Finally, something to cheer about in all this ethanol/gasoline quagmire--including the entire wholesale oil price hostage scenario. From the friendly folks who brought us the machine-gunning Kentuckians set to Marshall Tucker (and thank you to whoever posted that gem months ago), the next best thing to cold fusion. The thing we've been intuitively awaiting all our lives. IMAGINE the historical, political, and economic significance of this if it's for real.
http://www.czabe.com/mediaclips/index.s ... lip&id=519
Is this why gas prices are falling?
Moderators: CaptPatrick, mike ohlstein, Bruce
These water as a fuel machines all suffer the same problem: turning the water into fuel takes more energy (electricity) than the energy you get out of the fuel you made. Those pesky laws of physics again. But I agree, it certainly would be great if it worked.
On the other hand, maybe you gas engine guys have finally found someone who can burn your phase-separated ethanol/water/gas....
That torch he's got is pretty neat
On the other hand, maybe you gas engine guys have finally found someone who can burn your phase-separated ethanol/water/gas....
That torch he's got is pretty neat
Saw that a few months ago. Read into it and found that a few people many years ago tried this. Think it was Brown's Gas. I read somewhere that one guy was wacked for the obvious reasons. Some have been paid of by the big oil not to further the projects. But like Sean said, physics.....tough to beat it. Hopefully someone will figure it out. Kevin
-
Josh Johnson
- Posts: 27
- Joined: Jul 9th, '06, 10:26
That makes sense, Bruce. It wasn't demand so much that pushed up the price, but speculation. And in terms of the costs associated with producing hydrogen, ya'll are right--they didn't mention the energy-in vs. energy-out ratio. Anybody know what the numbers are? There would have to be an equivalent break-even point if oil keeps going up. I'm guessing the recent huge find in the Gulf of Mexico-purportedly larger than the entire Alaskan reserves might also be a factor in falling gas prices. Mind you, I'm not complaining--except that diesel is still $2.99.
Josh
They stood to make a killing based on last years hurricanes and disruption in the Gulf and elsewhere driving prices high.
When the revised storm reports dropped and the current batch of Canes have been way out in the Atlantic, they saw prices starting to drop, end of summer travel demand and pulled the profits dropping them even more.
Besides winter blends which cost less to make are comming or have started to come out added to the drop.
The administration can only manipulate the fuel prices by holding back or releasing the Federal reserves in a time of emergency and may not influence prices at all, not by calling all the Oil Ceo's and say raise prices till right before the mid term elections. They don't have that kind of power and anybody who believes that needs to study economics 101 again.
When the revised storm reports dropped and the current batch of Canes have been way out in the Atlantic, they saw prices starting to drop, end of summer travel demand and pulled the profits dropping them even more.
Besides winter blends which cost less to make are comming or have started to come out added to the drop.
The administration can only manipulate the fuel prices by holding back or releasing the Federal reserves in a time of emergency and may not influence prices at all, not by calling all the Oil Ceo's and say raise prices till right before the mid term elections. They don't have that kind of power and anybody who believes that needs to study economics 101 again.
This administration claims it won't use the strategic reserves to manipulate the market price of oil, but they continued to buy more oil to fill them even as the price was going up, competing on the marketplace and driving up prices further. Now those reserves are full, so the gov't isn't currently a buyer of oil, taking a little pressure off.
Then there is the lack of hurricanes. In the beginning of the summer of '06 the doom-and-gloom forcasts for the hurricane season were a factor in driving up futures prices. Everyone anticipated that with all those storms predicted that there was a good chance there would be some disruption to the system. That has now all worked its way through the system.
And there was the situation with Israel threatening to expand and disrupt the entire middle east which has now dropped back to a simmer.
And even if the administration can't just call up the heads of the oil companies and ask them to lower prices and increase supply in the days before an election, if the oil co. execs think that their own financial interests are best served by making the current administration look better, they certainly can decide to open up the taps a little. This doesn't have to be something done on a whim. The execs are well aware that the elections are on the way years in advance, just like the rest of us.
