Is $120 Oil Actually Good For Us?

• kef
  May 8th, 2008 at 8:09 pm

  it all seems to fall into place when you look at it from the hippie point of view, but they seem to be missing one vital point: what will happen when petroleum gets so expensive that the masses cant afford energy anymore? you cant afford gas for your car, thats fine you can bike (or walk). what happens when you cant afford food? pretty much everything you consume depend on petroleum, remember?

• bean
  May 8th, 2008 at 8:40 pm

  Oil is a commodity with extremely inelastic demand and decreasing supply. Raising the price on a commodity like that is nothing other than price gouging, because consumers have nothing to replace it with.

• Jerse
  May 8th, 2008 at 9:16 pm

  The market will reset itself, it always does…

  People will move closer to their jobs and buy fuel efficient cars - and in the meantime we are weening ourselves off oil and saving the planet…

  How could that be a bad thing?

• player hater
  May 8th, 2008 at 9:18 pm

  Event at $4 a gallon, 60,000 gallons of oil is still just $240k. So dude’s quote is really kind of a stupid thing to say.

• Miss Cellania
  May 8th, 2008 at 9:46 pm

  I bought a house within walking distance of my workplace. Then the workplace moved out to the suburbs.

• L
  May 8th, 2008 at 9:50 pm

  People can’t always move closer to their jobs, Jerse. That’s part of the problem. People live in the suburbs because, in the past, the price of gas for commuting was less than what it would cost to live in the city. If your job is in a downtown area, and you can’t afford the increased price of gasoline, you’re sure as hell not going to be able to afford to live closer to your job!

  Fuel-efficient cars might be a more realistic goal for most people.

• Justin
  May 8th, 2008 at 9:51 pm

  What people aren’t thinking about is the innumerable things that are affected by the price of oil. More expensive oil means things that require any sort of transportation are more expensive.

  How is this good for anyone except oil companies and countries with large deposits of oil?

  if the price of oil reached 150 or 200 dollars a barrel its not like we would all magically be in hybrids and everything would become green. Stuff would just become more expensive which hurts the poor to a great extent.

• sparge
  May 8th, 2008 at 10:19 pm

  Justin — in the short-term, perhaps. However, with sustained high oil prices,the demand for alternative energy will increase, and companies will promote development in alternative energy in order to get a piece of the market.

• Chuck Green
  May 8th, 2008 at 10:26 pm

  I spend over $300/ month now on gas. Theoretically speaking, U.S. gas prices are lower than others. However I hope telecommuting will be more common.

• the man
  May 8th, 2008 at 10:39 pm

  You can’t limit demand when 80% of America doesn’t have access to public transport of any sort useful enough to live their lives AND 70% can’t access any car that gets better than 40 mpg.

  Demand is stagnant for the the next 4 business cycles until this is addressed.

• Dick Davies
  May 8th, 2008 at 10:45 pm

  If ‘the market worked’ , the States would have been paying a more realistic price for its oil over the last decade or two - it’s far cheaper in America than anywhere else.

• Tom
  May 9th, 2008 at 12:03 am

  Actually, the US is about in the middle as far a gas prices are concerned. The “rest of the world” (meaning Europe) pays much more than we do because they tax gas a lot more than we do. They also have public transit systems that work for most people, unlike here.

  One interesting think to note is that in real terms, oil is actually slightly less expensive now than it has been in the last decade. It only looks like more because the dollar is falling so fast. Take a look at oil priced in gold, and you’ll see what I mean.

  Here’s a good article on the subject, with graphs to back up my point:
  http://www.thedailygreen.com/environmental-news/latest/oil-gold-commod ities-47041507

  Get ready folks. All this inflation is going to start hitting manufactured goods soon, once industry can no longer absorb the shortfalls. We’re in for a major contraction, and it’s all due to the inflationary policies of our wonderful print-and-spend government (Republicans don’t want to tax, but they steal your money by decreasing it’s value–all they have to do is hit a button, and your dollars are diluted).

  It’s a big mess. I’m putting my money into hard commodities.

• Ashley
  May 9th, 2008 at 12:09 am

  I hear a lot of non-Americans complaining about how cheap our gas is and whining that we are whining.

  We have several Gulf oil rigs, some mid-land ones, and maybe even some Alaskan ones. By that right, our economics demand that we pay lower prices as we can supply some of our own oil. Europe? Completely dependent on Middle East oil.

• Louise
  May 9th, 2008 at 12:56 am

  I’m actually looking forward to this. I especially will enjoy the 21st century trollies.

• Pol x
  May 9th, 2008 at 4:06 am

  If the US car market(and the customers) had moved on the idea that fuel economy is in fact agood thing then you’d all need a lot less and the price wouldn’t be so scary.

