[Realist]

After falling the past few days (until yesterday), it's up to 136.

[RagingTireFire]

At this rate, the contents of my gas tank are going to be worth more than the rest of my car.

[Sly Fox]

It ainlt over yet but a long stretch.

[Realist]

You think? Nothing supports the price. Plus, it's only going to hurt those that profit off of oil in the long run if prices remain this high. If prices remain high, consumers are going to start learning to conserve and once you teach them that behavior and how much money they can save, they won't forget.

[Hold My Own]

A buddy of mine drives a King Ranch and the pump cut him off at $100...I laughed...better him then me!

[Sly Fox]

I love the King Ranch! They still have real cowboys there and that Santa Gertrudis beef is phenomenal. Oh, you mean the truck. Nevermind.

As for the prices, there is room for it to continue to rise before correction. Summertime's high consumption is not the time for a drop.

[jmdickens]

A buddy of mine drives a King Ranch and the pump cut him off at $100...I laughed...better him then me!

I drove one to work wednesday

[TDDance234]

About a year ago, I sold my Dodge Intrepid and bought a Kia Sportage. It was the best thing I've ever done...I get anywhere from 25-30 mpg on the highway and I couldn't be happier.

[belcherboy]

You think? Nothing supports the price. Plus, it's only going to hurt those that profit off of oil in the long run if prices remain this high. If prices remain high, consumers are going to start learning to conserve and once you teach them that behavior and how much money they can save, they won't forget.

It won't matter. India, China, and other countries are using much more oil, and that trend is expected to continue. I read something that said that even if the US dropped usage by 25% (we have currently dropped usage by about 4%), it would make little to no impact on the cost of a barrel of oil. We will never see the price of gas below $3 again. Perhaps in the next 5 years, we may be averaging near double what we pay now according to many analysts.

[thepostman]

simple answer....its called Alaska....

discuss...

[SuperJon]

We will never see the price of gas below $3 again. Perhaps in the next 5 years, we may be averaging near double what we pay now according to many analysts.

Well, that's not necessarily true. If we'd use our own from Alaska and other places where we're not allowed to drill, then we could get it back down.

[belcherboy]

It still would take at least 5 years to see it, and I'm not so sure it isn't too late. IMO we will begin investing in alternative energy sources and will not care if gas is over $3 a gallon (or double/triple that). I like the idea, but nuclear power is where we can really save money and create independence. I still think we should drill, but I don't believe it will make one dimes difference in the cost of oil.

[Realist]

You think? Nothing supports the price. Plus, it's only going to hurt those that profit off of oil in the long run if prices remain this high. If prices remain high, consumers are going to start learning to conserve and once you teach them that behavior and how much money they can save, they won't forget.

It won't matter. India, China, and other countries are using much more oil, and that trend is expected to continue. I read something that said that even if the US dropped usage by 25% (we have currently dropped usage by about 4%), it would make little to no impact on the cost of a barrel of oil. We will never see the price of gas below $3 again. Perhaps in the next 5 years, we may be averaging near double what we pay now according to many analysts.

Lots of problems with this statement. A) China, India, and some other countries subsidize their oil driving down the price to consumers. The cost of oil is really starting to be felt by those governments, and they are going to start passing along the costs to consumers. India has already begun to do so. If that trend continues, the growth over there is going to be curbed quite a bit, as those consumers don't have nearly the disposable income that Americans do to absorb those higher costs. B) The U.S is still by far the greatest consumer of oil and will continue to be, if the country cuts back on oil for a duration of time, prices will go down. If we reduce by 25%, whoever wrote that is an idiot, b/c they definitely will go down, though it won't decrease that much.

Again, supply and demand have nothing to do with the current price of oil. There is plenty of supply to cover demand. Speculators and the dollar are what fueling the drive up in price, and right now it's more speculators than anything. The guys on wall street, analysts included, are driving up the price and doing what is best for thier clients, release statements that fuel more drive up in price, to get themselves and their clientele rich. Why do you think we've seen the releases from the big dogs lately saying that oil will hit 150? Nothing supports it, only their desire to make profit for the ones that bought at 130, and then saw the decline earlier this week to 124, along with the data that shows that America is cutting back.

This is just a bubble.


My point is this, it takes a lot to change consumer behavior, however, we have begun to see the behavior change in America as more people are taking mass transit than ever before, sub compact, compact, and hybrids are now the best sellers, etc. Once you start driving behavior change, it is very hard to reverse. This oil bubble may have been the best thing to happen to the country in terms of the long term prices of oil. In the long run we're going to see lower costs than we would have. Will we see below $2 ever again? Probably not, but I'd bet the house it will be under $3 again within a few years, if not much sooner.

