Stop the short selling. Git rid of it forever. The fed needs to RAISE the interest rate it loans money to banks to a min of 3%, not keep it close to 0% as is now. Currently it is so low the banks are borrowing for 0% interest and then buying gov bonds paying 2-3%---IE they are getting free money by the billions. Make their rate 3%. Then they will be forced to make good smart loans to business and home buyers. It will not hurt the housing market. Housing is already at bottom levels and can only go up. In the 80's rates were over 9 % and people still bought homes. I think 6-7 would be fine. Raising prime would force banks to stop buying bonds and start lending (which would help grow our economy).


I am for getting rid of ALL loop holes and changing the tax rates. There are UBER rich paying almost no taxes. This would not HURT business. However, i do not anyone should get screwed with the new tax rates.


Finally, start drilling for oil everywhere we can. We got TONZ of oil in the gulf and in Alaska. Drill all we can and maybe build another gas refinery. Then we would see gas back down to a buck a gallon. Think of all the things lower to middle income family's would be free to buy then, not to mention places they could then go. While doing that, work with the auto industry to increase the mileage that vehicles get. Doing both at the same time would drop oil and gas like a stone and crush our dependence on the mid east and other bastardly countries.

Doing these things and dealing with our immigration and border security problems would have this country booming in a couple short years. Just announcing it would make oil plunge. Why don't they do these- they must know they would work?

As someone who has worked at BP, I can assure you that drilling as much as we can is not going to reduce prices any significant amount. It would be years before any of new wells would produce oil. First you have to have the geologists figure out where oil might be, then the geophysicists have to collect field test data to figure out the best way actually collect data to figure out where oil might be. If oil is believed to be somewhere, then you have to start tracking down land owners, working on permits, etc. When you do finally get permission and get all the equipment and personnel to the drilling locations, you still have to drill the wells and build the infrastructure months and years later. Finally you can hook up your well to the pipelines. Off-shore takes more time than on-shore and most of our reserves are located off-shore. Even if we did start producing a lot more oil, there is no way we can realistically produce enough to not continue importing oil.

The prices at the pump are actually not mostly controlled by production, but rather by what people will pay. That is one of the reasons why prices spike periodically. People will pay $3.50/gallon for gas if the price hits $4.10 for a week. There are two key ways to lower prices at the pump and ultimately they both are simply decreasing demand. They will only charge what people will pay. We are completely dependent on oil though so we are sort of hostage in some ways. 1) Electric cars are the future for all sorts of reasons, but in the interim 2) cars can actually be readily and fairly inexpensively converted to run on natural gas, which is much cheaper than petroleum. People do #2 in other countries already. You still need some petroleum to start the car, but once it is running you can power it on natural gas.

Same thing they were saying years ago.

Some European countries including Germany banned short-selling last week and it worked for 1 day. The problem with increasing interest rates is that banks are less reluctant to lend to medium/small businesses, which is bad. Also it isn't house prices per say, but its people on fixed incomes and flexible mortgage rates. You are going to get a lot of unemployed people.

US petrol prices are still at half the price than the European pumps. Kinda says something about the sustainability of cheap oil.

stopped reading at "stop the short selling".

Short selling is necessary!

in 2005, 95% of american companies didnt pay tax, your taxes in general are redicioulous and I would honestl be ashamed of sitting in your goverment and refusing to raise taxes another big problem in the US is that you import more then you export most products that are produced even by american products are made in china instead of the US. eventually Chinas salaries will even out just like japans did before but that could take another decade

As for oil yeah we will probably be dependant on oil for another 10 years but after that? focus on solar power and renewable energy instead germany alone have like 100 000 people employed building solar panels (no idea if the US have the same or even more but i doubt it)

just my thoughts

Where do you think they are going to drill? Aside from the drilling stoppage after the BP incident, there has been nothing stopping the wealthiest companies in the world, who are subsidized by our government for unimaginable reasons, from drilling more. The only thing they are stopped from doing is drilling in protected locations. Even if those places are opened up it will not have any significant effect on prices. People imagine prices dropping multiple dollars but that is just not realistic. We will always be importing petroleum as long as we are using it at the rate we do and the amount that increased pumping would provide would not really be noticeable on the commodities market. What it would do is decrease the amount of money we spend importing oil. (well, not really, it all goes into a global market, but our contribution would be larger so we'd effectively have lower net losses from our economy). That sounds great and all, but the effects would be small in the grand scheme of money we send out of the country and would be short lived.

