Well here's one such article from the WSJ that mentions it. I think my post was pretty self-explanatory about what I meant by IP. I was talking about all of the shiny steel tools used to get oil out of the ground. Those are designed and manufactured primarily by oil-service companies, but that's a distinction most people don't make. They lump them all together as "oil companies."
+$4.00 Gasoline. How does it change the Energy game
by designs 89 Replies latest social current
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Wasanelder Once
People in the UK live on a small island, it's not like the U.S. with so many great distances. In addition they have great rail service in cities and between cities. Who the hell needs to drive? Comparing your gas price to the U.S. leaves out that important fact. Hell, if you drive accross the island you'd be in the water before two hours were past!
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designs
Megawatt Energy Storage is coming online with companies like GE, Siemens, APS, and others.
For homes and businesses roof mount and parking lot carports with solar are efficient means of transmission, sending electricity 200 miles over transmission lines suffer considerable losses. We will see a roll out of plug-in stations at shopping centers and businesses in the next 5 years.
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Razziel
Solar is a good option in some locations for powering homes and offices, but I don't think it will see much large-scale use in powering vehicles, at least in the US. The Nissan Leaf is rated at 34kw-hr/100 miles. The average home in the US used 31.5 kW-hr/day in 2010 per the DoE. There's just too many cars, and we drive too many miles (over 3 trillion miles per year in the US) for solar to be used to provide a great percentage of that power.
I did another quick calculation, and if we drove those 3 trillion miles in Nissan Leafs (not possible since much of that is commercial trucking) running off solar, we'd have to cover 750 square miles in solar panels. A little less land area than the State of Rhode Island. Much better to concentrate our efforts to onsite solar power generation for homes and offices, utilizing unused space on roofs like you mention, designs. I think we're going to have to use another energy generation source for transportation.
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designs
Razziel- I agree no 1 fix solves it all. Constant recharging while driving, I like some of those technologies. Biodiesel, one customer in LA has a business converting diesel engines to run on cooking oil. He collects cooking oil from restaurants in his area, filters it and sells it in 55 gal. drums, has a booming business. He drives an old converted Mercedes Benz and gets +50 mpg.. Algae may be used as a source for fuel blends. There is a Fish Farm out by the Salton Sea that has 20 football Field size ponds and they produce tons of algae, they sell the algae as cattle feed and have investors looking into algae for fuel. Slim Pickens may get his wish for Natural Gas to really take off, Navistar is converting their entire fleet to NG.
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designs
Gasoline has risen .55 since the President's decision to send the Keystone pipeline back for environmental review. Our supply of gasoline is fine, the Refiners are exporting record amounts.
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sammielee24
Really? Cuz I see hundreds of people daily driving Escalades, Navigators, Excursions, etc., who use them for little more than carrying grocery bags 3 miles to home from the grocery store.
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Yes - really.
Tell me, did you approach every one of them and ask why they were driving those vehicles? You assume - I don't. I've seen too many judgemental faux enviro's almost choke on their water bottles upon seeing such waste - when in fact the driver of the truck just happens to be a farm worker who needs the vehicle for work and who just happened to stop off in town to grab some groceries.
I live in an area where trucks, big trucks abound. Those are work horses for the population that live on the back roads and need the power to move around.
Like I said, I don't know anyone who has a big vehicle just because. I do know farmers and landscapers and their help who drive big trucks. I don't know one single person living in town, who has a truck that they drive every day to go out around town in. Most people I know drive carefully and efficiently - unless you want to count the 1% that also cart their yachts down to the bay to unload. Those people aren't worried about the cost of gas even though they will complain about it when they fill up the boat.
