Click here: AOL Business News: Green Vehicles in the Spotlight
I read this with interest, because I’ve been angary at the gasoline mess since 1975, ticked off at the ‘brilliant’ decision to shut down home refineries and wells and farm our fuel making out to foreign companies, who are often of not real reliable quality. I dream of the days when gas was 95 cents for high test and 65 cents for regular!! (Kiss those days good-bye because economics state that those prices will never return even if we get crude at $1.00 a barrel.)
That brings up a question.
If these cars take off, getting 70 to 100 mpg, we’ll use less gas. If the demand for gas drops, so will the price per gallon. Right? (Shut up! I’m not done yet!) In the 'good ‘ol days’ gas prices dropped to encourage people to ‘see America’ on vacation, the oil companies knowing that in the long run, they’d make a bundle, rather than increasing the pump price and having people stay home. Everyone benefited, as much as I, who hates tourists, must agree. Whole tourist driven economies developed and flourished, until the 70s crunch. Plus, gas stations actually were Service Stations where they were actually nice to you, gave away free things, washed you windows, checked your oil and provided you with Clean Bathrooms and, later, tasty snacks at a reasonable price. (Today, you often have to pry the street person out of the can, where he lives at night, stand back about 6 feet from the urinal that hasn’t been cleaned in 50 years and do your business. As for the other, well, you’re better off doing it behind the station in the woods.)
The way I look at it, is once these cars become popular and gas consumption goes down, pump prices are going to soar because oil related businesses are used to high profits. I read something like that concerning the beef industry. During the beef shortage here, beef people discovered that not only will people buy cheap beef at high prices, but, not knowing how to cook these cheaper cuts, they’ll waste more and buy more. People want beef.
So, a few years later, the beef crisis ended, the on the hoof price dropped, but most sellers kept the counter price high, gaining a better profit. When people started buying cheaper meats, like chicken and fish, those prices also soared so the public got screwed and are still being screwed.
I figure the fuel prices will jump sharply, not only at the pump, but for major industries like power plants which need the fuel. So, power bills will go up. The public will still get screwed. At the worst, the Arabs will reduce production and barrel prices will go from $20 to $50. At the least, our own major oil companies will increase prices from $1.61 for regular to around $3.50. We’ll use less, but their profit will still be high at our expense.
In the crisis of the 70s, anyone ever notice how documentaries showed us the thousands of items and chemicals that come from crude oil, but only the cost of fuel went up – which jacked everything else up. They never even slowed down in production millions of tons of disposable plastic eating utensils, which come from crude, nor in Styrofoam production, which also uses oil chemicals. Their costs never jumped in relation to the more expensive oil. Hmmm. Interesting.
One thing you’re missing is that, eventually, gasoline may be phased out entirely. One alternate fuel source being considered is Methanol, a renewable fuel source that’s cleaner than gasoline.
??? Ahem, pray tell what are you talking about? You are aware that American firms remain among both the majors as well as active participants in the field? What “unreliable” “foreign” corporations do you speak of?
Oh dear, I dream of the day when folks will learn basic economics myself.
Here’s a small item to consider. Inflation. Inflation. Inflation. If petrol was at $.95 the gallon in 2000 dollars, no oil company would be able to cover production costs.
When comparing prices over time periods, you have to adjust for inflation. I don’t particularly feel like digging up the data, but I seem to recall that 1999 price at the pump of $1.40 (1999 dollars) was generally cheaper than equivalent pre-1973 prices. Somewhat hazy on the specifics, but the lesson should be clear.
Of course, this leaves aside the issue of properly pricing oil and derivatives consumption to pay for externalized costs. I believe Flowbark just was talking about this. Excessively cheap prices are going to promote waste and will not properly price for the costs such consumption impose on society (such as ineffecient use of resources, detrimental health effects, etc.)
Depends on whether miles driven change. Usage per mile driven may decrease while overall usage increases if demand is rising. Proper pricing works in here.