Flamey that is because in europe we have about 100% tax on gas

It isn’t that simple, Deerhunter. The banks are good at finding the “free” money and closing shorts, calls, puts and straddles wouldn’t really fix anything. They will simply move on to a new mid to high-yield trade, and continue to hoard the money until they find qualified mortgagors to issue these loans to. I do agree, just based on sheer numbers that, they do need to start lending again and need to be encouraged to do so. I don’t think they’ll be as encouraged to take on the bad loans they did before, even though they made trillions in the process last time.

In terms of the housing market just rebounding after a few years, I hate to say it, but it isn’t going to happen. I own a company in the property preservation field and opened up my services to HUD, and various banks in the southern US last year. We are still sitting on more than 56 months of inventory, and we have several million houses that still have not been released. Also, every 3-4 months this drags on, we add another month to this inventory. So, in short, by November, we’ll have 57 or maybe 58 months of vacant inventory, PLUS the 3 months we waited for the new numbers to weigh in. So, let’s call it 60-61 months of inventory or FIVE YEARS before we reach the “magical” 1 million transitional households that Warren Buffett mentions so prominently (although, he does admit that it won’t be the fix all point that some media outlets boast).

As far as the oil goes: what Detmer said. I worked sub-sea operations in the Gulf of Mexico for a couple years working for several oil companies and it takes a long…looooong time to go from exploration to production. Even the Macondo Well that BP botched was in a plug and abandon step, and they were basically going to sit on the well for 3-5 years before producing. Alternative energy is definitely the way to go here, but with all the big oil subsidies coming in the form of $4B a year in tax dollars it will be a while before we see these really take a foothold.

Now, on to the comment about “back to $1/gal”…CAN’T HAPPEN. IMMPOSSIBLE. Two reasons, with one being just good old fashioned greed. These oil companies are seeing record profits while they sit on inventory for months on end. I doubt they’ll relinquish that easily. And 2: Peak oil. We hit it already. The cheap, easy to get to oil (mainly the WTI, or “sweet crude”) that is easy to refine has been used up. We’re drilling deeper for lower quality oil that takes more time and resources to refine. Simple equation: Time (money) + resources (more money)= more expensive oil/oil based products. And just a bonus point: What do you think we’re burning to produce the electricity for those electric cars? Yeah, Oil and Coal, which actually produces a net-energy LOSS in most cases (not all) which increases demand further which increases prices. So, I’m sticking by my prediction for $5 dollar gas by fall 2012.
That’s enough out of me for now. Peace.

Schilling

You people are crazy. first europe where they pay 2x as much for petro is due the the tax that pays for their free health care. so there is no comparison of our prices vses theirs. The logic of most of you is that if it wont bring down prices this instant than it is not worth doing. That is stupid. There are many known places we could drill that are protected for dumb reasons. What im saying is we need to do everything possible to get all we can starting now. While we also do al we can to find alternatives that are viable.

I realize the housing industry will probably take 5-10 years to get back to what it was. That is why raising the prime will be good. It's not like it will stop the 5-10 guys who are left buying from making the deal. What it will do is force the banks to start lending again, as that will be their only way to make money. Clearly the policy of 0 % interest is not working- except for the UBER rich (the top .1% had their WEALTH-not income- increased by 10% since 2008).

Stoping short selling for good, and closing all loopholes and tax deductions is the way to go. Think how much the little guy will save being able to do his own taxes. Doing that and lowering everyons tax rate is nothing but effecient.

Also, i think everyone should watch bowling for columbine great movie


Wait, the US has like 100% BNP dept and you want to lower taxrates deerhunter?!!

I can't speak for the 49 other countries in Europe, but I am sure some of them got quite similar reasons as in Sweden.

