New XM3k: $7500.00

Hey Gary,

wasn't it those "Dumbocrats" who left a record surplus of 584 billion bucks to your obviously favored Reptilicans who succinctly ransacked the country in their well-known ways and left it with how many TRILLIONS of record national debt?

How do you people have the face to mock democrats under these circumstances??

Admit it, your people are plain unfit for business and need those pesky Liberals for your own goddarn survival - just like the commies need capitalism for their survival.

Pretty "leachy" business ain't it??

As far as not drilling for the 90 billion barrels of oil off our coast, that's suicidal.....by deronmoped

I can't believe how far from the truth a one-dimensional statement like that can carry you....

You know how fast that little trickle of oil can actually reach our shores ??
......between 5 and 10 years!!

Go to the

www.theoildrum.com

and read around a bit if you care....

GC

Here in Chicago we haven't been hit hard by the housing bubble. I've seen the photos of the foreclosed homes the newspapers. Empty beautiful new houses hidden behind overgrown shrubs and brown lawns. Can you imagine what Dubai will look like?

Maybe our highways will look the same. One report says that 10 million cars will get off the highway during the next 4 years. The largest decline in US history. I know that the airlines are dropping routes like mad, particularly to the recreation destinations like Florida and Vegas. For them to drop a route, reconfigure the airplanes and park other perfectly good airplanes in the desert, takes around a year. That means they don't expect any solutions soon. This isn't just another recession, but a change in the fundamentals.

Can anyone predict beyond five years though with any accuracy? Will we get an upgraded infrastructure that isn't so oil hungry? Will all these wonder batteries we keep hearing about be affordable? We know the power grid could recharge them at night with minimal capacity increases. Will a nuclear weapon explode on US soil? Can who ever the next president, however well intentioned, be able to get is agendas passed? Globalism, and that interdependency that kept us peaceful is already starting to slow down. It is a very interesting and frighting time in history. I'm an optimist by nature, but I think this could go either way.

If we don't solve our energy problems, what will our nation look like? Maybe it won't be so bad. We'll live with a mixture of old and new technology. Cement will crack and grass will spring forth. Plagues and religion will make a comeback. People can't make transistors by hand, but they can make vacuum tubes. Wireless communications will increase. Local theater will be popular again. I'll probably get mugged and have my xm-3000 taken from me. It's alright, bicycles are better exercise anyways.

The prediction markets say there is a more than likely chance congress will remove restrictions on offshore drilling.

How do we keep the same things from happening again? Forget saving for 60AH 60V Li-ion pack, I'm saving up for a horse.

OK guys I'm going to say it. The argument that we should not go after the offshore oil because it will take time to get it to your gas tank is completely stupid. There I said it.

It's like telling a guy that is going to plant and make a living off of a orchard of avocados, apples, oranges or whatever not to plant them because it will take him ten years before his trees are even ready to bear fruit. Plus the trees do not provide fruit forever so why bother.

It's like telling someone to put a little extra cash away for retirement. It's going to take you twenty or thirty years of saving, why bother? Plus a little extra cash will not pay for everything in retirement, so why bother?

It's like telling a entrepreneur that is trying to develop a revolutionary battery, why bother, it's going to take ten years to get it to market (even if you do succeed) and it's going to be made worthless by a supercap anyways.

It's like telling a person that makes their living off of oil not to go looking for oil, it's going to take you five to ten years to get it to market, those wells will not produce for more then a few decades so why bother?

What you guys are repeating (I know you guys did not come up with this stupid idea) is that any solution that can not be had in a few weeks, months or a year or twos time is not worth going after. Plus this solution has to last forever, or forget it!

Come on guys, just because someone puts it out there, and we all know the goof politicians that started this, does not mean we have to repeat that political line.

Deron.

I just wrote a post, and deleted it. I think I've been using the wrong approach, we're just not finding common ground to build on. My argument wasn't that we shouldn't drill because it will take a long time for it to make a difference in the price. My argument, supported by data (do you know how long I spent looking for a credible source?!), is that the offshore drilling isn't anticipated to make a noticeable difference in the price of gasoline since it will add 0.2% to world oil production at its peak.