  The average american car is several tons of steel with an automatic transmission and a 4 litre engine.

  And there is one for every citizen in the US.

  In Europe cars a re a LOT smaller, with smaller engines and manual transmissions.

  NOw EU cars are VERY far from green, but compared to the gluttonous consumption and frankly crappy standards of design and fuel efficiency, European cars are a Ralph Nader wet dream where diaphonous vehicle cruise around fuelled only by The smiles of Care Bears and the good kharma of Unicorns.

  The atrocious SUV things you lot drive are should shame a nation with such a great engineering back ground.

  I always hear about how you guys should be leading the world, well LEAD.

• MoonCake
  May 9th, 2008 at 5:04 am

  it’s really irrelevant to compare oil prices around the world because moral of the story: EVERYONE’Spocketbook is slowly being sodomized.

• Angstrom
  May 9th, 2008 at 5:13 am

  Now there’s a mental image that will stay with me all day!

• DCGaymer
  May 9th, 2008 at 5:36 am

  I put people who complain about the high cost of gas into the same category as people who bought into the whole subprime mortgage market. They did it to themselves. There should be no taxpayer bailouts for subprime borrowers….and no taxpayer bailouts for people who can’t afford gas. They need to sell that crapass house in the burbs….pare down their belongings…and rearrange their lives to live within their means.

• H8tred
  May 9th, 2008 at 5:44 am

  A load of crap. If it’s a vastly diminishing resource, why is it .78 USD in Kuwait City? Where it’s less refined and free of additives and detergents? I have friends in the military that say the same cars there run way better than ours. Even the government hummers run better there.
  Not to mention all the war going on there…

  Granted a lot of places in Europe have it worse than us, but at the same time there money is worth .54 more on the dollar, and 1 Kuwaiti Dinar = 3.75333 US Dollars. So who’s getting shafted?

• MoonCake
  May 9th, 2008 at 5:55 am

  i had more to say and accidentally hit the submit button.. sorry folks.

  anyway- i think in order to really make a difference, we need to come together as a society and work towards reform. things need to change and we all know the various reasons why. and i’m not just talking oil prices.

  i’m really impressed with vectren energy delivery because they’re making some good steps in helping us. they ’say’ they going to phase out natural gas and use more renewable energy, like windmills and solar power, by the end of 2009. i think this is a huge step in getting everyone else in line. i think it’s the job of the big companies around the world to take these first steps too, because they’re the ones that control the markets. it would probably bring a tear to my eye if the big boys actually tried to HELP us instead of hinder us for their own benefit. that will be the day…

  what i think is most important though is that in times of crisis, people come together and try to solve societal problems rather than individual. we’re helping each other out by venting our frustrations and thinking critically about our futures. it really shows that people care and want things to change, and as long as everyone wants change, others will follow in working towards new goals. the challenge isn’t finding ways to reduce prices to maintain our societies.. it’s finding new innovations to get us through to the next era. times of transition are always very rough, so patience is vital. in the meantime, i think it’s important for us all to brainstorm and think critically about the direction we want to go. cheers.

• Kathleen
  May 9th, 2008 at 7:34 am

  I would like to do my part in lowering demand by riding my bike to work. Makes sense, it’s only 8 miles away, and I own a bike. Unfortunately, there’s no safe route for me to take on my bike. SO I’ll keep paying the high gas prices to avoid getting hit by a car while I’m riding my bike to work, those would be some expensive medical bills, and it would hurt quite a bit.

• snackcakes
  May 9th, 2008 at 8:36 am

  I don’t know what all the fuss is about; just let them eat cake.

• Woodwose
  May 9th, 2008 at 9:22 am

  It all comes down to the fact that almost no one addresses a problem before the pain of not addressing it becomes greater than the pain of addressing it. Hopefully this occurs before the original problem kills you.

  Instead of finding a solution and putting in the hard work and pain to enact it, there’s always the procrastinator’s prayer - “Gawd, please give me another chance, I promise I won’t piss it away like all the other times!”

• Dave
  May 9th, 2008 at 9:29 am

  Reading through this thread is a bit depressing. Are there really so few who understand basic economics and how that plays into fuel prices? And how many really read the linked article?

  “High prices are necessary if we are to reduce demand, find new oil, and develop alternative technologies.”

  But what the article doesn’t mention is that there are so many who are intent on breaking market mechanisms to induce an early transition from fossil fuels.

  “The problem, he says, is new discoveries of crude in non-OPEC areas like the United States, the North Sea, and Russia have not kept pace with the oil being removed from those places. OPEC, which holds two thirds of the world’s crude oil reserves, has seen no drop in global demand despite $120 oil and has little incentive to increase output.”

