In summer of 08 you may recell president Bush calling on the Saudis to pump more oil. They didn't say anything publically which was odd to me. There's been speculation that they were already pumping at capacity. Sure some parts of the world may could have pumped more but many nations including the US are pumping less and using more. Mexico is close to being at that point is they're not already. Some countries have recognized that countries wells are drying up and have stopped exporting to save it for themselves. I saw on TV a couple of weeks ago that $4 gas was expected again this spring. Yes you're right producers don't want to see high prices like that but it may be they can't stop it. Could it be? They know alternatives will be sought out with high prices but I honestly don't think they're able to produce enough to meet demand now. While the US has reduced our consumption of oil yearly for the last few years, India and China have increased consumption and are expected to continue the trend. Governments worldwide are advocating acceleration of electric vehicle sales & technology, Germany and China are two I've read about. They know we need to move quickly and I think the US knows too thus the funds being dumped world wide for battery development. BTW, I've read that most who study this subject were in agreement a couple of years ago that 2010 would be the year that demand would outstrip supply. A large yet smaller group thought 2012 would be the year with the smallest group think 2013 or beyond. I've read also that a 5% supply will double the price of oil and that will sink economies world wide. I'm not a doom and gloomer but I've read a lot about this subject. Who knows what will happen but the world pretty much agrees we need to step it up. I think it's prudent to prepare for it and this rebate is a quick way to accelerate the switch. And I'm a very conservative when it comes to how the government spends money. I think they need to abolish many government agencies but this I think we have no choice about.
It fascinates me that people choose to describe an equivalent two-sided equation as somehow being one-sided. What you have described here is nothing other than the law of Supply and Demand; characterizing the businesses as "greedy" (no doubt meaning "evil," despite the fact that big oil is one of the least profitable industries per dollar of capitalization) and somehow the consumers are "good."It doesn't matter that we're using more than we're finding. We're not using more than we're pumping. The only reason gas spiked was because [email protected] got greedy.
For years it went up in the summer, then down in the winter, because "the summer formulation costs more". Then one year it went up even more in the winter, because "the winter formulation costs more".
The next year it broke $4 and everything collapsed. They won't do that again any time soon because they know it almost destroyed everything. They'll creep it up as much as they can, but they're very sensitive to lower it when they feel the resistance. I don't see it hitting 4 again until you go a month without someone mentioning the economy or unemployment rate.
It fascinates me that people choose to describe an equivalent two-sided equation as somehow being one-sided. What you have described here is nothing other than the law of Supply and Demand; characterizing the businesses as "greedy" (no doubt meaning "evil," despite the fact that big oil is one of the least profitable industries per dollar of capitalization) and somehow the consumers are "good."
It's utter rubbish, of course. As consumers we benefit from the product. Government takes a bigger piece than any of the producers or refiners. And, if anyone is to "blame" for high prices it is the consumers for demanding so much of the silly stuff.
Agreed - and therein lies the rub. There simply isn't another alternative available yet that is as versatile for the same, or even nearly the same, price. The closest thing is Propane, and that only works if you live in a metro near a filling station. Even then most of those folks really need dual-fuel systems to allow cross-country trips.Yep. Even if the oil were an infinite resource ( I'm not saying it is, just if it were) you can only pump it out of the ground so fast. Once consumption exceeds that rate the price goes up until the supply/demand ratio reaches a near equal state. The inverse is also true. When the economy tanked and demand fell and the price dropped like a rock.
Personally I'm concerned whether or not we can have a true recovery until we switch to alternative fuel for transportation. Since transportation accounts for 70% of the oil consumption and accounts for hundreds of billions of dollars sent over seas every year. We need that oil for other things. Plastics, lubricants, fertalizer, etc.