Deron,

Do you agree or disagree that we should keep some oil for future generations until we have a workable alternative?

When do you think we should transition away from our oil dependent economy and why?

Do you agree or disagree that low oil prices are an intensive to keep doing business as usual? (Short term gains chosen over long term gains).

Do you agree our dependence on foreign oil is likely to continue and that has direct implications on our domestic end economic security?

On your first question, No. Almost our whole society runs on oil right now, future generations will have replaced oil with something better, cleaner and cheaper, what would they need oil in the hundreds of millions of barrels a day for? Take a look at history, it used to be the horse and buggy, then the coal powered steam locomotive/ships, we used to burn whale oil to light our houses... Right now we already have a company that has revolutionized the making of photovoltaic cells. How long do you think it will take before these photocells are covering everything. Then there are the windmills that are the cheapest source of electricity in some parts of the country. Oil is already on it's way out.

On your second question, we are already doing that. What's the US at right now, 25 GW of renewable generation. Why, well I think oil will always have it's place somewhere, but it's starting to get a little pricey and we need to diversify. It's not smart to have all your eggs in one basket.

On your third question, sure. If the bottom was to fall out of the price of oil, people would be driving their big old SUV's again. It happened in the 1980's, that is just the way people are. That's how I got four (I use one for domestic hot water and three to heat the house via hydronic tubing in a slab) cheap solar hot water heating panels for my house, abandoned from the last energy crisis.

On the last question, yes. That's why I'm so adamant that we should be drilling more of our own oil, turning shale into oil, turning coal into oil, promoting natural gas cars (we have tons of natural gas), converting waste into alcohol, using nuclear energy, wind, solar, hydro, geo, promoting technical breakthroughs on fusion, batteries, supercaps, making things more efficient... I do not want to go backwards like Carter had us doing with gas lines, no gas, no heat put a sweater on, a economy that makes this slow down look like we are all living like kings and queens.

Deron.

"...It's like telling a guy that is going to plant and make a living off of a orchard of avocados, apples, oranges or whatever not to plant them because it will take him ten years before his trees are even ready to bear fruit...."

Q: Who on god's earth WANTS those "fruits" of yours? I sure as hell don't and probably the great majority of the people that make up this forum.

"...It's like telling a person that makes their living off of oil not to go looking for oil, it's going to take you five to ten years to get it to market, those wells will not produce for more then a few decades so why bother?..."

Q: Are you sure you don't wanna post all that stuff on an OIL-FORUM?? Please present something to back up their claim that this is gonna do anything but destroy nature even more than it already is.

"...What you guys are repeating (I know you guys did not come up with this stupid idea) is that any solution that can not be had in a few weeks, months or a year or twos time is not worth going after. Plus this solution has to last forever, or forget it!

Q: What a joke. A sustainable multiple energy society is the long term plan worth pursuing. That's why I visit this forum.
Your offshore drilling idea is plain standing in the way and makes matters worse by sponsoring political abuse and delay tactics. Might help someone in the elections...
I would recommend consulting "PLAN B 3.0" by Lester Brown. It's almost hard to grasp these complex systems without significant education in the subject matter!

"....Come on guys, just because someone puts it out there, and we all know the goof politicians that started this, does not mean we have to repeat that political line...."

Funny, why are you then defending the political "line"?
To me, the argument against offshore drilling as displayed here is the result of some deeper research, which you clearly don't seem to like, given the lack of real information in your post.

One thing I know for sure: The people keeping things in gridlock are not dumb - quite the opposite. AS long as you can't bring CHEAP oil back in significant quantities, all efforts are useless in stopping the demise of the oil-based infrastructure of our country.

Have you checked out THEOILDRUM.com yet?

As I sit here with my morning coffee I'm relieved that gulf dividing us isn't as wide as I expected. Our disagreement comes down to one (probably two) points. We have two separate ideas about how fast oil should be drained. I'd like to be conservative and make drain it at a rate that can provide for many generations, or at least until we have a replacement, and you think it's ok to use it all in one generation if I understand you correctly?

