Gas prices: good idea, but...

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Some very good points, but I don't think I would take farm prices as a best example of free market prices. Although the oil cartel is not exactly trying to keep prices unfettered.

It is the nature of individuals to operate in their short term self interest, but there is some wisdom in the behavior of large (free) markets.

Prices of fungible commodities, like oil, are based on present value and expectations of replacement cost. As prices adjust based on supply/demand and expectations of future availability our utilization of that commodity will change as it becomes more dear. The tightness of our supply capacity to actual demand is increasing the volatility as speculators expecting higher future prices and buy more now.

The EROI is not a hard limit. technology is constantly working to push this break even point lower. We are now pursuing extraction from deep sea offshore reservoirs that were previously considered much too difficult and expensive.

Another twist on the EROI transaction is type of energy. Unlike the classic running the oil well pump from it's own crude, we are getting to the threshold in price benefit for some shale and tar sands that require a lot of energy input to extract. There is already work (in Canada by a French? company IIRC) to apply nuclear power to the oil extraction process... OTOH consuming oil to make biofuel seems counter productive if oil is the precious commodity we're trying to optimize.

I am not optimistic that the typical oil/energy consumer will suddenly develop a long term judgment capacity in their monkey brain to significantly alter present behavior. What I am already seeing is them driving less, and buying less SUVs in response to their current pain and selfish self interest. This is how the invisible hand of free markets works to correct such imbalances (demand destruction due to high price). As far as I can tell, the governments efforts to look like they're doing something has helped very little and maybe hurt in some areas.

I understand the current pain for people living with decisions made based on cheaper oil. This too will pass but there will be some interesting times in the meanwhile. I hope we don't do something more stupid trying to fix this... Probably the most impactful thing in the pipeline for the near future is the major car companies ramping up production on electric hybrids. This will shift a percentage of the transportation energy demand over to the power grid which is predominately serviced by other fuels.

It will take years for this percentage to become significant, In the meanwhile keep your tires properly inflated. Maybe lose 20# to improve gas mileage.

JR

PS: I believe Indonesia just reduced the amount it was subsidizing the pump price of gas it's citizens was paying. After the riots quiet down there will be demand destruction there too.
 
So long as the time constant of the free-market economy is shorter than the time constant of the drop of availability of cheap oil, things should manage themselves, kind-of. People will be upset, things will change, but manageable. The 'plateau' model of oil use and price shows this scenario. If availability drops off faster than the time constant, then stuff might hit the fan bigtime and the bunker-types will be saying 'I told you so'.

There have been arguments about the environmental impact of mining the nickel for NiMH batteries currently used by the Prius and some other hybrids. One article compared driving a Hummer to a Prius and argued that the Prius was worse on the environment. I think they forgot the incremental use of metals and oil to produce the Hummer - after all, iron ore is strip-mined, and we know that process is really nice on the environment. Worse, in Alberta, the tar sands are also strip-mined - and that is a continuous demand. I think there have been articles flying around since a bunch of ducks got poisoned in an open lake of oil and water. Northern Alberta is starting to make Love Canal look tame.

What they need to extract tar sands are two things: natural gas and synthetic oil as raw hydrocarbons to 'dilute' the bitumen, and lots of heat and steam to actually extract it. The heat and steam currently come from burning natural gas, but could certainly come from a nuclear reactor. I'm still not so sure it is the best thing to do. I might not mind so much if it were extracted-in-place somehow, but strip-mining is pretty brutal.

-Dale
 
[quote author="dale116dot7"]So long as the time constant of the free-market economy is shorter than the time constant of the drop of availability of cheap oil, things should manage themselves, kind-of. People will be upset, things will change, but manageable. The 'plateau' model of oil use and price shows this scenario. If availability drops off faster than the time constant, then stuff might hit the fan bigtime and the bunker-types will be saying 'I told you so'.[/quote]

Dale, I think you pretty well nailed it, there. That sums up my issues with the "Free Markets solve all our problems" people. It's like the difference between having a reactive compressor and a predictive one. The reactive one will always allow peaks to slip through, but the predictive one at least has a chance to knock them down. So rather than taking advantage of the forebrain present (though, admittedly often under-developed) in all humans we are to use our monkey brains and just keep eating bananas until we have to fight for them before looking for other sustenance. Hogwash.

We have brains with some capacity for rational thought, so let's use them to our collective (oh, no, not the "C" word) advantage/benefit.

There have been arguments about the environmental impact of mining the nickel for NiMH batteries currently used by the Prius and some other hybrids. One article compared driving a Hummer to a Prius and argued that the Prius was worse on the environment.

