• Welcome, Guest! We hope you enjoy the excellent technical knowledge, event information and discussions that the BMW MOA forum provides. Some forum content will be hidden from you if you remain logged out. If you want to view all content, please click the 'Log in' button above and enter your BMW MOA username and password.

    If you are not an MOA member, why not take the time to join the club, so you can enjoy posting on the forum, the BMW Owners News magazine, and all of the discounts and benefits the BMW MOA offers?

  • Beginning April 1st, and running through April 30th, there is a new 2024 BMW MOA Election discussion area within The Club section of the forum. Within this forum area is also a sticky post that provides the ground rules for participating in the Election forum area. Also, the candidates statements are provided. Please read before joining the conversation, because the rules are very specific to maintain civility.

    The Election forum is here: Election Forum

$150 barrel oil

For myself, I think my investment in solar 6.5 years ago, while expensive, is going to prove itself. Electricity costs have gone up here since I installed solar, and I'm on schedule to pay off the cost in about 6 more years. From then on -- and my panels have a 25 year warranty -- it's all free juice.

I think that your numbers while good for California don't work out as well elsewhere. Based on your numbers, you've generated about 90,000 kWh over 6.5 years (if I read your web site correctly). That's about $1,250 per year in Minnesota ( 0.09 per kWh). A 10 kW system like you have is going to cost about $40,000 just for the panels.
 
I think that your numbers while good for California don't work out as well elsewhere. Based on your numbers, you've generated about 90,000 kWh over 6.5 years (if I read your web site correctly). That's about $1,250 per year in Minnesota ( 0.09 per kWh). A 10 kW system like you have is going to cost about $40,000 just for the panels.

You are correct that the electricity rates vary widely. In the SF bay area, the baseline rate is $0.11/kwh, but that is the first of 5 tiers of rates, and only covers a very small amount of electricity. Most suburban homes are buying electricity in the 4th and 5th tiers, and the 5th tier costs something like $0.36/kwh.

When I lived in Washington state in 1990s, electricity was cheaper there, but rising. People were converting from all electric homes (built when the mighty dams of the PNW were supplying huge amounts of energy relative to the population size) to use natural gas for heating and cooking.
 
It is truly amazing how some people just cannot resist injecting their personal political stance into a discussion, even when is it not relevant.

Please read the note again. I wasn't commenting on comparing the cost of the Iraq war to the cost of solarizing the southwest U.S. I was just asking whether the Vanity Fair article got into these sort of "details", i.e., costs, environmental impacts, etc., so I could get a feel whether the article was just a "puff piece", or was it an attempt to write a serious and researched article on the subject.
But KBasa's note, which you were quoting, was comparing the cost of the war and the cost of getting off the oil addiction. Just because you don't feel they're related, and you don't feel that the political aspect of choosing an energy policy are important (see below), doesn't mean that everyone feels that way.

No doubt that storage of nuclear waste is the big obstacle, but it is more of a political obstacle than a technical obstacle.
While I agree completely with your statement, it is a political obstacle that shows no sign at all of being solved. You are dismissing the part that makes it extremely unlikely that Yucca Mountain will ever open as the nation's nuclear waste repository.

The total volume of nuclear waste that must be managed each year in the U.S. is relatively small. It can be managed in an environmentally sound manner to be safe.
Again, this is true but ignores the fact that nuclear power scares people. People who weren't born when 3 mile island had it's problem and when Chernobyl blew its top, are afraid of the word nuclear, even if the designs for those plants are not at all what the current state of the art is today. As an engineering type it pains me to say this, but just because it is now technically much safer and easier to deal with, doesn't mean that the population is going to go for it. Unlike prisons, NOBODY wants a nuclear reactor in their backyard.

We don't rely on one or two forms of energy. Over half of the U.S. electrical supply is generated by coal (of which we have at least 200 years worth), and almost all of the rest is generated by natural gas, hydro, and nuclear, and our cars and trucks and trains and airplanes are powered from crude oil. I think the "green" sources (solar, wind, etc.) currently account for at most a percent or two.

This is an accurate statement of where we are today.

But coal, in spite of huge "research grants" to develop "clean coal", is still the dirtiest fuel we use. Many states affected by the results of using coal have banded together to require coal plants to be comparable to natural gas plants regarding waste gases, which makes coal very expensive. If they cannot find a way around the Supreme Court's decision that CO2 is a pollutant, then they will have to go into the carbon capturing and sequestering business, and coal will cease to be cheap.

The obstacles in the way of completely, or significantly, converting to "green energy" sources include the fact that they have their own environmental and public acceptance issues, and paying for the what will certainly be enormous conversion costs.

But one must compare the costs of converting a percentage of our energy generation costs to the externalities to our current energy regime that most commentators on the subject seem to ignore, such as subsidies to coal and oil industries, at least part of the cost of running a war in the middle east, and perhaps the largest cost (according to The Economist), which is the cost to the environment of not cleaning up the wastes that this produces. There are externalities that are harder to account for, but supporting Myanmar and Nigeria can't really be a positive political outcome for us, just as Europe is learning by supporting Russia for access to their gas and oil.

