Unfortunately, drilling for more oil is only a short-term fix for a long-term problem. The next time a shortage comes along, it's going to be far worse than this time. And, how soon will that come along? In another ten years? or maybe only five years? And, what do we do next time? Drill still more wells? It is not an "UNLIMITED RESOURCE". There is a limit to the amount of oil this earth can hold, and once burned, we don't get it back. And, I'm afraid that corn and soybeans are not the answer either. As the population increases, and technology advances, the demand for more energy will only increase. Current answers will not hold up in the long run. What will you give your grandchildren to inherit? A couple of thousand oil wells running dry? Why isn't anyone looking very far ahead?

 

Because that would be the smart thing to do.

 

Way back in 1995, ARCO invested a little over $75 Million in a company up in Vancouver BC, called "Ballard Fuel Cells Inc." Every now and again, we would read in the monthly mag that the company sent out, about how that investment was going to turn into platinum for the company, and that ARCO & BFCI were working with both Honda & Toyota, to come up with Hybrid cars, that would run on those batteries, yet still have a small gasoline engine, for charging the batteries on the road, and boasting power while those cars were climbing hills.

Honda's "Hybrids" have gone into the tank, while Toyota's "Hybrids" are rolling out now. A friend bought his wife the toyota camry hybrid for her B-day last year. That sucker is as comfortable as any car can be...zip's along at 75 mph without a problem, and Michele is averaging 46 miles to the gallon, running around the area. Over course..there is a waiting line now for the camry and the Prius as well. Better than nothing. Way better than the Cobalt that Chevy is putting out there.

This link tells what Ballard is today; http://www.ballard.com/Automotive_Fu...n_Overview.htm

Quite a bit different from what it was in the early and mid 90's.

 

While reading through news articles on Yahoo this morning, I came across this article, which pertains to this thread,to a degree. It comes from a newspaper located in Maine...but the man interviewed for the article describes the commodities market pretty much perfectly.

http://www.mainelincolncountynews.co...x.cfm?ID=32537

Crude Oil Speculation not Driving
Story date: 06/18/2008
By Emily Elliott
Gasoline prices are higher than ever before, and expected to keep going up. The price of crude oil on the commodities market keeps breaking records; it closed at $134 a barrel on June 16.

Ralph Hassenpflug lives in Bristol and has been a commodities investor for 23 years. He received his bachelor's degree in Economics and Psychology from the University of Tours in France.

"Speculators and investors driving up prices is an age old myth," Hassenpflug said. "Wherever there is a buyer in the market, there must be a seller. They both must agree on the price. Just the fact that I want to buy something will not raise prices.

"If we decided to invest in tomatoes, so we went and bought all the tomatoes from the local grocery stores every day for a week. In a week we may have driven the price up, but it was because we reduced the supply of tomatoes in the local area. Once we've bought them, we will need to sell them to get our money back. Now if we try to sell all the tomatoes at the same time, the price would immediately drop because the market would be flooded. This is a good parallel to the futures market."
Commodities futures are traded on the New York Mercantile Exchange (NYMEX), which was housed in the twin towers before Sept. 11. When investors buy a future, they are actually buying a share of profits from the sale of a commodity (i.e. corn, cattle, crude oil) in the future and guessing about whether the price will go up, buying long, or go down, buying short.

"There are two kinds of people in oil futures who have a vested commercial interest, crude oil producers and refined gasoline manufacturers," Hassenpflug said. "The crude oil producers want to keep the price as high as possible, and protect themselves against falling prices. The refiners want to see the lowest possible crude oil prices, so they can buy the crude they refine as cheaply as possible."

Speculators, if they are getting into the market now, are buying short, because they expect prices to fall soon, he said. "There are not as many speculators in the crude market as there were a year ago. I stopped investing in crude oil when it hit $80 a barrel," said Hassenpflug.

