As much as I am for the free market, this may be even too much for me.....
As much as I am for the free market, this may be even too much for me.....
Get rid of the red tape and make it easier to import/dig up oil and open refineries. The oil trade isn't an "ideal" or really "free" market by any means. A good start would be to make it one.
I agree with you. While many families are having a hard time getting to work in the morning, oil companies are sitting on higher profits than ever.
What do you think the oil companies should do? They don't set the prices for their oil. Oil is sold on the futures market. That means people are offering them $X/barrel of oil.
Do you think the oil companies should just say, "No, we aren't going to take that much money for our oil. We'll give it to you for only $Y/barrel"? That's assinine.
Do you think the stock-holders of Exxon would stand for that? These are people who risked their hard earned money on the possibility that Exxon would someday make a record profit. If last week someone invented a car that ran off of urine, these people would have been completely fucked. Should those stockholders be penalized now that their risk panned out? Should people who win the lottery be forced to share their money with everyone who didn't even buy a ticket?
I just threw it out there.
Oil is a unique commodity in that it runs our country, totally and completely. Without it, every aspect of our lives is jeopardized, from the largest government agency, down to the lowliest stock clerk in shoprite.
Im not sure what I would do and I dont have a very advanced understanding of economics. Im also pretty comfortable in life. Not very wealthy, but certainly upper middle class and to be quite honest, the higher prices didnt really effect my life to much. However,
I am smart enough to realize 2 things. 1. Not everyone is in my comfortable position even though they work damn hard - this includes lots of elderly who are getting hammered right now because of absurd heating oil prices. 2. The country's economic health is being jeopardized so a single industry can post record profits.
The oil business is closely tied to the government...they get tons of free money. As long as you are taking handouts, maybe you should answer to some of us who are footing the bill.
Im all for lifting a lot of these ultra-strict environmental restrictions so we can start building a greater refinery capacity. We should also be drilling anywhere we find oil domestically. Certainly, its time to seriously fund alternative fuel source research. Dont leave it to the oil companies, they're not interested.
If all else fails, why not consider an excess profits tax?
By the way, I dont think you're lottery ticket example holds up. The only thing I can do to increase my odds of winning the lottery is buy more tickets(ie invest more money). Thats fine. But that is not what happened here. What happened here is akin to taking control
of the machine and picking out my numbers.
Regardless, Im just throwing all of this out there as its been in my head. Im one of the most hard right wing guys you could ever meet but I havent forgotten my working class roots.
Unfortunately oil is not quite a freemarket.
With so few oil companies, price fixing and collusion are quite possible.
I do not believe we should cap the price of gas or oil, rather I think we should investigate to see if any collusion took place. If so steep fines and maximum jail time is warranted.
If nothing can be proved we should bite the bullet and pay the high prices while trying to save gas.
Anyone that buys a vehicle that gets shitty mileage is either rich or a chump.
Everyone knows that we are overly dependent on oil. This is the kind of stimulus that may actually make us change our ways.
Solid post. Investigating for collusion is another measure I didnt consider but its a good idea.
For some reason I'm starting to agree with Zap a bit more nowadays...scary.
Free market competition works ok until someone wins!
OK guys. I work for one of these @sshole oil companies. You know what, they ARE greedy as hell ... I have a single well that makes $58,000 per day ... that's $21,000,000 per year ... one well.
The raise that most of us got this year doesn't even cover the increased cost of driving to work due to higher than ever gasoline prices.
Now, we can bitch about it, or we can do something. Me, I have an interview Tuesday to make waaay more money and work ~ 1 mile from home. If I all but disappear from T-Nation, it'll be because I have a real job.
or ;( ... undecided yet.
Starring in gay porn flicks is not a real job. But good luck in what ever you decide.
I think the whole issue with oil, as Zap pointed out, is that it is not really part of a "free" market. Its controlled by 5 compaines. It also is the most vital commodity in the the world and no one can stop buying it(the best you can do is curb consumption to a degree) which changes the supply/demand dynamic to some extent.
Oil is a necessity. Oh the poor stockholders. What about the millions of working people who can barely afford to pay for gas. I hope the oil ceo's burn in hell. That lottery ticket anology is rediculous. Risk? it's fucking oil; where is the risk.
My favorite lie is that the saudis are causing the price of oil to be as high it is. The price of oil is determined by stock market speculators on the NYMEX. The Saudis have oil sitting on the docs and want to see it at 30 dollars a barrel. Where is Teddy Roosevelt when you need him. Someone needs to bust up the oil trust.