I believe that argument was proven bogus. In reality, very little of the mined Nickel ends up in batteries. The vast majority of it is used in steel alloys and plating applications. A lot is recovered via recycling. And of course battery technology is moving forward--NiMH will not be the preferred type for the next generation of hybrid and electric vehicles, whereas steel (and lots of it) is present in all Hummers.

I think they forgot the incremental use of metals and oil to produce the Hummer - after all, iron ore is strip-mined, and we know that process is really nice on the environment. Worse, in Alberta, the tar sands are also strip-mined - and that is a continuous demand. I think there have been articles flying around since a bunch of ducks got poisoned in an open lake of oil and water. Northern Alberta is starting to make Love Canal look tame.

Yep. But since most economists cannot put a value on such things, they are not accounted for. Yes, they have a fancy name for them (negative externalities), but that doesn't solve the problem. Economic "models" are so fraught with such errors as to make them laughable, but unfortunately the economists are often in charge (or at least a large influence on those who are in power).

A P
 
If batteries were not so expensive for an individual to buy, I would probably commute in an electric conversion. As it is, I hope to commute most of this summer in an oats-powered vehicle, or maybe rice cereal or eggs, depending on how I feel in the morning. Later this fall, an electric train (wind-powered!) will be able to carry me 80% of the way to work, once they finish the track extension. Then I sit with 40 others on a diesel bus to get the rest of the way.

-Dale
 
[quote author="AnalogPackrat"][quote author="dale116dot7"]So long as the time constant of the free-market economy is shorter than the time constant of the drop of availability of cheap oil, things should manage themselves, kind-of. People will be upset, things will change, but manageable. The 'plateau' model of oil use and price shows this scenario. If availability drops off faster than the time constant, then stuff might hit the fan bigtime and the bunker-types will be saying 'I told you so'.[/quote]

Dale, I think you pretty well nailed it, there. That sums up my issues with the "Free Markets solve all our problems" people. It's like the difference between having a reactive compressor and a predictive one. The reactive one will always allow peaks to slip through, but the predictive one at least has a chance to knock them down. So rather than taking advantage of the forebrain present (though, admittedly often under-developed) in all humans we are to use our monkey brains and just keep eating bananas until we have to fight for them before looking for other sustenance. Hogwash.

We have brains with some capacity for rational thought, so let's use them to our collective (oh, no, not the "C" word) advantage/benefit.

A P[/quote]

While I wouldn't exactly call myself a "Free Markets solve all our problems" person, free markets are by far the most efficient way to allocate scarce resources. Do any here remember the gas lines from when the government tried to improve on that with rationing? Only by allowing scarce commodities to rise to their true levels will we reduce wasteful consumption and stimulate either more exploration, alternate energy sources, or both.

The government and other thoughtful people thinking as hard as they can to protect us monkeys, have invariably screwed thing up more than they helped.

Lets allow the free market to decide if things like ethanol makes sense (without huge subsidies)... corn, cane, switchgrass ??? So far only switchgrass isn't subsidized by the government but they're probably working on it (may have already in that bloated farm bill).

We should have an accountant and a economist sitting on either side of each congressman. One to do the math, and the other to tell them what it means. Not that economists have a good track record for agreeing with each other, or predicting the future.

There are some things that government should do, but regarding energy and oil their help makes me nervous. To stop putting 70,000 barrels a day into the strategic reserve in the context of 84 Million barrels a day daily consumption is literally a drop in the barrel. While I concede it is a drop in the right direction, it is classic arm waving politics, "look we're doing something" about the problem. That is not as bad as the gas tax amnesty which will actually stimulate consumption. The reason consumption is falling is because the price is higher. Let the markets work, please. Free markets are smarter than us monkeys who will just drive more if gas is cheaper.

JR
 
[quote author="JohnRoberts"]
While I wouldn't exactly call myself a "Free Markets solve all our problems" person, free markets are by far the most efficient way to allocate scarce resources. [/quote]

In the absence of "externalities" (also known as "reality" to many of us). Starting with the view that everything is a "resource" to be "allocated" ignores most of what is important--the system--the connectedness of everything.

Do any here remember the gas lines from when the government tried to improve on that with rationing? Only by allowing scarce commodities to rise to their true levels will we reduce wasteful consumption and stimulate either more exploration, alternate energy sources, or both.

The government and other thoughtful people thinking as hard as they can to protect us monkeys, have invariably screwed thing up more than they helped.

I do recall the age of the land-yacht and the crisis they caused. I don't recall stating directly or implying indirectly anything regarding government intervention in my arguments. If we continue to see ourselves as a bunch of monkeys lashed about by the winds of the almighty free market, then we are lost. If we cannot participate in governing ourselves, then we've failed.

Lets allow the free market to decide if things like ethanol makes sense (without huge subsidies)... corn, cane, switchgrass ??? So far only switchgrass isn't subsidized by the government but they're probably working on it (may have already in that bloated farm bill).