Greater volatility in the market creates more risk, which drives speculators out, he said. "People stay away because the swings in prices are so huge, you can win or lose thousands in a single day," Hassenpflug said.

The effects of rising fuel prices are far reaching across the globe. "The price of a donkey in Anatolia has risen from $25 last year, to more than $250 this year," he said. "They have moved from using cars, back to donkeys to compensate for the high fuel prices. The gas prices in Europe are three times as much as here in the U.S., almost $12 gallon right now."

"Politicians often like to throw the speculators to the lions, because it's easiest. If you really want to know why prices are so high, politicians have made many mistakes over the years," said Hassenpflug.

The high fuel prices are due to a lack of supply, because OPEC decided not to produce to their maximum capacity, Hassenpflug said. That creates an artificial shortage, which causes prices to become inflated, he said.

For gas prices to go down, we must reduce the artificial shortage in the crude oil market. "We have to drill here, we have to drill now," he said. "The Chinese and Canadians are both drilling off America's coast, but we are not. The technology has increased greatly, and the environmental impact is much less."

"No gasoline refineries have been built in 25 years, government regulations make it almost impossible to build one now," he said. "We need to explore clean coal technology and nuclear power to expand our electricity generation capacity and make it less dependant on gasoline& If the U.S. decided to build 15 refineries, 20 coal plants and 20 nuclear plants, the price of fuel would go down immediately with that announcement."

Improving efficiency in consumers' daily lives and using less fuel will help prices fall as well, he said. "I find it patriotic to slow down on gas, skip a trip, and only go into town once a day," Hassenpflug said.
Biofuel production will not help reduce gas prices, because it is inefficient to produce and will cause inflation in prices for other crops, he said.

"The price of corn in Mexico has tripled in the last year, people are protesting in the streets because they think it is the government's fault," Hassenpflug said. "Everything is interconnected, rising corn prices create higher wheat, rice, and soybean prices. Then the price of every good that uses ingredients that comes from these crops goes up. Like the price of margarine, glue, cosmetics, and explosives: they all use ingredients derived from soybeans."

"Alternative energies need more research, they must become market driven to succeed. It doesn't make sense to subsidize that industry. As soon as the free market accepts alternative energy, its time has come," he said.
Vol. 133 - No. 24
This site is owned by Lincoln County News © 2002

In that article..the only real dissent I have with the Interviewee, is his comparison of buying tomatoes on the local scene, as compared to crude oil and gasoline. Tomatoes are a perishable commodity, with an extemely short shelf life, therefore uncomparable to crude, which can be stored for month's without worry by an owner.

I find it interesting that this guy, whom is a professional invester, has thoughts about many subjects, to which we as professional truck drivers, are in agreement with him about. For instance, look at his stance on bio-fuels and the need to build not only more refineries but coal fired power plants and nuclear power plants.

The tree hugging "Greenie Babies" need to decide which way they want "OUR" society as a whole to proceed. Forwards into the future..or backwards into the past.... as Mr.Hassenpflug's earlier statement shows; LOL....we truck drivers can ALL become "teamsters"....and work just like the "Original" teamsters did. Can anyone else on this forum handle a team? I can.

:lol: :lol: :lol: Conestoga wagons....on rubber tires anyone?? :P :P :P

 

It's been a few years, but I think I still could. :wink:

 

I feel the slight need as a farmer to explain more about corn prices and ethanol. First about corn prices: Corn is first becoming more expensive because the two things that farmers have to buy in great quantity to grow corn are more expensive. Ten years ago we could purchase nitrogen fertilizer for $150 per ton, now it is over $750 per ton because that nitrogen fertilizer is created using natural gas. (time for somebody to make it from coal like they did in the 1920's) The second factor is that off road diesel fuel has gone from $1.50 to $4.00 in the same time. You do not have to be a math genius to figure out that if fertilizer costs five times as much and fuel costs three times as much that the corn can't stay the same price.