If we reduce our dependence on non-renewable energy sources, we make ourselves more independent from those that control them, and the results of using them. We will never get completely away from oil and coal, and there's no reason to. But if we, over the next couple decades, used half as much oil, we'd be a lot less concerned about $130/bbl oil, and the producers and market speculators would have a lot less hold on us.
 
Anyone ever see this I found on the web as to why prices are so high?

My father and I have been saying this for the last 2 years. It's like the dot.com companies in the 90's. They need to take oil off the mercantile exchange or make the people that buy it store it.
But I have a solution. If every one sends me $1.00 I will invest it in oil and I guaranty the price will fall like a sky drive with out a parachute. :usa
 
I don't think oil company profits are out of line from a percentage profit perspective. I think they make 7 or 8% (?), which isn't a huge margin. It's just that they do a ton of sales.

Nobody is driving oil prices higher, it's just free market economics in action.

I believe they testified yesterday that they where making 4% profit on oil.
 
But KBasa's note, which you were quoting, was comparing the cost of the war and the cost of getting off the oil addiction. Just because you don't feel they're related, and you don't feel that the political aspect of choosing an energy policy are important (see below), doesn't mean that everyone feels that way.

OK, I can see this is heading into a box canyon, but Kbasa's note had two separate points, one about the cost of the Iraq war vs. spending the Iraq war money on green energy projects to get us out of the Middle East, and a second point about a Vanity Fair article discussion solarizing the southwest. I commenting on them both, and on the second point, I was just trying to find out how much detail about the solar project was in the article. But, if you want to connect everything to the war in Iraq, please go ahead. :rolleyes

While I agree completely with your statement, it is a political obstacle that shows no sign at all of being solved. You are dismissing the part that makes it extremely unlikely that Yucca Mountain will ever open as the nation's nuclear waste repository.

No, I am NOT dismissing it. I just do not agree with you that it is an insurmountable obstacle.
 
It is truly amazing how some people just cannot resist injecting their personal political stance into a discussion, even when is it not relevant.

Mike, that what a blog is all about. I would hardly consider our contributions researched base, but rather common sense based. While all of us respect and are even proud of our free market constructs, we also know that the larger and more influential a company gets, the less they seem to follow high ethical standards. They use lawyers, accountants, and politicians in their pocket to work the system. They rarely outright break laws, but they often run short of high ethical conduct. Most executive are mostly concerned with mergers, barrel and stock prices, and the latest quarterly profit.

Is this a real shortage....We had one in 1973 where the oil companies swore in congress we had a shortage. Granted we waste more oil now than then, but we get tired of hearing the oil companies whine about being retricted by the goverment, unrest in foreign countries, and hurricanes. We are good customers of the oil companies. Don't take us for fools. We let them merge so they could save money and ever since prices have gone up.

If it walks like a duck, it quacks like a duck, and looks like a duck. It is a duck.

Ducks.jpg
 
Mike, that what a blog is all about.

Wow, this is getting unbelievably tiring. No, that is NOT what a blog is all about, or at least it should not be. I asked Kbasa a pretty simple and straight-forward question. I just wanted to know a little about how much detail was in the Vanity Fair article about solarizing the southwest U.S. I don't really see any connection between that question and the cost of the war in Iraq. If my question or point had been about where to get the funding for such a solar project, then the cost of the war in Iraq would have been more relevant. But, that is not what I asked. It does not seem too much to ask to try to stay "on point" in one's replies, but maybe it is.

If what a blog is all about is that you can inject any random thought that is rattling around in your head at any time, then a blog quickly becomes a waste of time . . . as we have seen often in these MOA forum threads.

We are good customers of the oil companies. Don't take us for fools. We let them merge so they could save money and ever since prices have gone up.

As have the prices of everything else. So what does that indicate, show, or prove? The relevant question, assuming relevancy makes any difference here, is whether or not prices would have gone up even more, or gone up less, or even gone down, if we did not have the mergers, and instead we had more, but smaller, oil companies with smaller financial resources attempting to explore and develop what are today multi-billion dollar energy projects.
 
Last edited:
if we did not have the mergers, and instead we had more, but smaller, oil companies with smaller financial resources attempting to explore and develop what are today multi-billion dollar energy projects.

I do not think they were small before they merged and according to Mobil/Exon they are only spending 100 million on renewable/alternative energy projects. That is a paltry amount by the same company that brought us the Valdez.

Valdez.jpg
 
I believe they testified yesterday that they where making 4% profit on oil.

I think what they said was that in 2007 about 4% of the retail price of gasoline was profit to the oil companies (not to be confused with the retail gasoline station), and not 4 percentage points out of the total 7 to 8, or 10, percent profit margin compared to total revenue. It should go without saying, but you never know here, that petrochemical companies make money on products other than gasoline sales.
 
Wall Street Journal

Just in case anyone wants to take a little time to maybe better understand the future of world crude oil supplies, there is an easy-to-understand article on the front page (above the fold) of today's Wall Street Journal.
 