We got a tradition to sometimes use taxes to force some envisioned results to happen.
We first had a gasoline tax already back in the 20s or something (I do believe it was during the conservative party being in power. Being very rightwinged back then and far from the left). The government want revenues for all sorts of things, not only free health care. Plus free healthcare was a bit, well, not so exisiting back in the 20s.
It ended in 1995 where we replaced it with a CO2 tax (which is more than only gasoline) and an energy tax (also more than on only gasoline). Partly used as a nice revenue source for all different expenditures (health care being one of several).
The environmentalists (yup, we got such a political party) is big on increasing those two taxes to force people to consume less of what is bad for the environment. The environmentalists always pushing for an increase of them to help solve things. That is part of their ideology. It being an added revenue is an added benefit which I am sure the other parties like:) Although each time the environmentalists have pushed for an increase it always sparked an intense debate in Riksdagen (the parliament).

Increasing those taxes have worked to decrease consumption though. People push for cars etc which use less energy, drive less, try to use more public collective transportation and so on.
Some of that behavior is also part of an increased awareness and concearn for the environment. People wanting to contribute to less polution.
But national polls do show that consumption would increase if those taxes were decreased :)

Did you read what Schilling and I wrote (as two people who have worked in the petroleum industry and ostensibly know much more about it than you do)? There is more than things taking a long time - increased drilling won't lower high gas prices. The assumption of supply and demand equilibration is not valid.

Care to substantiate that comment with even a shred of fact? I think you have it ass backwards, quite frankly. 95% of businesses in the US (small-medium) cover the other 5% that are big enough to create/abuse loop-holes in tax code.....just like in Europe.

Bowling For Columbine was another Michael Moore ultra-liberal loud-mouthed piece of sensationalist garbage. Even when the guy gets the core message right, he is still utterly biased against big business, completely obnoxious in presenting his opinion, and utterly incapable of seeing past his spite for anyone with money. If that's where you're getting your facts about the US, I can see why you're so far off base.

Deerhunter - you obviously know nothing of European economics. You are ass backwards in your facts as well. Please stop taking facts on European health care and economic structure from Fox - it's bad for your (mental) health.

This is incorrect in general I'd say; yes we burn coal; oil burning for power generation is actually somewhat rare, it costs a ton; that's why power costs *really* spike when the grid is loaded to the max, as oil or natural gas turbines are what are often used as a last-minute easy-to-fire-up emergency power solution. Usually coal + hydro + nuclear + natural gas are what handle almost all of the load though. And coal is cheap (because there's lots of it, relative to demand).

And electric cars done right (which I'm sure will start to happen as power companies continue to switch to charging different rates
at different times based on loading) will actually help stabilize the grid, as you can charge them in off-peak times, which actually makes it more efficient (cheaper!) for the power companies; things like nuclear power can't just be scaled back because the load went down for a few hours, it takes more than a day to ramp up a nuclear power plant; having a more stable base-load would really help the electric grids generally.

Additionally, *CARS ARE INEFFICIENT*; this is one of the actual cool things about the chevy volt's range-extender. Because it doesn't actually drive the vehicle directly it can be run at its most efficient RPM, basically a gasoline generator; ICE cars, on the other hand, especially in the city, spend a ton of time "generating power" at inefficient RPM levels; plus it's just so much easier to be efficient on a large scale than on tiny little car engines. (a 500 hp car engine is about 300 kW; modern coal plants tend to be more on the 500MW scale).

Also, environmentally... it's way easier to add expensive and heavy scrubbers and filters to a coal stack than it is to put them on *EVERY SINGLE CAR*


-qz

I'll add the third voice of somebody in the petroleum industry. The time difference between drilling a well and getting a marketable quantity of petroleum from the field to the market is can run anywhere from 1 year under absolutely perfect circumstances for a well developed onshore field (which don't exist much anymore) to as much as 6-7+ years for a greenfield offshore play.

DH, you live pretty close to me, so I know you are aware how many Ark-La-Tex wells are throttled down because there is no pipeline capacity to get it to market. 30+ years ago, it was pretty easy to get pipeline right of way, but now landowners fight pipelines tooth and nail. The Barnett shale in the Dallas area has been a huge gas field for over a decade and they are only now getting enough pipeline capacity to get it to market. Take that offshore, where most new domestic oil production will come from and multiply the cost by 20.