The second thing that is driving up corn prices is the Kyoto treaty. For those of you not familar with it this is the algore deal that capped carbon dioxide production and the US hasn't signed on to yet. Now the treaty outlined ONE way to offset carbon dioxide production and that was to plant FARMLAND with trees. So in India and a lot of the countries near there they are now planting trees on the best fields and having to buy their food. Not to mention how they are getting ripped off earning about a penny for every dozen trees per year. (Surprisingly NPR broke that story, not that they related the effect on corn prices though.)

The third thing is that the rice crop in Southeast Asia was very poor. So much so that some country ( I forget which) is having rice as a major import this year instead of a major export. That means that prices are up globally on all food items.

The fourth thing driving corn prices up is corn based Ethanol. Ethanol is great in small doses. A farm that feeds livestock can extract enough ethanol from the corn that they are going to feed out anyway to power most of their own vehicles. This is the end of the efficiency in ethanol. Biodiesel is the same way in that the oil is extracted from soybeans in the process of making cattle feed. And you ask why the price has gone up? It is simple: The biofuel plants have been able to pay more for their ingredients because they are getting two products that are worth money. When they are competing with traditional uses for corn they have more buying power. Kind of like when you go to the store and the stuff on sale is sold out you have to buy the next most expensive package. Then you add the subsidy and essentially the government is paying ethanol companies to raise the price of corn. It is a brilliant strategy if you are trying to increase consumption of corn and ignore the consequences.

Now Ethanol isn't the problem here. Farmers should be free to sell their corn to whoever wants it. Also Ethanol will always be competitively priced to gasoline because I bet you can't give me one good reason why I shoud sell it for less if people will buy it at the same price. Ethanol can naturally replace about ten percent of our gasoline I am guessing. Ethanol would be a great use of excess food production where we could produce more than we need and make something useful from the excess rather than collapse the prices. The problem here is the GOVERNMENT has required ethanol to be a part of gasoline. The Government can do four things to affect the price of something.

1) The government can restrict things. Like restricting the drilling of a place in Alaska that is the size of South Dakota when the oil companies will only need to build on a place the size of JFK airport. This leads to increased prices because it limits supply, so what people already have is worth more. The related political buzzwords are regulations and oversight.

2)The government can require things. Also known as mandates, unfunded mandates, and hidden taxes. The obvious example is what would happen if the government required a gallon of gasoline to contain one ounce of gold dust. Ignoring the obvious effects that metal particles would have on your engine and the difficulties of mixing the two ingredients (the Government always does anyway). At the basic prices today I think that means each gallon of gas would be worth about one thousand dollars. Of course the evil oil companies would get the blame.

3) The government can Tax things. This is the popular cure all method for the left leaning leberals. In my opinion taxes are a deterrent. When you tax something you get less of it. If a person makes $10 to spend on wigets then how many can he buy if they cost $2? That's right 5 wigets. Now if you tax his income by 40% he only has $6 left so he can buy 3 wigets. Add a $1 tax per wiget and he can only buy two wigets. Of course if you are the government you expected the tax revenue from 5 wigets and $1 tax per wiget, so you have a $3 shortfall or structural gap.
This is currently applied in two opposing ways by the libs: Tax cigarettes so people won't smoke as much, and tax oil companies to get them to produce more oil. Only one is correct.

4) The government can subsidize things. Also known as price supports, tax credits, welfare, corporate welfare, tax incentives, bail-outs, etc. Businesses who are receiving the subsidy are able to price their goods more cheaply. This causes their competition to need the same support from the government. So instead of stability you have two businesses competing to see how poorly they can run things and keep the government pity checks coming. This is a hidden price increase. It causes two things Inflation, and other Taxes. The other taxes come about because no matter how little the government may need the money they wil use these programs as a reason to increase spending and by association raise taxes. The inflation occurs because the government meddling distorts the market. The inflation occurs because other companies have to raise prices to keep up with the rising taxes.

