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Oil's Well that Ends Well


OldGreyEagle

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I like the new hybrid cars. They are amazingly quiet.

 

It's taken 30+ years to get hybrid cars on the road. I remember reading about similar concepts in Popular Science back in the early 70s. Folks just don't know how long engineering developments can take, especially if you want to make them affordable.

 

Toyota is saying that they are going to release a hybrid SUV soon, the power of V8 and the fuel economy of a 4 Cylinder.

 

Personally, I'm confused why every family that got by with a medium sized sedan 20 years ago now needs a Suburban. Or even two Suburbans. I know silly people who commute 30 miles every morning in their Suburbans and then complain about the cost of gasoline.

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OGE, byte your tongue! FOG, me too. I also read instructions on how to make your own in Mother Earth News. But I refrained, probably for the same reason nearly everyone else did - economics. The Ford Escape hybrid looks pretty good too. I like the idea of the regenerative braking and the ability to use regular 110AC appliances directly from the vehicle. On the other hand, real camping is about to take another hit - Ford is suggesting such add-ons as crock pots. Oy vey!(This message has been edited by packsaddle)

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For those that just have to have more power...ur...ur...ur, the technology that Toyota and GM is looking at for larger engines appears to be relatively close to being implemented. I read where GM will be offering what they call "variable displacement engines" this year on their larger trucks.

 

As I understand it, a computer monitors the drag on the engine and shuts down cylinders when less power is needed and turns them back on when drag increases and more power is required. Supposedly the driver would be not able to tell the difference compared to today's engines, but fuel economy would improve significantly. Nothing like the 50 - 60 mpgs the little hybrids get but maybe 25 mpgs out of the 5 - 6 liter V8s.

 

The good news is there is no need for a fuel infrastructure change to distribute CNG or Hydrogen and we still get to import oil from our "allies" in the mid-east.

 

Just imagine what our foriegn policy would be if we really did come up with a technology that replaced petroleum fueled vehicles.

 

SA

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OGE,

 

Im late to join this discussion, but what the hey

 

Just as an example, if it costs one dollar to acquire and refine and deliver a gallon of gas, I can see the oil companies charging $1.15, effectively making 15 percent on their investment. So if factors change and it now takes two dollars to refine and acquire and deliver gas, is it practical to charge $2.30 a gallon to keep the same 15 percent return on investment?

 

Im sure the turnaround on the sale is fairly quick (raw oil to petroleum to the sale at the pump), so this may not be as simple as it sounds. But, I think youve answered your own question. A business needs to have a profit margin greater than what they can knowingly get elsewhere otherwise it makes no sense for them to stay in that business. So, if my return on investment in terms of dollars remains constant, but as a percentage of my invested capital decreases from say 15% to 7.5% (i.e., from 15 cents on every dollar to 15 cents on every two dollars) why wouldnt I (as a good businessman) put my money in an investment like a good mutual fund that earns say 8 or 9 or 10%. Of course, knowing the market can bare the increase (i.e., supply and demand will permit me to maintain the same profit margin), instead of folding my business and going elsewhere, doesnt it make better business sense to raise the price of my product so I can maintain the same profit margin that existed before my costs went up. Those who criticize businesses for doing this do not understand a free market. There needs to be an incentive for maintaining a business. If I have the option of making the same profit or greater without the risk of running an enterprise - by investing in something safe like a mutual fund - why should I stay in that particular business?

 

I know its popular to accuse the oil companies as being money grabbing opportunists and in many cases it may be true but I dont think reports of increased profits confirms that suspicion.

 

As for OPECs motives, who knows? I believe theres plenty of oil available in America (i.e., Alaska, the Gulf of Mexico, and other areas), but there are many who do not trust our governments willingness or ability to monitor its extraction in a safe and prudent manner. Personally, I believe we have the right people in government to make it happen without sacrificing our environment, but I know thats a futile argument to pursue with many folks on this board. If Im right and we make use of that oil in our own backyard, I believe the price of gasoline will go down dramatically.

 

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It was pointed out to me that the following part of my previous post on this topic could be confusing.

"Now if we assume that all of the final product is gasoline (actuall only about 20 gallons is) we get a base cost of .8090 cents per a gallon. Add to that the Federal taxes of .184 cents per a gallon and the State of VA taxes of .175 per a gallon you get a cost of 1.168 a gallon.".

 

It should read as follows.

"Now if we assume that all of the final product is gasoline (actuall only about 20 gallons is) we get a base cost of .8090 per a gallon. Add to that the Federal taxes of .184 per a gallon and the State of VA taxes of .175 per a gallon you get a cost of 1.168 a gallon."

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FOG says: I'm confused why every family that got by with a medium sized sedan 20 years ago now needs a Suburban. Or even two Suburbans.

 

Beacuse they can afford them. Compare the prices of food, gas, steel, and housing to what they were twenty years ago as a percentage of average income. Twenty years ago, they didn't have a choice about getting by with a medium sized sedan. But roll it on back 100 years. Most people got by without any motorized vehicle at all, and many without even a horse and buggy. People can afford to drive lumbering giants now and many of the people driving those lumbering giants are the same ones who got by with one midsize sedan twenty years ago. They didn't do it from the goodness of their hearts or as a choice to live a simpler lifestyle. They did it because it was they best they could do. Forty years from now, some folks will be amazed that we ever got by without our own personal rocket-packs, and others will gripe that forty years ago we got by without them just fine. Also, compare and contrast cell-phones. It wasn't so long ago that car phones were very expensive and only those that really "needed" them bought them. Now they're everywhere and every teenager has one.

 

The answer to every question like this is simply because we can.

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You are all Deer staring into the headlights. DOH!!!!! You all make me wonder if your Scouters, or politicians. But in any event, it is clear Scouting is far from your agenda.

 

ASM1

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"You are all Deer staring into the headlights. DOH!!!!! You all make me wonder if your Scouters, or politicians. But in any event, it is clear Scouting is far from your agenda.

 

ASM1"

 

Just stay out of the left lane...especially when I'm behind you driving my Mortifier. ;^)

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