In general, I’m with you, but keep in mind costs to replace produced reserves are increasing. This is largely due to a dramatic increase in rig and equipment costs, so likely reflects more of a shortage of rigs than a shortage of oil.
Sure, you could see short run price hikes due to this kind of “perfect storm” but in the long run, none of these factors have anything to do with ultimately recoverable reserves or crustal abundance.
I was just going to say the same thing. Some people are talking about the oil sands as if they are some far-off replacement source. But Alberta is ramping up production as fast as humanly possible today. My brother is living in a trailer working in Alberta because there is no housing. Real estate in Edmonton has tripled in price in the last five years.
There is now serious talk about putting a nuclear plant up north to provide the steam for extracting the oil, which will increase yields dramatically. As Gorsnak said, Alberta is currently on pace to be producing 3 million bbl/day in 8 years. And the only thing stopping us from producing more than that is a shortage of labor and infrastructure. But you can bet that if oil is $100/bbl and the world is crying for it, we’ll figure out a way to increase production a lot more. And Alberta’s sands are so vast that the government estimates we can continue to produce 3 million bbl/day for 400 years. And that’s assuming a recovery efficiency of only 20%, which was the estimated maximim 10 years ago. To give you an idea of how the market solves these problems, since then new techniques have been developed which have driven recovery rates up to 60%. So we may have 3 times as much usable oil as our current estimates predict.
So… at least 3 million bbl/day for 400 years from just Alberta alone. Now add in oil sands located all over the world - Venezuela’s may be bigger than ours. It’s not hard to see how we can hit 20 million bbl/day, is it?
If you can use nuclear power as an energy source to extract the oil, then the oil just becomes a battery - a way to store that energy for use in cars. Even if it takes twice as much energy to get it out, the oil is still useful. Essentially, you’re then driving a nuclear powered car.
Back in the day they didn’t have the technology they have now. The Japanese have developed passive devices for extracting uranium from seawater - basically a huge filter that is lowered into the ocean and which traps heavy metal. No energy required. They can now extract uranium from seawater for about 5-10 times the cost of current mined uranium. But since the cost of uranium is only a tiny fraction of the cost of nuclear power as a whole, you can increase the cost by a factor of 10 and only drive up the end-user cost of power by a few percentage points.
This is true. For example, carbon nanotubes have amazing properties including highly efficient conversion of sunlight into power, extremely efficient transmission of that power, and the ability to store very large charge densities. We may see car bodies made out of carbon nanotubes, where the entire car is a solar cell and its own storage device. There are some amazing technologies just around the corner. We’re not going to be burning oil for power 100 years from now.
Actually, break-even for the tar sands projects underway are about $35/bbl. It’s the more difficult to get at stuff that’s higher, but we’ve got plenty of supply until we get to that point, and by then maybe we’ll have better extraction technologies.
More likely, people will look back on this era and say, "Can you believe that they burned oil for power? Talk about the dark ages!
You’re kidding, right?
It does kinda surprise me that if the experts know Simmons is full of it, that nobody’s refuted him more publicly.
Of course, if they mischaracterize his argument and his background as completely as you, then the people you talk to are probably not experts.
Well, yeah, it is SOP for an old field. And as a field gets older, more and more secondary recovery techniques are brought to bear to keep production up. And as I said, according to Simmons, the Saudis are maxing them all out in Ghawar.
It’s not like the truth of his argument will stand or fall on that claim.
Actually, more than that. 10-12 years is the average age of a car, but there are plenty of cars on the streets older than that. And no one is saying that we’re going to convert to all-hybrid or all-electric any time soon. But the point is that if oil did suddenly spike and suddenly gas cost $10/gallon, the turnover rate of the auto fleet would be MUCH higher, with personal SUVs and ‘muscle cars’ being the first to go.
As for where the electric cars are, it’s looking like the next generation will be ‘plug-in hybrids’. The problem with electric has been battery size and cost. It’s simply not economical to build cars that can travel hundreds of miles on battery alone. Not with today’s battery technology.
