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Constructive gadfly
Offshore Drilling Is Bogus
Published on July 31, 2008 By stevendedalus In Politics

 

 

All the hoopla over ANWR, Arctic Ocean rights and offshore drilling is nothing but a ruse to delude the public into believing so-called energy independence will bring down the cost of gasoline and energy in general. Undisclosed is the oil industry’s motive that with the price of oil at an all-time high, profits will continue to grow like never before. There is no intention to ultimately reduce the price because there would be no incentive for the oil titans to explore for oil if they thought it would drop below $100 a barrel other than perhaps more easily accessible gas for domestic use.

Even as a ploy to threaten OPEC to increase supply therefore driving down the price of oil will not work as it did in the ’70s when Nixon and Carter called for energy conservation, brownouts and smaller cars inasmuch as China and India will more than offset US move to tap our continental shelf.

This noisy cry for offshore drilling is but a deterrent for getting back to basics of developing alternative energy.

 

Copyright © 2008 Richard R. Kennedy All rights reserved. Revised: July 31,  2008.

http://stevendedalus.joeuser.com

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Comments (Page 3)
9 Pages1 2 3 4 5  Last
31
stevendedalus
on Aug 01, 2008
Obama's energy solution - inflate your tires.


Every little bit helps--not to mention it's safer.  
32
EL-DUDERINO
on Aug 01, 2008
This is the argument I used above for the good old days, except the volume will no longer be there unless you wish to continue filling the highways with Humvees, trucks and SUVs. Moreover, the oil industry would prefer to pump less at a higher price as the cost of productivity is essential.


You are only thinking about the US in your argument. The volume that I am talking about is worldwide. India and China are in the midst of a major industrial revolution which requires lots of oil. They will pick up any slack that a lack of SUVs, trucks, and humvees leave behind and then some.

Essentially we experienced this summer where people's ceiling on gas and oil prices are: $4/gallon of gas. That is where people really started to take stock of how much they drive and started cutting back. So what the oil companies are going to want to do is keep gas just below $4/gallon, like around $3.50. At that level people will be pissed but willing to pay it. That's business for you, you find what people are willing to pay and you charge as close to that amount as you can get away with.
33
theruler99
on Aug 01, 2008
If they can sell in higher volume at a lower price it can end up being more profitable. Look at Wal-mart, relatively cheap prices but they sell in high volume so they make huge profits. It's the same for oil companies, these are random numbers but if the oil companies are able to sell 70 million barrels of oil a day at $140/barrel vs. 100 million barrels at $100/barrel which is more profitable? The 100 million at $100/barrel.


It’s not the same for oil companies. Wal-mart purchase its products from the manufactory sector which can constantly replenish the product. Therefore, Wal-mart can buy in bulk and sell for less. Crude oil is not manufactured nor replenished. There is just so much oil to go around. In fact, there are approximately 1,200,000,000,000 trillion barrels of oil reserves world wide. Even you could understand that the profits would be greater at $140 a barrel (1.2 trillion x 140 = 168 trillion dollars and 1.2 trillion x 100 = 120 trillion dollars).
34
EL-DUDERINO
on Aug 01, 2008
It’s not the same for oil companies. Wal-mart purchase its products from the manufactory sector which can constantly replenish the product. Therefore, Wal-mart can buy in bulk and sell for less. Crude oil is not manufactured nor replenished. There is just so much oil to go around. In fact, there are approximately 1,200,000,000,000 trillion barrels of oil reserves world wide. Even you could understand that the profits would be greater at $140 a barrel (1.2 trillion x 140 = 168 trillion dollars and 1.2 trillion x 100 = 120 trillion dollars).


Just playing devil's advocate here but what if the American oil companies can only sell oil for the next 30 years, well before the full amount of oil is gone? If you could sell more oil, at a slightly lower price, for the next 30 years and make more money for that 30 years wouldn't you? The bottom line is that any oil exec can see that the times, they are-a chanin', and alternative, renewable energy is the wave of the future. That being said the American oil companies are going to be on a much shorter time frame than OPEC which can easily last for quite some time selling to India and China for many many years to come. America will eventually become energy independent and be off of oil as a major source of energy so the American oil companies are going to want to get as much profit as they can now rather than hoping that oil remains the only major energy source until it runs out.
35
Dr Guy
on Aug 01, 2008
It’s not the same for oil companies.