Its pretty funny how many people are for free market capitalism until they pull up to a gas pump.

Agreed@archaic

People are often just about what they think will help them the most. I think increasing gas taxes over the next decade (something that falls out of the 4 year election cycle) would be a good way to start encouraging people to use less gas.

It is amusing how liberals claim to be so forward looking but when it comes to oil drilling their excuse for why we shouldn't do it is 'We won't see the benefits until the future'. If we had started new drilling ten years ago, we'd be reaping the benefits now. I don't have much knowledge of the oil industry but I'd have to guess the industry would love to expand drilling but the government is in the way as usual.

People love to demonize the oil companies because their profits are so high. That's wrong. Oil company profit margins are actually much lower than the S&P 500 average. They are so profitable because of their extremely high inventory turnover rates (people buy a fluff load of gas). Increasing the supply of oil WILL lower the price of gas, its indisputable. Now, I'm all for alternative fuels but there is simply no viable substitute for oil yet. I'm NOT for alternative fuels at the expense of the economy as a whole.

Klown: I'm a moderate democrat myself, but I believe the liberal argument about forward looking is more concerned with the reduction in the burning of non-rapidly renewable fossil fuels, or the burning of fossil fuels, depending on how chewy granola they are. The main mainstream argument against off-shore drilling is more related to risk/reward than forward looking. If the gulf fishing industry rebounds quickly, we will probably see an equally quick relaxation on drilling in the gulf. If it doesn't, you'll have to wait for it to slip from the collective consciousnesses of the American electorate, which should take anywhere from 144 characters to 5 or so years.

Personally I take a longer term approach, and my own opinion is that we should be subsidizing alternative energy sources rather than the oil industry, because the fact is that we will run out of oil, and when that happens, this country had better not only have a plan 'B', but be in a position to implement it. I would also point out that as the world oil supply shrinks, having our oil resources will be a major plus for this country. Let the middle east and south america tap themselves out.

As far as the gas price goes, if we get too close to peak oil, there will be another clamor for alternative fuel sources, and the Saudis (mainly fearing more countries will go the route of Brazil and actually implement alternative fuel sources instead of talk and pilot programs), will flood the market with cheap oil. This will happen much sooner than any return on drilling.

Ivan, did you not read what i said? I said i am for lowering the tax rates while getting rid of all tax breaks and loop holes. Doing that would increase revenue so much you could lower tax rates. It just simplifies the system.

As for you drill tards- i dont care if it takes 10 years to get that oil to market- start new drilling now and prices will go down overnight. As for the profit margins of oil companies- yes i do think they are unfair. It was fine for them to make 5% when gas was 80 cents a gall. They were making good money with that. Now prices are 3-4 times that so they are making 20cents + a gallon. Not to mention the guys manipulating oil futures, buying and selling without ever taking possession. If you tree huggers want to invent some new kind of fuel great, i support you, but do not do it to the ruin of our great nation.

Qzjul- you would have us all living as the Amish do, wich would last about 5 minutes for China or some other nation to take us over.

It is great to go green- but it does not work if it makes us so weak we get took over and killed. Help me save you from yourself. All you green machines, go to CA, stay on welfare, and smoke your weed.

DH - you need to look into how the oil market actually works. Even if oil were struck tomorrow, it would be several years before it made its way through private investors buying it up, holding it until the price hits the mark they want, selling it to a middle man who sells it to a distributor, who then stores it until it makes its turn in rotation.

Sorry mate - if dropping oil prices were that easy, it would have happened already. Sarah Palin isn't the first person in history to naively think that finding more oil is the solution to the problem. Oil prices aren't going anywhere but up as it becomes more an more of a scarce resource. It's simple supply and demand, and investment theory - there isn't a deposit on the planet big enough to upset the trend.

You pulled your BP card, I am pulling my car business card.