Certainly, although consumer consumption of petroleum products is but one component of consumption and of course other factors might intervene. Supply might decrease, production costs might increase for a variety of factors.
You should have stopped while you were ahead.
Interesting tale. Is it supported empirically or is it a just so tale.
In any case, the economies of energy production have changed and wasteful consumption by explicit subisidies to internal consumption hardly seems like a brilliant economic policy. (See the wonderful Venezuelan economy, e.g.)
Nostalgia. Wonderful thing that.
Well, it would appear that the petroleum business has gotten more competitive and so the frills, to help justify less-than-fully comptetive conditions, have been cut. Price sensitivity? Changes in consumer taste?
Of course in re ‘tasty snacks at a reasonable price’ I think you’re once more being seduced by the illusion of unadjusted historical prices. Adjust for inflation (inflate past prices, deflate current prices, whichever you like) youre likely to find your illusion is just that.
The logic is hard to follow here.
Okay, gasoline for car consumption begins to platform as mileage increases. One suspects the increase in miles driven historically seen in America will at least partially offset economies from greater full efficiency.
Let me presume that the market is partially competitive. On one had, gas price per product should be subject to competitive pressures so that without illegal collusion, one is not likely to see inflated prices. Marketing of new, value added brands of gasoline, perhaps added octane or with detergents or some new-fangled “high end” formulation is more likely.
The beef shortage? Do you have some evidence for all this? This sounds suspiciously like another just so tale by someone with a poor grasp of economics. Perhaps not, but I’d like to know where you’re getting this from.
Demand. Shift in demand to chicken and fish will drive up their price, given a relatively constant supply. Supply probably will increase of course in the medium term. In re meat prices not coming down I strongly suspect this is once more a misunderstanding revolving around inflation.
That strikes me as highly unlikely.
The Arabs? I suppose you mean OPEC, which of course is made up of most oil-producing nations, including such big producers as Venezuela, Nigeria etc. If the Gulf nations tried the oil weapon again, which is highly unlikely, other producers with slack capacity would step in.
OPEC learned its lesson about driving up oil prices too high long ago. Present policy is driven by a much more sophisticated sense of supply and demand management.
Of course all this leaves out non-oil options.
Anyway, you OP is giving me a headache and making me depressed.
From what I understand of you OP, you fear that rising gas prices will kill tourism, thus ruining the economy.
First off, if gas prices do rise signifigantly do to hybrid vehicles, chances are that they won’t rise so high that the price of travel will rise as well. For example, if a gallon of gas right now costs 1.95 and takes you about twenty five miles, then when hybrids become standard, then the amount of gas it takes to go that same distance will most likely not cost more than $1.95. In other words, you might end up paying more for less stuff, but you are most likely not going to pay more for the same amount of travel.
Beyond that, much of the world sustains tourist economies without relying on cars. Many Europeans conduct their travel on trains, which in my experience is superior to traveling by individual vehicle. If there was a market for it (say, one create by high gas prices) it wouldn’t be too hard to create a system of reasonably priced high speed trains to facilitate tourism.
I am sure non-gas selling convience stores would pop up to fill any gaps caused by failing gas stations. Heck, if train travel picked up we wouldn’t even need them because everything you need is right on the train.
I must admit I don’t really understand your OP. Mostly it says that things will change. Yes, they will. Did you think that our current oil driven way of doing things would last forever? Our use of fossil fuels in unsustainable. It has to change sometimes. Change is not always a bad thing. Go back 100 years and you will see a lot of the same fears, only it was fears of what would happen as cars replace horses as transportation.
**My appologies for the length of this post, but blame Collounsbury! **
aol://4344:30.L100abDI.383017.675146080
Try this link.
I don’t know how soon alternate fuels will show up because there doesn’t seem to be much effort by the fuel companies to create them and those existing vehicles fuels by propane have some problems in acceleration. They don’t take off as fast as gasoline fueled vehicles do.