[PAmedic]

I've never wanted REALIST to be right so much in my LIFE.

And having family in the investment business- the theory sounds very plausible.

[Ed Dantes]

Paraphrasing George Will...

The voters elected Democrats to be their representatives, so they should pipe down about gasoline prices, which are a predictable consequence of their political choice.

[4everfsu]

Once we say we are going to start to drill in Alaska and other places in the US that are off limit the price per barrel will drop whether it takes 5 or 10 yrs to hit our market. Why? Speculation drives this market.
Reason we didn't do this years ago, the liberal members of Congress who have their members in the hands of enviromental wackos would always use this as an excuse not to drill.

Hey Nancy 'never met a tree I didn't like' Pelosi, I love the Democraps plans to lower the price of oil!!

[Sly Fox]

New leases on the North Slope were sold earlier this year. But production takes years & years to get going even after approval.

And for the record, most of the easy oil has already been extracted. The majority of the resources we have remaining require heavy investments that weren't cost effective a few years ago even if there would've been access. Times have changed.

[4everfsu]

North slope is not the only place that we can extract oil, if the Chinese can start drilling in the Gulf of Mexico, we have that territory and others. Again speculation of more oil coming in will drop the price of oil

[Fumblerooskies]

For those of you worrying about the price of gas...
...I recommend you doing a Google search on...HYPERMILING.

I saw a feature on it while watching CNN last week. Pretty radical driving techniques, some crossing the border on safety...but if you can increase your gas mileage by 30%...that's not too bad.

[belcherboy]

http://money.cnn.com/2008/06/06/news/ec ... 2008060617

The politics of oil shale

Fortune talks to Sens. Orrin Hatch and Wayne Allard about the roadblocks to oil shale production.

By Jon Birger, senior writer

NEW YORK (Fortune) -- You'd think this would be oil shale's moment.

You'd think with gas prices topping $4 and consumers crying uncle, Congress would be moving fast to spur development of a domestic oil resource so vast - 800 billion barrels of recoverable oil shale in Colorado, Utah and Wyoming alone - it could eventually rival the oil fields of Saudi Arabia.

You'd think politicians would be tripping over themselves to arrange photo-ops with Harold Vinegar (whom I profiled in Fortune last November), the brilliant, Brooklyn-born chief scientist at Royal Dutch Shell whose research cracked the code on how to efficiently and cleanly convert oil shale - a rock-like fossil fuel known to geologists as kerogen - into light crude oil.

You'd think all of this, but you'd be wrong.

Last month, the U.S. Senate's Appropriations Committee voted 15-14 to kill a bill that would have ended a one-year moratorium on enacting rules for oil shale development on federal lands (which is where the best oil shale is located). Most maddening of all - at least to someone like myself not steeped in the wacky ways of Washington - the swing vote on the appropriations committee, U.S. Sen. Mary Landrieu, D-La., voted with the majority even though she actually opposes the moratorium.

"Sen. Salazar asked me to vote no. I did so at his request," Landrieu told The Rocky Mountain News. A Landrieu staffer contacted by Fortune doesn't dispute this, but notes that Landrieu did propose a compromise which Republicans rejected.

Arghh!

She was speaking of U.S. Sen. Ken Salazar, D-Colo., who has emerged as the Senate's leading oil shale opponent. Salazar inserted the aforementioned moratorium into an omnibus spending bill last December, and in May he proposed a new bill that would extend the moratorium another year.

Salazar's efforts have essentially pulled the rug out from under Shell (RDSA) and other oil companies which have invested many, many millions into oil shale research since the passage of the Energy Policy Act of 2005, which established the original framework for commercial leasing of oil shale lands. (Last year, oil shale represented Shell's single biggest R&D expenditure.)

Salazar says he's simply trying to slow things down in order to ensure environmental considerations don't get trampled in the rush to turn western Colorado into a new Prudhoe Bay. But, ironically, his bid to extend the moratorium comes at a time when his fellow Senate Democrats have been blasting Big Oil for not reinvesting enough of their profits into developing new sources of energy.

I recently spoke with Republican U.S. Sens. Orrin Hatch of Utah and Wayne Allard of Colorado, the two lawmakers working hardest to end the oil shale moratorium. Here are some excerpts from the interviews:

Fortune: Why do you consider developing oil shale such a high priority?