Oil execs are also capable of making their own independent decisions as to what to do to bring favorable or unfavorable conditions to the election with regard to their sphere of influence on oil prices. So even if they don't conspire in a back room someplace it should come as no surprise that they all might move in the same business direction at the same time. After all, they are all driven by the same financial, market and political conditions.
I learned in Economics 101 that in order for free market pricing to yeild the lowest possible price you need a lot of competitors and low barriers to entry into the market place. The idea is that if one supplier raises his prices purchasers will switch to other suppliers who can replace the high price goods with their lower priced supply. That is not the description of the current oil marketplace. The oil market place is controlled by a few big companies each of whom controls a piece of the total supply, and nearly all of that supply is needed to satisfy the current demand. No one company can say that they will replace the entire supply of a higher priced competitor with their own supplies, because they don't have that much product.
But here is what we need to look for after November: All the tough talk about Iran! It isn't getting much play right now, but after the elections the administration might really hike up the rhetoric. Just the possibility of US military action there or a blockade of Iraq could make make $3.00 a gallon a sweet memory. Pull out your atlas and look up "The Strait of Hormuz" if you want to know where the action is likely to be.
And even if the current administration isn't threatening Iraq for the purpose of causing oil prices to go up, their attitude about big buiness and big oil probably doesn't consider higher oil prices a negative side effect.
Peter
Then there is the lack of hurricanes. In the beginning of the summer of '06 the doom-and-gloom forcasts for the hurricane season were a factor in driving up futures prices. Everyone anticipated that with all those storms predicted that there was a good chance there would be some disruption to the system. That has now all worked its way through the system.
And there was the situation with Israel threatening to expand and disrupt the entire middle east which has now dropped back to a simmer.
And even if the administration can't just call up the heads of the oil companies and ask them to lower prices and increase supply in the days before an election, if the oil co. execs think that their own financial interests are best served by making the current administration look better, they certainly can decide to open up the taps a little. This doesn't have to be something done on a whim. The execs are well aware that the elections are on the way years in advance, just like the rest of us.
Oil execs are also capable of making their own independent decisions as to what to do to bring favorable or unfavorable conditions to the election with regard to their sphere of influence on oil prices. So even if they don't conspire in a back room someplace it should come as no surprise that they all might move in the same business direction at the same time. After all, they are all driven by the same financial, market and political conditions.
I learned in Economics 101 that in order for free market pricing to yeild the lowest possible price you need a lot of competitors and low barriers to entry into the market place. The idea is that if one supplier raises his prices purchasers will switch to other suppliers who can replace the high price goods with their lower priced supply. That is not the description of the current oil marketplace. The oil market place is controlled by a few big companies each of whom controls a piece of the total supply, and nearly all of that supply is needed to satisfy the current demand. No one company can say that they will replace the entire supply of a higher priced competitor with their own supplies, because they don't have that much product.
But here is what we need to look for after November: All the tough talk about Iran! It isn't getting much play right now, but after the elections the administration might really hike up the rhetoric. Just the possibility of US military action there or a blockade of Iraq could make make $3.00 a gallon a sweet memory. Pull out your atlas and look up "The Strait of Hormuz" if you want to know where the action is likely to be.
And even if the current administration isn't threatening Iraq for the purpose of causing oil prices to go up, their attitude about big buiness and big oil probably doesn't consider higher oil prices a negative side effect.
Peter
Peter,
Oil companies are not setting the retail price except via the NYMEX, where they sell to refiners.
When the traders run the price up, oil companies naturally win.
But the crude price is set by market demand i.e., what will they pay today.
Price gouging is almost always at the local level.
Oil companies won't sell under market value for fear class action lawsuits by share holders.
One thing that puzzles me is why they are hording cash and not putting it back into research, exploration, etc?
This also accounts for the record profits as very little is being put back in the companies.
Are they looking at future investments or are they worried that oil supplies will be cut by war and the cash will keep them afloat till the conflict is over?
Which brings us to Iran and the Gulf.