I’ve been a big fan of using alcohol for fuel, but there are always excuses why not to use it that seem mainly involving engine parts that the car makers are reluctant to modify.
Agreed, but in the late 80’s, it was decided that it was more cost efficient to buy the crude elsewhere, have it processed in places like Japan or Taiwan and shipped to storage facilities in the US. No new refineries have been built in years, though currently, because of increased fuel costs, the oil companies with government backing, are getting ready to open closed ones and restore their function. Most of our active wells were capped because again it was cheaper to buy OPEC oil, but now, again because of fuel prices and because of the price per barrel being jerked around, plans are being made to reopen them.
In many of the posts that I’ve read by you, you keep acting like inflation is a mandatory, set increase that affects everything the same. It doesn’t. Agreed, inflation would have increased the cost of gas from then to now, but it is doubtful that it would have been so dramatic. I’m not sure of how to figure out the relationship, but when I was making $92 a week, which was good pay then, gasoline was 35 cents a gallon.
Now, I’m not real sure on how to determine the cost equivalent today, but gas seemed to be below the then rate of inflation because they sold lots of it and had gas wars.
Promote waste. ??? Like, it doesn’t now? The only thing which has changed is that the well off now buy gas guzzlers, the not so well off buy 27 mpg cars and the poor run old 11 mpg ones. If they can easily pay the gas prices, they waste a bunch.
Americans love cars. Cheapen the gas and they’ll drive more. If you recall, when the first gas crunch hit, it did not even slow down car races, boat races continued and the ever popular ‘Mud Boggin’ of the time actually grew in popularity. I remember sitting in long gas lines, hoping the station would not run out before I got to the pumps, watching some guy with a monster truck, filling up the monster fuel tanks on his monster boat so he could go play for the day.
?? Were you born or just hatched somewhere off in the woods? If you examine the many documentaries and historically related informative programs on America and cars, you’ll recall the big push after WW2 to get people out and on the road. I was around in the late 50s and even on our B&W antenna powered TV with 3 channels (ABC, NBC and CBS) were the big advertisements to ‘See America First.’ Gray Hound had special buses for long trips, drive to nearly every water stop town in the US, and promoted clean, huge, bus stops along the trip where one could get fine food and hot meals in ‘pleasant surroundings’ before continuing on.
The Rail Roads advertised split level touring cars that were magnificent, air conditioned and roomy, with comfortable passenger car conditions, great meals, private compartments and even the kids could play as the parents relaxed. They were even bringing in ‘travel in your own car’ programs for short hops. You’d drive up onto a special flatbed RR car, get locked into place and the train would take you in your car to your destination, avoiding all time consuming traffic!!
Camping communities sprang up for over night and weekend camping, and all sorts of little strange communities popped up, like ‘Jackson’s Alligator Farm,’ ‘See the Worlds Biggest Pumpkin,’ along with some crazily shaped buildings to draw you in. Around here, down the road a piece, is an old, closed up 3 story building that used to be a gas station and restaurant, … shaped like a Teapot.
Fact and nostalgia, which leads me to believe that you are probably under 40 years old. People traveled all over until the middle 70s. As a kid, my family and I toured all over our State on summer vacation, took week end trips and I loved it. We bought a small house trailer and stopped in many a private and public camping ground. Gas was cheap! Power was cheap.
I doubt if you realize the impact the gas crisis of the later 70’s had on this type of booming economy. It started getting too expensive for regular folks to travel much and so they stayed home. It was a remarkable time. Travel is increasing now, but mainly among those who can afford the gas and buy these huge mobile homes. The fuel crisis wiped out thousands of tourist dependent businesses and even small towns.
Nostalgia, of course.
In the late 70s, gas wars were stopped by bigger oil companies offering to force the many independents out of business. Those that failed to listen were forced to close up. The big companies simply lowered the pump prices beyond what the independents could afford and kept then low until they closed up.