Electric cars are fluff and will be for the foreseeable future. The batteries are made from rare earth metals, the mining process is more polluting than anything else you can think of, the "disposal problem" is the elephant in the room. The returns on the price premium take hundreds of thousands of miles over IC engines. By the time you are getting to the black on the transaction (vs a comparable IC car) you will have to replace your battery. At today's prices that's another $8k. There's a reason nobody is buying these things. They suck, they are unreliable, and most of us need more than 40 miles of reliability. For model year 2010 the US government bought more than 90% of the hybrid vehicles sold in America. I shudder to think what the government's take rate is on the electric vehicles available. As they are all 2011 models, data isn't available yet.

Hydrogen cells are the way of the future. I know this not because of Mercedes' ballyhooed hydrogen world tour (although it's pretty cool too), but because Honda and Toyota are both pushing it. They have been the bellwethers for too long to ignore. The mid size sedan is the best selling segment in this country because of them. Toyota has a fleet of hydrogen powered Higlanders on the ground in livery service in Tokyo (or did, before the disaster anyway) and the Honda Clarity FCX has been around for a while. Couple that with the breakthroughs the Swedes appear to be making the storage of hydrogen and extraction of energy, and there is no contest.



That is maybe the only good argument I've heard against drilling, it's a fantastic one actually.



It's amazing who people rail against making money. The retail car business had, in FY 2009, an average return on investment of 2.7%, according to Automotive News. That placed them in the bottom ten businesses in the country. Still, everyone thinks we're raping them. The banks are the ones who consistently, year in and year out, make the most money. How come we never freak out about their mid30% returns?

I agree that electric cars are not a final solution - they still are reliant on relatively scarce resources, and at least for the foreseeable future are not an effective solution to the current reason they are being produced in the first place. They may serve as a stepping stone to a real solution, but that is about the most beneficial they will ever be.

Top Gear (UK) did a really excellent segment on why electric cars cannot solve the problems of our reliance on petroleum using the Tesla Roadster as an example, and another using the Prius (or Pious, as I like to call them). I'll see if I can't track down the entire clip, although currently I've only been able to find segments of it.

I am very happy to see Honda developing a braking system that uses energy transfer from friction --> charge though. I had asked on Jolt's forums a few years back why this hadn't been looked into, but was mostly told it wasn't physically possible.

The biggest problem with low interest rates? The interest rate is the value of the money. If our interest rates stay low, that means the value of our money is low, that means there is more inflation coming. We are overdue for a massive inflation (I know, it is creeping in and everyone refuses to call it that, but more than that even). If your money isn't worth much, then your money isn't worth much.



You are a little off here on both counts. Let me tackle the second one first. Cars all already have tons of scrubbers and filters. Environmental standards are one of the largest cost adding items from model year to model year. Electric cars don't solve the problem because the problem's already been solved.

About the Volt: http://www.motortrend.com/...2011_chevrolet_volt_test/

second paragraph.

Besides, the Volt requires premium fuel. WTF? To top it off, when running in "extended range mode" (as a gas car, for the uninitiated) its fuel efficiency, even with premium fuel, ranks below every compact and subcompact offered by the top 10 manufacturers.

We will run out of oil. A child born today will not be able to have a full career in the petroleum industry. We will be on electric sooner or later. It is inevitable. I recognize that the rare earths we depend on are indeed rare and that the manufacture of them (as well as solar cells) is quite polluting. It is a one time versus extended pollution balance there as well as what is polluted (atmosphere, waste, etc).

As far as hydrogen, from your Swedish comment I just want to stipulate for those who are not aware that hydrogen cells are purely a form of energy storage, not an energy source itself.

Ya... I work for a railroad and we've been using regenerative braking on our locomotives for quite a while, not sure why it took the auto industry so long.

This is what I was talking about, although from the story you can see I was confused about who developed the tech. Not surprising, I haven't talked about this aspect of it in some time.

http://www.sciencedaily.com/.../2007/08/070821112346.htm

Right, but to be clear, you put more energy into the hydrogen cells than you get out. They are really just a very good battery system. I see from the responses that I was unclear and not using the best terminology, when I say electric cars, I mean non-fossil fuel powered cars. I recognize the terminology I used wasn't clear on that.

Yeah, electric cars are basically fluff on wheels, with seats.

