Gas Prices going up Fast As Mid-East gets Ready to Blow

General Discussion
41

@cdaquila If you wring out all the short term speculations and spikes, we have one underlying set of facts. Most of these deal with the fact that light, sweet oil that is easy to extract is now becoming a minor part of world prodction. Heavy and expensive to extract oil will be the main source in the future. Texas refineries have already geared up for that type of oil.

However, at $110 per barrel there is lots of it. If, for some reason, oil from the Middle East became completely unavailable to the US, Canada and Mexico would be willing an able to fill that gap very quickly. Most sane Americans are calling for increased pipeline capacity form Canada to the Gulf Coast to ensure a steady and secure supply.

The 3 main drivers preventing oil from nosediving in the future are:

  1. Continuing instability in the Midle East; this has nothing to do with Israel by the way.
  2. Rapidly increasing consumption in China, India and other developing countries.
  3. As mentioned, the gradually increasing production costs of the oil itself.

The flattening out of US gasoline consumption, electric cars, gas pwored vehicles will have no measurable effect on World demand for crude oil.

42

+1 @Docknick - the wells producing the light sweet oil from the shale plays can cost $5 million or more, and wells in the deepwater offshore plays now being drilled can be $700 million, for ONE well! Nothing like the half million dollar wells the used to be considered ‘expensive’…

43

doc, if we find a way to use renewables the world will follow, or perhaps lead. complete dependence on petroleum will be a thing of the past. much of the developing world will leapfrog over petroleum dependence just as they have with whale oil, traditional land lines, and the horse and buggy

44

well, none of this gets my garden weeded and mulched, and I m going to need that corn to fuel my1967 blood pump

45

Not to be too hard on the English but after all, the cause of WWII were the reparations of WWI. Part of the problems in the Middle East are caused by trying to artificially determine the borders after WWII. The Soviet Union was handed to Russia on a platter. The Kurds, Shiittes, and Sunnis are simply never going to live together in peace and Iraq needs to be broken up. The UK protestants vs the catholics, waring tribes in Africa killing each other. In nearly every country there are deep religious or idealogical divisions that they kill for. There is no easy answer to all of the turmoil until the people themselves change their culture but this is no game for amatuers.

Do we have a role in this? Yes of course. We can’t stick our head in the sand while the world deteriorates. But we need to promote world health, social reform, economic reform, infrastructure building.

46

@wesw Renewables will play a role of course, but land grown renewables have their limitaions and will compete with food production to feed an expaniding world population.

Producing fuels from growing algea is promising. Most scientists forecast a practcal limit of 25% or so for renewables. The Uk made an ironclad promise to have a target % of renewables in thier energy supply. It turns out they cannot meet the target, so they are:

  1. Importing wood pellets from Canada and the US in large qualities to fuel those boilers
  2. Even cutting down trees!!! in their own country to get more “renewables” into the sytem.

Many of these noble goals established for political reasons have unintended consequences.

There is a city in Canada, Edmonton, which has a 95% recycling goal for the solid waste. In addition to traditional recycling, which already is maximized and composting on a very large scale, the remainder will be turned into liquid fuel. Waste wood and other combustible components will go through a special thermal destruction process to produce this fuel. The plant will start up next year on schedule.

This city has sucessfully accomplished what they set out to do by using workable technology and passing strict bylaws. And, of course keeping the politices and environmental opportunists out of the process.

47

the remewables you mentioned were not the ones I had in mind. mono cultures of pine trees are not my idea of conservation. and I would rather eat corn. wind sun and tidal/river flows were what I meant. I m not a fan of dams either

48

also geothermal and hydrogen fuel cell are other options

49

Hydrogen is a use of energy (have to make it from something), not a source. I wonder where Toyota’s going with their fuel cell push. It’ll require a whole new infrastructure.

50

@wesw Yes there are many options. As an energy consultant, I get to discuss these all the time. Home heating and electric supply can eventually be totally renewable, with the whole house clad in solar panels with energy storage and supplemented by geothermal heat pumps.

Transportation fuel is much more dificult, but a certain percentage can be renewablew without wrecking the tropical forest and taking farmland away from food prodcution.

51

the world has been developing new infrastructures since we were hunting and gathering,

52

But why create a whole new infrastructure for hydrogen? Why not just use whatever energy was needed to make the hydrogen directly? EV or CNG cars, for example.

53

You’re right, wes, I should have said the president of Iran. I did mean Hussein. I had the title wrong.

54

According to the Energy Information Administration, the USA imported about 40% of our petroleum products in 2012. 20% of the imports, or 8% of the total used came from the Persian Gulf states. But 13% of imports came from Saudi Arabia alone. Now we are down to 7% of imports from the more volatile states in the Middle East. That is less than 3% or all petroleum products used. We will see a spike in prices, but not like the increase in Europe where a lot more Middle Eastern oil comes from.

