Fixing oil ? What's your approach?

[Flubber]

In the ExxonMobil profit thread there were some posters railing against the "profiteering" of the oil companies and the general high price of a barrell of oil. Some were fair comments and others were just corp-bashing but either way I want to hear about solutions from those that think there is a "problem".

Assume you are the head of state of any country or any organization in the world. You can pick your country/organization. How would you act to lower the price of oil? Now please be realistic. Solutions that involve every country in the world holding hands and singing "kumbiya", are not really solutions. Please assume as well that countries and corporations will generally act in their own self-interest.

If your solutions involve changing the entire world order, creating a socialist or communist utopia, nationalizing the resource or otherwise radically altering the world as we know it, please feel free to share those as well.



Now, saying something is terrible or whatever is easy. Solutions are hard.

** For the purposes of this thread please stick to oil. Things like gasoline and natural gas prices are a separate (but obviously linked) issue

[Japher]

How about creating government sponsored competitor programs to bring up more gas companies to the same level of competition?

Remove the quotas for hybrid fuel vehicles or make them stricter as the increase in fuel economy also leads to rising gas costs.

[Lawrence of Arabia]

bush is right - we should go with ethanol, and start at first replacing our mid east sources with ethanol, and then go from there.

[Arrian]

There are only two things that come to mind:

1) Lower demand.
2) Increase supply.

Lowering demand can be tackled from several directions at once:

a) More investment in alternative energy (R&D money/incentives). This is the biggie. This includes, IMO, nuclear power.

b) taxation of oil-guzzling things... like cars that get 15mpg

c) urge conservation (in theory, there is already incentive enough to conserve - you save money on your utility bill... but perhaps there needs to be more incentive?)

Increasing supply is something we're already doing. Oil companies have plenty of incentive to seek out new sources of oil, and when oil prices rise, new areas will become economically feasible to drill (or otherwise extract oil from).

As for the "profiteering" stuff... if you can prove that the big oil companies colluded to artificially jack up prices, I would think they could be prosecuted for something. If not, meh, not much you can do.

-Arrian

[Colonâ„¢]

I say we wait a couple of millions year until all the organic matter stuck in the soil right now has been properly converted.

[Arrian]

the increase in fuel economy also leads to rising gas costs.

Huh?

-Arrian

[KrazyHorse]

the increase in fuel economy also leads to rising gas costs

Why?

[KrazyHorse]

Damnit, Arrian.

[Arrian]

Rats! Thwarted again!

Anyway, clearly bass-ackwards, Japher.

-Arrian

[OneFootInTheGrave]

I am with Arrian on 1 a) - this is "very" feasible if politicians go for it.

The whole point is to make economies less oil dependant, and than who cares if Chineze are paying 100$ per barrel when we are mostly off the hook.

I'd say that could be really pushed with Nuclear over next 5-10 years of investment. not very pretty but effective.

As for b - europe does it big time, and we surely have less energy consumption than US, but it has 0 relevance for oil dependancy and minor relevance for the prices.

So nuclear and renewables where feasible (so perhaps up to 20% of total energy consumption for renewables), the rest nuclear + coal, if politicians in US & EU pressed on that in 10 years we would be miles ahead of this current oil situation.

--- no idea what will have to be the price of oil for them to get into gear to get projects going

[Drogue]

Re: Fixing oil ? What's your approach?

Originally posted by Flubber
Assume you are the head of state of any country or any organization in the world. You can pick your country/organization. How would you act to lower the price of oil?

I wouldn't. It's not in their interest to have cheaper oil, nor in the long term interest of the world. The only use of low oil prices is short term economic growth. I'd like to see a slow, steady rise in oil prices, say a couple of percent a year above inflation. Slowly incentivize people to invest in cleaner, sustainable fuels while not doing the huge shock/cripple economy method. And I'd buy stocks in energy technology firms.

[KrazyHorse]

I think the railing against supposed profiteering by the oil companies is based on a misunderstanding of marginal pricing. There's only one price for oil (ignoring the variations due to transportation costs and oil quality), so as demand (and therefore price and supply) climb, the profit margin on the additional supply might remain the same as the profit margin was previously on the most expensive supply (so now the most expensive oil being drilled costs 65$ per barrel to extract and is being sold for 67 dpb, while previously the most expensive supply cost 20 dpb to extract and was being sold for 22 dpb), but now all of that less expensive supply has a higher profit margin associated with it...

[Flubber]

Originally posted by Arrian

As for the "profiteering" stuff... if you can prove that the big oil companies colluded to artificially jack up prices, I would think they could be prosecuted for something. If not, meh, not much you can do.

-Arrian

Be clear, it wasn't me saying things about profiteering.


More generally, some good responses and food for thought.

[Arrian]

Originally posted by Flubber
Be clear, it wasn't me saying things about profiteering.

I know YOU weren't. You work for the oil industry, don't you?

You brought it up in the OP, so I thought I'd throw out a comment on it.

-Arrian

[Kidlicious]

It's more price gouging than profiteering maybe.

Anyway, I say set a price ceiling. I don't think there would be shortages because the price of oil is so high. As long as the ceiling wasn't too high it would be ok.