Short selling makes the markets more efficient.

lol people arguing with Detmer about oil related issues is funny :p

people on this board have become too specialized, though. every thread like this has at least 1 expert on it now

everyone forgive and is forgiven what is oweed and all other debt, clean slate start over .. he is the mulligan

Actually NOW3p I didnt get that from a michael moore movie I was quoting the biggest newspaper in sweden but they like all news papers have their flaws too

@qzjul: Noted. I failed to realize that under some stats "Natural Gas" and "Oil" are sometimes paired together and listed as fossil fuels. Would account for why I was under the idea that 71.6% of our electricity in the US came from oil. It doesn't, but some clever statistics manipulation sure as hell made me think it did.

And to think this was a discussion on "easy" fixes to the economy...

Schilling

We all do a limited number of things, but we do them very well.

My specialty is military history.

Pre-Script (Rather than Post-Script): I wrote up a big thing then accidentally refreshed (Ctrl-R instead of Ctrl-Z when typing) and lost it all, so this is a summary:



L O L

I'm not exactly a hippy or environmentalist, but anybody remotely interested in technology or the future (or engineering) would realize that EFFICIENCY IS GOOD! You do realize that i was essentially advocating using coal power plants to generate electricity for electric vehicles? that's not exactly in the sierra club's play book i think. But would be more efficient than driving our current cars.



Actually, as you've said, they solve an existing problem, by eliminating what is already there. Extra, unneeded weight & inefficiency. Furthermore, even coal power plants have cleaner emissions than cars. Nuclear is even better.



That article actually paints it in a pretty good light if you'd read the whole thing (other than the price, and, well, it is the *first* true electric vehicle, you can't expect it to be instantly competitive); apparently it does actually change RPM on the range extender, which is unfortunate; it would be better to optimize for efficiency and tell people to go fluff themselves rather than pandering to customer expectations about this or that triviality; they'd increase their MPG rating too.

Yes it uses premium fuel, but that's for efficiency again, and the fact that it uses premium is not a big deal if you don't use very much of it.

And on the last point you're just wrong:



And according to this list that would make it 5th, after 4 hybrids, ASSUMING you DIDN'T CHARGE IT:

http://www.gotmpg.com/...n-best-worst-cars-mpg.htm

And buying an electric vehicle and not charging it would be retarded; it would top the list assuming you actually used the electric. And if you actually commuted < 25 miles per day, you'd use no gas. Well, 1 tank of fuel per year, as that's about the minimum according to your article there, as it runs the gas extender every now and again for maintenance tests &etc to make sure the thing still works. Or something.


PS: http://xkcd.com/386

Car business card again -

Ford, Toyota, Honda, Hyundai, Kia, Chevy all have IC cars EPA rated for 40+MPG currently for sale. 2010 is 2 model years ago.

Oh, also Vic; hydrogen powered cars ARE electric vehicles. Just they use hydrogen as the storage method, rather than batteries. Everything else applies though.


And to round out the specialization, I just finished writing my thesis on Hydrogen storage in Sputtered MgAl and MgAlTi alloys. (Materials Engineering masters).

That doesn't change the fact that you'd be silly to not plug in your electric car.

LOL true. Of course Motor Trend made it sound good though, they named it car of the year (before it was even out, wtf). If I wanted a particularly nasty hit piece I know where to send you. ;P I just wanted a mag everyone knows.

If you have those chops, wtf are you waiting for? I want a hydrogen powered 4x4 5500 series doom fluff truck with a mega cab already!

I can't buy an electric car in Canada =/

Also, I'm not sure of battery performance at -44C, that's my one main concern with electric vehicles in Canada

Yeah, all the reports about the leaf and the volt this winter said the indicated range was half or less in the Chicago winter.

marker

this thread has merit

The three cheapest sources of power we have are nuclear, coal and hydro. Hydro is clearly only available in certain places. All have varying environmental impacts. Of those coal is by far the most major in our portfolio. As noted earlier, petroleum is not really a fuel source in power plants now a days. Coal is terrible for the environment from how it pollutes to how we mine it. Moving off of it is a difficult thing to do though. Wanting to get off coal probably cost John Kerry the 2004 election since WV went Bush which they would not have necessarily have done.

That is neither here nor there. Making greener energy (which is pretty much anything other than coal) would add jobs somewhere and take them away from somewhere else. That is pretty much a zero-sum game.

