Thread: High oil prices good?

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.

But in terms of whether high oil prices are a good thing, it probably depends on who you are and what your perspective is. For me, at the moment, it's a bad thing - there's no public transport where I live and we need to drive. And if you believe peak oil has been reached, it'll get worse before it gets better.

For Australia at the moment it's a bad thing - big, spread out country with a huge reliance on vehicle-based goods shipping between major centres. Our inflation figures are sensitive to petrol prices, and our inflation figures are what our Central Bank uses to determine its official interest rate strategy. Over the past 2 years we've had something in the order of 5 or so interest rate increases I think. People with mortgages are starting to feel the pinch.

On the other hand, I think increasing oil prices are a good incentive to develop other energy sources, which has to be a good thing for those countries that have started down that road already. I mean, let's face it: even if you don't believe we've reached peak oil, at some point in the future we're going to run out of it, or it's going to become prohibitively expensive to extract. Places that are prepared for that will benefit more than those that aren't.

James.

I'm surprised gas doesn't cost more than it does considering the enormous overhead --- just the amount of money spent and risked in exploration is amazing. What does a gallon of high quality water cost or milk?

Justin

Originally Posted by jaegerhund

I'm surprised gas doesn't cost more than it does considering the enormous overhead --- just the amount of money spent and risked in exploration is amazing. What does a gallon of high quality water cost or milk?

Justin

Good point. I think petrol is still cheaper than Coke here.

James.