No, that was argued back in the 70s - the inelasticity of Oil. We found that it is indeed elastic. The only difference in WalMart and the oil companies is where they get their products. It is the same. Crude is replenished (just not as fast as it is consumed), but it is made feasible to extract (where it was not before) due to higher prices and the advance of technology. In the market, that is the same as being replenished. It cannot last forever, but forever is a long time - not 10-20 years.
36
theruler99
on Aug 01, 2008
No, that was argued back in the 70s - the inelasticity of Oil. We found that it is indeed elastic. The only difference in WalMart and the oil companies is where they get their products. It is the same. Crude is replenished (just not as fast as it is consumed), but it is made feasible to extract (where it was not before) due to higher prices and the advance of technology. In the market, that is the same as being replenished. It cannot last forever, but forever is a long time - not 10-20 years.


Well, actually at the world’s present rate of consumption, which is approximately 83 million barrels/day, we could run out in about 40 years. But as I said before, consumption is increasing every year.
37
theruler99
on Aug 01, 2008
Just playing devil's advocate here but what if the American oil companies can only sell oil for the next 30 years, well before the full amount of oil is gone? If you could sell more oil, at a slightly lower price, for the next 30 years and make more money for that 30 years wouldn't you? The bottom line is that any oil exec can see that the times, they are-a chanin', and alternative, renewable energy is the wave of the future. That being said the American oil companies are going to be on a much shorter time frame than OPEC which can easily last for quite some time selling to India and China for many many years to come. America will eventually become energy independent and be off of oil as a major source of energy so the American oil companies are going to want to get as much profit as they can now rather than hoping that oil remains the only major energy source until it runs out.


And this may explain why oil is hovering around $4 dollars a gallon and the oil companies are making record profits--to invest in alternative energy. Right?
38
ParaTed2k
on Aug 01, 2008

Actually, there are huge incentives to drill here in the US.  Yes, the petroleum industry is enjoying record earnings, but since the cost of doing business is also high, they still only made around 10% profit.

All the rediculous conspiracy theories about the petroleum industry are the real ruse here.  Why is it so hard to believe that oil companies make their money by producing petroleum products?

 

39
Dr Guy
on Aug 02, 2008
Well, actually at the world’s present rate of consumption, which is approximately 83 million barrels/day, we could run out in about 40 years. But as I said before, consumption is increasing every year.


Bet you we dont. Bet we dont run out (even with increasing usage) for the next 100. I will put it in a trust fund too, as I know a sucker bet when I see one.
40
Paladin77
on Aug 02, 2008
Well, actually at the world’s present rate of consumption, which is approximately 83 million barrels/day, we could run out in about 40 years. But as I said before, consumption is increasing every year.


That is only if we don’t drill for more oil. if we drill and get more oil then we will have longer to burn it. Oil is created by microbes, just like the microbes that changed the atmosphere from nitrogen sulfur carbon oxygen to nitrogen oxygen, sulfur and carbon. There are billions of tons of oil still under the surface waiting to be tapped. All we have to do is tap it.

And this may explain why oil is hovering around $4 dollars a gallon and the oil companies are making record profits--to invest in alternative energy. Right?


They would make the same amount in profits if the oil was a dollar a barrel by selling volume which they have been doing for decades. The record profits are made by volume sales since the profits are fixed they can’t make more money when the price goes up or less money when the price goes down.

Bet you we dont. Bet we dont run out (even with increasing usage) for the next 100. I will put it in a trust fund too, as I know a sucker bet when I see one.


Dr. did you read that old ESA report on hydrocarbons on Titan? Funny how Titan is the only other world in the solar system with liquid on its surface and it is all methane and ethane. Wonder when we can start drilling there?
41
Dr Guy
on Aug 02, 2008
Wonder when we can start drilling there?


When it becomes economically feasible - in about 75 years.
42
stevendedalus
on Aug 02, 2008
When it becomes economically feasible - in about 75 years.



Bet we dont run out (even with increasing usage) for the next 100.


Doc is the supreme optimist.
43
theruler99
on Aug 03, 2008
They would make the same amount in profits if the oil was a dollar a barrel by selling volume which they have been doing for decades. The record profits are made by volume sales since the profits are fixed they can’t make more money when the price goes up or less money when the price goes down.


Now that really makes a lot of sense. So tell me this--why is gas hovering around $4 dollars/gallon since, according to you, it wouldn’t affect their profit?
44
Dr Guy
on Aug 03, 2008
So tell me this--why is gas hovering around $4 dollars/gallon since, according to you, it wouldn’t affect their profit?


Maybe they are not controlling the price as has been advanced by others? And that those controlling the price are not market savy like Oil companies and would rather milk the golden goose till it's dead instead of thinking long term?
45
theruler99
on Aug 03, 2008
Maybe they are not controlling the price as has been advanced by others? And that those controlling the price are not market savy like Oil companies and would rather milk the golden goose till it's dead instead of thinking long term?


If not the oil companies, who are those controlling the price of oil?
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