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Thread: Oil is at a 12-year low

  1. #46
    Senior Contributor SteveDaPirate's Avatar
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    Quote Originally Posted by gunnut View Post
    Oil at $29.50 at this moment.

    I demand an investigation in to why oil is dropping so fast. We have to help those oil companies losing money right now. They must survive in order to preserve competition in the market place. We all know monopoly guarantees higher prices. Competition guarantees lower prices. No exceptions.

    Production > Consumption = Falling prices


    So are you advocating for government intervention to save failing oil companies or letting the free market do its thing by killing off the dead weight in an oversaturated market?

    I feel like I'm getting mixed messages here.

  2. #47
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by SteveDaPirate View Post
    Production > Consumption = Falling prices


    So are you advocating for government intervention to save failing oil companies or letting the free market do its thing by killing off the dead weight in an oversaturated market?

    I feel like I'm getting mixed messages here.
    It was sarcasm.

    There are always screams of "investigation" when oil prices get high. "Let's have a windfall tax" when oil companies make too much money. I don't hear any calls for investigation or refund when times are bad for oil companies. I just want to be "fair."

    Actually, isn't it a great time for nations of the world to stock up on their strategic oil reserve? Buy when prices are low, sell some when prices are high. States can make a killing this way using taxpayer's money.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  3. #48
    Senior Contributor Doktor's Avatar
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    Quote Originally Posted by gunnut View Post
    It was sarcasm.

    There are always screams of "investigation" when oil prices get high. "Let's have a windfall tax" when oil companies make too much money. I don't hear any calls for investigation or refund when times are bad for oil companies. I just want to be "fair."

    Actually, isn't it a great time for nations of the world to stock up on their strategic oil reserve? Buy when prices are low, sell some when prices are high. States can make a killing this way using taxpayer's money.
    Can they know how low will it go? Why buying now?
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

  4. #49
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    Quote Originally Posted by SteveDaPirate View Post
    Quite a bit I imagine.

    That said, once an industry is well established, it doesn't require continuing government subsidies to keep chugging along on its own because it is now profitable. The government would receive those royalties whether they continued subsidies for the O&G industry or not. Exxon isn't going to shut down their billion dollar facility because they no longer get a favorable tax break.

    The whole idea behind a government subsidy is that it provides financial aid to promote an economic or social policy. In some cases that might be trying to get an alternative energy industry off the ground, in others it might be to encourage new construction to meet earthquake safety standards. It is the carrot to go along with the regulatory stick.

    Once the alternative energy industry is competitive and profitable enough to keep going on it's own, we can listen to those companies whine when their subsidies get pulled to help finance the development of the next thing.

    Did you ever bother looking into what exactly is counted as a subsidy? Dig a bit. Those "subsidies" include things such as depreciation rates for construction equipment. Many of these "subsidies" are in place to help start ups and smaller companies stay in existence and prevent the big boys from totally taking over.

    Thing is oil, coal, natural gas all make money by disturbing the land. Wind does as well, but at least the coal, oil, and natural gas pay royalties, taxes to return a bigger investment for the locals. Wind power, slap a wind severance tax similar to the mineral royalties and taxes for the mineral industries and they can give back more for taking up habitat, destroying view sheds, and being a hazard to eagles, all so California can be considered green because they bought/claim the power generated by Wyoming wind.


    Things are slowing down, but the big players aren't panicking but setting the pieces to be ready for when the prices go back up.

  5. #50
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    Quote Originally Posted by Parihaka View Post
    Get rid of catalytic converters on cars and most of the current 'pollution' problems associated with fossil fuel engines go away, plus you get greater efficiency. Added bonus, all that money on research can instead go to the poor.
    I may be missing the bait/point, but as someone that does air quality emissions permitting, I do not agree. New catalytic converters do more than just reduce CO, they reduce NOx which is a particularly nasty particulate. NOx has real and noticeable negative environmental and health impacts especially in dry mountain regions like Colorado and Wyoming.