What is so frighting to me (working in the airline industry) is we don't have any solutions yet, just higher prices at a rapid rate. Natural gas will undoubtedly play a larger role. We can run existing cars off it with a $1000-$2000 modification. Tanker building companies are doing something unprecedented and building natural gas tankers before the orders for them even come in! In so many countries they still flare the well head as a waste.

The other scary thing is it takes much more than finding electricity solutions. Everything from asphalt, oils, wax, tar, plastic, and more need to find replacements also. Our society will look like a train wreak if we can't find alternatives to make those things (particularly plastics) at affordable rates.

In all your other you listed we didn't abandon the source of energy because scarcity forced us to. This time it's different.

http://thepage.time.com/prepared-remarks-of-obamas-energy-speech/ Now here's what I'm talking about. Obama's new energy speech with real policy substance.

One thing I would like to point out is, the economics of something has a regulating factor.

Oil will never run out.

Look at what is happening right now, the price of gas shot up like two bucks in less then a years time. What happened, people used less. Now as oil gets more expensive because the easy to get stuff gets used up, people will use less. They will find alternatives to the ever increasing price of oil.

The market will control how fast oil gets used. Right now more and more people are abandoning their gasoline powered cars for something that fits their budget. Instead of firing up the car to go five blocks to the market, like they used too, their walk, bike or take the bus. People would buy a house out in the sticks and drive a long distance to work because the houses were cheaper out there. They were making a economic decision to do the extra driving. Now it makes less and less sense economically to drive that distance, time to buy a house near work. I have talked to people that are in the process of getting rid of their cars. They are close enough to get to everything without a car, the car was just a luxury to them. Look at the airlines, you should know, they are cutting back big time.

At what point would you abandon your (I know pretty much everyone has cut back already) gasoline powered devices (Car, motorcycle, moped, lawn mower, generator...)? Five dollars a gallon, ten dollars a gallon, fifteen dollars a gallon, twenty dollars a gallon, thirty dollars a gallon, fifty dollars a gallon...

Me, I have changed my driving habits long ago, way before gas even hit two dollars a gallon. I used to drive my car everywhere, now I take a moped almost everywhere I go. One hundred fifty miles a gallon sure beats fifteen miles a gallon. Even now I have upped that by using my Pedelec about 50/50 with the mopeds. I have reduced my gasoline consumption by one thousand percent. Is my math right?

Deron.

I think it's possible that, as you say, "oil will never run out" and instead that it will get so expensive hardly anybody will be using it but that some will, enough to fund some oil companies to continue extracting oil just as there are still companies making buggy whips.

There's a serious debate in the peak oil community about how steep will be the slope on the other side of the peak. Will it plateau for awhile before falling off, or will it be a steep decline.

If it's a steep abrupt decline then there is little chance market forces can cause quick enough turnaround to get the society switched to other fuel sources. It has historically taken a long time to get 'energy' utilization to switch from one technology to another. It's taken how long for wind or solar power to make enough headway that they're (wind anyway) being seriously considered by officialdom?

Speaking for myself I'm not comfortable with letting market forces play this out on their own. I would feel more comfortable with the government setting an agenda here.

BTW last week I talked with a co-worker and found about this very curious airline passenger game he plays. I forget the exact terminology, but he takes airplane trips for the sole purpose of building frequent flyer miles, so that later when he takes international flights he can get upgrades to the expensive high service seats. He described it as a pure economics calculation.. by finding an inexpensive domestic U.S. flight with lots of miles the earned frequent flyer miles can buy him what's effectively an international business class seat that would cost $5000 or more. But to do that he's causing oil to be burned for no positive purpose ... On these mileage building trips he doesn't even leave the destination airport, he simply books a round trip ticket possibly with multiple legs, and schedules it all to take place over one day, not leaving the airports, eschewing even the possible excuse of doing some sight-seeing somewhere.

Making 'economics' be your sole argument begs a question... how do you value the cost to society of not having sufficient oil to drive society? The wasteful use of fossil oil, like what my co-worker is doing, accelerates the speed with which we will reach that day (insufficient fossil oil). And, again, the steepness of the slope of the decline of the availability of oil will determine the success we have in navigating through weaning our society from fossil oil to other sources which could perform the same job for us.

