Thread: High oil prices good?

In manufacturing!

And at the same time very wasteful in consuming. And I distinguish between both as an economy competes with others not in its consuming power, but in its producing.
If you choose gas guzzler and are paying for it because you think it provides you better quality of life, it is your own choice of spending the money you've earned. If you didn't have the money to afford it, it wouldn't be an issue at all.
And yes europe may be outperforming US in energy efficiency and may have better standard of living. Europe clearly seems more energy hungry than US, but that's probably because it is more nervous about its lack of control over its main sources.

This is, of course, a speculation and any arguments are welcome.

Don't know about that last Europe statement. I don't have any facts about the gathering of energy.

And I'm definately not trying to get into an europe/US argument here.

I read somewhere that if the rest of the world consumed as much resources as the US does, we would need 5 more planets to support our living... I don't know how true it is but it's certainly food for thought...

I'm not sure you can separate production and consumption when discussing energy efficiency. I'll trust someone with better knowledge than me when they say production methods for producing fuel-hungry 4x4s are extremely efficient, but I'm not sure you can argue that a nation-state's energy policy is efficient because of how they produce. I think you really need to look at what they produce as well.

Now I really don't know whether manufacturing and the service industries in the US are competitively fuel efficient or not. But my point is that production and consumption are two sides of the same coin -- production methods might be fairly efficient, but the outcome of that production (and how we use it) shouldn't be ignored. At the very least the latter cancels out the former, at the worst we think we're absolved from global concerns because our industry will take the heat. (And I use 'we' because I think it isn't just the US here.)

Wrong! Whatever effect you see on the world economy won't be a result of what industry is doing, but is a result of what the market is doing and wanting. Until we change our individual approach (to heating, cooling, travel, agriculture, industry and the supply chain, and consumption in general), then the market forces will always push industry to producing inefficient products, even if the manufacturing process itself is less inefficient.

Legislating to force industry to become more fuel efficient is the tail wagging the dog. And it undermines the principles of free market economies not only fundamentally, but between nations -- how tough will the US be with financial penalties on US businesses compared to, say, European states on European businesses, or even the Chinese government on Chinese businesses? Each nation is going to be reticent to penalise their own domestic economy in such fiercely competitive international markets! That's why agreements like Kyoto are so difficult to make multilaterally.

Either we invent clean energy or we change our behaviour to consumption. Production and manufacturing will then naturally follow.

What about offering (more) incentives for producers/consumers of energy-efficient equipment?

You see, I go writing an essay-length message to try and get across my thoughts, and Ilija sums it up in one line!

You're absolutely right, it should be carrot not stick!

Originally Posted by FiReSTaRT

What about offering (more) incentives for producers/consumers of energy-efficient equipment?

Well, alternatively higher energy prices would cause the need for it w/o any incentives. If insulating your house costs you 2000USD, but saves you 3000USD over the cold winter months you will likely go ahead and pay for it, unless you prefer paying to heat the universe. Even taking out huge interest loan will save you money.

People in europe may like to drive 8cyl, 5l monsters, but it's expensive both in gas prices and in terms of space. In the US market every time the gasoline prices increase the demand for SUVs decreases and for sedans increases, just as you would expect. Investing in new technology is expensive, but the big businesses are not poor. As the supply for oil is limited eventually they will do it, when the returns on their investments are high enough. They are anything but dumb. I'm sure there are plenty of high-skilled PhD's that get paid way over the median salary to model these things, so that the management can make profitable decisions.

High oil prices good? It all depends on your definition of good. I see oil the same way I see diamonds. It's an entirely regulated product with its price artificially high. OPEC and our energy companies are only profiting big time off this while americans are struggling to put gas in their vehicles. Meanwhile everyone blames the prices on President Bush- because he has so much to do with it.

I think slightly higher prices are good, but only because it will eventually force the car companies to introduce more efficient vehicles. Do I think it should be artificially high? Hell no. I feel like you're saying that OPEC is trying to teach us a lesson.

But back to Americans. How do the higher prices help the people that use it most? Higher prices mean that people lose more of their paychecks to gas, more of it to car payments for expensive "efficient" vehicles, etc. Honestly, many SUV's have 4-6 cylinders, which is just like many smaller cars. Nevermind the behemoth vehicles from the 70's-90's that are way more inefficient. Many people drive SUV's because they need the space or the capacity. I fail to see how it's any different than someone driving a similar powered car or truck.

What some europeans tend to forget is that the SUV driving population tends to live in the suburbs or the rural areas. They have distances to travel, need to be able to pack things into their vehicles, and usually don't have the greatest of road systems. When it snows out here, you bet I want to be in an SUV instead of a honda civic.

Anywho, that's the take from someone here experiencing it.

Maybe someone can explain to me who actually controls the price of gas?

Jusitn

Originally Posted by jaegerhund

Maybe someone can explain to me who actually controls the price of gas?

Jusitn

My wife! Although she's got it back to front in our house - the more gas produced, the higher the price I pay for it

Seriously, I have no idea but in Australia petrol prices are driven by oil prices out of Singapore I think. Then the various state governments put their taxes on it and we end up with the price at the bowser. In Queensland we're lucky, as our state taxes are lower than in some other states, but at the moment I'm paying about 1.4AUD per litre. This changes on a daily basis though.

James.