  6. #51
    Padishah Shahanshah Senior Contributor xerxes's Avatar
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    Doesn't matter how low it goes
    What matters is how will it stay there. That would be key forcing excess capacity to be pushed out permenatly.
    The longer it stays low, the better off the market will be in the future

    If it just bounces off, the market patricipents will be pricing in a market recovery.
    And gone would be any chance of re-balancing the market and sustaining a fair price.
    If we contrast the rapid progress of this mischievous discovery of gunpowder with the slow and laborious advances of reason, science, and the arts of peace, a philosopher, according to his temper, will laugh or weep at the folly of mankind. - Edward Gibbon

  7. #52
    Senior Contributor SteveDaPirate's Avatar
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    Quote Originally Posted by Jimbo View Post
    Thing is oil, coal, natural gas all make money by disturbing the land. Wind does as well, but at least the coal, oil, and natural gas pay royalties, taxes to return a bigger investment for the locals.
    The taxes and royalties are different, because wind, solar, and even timber if well managed, don't permanently remove a resource from the land. Once that coal is mined, or that gas is extracted, it is never going back into the ground. The government has only one opportunity to benefit from those resources.

    The government can tax land well suited to hosting windmills for the next thousand years. Once that coal vein plays out in 6 months, it is gone forever, along with any potential for future revenue.

  8. #53
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    Quote Originally Posted by SteveDaPirate View Post
    The taxes and royalties are different, because wind, solar, and even timber if well managed, don't permanently remove a resource from the land. Once that coal is mined, or that gas is extracted, it is never going back into the ground. The government has only one opportunity to benefit from those resources.

    The government can tax land well suited to hosting windmills for the next thousand years. Once that coal vein plays out in 6 months, it is gone forever, along with any potential for future revenue.
    I am not communicating my point well. Let me try again.

    My point is that coal, natural gas, oil, gravel, all contribute more than basic property taxes/lease fees. Wind does not. Government can tax any private land for the next thousand years. The local and state gov't (and the communities) don't get an added benefit whether it is a ranch, wind turbine field, coal mine, or owned by a conservation group. Look at this from the gov't and communities perspective why push or subsidize an industry that is going to cut down rather than grow your budget and the local economy? If you really want to get wind going, make it contribute more to the location where the wind farms are located. The wind is a natural resource as much as coal or oil, but with laws as they are now you cannot have a tax similar to a severance tax on it. There has been some talk of doing it at the state level, but wind isn't profitable enough yet to take the hit it would need to approach (let alone supplant) the funds that had been generated by coal, oil, natural gas.

    Further if the wind farm is on BLM land, well no state or local property tax on that land. At least the state gets a cut of the severance and royalties from minerals mined anywhere in the state.

    In the end my primary points are that the oil business is not nearly as subsidized as many would have you believe, two there is a reason why government (especially local and state) are more supportive of the fossil fuels, and third that in order to get local acceptance of wind on par with coal, oil, natural gas, it is going to have to be able to contribute more to the local and state than it currently does. My point is not that wind has no future, it does. There are some major hurdles (namely disturbed land per unit of energy generated is too high).
    Last edited by Jimbo; 18 Jan 16, at 19:02. Reason: For clarity, fixed typos

  9. #54
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by Jimbo View Post
    I may be missing the bait/point, but as someone that does air quality emissions permitting, I do not agree. New catalytic converters do more than just reduce CO, they reduce NOx which is a particularly nasty particulate. NOx has real and noticeable negative environmental and health impacts especially in dry mountain regions like Colorado and Wyoming.
    He was being sarcastic.

    The whole point of catalytic converter was to change the far more dangerous gases of ozone, carbon monoxide, and nitrous oxide into relatively harmless carbon dioxide. Cars need to breath. So do we. The best we can do is to limit the really bad stuff and go with relatively not bad stuff. This is why we have high carbon dioxide emission. Now the enviro-whackos want to restrict carbon dioxide emission. Carbon dioxide WAS the alternative. They believe it's the primary component of the exhaust.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  10. #55
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by DOR View Post
    First, we move manufacturing off-shore, to reduce costs.
    Next, we move up the value-added scale at home, while standards of living get a boost from lower consumer prices.
    But, some companies won't invest (domestically) in increasing productivity, and instead call for trade barriers.
    And, some workers won't invest in their own skills and still expect to be over-paid for low value work.

    As living standards rise / consumer goods become more affordable, demands for better labor and environmental rights emerge. When the companies and workers noted above can't manage to turn 320 million consumers into self-harming protectionists, they turn to "conditions."

    "Those cheap workers stole our jobs!"
    "Those polluters stole our jobs!"