Sen. Hatch: We have as much oil in oil shale in Utah, Wyoming and Colorado as the rest of the world's oil combined. Liberals and environmentalists can talk all they want about wind, solar and geothermal - all of which I'm for - but last time I checked, planes, trains, trucks, ships and cars don't run on electricity. 98% of transportation fuel right now is oil. Ethanol is the only real alternative, and we're seeing that ethanol has major limitations.

It's pathetic. Environmentalists are very happy having us dependent on foreign oil. They're unhappy with us developing our own. What they forget to say is that shipping fuel all the way from the middle east has a big greenhouse gas footprint too.

Fortune: Any hope of changing Sen. Salazar's mind? After all, he says he's not opposed to oil shale production in principle.

Sen. Allard: His mind seems pretty set. His argument is, if we delay this, it gives us an opportunity to phase it in gradually. But he's got it turned around. We need the rules and regulations in place first. When the oil companies go to bid on their leases, they need have some idea what their royalties might be and what their remediation requirements might be [for restoring the land at spent drilling sites].

Fortune: Have you talked to Shell about this?

Sen. Allard: We have, and they've indicated a great deal of frustration. They've put it this way: Look, we can't continue to invest millions and millions of dollars in this kind of research without seeing some light at the end of the tunnel.

Fortune: Sen. Salazar insists he just wants to take things more slowly.

Sen. Hatch: Sen. Salazar and the Colorado governor [Democrat Bill Ritter] say they don't want it to happen too fast. Well, the existing law that I sponsored [which became part of the 2005 energy act] makes it abundantly clear that each governor gets to decide how quickly developments should move forward in their respective states. [Salazar and Ritter] know that. What they're really doing is making sure that the governor of Utah and the governor of Wyoming never gets to make that decision for themselves.

Fortune: One of Sen. Salazar's environmental concerns involves water and the big draw on local water supplies required for oil shale production. Based on my reporting in western Colorado last year, this seems like a legitimate concern. What's your take on this?

Sen. Hatch: Let's compare it to ethanol. Corn needs about 1,000 barrels of water for the energy equivalent of a barrel of oil. That's a crazy amount of water, but it's worked out alright so far because corn is grown in rainy areas, for the most part. But if you want to increase the amount of ethanol, you're going to have to go to irrigation, and then there will be major water limits on how much we can afford to grow.

On the other hand, the Department of Energy estimates that oil shale will require three barrels of water for every barrel of oil.

Fortune: Of course, water is a lot scarcer in western Colorado than it is in Iowa.

Sen Hatch: It is, but remember the oil companies are going to use and recycle the water. And while we're on the environmental impact, let's talk about land use and wildlife habitat. One acre of corn produces the equivalent of 5 to 7 barrels of oil. One acre of oil shale produces 100,000 to 1 million barrels.

Fortune: With gasoline at $4, why this isn't this more of a front-and-center issue for consumers and voters?

Sen. Hatch: I'm generally the last guy to lambaste the media, but generally you do not hear these facts. We're sending $600 billion annually to enemies of our country. If one acre of oil shale produces 1 million barrels of oil, that's 1 million barrels that we would not be importing from Russia and the Middle East. People are going to go berserk when they find out that all along we had the capacity, within our own borders, to alleviate our dependency in an environmentally friendly way.

Ironically, the local governments in Colorado's oil shale areas do support oil shale development, but it's being stopped by the ski-resort elites. A couple months ago, an article came out about how the city of Aspen was being besieged with building applications equating to about $2 million in development a day. Now if those nice, rich people in Aspen really cared about the environment, they might save an acre or two of those beautiful forests they're building on and support some oil-shale development in the not-so-nearby and not-so-beautiful oil shale areas of Colorado.

Fortune: Has oil shale development always been a partisan issue or is this something new?

Sen. Allard: It is something new. The issue with the Democrats now is they want to cut off any source of carbon. And there are those in the Senate who believe the more expensive you make gasoline, the less driving people do and you force conservation by making driving so expensive people can't afford it. To top of page.

[TylerBakersGonnaBGreat]

Thats a Good closing sentence for the article

[LUconn]

"Sen. Salazar asked me to vote no. I did so at his request,"


I forget do the people of Colorado elect their reps or does this retard Salazar elect them?

[SumItUp]

I forget do the people of Colorado elect their reps or does this retard Salazar elect them?

Did you mean the people of Louisiana???

[LUconn]

yes, you're right. That's what I meant.

[SumItUp]

http://www.reuters.com/article/GlobalEn ... 2520080610

I have believed and continue to do so that the price of a barrel of oil does not meet supply/demand criteria. IMO the most valid argument to an increase in the cost of a barrel of oil over last year's prices are the strength of the dollar. Still, that does not justify current prices.