Afterwards, prices went up. Historically, we saw high prices at the pump unaffected by low OPEC barrel prices and investigations were launched into profiteering. When the low mileage cars hit the roads, the fuel prices did not stay the same because of surplus, but actually went up again and oil companies said that it was necessary because using less gas actually hurt them financially because their costs were fixed at the previously high rate. Gasoline wobbled for over a decade between 95 cents a gallon for regular and $1.78. About the time SUVs started getting popular, the bottom end price stopped falling below $1.25. Regular gas has, locally, fluctuated between $1.48 and $1.68 a gallon for the last 6 years.
High test, however, often has required a refinancing on one’s house to buy a tankful.
Are you for real? You are American, right? If not, then I can see where some of your misconceptions come from.
In the 1980s, I believe, the government, in a really ignorant plan, observed that beef farmers had a bumper crop, which was driving the prices down too far for them to make any profit. Now, the public heard that farmers had cut beef production to increase prices because of costs, but a couple of years later, many articles in reliable magazines informed us that the government accidentally screwed us over. To keep prices reasonable for the cattlemen, they slaughtered thousands of cattle and encouraged other farmers not to breed as much. Well, they slaughtered or bought too many. Meat that sold for 98 cents a pound jumped up to $1.98. To try to help things out, the FDA dropped the grading process a set. Grade A beef is now Grade B, grade B is now Grade C and so on. I don’t know whatever happened to the real Grade A.
That was one report. The other was that farmers, really pissed off at the screwing over they were getting by the Government and the beginning of major consolidations by Agricultural Mega-companies, started not breeding beef. At the time, the US Govt. was buying up South American and Canadian beef at cheaper prices than American, screwing the cattle farmers, who had to pay much higher feed prices due to the oil crisis. Around the same time, the US got screwed via diseased beef from China, Brazil and the demand for American beef went up in Japan and Europe due to another breakout of BSE.
In the end, meat companies sold to over seas markets, creating a beef shortage here and we all paid for it. Beef wholesale prices have dropped since then, but retailers are keeping them artificially high. It gets even more complex, and, unless you wish me to write a dissertation on it, which will piss off the SDMB over valuable space, I’ll leave it at that.
WARNING: Never, ever start reading American Agricultural reports. If you do, you’ll get so immersed in political messes, Mafia conglomerates, run away consolidation, sinking farms, over supply of food and under supply of food and buyer manipulations that you’ll be stunned, appalled and disgusted. Plus you’ll wonder how we have any farmers left.
http://www.billingsgazette.com/region/980922_reg025.html
(Excerpt):A number of factors have contributed to drop in cattle prices: Too much meat - beef, pork and poultry - has flooded the grocery store. Ironically, prices at the meat counter have not declined in proportion to the drop in the prices paid for slaughter cattle. Because of large supplies of meat, retailers have “leveraged” beef, pork and poultry, thus keeping them all relatively high, according to an analysis, by Chuck Levitt, a senior meat analyst at Alaron Trading Co. in Chicago. Beef has also continued to lose market share to poultry, but at a much reduced rate in comparison to the 1970s and 1980s.
In relation to beef, the shift was because beef was too expensive, so people sought other meats that were cheaper. Beef is now running at 3.3 times as expensive as chicken.
As beef consumption dropped, less beef is bought by retailers to keep the prices up and we get more beef from foreign nations, like South America. The Fast Food Industry is the biggest buyer of South American Ground beef because it is cheaper than American beef.
Now, the same happened in the fuel crisis in the 1970s. When everyone switched to gas misers, the prices dropped to get us to buy more gas and, naturally, Detroit churned out guzzlers. Being a business and being greedy, Detroit could have actually helped bring fuel prices lower by refusing to produce gas guzzlers, but they went for the bucks. Once the gas guzzlers hit the streets, gas prices went back up. The government set MPG regulations on new cars and instead of 11 mpg, big cars must get at least 24 mpg. Gas prices have not fallen.
