Financial News

[southsider2k5]

So what is your answer? Additional production? Tax credits so that the government pays for energy rather than the poor people?

 

How about quit acting like not drilling in the short term is a solution?

[NorthSideSox72]

How about quit acting like not drilling in the short term is a solution?

I'd be all for allowing drilling in already-approved reserve areas as much as they want to, if that got a compromise of having some long-term thinking and doing the smart thing as well. Heck, even allow more drilling areas, as long as they aren't in legally protected lands.

 

[Balta1701]

How about quit acting like not drilling in the short term is a solution?

How exactly is drilling even a short term solution?

 

Ignoring the startup times...we've been drilling like f***ing madmen for the last decade. There are huge supplies that have already been tapped and drilled but which aren't being deployed because of either a lack of pumping resources or the fact that it makes good economic sense to wait and sell the product in a few years when the price is even higher. Combined with the fact that despite all the drilling that has been done, domestic production continues to decline and will continue to decline...this is a joke.

 

And anyway, if we're concerned about the impact on the poor, when you pump more, it just gets consumed by the wealthier people and the poor people get very little.

[southsider2k5]

How exactly is drilling even a short term solution?

 

Ignoring the startup times...we've been drilling like f***ing madmen for the last decade. There are huge supplies that have already been tapped and drilled but which aren't being deployed because of either a lack of pumping resources or the fact that it makes good economic sense to wait and sell the product in a few years when the price is even higher. Combined with the fact that despite all the drilling that has been done, domestic production continues to decline and will continue to decline...this is a joke.

 

And anyway, if we're concerned about the impact on the poor, when you pump more, it just gets consumed by the wealthier people and the poor people get very little.

 

Start up times is a piss pour excuse. We have had the same problem for years now, and we keep ignoring it for some uptopic ideal, that is probably not going to happen. This cloud hanging over the oil industry is all of the reason that they need not to advance at all. Why would you invest billions if the whole idea was to replace you? The answer is you wouldn't, and that is why we have $100 oil now. That is why production continues to decline.

[StrangeSox]

So instead we should continue using oil and eschew alternative energy research because it's a "utopic ideal?" But production will never peak out? It'll always grow as fast or faster than demand?

 

There's some short-sited thinking for you, even leaving environmental concerns aside.

[Jenksismyhero]

Why can't we do both?

[StrangeSox]

Limited resources/economic motivation. As long as we keep subsidizing oil, alternatives are less attractive.

[Jenksismyhero]

Limited resources/economic motivation. As long as we keep subsidizing oil, alternatives are less attractive.

 

Alternatives are ALWAYS going to be less attractive, otherwise it would have happened 30-40 years ago.

 

IMO it's not going to be like flipping a switch. We're not going to go to bed one night and wake up with a completely new energy infrastructure. So why not plan in the short term to supplement our oil reserves and become less dependent on crazy middle eastern tyrants, while at the same time offering investments, money and incentives to other transportation technologies.

[NorthSideSox72]

Why can't we do both?

 

I'd be in for that, as long as its actually both, and not just oil subsidies and then a small pittance for the actual future-oriented stuff.

 

Alternatives are ALWAYS going to be less attractive, otherwise it would have happened 30-40 years ago.

 

IMO it's not going to be like flipping a switch. We're not going to go to bed one night and wake up with a completely new energy infrastructure. So why not plan in the short term to supplement our oil reserves and become less dependent on crazy middle eastern tyrants, while at the same time offering investments, money and incentives to other transportation technologies.

Bolded just not true. Alternatives have become more and more attractive and will continue to do so.

 

But here is the main problem. Societies often tend to not adapt to changing resource situations fast enough - food, water, energy - and this has been the downfall of more than a few civilizations. We have to be smarter than that, and not allow the country to continue plowing down a road that will end in disaster.

 

[Jenksismyhero]

I'd be in for that, as long as its actually both, and not just oil subsidies and then a small pittance for the actual future-oriented stuff.

 

 

Bolded just not true. Alternatives have become more and more attractive and will continue to do so.