But you don’t need to do that. Something like 80% of all commutes are less than 20 miles. So instead of trying to build a car that can go hundreds on a battery, you make one that can go 40. Then 80% of car trips can be made on battery alone. For longer trips, you put a small gas engine in the car, which is not used to drive the wheels at all but is simply a gas generator for recharging the battery. We can build those vehicles today en masse.
For example, here is the Chevrolet Volt. Built using off-the-shelf hardware (lithium-ion batteries, etc), the Volt will do exactly what I said - let you commute every day from the burbs and back without burning a drop of gasoline. Analysis of typical driving patterns, including longer trips, indicates that the average Chevy Volt would go about 500 miles on a gallon of gas.
The main thing keeping this car out of production right now is the cost of the batteries. Not that they’re outrageous, but they price the vehicle out of the target range it would have to be in to sell to the mass market under today’s oil prices (I think the battery costs over $10,000, and needs to be closer to $2,000). But price gas at $10/gallon, and suddenly that $10,000 battery might not look so bad. So we CAN do it. It’s a question of the market providing the right incentives.
And the incentives are now there. Both GM and Toyota, the two largest car manufactuers on the planet, plan to have plug-in hybrids on the market in 2 years.
After all these years of debating on the SDMB, haven’t you got a better understanding of how markets work by now? Markets don’t wait for dislocations before responding. They respond smoothly and linearly to available information.
Let me give you an example. Lets say the futures price for 10 year oil contracts suddenly shot up to 500/bbl. Do you think people would blithely drive their SUVs until the crunch hit? Do you think oil today would stay at a low price until suddenly it skyrocketed? The answer is no. Myriad forces would come into play overnight that would start -pushing people in the right direction. For example, an SUV would have its resale value depreciated compared to more fuel efficient vehicles. That would drive up leasing costs today, and push people into more economical vehicles.
Sudden market dislocations are usually the work of governments. Laws DO happen overnight, and the market is sometimes forced to respond in drastic ways. Markets can also be dislocated when sudden changes happen, such as a hurricane or other natural disaster. But when information is available, the market reacts to it.
As we learn more about where the price of oil is headed, the market will adapt, immediately and in the correct proportion. It’s not ‘magic’ - it’s the aggregate knowledge of all the experts in the world. A truly open market is self-correcting, because if the price of something (like a 10 year futures contract for oil) is way out of whack with reality, the people who know better will pounce on the opportunity and drive the price up. And that’s exactly what they do, but there are so many of them that the prices move incrementally as decisions on the margin change with new information.
You can bet that the price of oil futures incorporates the best knowledge of the heads of the major oil companies, petroleum engineers, wildcatters, scientists and engineers working on oil extraction and sensing equipment, etc. All that information is collected and represented in the price of oil.
I’ll stack that up any day against a tendentious author with an agenda and a book to sell.
In any event, plug-in hybrids will begin trickling into the market in 2009. Will they be the ultimate winner? Who knows? The beautiful thing about the market is that many alternatives are tried. Some fail, some succeed. Maybe the stress on the grid of all those plug-ins will cause electricity to increase and make them expensive to drive. But then, the increased demand for and profit from electrical generation may kickstart the process of transitioning to more nuclear power. It’s hard to predict. Maybe a better alternative will come along in the meantime and relegate the plug-in hybrid to the auto wreckers of history. But that’s okay, because that solution by definition will be better.
The problems come in when government gets involved. If some smart boy in congress decides that plug-in hybrids are the future and manages to rally enough support to pass a law mandating them, it could choke off innovation and research into alternatives, or cause a mass migration to plug-in hybrids that breaks the eletrical grid or causes a shortage of batteries or something. Or the idiots will respond to screams about the high cost of oil by trying to cap it or subsidize it, and therefore stunt investment in alternatives while simultaneously causing shortages. Because governments are stupid, and they’re a blunt weapon when a surgical scalpel is required.
No. What part of my post is so fanciful to you that you assume I must be joking?
How, specifically, have I mischaracterized his background and argument?
Not necessity I suppose, but I would certainly trust an astronomer a lot less if a major element of his body of work claimed a massive asteroid would hit earth in 2010, and the vast majority of his colleagues disagreed. And a lot of his pocket money was coming from a popular press book that this claim drove sales figures for.