With a 20 mile wide entrance, surrounded by mountains the missles that Iran is reported to have, the "Sunburn" would decimate any tankers and the 5th fleet.
We currently have no defense against these missles including the Aegis.
As scary as that is and as much as Iran deserves an ass wipping, I don't believe the current administration is brain dead enough to start a conflict in Iran, or make Israel start one, with the over worked, under supplied and seriously under manned military force in the region now.
Afganistan is becomming a problem spot again.
I also believe that in that conflict that Chavez might send military up thru Mexico to give us trouble.
He has been buying millions of AK's and ammo along with Migs and mucho military supplies from Russia and China from the oil profits he gets from those who buy Citgo gas.
Our poor sons and daughters are worn out and need serious relief in the Gulf now.
I really don't think Bush and Rumsfeld are that stupid, but then I also believe in Unicorns and the tooth fairy.
God help us if they are.
Oil companies are not setting the retail price except via the NYMEX, where they sell to refiners.
When the traders run the price up, oil companies naturally win.
But the crude price is set by market demand i.e., what will they pay today.
Price gouging is almost always at the local level.
Oil companies won't sell under market value for fear class action lawsuits by share holders.
One thing that puzzles me is why they are hording cash and not putting it back into research, exploration, etc?
This also accounts for the record profits as very little is being put back in the companies.
Are they looking at future investments or are they worried that oil supplies will be cut by war and the cash will keep them afloat till the conflict is over?
Which brings us to Iran and the Gulf.
With a 20 mile wide entrance, surrounded by mountains the missles that Iran is reported to have, the "Sunburn" would decimate any tankers and the 5th fleet.
We currently have no defense against these missles including the Aegis.
As scary as that is and as much as Iran deserves an ass wipping, I don't believe the current administration is brain dead enough to start a conflict in Iran, or make Israel start one, with the over worked, under supplied and seriously under manned military force in the region now.
Afganistan is becomming a problem spot again.
I also believe that in that conflict that Chavez might send military up thru Mexico to give us trouble.
He has been buying millions of AK's and ammo along with Migs and mucho military supplies from Russia and China from the oil profits he gets from those who buy Citgo gas.
Our poor sons and daughters are worn out and need serious relief in the Gulf now.
I really don't think Bush and Rumsfeld are that stupid, but then I also believe in Unicorns and the tooth fairy.
God help us if they are.
-
AndreF
- Senior Member
- Posts: 711
- Joined: Jun 29th, '06, 09:53
- Location: Baton Rouge, Louisiana
- Contact:
Peter,
One deep water drilling rig is a one BILLION dollar investment (gamble). That's why it's a man's game . No Mom and Pop operators.
Gulf production is still not all back, less than some 60 %, I think, at best. Garry would know.
The Gulf of Mexico is full of proven reserves just like the one recently announced. In deep water though, 5000 feet plus.
They're drilling more than 39,000 feet total. I cannot imagine how much that much pipe weighs when you're pulling it out of the hole.
The strain on the peice of drill pipe first out of the hole.
It's a very technical operation, controling pipe that long.
One deep water drilling rig is a one BILLION dollar investment (gamble). That's why it's a man's game . No Mom and Pop operators.
Gulf production is still not all back, less than some 60 %, I think, at best. Garry would know.
The Gulf of Mexico is full of proven reserves just like the one recently announced. In deep water though, 5000 feet plus.
They're drilling more than 39,000 feet total. I cannot imagine how much that much pipe weighs when you're pulling it out of the hole.
The strain on the peice of drill pipe first out of the hole.
It's a very technical operation, controling pipe that long.
I'm not sure but indecision may or may not be my problem.
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - George Orwell
1981 FBC BERG1883M81E
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - George Orwell
1981 FBC BERG1883M81E
Andre,
Being boaters we all know the powerful force of water. Its amazing how they can drop that deep with pipe and the drill head.
Its also amazing how the rigs can go thru a storm like Katrina and not have massive spills.