Simple economics states that if a company produces a needed product, reduction in consumption will result in an increase in price in order to maintain the desired profit picture which the company created.
Oh my goodness, momma said that the Straight Dope Message Board would expose me to people with different views of reality, but I never knew it would get quite this zany! Container20, Collounsbury tried to explain to you where you are confused, but you seem unwilling to listen. I am willing to give it a partial “go” myself:
Well, this may be Container20’s rule of economics but it happens to go against all of conventional market theory, which would show that if demand goes down then the price goes down. If you get out an Intro Econ textbook and look at the graphs of intersecting supply and demand curves, you’ll see why.
Now, I am the first to say that the world is a bit more complicated than imagined in Market Economics 101, but I see little reason to believe that there is such a strongly anticompetitive market in gasoline that it will actually go the other way.
In my opinion, while there may be a little price gouging going on, the main reason that gas prices are rising so dramatically is that the demand curve is so inelastic, i.e., it takes a large increase in price to produce the necessary drop in use to get supply and demand back into balance.
If we stupid Americans would respond to higher gas prices by actually using the legs God gave us to walk around to the corner drugstore instead of driving, combining trips, using public transportation more, buying more fuel efficient vehicles, etc, etc to a much greater degree than we do, then the gas prices wouldn’t go up as steeply! We have met the enemy and it is us…The reason the oil producers have us over a barrel, so to speak, is that we are vastly overusing this resource of gasoline. Of course, the reason we are overusing the resource is that the price is too artificially low, as Collounsbury alluded to, because of all of the externalized costs. This is why the more intelligent governments in Europe have taxed their gasoline up to about $4.00 per gallon. Rather than whining about high gas prices, we ought to be asking why gasoline is effectively so heavily subsidized in this country.
What is this, the “law of voluntary inflation”? As you clearly do understand, wages and prices tend to go up together which is one reason why it makes sense to compare prices in real (or “constant”) rather than current dollars. Do you think that $92 a week is a decent wage now? Do you think $460 is? If you do, then gas ought to be about $1.75 a gallon in order to have the same drain on your pocketbook (ignoring general increases in few efficiency of automobiles, at least during the late 70s and 80s). If you think $460 ain’t all that decent, then you ought to think $1.75 a gallon is quite a bargain compared to “the good ol’ days”! [One can do more careful constant-dollar comparisons, and while I don’t think the current prices are as low in constant dollar terms as they were “back in the good ol’ days”, the prices a year and a half ago before this rise began were historical low water marks, I’m pretty sure. And, it has definitely been pointed out that the current prices, again in constant dollar terms, are still considerably lower than they were back in the “energy crisis” days of the late 70s.]
Finally, I’ll point out, getting back to the external costs issues, that you seem to have a basic assumption that lower gas prices are the root of all good and high prices are the root of all evil, which seems to be the starting point for any debate in the U.S. on energy. (Even the more liberal Dems don’t seem to want to take on this one.) Why should we be subsidizing gasoline, personal transportation, car ownership (however you want to look at it) so much. I mean, I could make the case that I would be much happier if I could go down to the store and pick up a new 1.5 GHz computer for $10.99 and I could even make some further arguments in its favor on the basis of allowing more people access to the internet, etc., etc., but I am not going to seriously advocate our society subsidizing computers to that degree. We ought not to be subsidizing environmentally and socially destructive forms of transportation either to the degree that we are now.
*Originally posted by Container20 *
**If these cars take off, getting 70 to 100 mpg, we’ll use less gas. If the demand for gas drops, so will the price per gallon. Right? **
Right.
The way I look at it, is once these cars become popular and gas consumption goes down, pump prices are going to soar because oil related businesses are used to high profits.
Wrong, for two reasons:
Oil businesses are already charging the highest prices they can – that is, as much as competition will permit. (Just like any other business.) If demand goes down, there’s tougher competition for the reduced sales available, so the market price goes down.
