A pleasure I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude
Still, one can see that as positive news (especially when you look at numbers like the total number of kilometers driven, which has gone down in France for the past 2 years), and a trend likely to continue.
But one could also focus on the fact that a tripling of the price of oil (oil has now been over $60 for the most part of the last 2.5 years) has changed very little of our behavior - or only at the margins. Substantial change will require bigger "incentives" - ie bigger sticks in that case, ie higher prices. In the long run, we're all dead. John Maynard Keynes
So unless they price goes up up up (300-400$)and we can control inflation by moving goods with trains or we will nto see the destruction of demand necessary ...
But it is still good news becuase I expected that we can live with present consumption in the developed countries for more than a decade... 1/4 of emission come from private trasnprotation...drive less move around more with cars compeltely full, or train or bike adn we can keep with the economy going on with basicaly no disruption in otehr sectors... I fear more the bubbles and the lack of train transportation of goods tahn the increase in the price of oil directly...
Given that oil consumption has been essentially flat (but likely slightly increasing) even with the strong growing price trend, a simple-minded estimate of the price elasticity of demand not only will give a number very close to zero, but of the wrong sign (i.e., increasing prices would seem to lead to increasing demand!)
The fact is that "price elasticity of supply/demand" have to do with the supply and demand curves considered separately, which are not observable. What is observable is the clearing point, in terms of price and volume as a function of time, not supply and demand as a function of price at fixed time.
So, 1) why do people insist on talking about unobservable supply and demand curves? and 2) what is a proper method for estimating the price elasticity of oil consumption? [I have my own idea but I'd like to know whether there is a "standard" answer] We have met the enemy, and he is us — Pogo
When the oil companies have squeezed the last drop of profit from the people of the world, someone will go to John D. Rockefeller's safe and take out the plans for the cheap, non polluting alternative to oil. We will then be saved.
Hurrah for big oil, altruism with an inhuman face!
Exxon Revenue Hits Record, But Shrinking Margins Hit Profit Exxon Mobil Corp. posted a bigger-than-expected 10% drop in third-quarter net income on lower refining and chemical margins, as the company set a quarterly revenue record. (...) Revenue rose 2.8% to $102.34 billion, topping the prior record of $100.72 billion set two years ago. Capital spending climbed 7.5% to $5.44 billion. Upstream earnings - the company's oil-and-gas production business - dropped 3% to $6.3 billion on a 2% drop in production on factors including divestments and its loss of its Venezuelan assets. Helping was higher oil prices. The benchmark West Texas Intermediate crude price averaged $75.25 a barrel during the quarter, compared with $70.50 a year earlier. Those higher prices have been hurting oil companies' refining profits. At Exxon's downstream business, which buys crude oil and which converts it to products like gasoline, earnings fell 31% to $1.9 billion on slumping margins. Oil refiners have been warning of late of falling margins as the surging crude prices haven't been matching with increases by finished products such as gasoline.
Exxon Mobil Corp. posted a bigger-than-expected 10% drop in third-quarter net income on lower refining and chemical margins, as the company set a quarterly revenue record.
(...)
Revenue rose 2.8% to $102.34 billion, topping the prior record of $100.72 billion set two years ago. Capital spending climbed 7.5% to $5.44 billion.
Upstream earnings - the company's oil-and-gas production business - dropped 3% to $6.3 billion on a 2% drop in production on factors including divestments and its loss of its Venezuelan assets. Helping was higher oil prices. The benchmark West Texas Intermediate crude price averaged $75.25 a barrel during the quarter, compared with $70.50 a year earlier.
Those higher prices have been hurting oil companies' refining profits. At Exxon's downstream business, which buys crude oil and which converts it to products like gasoline, earnings fell 31% to $1.9 billion on slumping margins. Oil refiners have been warning of late of falling margins as the surging crude prices haven't been matching with increases by finished products such as gasoline.
The other majors have shown similar numbers, i.e. declining profits on much lower refining margins. In the long run, we're all dead. John Maynard Keynes
There's no recession.
This is debatable, I think. Inflation is being systematically under-reported in both the UK and US, and I suspect that if the true growth figures were available they'd either be close to zero or negative.
European Tribune - Comments - Countdown to $100 oil (51) - we'll never see 100mbd
Which points to a simple conclusion: oil is still much too cheap.