Working on a rig ain't for the faint of heart. I had a buddy who worked for OSHA investigating accidents on rigs and he showed me photos of some that were killed. Very grusome especially one guy who got caught in a verticle spool of steel cable and was wrapped a dozen times before they stopped the spool.
Being boaters we all know the powerful force of water. Its amazing how they can drop that deep with pipe and the drill head.
Its also amazing how the rigs can go thru a storm like Katrina and not have massive spills.
Working on a rig ain't for the faint of heart. I had a buddy who worked for OSHA investigating accidents on rigs and he showed me photos of some that were killed. Very grusome especially one guy who got caught in a verticle spool of steel cable and was wrapped a dozen times before they stopped the spool.
Bruce and Andre both make some interesting points. I wanted to reply to them with my thoughts.
Unfortunately that mkes this slightly off topic post rather long. Sorry about that.
Peter
Andre;
>>One deep water drilling rig is a one BILLION dollar investment (gamble). That's why it's a man's game . No Mom and Pop operators.
Gulf production is still not all back, less than some 60 %, I think, at best. Garry would know.
The Gulf of Mexico is full of proven reserves just like the one recently announced. In deep water though, 5000 feet plus.
They're drilling more than 39,000 feet total. I cannot imagine how much that much pipe weighs when you're pulling it out of the hole.
The strain on the peice of drill pipe first out of the hole.
It's a very technical operation, controling pipe that long.
Yes, the deepwater drilling platforms are amazing! And amazingly expensive to build, and amazingly difficult to operate, and amazingly complex to get the necessary permits and leases to place them where they will turn a good profit.
This is the sort of HUGE "Barrier to Entry" that keeps mere mortals from jumping into the oil biz and grabbing a handful of the record profits the current players are pulling down. If all you needed was a Kitty with steer horns on the hood, then every Mother's son would jump in and the glut of supply would drive oil prices to rock bottom. Such are the laws of supply and demand in the open and free market...but alas. It doesn't quite work like that, does it?
It is precisely because of the huge "Barriers to Entry" that oil companies can keep upward pressure on prices without fear that someone is going to suddenly leap into the market and steal some of their market share. And if someone tried to do that, the current players could temporarily sell oil on the cheap until the new kid went under anyway.
The oil market is imperfect. It does not respond instantly and exactly to simple laws of supply and demand. The supply of product is not easily increased to match demand even among the current players. So prices can remain at high levels where good profits are made, at least in the short run. This is what economists call "inefficiencies." Exploiting those inefficiencies for profit is the business of big business and finance.
In light of my comments above why would anyone sell oil for 20% off the going price of only a few short weeks ago? It has already been demonstrated that the market will bear a price somewhere above $72 a barrel without flinching. So who is agreeing to sell oil for $62 and why are they doing that? Yes, some normal market forces are at work putting downward pressure on oil, but not that much, that fast.
Bruce;
>>Oil companies are not setting the retail price except via the NYMEX, where they sell to refiners.
When the traders run the price up, oil companies naturally win.
But the crude price is set by market demand i.e., what will they pay today.
I agree with that statement, but for every transaction there has to be a buyer and a seller. Who would agree to SELL oil contracts at $62.00 a barrel when only a short while ago the price was up to $78, and for quite a while it has been trading above $70? About the only holders of oil futures who could afford to drop the price so low so fast are the oil companies whose cost basis is derived from the costs of production, not current or recent market price as is so with the traders. However, once several of those discount contracts get sold out there, speculators and other traders of oil who are neither actual producers nor end consumers are stuck having to follow suit.
>>Oil companies won't sell under market value for fear class action lawsuits by share holders.
No company, and especially a publicly traded company is in the business of selling their product at prices below market value...unless there is a good reason to do it in the short term.
We are facing an election that might put the GOP out of power and install the Democrats. The Democrats just might consider the profits that the oil companies have been making this year to be excessive and if they did come to power maybe they just might try to do something about that.
The Republicans, on the other hand, think that the very concept of "Excessive Profits" is an oxymoron.
