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| 11/22 |
| 2008/5/22 [Politics/Domestic/California, Science/GlobalWarming] UID:50026 Activity:high |
5/22 We brought together the heads of big oil.
See that big head over there? Yeah, he runs Shell. That one? That
runs ExxonMobil. Mr. Big oil, we're here to talk about the high price
of gasoline. How could it have possibly gotten this high?
Let me tell you what we've done here in congress. We told you that
drilling in ANWR is off limits. We told you that drilling off the
coast of Florida and California is off limits. We told you, Mr. Big
oil, that there wouldn't be any new leases for drilling in the Gulf
while China and Venezuela and even Cuba pursued these leases and have
just signed 100-year leases on the oil in the Gulf of Mexico. We here
in congress have promised, as all three presidential candidates have
also promised, to introduce and pass in the next term a cap and trade
legislation bill that will increase the price of gasoline according to
the EPA by an additional $1.50. Some people say it could be as high as
$5 additional per gallon.
We have said that we're shutting down oil fields in Colorado. We
won't let you develop shale oil fields in several Western states. And
yesterday we passed legislation that would let us sue OPEC with the
full understanding that they'll never retaliate. Yes. We have allowed
environmental attorneys to sue you big oil fiends for future possible
destruction of Alaskan Eskimo village which legal experts believe is
the same strategy used to bring down big tobacco. We're especially
proud of our recent action to protect the polar bear and their habitat
which just happens to be where the future oil deposits happen to be
located. We told you that you're making too much money and that we're
looking at seizing any money that we consider windfall profits. Yes.
We have allowed you to drill in some very small areas in Alaska while
simultaneously creating very generous environmental laws which have
tied up the very production we authorize through years of litigation
after you spent the money on buying and setting up equipment. We told
you through our policies that we would not allow you to build a new
refinery in over 30 years. In fact, this great country, under our
tutelage, has even reduced the number of operational refineries by half
since 1982.
We have even told your potential competitors in the nuclear and
hydroelectric industries that we would send the environmental lawyers
after them if they even dared think about building a new plant or a new
dam. We've refused to fund or allow the deployment of coal-to-oil
technology which has been around since the 1930s. We've told you that
you have to make different blends of gasoline, let states like
California dictate what unique gasoline blends you have to make for
them. We will not reduce our federal gasoline tax. We won't even
consider reducing it for the summer months.
So Mr. Big oil, tell me why exactly are gas prices so high?
\_ This guy is barking up the wrong tree. Prices are high because
demand is high, due to economic growth in India and China. The
US cannot possibly pump enough oil to satisfy worldwide demand
increases, in fact, we cannot even make a dent in it. What
grandstanding politician are you quoting?
\_ This is essentially what the hearings on gas prices are. -op
\_ Yes, we agree. I guess this guy (Glenn Beck?) has a point
on the nuclear and hydro issues.
\_ No, demand is not driving the price. Speculation is.
\_ Wow you're stupid.
\_ Should I bother showing you why you are wrong, or is this
an ideological belief of yours that is not subject to debate?
\_ Go ahead and show me, because I've seen the charts
that show current usage versus supply. Usage now is
about 12% higher than it was a decade ago. Sure,
that's higher. Not enough higher to create the crazy
high gas prices we are seeing now as production hasn't
dropped. Also, the low dollar is making gas seem expensive
to us, but if you adjust for inflation (use real dollars)
gas prices are not even at historical US highs. In
short, people are buying oil because they are worried
about supply interruptions and because they perceive
that the price will always rise. This creates a
self-fulfilling prophecy. The DOE has 3 oil-price
profiles and only one of them (worst case) has oil
prices rising from here over the next decade. If you
look at supply versus consumption versus price on a
graph you will see that consumption is indeed driving
oil prices higher, but most of it is speculation. You
think oil prices have gone from $60 to $130 per barrel
in a year because of an increase in *consumption*?!?! -dim
\_ http://preview.tinyurl.com/6de8js (BP usage data)
This is the most recent good data I can find, which
shows more like a 20% increase in demand. Are you
laboring under the illusion that a 12% increase in
demand (with no increase in supply) should only lead
to a 12% increase in price? The truth is, prices should
obvious that gasoline demand is pretty inelastic
meaning that people don't use it much less just because
the price goes up. Also, your factoid about the dollar
is not really true: gasoline is now at an all time
inflation adjusted high. It might perhaps not be true
if you use some oddball deflator factor. Look at
oil priced in Euros. Speculation does not increase
the consumption of oil, in fact, it will decrease it.