T_SQUARE, thank you for your reply.Your point is well taken, However, this only affects prices, not the number of years of reserves. And in general, the increase in prices will reduce consumption, thus increasing the number of years of reserves remaining.
w.
Quite right, that’s not too bad - but, as you say, the cost of simply getting uranium is just a fraction of the cost. The biggest cost is refining uranium (or any other radioactive material) to the degree that it becomes acceptable for use in generating heat. This is actually a very energy-intensive process. You don’t just melt some uranium down like you would with some other metal. I’m not saying you can’t use it…it’s just not the infinite energy source we hope for.
Sometimes technology can find a way to lower the energy cost of certain things. But sometimes it cannot. Eventually even the best technology will hit a physical wall where more energy cannot be extracted than the energy of extraction. But yeah…it’s a ways off, probably after we’ve developed solar and wind…and biofuels that aren’t the hideously stupid corn-based ethanol.
Renob, your responses are a little pavlovian. Is anyone in this thread actually saying that corporations are evil and we need a big government program?
Perhaps they are. I think I’m still suffering shell-shock from the old “Gas at $2.00 a Gallon by Election Day” thread where gonzomax and his ilk talked about evil corporations and the like.
There was some suggestion earlier in the thread, however, about the government doing things such as raising CAFE standards and the like to help. I’ll grant that the discussion has veered away from that, though.
The part that I quoted.
Glad you asked.
Background, T-SQUARE version:
The fact that he’s been an investment banker to the oil industry for the past 1/3 of a century, and that the company he founded is one of the largest in the field, might be at least of tangential relevance.
No, he’s not a petroleum engineer. But he probably knows the industry about as well as an educated layman can.
Argument, T-SQUARE version:
Kevin Drum summarizes Matt Simmons’ argument here:
Doesn’t really condense to what you say it does, does it?
It’s fine for you to disagree with Matt Simmons. I don’t know for sure that he’s right, and I’d love to see the best possible counterargument to the case he makes. But your setting up bullshit strawmen casts your credibility, not Simmons’ into doubt.
Since I’ve read a fair amount by and about Simmons, and I only found out about the bet a few days ago, I’d hardly consider the bet to be “a major element of his body of work.” YMMV, of course, and apparently it does.
A few decades as a successful investment banker with his own firm, and a middlin’ seller of a book has made a significant difference in his pocket money? Oh, I very much doubt that.
Sam, please save the funnies for MPSIMS, my friend. Markets are often caught by surprise by dislocations. I’ve lived through some instances of that, including twice during the 1970s.
Sometimes there is sketchy information, or practically nonexistent information. Sometimes people choose to believe that tomorrow will always look like yesterday, and the markets cater to them up until the moment that they can’t any longer ignore the fact that today’s already different, and yesterday’s probably not coming back.
Markets are composed of people, and both individuals and herds can act quite irrationally. I’m still seeing plenty of shiny new SUVs out on the road. Meanwhile, yes, demand for Priuses exceeds supply, but that’s because factories need to be retooled to build more of them, and that takes time, and Toyota doesn’t know how strong the demand will be.
This is where CAFE standards would kick in: if Congress said “you need to produce a fleet average of X mpg by year 20YZ,” then Toyota would sit down and figure out how many Priuses and other high-mileage cars they’d need to sell to balance out expected sales of their SUVs and other lower-mileage cars, and they’d retool accordingly, before the market made them do it. This would have the effect of smoothing out the disruption, because government would be doing its job of thinking ahead, which is something a crowd does a terrible job of.
Ooooh - two years! And in what quantity?
The answer, of course, is, enough to satisfy projected market demand, but how many units will that be, and how much of a dent will it make in America’s oil consumption?
Having had no idea until earlier in this thread that there were oil contracts of that term, I doubt that most other people are aware of them either.
And that’s what they’d react to, of course. Why would anyone sell oil at $66/barrel today, if they can get $500 for it in 10 years? Today’s price of oil would jump to the present value of $500 in 10 years, which at 5%, would be somewhere around $300.