Why do we need to let this get to the market at all? Science and engineering will inform us well before it gets that far (or should have, at least). Burning our food (or feeding it to "food" animals and thereby wasting 90%+ of it) makes no sense. What about water requirements for these fuel crops? Fertilizer?

We should have an accountant and a economist sitting on either side of each congressman. One to do the math, and the other to tell them what it means. Not that economists have a good track record for agreeing with each other, or predicting the future.

Lose the economist and add an engineer and a scientist or two. IMO what is missing in most governmental cogitation is a systems view. Most things are interconnected in non-trivial ways. It takes a multi-disciplinary understanding of the system to make anything approaching "good" decisions. The only system our politicians seem to understand is the election system. They have mastered the art of Gerrymandering, pandering, poll-riding, and the sound bite to the exclusion of almost all else.

Let the markets work, please. Free markets are smarter than us monkeys who will just drive more if gas is cheaper.

And there I disagree in a most fundamental way. Humans have the capacity to understand that we are part of a complex system here on Earth. Markets are a flimsy contraption, a poor model of anything "real."

A P
 
I wrote a nice :twisted: point by point response but it timed out and I am losing interest.

I do however disagree with your low opinion of free markets. It is the ham handed interference of thoughtful humans that distort them and cause markets to break down.

Oil consumption (here) is down and exploration is up... It looks like it's working to me.

There's plenty of stuff that's actually broke we could think about fixing.

JR
 
[quote author="JohnRoberts"]I wrote a nice :twisted: point by point response but it timed out and I am losing interest.
JR[/quote]

That happens, and it's frustrating. I recommend writing the posts in something like Word and then pasting in.
 
Here is my take on an effective way to save money,buy a Motorbike to get to work if you do not work in an office.

Here in the UK with our very narrow roads I wonder why anyone needs a car above 2 litre capacity. :roll: :roll:
Lets just say your average car in the UK manages about 35 mpg and a 125 four stroke Motorcycle manages 100 mpg easily even if you rev the tits off it.
Then again there are not any 125 motorcycles with automatic gearboxes unless you get a scooter instead.

I guess a 125 Motorcycle would not be of much use in the US because people tend to be BIGGER!!

Remmeber farmers use alot of diesel to to keep there crops dry once they have harvested there crops.
If this process was changed there would be more oil available but I would dought wether road users would see any benefit because I would say that the surplus would be sold to another country to help keep the cost of oil high.

Remmeber oil companies are in a win win situation no matter what they say, if the price of fuel goes up they can make more profit, oil companies loose money/ market value if they cannot find any more oil fields.
 
[quote author="bcarso"][quote author="JohnRoberts"]I wrote a nice :twisted: point by point response but it timed out and I am losing interest.
JR[/quote]

That happens, and it's frustrating. I recommend writing the posts in something like Word and then pasting in.[/quote]

Nah.. Its a reminder that I shouldn't waste so much time.

These posts aren't very important in the grand scheme of things.

JR
 
Filling our minivan this afternoon totalled $67.

Before today I've always stopped at $50 because I couldn't bare the psychological pain of a total that started with a 6...
 
[quote author="kato"]Filling our minivan this afternoon totalled $67.

Before today I've always stopped at $50 because I couldn't bare the psychological pain of a total that started with a 6...[/quote]
Filling my Saab 900 costs me about $95...

Best regards,

Mikkel C. Simonsen
 
To fill the small tank of my aging VW Golf from empty costs 60EUR - approx $93 at today's exchange rates. Petrol here is averaging 1.25EUR a litre.

Cheers,
Ruairi
 
Ruari,

£1.28.9 a friggin litre of diesel by me !!

got to be close on $10 a Gallon now.

F**King disgusting.........

Chip fat option is getting more and more realistic, day by day...

Steve :thumb:
 
Little things matter... Today is garbage day and when I put my garbage out to the curb, rather than placing it at the end of my driveway, I carry it about 15 yards up the street so I am directly across from my neighbor's garbage. This way the garbage truck makes only one stop instead of two. At two pickups a week over time that will be a few thimbles full of gas.

I've been doing this for years and it didn't avert this shortage, but if everybody did these little painless things that are available it could add up and make a noticeable difference.

We just need to think about how we use and typically waste energy if we're concerned about the cost, or running out. Apparently few really are, and most think it's somebody else's fault.

JR

PS I calc more than 13B litres but it's a sufficiently large number to make the point.
 
I used 82 Mbbl per day, which is about 13GL per day.

Yes, little things add up, and adding the probably a few thousand litres of cooking oil per day that gets thrown out would help a bit.

Check out ExxonMobil's business strategy lately - doesn't that tell you something?

-Dale
 

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