't quite caught on yet.

Yes Hybrids are efficient. They just aren't environmentally sound.

Flywheels are even more efficient - however having spun up flywheels in every car would present a very serious safety hazard. They have been used quite successfully in buses but containment issues make them impractical for cars.

 

[BrianH]

The only reason gas is so high, is because each and every one of us will go down to the nearest convenient store and fill-up. We'll fill up our SUV's and our 4X4's, and we'll take that trip a few hundred miles away for the weekend. Or we'll commute 50 miles to work. Whether it's .70 per gallon, or 4.00 we seem to be paying for it. The oil companies have made so much money in the last 10 years, that us boycotting oil will not do any good, they've got enough dough to last their lifetime.

The only solution is to find an alternative energy source. The only environmentally sound technology out there RIGHT NOW is solar-energy. Battery technology is not yet sound. If lithium/nickel batteries were used in everything, then it would be fine because they can be recycled, but any other battery becomes toxic waste.

They should combine solar,wind, and electric techonology for vehicles equipped with recycable batteries. Use Solar to charge, have ram-air technology that creates more electricity as the car is traveling. I wonder when someone (in high places) will combine energy sources to form one.

 

[BaronVonBigmeat]

The only solution is to find an alternative energy source.

Again, I have to disagree. We cannot pin our hopes on some Buck Rogers whizbang technology. We will almost certainly have to scrap our building codes, and reduce the distances we drive. That, plus nuclear power, will allow us to preserve some semblance of civilization.

For more reading, any of James Kunstler's books will explain the history of how we got here and specifically why our current model sucks so bad, or [ame=http://www.amazon.com/Suburban-Nation-Sprawl-Decline-American/dp/0865476063/ref=sr_1_1?ie=UTF8&s=books&qid=1209078605&sr=1-1]this one[/ame] for something with more illustrations. Or just check out [ame=http://www.dpz.com/projects.aspx]DPZ's website[/ame].

 

[BaronVonBigmeat]

I was talking about purely electric cars, not hybrids. Hybrids are efficient, but current battery technology is not environmentally sound.

Please tell me you're not referring to that old story about that one nickel mine in Canada that Toyota was buying from for it's hybrid batteries, the one surrounded by dead trees and environmental devastation. If so, that's been thoroughly debunked.

The newest lithiums from A123 and Altairnano can last for thousands and thousands of cycles, so they don't need replacing every two years like lead-acid batteries. And besides which, they can be recycled, so I'm not sure why you'd say that they aren't environmentall sound, of all things. They allow power generation to take place at a central location, which makes pollution scrubbing much easier; and they would allow for flexible and green power sources as well.

I think you underestimate the loss through the grid. While the main line transmission is efficient, the final path transmission usually is not. By the time you get done adding it all up, it takes about 2W of power to deliver 1W to the typical customer.

Hmm, I could have sworn that the efficiency is pretty high. Well whatever the case, something must be more efficient, somehow/someway. Otherwise, how is an electric car charged by a natural gas powerplant able to travel for significantly less than a CNG burning piston engine car?

 

[Zoomie1980]

I was talking about purely electric cars, not hybrids. Hybrids are efficient, but current battery technology is not environmentally sound.



I think you underestimate the loss through the grid. While the main line transmission is efficient, the final path transmission usually is not. By the time you get done adding it all up, it takes about 2W of power to deliver 1W to the typical customer.



Yes Hybrids are efficient. They just aren't environmentally sound.

Flywheels are even more efficient - however having spun up flywheels in every car would present a very serious safety hazard. They have been used quite successfully in buses but containment issues make them impractical for cars.

As the energy crunch gets worse and worse, environmental concerns get ever more and more ignored. As it is now, environmental concerns will NOT prevent electrics, gas-electric hybrids or fuel-cell/electric hybrids from grabbing a MAJORITY market share in only 3-5 years from now. All the major auto manufacturers either already are or will be converting a majority of their capacity to these stop-gap technologies until even better ones come along.