 

But here is the main problem. Societies often tend to not adapt to changing resource situations fast enough - food, water, energy - and this has been the downfall of more than a few civilizations. We have to be smarter than that, and not allow the country to continue plowing down a road that will end in disaster.

 

Ok, "more attractive" but not enough to make any serious change. Take away the subsidies on wind/solar power and they wouldn't operate without a loss right? Hybrids have been around for 4-5 years at this point, and it's not like everyone drives them (and they're still not cost effective). I'm interested to see how the electric car thing works out, but again that's a decade or more away before that's a real alternative.

 

I just don't see it. This is like the NFL right now saying, screw working on a new agreement, the future is arena football, so let's switch. They'd never do that, because they make a s*** ton of money producing the NFL. Why would oil-gas based companies suddenly decide it's time to change unless there's a motivation ($$) to do it? The demand is simply not there and really they hold most of the bargaining chips with the government on this issue.

 

Now, that's not to say that the government shouldn't be finding other technologies. I'm in full support of a man-to-the-moon style shift to finding that. Let's do it. But in the meantime, let's make use of the available oil resources we have.

 

 

[NorthSideSox72]

Ok, "more attractive" but not enough to make any serious change. Take away the subsidies on wind/solar power and they wouldn't operate without a loss right? Hybrids have been around for 4-5 years at this point, and it's not like everyone drives them (and they're still not cost effective). I'm interested to see how the electric car thing works out, but again that's a decade or more away before that's a real alternative.

 

I just don't see it. This is like the NFL right now saying, screw working on a new agreement, the future is arena football, so let's switch. They'd never do that, because they make a s*** ton of money producing the NFL. Why would oil-gas based companies suddenly decide it's time to change unless there's a motivation ($$) to do it? The demand is simply not there and really they hold most of the bargaining chips with the government on this issue.

 

Now, that's not to say that the government shouldn't be finding other technologies. I'm in full support of a man-to-the-moon style shift to finding that. Let's do it. But in the meantime, let's make use of the available oil resources we have.

LOL at the bolded, come on dude, at least try to make an effort here.

 

Hybrids, plug-ins and electrics have continued to grow quickly every year. They are still far too low, but to say its not a real alternative for another decade is missing the fact that its already an alternative today.

 

And by the way, saying hybrids aren't cost effective doesn't make much sense to me, unless I am misunderstanding you. I bought a Ford Escape Hybrid in Jan of 2008, and between the tax incentive and the miles I drove with the difference in mileage, I made up the cost in a year. Without the tax break, it would be 2.5 years. And that number keeps going down as the tech matures and as gas prices increase. I suppose if you plan to buy a new car every year, then maybe it doesn't make sense yet, as much so anyway. Also worth noting, I cannot believe how well this car is retaining value. Its 3 years old with 40k+ miles on it, and the blue book mid-value on it is still 70% of what I paid for the car. More than that if you consider the tax rebate into the equation. That is way above normal, I wasn't even expecting that benefit, but apparently demand is still quite high even for a 3 year old hybrid.

 

 

[Jenksismyhero]

LOL at the bolded, come on dude, at least try to make an effort here.

 

Hybrids, plug-ins and electrics have continued to grow quickly every year. They are still far too low, but to say its not a real alternative for another decade is missing the fact that its already an alternative today.

 

And by the way, saying hybrids aren't cost effective doesn't make much sense to me, unless I am misunderstanding you. I bought a Ford Escape Hybrid in Jan of 2008, and between the tax incentive and the miles I drove with the difference in mileage, I made up the cost in a year. Without the tax break, it would be 2.5 years. And that number keeps going down as the tech matures and as gas prices increase. I suppose if you plan to buy a new car every year, then maybe it doesn't make sense yet, as much so anyway. Also worth noting, I cannot believe how well this car is retaining value. Its 3 years old with 40k+ miles on it, and the blue book mid-value on it is still 70% of what I paid for the car. More than that if you consider the tax rebate into the equation. That is way above normal, I wasn't even expecting that benefit, but apparently demand is still quite high even for a 3 year old hybrid.

 

What's wrong with the analogy? Why would a company that owns such a valuable product be so willing to throw it away and put themselves out of business?