Well, yeah. Suddenly people will be stuck with big, expensive cars they can’t afford and can’t sell for a decent price. They’ll be stuck with houses too far out in the 'burbs that they can’t sell either. People will go fucking bankrupt.
Since what we’re talking about here are increases in CAFE standards, care to explain how this bit of theory applies to the specifics of this discussion?
Only some markets are expert-driven. The main adaptation to possible futures for the oil market is in the manufacture of personal automobiles, which are owned by the general, nonexpert population.
Where can I buy Prius futures? And what good would that do - it would only make them more expensive for the people who needed to buy them!
Markets can only adapt immediately if goods can be produced instantly. How long does it take an auto factory to switch from SUVs to hybrid sedans?
As Simmons points out, information with respect to oil reserves is exactly the weak link. He’s read all there is to read on the state of the Saudi oil fields, and while he thinks he’s got a pretty good case, he acknowledges that he’s looking through a damned small keyhole, and he could be wrong.
It’s quite possible - I’d say even likely - that at some point, information about the future of the oil supply will crystallize in a very short period of time. If we discover that oil has already peaked - which everyone pretty much acknowledges we won’t know for sure it’s happened until a year or two after the fact - then yeah, ten-year futures will go from $75 to $500 in a month, with the attendant dislocations in the here and now.
But that’s OK, because the market will adapt instantaneously, no matter how much hardship it causes to actual people in the process.
And this strawman of yours relates to CAFE standards how?
Oogabooga! Government intervention! Run for the hills!!
One would think that nobody had ever tried CAFE standards before, and their effects were unknown.
And I will be especially impressed when “the aggregate knowledge of all the experts in the world” immediately relocates the nation’s housing stock to reflect people’s increased desires to live closer to jobs, central cities, and good public transportation in response to spikes in gas prices. That will be magic! 
Meh. Meet the VW Lupo 3L, which could do 78MPG (one journalist managed 84MPG) in 1999, using nothing more sophisticated than a diesel engine and a semi-smart transmission. Assuming no progress at all in reducing the $3000 cost premium for these components, and figuring that the price of a base VW Fox (the replacement for the Lupo) is €8,990/$12000 after shipping it from Brazil to France, $15,000 gets you a car with better mileage than any hybrid you can buy today, using decade-old technology which can be made in any major car plant in the world with very little difficulty.
Sure, it’s a shitty uncomfortable little car, but if gas looks like its going to hit $12-$13 per gallon (which your oil price implies) and you’re worried the economy collapsing, then you’re going to have to make some sacrifices. If fuel efficiency is the be-all and end-all (and crash and pollution reqs are accordingly slightly relaxed) then I’m sure you could make a functional little 80MPG diesel commmuter car for well under $10,000 in Mexico, Brazil, or wherever, by the million, today. The idea that its SUVs or super-fancy hybrids and nothing in between is just silly.
And I didn’t say otherwise. I said that markets can be hit by dislocations in the case of government action, or sudden disasters, or other events for which the market lacked information. I guess I could add things like sudden discoveries of major oil fields, or technological breakthroughs that radically change the market. For example, the ability to make gem-quality diamonds cheaply.
But in the case of oil, there isn’t sketchy information. Okay, so maybe the Saudi government is hiding something (but if they are, they’re keeping the secret so well they don’t have any rich cousins pricing up oil futures), but Saudi Arabia is not the sole source of oil on the planet. Around the world, we have extremely good information on the state of oil reserves. There’s no mystery.
And if there was a risk that Saudi Arabia was lying, the market would factor that into the price of oil as well. Risk has a price.
The markets are generally rational. Individuals may be irrational, but markets are not. If they were, there would be smart people making a hell of a lot more than 10-15% per year speculating in them. It’s extremely hard to find market prices so out of whack that anyone with a brain can simply buy in and double their money in a couple of years.
And you’re supporting your claim that people are irrational by pointing at SUVs. That’s begging the question. Why are SUVs irrational? People respond to incentives, and the cost of gas is only one factor in the equation.