So to review there are 4 ways that the Government can interfere with prices in the marketplace and they all result in more money out of your wallet either directly or indirectly. Don't look to the Government for solutions, they are the PROBLEM.

If all the government was doing was one of the four things to raise prices there wouldn't be this problem. But they are requiring corn ethanol, subsidizing corn ethanol, and restricting oil exploration, drilling, and refining. Now Obama wants to put a windfall profits TAX on the oil companies. That is government speak for "let's increase prices more." Just what we need.


I don't know about oil and gas, but did you see the report that AFTER algore (inventor of the internet and global warming) spend a bunch of money to install compact florescent light bulbs and a bunch of energy efficient stuff his electricity useage at home INCREASED? He now uses enough electricity in his mansion to power over 200 average houses every month. :lol: We can't conserve our way out of this.

 

It depends on how well we fix the problem this time. My guess is that prices will stabilize a bit below their current levels, and the next big big jump won't be for another 30 years if we allow drilling offshore and in anwr.


Well one thing we can do is shift away from oil for uses other than motor fuel. Motor fuel is only 40% of the uses of oil in this country now. The policies of the Environuts has resulted in a lot of oil and natural gas being used to generate electricity because it is "cleaner." The widescale use of Nuclear and coal for electricity would go a long way. Even the French are generating 78% of their electricity from Nuclear power. Of course the Environuts in this country would apparently prefer us to drive around in electric cars, and we can only build natural gas power plants to charge them up, so go figure.

We could build enough Nuclear plants to create all our own electricity and use the offpeak times to manufacture an artificial 'energy carrier fuel' like hydrogen or ammonia or something. Then we can EXPORT all our oil for the developing countries and have a trade imbalance in our favor for a change. Unfortunately neither political party has a good message of energy independence.


One of the things about ethanol is that it takes 100 gallons of fuel to make the fertilizer, work the land, plant, harvest, transport, and refine the corn into ethanol to get 130 gallons of ethanol. So you can increase energy by 30 percent by harnessing the power of the sun for a growing season, big deal. You still are going to need the power to start with.

Because nobody that is elected now will be in office then, so what do they care. The only vote that counts is the vote that will get you re-elected next term, not in 30 years.

 

Rawlco said:

Nope.... time for farmers to make it from COWSH!T like they did in the 1800's!!! :roll: :lol:

BTW.... a byproduct is METHANE GAS which could power most farm equipment if someone had the foresight to adapt or manufacture tractors, combines, etc to run off of such a "natural" gas. :wink:

WHAT does the price of tea in China (or rice, in this case) have to do with the price of a Hamburger in America??? Have you SEEN these prices lately?? Why buy a hamburger, when you can have a STEAK for a quarter of a gallon of diesel MORE??? Heck! Even the price of the buffet at a Flying "J" is only a few dollars more than a #3 Combo!! :x :x

Last I heard.... they still COULD!! Now.... find me a farmer who'll turn down the government subsidy gained by selling his corn for Ethanol, and will sell it to me for $2 a bushel, and I'll show you an HONEST.... but POOR.... farmer! (Probably a Democrat!) :roll: :wink:

OrangeTex said:

Well... never HAD to! But, up until 3 years ago.... never drove a Big Rig, either! I'd say give me about six months, and I'll have them "boys" backin' 'er in in less than 2 pullups, and getting to the dock FIRST!! :lol: :lol:

 

Actually almost all cow manure gets used to grow crops. The exceptions are manure sold as "compost" at your local wal-mart which is overused on peoples lawns and gardens so that the farmer can be blamed for the runoff pollution. :wink: Current production of corn cannot be supported without some artificial fertilizer. "Organic" production methods cannot sustain enough production to feed the world in my opinion.

Capturing methane is rapidly becoming more feasible. Especially when paired with the Capstone brand microturbine to produce electricity. So to summarize we can grow corn and extract ethanol, feed the co-product brewing grain to livestock, and extract electricity from the manure. These technologies have been cost prohibitive until recently.