I suggest we have three separate issues here.
1. Cost of oil that is used to make gasoline.
2. Cost of gasoline.
3. How much oil is used in the US for transportation.
Each of these issues have a different solution and consequence. As Terry
pointed out and I have seen also, use of gasoline in the US is going
down as people try to protect their own personal livelihood. This change
will help individuals. However, the cost of oil and the resulting
gasoline depends on many interrelated forces, speculation being only one
of them. As long as people believe that the price of oil will go up,
they will buy futures, thereby causing the price to go up. This is a
natural and essential feature of the futures market, the purpose of
which is to shift the risk from the producer to the speculator. The
expectation is being driven by the demand from China and India, by the
fact that production has peaked, and the insane policy of the US in the
Middle East. No amount of jawboning by politicians will change these
factors. The US had a chance several years ago when the Energy Bill was
passed to reduce our use of oil. Now we are paying the expected and
predicted consequences. At some point in the future, the speculators
will sense that the world-wide demand is going down and reverse their
positions. At that point, the price will drop for awhile. Meanwhile, the
US will shift more to hybrids and other methods to save energy and the
Chinese with shift from bicycles to SUVs. As a result, the price will go
up again. So, I suggest you protect yourself as best you can because the
situation will get much worse before it gets better for awhile.
Ed
Terry Blanton wrote:
Well, if you believe Congressman Matheson, his new bill will drop the
sales price of gas to $2.00.
http://www.kcpw.org/article/6217
I have noticed a significant improvement in traffic in my commute.
Papers in Atlanta say that, overall, ridership of transit has
increased 10%. I can verify a 7% increase on MARTA alone.
I have also noticed fewer trucks and SUVs are on the road. I can
usually see traffic ahead of me from my Scion xB. This was not the
case when most vehicles were trucks and SUVs.
If these trends continue, there will be a noticable impact on gas
demand. My 400 mile weekly commute only takes me 10 gallons; but, my
neighbor's Tahoe consumes 40 gallons over the same distance. His
purchase of a Prius would have significantly higher impact on demand
than my purchase of the same.
It happened before due to the oil embargo of the 70s. The cartels
suffered a financial backlash as consumers did not consume.
Hopefully, this time it will be permanent.
No, I really don't think you should make that investment, Richard.
Terry
On Wed, Jun 25, 2008 at 8:15 AM, R C Macaulay <[EMAIL PROTECTED]> wrote:
Howdy Vorts,
I am trying to reconcile the economics of building a sophisicated chemical
processing plant with a 25 M/G/Y capacity of gasoline at $ 2.00 gallon cost
of production with the world I live in.
Richard
http://www.technologyreview.com/Energy/20828/?nlid=1112