By the way, demand for Priuses has tapered off. I hear there are now dealer incentives on them in some places.
Sorry, but they’re only going to make as many Priuses as there is demand for. It does no good to raise your CAFE numbers by building cars that no one will buy. Ultimately, the market decides. CAFE standards are responsible for the SUV - when people couldn’t buy their big V-8 station wagons any more because CAFE restrictions prevented it, they bought SUVs instead, which were classed as light trucks and therefore exempt.
CAFE standards are a lousy way to decrease fuel consumption. For one thing, if you make the cost of driving lower, people will drive more. If you’re worried about people moving out to the 'burbs, forcing them into cars that don’t cost as much to commute with is only going to make the problem worse.
A much better solution is to simply put a tax on gasoline, and then let the people decide how much they want to spend and how much they value their SUVs.
Absolute nonsense. Governments are terrible at thinking ahead. Do you really think a few hundred elected officials are really qualified to make the best decisions regarding the technological tradeoffs of auto engineering? Please. Do you think the government is investing big in bio-fuels and forcing CAFE standards because that’s the smart thing to do? No. They’re investing in bio-fuels because a few powerful senators come from states that have big agri-businesses. It’s pork in the guise of environmentalism. Do you think they favor CAFE standards because that’s the best way to make our transportation infrastructure more energy efficient? No. They favor CAFE standards because the people want them to ‘do something’, but they don’t want their taxes raised. So as usual, the government figures out a way to push the problem off onto someone else.
I guess we’ll find out. If oil really goes to the prices Simmons says it will, then I’d guess demand will be very, very high. If it doesn’t, it won’t.
The people who matter know all about them. The investment banks, the retirement fund managers, mutual funds… Those are the people who move markets, and they spend billions on expert analysis and research to make sure their money is invested where it can do the most good. Most of the big funds allocate a portion of the portfolio to risky investments. If there was real evidence that oil was horribly underpriced, they’d act and bid the price up.
That’s not the way it works. If the price of oil jumped to $300 tomorrow, demand would drop. Oil inventories would increase… And the futures price would come down. Also, holding that oil takes resources, and you have to factor in the risk that the demand for oil will change. If the futures price for oil went to 500bbl tomorrow, oil would definitely go up - until a new equilibrium was reached. What that new equilibrium price would be depends on many things, including the price elasticity of oil demand, the unknowns around exploration, etc.
Anyway, if it were that simple, and the claim that the Saudis know that they don’t have as much oil as they claim to have is true… then why aren’t the Saudis cutting production and hoarding their remaining oil until the price skyrockets?
There are lots of ways people could cut back, short of losing everything they own and going bankrupt. For instance, car-pooling would become a much bigger deal. Family outings in the car would be decreased. People would turn down the heat in their homes. Employers would find it advantageous to allow more people to telecommute, or to locate branch offices in the burbs so their employees don’t have to travel so far. Home deliveries and online shopping would gain a competitive advantage over driving to shop. Energy-intensive hobbies and sports would diminish in popularity. Those are all short-term changes that could be applied tomorrow to cut energy costs, if people had a real incentive to do so.
And I think you’ll find the economy is a lot more robust than you’re giving it credit for. Here in Edmonton, the average housing price has jumped from $150,000 to $440,000 in five years. Yet the economy is still humming right along. Booming, in fact. People adapt.
Sure. I said governments cause dislocations. The CAFE standard is a perfect example. When CAFE standards were first imposed, the auto industry wasn’t ready for them. The result was a decade of crappy cars. Also, the CAFE standards caused the SUV boom - a major dislocation in the distribution of cars vs trucks.
Yeah, like the major commodities markets. Like oil. I’ll grant you a bit of inexpert pricing in the herbal medicine and cosmetics markets. Not so much for pork bellies and Sweet Light Crude.
Now you’re talking nonsense. I have no idea what point you’re trying to make. If you’re saying that the general population is too stupid to factor the price of gas into their purchasing decisions, well, you’re wrong. Witness the collapse of the large SUV market when oil spiked in price, and the rapid rise of the smaller, more efficient cars and hybrids. People respond to incentives. Always have, always will. It’s one of Mankiw’s tautological rules of the market.