Remember seven years ago, gas was $1.49/gal!

Probably not worth the effort it takes to write this, but how do you define "price gouge", and what evidence (or even inuendo and rumor) do you have that this is not caused by basic "supply and demand", and speculation in the oil commodities markets?

No consumer likes higher prices, but it's kind of important to correctly understand WHY prices are high before you go off and develop a "solution" . . . assuming you really want to find a solution and not just make political points. :rolleyes

The day that the price per barrel hit $129, the price of gas at all stations went up to $3.49/gal around me. It was an instant 30 cents per gallon. That oil had not been loaded onto barges yet. It had not traveled overseas to the refineries. Nothing had been refined or delivered to the gas stations.

Demand was the same that fateful Monday. The cost had not been incurred by the oil companies. That is what I call gouging.

PS: What started the investigations was when price per barrel decreased, and the price of gas stayed the same. The industry indicated that oil price is a very small component of the price of gasoline. Gas cost is driven by the refineries. :thumb
 
The day that the price per barrel hit $129, the price of gas at all stations went up to $3.49/gal around me. It was an instant 30 cents per gallon. That oil had not been loaded onto barges yet. It had not traveled overseas to the refineries. Nothing had been refined or delivered to the gas stations.

Demand was the same that fateful Monday. The cost had not been incurred by the oil companies. That is what I call gouging.

The short answer to your implied question is you need to do some research to better understand how the price of crude oil is established, how the wholesale price of gasoline is established, and how the retail price (at the pump) of gasoline is established (it is not difficult - just google it) . The three are all different.

PS: What started the investigations was when price per barrel decreased, and the price of gas stayed the same. The industry indicated that oil price is a very small component of the price of gasoline. Gas cost is driven by the refineries. :thumb

And what did the investigations conclude? Hmmmm?

Your statement that the oil industry indicated that crude oil price is a very small component of the price of gasoline seems incorrect. Do you have a specific reference we can check? At $130 per 42-gallon barrel, the price of crude is $3.10 per gallon. That seems like a pretty big component of a $3.80 per gallon price for gasoline, even allowing for the volumetric expansion that occurs during the refining process.
 
The short answer to your implied question is you need to do some research to better understand how the price of crude oil is established, how the wholesale price of gasoline is established, and how the retail price (at the pump) of gasoline is established (it is not difficult - just google it) . The three are all different.

There is no way we can find out the truth on how prices are set at any level. Anything that is reported are just quotes or analysis based upon what the industry divulges. I believe there is competion on the retail level. On the wholesale level that is a very small and elite group of refiners with little competive pressure, especially since they merged. The crude oil markets are beyond understanding, except the BIG OIL holds most of the cards.
 
There is no way we can find out the truth on how prices are set at any level. Anything that is reported are just quotes or analysis based upon what the industry divulges.

Yes, there is a way you can "find out the truth", but you may have to work at it a little. I know that's more difficult than just flaming unsubstantiated inuendo, but that's just the way it is. You can look at a university marketing and/or petroleum industry economics textbooks, subject-matter reports on the DOE web page, reports from government investigations of the oil industry, subject matter reports on the API web page, and probably even reports on the web pages of states and other countries with an oil industry (e.g., Texas, California, Louisiana, Great Britain, etc.). If they all say basically the same thing, I think you can be pretty comfortable that you have the "truth" . . . unless of course you want to believe that EVERYONE is involved in the big oil conspiracy. BTW, Ben Stein and others have tried to explain this to Bill O'Reilly many times, and Bill just cannot or will not get it, so I understand why people are skeptical.

I believe there is competition on the retail level.

Correct, but interestingly that is probably the most likely place where "price gouging" may occur, usually in response to some local catastrophic event such as a hurricane.

On the wholesale level that is a very small and elite group of refiners with little competitive pressure, especially since they merged.

BZZZZZZZ! Wrong answer. You need to do some research.

The crude oil markets are beyond understanding, except the BIG OIL holds most of the cards.

BZZZZZZZ! Wrong answer again. If anyone "holds the cards", it is the big oil producing countries who control the crude production from their countries' oil reserves. But, again, you need to do some research.

Good luck! :thumb
 
Oil is a world market there are 3 major influences on the price of oil right now

1) The downward trend of the US dollar. Being tied to the dollar means you need to get more dollars for your oil to deliver the same profit - most oil companies are not US based.

2) Speculators - You can't ignore that market fundamentals are at least a contributing factor or many agree the main driver for the broader 5-year move up in oil prices

3) Demand - China - their diesel imports were up 600% for the 1st quarter and gas imports were nearly double. Total oil consumption is growing 7 times faster than the US. If they continue on their trend they will match the US consumption by 2020. China is securing future requirements buy buying oil companies in North (Canada) and South America (Venezuela). Oh and with the recent earthquake they have announce an increase in their projected imports.

$6.00 a gallon you may be looking back on those days fondly.

Dave
 
Back
Top