Some oil is cheaper to produce than other oil. If demand goes down, the most expensive oil will not be produced, so the oil businesses’ average cost goes down.
P.S. I highly recommend Basic Economics by Thomas Sowell, which covers this sort of stuff.
Generally, I agree with both of you concerning supply and demand in economics, but when it comes to gasoline, the situation is different. The oil companies fought alternate energy sources from the 60s on and in the late 70s, when fuel prices jumped, our country had full reserve storage tanks and metered the stuff out causing gasoline shortages. By the time it was all over, out came news of the main companies profiteering. It’s like the car industry crying minimum profits to explain why a $10 headlight assembly costs $50 when you order one, then, which happened, showing a billion dollar profit.
The fuel oil industry is about as close to a monopoly as we can get, consisting, here in the States, of, I think, only 3 major companies having control of it all, out of the nearly 100 or so that ran it in the 40s. No one back then and up until the late 60s realized environmental pollution caused by it, but even today the 3 big oil companies are polluting other nations and even a State Park or two here because they’re not bothering to fix their wells, many of which leak. They don’t care about fines.
We’re driving a whole lot of fuel efficient cars now but the price per gallon has only dropped around 25 cents since the maximum peak in the early 80s. When the crunch hit, our cars were getting 8 to 11 mpg. Detroit was not interested in fuel economy. The major fuel companies were wallowing in the dough. The government, which later fined them for major fuel spills, did not even cause them to blink.
Their arrogance was clear when our imports of OPEC fuel was carried on single hulled tanker ships. That’s like shipping liquid DDT in tinfoil! The Government had to force them to demand and to build double hulled ships. The government had to force both the auto industry and oil industry to eliminate lead in the fuels. Both industries work hand in hand, and neither was concerned about economy nor pollution until they were forced to.
With the amount of people we had taking trips across the country on vacation pre-fuel crisis, the oil companies were making big bucks by selling more gas at lower prices rather than less gas at higher prices. After the crisis, we developed better cars, and the fuel economy cars outnumber the big gas guzzlers. Now, we have, percentage-wise, more cars on the road, and, with the nuclear scare, power plants using fuel oil have increased, and ecologists have managed to reduce the building of coal fired plants.
Most of the Texas wells are still capped, though there is oil down there. The Alaskan pipeline has never been brought to full capacity. We shut down most of our refineries. (Now, the government is getting them reopened.) Texas, once the great supplier of American oil, nearly went bankrupt when the wells were capped, but, interestingly enough, the companies who bought their crude never lost a penny. They switched to buying OPEC oil, passing the cost increases onto us.
So, we have a very mobile society, with cars getting double and triple the pre-crisis mileage. The fuel prices have not significantly dropped, though the relative consumption has. OPEC has been reported as having to reduce production to not flood the market, which would generate cheaper gas because the major economies are used to the high income from the metered supply. The newer cars would increase travel, which would benefit various local economies, because more people would drive around, airline prices would drop so more people would fly, food prices would drop because the fuel used in production would be cheaper, the prices of goods would drop because stores would not have to pay such enormous power costs and transportation costs would drop because less money would be spent on fuel.
But, they have not reduced the pump prices in relation to the more economical cars. OPEC reduced flow and prices jumped up. There is no gas shortage anymore but costs have still not fallen enough.
If the oil companies and Detroit were concerned about alternative fuels, we’d have them by now. The major concern for cars, a mechanic told me, was that alcohol ate off the Teflon coating on injectors and rotted out seals. Like, how difficult would it be to develop alcohol resistant seals and would Teflon coated injectors be necessary with a cleaner, less oily fuel? Additives could be tossed into the fuel to increase or decrease combustibility.
We use propane and natural gas for fuel, which, prior to the crisis, was real cheap. As was diesel, which is the cheaper byproduct of refining oil. Propane and natural gas now cost more than gasoline, but most oil wells deliberately burn off vented gas instead of saving and selling it. Diesel, produced more easily and in greater volume than gas, jumped in price during the crisis and remained high.