Deron,

You didn't answer the question at what rate do you think the oil should be consumed? I think your answer was at whatever rate the market forces will allow. If I knew we had any cheap alternatives I'd not mind that so much. We don't yet, and we don't know how long it will take either. Should we spread out consumption (price) over many generations or get it cheap and fast for as long as we can? Is oil any more our property then the property of future citizens? Doesn't a good business environment require property rights be protected? It's not conventional to think of property rights of future individuals but they will inherit what we leave them.

I also know markets tend to favor short term gains over long term. Brazilians would make a ton of profit burning down (or logging) their rain forest and planting sugarcane to supply the world with ethanol, but the long term consequences of throwing nature that far off it's balance is going to hurt them in the long run. Similar stories can be said for waling, or overfishing, or soil infertility.

You notice I'm not even talking about the global warming reasons for reducing consumption artificially. Even if humans are the main cause in climate change, and it DOES have expensive economic consequences that outweigh the solutions, it doesn't matter. We don't have a way to enforce pollution quotas for those countries who resist it. I'm getting myself depressed. This will be my last post on the matter. Deron you get the final word.

As for your friend who takes the long way to his destination to rack up the miles, he's a clever guy. It takes a lot of time to read the fare rules and plot an exploit. It's funny you say that because I'm directly responsible for coming up with the rules for specific fares based on complicated economic models. Mostly young people do this, the majority of travelers don't have the patients for it. We loose money on guys like him, but in the big picture he only flies on planes that would be flying anyways. His frequent flier upgrades only work if there is an empty seat in the first class (at the time of upgrade), and we overbook the flights by around 15% expecting people to upgrade and be absent (charged a change fee). People with elite frequent flier status often get upgraded for free at the gate or check in if possible, but its better for us if they use their miles instead. It gets more complicated but that's the idea.

The people using the product (oil) should decide at what rate it gets used up. That has been and is usually the best way to decide how a product is utilized. It's almost impossible to do it any other way. Trying to control how a product gets used almost never works. Take the 55 MPH speed limit during the Carter gasoline crisis, sure when it was first enacted to save fuel it was followed by quite a few people, but after a few years it was largely ignored. The government stepped in and tried to guess what would save gasoline, they were wrong, people preferred not driving over going slower. Now we have gasoline prices that have spiked and are costing people larger portions of their incomes. What's happening now is people are voluntarily making a choice not to drive.

How do you go about trying to stretch or save something for future generations? Is it possible? Can I save my "allotment" for my kids? Do we know what people in the future are going to use or even want? Will technology make oil almost useless to future generations?

You know I have been trying to figure out where to invest some extra income I have had lately. I have been thinking about it for a couple of years now. It's a extremely hard question to answer. Can you answer the million dollar question for me, what will be valuable in the future? Where can I put my money so in twenty five to thirty years it will have not have lost it value do to inflation or that the thing I invested in is still worth something? Now if I knew I could invest my money in the oil market and come out even or ahead in thirty years, I would do it in a heartbeat. When it comes down to investing hard gotten gains, it makes a person real uneasy about what will happen to that investment. Actually I'm waiting for gold to come off it's peak and back down to it's average, over the past twenty years. I might get in at four to five hundred a ounce. Oil I think is becoming a harder to predict product. Technology is moving along so fast that in the next bunch of years I can see batteries, supercaps, powered by cheaper wind and photovoltaic, making gasoline powered cars obsolete.

I mean, who's going to want to go to the gas station, when you can plug in at home?

Deron.

Can you answer the million dollar question for me, what will be valuable in the future? Where can I put my money so in twenty five to thirty years it will have not...

Deron.

Well if you believe Mr. Pickins, the thing he is putting money into, other than wind, is water rights in the mid west and western US.