  Politicians, unduly influenced by environmentalists, have all but shut down North American oil exploration. That is the true problem. We were forced to turn instead to so-called green initiatives like wind energy and crop-based fuels, which have created their own problems. If the market had been allowed to work as it should, fuel prices would have increased gradually, which would have gradually increased pressure on energy developers to come up with solid alternatives that don’t rely on fossil fuels.

  It’s much more complex than that, and there are other factors (like the weakened dollar) that play into the equation as well, but unfortunately the attention span of the typical person reading this is too short to go into it at length. But the short of it is, screw with the system and the system will screw you.

• fsmarch
  May 9th, 2008 at 9:42 am

  Why do the oil companies always come up smelling like roses?

  They price-gouge us to death, in times of record profits, and still people defend them.

• MoonCake
  May 9th, 2008 at 10:25 am

  that’s because there’s always two sides of the story, and you can’t base your opinion only on what you’re pissed-off about. there’s more to the story that you’re letting yourself know.

• Lindsey
  May 9th, 2008 at 10:45 am

  Funny I felt commpelled to write this today and then saw this article and so I feel it is a perfect comment…

  I like many people these days are feeling the strain of our economy, soaring food prices and sky rocketing fuel prices. Recently I learned that I could take the train to work and decided to give it a try. My monthly round trip ticket costs 137.00 a month. When I was driving I was spending close to 400.00 a month. In addition to the money I am saving my compute has been shortened by 15 to 20 minutes.

  I walk to the station every morning which lucky for me is not far. Sure I have to get up a little earlier but I have found that my morning walk is actually perking my mood. Here in the City or Orange where I live there are wild Parrots and it is always neat to see them flying from palm tree to palm tree. The manicured laws add an additional bonus as I actually have time to stop and smell the roses. Consequently by the time I arrive at the train station I am quite peaceful opposed to being frustrated by morning traffic.

  The train ride is pleasant. All I have to do is sit there and let the conductor get me to where I am going. Lucky for me my stop is the second the train makes. My ride is a total of 15 minutes. Once I arrive at the train station I have to board a bus to complete my commute. The idea of taking the bus was not something I looked forward to but the experience is what has lead me to want to write this note.

  As I said and as I am sure you know, many of us are feeling the strain right now. Very few are sheltered from the over bearing financial stress we as a nation are feeling. With this said you can imagine that I am not the only person who has sought alternative transportation. The trains get busier and busier every day and so do the buses.

  Everyday we all board the train/bus trying to get to work just to try to make a living. I have always had a certain frustration with people in general as it is so often I notice that the vast majority has what I like to call, “I am the only person on earth syndrome”. For example the people who bump you in their rush to get some where and never think for a second to say excuse me. Or even as simple as avoiding eye contact and or a friendly good morning when sharing the same space.

  Well I have been quite surprised lately. Every morning when I board the bus every seat is taken. In addition to the seats being taken there are always at least 15 people standing which pretty much takes up any and all room humanly possible. Yeah it is a bit humid with all this body heat, and most of us are crammed in with each other much more closely that we would prefer, but much to my surprise rather than being hostile or grumpy about it people are being considerate.

  It is almost as if we all have been humbled at bit. Men get up and allow woman to sit while they stand. Laughs are exchanged when the bus jerks you into someone else’s personal space. Friendships are being formed from our discomfort rather than hostility. It is truly a wonderful thing for me to experience. Perfect strangers all with a similar goal working together to make the experience as pleasant as possible.

  Two days ago the train was delayed due to a suicide on the tracks. The train stopped running around 1pm and did not resume until 5pm. As u can imagine many people were stranded and by the time the train reached each stop the number of people boarding had quadrupled. With the trains stocked full daily this lead to some pretty severer conditions. We were all crammed in that train like sardines. When the train arrived in Tustin where I board in the afternoon it was standing room only. The train was alive with laughter and chatter. We were all just so glad to be headed home. When the train stopped in Santa Ana it was ridiculous. Riotous conditions and yet the adventure continued as we all just made room. When the train stopped in Orange which is where I get off the looks on the faces of those waiting to board were hilarious, as it was clear it was going to take some serious human Tetris like maneuvering to get them all on. As the train pulled away I watch from the street as the conductor on the loud speaker cautioned everyone to watch their arms and legs the doors were closing. Literally the doors were closing within inches or peoples noses.

  The next day the train was alive with conversation about the adventure of the day prior and more bonds were formed.

  Lastly not only are we all humbling ourselves and opening our eyes the others around us we are lessoning the impact of our carbon foot prints. All in all the strife we are enduring is actually bring us together and inadvertently helping our planet. I encourage you to look into your local transit as an alternative to your daily drive. You too may find that it brightens your day.

  Also I thank each and every person I have come in contact with during my commute. You have in a small way helped renew my faith in man kind.

