Different Take on Oil Price Gouging

[bustr]

It's long but interesting with all of it's sources linked. Gist is our high fuel prices are due to trading practices on the Oil-spot market. Give it a read....it's a different direction taken than we hear on this BB for the most part.

http://www.americandaily.com/article/19123

[Captain Virgil Hilts]

I've said for years that oil is a commodity, and oil futures are traded by day traders looking to cash in on a quick buck. Therefore, every time there's the slightest hiccup anywhere in the supply, the price is going to spike.

[Charon]

Speculation certainly plays a role, a huge role. He didn't even mention the ICE (Intercontinental Exchange) and the major questions that are raised about over-the-counter trading. Speculation can play a dramatic role in the market today, especially in volatility. But...

Then he spins it to another "the man is sticking it to ya" conspiracy.  Take this:

Between 1980 and 2004, world consumption increased by 30.8% , while U.S. consumption increased only 21.5% . World production increased 23.2% , but U.S. production actually decreased by 40.3% .

Our consumption ONLY increased by 20.8 percent. Of course, he omits the fact that we consume 20,730,000 bbl/day, about 5 times as much oil as our nearest competitor and as much oil in total as the next five combined:
#2 China: 6,534,000 bbl/day        
#3 Japan: 5,578,000 bbl/day       
#4 Germany: 2,650,000 bbl/day       
#5 Russia: 2,500,000 bbl/day       
#6 India: 2,450,000 bbl/day       

Plus, the relationship he's pushing between production and demand lacks any specific correlation. We've been pumping oil out of the ground about 50 years longer than most other countries. We still pump it out at a high rate. We still have failing reserves relative to demand and the rest of the world. We still can't meet our demand, or be anywhere close.

 There is a lot of this. He takes a bunch of trees and constructs the forest he wants to see out of it. Probably not intentionally. It's a complex industry. It's odd that this great evil managed to make such hum drum returns and only now figured out this great scheme, that even the FTC fails to find after at least two Congressionally directed investigations. Amazing that it coincides so well with the booming Chinese and Indian economies.

Charon

[john9001]

you can control the market, next month buy 10% less gas.

[Sandman]

Originally posted by john9001
you can control the market, next month buy 10% less gas.

Only works if everyone else plays along.

[rpm]

The next step is gonna be biofuels. Get into that market now. Corn gives 1.3 gallons back for every gallon of energy used to make methanol. Switchgrass gives back 7 gallons for every gallon used and you get about 1000 gallons per acre yield. There are lots of possibilities with this.

link
link
long boring detailed link

[Captain Virgil Hilts]

Originally posted by rpm
The next step is gonna be biofuels. Get into that market now. Corn gives 1.3 gallons back for every gallon of energy used to make methanol. Switchgrass gives back 7 gallons for every gallon used and you get about 1000 gallons per acre yield. There are lots of possibilities with this.

link
link
long boring detailed link

The problem is that methanol has 1/2 the energy content of gasoline, and an engine needs a completely different "tune up" to get as the same percentage of the energy content from a gallon of methanol as a gallon of gasoline. Different enough that it would only run on 110 octane gasoline. My 30MPG V6 Firebird would get 15MPG, on a 16 gallon tank. The average 16MPG pickup would get 8MPG.

The formaldehyde emissions from alcohol would be incredibly hard to deal with in traffic, especially in an area like a major city.

The good news is over heating would be a thing of the past, and power would be up on the order of 20% or so.

Methanol also requires either mineral based motor oil, or special synthetics not seen on the shelves of regular outlets, and requires the oil be changed twice as often.

And I LIKE methanol so it isn't that I oppose it, it is just that people need to be aware of the drawbacks.

[Toad]

The day is coming when they will be back to pounding sand. Including the little chimp down in Venezuela  


A new step in the ethanol revolution

[Charon]

The energy figures on corn have been all over the board and some show a net energy loss (depending upon how broadly the study looked at energy consumption relative to fertilizers, transportation, etc.

The energy ratio for ethanol may be 1.3:1 (or it may be 0.8:1) but oil to gasoline is still 5:1. Plus, ethanol requires a tremendous amount of surface area, particularly with corn to produce ethanol. There is not nearly enough agricultural land in the US to even remotely begin to consider ethanol as anything more than an additive. Perhaps 10 percent (of gasoline fuel) in 20 years or so would be an excellent level, but one perhaps achieved at the expense of feedstock and consumer food costs.

As it stands now, our tax dollars are still required to subsidize ethanol as a product since it cannot compete on the free market. Good deal if you happen to be ADM.

The biggest problems with ethanol concern transportation. Alcohol readily absorbs water, making traditional pipeline transportation impractical. That leaves rail, barge or truck which are energy inefficient. That means ethanol has to be produced close to where it is used, and current food crop feed stocks have real limits in the US climate and with current regional land use. What that means is that there is a broader ethanol market in the Midwest due to crops and the East Coast due to readily available barge traffic. Not so much elsewhere. Try buying E85 someday for your flex fuel vehicle and see how easy it is. Even in Illinois I would have to drive 3 hours to do so.

Biodiesel is better in many ways, but currently suffers similar limitations. You can expect, even 35 years out, to have biofuels filling about 3 percent of our total liquid fuels demand at best.

Several potential breakthroughs might change that. Biomass ethanol is promisign because it is made from grasses hard woods and waste products allowing for local ethanol production throughout the country. But it is currently expensive since significant enzyme activity is required to extract the sugars compared to corn or beets etc. People like Prof. Lee Lynd at Mascoma are working on solutions, and he just one an MIT sustainability award for his efforts. These show some promise. There is also an algae that could provide a huge biodiesel breakthrough someday.

Off course, more promising (but by no means inexpensive today) are synthetic fuels from coal or natural gas, etc. or oil sands and at some point oil shale.  They require a lot of up front capital investment in equipment and technology and the product is not cheap, but the ROI is there on a projection of crude over $45 per bbl.

Charon

[john9001]

corn is a poor producer of ethanol. there are much better crops to use to produce ethanol , but you knew that.

[Toad]

The Stratfor article points out that it's quite possible we are on the verge of solving the major problems with ethanol that Charon mentions. Once you start using the agricultural waste to produce it, cut the time and energy required to produce it... new game for the whole world.

The Jatropha plants (physic nut) may turn out to be one of the best producers of biodiesel. Another avenue to let them go back to pounding sand. Seems to grow easily on poor land and provide a lot of oil.

The Cost

The cost of Bio Diesel is largely dependent on the choice of feedstock and the size of the production facility.

If Jatropha feedstock is used, the fuel will cost depending on the country approximately US $ 0,40 per liter plus tax when applicable.

[Toad]

This jatropha stuff is pretty cool.

One UK-based company, D1 Oils plc (http://www.d1plc.com), has put itself at the forefront of efforts to fill this gap with Jatropha oil. Jatropha grows quickly, is hardy, establishes itself easily even in arid land, and is drought-tolerant, requiring only 300mm of annual rainfail. It grows especially well in South and West Africa, and South East Asia. Jatropha can even be grown on semi-arid land using waste water, making it a useful tool in the prevention of desertification.

Each Jatropha tree can produce an average of 3.5 kilos of beans each year depending on irrigation levels. According to D1's estimates, if 2,200 Jatropha trees are planted per hectare, each hectare could yield up to 7 tonnes of beans per annum. Jatropha beans can produce oil yields of up to 40% and D1 expects each hectare to deliver about 3,000 litres of biodiesel.

http://www.ecoworld.com/home/articles2.cfm?tid=356