 

Hybrid sales are 2-3% of total new car sales max. Plug-ins/electric cars are even less than that. Obviously those numbers will grow, but it's still not even a significant number of people, so yeah, I think a least a decade before a major chunk of the country jumps over, if not more. We all had this same discussion 2-3 years ago when gas prices were at this point and higher. Some people will jump because of the increase in price, but until we're at 5-6 bucks a gallon it's just gonna be a slow and steady increase, but not a major jump.

 

And I have no idea how you saved with the hybrid unless you drive a ton more than I do. I bought a new ford escape 2010 over a year ago. When i ran the numbers it was going to take me something like 6.5 or 7.5 years to get my money back on the extra 14-15k in cost of getting the hybrid model. I can't remember, but I think the credit you got expired and/or went down, because that was never a significant reduction in the amount of years it was going to take.

Edited March 2, 2011 by Jenksismybitch

[StrangeSox]

What's wrong with the analogy? Why would a company that owns such a valuable product be so willing to throw it away and put themselves out of business?

 

The value is at least partially based on ignoring a lot of externalities and government subsidies. I think this also highlights that's what in the best interest of multi-billion dollar multinational corporations may not be in the best interest of the citizens of any given country.

[Jenksismyhero]

The value is at least partially based on ignoring a lot of externalities and government subsidies. I think this also highlights that's what in the best interest of multi-billion dollar multinational corporations may not be in the best interest of the citizens of any given country.

 

I agree with both statements, but unfortunately they pay for the government we have so...again, the incentive isn't really there yet.

[lostfan]

We are the exact opposite. Why create three times the work of managing all of the different accounts? We communicate just fine. No need to worry about getting money in the right place at the right time, because it only is in one place. If it takes three accounts to get things done, it sounds like communications or trust might be a problem.

It's not three times the work if you're married to an idiot.

[Balta1701]

Start up times is a piss pour excuse. We have had the same problem for years now, and we keep ignoring it for some uptopic ideal, that is probably not going to happen. This cloud hanging over the oil industry is all of the reason that they need not to advance at all. Why would you invest billions if the whole idea was to replace you? The answer is you wouldn't, and that is why we have $100 oil now. That is why production continues to decline.

Production continues to decline because of a lack of investment? Do you have any idea how backwards that is?

 

The amounts of money invested in new dirty energy resource extraction are absolutely, ungodly, enormous. Annual spending on oil and gas exploration is currently about $500 billion a year, globally. The EIA projects it to rise to $1 trillion a year by 2030. They even drill and frack wells that they don't expect to produce for years. The Macondo well, which we all remember, was years away from production. They were going to seal that off and put an actual production rig on it in a few years. Pretty much none of the gas being extracted at great cost from Pennsylvania right now is profitable, but billions of dollars are dumping into it in anticipation of future production. Companies have dumped tens of billions of dollars into developing oil extraction from tar sands, which in many cases isn't profitable when oil is below $75 a barrel, same reason.

 

Production is declining because you have to discover amounts equal to the amounts you extract for production to stay constant. Discoveries in the U.S. peaked in the 1950's, and peaked globally in the 1960's. There is no more oil to find, and the amounts that are undeveloped are an incredibly small sliver of the available supplies. It has absolutely nothing to do with a lack of investment.

[NorthSideSox72]

What's wrong with the analogy? Why would a company that owns such a valuable product be so willing to throw it away and put themselves out of business?

Where are you getting this? What company is making that choice?

 

[NorthSideSox72]

And I have no idea how you saved with the hybrid unless you drive a ton more than I do. I bought a new ford escape 2010 over a year ago. When i ran the numbers it was going to take me something like 6.5 or 7.5 years to get my money back on the extra 14-15k in cost of getting the hybrid model. I can't remember, but I think the credit you got expired and/or went down, because that was never a significant reduction in the amount of years it was going to take.

The difference between hybrid and not in the FEH is like $3800. Tax break was $3000. Mileage difference is variable depending on whether you are comparing two new cars (i.e. you are buying a new one regardless), or comparing to your previous car at its mileage. Paying off an $800 difference was actually well under a year for us if compared to the previous car (also a small to medium SUV), more like 1.5 years comparing the two models.