The sure way to reduce national consumption is a tax on it phased in. Reduce the income tax the same amount as the gas tax brings in so it is not a new tax. As an airline economist, I VERY reluctantly suggest new taxes. I am committing professional suicide for a good cause. I don't see a better alternative. There is no better way to reduce domestic consumption. The risk is that there can be a black market, but I doubt that will happen very much. We are uncertain if the future generations will want oil or not. As things stand at the moment they will want it until technology comes to the rescue. Had we begun developing a oil free economy when oil was cheap we wouldn't even be having this conversation. It will now take a larger percentage of government revenue to achieve this as receipts are on the decline. Shipping and manufacturing costs all going up. Private companies never step in to do the large infrastructure projects without government sponsorship. The good news is there has historically been a large ROI on macro-infrastructure modernization.

I wonder can the USA still do big things? A great source of pride for Chicagoans came after the great Chicago fire wiped out much of the city, is the tireless effort to rebuild the city. After three months of work it was bigger and better developed than before the fire, a testament to American work ethic and determination. Now we try our hand at rebuilding, and get poor results and an endless list of huge scandals. Iraq, Afghanistan, New Orleans... I'm not seeing any marshal plan like successes. (I suspect the Marshal Plan deserves less credit than it gets, most credit should go to the adoption of a market economy). Today we can't even get minimum wage to keep up with inflation, or the city workers to come trim the trees after three years of pestering.

So if you want to invest in something? In an uncertain world that's very hard. It really depends on how much risk you want to take on. How much risk you want to take on should be adjusted by when you plan to retire. When you're young and your salary is low but you expect to make more money when you're older, it is wise to save less. The purpose of saving is to spread even your consumption levels over your lifetime. For uncertain times annuities are a good safe investment. There are new ones with cool features the old ones didn't have. It guarantees a 7% interest rate regardless of what the market does (can be bad if the market is growing faster than 7% but great if there is no growth or declining). If you want to be very risky you can put all your money in the stock market. I shy away from mutual funds, in general they have no better rates of return compared to the overall stock market, some do better than others, but from statistical probability, that's guaranteed. All the fund managers are guaranteed a % of the total pool no matter what the performance is, over the long run, that makes a big difference to the amount you end up with.

I'm sorry if you were hoping for a stock tip, I'm not qualified for that. Buying up commercial real estate in big cities seems to me a good idea now that the prices are lower than they should be and the long term trend is for people to move to cities. Find a fund which buys the properties with cash, so you're not taking on the risk of a mortgage, and in the end you'll own something, so worst case scenario you'll still have equity, it just won't be earning you cash. There are more sophisticated ways to earn low risk income like if you perform currency "carry trades". I did this for a while to earn income as a college student. It is time intensive and complicated, but it was more lucrative and less time consuming than delivering pizzas.

Yes taxing something is a sure way to get less of it. Does not some countries in Europe have heavy taxes on gasoline consumption? There is quite a bit of tax on gasoline right now. I think in San Diego it's like 75 cents a gallon. Federal 18 cents, state 30 cents, and 8% sales tax. Of course the 8% sales tax, taxes you on the state and federal tax. There is also all the hidden taxes the government gets from oil. Excise taxes, royalty payments, taxes on shareholders dividends, drilling rights... I bet there is probably hundreds of taxes and fees the industry pays.

I think what you want is a switch to something else besides oil through higher taxes. If people do not switch to something else, the higher prices would just mean that the oil would last longer. Anyways, I'm not 100% sure this would work. The UK has a tax of like over $5.00 a gallon for diesel, yet I do not see them switching to something else to power their cars, all I see is them getting into smaller more economical cars. They have had extremely high taxes for decades now, you would think they would have developed a alternative technology if high taxes meant they would develop something else. Now of course this is the UK, nothing like the good old USA. Higher prices in the US has caused a dramatic cut back in consumption, but I also see people trying to come up with alternatives. I do not think we have the same mentality as the Brits, we want it all and we want it now, the Brits seem to be happy with less of something.

I was not hoping for a stock tip, I was just trying to point out how difficult it is to predict where we will be at with gasoline in 10, 20 or 30 years. Will consumption be up, down, flat or in the tank? If I knew gasoline would still be a hot commodity, I would invest some money there. I actually think electric motors will quickly replace the internal combustion engine in the next 10 to 20 years. We have a decent battery right now, it just needs to be a little cheaper.

