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I'm pretty sure the price of all fuels is being kept high, but not necessarily for the reasons Jazz states.
Oil is traded much more than it is used, and the profits siphoned from that trading is the primary reason that we're seeing such high fuel prices while there's such a glut of it in storage tanks all over the world.
The knowledge of whether the banks are doing it to help bail themselves out or if they're doing it at the direction of the Fed to fend off a deflationary spiral is above my pay grade, but I am bright enough to see that the price of oil, gas, and distillates is higher than the laws of supply and demand would normally dictate.
At any given time, there is only enough storage of petroleum products to last a few days or weeks in what is stored above ground in the world. Oil in transit might add a few days more. What is important is to look at recoverable reserves still in the ground compared to present and projected demand--and there the supply picture is getting pretty dismal for the long term. The oil companies fully understand this--that is why they are in no mood to add more refining capacity when they know that the crude to supply them is not going to be there in the long term. The cheapest place for oil companies to buy oil reserves today is on Wall Street, not out in the oil fields, so that forces prices up in the long-term. The only reason that gasoline is less than $4/gal. right now is because of the collapse in demand caused by a worldwide recession. If economic activity picks up at all, we will be back at $4 or more--maybe way more--in short order.
If you want to see just how fragile the whole petroleum supply picture is in this country, just let one thing go wrong in the supply chain--a disruption in the Mideast, another big off-shore disaster, say, in the Cantarell Field in Mexico, an accident/attack at one major US refinery, and watch how quickly the whole creaky system starts to seize up.
At any given time, there is only enough storage of petroleum products to last a few days or weeks in what is stored above ground in the world. Oil in transit might add a few days more. What is important is to look at recoverable reserves still in the ground compared to present and projected demand--and there the supply picture is getting pretty dismal for the long term. The oil companies fully understand this--that is why they are in no mood to add more refining capacity when they know that the crude to supply them is not going to be there in the long term. The cheapest place for oil companies to buy oil reserves today is on Wall Street, not out in the oil fields, so that forces prices up in the long-term. The only reason that gasoline is less than $4/gal. right now is because of the collapse in demand caused by a worldwide recession. If economic activity picks up at all, we will be back at $4 or more--maybe way more--in short order.
If you want to see just how fragile the whole petroleum supply picture is in this country, just let one thing go wrong in the supply chain--a disruption in the Mideast, another big off-shore disaster, say, in the Cantarell Field in Mexico, an accident/attack at one major US refinery, and watch how quickly the whole creaky system starts to seize up.
I agree with you that we don't have huge supplies on hand, but you also can't ignore the role of the government(s) in manipulating the price of oil. A prime example of that is Bush's decisions to double the size of the SPR to 1.5 Billion barrels, followed by the purchases by the Fed which helped to drive oil up to over $120/bbl before congress finally put the brakes on US stockpiling in 2008. You also have to remember that China was busy building and filling SPRs at the height of $5/gal diesel.
If the world economy was still humming along at the same speed which drove prices to $75-85/bbl the first time, I'd agree that prices should be that high today. Lack of refinery capacity doesn't convince me either while the US is only running at ~80%.
All your concerns are valid and I agree with you about the potential for continually higher prices as the oil gets harder and harder to get to, but I have a hard time believing that the government and banks aren't manipulating the price of oil just as much as they're manipulating the price of houses.
Last edited by sterlinggirl; 06-04-2010 at 11:01 PM..
They are planning to do it again at the end of this year. Get ready for sky high gas prices once again.
No one outside the Bilderberburg group knows their plans let alone publish them. This link is to the Prisonplanet site which is known for it's fear mongering.
Like the Interstates did any favors for small towns . I agree about producing more locally. Still, some things will need to be transported long distance, and rail wins that contest.
As to the horsepower straw man, let's do some calculations. 85,000 lb. truck and cargo with a 350 Cummins. Say it's using half that horsepower to move the load on average. That's 4.1 horsepower per ton, plus a driver for that 42.5 tons. Now the train: Faster intermodal trains, usually around 5,000 tons, are figured at 3 horsepower per ton using the locomotive's full horsepower rating (commodity trains often run with only 1.75 to 2.5 horsepower per ton). If one assumes that average being at half-throttle like the truck, that takes the horsepower per ton down to around 1.5. Hmmm . . . . Now add the fact that a two-person train crew can move that 5,000 tons vs. 1 person moving only 42.5 tons in the truck.
All of this also ignores the fact that some railroad corridors could be electrified, eliminating petroleum use altogether. I don't think they make an extension cord long enough to do that with a truck . . .
I did agree about the use of rail for moving mass commodities long distance, that has always been the case. Nothing new. The point I am making is the logistics in converting almost everything over to rail, would actually cost more. The long trains must be full to be effective, its just like water-barges, takes a lot of tonage to be cost effective. Great for coal,grain, and other bulk goods.
I did agree about the use of rail for moving mass commodities long distance, that has always been the case. Nothing new. The point I am making is the logistics in converting almost everything over to rail, would actually cost more. The long trains must be full to be effective, its just like water-barges, takes a lot of tonage to be cost effective. Great for coal,grain, and other bulk goods.
No real advantage to having electric trains be so long.
Could be faster, better and cheaper to run many more short trains on line-electric power.
No real advantage to having electric trains be so long.
Could be faster, better and cheaper to run many more short trains on line-electric power.
Point to note: Electric or diesel trains are put together based on the tonnage scheduled to haul to any given destination. If the engines (s) can't pull the load the train will be shortened to the correct length.
However, cost per ton per mile is the deal breaker on all freight trains. It pays or it don't go.
Point to note: Electric or diesel trains are put together based on the tonnage scheduled to haul to any given destination. If the engines (s) can't pull the load the train will be shortened to the correct length.
However, cost per ton per mile is the deal breaker on all freight trains. It pays or it don't go.
Yes, that was my point. Forty years in transportation , I have been there...and back several times. However, some things change, we must always be open for new ideas and ways to lessen our carbon footprint.
Point to note: Electric or diesel trains are put together based on the tonnage scheduled to haul to any given destination. If the engines (s) can't pull the load the train will be shortened to the correct length.
However, cost per ton per mile is the deal breaker on all freight trains. It pays or it don't go.
Sure. And since a single engine short train -- if electric -- costs about 1/4 of the fuel cost of diesel, it should be more practical to do short(er, faster, cheaper, better) electric trains than the existing diesels.
For example -- some of the current practice is to use 4 engine diesels to haul some near 200 cars at one time. With straight-up electric, it may be more practical to do (4) single engine electrics with only 50 cars, each.
man all of u are dumb.,...jk
Look, as much as there was all the hype on peak oil 2010 and it may be true, the OPEC will never put higher prices in a fragile economy. NEVER. it will just cause the mess a bunch of times faster. Look demand hasnt weakened, trust me. its inelastic demand. In fact demand has stayed the same in which people will use it if they still want to get to places. As the market becomes more unstable like currently oil will drop with it. If it becomes better, oil prices will go higher.
As long as the economy is "bad" we can enjoy our low oil.
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. I agree about producing more locally. Still, some things will need to be transported long distance, and rail wins that contest. 