How long does it take you to decide not to drive to Grandma’s? Or to watch your lead foot in traffic? Or to decide that maybe you’ll combine those two trips to the store into one? Or to negotiate with your boss to let you work at home one day a week to cut your gas consumption by 20%?
In the medium term, how long will it take companies to realize that if their employees are spending $500/mo for gas to commute to work, they have a powerful new negotiating tool against their competitors? Or for job applicants to start paying more attention to how close the job is to home or to mass transit when making a decision where to work?
If energy intensive foods and products are suddenly doubled in price, how long will it take people to decide to buy the cheaper alternatives?
There are millions of ways the economy can adapt in the short, medium, and long terms.
And no one with any money to invest seems to agree with him. He’s a lone voice in the wilderness. But if you’re so sure he’s right, why aren’t *you investing in oil futures? They’re your road to riches, man.
What’s your evidence that it hasn’t already? Aside from Simmon’s book, that is.
I don’t follow you (and your links) at all. The Renault Logan is the replacement for the VW Lupo? And it’s the same thing as a VW Fox? What mileage does the Logan get - the link didn’t say. And the Lupo, which got the great mileage, cost the equivalent of $17K in 1999. Eight years later, with inflation and Euro appreciation, that’s likely to be more like $25K.
Your links seem to describe two very different cars from two very different engineering lineages. Either that, or I’m confused. Maybe both.
VW Lupo - cheap little car that could do 70MPG with ease.
VW Fox - brazilian-made very cheap car that replaced the Lupo - far cheaper despite being much more sophisticated in pretty much every way. Not available in ultra-efficient model since diesel is too cheap to provide demand.
Renault Logan - very very cheap car made in Romania, that is killing the Fox in the entry level market in Europe. Meets all current EU emission and crash regs, but currently isn’t available in ultra-efficient version - best you can get is a 1.5 litre diesel that can’t manage more than 50MPG and costs a staggering $8,000
So even without making any changes to existing models you can buy a car today that beats the Prius for economy but costs less than half the price, manufactured using the cutting edge technology of Romanians-in-greasy-overalls.
The major manufacturers have the technology and techniques to build an affordable 80MPG car ready and waiting to be implemented in the third-world factory of your choice tomorrow, if only consumers wanted to buy such a car. But instead they’d rather drive a two-tonne lardwagon with heated leather seats, air conditioning, power-operated wingmirrors and 16 cupholders, while bleating about how much it costs to gas it up and make the finance payments.
And that, of course is the key…consumers don’t WANT to buy such cars. Yet. Even today there isn’t really a market yet for them. However, let the price of gas at the pump keep creeping up and eventually a lot of American’s are going to rethink that equation…
-XT
They don’t want to buy them over here either, at the equivalent of $7.50/gallon…
Then you deny saying:
Get back to me when you’ve won or lost that argument with yourself.
That’s not true, and Simmons has thoroughly documented that.
And which way does it factor it? Down or up?
The problem is, oil is only one of the markets involved in potential dislocations of people’s lives.
If the price of gasoline stays pretty much where it is, then I suppose it’s quite rational. And maybe all those SUVs I see are owned by people who won’t be impacted by gas at $5/gallon. But it’s not the way to bet, judging by how people are reacting now - by curtailing car trips and the like. What’s not irrational about that?
It’s one thing to predict the future badly, but it’s another thing to predict the past inaccurately. In fact, CAFE standards did increase the market for higher-mileage cars. Because auto makers had to meet fleet averages, they (as needed) lowered the prices on higher-mileage cars, and raised the prices on lower-mileage cars, so they could meet the targets. By those price changes, they increased the market for the higher-mileage cars, reduced that for the lower-mileage cars, and everything worked out. Except for the light-truck loophole:
No, the loophole in the CAFE standards is responsible for the SUV. If there had been no CAFE standards, there would still have been something equally large, powerful, and inefficient, if not more so.
