Government Forcing Gas Prices Up So We Go Green?

[doctorjj]

We don't need them, especially with all the finds here in the U.S. like in the Bakken shale. I know for a fact it's not affecting the supply, once again, go talk to the boys in Cushing.

The restriction of permits has been a factor. Still though, Cushing actually proves the point. If we have plenty of supply, why is the price so high? I'll tell ya. It's because of our monetary policy with zero interest money and QE2, with talk of QE3. With the government giving away money and telling everyone that they are going to print a crapload of money, what do you think investors are going to do with the cash? Of course they are going to commodities. If that isn't by design from the administration, then the administration is a bunch of retards for not realizing that is what they are doing. They know exactly what they are doing.

As for electric cars being charges off of the grid, you guys might want to look into the studies by Oak Ridge Labs and others that have indicated that almost the entire fuel consumption for transportation could be replaced with idle capacity in the electric grid, i.e. no need for more generation capacity to be built and no additional fossil fuels to be burned.

 

[Cinaet]

We don't need them, especially with all the finds here in the U.S. like in the Bakken shale. I know for a fact it's not affecting the supply, once again, go talk to the boys in Cushing.

You're right GMThunder. It's not like that investment in exploration goes away. It just changes location. And it's not like those changes in location go overseas. The best investments are by far domestic.

 

[SMS]

You're right GMThunder. It's not like that investment in exploration goes away. It just changes location. And it's not like those changes in location go overseas. The best investments are by far domestic.

The best investments might be domestic...but if the administration doesn't allow us to open up new areas....they are worth nothing. And the culture of not allowing new exploration certainly affects speculation and prices, if not the direct supply.

Oklahoma isn't exactly 'new' exploration is it? We knew that oil was in the ground and it's only economical to go get it now because the price per barrel is going up right? Cushing isnt' new and doesn't add anything to the speculation equation does it?

To get back to the topic of the government forcing up prices....show me where the administration has encouraged new exploration or drilling, and significantly ramped up new production? The only thing we've seen if the halting of existing production.

 

[HMFIC]

I have a source for dilithium crystals but I'm sitting on it until the SHTF.

 

[SoonerBolt]

Actually private speculators can make money with the price going down just as much as they can with the price going up. Options can be bought or sold either way.

 

[Werewolf]

The Green River Basin has 2-3 trillion barrels. More in the Gulf, Alaska, everywhere. In every case, there is a "good" reason why we must not produce that oil.

One wonders if the green weenies will still feel the same when they and their children are freezing to death in the dark or being baked to a crisp at high noon in the middle of summer when mideast oil runs out or other nations outbid us on the commodities market for it?

 

[webmogul]

Speculation is allowed because it creates liquidity in the commodity markets. Around 70% of all trading in the commodity markets is speculation. Without it the holders of contracts who actually want to take delivery of a commodity or who are the suppliers of a commodity would be trading in a non-liquid market place where if a contract needed to be modified, closed or traded it might take days or even never. The consequences of that considering the volume of real goods traded wouldn't be pretty.

Take the Securities and Derivatives course at OU to learn more.

I'm glad you made this statement. Blaming speculators is just as bad as blaming the rich for making people poor or other scapegoat scenarios. People don't realize just how big and important the commodity markets are.

 

[webmogul]

I don't really know much about green cars, but isn't that still better than our gas and diesel powered vehicles? If not, please explain.

A couple things to consider here. One is that depending on the type of green vehicle, it may require lots of rare earth minerals which we don't have. So instead of being dependent on the middle east we become dependent on countries like China which has some of the largest rare earth minerals on earth.

then think about the machinery it takes to mine that material, ship is across the ocean, etc.

For electric vehicles with huge batteries, well we all know how long batteries last right? Even if their life was doubled, it will still be only 15-20 years before that car goes kaput, and nobody is going to fork over the cost of replacing a battery like that. So instead of one 30lb battery going in the dump, one weighing several hundred pounds goes into the dump. Tree huggers will have a field day with that one.

There is also, as previously mentioned, coal or nuclear waste that goes into making electricity for plug-in electric cars

personally I'm hoping that scientists will find really cheap ways of converting waste plant material and plants like switchgrass to ethanol. That way I can keep my internal combustion engine

 

[doctorjj]

Actually private speculators can make money with the price going down just as much as they can with the price going up. Options can be bought or sold either way.

True, but the sheer volume of new long contracts does force the market in a certain direction, which is not supported by the fundamentals. I don't blame the speculators. I blame the underlying forces at work, which would tend to encourage speculators to dump tons of money into commodities right now. Those underlying forces are the current administration's fault.

 

[doctorjj]

A couple things to consider here. One is that depending on the type of green vehicle, it may require lots of rare earth minerals which we don't have. So instead of being dependent on the middle east we become dependent on countries like China which has some of the largest rare earth minerals on earth.

then think about the machinery it takes to mine that material, ship is across the ocean, etc.

For electric vehicles with huge batteries, well we all know how long batteries last right? Even if their life was doubled, it will still be only 15-20 years before that car goes kaput, and nobody is going to fork over the cost of replacing a battery like that. So instead of one 30lb battery going in the dump, one weighing several hundred pounds goes into the dump. Tree huggers will have a field day with that one.

There is also, as previously mentioned, coal or nuclear waste that goes into making electricity for plug-in electric cars

personally I'm hoping that scientists will find really cheap ways of converting waste plant material and plants like switchgrass to ethanol. That way I can keep my internal combustion engine

A lot of misconceptions here. The reason why we don't produce "rare earths" such as neodymium isn't because China is the only place it's found, it's because of our ridiculously stringent environmental rules regarding the mining industry. Second, if a battery in a car lasts 7 years, at 15,000 miles a year, well, that's over 100,000 miles. A lot of cars are worn out about then anyway and if you saved all the money for gas, oil and otter maintenance, a battery would seem cheap. Also, why wouldn't the economies of scale apply to large format battery production? And finally, why would you throw away a battery filled with valuable materials when it can be recycled?