If the oil companies want to keep making the big profits they should do whatever they can to help keep the GOP in the majority of the House and Senate. If oil execs CAN jigger the price of oil lower for a few weeks right before the election, and if that in turn helps the Republican party at the election, not only should they do it, but in a way they are bound by their fiduciary responsibility to the shareholders TO do it.
>>Price gouging is almost always at the local level. Again, I agree, but at the retail level the selling of fuel is very competitive. Almost every American has a choice of several gas stations and heating oil suppliers. Price gouging can't last very long at the local level unless there is some conspiratorial price fixing between local suppliers.
I don't believe those sorts of conspiracies arise all that often, but I DO believe that all local retailers are driven by the same local market pressure. So if the gas station on one side of the street can raise his prices and not loose market share, then his competitor across the street is likely to do the same thing. If you were to ask each of them why they raised their prices they would both cite that the costs of doing business had gone up. (Read; I'm making more money now, and I like it, so that is what it costs to do business!) Meanwhile the reactionaries start crying "Conspiracy! How else can it be that they both raised there prices about the same amount at about the same time?" It doesn't have to be a conspiracy for two competitors to move in the same direction at the same time, it could just be circumstances in the local market.
However, in my little example above, if these guys start making any substantial profit eventually someone will buy a gas station down the street and sell fuel for less causing both the profits and the price to fall for all three of them. Thus endeth the gouging.
>>One thing that puzzles me is why they are hording cash and not putting it back into research, exploration, etc?
This also accounts for the record profits as very little is being put back in the companies.
I can't say what plans they have for the money. I question most why they have not put any cash into the ethanol thing. If ethanol laced gas is the fuel of the future why are they not jumping on board? My guess is that they figure the ethanol thing is only temporary.
>>Are they looking at future investments or are they worried that oil supplies will be cut by war and the cash will keep them afloat till the conflict is over?
Having a reserve of cash isn't a bad idea in any business, and in the oil biz that reserve has got to be huge to be effective. What if they wanted to build a few of those deep water platforms that Andre talks about? Or improve the leaky pipeline in Prudo Bay? Or renovate the Trans Alaska Pipeline to restore it to full capacity? What if after the election the GOP retains power and opens up ANWR to more drilling? The money and cash requirements just to manage projects like that would be enormous. The company with the ready cash to tie up the opportunity is the one that will benefit the most.
>>Which brings us to Iran and the Gulf.
With a 20 mile wide entrance, surrounded by mountains the missles that Iran is reported to have, the "Sunburn" would decimate any tankers and the 5th fleet.
We currently have no defense against these missles including the Aegis.
As scary as that is and as much as Iran deserves an ass wipping, I don't believe the current administration is brain dead enough to start a conflict in Iran, or make Israel start one, with the over worked, under supplied and seriously under manned military force in the region now.
Afganistan is becomming a problem spot again.
I am no military expert, so I can't comment on specifics. All I can say is that up till now these guys seem to pick and choose when to listen to the guys who REALLY ARE military experts and when not to based on their own set of criteria. Sort of scary if you ask me.
>>I also believe that in that conflict that Chavez might send military up thru Mexico to give us trouble.
He has been buying millions of AK's and ammo along with Migs and mucho military supplies from Russia and China from the oil profits he gets from those who buy Citgo gas.
An interesting thought. How do you figure he is going to deal with Columbia, Panama, Costa Rica, Nicaragua, Honduras, and Guatemala?
>>Our poor sons and daughters are worn out and need serious relief in the Gulf now.
Amen, Brother...Amen.
>>I really don't think Bush and Rumsfeld are that stupid, but then I also believe in Unicorns and the tooth fairy.
What did Forest Gump's mom say? "Stupid is as stupid does."
I sure hope they approach Iran with some careful consideration and don't go kicking that hornet's nest of trouble.
To Anyone who has bothered to read this far;
I am not a conspiracy theorist. I doubt very much that this administration or any other can actually just ring up the heads of any industry and ask them to adjust their prices or business practices to suit their own political agenda. I do believe, though that similar companies in similar circumstances competing in a single imperfect marketplace will probably move in similar directions business wise more often than not.