 

[iamshack]

The difference between hybrid and not in the FEH is like $3800. Tax break was $3000. Mileage difference is variable depending on whether you are comparing two new cars (i.e. you are buying a new one regardless), or comparing to your previous car at its mileage. Paying off an $800 difference was actually well under a year for us if compared to the previous car (also a small to medium SUV), more like 1.5 years comparing the two models.

Where it doesn't make sense is in the new luxury hybrid SUV's, where the difference is like $10k or more. But I don't think those people are buying the hybrid model because they are concerned about the recapture time.

[NorthSideSox72]

Where it doesn't make sense is in the new luxury hybrid SUV's, where the difference is like $10k or more. But I don't think those people are buying the hybrid model because they are concerned about the recapture time.

Well yeah, because they know that about those buyers. That's different math.

 

[Jenksismyhero]

Where are you getting this? What company is making that choice?

 

I'm saying that would be the situation. Why would BP/Chevron/Conoco and others simply stop their oil/gas businesses for alternative energy? They currently have a highly prized commodity that makes them a ton of money every year. Whether or not they get assistance from the government doesn't matter, the fact is if the country switches to electric cars, wind power, etc only then they're out of business (at least in the US). They have no incentive to do this, regardless of whether public demand for it is growing. They currently pay for probably every politician in Washington, so it's not like the country is suddenly going to shift gears tomorrow.

[Chisoxfn]

LOL at the bolded, come on dude, at least try to make an effort here.

 

Hybrids, plug-ins and electrics have continued to grow quickly every year. They are still far too low, but to say its not a real alternative for another decade is missing the fact that its already an alternative today.

 

And by the way, saying hybrids aren't cost effective doesn't make much sense to me, unless I am misunderstanding you. I bought a Ford Escape Hybrid in Jan of 2008, and between the tax incentive and the miles I drove with the difference in mileage, I made up the cost in a year. Without the tax break, it would be 2.5 years. And that number keeps going down as the tech matures and as gas prices increase. I suppose if you plan to buy a new car every year, then maybe it doesn't make sense yet, as much so anyway. Also worth noting, I cannot believe how well this car is retaining value. Its 3 years old with 40k+ miles on it, and the blue book mid-value on it is still 70% of what I paid for the car. More than that if you consider the tax rebate into the equation. That is way above normal, I wasn't even expecting that benefit, but apparently demand is still quite high even for a 3 year old hybrid.

I'm not going to lie, I'm not aware of any hybrid currently on the market with a 1 to 3 year break even point if you are driving 40K in miles total during that 3 year time frame. Most all of the models I've looked at have significantly longer pay-back periods than that, with the exceptions being for those individuals who drive significant miles as their buy-back window would be smaller.

[StrangeSox]

FYI as of December 31st, 2010, there are no more federal tax credits for buying any hybrid vehicle.

 

Just doing a quick comparison of a Ford Fusion SEL vs Hybrid (seemed similar in features), it'd be about 66k miles with gas at $4.10/gallon to break even. Of course, immediate financial impacts aren't the only concern for most people shopping for a Hybrid eg I don't see any financial gain from buying cage-free eggs.

Edited March 3, 2011 by StrangeSox

[NorthSideSox72]

FYI as of December 31st, 2010, there are no more federal tax credits for buying any hybrid vehicle.

 

Just doing a quick comparison of a Ford Fusion SEL vs Hybrid (seemed similar in features), it'd be about 66k miles with gas at $4.10/gallon to break even. Of course, immediate financial impacts aren't the only concern for most people shopping for a Hybrid eg I don't see any financial gain from buying cage-free eggs.

There were still credits when I bought, my math was different than this.

 

Jas, same to you - without the tax credits, the payoff is a lot further out now. Remember too that in my case, I bought just before the ridiculous run-up of gas prices in 2008, and we were paying north of $4 in the city.

 

[StrangeSox]

Edmunds has a "Top 10" break-even hybrids and diesels list.

 

http://www.edmunds.com/car-reviews/top-10/...s-for-2011.html