Deron.

Ah you were just making a point, now I feel silly for giving investment thoughts =D. Point made.

I'm pretty sure it will work, unless we get a thriving gasoline black market. Europe just found their tipping point same time as we did ($9/gal). Besides we have 301 million people vs UK's 61m. Americans don't take so kindly to living the euro lifestyle ;)

If they get super capacitors affordable enough we can use them in electric cars. The only thing is to charge it as fast as we can fill a car with gasoline, we'd have to dump as much power as an office building consumes for that moment. A typical gas station filling 8 cars at once would need to be given the equipment to handle it. Hybrids will fill the gap in the meantime.

The UK has a tax of like over $5.00 a gallon for diesel, yet I do not see them switching to something else to power their cars, all I see is them getting into smaller more economical cars.

In the UK there are a lot of electric vehicles available. The REVA is available as are many others.

One part is the congestion charge which is a kind of tax levied against cars driving in London, but electric vehicles are exempt from the congestion charge. There was a podcast ("Danny's Contentment") by a Reva owner documenting his explorations of EV's in London and he pointed out how the EV charging outlets are all over London and that the EV's are popular enough the EV charging spots were full.

Sounded to me as if they're switching to "something else"

They have propane widely available at gas stations too, and dozens of shops authorized to put in the conversion kit. You can buy them on ebay from british and italian companies mostly.

All this talk about the future of oil has me looking at what is out there in the way of changes in technology. Mazda has come up with what's called SISS, "Smart Idle Stop System". This is supposed to be good for a 10% increase in fuel economy. What it does is kill the engine when you are not using it. Then restarts it by using a shot of fuel and spark. The hybrids use a starter. This also is good for a reduction in pollution. Mazda is also committed to a 30% increase in fuel economy by 2015.

http://www.japancorp.net/Article.Asp?Art_ID=18761

There is also what they are doing with alternators. Instead of running them all the time, they are making them smarter, using them in regenerative braking. BMW says they can get a 4% improvement. We can even do this one. Just remove the alternator and run off the battery, recharge it at home. Some guy has tried this and said he got a 10% improvement in fuel economy.

http://www.metrompg.com/posts/alternator-optional.htm

Then there is the new lead acid battery. A carbon-graphite foam, lead-acid battery. One quarter the weight or four times the power, double the life, seven times faster recharge, one tenth the cost of lithium. If this is all true the lithium battery for my bike might be replaced by lead acid when it dies. I wonder what this new battery will mean for EV's? Can we say affordable EV with decent range?

http://blog.tmcnet.com/beyond-voip/green-technology/firefly-breathes-new-life-into-lead-acid-battery-design-and-scores-10-.asp

Technology is changing so fast, we will look back in twenty years time and wonder how we could have lived so primitively.

Deron.

Cool idea re: removing the alternator. I know race cars do that, but never thought of doing it myself. You'd have to put in a deep cycle battery. I was thinking, if people put nickel iron batteries in, they'd never have to buy another battery for the rest of their lives. Maybe it's a nice sweet 16th present for a kid.

Good post Deron!

Well, of course the price is too high! Think about it, dude. It's way too much. I wouldn't afford buying something like this with this money. Since I spent a lot of money for the program I attended at the Drug Rehab Center, I'm short on money.

Dude, you're right.. I just thought about it. I'm broke too, spent all my money on Sarah Palin memorabilia I found on eBay.

gushar wrote

No more reasonable oil, gasoline, etc. Those days are gone. That's simply the truth...and accurate figures support that.

No more "Easy Oil" for us folks, whatever happened to the "Peak Oil" situation and the mountain slope graph that
DR. M. King Hubbert himself twenty years ago accurately created by using mathematics, geology, physics, arent we sitting on what he predicted? :jawdrop:

http://www.hubbertpeak.com/hubbert/

ArcticFox wrote

There is water-ice on Mars.

That's it I'm moving to Mars! :?

Finally a wise man talking in public about economics:

http://www.youtube.com/watch?v=ketB8a1EUts