Since they all seem to be doing about the same thing, the natural reaction of those inclined to be reactionaries is to cry "Conspiracy" and point to the circumstantial evidence as proof.
In fact their "Proof" is the strongest argument for disproof. It is the similar circumstances that beget similar responses.
I also happen to believe that random coincidences are rare. Especially in business and politics. I find it interesting that the price of oil has dropped rapidly and dramatically taking the discussion about possible profiteering by Big Oil out of the forum of the public media right before an important election. That this in turn takes some of the political fodder off the table for the Democratic candidates and so, in a minor way, favors the Republicans in the upcoming elections. And that in turn the continued control of the House and Senate by the Republican party would be a better political environment for Big Oil's big profits than if the Dem's took control. It is all just too neat and pretty.
You may call me a cynic, if you like, but don't tag me as a conspiracy nut.
Peter
Unfortunately that mkes this slightly off topic post rather long. Sorry about that.
Peter
Andre;
>>One deep water drilling rig is a one BILLION dollar investment (gamble). That's why it's a man's game . No Mom and Pop operators.
Gulf production is still not all back, less than some 60 %, I think, at best. Garry would know.
The Gulf of Mexico is full of proven reserves just like the one recently announced. In deep water though, 5000 feet plus.
They're drilling more than 39,000 feet total. I cannot imagine how much that much pipe weighs when you're pulling it out of the hole.
The strain on the peice of drill pipe first out of the hole.
It's a very technical operation, controling pipe that long.
Yes, the deepwater drilling platforms are amazing! And amazingly expensive to build, and amazingly difficult to operate, and amazingly complex to get the necessary permits and leases to place them where they will turn a good profit.
This is the sort of HUGE "Barrier to Entry" that keeps mere mortals from jumping into the oil biz and grabbing a handful of the record profits the current players are pulling down. If all you needed was a Kitty with steer horns on the hood, then every Mother's son would jump in and the glut of supply would drive oil prices to rock bottom. Such are the laws of supply and demand in the open and free market...but alas. It doesn't quite work like that, does it?
It is precisely because of the huge "Barriers to Entry" that oil companies can keep upward pressure on prices without fear that someone is going to suddenly leap into the market and steal some of their market share. And if someone tried to do that, the current players could temporarily sell oil on the cheap until the new kid went under anyway.
The oil market is imperfect. It does not respond instantly and exactly to simple laws of supply and demand. The supply of product is not easily increased to match demand even among the current players. So prices can remain at high levels where good profits are made, at least in the short run. This is what economists call "inefficiencies." Exploiting those inefficiencies for profit is the business of big business and finance.
In light of my comments above why would anyone sell oil for 20% off the going price of only a few short weeks ago? It has already been demonstrated that the market will bear a price somewhere above $72 a barrel without flinching. So who is agreeing to sell oil for $62 and why are they doing that? Yes, some normal market forces are at work putting downward pressure on oil, but not that much, that fast.
Bruce;
>>Oil companies are not setting the retail price except via the NYMEX, where they sell to refiners.
When the traders run the price up, oil companies naturally win.
But the crude price is set by market demand i.e., what will they pay today.
I agree with that statement, but for every transaction there has to be a buyer and a seller. Who would agree to SELL oil contracts at $62.00 a barrel when only a short while ago the price was up to $78, and for quite a while it has been trading above $70? About the only holders of oil futures who could afford to drop the price so low so fast are the oil companies whose cost basis is derived from the costs of production, not current or recent market price as is so with the traders. However, once several of those discount contracts get sold out there, speculators and other traders of oil who are neither actual producers nor end consumers are stuck having to follow suit.
>>Oil companies won't sell under market value for fear class action lawsuits by share holders.
No company, and especially a publicly traded company is in the business of selling their product at prices below market value...unless there is a good reason to do it in the short term.
We are facing an election that might put the GOP out of power and install the Democrats. The Democrats just might consider the profits that the oil companies have been making this year to be excessive and if they did come to power maybe they just might try to do something about that.