• Justin
  May 9th, 2008 at 10:59 am

  Yeah, tell the factory worker in Indiana who has to drive 20 miles to work every day that “IN THE LONG RUN HIGH OIL PRICES ARE GOOD FOR YOU!”

  Or the guy getting minimum wage at mcdonalds who now has to pay more for everything because the fuel cost of transporting goods have skyrocketed.

  Not everyone can afford a new Toyota Prius or has access to public transportation.

  While there are a lot of things we can do to create more fuel efficient transportation, sky rocketing oil prices in such a short period will not help anyone but the oil producing countries and oil companies.

  It’s easy for you to sit in your comfy chair on your big computer and think about the great “long term” benefits of this. But you forget how much this hurts poor working people who are deeply affected by the price of gas.

  Or are they a necessary sacrifice to your Utopian dream?

• oldie
  May 9th, 2008 at 11:24 am

  I think that

  you: “Not everyone can afford a new Toyota Prius or has access to public transportation.”

  and you : “You can’t limit demand when 80% of America doesn’t have access to public transport of any sort useful enough to live their lives AND 70% can’t access any car that gets better than 40 mpg.”

  are missing the point. Yes, right now it sucks. There’s not enough public transportation, most cars are inefficient and efficient cars are expensive.

  The point of the article is that in the *long run* the pressure applied to the market by high gas prices will cause consumers to demand better/more efficient/greener cars from car companies and cause citizens to demand more public transportation.

  No one (reasonable) is saying that it doesn’t suck right now or that it doesn’t hurt people (especially the poor) between now and then.

• Lindsey
  May 9th, 2008 at 11:48 am

  Well said Oldie!

  Some times we all need to do our best to see the glass half full rather than half empty. It truly is sad that it is mostly in the event of tragedy or inconvenience that we make changes for the better. But hey, at least some changes are being made.

• smak
  May 9th, 2008 at 12:15 pm

  Oh, Dave — you’re so much smarter than everyone else, ever!

  Thanks for not wasting our time with lengthy explanations that we’re too ADHD or stupid to understand!

  By the way, I didn’t know GW (Mr Biofuel) was an environmentalist! Wow! And here I was thinking that the Alaskan oil fields would only provide 10 to 15 years of oil, conservatively — 30 years at best. What an idiot I am!

  Thanks so much, Dave! I’m such a f*cking moron!

• Cathy
  May 9th, 2008 at 1:06 pm

  I live in Southern California.

  I drove past a mini mall with three drive through restaurants: Starbucks, Taco Bell and In-N-Out Burger last night. 7 vehicles (two of them H3 Hummers) waiting at Starbucks, 6 vehicles at Taco Bell and 12 vehicles at In-N-Out. All of them offer walk-in service. People do not care and are willing to pay higher prices. They are not conserving. The fuel companies are in business to make money. Let them.

• someguy
  May 9th, 2008 at 2:55 pm

  Dave has it right.

  The USA has huge amounts of oil reserves that have not been tapped for the last 30 years because of environmental concerns. Unfortunately, many environmental activists want to force people to use less fuel for transportation so they like higher gas prices.

  There may be a similar issue with the lack of new nuclear power plants in coming years.

• robbi
  May 9th, 2008 at 7:46 pm

  Good point, someguy. If we can just burn all that oil those pesky environmentalists are protecting, then hundreds of millions of people will die when the sea levels rise. This will reduce demand and prices will drop. Let the market work!
  Seriously, people in Europe pay more for their petrol (in part) because of higher taxes on the stuff. These taxes go on to fund excellent public transportation systems (at least compared to ours). I’d be all for higher prices if the money were being used properly. Instead it’s all going to record breaking profits for oil corporations who exist only to make more profits–even if that means the planet has to die.

• Idil
  May 9th, 2008 at 10:20 pm

  Um… maybe if the US had good convenient public transportation like Europe, we could actually have a CHANCE to save oil

• sparge
  May 9th, 2008 at 11:51 pm

  Idil: maybe now that the price of oil is increasing, it might make financial sense for the sprawled US cities to install public transportation systems.

  someguy - if environmentalists were smart, they’d endorse the building of nuclear plants. There’s hardly any emissions, and the amount of energy available from the Earth exceeds that of oil.

• David B
  May 10th, 2008 at 9:18 am

  I don’t know about anyone else but I’m tired of the people in power telling us everything that happens with a negative attasched is our (the public) fault. We don’t have sufficient public transportation, they continue to allow building of homes and business without regard to infrastructure and utility use, they haven’t been working on alternative fuel and power sources and now we (the public) are suffering and blamed for the problem. We don’t have a say other than electing politicians that cater to the special interests that include big oil, the utilities, and the car manufacturers. Yeah it’s all my fault because I don’t live next door to my job, within walking distance to the stores I frequent and when I do have to go any distance ride a bike.

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