Ivan - the editor of that paper should be fired. Not only is that statement utterly incorrect, if you think about it a bit it's just downright stupid. I think you would be hard pressed to find even a hint of substantiation for it. You sure it wasn't a tabloid?

Easier way.

Print more money.

Good god, I hope that wasn't a serious comment....

/me bangs head against desk after reading Klown and Deerhunter NOT getting it.

Guys, nobody is keeping anybody from drilling for new oil in the US. Leases are still being written, wells are being permitted, etc.

The reason the production delay keeps being mentioned is because it affects how oil companies spend their money. Drilling is expensive, VERY expensive. GE, GM, Apple, etc. would all be wary of investing hundreds of millions of dollars on something that would not show any return for 7-10 years. What makes you think that oil companies are any different?

They are going to continue to lease US waters, poke a few wildcat holes, and wait for oil to hit $300 a barrel (which it will). In the meantime, they are going to chase the oil in Russia, Africa, Brazil, etc. that is easier to get. Once they have picked the low hanging fruit overseas, they will be back around for the higher value American oil when the risk/reward ratio is better.

Hopefully by that time, most oil production will be feedstock for the petro-chem industry instead of wasted in cars.

Detmer, there will be work in petroleum for at least another century. It will gradually transition from E&P to just production of natural gas, but it will be there.

Your thoughts are well intentioned, Deerhunter, but they miss the mark of reality. As Demter said, typical supply and demand trade-offs aren't appliable as distribution and processing are the choke points, not discovery and supply. In fact, North American WTI oil is severely depressed compared to Brent due to over supply.

When oil prices are referred to in the U.S. and Canada, typically the price of WTI/NYMEX crude is referred to. The refineries that use Brent obviously are paying more for that oil, and pass that cost on. Refineries who use WTI/NYMEX are paying less and can pass that savings on.

So why is WTI/NYMEX crude so cheap? The answer is complex, but WTI/NYMEX oil is stored in vast facilities in Cushing, Oklahoma have reached near record high levels, and storage space is running low, depressing prices as supply rises. WTI/NYMEX crude is essentially landlocked and can't be shipped to the Gulf for processing or the East Coast to be shipped overseas to other markets. With vast Canadian crude also being used in the Midwest, this has led to further increases of WTI crude oil at Cushing. While the Midwest benefits from the ability to receive WTI oil, many use cheaper Canadian oil, leading to a scenario of falling oil prices as supply remains lavish, but only in the Midwest.

Parts of the country that use more expensive oil will soon be paying more than the areas of the Midwest, unless supply at the NYMEX delivery point in Cushing, Oklahoma drops quickly.

Until new pipelines are build in the US to eliminate the bottleneck or in Canada to divert supply to Asia, the Midwest is oversupplied while the rest of America is stuck paying more for Brent crude.

If oil continues to be abundant in Cushing and if Canadian supply continues to build, NYMEX/WTI crude could slip even lower. For now, wholesale gasoline prices are lower in the Midwest than any other region in the country thanks to the cheaper crude.

The reason gasoline in the US is significantly cheaper than the majority of the developed world is because the US government spends between $9 billion and $18 billion a year to subsidize it's production ($36.5 billion in 2010 for the whole petroleum industry). In addtion to this, the US strategic oil reserve of 700 million barrels is often used to release batchs of cheap/old oil to reduce prices.

Beyond all that, the true reason for the continual creep in gasoline, oil, and gold prices is the devalution of the US dollar. Since 1990, it's worth about half as much against the global average. So long as the trend continues, any cost savings from more production will quickly be absorbed into the general price trend globally.

There are 7 countries in the world where gasoline is $1/gal or cheaper and 5 of them are OPEC nations. So if you want dirt cheap gasoline I'd recommend moving to Venezuela.

Didn't Michelle Bachman say that, as president, she guarantees gas will be under $2/gallon again?

So is she assuming she's unelectable and bidding for a VP slot (which, IMO, was the reason she ran in the first place... the right will need a TEA partier as the VP choice in the current climate) or is she actually planning to tank the economy even more to lower gas prices artificially? :p