The Republicans, on the other hand, think that the very concept of "Excessive Profits" is an oxymoron.
If the oil companies want to keep making the big profits they should do whatever they can to help keep the GOP in the majority of the House and Senate. If oil execs CAN jigger the price of oil lower for a few weeks right before the election, and if that in turn helps the Republican party at the election, not only should they do it, but in a way they are bound by their fiduciary responsibility to the shareholders TO do it.
>>Price gouging is almost always at the local level. Again, I agree, but at the retail level the selling of fuel is very competitive. Almost every American has a choice of several gas stations and heating oil suppliers. Price gouging can't last very long at the local level unless there is some conspiratorial price fixing between local suppliers.
I don't believe those sorts of conspiracies arise all that often, but I DO believe that all local retailers are driven by the same local market pressure. So if the gas station on one side of the street can raise his prices and not loose market share, then his competitor across the street is likely to do the same thing. If you were to ask each of them why they raised their prices they would both cite that the costs of doing business had gone up. (Read; I'm making more money now, and I like it, so that is what it costs to do business!) Meanwhile the reactionaries start crying "Conspiracy! How else can it be that they both raised there prices about the same amount at about the same time?" It doesn't have to be a conspiracy for two competitors to move in the same direction at the same time, it could just be circumstances in the local market.
However, in my little example above, if these guys start making any substantial profit eventually someone will buy a gas station down the street and sell fuel for less causing both the profits and the price to fall for all three of them. Thus endeth the gouging.
>>One thing that puzzles me is why they are hording cash and not putting it back into research, exploration, etc?
This also accounts for the record profits as very little is being put back in the companies.
I can't say what plans they have for the money. I question most why they have not put any cash into the ethanol thing. If ethanol laced gas is the fuel of the future why are they not jumping on board? My guess is that they figure the ethanol thing is only temporary.
>>Are they looking at future investments or are they worried that oil supplies will be cut by war and the cash will keep them afloat till the conflict is over?
Having a reserve of cash isn't a bad idea in any business, and in the oil biz that reserve has got to be huge to be effective. What if they wanted to build a few of those deep water platforms that Andre talks about? Or improve the leaky pipeline in Prudo Bay? Or renovate the Trans Alaska Pipeline to restore it to full capacity? What if after the election the GOP retains power and opens up ANWR to more drilling? The money and cash requirements just to manage projects like that would be enormous. The company with the ready cash to tie up the opportunity is the one that will benefit the most.
>>Which brings us to Iran and the Gulf.
With a 20 mile wide entrance, surrounded by mountains the missles that Iran is reported to have, the "Sunburn" would decimate any tankers and the 5th fleet.
We currently have no defense against these missles including the Aegis.
As scary as that is and as much as Iran deserves an ass wipping, I don't believe the current administration is brain dead enough to start a conflict in Iran, or make Israel start one, with the over worked, under supplied and seriously under manned military force in the region now.
Afganistan is becomming a problem spot again.
I am no military expert, so I can't comment on specifics. All I can say is that up till now these guys seem to pick and choose when to listen to the guys who REALLY ARE military experts and when not to based on their own set of criteria. Sort of scary if you ask me.
>>I also believe that in that conflict that Chavez might send military up thru Mexico to give us trouble.
He has been buying millions of AK's and ammo along with Migs and mucho military supplies from Russia and China from the oil profits he gets from those who buy Citgo gas.
An interesting thought. How do you figure he is going to deal with Columbia, Panama, Costa Rica, Nicaragua, Honduras, and Guatemala?
>>Our poor sons and daughters are worn out and need serious relief in the Gulf now.
Amen, Brother...Amen.
>>I really don't think Bush and Rumsfeld are that stupid, but then I also believe in Unicorns and the tooth fairy.
What did Forest Gump's mom say? "Stupid is as stupid does."
I sure hope they approach Iran with some careful consideration and don't go kicking that hornet's nest of trouble.