Pure bull shit, right out of the bull's ass. Here is what the current President of OPEC said about the current price of oil:
I'll address your comment about risk at face value. Some companies enter into oil contracts that specify a fixed price per year for certain leases (usually with a soveriegn state). As the oil is pumped out of the porous rock that usually comprises a reservoir, sometimes the porosity decreases since the oil no longer holds the rock particles separated.
With a decrease in porosity, flow rate decreases. However, the fixed price for the lease does not decrease. Sometimes this results in massive losses. You would probably say, well, that's the risk the oil companies took. And I would reply, Yes, it is.
"I think the whole issue with oil, as Zap pointed out, is that it is not really part of a "free" market. Its controlled by 5 compaines. It also is the most vital commodity in the the world and no one can stop buying it(the best you can do is curb consumption to a degree) which changes the supply/demand dynamic to some extent."
I agree, I posted the same thing on the Exxon thread. Here is a question for the board: If oil profits are at an all-time high, why did our congress just approve an energy bill with $8 billion in tax rebates for oil companies (not too mention another 6 million or so for the coal companies). Note that this is a rebate, not a deduction, which means that $8 billion is coming directly out of the tax revenue pool.
This at the same time when food stamps and farm subsidies are being cut...just shows the priorities of the current congress administration. The emphasis is on the rich getting richer, and maybe a little will trickle down to the poor.
"On a party-line vote, a Republican-run U.S. House of Representatives committee voted to cut food stamps by $844 million on Friday, just hours after a new government report showed more Americans are struggling to put food on the table.
About 300,000 Americans would lose benefits due to tighter eligibility rules for food stamps, the major U.S. antihunger program, under the House plan. The cuts would be part of $3.7 billion pared from Agriculture Department programs over five years as part of government-wide spending reductions."
Excellent post. I for one am not so militantly opposed to the high oil prices as some on here are.
The high prices have made it a better than break-even deal for domestic exploration. That is a very good thing for my part of the world. I've said this before - although I believe it was on another thread.
In my part of the world, we fell victim to the oil bust in the mid-80's, and we missed out on the economic boom in the late 90's. It has been 20 years since this part of the world has tasted good times. If it weren't for the high prices, there wouldn't be 15 wells going in within 60 miles of my house. That means jobs. That means money. That means the economy is actually doing something besides going in the tank.
And I have Big Oil to thank for that. Sorry about the rest of you that think this is such a horrible thing, but Nobody gave a shit when CD rates were at 1.5%, and little old ladies around here were living on bread crumbs. Now they have leased their land and have created a cushion that they would not have had were it not for the high oil prices.
Oil is a very unique item. It is tied very closely to the functioning of our government, and as such gets huge amounts of Uncle Sam's cash under the pretext of exploration and r & d. I've never had much of a problem with this until we started seeing these massive profit spikes resulting from suspicious pricing. I think its simple, if you're going to take our money(taxpayers), then you have to answer to us on some level.
Mind you, all of this is coming from a small-government, ultra-conservative. I dont mind the foodstamp cuts at all as that program has been abused to the nth degree.
I just see rampant oil profiteering as bad for our country and bad for the working man, and those are my primary concerns.
My next car will be a sub-compact hybrid, preferably a toyota. Beleive me they'll look real nice when gas gets to $5 a gallon and considering the impact on the environment , there is really no reason to buy an SUV or a huge truck for most people.
And like ProX said its going to hurt a lot of working class people. But seriously america is going to have to come to the realization that in comparison w/ the rest of the world ( who isn't appreciating their higher prices for gas ) . If europe and japan can make do with their gas situation then we will have to as well. It may mean the end to some long commutes thank god and less road trips or selling your SUV or dualie truck but we will adapt and be fine b/c Americans have been at the top of the pile as far as living standards for a long time.
more thoughts? Buy mass trasnportation stocks. They'll be popular considering that they will be able to cheaply transport people while basically sharing the price increases of gas. Or buy toyota or honda.
Short GM they are moving slow on the hybrid concept thing which doesnt really surprise me. Heck buy oil stocks - as gas prices go up their cost of producing oil will go up slower... Buy alternative energy stocks. They will increase in popularity given a greater demand by china and india and will be used somewhat more now. You won't use oil as much for heating i guess.