In stores, when you buy a lot of a product, the unit price drops. (Look at Ron Popil, the ‘O-Matic’ inventor on TV. His initial products sell high, but when the demand picks up, they turn up in stores at half price.) Look at computers. The more made, the cheaper they became. Walmart buys enormous lots of goods and gets a low price for them, which enables them to sell cheaply to the public.
I went to a roadside stand to buy tomatoes, which were selling at $1.00 a pound. I negotiated with the seller and bought a whole crate at 50 cents a pound, and he had purchased them off of a warehouse at 25 cents a pound!
Part of economics is lower prices when volume sales increase so long as the supply is constant.
The fuel supply normally is, unless artificially controlled to fix prices.
After the last major hurricane here that wiped out homes, changes in building codes meant that cement brick houses were safer than wood. The initial start up was expensive because cement homes were not in demand and brick prices were high. Within two years, as brick houses caught on again, the brick price dropped because they were selling more in volume and lower prices meant more people would buy the bricks. Had the brick prices increased, as you guys reason, less would have been consumed and eventually, people would have figured out ways to make wooden houses stronger.
As it stands now, wooden homes are more expensive than brick, because, with the increase in wood usage, the timber industry increased it’s prices.
Does this make sense to you? I’m really trying to explain my position here.
Cheap gas is good for the economy in hundreds of ways. As it stands now, it is good only for the oil industry and their investors. Once their volume drops dramatically and gas piles up in reserve tanks, they’ll up the gallon price to maintain their way of life. OPEC will be the first to increase barrel prices when instead of making 10 billion a year, they are reduced to 5 billion. You think those guys are going to loose a large chunk of their income because we save gas? No way, man!
Just how long do you think it’ll take to phase out standard internal combustion engines? Short of a “buyback program” sponsored either by Big Daddy Gummint, or the motor companies themselves, it’d take decades for all the old Camrys and Civics (and all the other multitudes of car models out there) to be sold off and replaced with Fuel-Cell-Mobiles and other improved vehicles.
Given then, I REALLY doubt that gas prices will “soar”… unless the notion of “rising over the course of twenty or thirty years” counts as “soaring”
Well that was quick. I have a susupicion as to who this was (given the poster’s comments on my “inflation” comments) but I guess I shall have to inquire.
Well, let me post what I wrote already.
I confess, this is so bizarre that it’s fascinating.
Alternate fuels exist presently, achieving a switch with such large sunk costs in terms of oil consumption isn’t easy. It takes time and perhaps some willpower.
Oh dear, the conspiracy driven view of the world.
In regards to this there have been several well-informed discussions in the past several months. I believe Anthrancite was a key participant. You might try searching on alternate fuels.
Oil Majors, Industry Structure:
(In response to my observation that American petrofirms are dominant players in the world market in response to an odd claim about foreign domination/low quality)
Oh my. I don’t even know where to start. Well, I see you abandon the for dom claim.
Let me suggest that you have a wildly distorted view of the economy.
Decided? Insofar as your description is correct (it doesn’t seem to be but…) I fail to see an issue with shifting petroleum processing to more cost efficient locations.
Nonetheless, I would like to know from where you derive your description.
Restore their function? The majors never ceased refining. Government backing? Oh this makes me head spin.
And non-OPEC oil.
So, you admit non-cost efficient wells were capped for price reasons.
Now, continuing, fuel prices have risen, making it economical to reopen them. All well and good.
Crude price manipulation. Well, there is some truth to this, OPEC has managed to get in a groove on managing the production of their oil (roughly) and given the large world demand, they achieve some rough degree of control. However, this depends in part on non-OPEC producers.
So, in production we have a partially monopolistic market characterized but an unstable cartel.
Eh? So many posts? How often do I even talk about inflation?
But no matter, I’m having trouble understanding what you mean by mandatory set thing here.