If your theory about speculation is correct, oil
prices should collapse real soon now, right?
\_ The truth is, dimitrious has a linear mind
ding ding ding!
\_ More of he doesn't understand the non-linear
nature of cost with inelastic demand:
http://www.investopedia.com/university/economics/economics4.asp
\_ No, I never said that 12% = 12%. The curve, if you
look at it, has a certain slope/shape that does
not match the reference at present.
\_ What curve are you looking at? I am curious what
your reference for this statement is. -dim
\_ Where do you see a supply-demand curve for
oil consumption? I would be interested in your
source for this.
increase as much as needed to clear the market. It is
\_ You could say this about real estate recently,
too and yet that was driven by speculation more
than by actual need for housing.
\_ Not every increase in price is due to a "bubble."
\_ You could say this about real estate recently,
too and yet that was driven by speculation more
than by actual need for housing.
\_ Bzzt. In 1981 it was $3.29/gallon in today's
dollars.
\_ Not all price increases are "bubbles."
\_ Bzzt. According to the DOE in 1981 it was
$3.29/gallon in today's dollars. I found a chart that
says $3.17 with an all-time high in 1918:
http://tinyurl.com/emy76
Regardless, the point is that prices have been just
as high in the past. This is not ground-breaking.
\_ Speculation increases the *PRICE* not the
*CONSUMPTION* which we already established is
just a bit higher than before. -dim
\_ I think they will eventually decrease a lot from
current level, yes.
\_ I moved your comments out of line. you're welcome -dim
\_ *********FUCK YOU***********
Worry about your own fucking posts, dick.
\_ Stop putting yours in the middle of others.
Makes it really hard to read. Or are you
too stupid to organize your thoughts? -dim
\_ This guy is wrong about oil shale and coal gasification, too:
http://preview.tinyurl.com/6xs54d
He is wrong about most things.
\_ Your story is from before congress changed things. |
| 11/22 |
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| preview.tinyurl.com/6de8js -> www.investis.com/bp_acc_ia/stat_review_05/htdocs/reports/report_6.html Coal prices: from 1988 BP - Statistical Review charting tool Oil consumption by area This stacked area chart shows world oil consumption according to geographic region for the years from 1979 to 2005. Oil consumption is measured in thousand barrels per day. Inland demand plus international aviation and marine bunkers and refinery fuel and loss. |
| tinyurl.com/emy76 -> inflationdata.com/Inflation/images/charts/Oil/Gasoline_inflation_chart.htm Chart Source- www.InflationData.com Read more about this Chart How to save on Gas |
| preview.tinyurl.com/6xs54d -> www.usatoday.com/money/industries/energy/2008-03-22-airforcecoal_N.htm Print | By Matthew Brown, Associated Press MALMSTROM AIR FORCE BASE, Mont. The Air Force wants to build at its Malmstrom base in central Montana the first piece of what it hopes will be a nationwide network of facilities that would convert domestic coal into cleaner-burning synthetic fuel. Air Force officials said the plants could help neutralize a national security threat by tapping into the country's abundant coal reserves. And by offering itself as a partner in the Malmstrom plant, the Air Force hopes to prod Wall Street investors -- nervous over coal's role in climate change -- to sink money into similar plants nationwide. "We're going to be burning fossil fuels for a long time, and there's three times as much coal in the ground as there are oil reserves," said Air Force Assistant Secretary William Anderson. Tempering that vision, analysts say, is the astronomical cost of coal-to-liquids plants. Their high price tag, up to $5 billion apiece, would be hard to justify if oil prices were to drop. In addition, coal has drawn wide opposition on Capitol Hill, where some leading lawmakers reject claims it can be transformed into a clean fuel. Without emissions controls, experts say coal-to-liquids plants could churn out double the greenhouse gases as oil. The Air Force would not finance, construct or operate the coal plant. Instead, it has offered private developers a 700-acre site on the base and a promise that it would be a ready customer as the government's largest fuel consumer. Bids on the project are due in May Construction is expected to take four years once the Air Force selects a developer. Anderson said the Air Force plans to fuel half its North American fleet with a synthetic-fuel blend by 2016. To do so, it would need 400 million gallons of coal-based fuel annually. With the Air Force paving the way, Anderson said the private sector would follow -- from commercial air fleets to long-haul trucking companies. "Because of our size, we can move the market along," he said. "Whether it's (coal-based) diesel that goes into Wal-Mart trucks or jet fuel that goes into our fighters, all that will reduce our dependence on foreign oil, which is the endgame." Coal producers have been unsuccessful in prior efforts to cultivate such a market. Climate change worries prompted Congress last year to turn back an attempt to mandate the use of coal-based synthetic fuels. The Air Force's involvement comes at a critical time for the industry. Coal's biggest customers, electric utilities, have scrapped at least four dozen proposed coal-fired power plants over rising costs and the uncertainties of climate change. That would change quickly if coal-to-liquids plants gained political and economic traction under the Air Force's plan. "There would be a number of plants that would be needed just to support (the Air Force's) needs alone." Only about 15% of the 25,000 barrels of synthetic fuel that would be produced daily at the Malmstrom plant would be suitable for jet fuel. The remainder would be lower-grade diesel for vehicles, trains or trucks and naphtha, a material used in the chemical industry. That means the Air Force would need at least seven plants of the same size to meet its 2016 goal, said Col. A 2006 report from the National Coal Council said a fully mature coal-to-liquids industry serving the commercial sector could produce 26 million barrels of fuel a day by 2025. Such an industry would more than double the nation's coal production, according to the industry-backed Coal-to-Liquids Coalition. The challenge seems to be getting the first couple (of plants) done," said industry analyst Gordon Howald with Calyon Securities. "For a company to commit to this and then five years later oil is back at $60 -- this becomes the worst idea that ever happened." Only two coal-to-liquids plants are now operating worldwide, all in South Africa. A third is scheduled to come online in China this year, said Corey Henry with the Coal-to-Liquids Coalition. The Air Force is adamant it can advance the technology used in those plants to turn dirty coal into a "green fuel," by capturing the carbon dioxide and other, more toxic emissions produced during manufacturing. However, that would not address emissions from burning the fuel, said Robert Williams, a senior research scientist at Princeton University. To do more than simply break even, the industry must reduce the amount of coal used in the synthetic-fuel blend and supplement it with a fuel derived from plants, Williams said. Air force officials said they were investigating that possibility. In a recent letter to Defense Secretary Robert Gates, Rep. Waxman wrote that a promise to control greenhouse gas emissions from synthetic fuels was not enough. Waxman and the committee's ranking Republican, Virginia's Tom Davis, cited a provision in the energy bill approved by Congress last year that bars federal agencies from entering contracts for synthetic fuels unless they emit the same or fewer greenhouse gases as petroleum. Anderson said the Air Force will meet the law's requirements. "They'd like to have (coal-to-liquids) because of security concerns -- a reliable source of power. They're not thinking beyond that one issue," Waxman said. This material may not be published, broadcast, rewritten or redistributed. Include name, phone number, city and state for verification. Conversation guidelines: USA TODAY welcomes your thoughts, stories and information related to this article. Keep the conversation appropriate for interested readers across the map. |
| www.investopedia.com/university/economics/economics4.asp Elasticity varies among products because some products may be more essential to the consumer. Products that are necessities are more insensitive to price changes because consumers would continue buying these products despite price increases. Conversely, a price increase of a good or service that is considered less of a necessity will deter more consumers because the opportunity cost of buying the product will become too high. A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied. Usually these kinds of products are readily available in the market and a person may not necessarily need them in his or her daily life. On the other hand, an inelastic good or service is one in which changes in price witness only modest changes in the quantity demanded or supplied, if any at all. These goods tend to be things that are more of a necessity to the consumer in his or her daily life. demand curves, we can use this simple equation: Elasticity = (% change in quantity / % change in price) If elasticity is greater than or equal to one, the curve is considered to be elastic. If it is less than one, the curve is said to be inelastic. As we mentioned previously, the demand curve is a negative slope, and if there is a large decrease in the quantity demanded with a small increase in price, the demand curve looks flatter, or more horizontal. This flatter curve means that the good or service in question is elastic. If a change in price results in a big change in the amount supplied, the supply curve appears flatter and is considered elastic. Elasticity in this case would be greater than or equal to one. On the other hand, if a big change in price only results in a minor change in the quantity supplied, the supply curve is steeper and its elasticity would be less than one. A Factors Affecting Demand Elasticity There are three main factors that influence a demand's price elasticity: 1 The availability of substitutes - This is probably the most important factor influencing the elasticity of a good or service. In general, the more substitutes, the more elastic the demand will be. This means that coffee is an elastic good because a raise in price will cause a large decrease in demand as consumers start buying more tea instead of coffee. However, if the price of caffeine were to go up as a whole, we would probably see little change in the consumption of coffee or tea because there are few substitutes for caffeine. Most people are not willing to give up their morning cup of caffeine no matter what the price. We would say, therefore, that caffeine is an inelastic product because of its lack of substitutes. Thus, while a product within an industry is elastic due to the availability of substitutes, the industry itself tends to be inelastic. Usually, unique goods such as diamonds are inelastic because they have few if any substitutes. In other words, the consumer is forced to reduce his or her demand of Coke. Thus if there is an increase in price and no change in the amount of income available to spend on the good, there will be an elastic reaction in demand; demand will be sensitive to a change in price if there is no change in income. If the price of cigarettes goes up $2 per pack, a smoker with very few available substitutes will most likely continue buying his or her daily cigarettes. This means that tobacco is inelastic because the change in price will not have a significant influence on the quantity demanded. However, if that smoker finds that he or she cannot afford to spend the extra $2 per day and begins to kick the habit over a period of time, the price elasticity of cigarettes for that consumer becomes elastic in the long run. FREE REPORT: The Five Things That Move the Currency Market Year after year, key players in the Forex market make a killing by picking the right currencies now its your turn. Income Elasticity of Demand In the second factor outlined above, we saw that if price increases while income stays the same, demand will decrease. It follows, then, that if there is an increase in income, demand tends to increase as well. If EDy is greater than one, demand for the item is considered to have a high income elasticity. If however EDy is less than one, demand is considered to be income inelastic. Luxury items usually have higher income elasticity because when people have a higher income, they don't have to forfeit as much to buy these luxury items. Bob has just received a $10,000 increase in his salary, giving him a total of $80,000 per annum. With this higher purchasing power, he decides that he can now afford air travel twice a year instead of his previous once a year. Income elasticity of demand for Bob's air travel is seven - highly elastic. With some goods and services, we may actually notice a decrease in demand as income increases. These are considered goods and services of inferior quality that will be dropped by a consumer who receives a salary increase. An example may be the increase in the demand of DVDs as opposed to video cassettes, which are generally considered to be of lower quality. Products for which the demand decreases as income increases have an income elasticity of less than zero. Products that witness no change in demand despite a change in income usually have an income elasticity of zero - these goods and services are considered necessities. |