Or possibly, politicians are stupid and incapable of much in the way of forward planning.
Never mind. We may have an attack on Iran soon, which will do wonders for oil pricing.
With the ExxonMobil results included and an added conclusion:
And, if I may again say so: a gas tax would ensure that some of the money from gasoline price increases stay with us for useful investment rather than going in the pockets of unfriendly regimes elsewhere; blaming the oil majors (or speculators) for price manipulation is mostly silly. Their production is declining, their power is waning, and their hold on the market increasingly tenuous. The main drivers today are fast demand growth from the world economy, and the inability of the supply side to keep up - or, to some extent, the unwillingness of some countries to invest as much as we'd like, a perfectly rational decision in today's context: why rush on the market today a product that you know will get more valuable in the future? The ONLY thing we can control in the long run is our demand. Time to work on demand-side policies rather than supply side policies (hmmm - sounds like a good programme for the Democrats...)
The ONLY thing we can control in the long run is our demand. Time to work on demand-side policies rather than supply side policies (hmmm - sounds like a good programme for the Democrats...)
Some very famous flame wars a few of these occasioned. Quite surprising, I'd have thought. Energy isn't exactly the most controversial topic in left blogostan, unless you are trying to defend Exxon's handling of the Valdez crash or somesuch... Fai de bèn a Bertrand, te lou rendra en cagant
Which means that its $5/gallon where we in the US start to hit serious trouble based on the price of crude oil alone.
However, the other change since 1979 is the much greater proportion of crude oil imported from abroad, so that in addition to direct price effects, we are also exposed to direct Keynesian effects from an increase in our trade deficit as a result of an oil price spike.
And that risk could be amplified, if China and other sources of much of our consumer goods are pressed into a position of raising their currency peg against the dollar. With the per unit cost of so many imports held stable, the US has not seen a J-curve effect from its currency devaluations, and so our trade deficit has been tapering off in response to the falling US dollar.
However, if we get the double-whammy on our external account of an oil price surge, and an substantial increase in per-unit price of imports, we are going to lose the primary motor for economic expansion that is offsetting the ongoing collapse of the housing market. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
The tables below do not show exactly this (they are about the biggest variations in oil production), but you can see that info in there indirectly:
In the long run, we're all dead. John Maynard Keynes
I was visiting an Indian village 350 miles east of Hyderabad and got to watch a very elderly Indian man undergo an EKG in a remote clinic, while a heart specialist, hundreds of miles away in Bangalore, watched via satellite TV and dispensed a diagnosis. This kind of telemedicine is the I.T. revolution at its best. But what struck me most was that just underneath the TV screen, powering the whole endeavor, were 16 car batteries -- the E.T., energy technology, revolution, at its worst. Some 250 million Indians today have cellphones. Many of them are people who make just $2 or $3 a day. More and more are getting access to computers and the Internet, even in villages. But only 85 percent of Indian villages are electrified -- and that is being generous, since many still don't have reliable 24/7 quality power. If only ... If only we could make a breakthrough in clean, distributed power -- an E.T. revolution -- it could drive the I.T. revolution into every forgotten corner of the world to create jobs, light up schools and tap the innovative prowess of rural populations, like India's 700 million villagers.
Some 250 million Indians today have cellphones. Many of them are people who make just $2 or $3 a day. More and more are getting access to computers and the Internet, even in villages. But only 85 percent of Indian villages are electrified -- and that is being generous, since many still don't have reliable 24/7 quality power.
If only ... If only we could make a breakthrough in clean, distributed power -- an E.T. revolution -- it could drive the I.T. revolution into every forgotten corner of the world to create jobs, light up schools and tap the innovative prowess of rural populations, like India's 700 million villagers.
If only... Don't people learn any basic physics anymore? Energy is not something you can create out of nothing; energy cannot be concentrated at will.
Can't we ever assume that the energy revolution might not come at all?
Far more mileage in "Meso" community projects on a neighbourhood and area (multiple neighbourhoods) scale basis, I think, both in terms of renewable energy generation, and in retrofitting energy efficiency (Negawatt) measures.
But the boundary of Micro and Meso is grey. Of course, there could be some big wins in urban distribution of hot water from current plant by "CHP'ing" them, although the current distribution of UK generation doesn't give that much opportunity. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