Eh? Oh my. I’m not even sure how to address this. Well, hopefully Jshore’s example will serve.
??? I am unable to parse this.
Low prices promote non or less-economic uses. Simple as that.
Yes, one does not that.
Yes, that’s part of the issue.
In the short run gas consumption is not very elastic, that is does not respond very much to changes in price. In the long run, as OPEC found out to its chagrin, it is elastic. Petroleum product consumption per capita or better per unit of work dropped as efficiency increased and substitutes were found.
(Cut a long set of vague statements, assertions and blandishments)
Nice try. Once again, provide a cite to back up your tale. It doesn’t jive with my understanding. You’ve shown a weak grasp of economics and facts. I’m afraid your vague assertions don’t hold much water. The assertion game is best played in IMHO forum.
Yes, I too recall trips. Big deal, I travel all over the world. Did then, and now. Doesn’t say one damn about Americans in the aggregate. I’m not terribly impressed by vague nostalgia as a method of argument.
You’ve made an implicit empirical assertion, that Americans travel less miles than they did in 1973. Back it up with hard data. Recall we also have substitutes, such as cheaper airfares.
Nostalgia. Whoopdidodah.
I want motherfucking data. Compare miles traveled for vacation by Americans (you may be able to obtain that data for income levels also) c. 1973 with that of Americans c. 2000. And we need it for all methods of travel to take into account substitution.
Else, I have to conclude you’re just whinging on about your youth and the good old days.
And? (Mind you this once more reads like a conspiratorial just so story, as I would guess that we might, just might wish to factor in efficiency into this. Implied but not understood I would say. ) You imply collusion between oil firms and large scale price manipulation at the retail level. Such accusations are often leveled. I don’t recall any proof of them as such. Spot instances, and certainly the industry could be more competitive.
However, I want to see something more substantial than some nostalgic half-baked theories of price manipulation by someone who clearly has a poor grasp of economics before reaching any conclusions.
Uhuh. One phrase, assuming your statement is factually correct — which I doubt or rather it strikes me as highly oversimplified — * correlation is not causation *.
Of course the vagueness of all these claims/assertions make it hard to contextualize or rebut your statements.
Fine, again some vague assertions.
Ah yes, one fine morning the entire US car fleet was replaced, yes is that it?
Again, more “* just so stories *” — I’d like some substantiation and precision before I take your story telling seriously.
Again, I need citations and substantiation. Frankly I don’t recall this at all. Of course, I don’t eat much beef, but be that as it may, your rendition of this does not ring a bell. It’s not a matter of writing a dissertation, its a matter of providing factually reliable information from reliable sources. I trust posters whose posting give me reason to trust their recollections, and even then ask for a cite or two when things seem off. Your writing does not rise even to the barest minimum of confidence.
http://www.billingsgazette.com/region/980922_reg025.html
(Excerpt):A number of factors have contributed to drop in cattle prices: Too much meat - beef, pork and poultry - has flooded the grocery store. Ironically, prices at the meat counter have not declined in proportion to the drop in the prices paid for slaughter cattle. Because of large supplies of meat, retailers have “leveraged” beef, pork and poultry, thus keeping them all relatively high, according to an analysis, by Chuck Levitt, a senior meat analyst at Alaron Trading Co. in Chicago. Beef has also continued to lose market share to poultry, but at a much reduced rate in comparison to the 1970s and 1980s.
Now, the same happened in the fuel crisis in the 1970s. When everyone switched to gas misers, the prices dropped to get us to buy more gas and, naturally, Detroit churned out guzzlers. Being a business and being greedy, Detroit could have actually helped bring fuel prices lower by refusing to produce gas guzzlers, but they went for the bucks. Once the gas guzzlers hit the streets, gas prices went back up. The government set MPG regulations on new cars and instead of 11 mpg, big cars must get at least 24 mpg.
Demand rose, you know. Gains in fuel economy were offset in the aggregate by increased usage.
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