 

[BrianH]

Again, I have to disagree. We cannot pin our hopes on some Buck Rogers whizbang technology. We will almost certainly have to scrap our building codes, and reduce the distances we drive. That, plus nuclear power, will allow us to preserve some semblance of civilization.

For more reading, any of James Kunstler's books will explain the history of how we got here and specifically why our current model sucks so bad, or this one for something with more illustrations. Or just check out DPZ's website.

That's what I said, I didn't break it down into little bits and pieces like you have...but it's a broad way of stating what you have. You mention shortening driving distances....I mentioned people paying for gas to commute long distances to work. or driving on trips when they don't have to. DEMAND is driving gas prices....and now that the oil companies have lined their pockets,a decrease in demand will not lower the price....a complete change of energy and fuel is needed to curb this chaos.

 

[Paulie]

DEMAND is driving gas prices

Yes, amongst a host of other more complex reasons.

 

[Care4all]

Can someone please explain to me, (at a novice's level) why it appears that this administration's policy on the Dollar has FAVORED the devaluing of it?

America has always taken a stance of keeping a strong Dollar, up until this administration....so can someone please explain, what gives with that????

Was the Dollar really overinflated before this administration and they have focussed on DEVALUEING it for this purpose??????

Was it ALL to just increase our world trade?

I really do not understand why a focus on a STRONG dollar has not been pursued by the administration?

Care

 

[Paulie]

It's not necessarily the fault of the admin. Congress as a whole has been irresponsible, and the out of control spending requires more money to be printed, especially during this budget deficit.

The massive debt in this country is being "fixed" by simply printing more money. The government can always print its way out of debt, at the cost of the middle class being crushed by loss of purchasing power.

Either they hyperinflate, or they deflate. Either way, the middle class gets screwed. They can't necessarily deflate right now, as it would cause the debt cost to skyrocket.

We're a consumer nation, and we're encouraged to spend, spend, spend...all the time. The Fed is keeping debt cheap right now so that borrowing is encouraged. Basically, the banks are being bailed out at the expense of the taxpayer, because the bankers are taking care of their own.

Someone else, feel free to expound or disagree.

 

[Care4all]

It's not necessarily the fault of the admin. Congress as a whole has been irresponsible, and the out of control spending requires more money to be printed, especially during this budget deficit.

The massive debt in this country is being "fixed" by simply printing more money. The government can always print its way out of debt, at the cost of the middle class being crushed by loss of purchasing power.

Either they hyperinflate, or they deflate. Either way, the middle class gets screwed. They can't necessarily deflate right now, as it would cause the debt cost to skyrocket.

We're a consumer nation, and we're encouraged to spend, spend, spend...all the time. The Fed is keeping debt cheap right now so that borrowing is encouraged. Basically, the banks are being bailed out at the expense of the taxpayer, because the bankers are taking care of their own.

Someone else, feel free to expound or disagree.

WOW! That's enough to make me want to puke... It does make sense to me that just printing more money to cover Congress's Deficit and the President's Budget would devalue the Dollar... ty for explaining this!

Why did they take this stance though, the administration and Congress?

Why would tax cuts be issued during a time of overspending and war when this just leads to "printing more money" or devalueing the dollar?

Doesn't it turn out that NONE OF US got tax cuts at all....because the Dollar isn't worth a poopie now with their actions of overspending, thus reducing our buying power from what it was prior to the tax cuts? (Speaking of the middle class right now, not necessarily the wealthiest, because they have an easier ability to invest in other currency and gold, where the middle class Joe, usually doesn't and is usually not as balanced with their savings and investments, or in many cases, don't have any savings/investments AT ALL...yikes!)

Pushing tax cuts while not reducing the spending seems to be where this ENTIRE dollar devaluation begins...no?

Though, not really understanding it, I did hear that our Dollar policies/trade policies with China are causing some of this....can you explain that to me?

Care