That flies in the face of history. In 1978, the U.S. consumed oil at the rate of 18,756,000 barrels a day. It didn’t match that total again until 1998, despite cheap oil most of the 1986-1998 period. (You’ll need to download the “Historical Data” Excel spreadsheet at the link.) In 1989, for instance, U.S. oil consumption was still down nearly 10% from 1978.
CAFE standards were effective. It’s a shame that the SUV loophole wasn’t closed in the early 1990s like it should have been, and that fleet average requirements weren’t increased further. Because they worked.
There’s a moderate amount of political support for higher CAFE standards. But higher gas taxes are viewed as political suicide.
Not to mention, how big would these taxes have to be, to make a difference? Gas prices have fluctuated about $1 over the past year, and have had some effect on overall gasoline consumption, but it hasn’t exactly been earthshaking. How big a tax would it take to reduce consumption by 10%: $1? $2? $3?
Nobody really knows - but there’s no way even a $1 tax would get through Congress. You know that, I know that, everyone knows that. So that’s not a realistic proposal.
They’re a hell of a lot better at it than crowds are. Government’s thinking ahead has brought us Social Security, Medicare, environmental protections that on balance have been very good and almost invariably cost far less than industry-funded alarmists (the free market at work!) predicted, and a host of other things that most of us wouldn’t want to live without.
“Please,” yourself, bucko. We can look across the pond at Europe, and see what’s already driving down their roads. Boy, that took an advanced engineering degree, right?
I’m not going to argue for and against biofuels, but as I’ve pointed out already, CAFE standards are effective.
I guess we’ll find out. If oil really goes to the prices Simmons says it will, then I’d guess demand will be very, very high. If it doesn’t, it won’t.
You’re right - how nonexperts respond to oil prices is unimportant. :rolleyes:
Gee, Sam - wouldn’t that all be factored in to the initial increase? Seems you’re contradicting yourself here.
It’s in the ground, waiting to be pumped out. What resources does it take to let it sit in the ground a bit longer??
Geopolitical reasons, perhaps?
We’re pretty much committed to stand behind the House of Saud as long as we depend on them for our oil supply. They have enemies within and without, but they know they can count on us, because we need their oil. They don’t know how our policies towards them would change if we didn’t view them as the ultimate guarantor of oil supply.
True. And some people will go bankrupt anyway. If you have a $450K mortgage on a $500K house in the outer 'burbs whose value drops to $300K, and your job goes somewhere else, all the carpooling in the world won’t save you.
I’ve never heard of a rising housing market interfering with the economy; quite the opposite. Don’t you know that? When housing prices triple, it’s like free money for everyone who owns those houses. People can borrow more money off those houses, which puts money into the economy, and people build more houses, ditto.
And here you are lecturing me on the market. Please.
Can you produce some evidence for this? I remember plenty of crappy cars and planned obsolescence (Remember that? You didn’t hear that term anymore in the 1980s) before the CAFE standards.
My point is that people will factor prices they’ve already experienced into their purchasing decisions, sure. BFD. But they’re lousy at factoring next year’s circumstances into their buying decisions.
How long does it take to lose that negotiation because the policy is companywide, and your boss can’t make that decision any more than you can? How long does it take you to still spend thousands more on unavoidable travel, even after doubling up on trips to the store and whatnot?
Think they’ll care, if the job market’s tilted their way?
If they’re already in the 'burbs, they’re kinda stuck unless they get lucky, since 'burb-to-'burb commutes are generally long, and not well-served by mass transit.
People are still going to have to live where the houses are.
Oh, absolutely. I’m not talking about the economy; I’m talking about people.
I remember hearing a buncha times last fall from the wingnuts that Republicans needed to get the word out about how well “the economy” was doing, because people didn’t seem to realize it. Their theory was that the Liberal Media was saying bad things about The Economy, and distorting everyone’s perceptions. Apparently they forgot that everyone experiences a slice of The Economy on their own, and apparently a lot of people weren’t experiencing The Economy as measured in the GDP or the Dow Jones Index, hence were of the opinion that the economy wasn’t being managed very well.
- If you care to read what I’ve said,
- You responded to this quote, so I know you read it: