$10 a gallon?

[thewise1]

Originally Posted by Roonie

I could see it hitting $10 dollars a gallon. The main reason I believe this is the world oil production has been stuck at about 85 million barrels/day for the last 2-3 years, while demand has increased beyond that level and will continue to climb. The gap has been filled by depleting above ground inventories, and in some cases by condensates from natural gas.

Though it seems tempting to point to Alaska etc, it pales in comparison to decline rates we are facing from old mature reserves; US domestic production rates peaked several years ago...it gets even worse when you look abroad; bye bye North Sea. Recently, it appears that russian oil production has also peaked. Peak oil is not so much about whether or not we have 50, 75 or 100 years of oil in the ground, but rather it is about the rate at which we consume oil, versus the rate at which we can get it out of the ground. The Energy Information Agency (the government department responsible for this kind of stuff...so this is what Bush is telling you, not someone with a communist agenda) has suggested that even if Alaska was running at peak production in 2025, the effect would be to reduce US reliance on foreign oil from 70% to 66% - hardly any difference at all. Never mind any environmental impact nor the difficulties in building a pipeline that long or pumping oil through that pipeline at freezing temperatures.

Recently, there was a mother of a discovery announced off of the coast of Brazil. The biggest single discovery in decades. The rub is that equates to about a 1 year supply of oil at current demand levels.

The most difficult culprit, in terms of finding more is the declining energy return on exploration. In the 1930's it took the equivalent amount of energy of one barrel of oil to find the equivalent of 30 barrels of oil. That has fallen consistently over the years and now, is more like a 2 to 1 payback. FWIW, the Canadian oil sands are 1.1 to 1 return on energy.

In the end, oil and gas are going to go significantly higher, and there is absolutely nothing policy makers can do about it.

A good piece about peak oil is here......


edit; it is not letting me show the link to the article about peak oil I guess beacuse it is a pdf.

I'm looking forward to 6speed's response to this one -

[WickedLou9]

Originally Posted by thewise1

We justify it because our business is largely relationship based, so I don't think it'll ever change for us. They will say take the bus, manage it yourself, be a professional, etc, just like they do now. But we'll see, that might eventually change.

We have a sort of contingency network setup already. Most people were given "white boxes" which are just dumb terminals that allow us to remote desktop to our PC's at work. So it's just like being here. We also have a voice over IP system so if there is say, a weather emergency like snow, our entire customer service department can operate remotely (phones and PC) as long as they have an internet connection. It's pretty neat, but it seems a bit of a waste to spend all this money and time on setting up such a system and then discourage people from using it.

[Donkey®]

I haven't been to work physically in two weeks. Saving quite a bit on gas.

[northhunter]

If we as Americans do learn to use less gas what will replace the lost revenue in state and federal fuel taxes? I can't see them getting by with less like we are supposed to do.

[A_C_E]

Originally Posted by northhunter

If we as Americans do learn to use less gas what will replace the lost revenue in state and federal fuel taxes? I can't see them getting by with less like we are supposed to do.

That's the least of our worries at this point.

[illavbill]

It used to cost me around $12 to fill up my car. Yesterday it cost me JUST under $12 to fill my motorcycle. That sucker is getting A LOT of use this summer for sure. I couldn't imagine having to pay $30 to fill my freaking bike.

[kinggovernor]

Originally Posted by A_C_E

That's the least of our worries at this point.

not if you are a politican.

[northhunter]

I think we are headed into uncharted territory here.
Replacing lost tax revenue I agree should be the least of our worries but what of everything else? Here in my home state of Michigan it will be like a domino effect. Everything that is moved by a vehicle using fuel ( and that's everything) will cost more, in some cases a lot more. Police cars, ambulances, snow plows, everything will cost more to drive, straining already short municipal budgets. Transporting students, busing will cost more than some school districts can afford. The list is endless, the added expenses are incredible. All klinds of taxes will need to be raised somehow to make up the difference.
Think the housing market situation was bad?
Some states are in pretty good shape financially but those will feel a pinch soon too.
Think the housing foreclosure mess was bad, add not being able to fill up to go to work somewhere that has no public transit.
And we have nothing in the wings that's ready to replace fossil fuel on the scale needed.

[thewise1]

Originally Posted by northhunter

I think we are headed into uncharted territory here.
Replacing lost tax revenue I agree should be the least of our worries but what of everything else? Here in my home state of Michigan it will be like a domino effect. Everything that is moved by a vehicle using fuel ( and that's everything) will cost more, in some cases a lot more. Police cars, ambulances, snow plows, everything will cost more to drive, straining already short municipal budgets. Transporting students, busing will cost more than some school districts can afford. The list is endless, the added expenses are incredible. All klinds of taxes will need to be raised somehow to make up the difference.
Think the housing market situation was bad?
Some states are in pretty good shape financially but those will feel a pinch soon too.
Think the housing foreclosure mess was bad, add not being able to fill up to go to work somewhere that has no public transit.
And we have nothing in the wings that's ready to replace fossil fuel on the scale needed.

The one beautiful thing about all this is that it might force government to minimize

[Thorgrim]

Originally Posted by thewise1

The one beautiful thing about all this is that it might force government to minimize

what would we minimize? have a list of things a majority of Americans want to chuck out the door?

[thewise1]

Originally Posted by Thorgrim

what would we minimize? have a list of things a majority of Americans want to chuck out the door?

You should read a little about people's experiences in the Great Depression and how what people 'wanted' really didn't matter when there simply wasn't money or work available to pay for what they 'wanted'.

Not that we're going to be in a Great Depression - though I think there are enough problems to have concern.

[Thorgrim]

Originally Posted by thewise1

You should read a little about people's experiences in the Great Depression and how what people 'wanted' really didn't matter when there simply wasn't money or work available to pay for what they 'wanted'.

Not that we're going to be in a Great Depression - though I think there are enough problems to have concern.

i really don't get what you're saying...we ran up a debt during the great depression...we'd do the same thing today...the last depression created an America overwhelmingly Democratic and liberal, with a significant plurality of people who still label a liberal as the best president of the past 140 years, and many historians/citizens still rate him #1 all time

So...i'm not really following where the country runs to small government conservatism

[thewise1]

Originally Posted by Thorgrim

i really don't get what you're saying...we ran up a debt during the great depression...we'd do the same thing today...the last depression created an America overwhelmingly Democratic and liberal, with a significant plurality of people who still label a liberal as the best president of the past 140 years, and many historians/citizens still rate him #1 all time

So...i'm not really following where the country runs to small government conservatism

I'm of the opinion that FDR prolonged and dragged out the last depression through poor policy.

That said, it's a different world today; A great depression wouldn't take on the exact same form because more controls are in place in our financial system and one of the key problems that we faced before - lack of currency circulating in the system - is easily remedied now by way of credit.

The problem is other aspects of the system mean that the exact same responses used during the Great Depression wouldn't necessarily be possible or effective at all this time - assuming we were to fall into one, of course.

I'm speaking hypothetically in that regard, for those of you ready to fight me

[TankRizzo]

Originally Posted by A_C_E

You know, a number of people have said that alt. energy is going to be the next bubble, following in the footsteps of dotcom and housing.

It makes sense if the technology is really there: high demand, governmental support, bad economy. The three amigos of a bubble.

This is one area where I'd love to see the government step in and help nudge the industry along. Just imagine the impact it would have on energy consumption if every house in the suburbs had a solar panel on it. I'm sure this is a technology people would love to have, it's just not really economically viable right now. It takes years to recoup the costs of them, but if geothermal, wind and solar power were cheaper, a LOT of people would invest in them.

[A_C_E]

Originally Posted by TankRizzo

This is one area where I'd love to see the government step in and help nudge the industry along. Just imagine the impact it would have on energy consumption if every house in the suburbs had a solar panel on it. I'm sure this is a technology people would love to have, it's just not really economically viable right now. It takes years to recoup the costs of them, but if geothermal, wind and solar power were cheaper, a LOT of people would invest in them.

And there are a lot of people who think the same way you do.

Start slowly investing in some alt. energy companies--believe me, it's going to pay off.

[kombayn]

Originally Posted by northhunter

If we as Americans do learn to use less gas what will replace the lost revenue in state and federal fuel taxes? I can't see them getting by with less like we are supposed to do.

They would just pass a bill to tax us more in other places to make up the cost. It's what they've been doing for the past 20 years since I've been alive. (Reganomics Rules! )

[motivez]

Originally Posted by TankRizzo

This is one area where I'd love to see the government step in and help nudge the industry along. Just imagine the impact it would have on energy consumption if every house in the suburbs had a solar panel on it. I'm sure this is a technology people would love to have, it's just not really economically viable right now. It takes years to recoup the costs of them, but if geothermal, wind and solar power were cheaper, a LOT of people would invest in them.

What makes this area different than other areas you think government should stay out of?

[motivez]

If it hit $10 a gallon I'd start taking the bus to class, wouldn't be able to afford $140+ every 1.5 weeks to fill up my tank.. there's options available, but it'd be damn hard..

The falling dollar is one of the main reasons for this, not sure there's an easy fix, and I don't know there's any indicators that show the dollar ready to start moving up in value any time in the near future..

[TankRizzo]

Originally Posted by motivez

What makes this area different than other areas you think government should stay out of?

Because this is something that will actually benefit everyone involved. Granted, I have no faith in the govt. that it won't be used to line the pockets of their friends and associates, but it's going to happen regardless.

[motivez]

Originally Posted by TankRizzo

Because this is something that will actually benefit everyone involved. Granted, I have no faith in the govt. that it won't be used to line the pockets of their friends and associates, but it's going to happen regardless.

I don't think you can have it both ways, who gets to decide whether it will actually benefit everyone?

Don't get me wrong, I agree with you that the government should be investing in these technologies to push the industry ahead faster than the market would do on its own..

There's other examples of everyone benefiting from similar investment, IE: NASA..

I think it's undeniable that we've benefited (especially in medical areas) from our mission to the moon, subsidized by the taxpayers, but I'm sure some small government people were against it because it was a 'waste' of money at the time.