Poorer people don't have the money to spend on wasting gas - when the budget is stretched, they tend to work harder to find ways to save. Any time there is an increase, it affects them the most. When people leave their homes and go to rent, it will drive the rental costs up, making it harder to find places to live in. It's a catch twenty-two for people trying to survive. Again, you cannot compare the USA or any big country to the smaller, more compact countries in Europe. Their transportation systems were not built on the car but on rail, subway, bike or public bus and that makes all the difference. If change is to happen, it must come after transportation systems are put in place that accomodate all the people, otherwise, all you are doing is penalizing those that can least afford it. sammies
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sammielee24
How Much Energy Does the U.S. Military Consume
Since the beginning of the 20th century energy has been a critical factor for armed forces worldwide. From the end of the Cold War to the first years of the 21st century, the U.S. Department of Defense’s (DoD) energy consumption dropped by some 40 percent, but with the Global War on Terror consumption has raised again.
In fiscal year 2009, the DoD consumed 932 trillion Btu of site delivered energy at a cost of 13.3 billion dollars. Energy consumed per active duty military and civilian personal is 35 percent higher than the U.S. energy consumption per capita, which is amongst the highest in the world. While consuming that amount of energy, DoD emitted 73 million metric tons of CO2, corresponding to over 4 percent of the total emissions in USA.
The DoD accounts for less than 2 percent of the US energy consumption and more than 93 percent of the U.S. government energy consumption. Although this may seem small, the fact is that DoD is the largest single consumer of energy in the United States. Nigeria, with a population of more than 140 million, consumes as much energy as the U.S. military.
On average, mobility fuels (for aircraft, ships, vehicles and equipments) have accounted for three quarters of the DoD’s total energy use over the past two decades. Buildings and facilities have made up the rest.
The U.S. is the strongest military power in the world and just like any other military in the world, energy, in particular energy derived from oil, is at the heart of that power. Oil accounts for nearly 80 percent of total DoD energy consumption, followed by electricity (11 percent), natural gas and coal. DOD pays immense effort for reducing its dependency on conventional oil and seeks ways to use alternative and renewable energy sources. Despite all these efforts, less than 4 percent of the DoD’s energy consumption comes from renewable sources.
The above graph breaks down energy consumption by the U.S. Military in 2009 based on data from DoD FEMRFY2009.
The DoD uses 360,000 barrels of oil each day. This amount makes the DoD the single largest oil consumer in the world. There are only 35 countries in the world consuming more oil than DoD. The U.S. Air Force is the largest oil consumer within the DoD services.
Less than half of DoD oil consumption occurs in the continental U.S., and the rest is consumed overseas. According to Sharon E. Burke, the Pentagon’s director of operational energy plans and programs, the Defense Logistics Agency delivers more than 170,000 barrels of oil each day to the war theaters, at a cost of $9.6 billion last year.
Although energy costs represent less than 2 percent of the DoD budget, indirect costs such as those for transporting fuel to battlefields and distributing it to the end-user add to the total. When the average American is paying $3 per gallon of gasoline, the price can soar to $42 a gallon for military grade jet fuel delivered through aerial refueling.
The military is aware of its dependence on energy. Defense Secretary Robert M. Gates identified energy as one of the department’s top 25 transformational priorities, and 2010 Quadrennial Defense Review addressed energy for the first time as a strategic issue. Although the DoD has already become a leader in some areas of renewable energy, it is yet to be seen whether it will be able to increase its energy efficiency and conservation, create viable alternatives and wean itself off oil.
Energy Costs
(million $)Site delivered energy consumption (trillion Btu) Buildings $3,553.4 209.8 Energy Instensive/exempt facilities $230.4 10.8 Tactical Vehicles $9,335.8 698.3 Non-Tactical Vehicles $225.0 12.6 $13,344.7 931.6 Written by Sohbet Karbuz, Energy Blogger
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designs
For those in England what is the story on Smith mfg. and Modec mfg. electric trucks.
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Duderino
How Do Gas Prices Increase?
Every four years or so, election years of 2008 and 2012, gas prices spike up, and all the talking heads give their spin on why this happens. The left blame speculators, the right blames lack of supply and the truth gets lost in useless arguments. What ends up happening is people receive misinformation about economics.So what are the facts?
Prices are determined by supply and demand. That is the beginning but there are other factors, “independent” variables, which can affect supply and demand.
The “independent” variables for demand are;
1. Income. If a good or service is “normal” people want more of it when they make more money, demand will increase. If it is inferior, they want less. People generally buy less fast food when their incomes rise.