55

I haven’t seen any discussion here on the concept of the “Tipping Point”. This occurs when we reach a point where we cannot meet the demands for energy by finding new sources or by conserving. As the price of oil goes up, and the price of gas follows, we adjust by either finding ways to use less, such as combining trips, carpooling or in some cases, buying more efficient vehicles.

That only works for fairly small changes and we soon get bored with the carpooling and combined trips. Currently we have much more efficient larger sized vehicles than we had in the past. A disruption of a small part of the oil supply can cause a huge apparent surge in demand. Its not that demand actually increased, it is just that there isn’t quite enough to go around, and those who can afford it will simply not give up a fair share in an free market society.

The last figures I have heard of is they we consume about 7 million barrels of oil a day. If each barrel yields about 20 gallons of gas, thats 140 million gallons of gas a day. Somehow that seems about right. If we suddenly lose 10 million gallons a day in supply, who among all those workers who need to go to work, kids that need to go to school and people who need to go to doctors appointments and grocery shopping are going to give up that 10 million gallons.

A shortfall even that small can mean that a lot of desperate people who need to get to their jobs, to the bank, to the grocery store etc are going to pay what ever it takes. They may cut back a little, but they will still need most of the gas they have traditionally used.

It used to be that the necessities in life were food, clothing and shelter. Now its food, clothing, shelter and gasoline. Without the gas, we can’t get the other three anymore. Can you get by with 7% less gasoline? What if during a gas crisis, you neighbor still insists on driving his big wheel 4wd that gets 6 mpg all over town just for recreational driving, or the other neighbor who decides to go on a cross country with their 4 mpg motorhome, how will you feel about that? Some people will simply not give up their 7%, they want everyone else to give up more.

These gas crisis’s seem to also cause a recession in the economy. We are trying to recover from the last recession, now is not a good time for this to happen.

56

"Back then, we were much more dependent on foreign oil"
And we still are ! What people refuse to acknowledge is that other countries are still very much getting direct shipments from refineries with high Middle East content and that affects the world price of oil. That was always the farce that we fed ourselves; our independency on foreign oil would insulate us from pricing fluctuation. When world oil prices go up, ours will too.

We are not insulated ! As our refineries and supplies from domestic sources start to get taxed by the “threat and sometimes not actuality” of loss of Mid East crude, your gas and oil prices will go up. The stock market fluctuates on perceived and real threats to the economy surrounding it’s participants; the world oil price does too. You are riding an illusion if you think it doesn’t. How much ? We can only hope as even though we have sufficient quantities, our refineries will ship more gasoline over seas then it already does to make a higher profit from crude locally developed then to keep your prices down here at home. DON’T be fooled. It goes to the highest bidder ! It happens instantaneously and is not a as a result of the real cost of the oil you are actually using.

Then, there is the actual element of price gouging locally that always follows perceived threats. The hope is, there will be gasoline available and no lines…just pump prices waaaaay up there ! Come on guys…you know how it works. This is nothing new and little has changed ! It may force the approval of the pipeline as politics of the situation plays itself out. The profits for oil companies remain high or go up with every threat to their supplies.

57

Que,sera,sera,Folks.Its axiomatic that human nature will dictate(in a large part) the course of social evolution and the reality of zeitgeist.One of my wealthy company owner friends has my respect,because He is honest"Its all about the money" and sadly(small cases of altruism aside) thats what drives this world.Wake up you will see there is less per person in the wealthy countries as the masses invade and try to assert thier rights as citizens of Terra(An accident of birth doesnt hold as much weight as it used to){where are my tweels?} lets face it, this society and current social structure will not let us be as self reliant as the past,We all float together or sink individually and our highway to hell,fueled by the internal combustion engine,is helping us get there.
Tipping point? its already been past-Kevin

P.S- Ever wonder why they are called infernal machines?

58

I’m curious as to what type of price increases the other forum members have seen so far.
Yesterday, I filled up at Costco, and the price ($3.26 per gallon) represented only a 3 cent increase from the previous week. This is within the “normal” price fluctuations that I see on a regular basis.

That is not to say that we won’t see greater price increases as the ME grows more violent, but…so far…I haven’t seen any impact on gas prices.

59

I filled up on Wednesday, and gas was about 20 cents less than the previous week.

60

I think I paid somewhere around $3.53 a couple days ago which is about what I think I’ve been paying all along. No big spikes here. Gotta long way to go to get back to $5 when I was driving 100 miles or more a day.

The beauty of when the masses invade to take over all of the wealth that has been denied them, is that they will find it takes effort and talent to produce that wealth. Just taking it won’t mean much unless they can also contribute to producing something in return. That’s why economics works with money as a means of exchange. That’s why ICE works as a means to get us comfortably and cheaply from one place to another.