    "Um, wadda ya mean I gotta work a dirty, dangerous, disgusting job for minimum wage? I'm 'Murican!"
    LIKE!!!

    It is literally impossible to have cheap goods, zero pollution, high wages, and full employment. Something has to give.

    Pollution mitigation costs money. High wages cost money. Cheap goods cost money (for businesses). Full employment costs money. We can print more money, but then it becomes worthless.

    The truth lies somewhere in the middle. We need to allow for some pollution. We need to have some unemployment. We need to not print so much money. We can't have the cheapest goods in the world.

    How much is the right amount? That's the $16 trillion question.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  11. #56
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    Quote Originally Posted by gunnut View Post
    He was being sarcastic.

    The whole point of catalytic converter was to change the far more dangerous gases of ozone, carbon monoxide, and nitrous oxide into relatively harmless carbon dioxide. Cars need to breath. So do we. The best we can do is to limit the really bad stuff and go with relatively not bad stuff. This is why we have high carbon dioxide emission. Now the enviro-whackos want to restrict carbon dioxide emission. Carbon dioxide WAS the alternative. They believe it's the primary component of the exhaust.
    Ahh I see. I do enjoy reading Pari's posts and normally pick up his sarcasm, but missed it this time. Based on my experience, I agree with your point above.

  12. #57
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by Jimbo View Post
    Ahh I see. I do enjoy reading Pari's posts and normally pick up his sarcasm, but missed it this time. Based on my experience, I agree with your point above.
    I picked up on it because I had a similar thought in the "global warming" thread long ago.

    I basically asked the question, why don't we convert CO2 into O3 and CO to cut down on green house gases to save the planet?
    "Only Nixon can go to China." -- Old Vulcan proverb.

  13. #58
    Senior Contributor antimony's Avatar
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    Quote Originally Posted by gunnut View Post
    Then we are talking about something much more grand, a complete revolution is electrical technology. I don't see that happening any time soon.

    The problem is oil is literally free energy. Dig a hole in the ground and energy comes out. The energy expended to extract it is miniscule compared to the energy we get out of it. Not so with electricity.

    Electricity has to be converted from another form of energy. This extra step, plus the difficulty in storing electrical energy makes our vehicles dependent on oil.

    I've advocated this for years. Let's use up oil as fast as we can to render our eternal friends irrelevant. Better yet, use up their stuff first and then we tap our reserve.
    Did you not yourself say that oil is never going to run out?

    Oil is not free energy. There is a huge amount military and political capital spent by the USA in the Middle East and elsewhere to keep the taps running. What do you think is going to happen if the USA withdrew all military personnel from the Middle East? this is keeping aside the drilling, refining and transportation logistics.

    The benefits of oil are the following:
    1. High energy output per dollar (which will come under competition as renewables and green energy increase efficiency)
    2. Ability to store and transport - storing electricity right now is a more difficult proposition. However, battery technology is getting better


    The revolutions in electricity technology is happening. We now have electric cars on the market that people lust for. If we have low cost versions of Teslas and Faradays running around, that would be a good thing.

    Once the Middle East and others annoying people are made impotent by the irrelevance of oil, there would be a lot less trouble in the world.
    "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

  14. #59
    Senior Contributor antimony's Avatar
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    Quote Originally Posted by gunnut View Post
    LIKE!!!

    It is literally impossible to have cheap goods, zero pollution, high wages, and full employment. Something has to give.

    Pollution mitigation costs money. High wages cost money. Cheap goods cost money (for businesses). Full employment costs money. We can print more money, but then it becomes worthless.

    The truth lies somewhere in the middle. We need to allow for some pollution. We need to have some unemployment. We need to not print so much money. We can't have the cheapest goods in the world.

    How much is the right amount? That's the $16 trillion question.
    I agree with most of the stuff, but pollution can indeed go away. If we can crack real efficiency in solar, wind and other renewable power and also improve batter technology then we are going somewhere.

    It is better if we work at it as a technical problem, and not just an unattainable economic goal
    "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

  15. #60
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    Quote Originally Posted by antimony View Post
    I agree with most of the stuff, but pollution can indeed go away.
    No it can't. Production will always produce pollution. And the solution to pollution is dillution but elimination is imagination.
    Chimo

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