To Anyone who has bothered to read this far;
I am not a conspiracy theorist. I doubt very much that this administration or any other can actually just ring up the heads of any industry and ask them to adjust their prices or business practices to suit their own political agenda. I do believe, though that similar companies in similar circumstances competing in a single imperfect marketplace will probably move in similar directions business wise more often than not.
Since they all seem to be doing about the same thing, the natural reaction of those inclined to be reactionaries is to cry "Conspiracy" and point to the circumstantial evidence as proof.
In fact their "Proof" is the strongest argument for disproof. It is the similar circumstances that beget similar responses.
I also happen to believe that random coincidences are rare. Especially in business and politics. I find it interesting that the price of oil has dropped rapidly and dramatically taking the discussion about possible profiteering by Big Oil out of the forum of the public media right before an important election. That this in turn takes some of the political fodder off the table for the Democratic candidates and so, in a minor way, favors the Republicans in the upcoming elections. And that in turn the continued control of the House and Senate by the Republican party would be a better political environment for Big Oil's big profits than if the Dem's took control. It is all just too neat and pretty.
You may call me a cynic, if you like, but don't tag me as a conspiracy nut.
Peter
While we strayed from the original topic, some of what was discussed does and has affected gas prices.
I appreciate your replies. They are intelligent and are not in any way a conspiracy.
I don't think Chavez would have much trouble with any of the countries between them and us.
First most are so corrupt that what little military they have could be bought easy.
Second most of those countries mentioned can't even fight roving bands of right, left wing groups living in the jungle dealing drugs or fighting the current regimes so a large force would be no problem.
Wouldn't take but a dozen troop transports disguised as commercial flights to skip right over all those countries anyway.
2500 well trained para troops fighting guerilla tactics would send the majority of Americans into a panic and easily defeat most all law enforcement departments with no problem while the military is tied up with Iran, Iraq and Afganistan and who knows were else.
Now thats a conspiracy theory!
I appreciate your replies. They are intelligent and are not in any way a conspiracy.
I don't think Chavez would have much trouble with any of the countries between them and us.
First most are so corrupt that what little military they have could be bought easy.
Second most of those countries mentioned can't even fight roving bands of right, left wing groups living in the jungle dealing drugs or fighting the current regimes so a large force would be no problem.
Wouldn't take but a dozen troop transports disguised as commercial flights to skip right over all those countries anyway.
2500 well trained para troops fighting guerilla tactics would send the majority of Americans into a panic and easily defeat most all law enforcement departments with no problem while the military is tied up with Iran, Iraq and Afganistan and who knows were else.
Now thats a conspiracy theory!
Oil prices
If you are in a (for profit) business, why would you be in a hurry to find more oil, or build more refineries, which would only cost you money to lower your profit? If I was the CEO, I would want oil scarce, refineries over capacity, and hold reserves til later.
ScottD
ScottD
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AndreF
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"This is the sort of HUGE "Barrier to Entry" that keeps mere mortals from jumping into the oil biz and grabbing a handful of the record profits the current players are pulling down. If all you needed was a Kitty with steer horns on the hood, then every Mother's son would jump in and the glut of supply would drive oil prices to rock bottom. Such are the laws of supply and demand in the open and free market...but alas. It doesn't quite work like that, does it? "
Peter, "if" my Aunt has balls, she'd be my Uncle. Your "if" above doesn't make sense to me. Every Mother's son would jump in ????? Let's stop there, because I'm not sure I understand that statement and disagree if I think I do.
Is something like "Kriptonite" affecting people that want to get he drilling-for-oil business?
Peter, "if" my Aunt has balls, she'd be my Uncle. Your "if" above doesn't make sense to me. Every Mother's son would jump in ????? Let's stop there, because I'm not sure I understand that statement and disagree if I think I do.
Is something like "Kriptonite" affecting people that want to get he drilling-for-oil business?
I'm not sure but indecision may or may not be my problem.
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - George Orwell
1981 FBC BERG1883M81E
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - George Orwell
1981 FBC BERG1883M81E
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