The real disposable personal income has dropped from $32,814 from when Obama was inaugurated in January 2009 to $32,458 today. A decrease of 1.1%. So if gas prices were $1.84 a gallon when Obama was inaugurated we would expect them to be about $1.82 all things being equal.
2. Price of related goods. Unfortunately with the exception of the Chevy Volt there are no substitutes for gas during this time frame, 2009 to today.
We subsidize farmers to grow corn for ethanol, driving up food prices, while imposing tariffs on cheap, $2.00 a gallon Brazilian bio-fuel. If Washington DC eliminated the tariffs on the $2.00 Brazilian bio-fuel we could lower the cost of both fuel and food at the same time. Corn farmers would be priced out of the ethanol market and would have to substitute back to food production, but with the current crop of corrupt politicians this will never happen.
3. Taste. This variable has not changed significantly since 2009. People prefer cars to bikes and scooters.
4. Population and demographics. The population has increased from 306,208,000 to 313,020, or a 2.22% increase. Using our baseline of $1.84 for gas the price today should be about $1.88 a gallon.
5. Expected future prices. This is the most controversial of the five. Nancy Pelosi refers to this variable as “speculators” and she is correct. If consumers expect higher prices they will, if possible, consumer more today. They are speculators forecasting into the future. There is nothing Nancy, or the federal government can do about speculation. It’s like legislating against cow flatulence. The only way to stop it is to kill a bunch of cows.
Also playing into expected future prices is world politics. If Saudi Arabia does not like the Obama Administration they can cut back on oil production, or threaten to cut back, and prices will increase.If Israel does not want to see the Obama Administration re-elected they can pick a fight with Iran, or pretend to be picking a fight with Iran.
If Iran is suffering from inflation and desperately needs higher oil prices, and their number one export is crude oil, they might choose to play along with Israel in the mutually beneficial game of war chicken, hoping one or the other will back down at the last minute.
While the tensions between the two are high they both enjoy the desired results, bad publicity for the Obama Administration, more revenue for Iran. As long as the game does not go into a actual “hot” war both win. This is sometimes referred to as a Nash Equilibrium and/or dominate strategy.
The “independent” variables for supply are;
1. Price of inputs. This would not be the end product, oil, but the cost associated with producing oil. Workers wages, drilling equipment, leasing land, and so forth.For this example we will assume the cost is directly translated into a price increase. Of course in the “real” world there would be a lot of mitigating circumstances, such as the elasticity of demand, inelasticity, and other factors. But here we will keep it simple and assume there is a direct, one to one, correlation between these variables.
The Consumer Price Index (CPI) has increased from 211.962 (1982-84 dollars= 100 MSA) to 227.505, a 7.3% increase or translated to $1.97 for a gallon of gas. The Producer Price Index has increased 17.1% or translated to $2.15 a gallon.+
2. Technological change. For petroleum production there has not been a dramatic change since 2009 that I am aware of. Assume this has had a negligible affect on the price.
3. Price of substitutes in production. Again, the only viable substitute is Brazilian bio-fuel, which is not allowed to compete because of tariffs.
4. Number of firms in the marketplace. There has not been substantial entry or exit since 2009.
5 Expected future prices. Suppliers “speculate” the same as consumers do. And this is where Obama plays a role in gas prices TODAY. If oil producers see the Obama Administration doing everything in its power to suppress supply, no new leases, regulations, more taxes, then it will have a effect on the price TODAY.
Why would it not?
Does Nancy Pelosi want to outlaw rational thought? Speculators are doing the best they can to deal with reality. If the President of the United States is hostile to oil production and consumption why would this not be reflected in the price of gasoline?
On the flip side if the president announced 100% support for the oil industry, drilling on a first come, first serve basis, prices would drop TODAY based on future expected increase in supply.
World supply has increased 2.2% from 2009 to 2010, 80,278 thousands of barrels daily to 82,095. Demand has increased from 84,714 to 87,382, 3.1%. The biggest increase in consumption was 5.3%, from the Asian Pacific countries including China and India.
The discrepancy between the amount of oil produced and/or imported and the amount consumed and/or exported is due to the omission of stock changes, refinery gains, and other complicating factors.So based on increased consumption and the inelasticity of demand for crude oil, -0.06, translated, for every 10% increase in price consumers consume 0.6% less of the product, we can estimate that the price would increase to roughly $2.02 a gallon taking into account also the inelastic supply of oil production. Since I only have 2010 data let’s add on another 18 cents and make the price $2.20 per gallon.
From the previous data we know that all things being equal the price of gas should be about, in a worse case scenario, say about $2.50 a gallon. An educated guess, nothing more than that. Not pleasant but nowhere near the $3.70 a gallon today that we pay.
So what happened?
Now let’s put together a simple model.
If we have 100 gallons of gas, 100 customers, and $100 dollars split 100 ways consumers will buy a gallon of gas for $1 a gallon.
Simple.
That is supply and demand. If there is more supply, 200 gallons of gas, the price drops to 50 cents a gallon. If the supply is 50 gallons the price will increase to $2.00 a gallon. Notice that price acts as a rationing device, everyone gets what they need, and what is available, and not what they want.
If the number of dollars increased to $200 the price will go up to $2.00 a gallon if the supply remains stable at 100 gallons.
Did you get that?
One of the big factors that is overlooked by the talking head “economist” is the relationship between printing dollars, the Federal Reserve, and inflation.
Simply put all that Obama Administration spending has to come from three sources;
1. Taxes. Tax receipts as a percentage of the Gross Domestic Product (GDP) since 2009 have been 15.1%, 15.1%, and 15.4% of the GDP. Historically this percent has been around 18%. Spending has increased to 25.2%, 24.1%, and 24.1% of the GDP. This is important as will be explained.
2. Borrowing. This is not necessarily inflationary. Remember when you borrow from person x, person x forgoes consumption, but must be paid back in interest.
3. Printing money. Extremely inflationary. Deadly. Something to be avoided at all cost. Some economist call it monetizing the debt, others counterfeiting, other increased “liquidity.” It all depends on your perspective. From Main Street it simply means Wall Street, Washington DC, the elites, get the use of printed cash first, and Main Street pays for it in the form of inflation. The elites get the sugar and we get the you know what.
So what is the record of the Federal Reserve and the Obama Administration for printing money?
Federal debt held by the Federal Reserve for January 2009 was $492.3 billion and is currently $1.6647 trillion, a 238% increase.
Since the September 2008, before the TARP bailouts, the monetary base has increased from $886 billion to $2.7 trillion, a 206% increase.
Gold is up 82% since 2009 and many economists’ think that it is undervalued based on the inflationist policies of the Federal Reserve.
The 800 pound elephant in the room no one wants to talk about is federal spending and the inflationary policies of the Federal Reserve. Politicians do not want to talk about this, Republicans and Democrats, because the smart ones know this is a hidden tax on all Americans, poor, rich, white, black, that for most is invisible.
When the price of eggs goes up from 99 cents to $1.49, to $1.99 does anyone really notice?
Does anyone make the connection between the Obama Administration spending too much money and paying more for eggs?
No, but they should.
Jimmy Carter learned that big inflation numbers could cost him the election and the CPI was changed in July 1980 to deemphasize food and energy, the items that have the lowest “inelastic” numbers, or more simply things people need and are willing to buy at almost any price in the short term. Today the official “core” inflation rate is 2.9%.
I will submit to you that the biggest factor in the increase in gas prices is the Federal Reserve and the Obama Administrations reckless spending policies, followed by increase demand in the Pacific Rim countries, then global political tensions, and finally the Obama Administrations obstructionist energy policies designed to restrict supply from Canada and the United States, in that order.The lesson for the working poor and the poor on government assistance is there is no free lunch. When the government spends too much money, you pay for it in lost jobs, lower wages, and inflation.
Be careful what you wish for, it might come true.http://usa-wethepeople.com/2012/02/how-do-gas-prices-increase/
