News and Politics Forum

iDissent wrote:

The gas prices we now see are largely driven now not by supply and demand, but rather by speculators.

Speculation does influence price, but this is because of anticipated supply and demand, not in spite of it.

iDissent wrote:

So the question becomes why is this environment possible.

And the answer is freedom to contract.

iDissent wrote:

The problem is that the market is owned by the speculators.  They have complete control over it, allowing them to drive prices purely through their own activities in difference to true market conditions.  This is known as the Enron loophole.

No, it isn't.

The market consists of consumers and the owners of drilling rights, and everyone between them.

BTW, Enron resulted from speculation driven by continuing market manipulation by government in CA.  It is a lefty meme that Enron is a free market failure.

iDissent wrote:

With this situation, it then becomes ridiculous that he wants to lower pump prices to aid the common man by drilling in Anwar and coastal areas, which he also previously opposed.  That will not effect prices in any way.

Increasing future supply reduces the value of a bet that the future price of petro will be high.  Decreasing the future supply, by keeping vast reserves off limits raises the value of the bet that the future price of petro will be high.

Also, the idea that the US government can outlaw international futures trading lacks simple foresight.

iDissent wrote:

It seems you and congress have differing perspectives on the loophole.  Enjoy your next fillup.

Appeal to authority = fail.

iDissent wrote:

The gas prices we now see are largely driven now not by supply and demand, but rather by speculators.  This is common knowledge at this point.  60% of the price is pure speculative non-sense.

I'd say 'influenced', more than controlled.  And everything I've read so far estimates 30% of the total cost of gas is the result of speculation.  Aside from that, I do agree that this type of manipulation of the free market, on a commodity that has no competition, is complete B.S.

iDissent wrote:

4. The oil industry has at least 60 million acres of oil leases they have yet to drill.  They only tap new sources when they price "matures", ie gets much higher as to extract maximum profit.  Giving new acreage to drill is no promise they will actually use it in a timely manner.

This is news to me, and its a pretty underhanded practice.  This fact should be brought out more. 

I really hope that someday the American people wake up and realize that voting with their wallet and changing their behavior of rabid consumption, is the only way to fix these types of problems.  Until then, opportunists will continue to take and take as much as they can by any means neccessary.  And I really can't blame them (the opportunists).

iDissent wrote:

Nice to see someone read and took note of item 4.

Relating to that I came across this:
http://www.chron.com/disp/story.mpl/bus … 33333.html

As someone noted, if the leased land contains little to no oil, what's the incentive to drill?

As someone noted, if the leased land contains little to no oil, what's the incentive to drill?

What's the incentive to lease it in the first place?

WASHINGTON — In a bid to force oil companies to drill more on existing oil and gas leases, House Democrats today unveiled a plan that would assess new fees on existing acreage producers may be holding but on which they are not actively working.

I get really twitchy when government wants to "force" a business to do something.

With the slogan "use it or lose it," Democrats introduced legislation that would force producers to pay $5 a year for every acre the companies hold but are not working on to produce oil and gas. By the fourth year, the fees would jump to $25 an acre and rise to $50 an acre every year thereafter.

Why not just increase the lease price of the land? This legislation seems to be aimed at preventing "hoarding" behavior. (e.g. leasing land and then not putting it to use.) Increasing the cost to acquire the land in the first place seems equally as valid an approach.

House Natural Resources Committee Chairman Nick Rahall, D-W.Va., is pushing a companion measure that would bar producers from leasing new acreage if they weren't using existing leases.

Take what you want, eat what you take. Makes some sense to me.

Without that restriction, it would be easy for someone to cheaply acquire lots of land, and then sit on it until such time as the commodity has a much higher value.

2.DOH wrote:

Because they thought it did, but after drilling, testing, etc, they found it wasn't the
producer they thought it would be?

Or maybe the amount available won't offset the cost to drill? [/shrug]

Oil companies have AZ land under lease for possible drilling
June 19th, 2008 @ 8:12am
by Bob McClay/KTAR

With President Bush calling for more oil and gas drilling, oil companies are expressing more interest in Arizona, according to the U.S. Bureau of Land Management.

More than 360,000 acres of land in the state is under lease to oil companies, most of it northwest of the Colorado River. Several thousand more acres that may potentially have oil are off-limits to drilling because they are in wilderness areas or near the Grand Canyon and the Vermillion Cliffs.

BLM geologist Paul Buff doubts there is much, if any oil, under the leased land, and he said the cost of drilling has stopped many companies from pursuing supplies in the United States.

``Our environmental constraints are so much greater than in these other portions of the world that it costs so much more to drill here in the United States," he said.

Buff said the environmental risk fom oil drilling in Arizona would be minimal.

Oil was found in Arizona decades ago and two wells on the Navajo Reservation have been producing oil since the 1960s, Buff says.

``Those are the only producing wells in the state... They are starting to lose their production capability, they're producing less oil."

Buff said another drilling operation in eastern Arizona produces carbon dioxide that oil companies can use to help push oil from the ground elsewhere in the country.

And there are also fertile grounds which go undrilled because the market isn't "right".  2 sides of the coin.

http://online.wsj.com/article/SB1213833 … d_outlooks

Democrats also claim that land already leased is "sitting idle," and should be used before any new exploration begins. As put by Maurice Hinchey, a senior member of the House Resources Committee, Big Oil is "trying to take control of as much land now during the oil-friendly Bush Administration years, but are holding off on drilling until the price of oil soars to $200 or $300 a barrel so they can make even greater profits."

Conspiracy theories aside, it is true that only 0.46% of the Outer Continental Shelf is producing oil (though only 2.3% is under lease). But because of the exploration ban, oil companies go in more or less blind, not knowing the extent of the available resources. Millions of acres lack oil or gas, which is why it's called "exploration." Federal law stipulates that an oil company must sink a producing well within 10 years or lose the lease; it often takes nearly a decade to navigate the geography, not to mention the long process of environmental and regulatory review. Or coping with multiple lawsuits from the green lobby.

iDissent wrote:

The gas prices we now see are largely driven now not by supply and demand, but rather by speculators.  This is common knowledge at this point.

Just because something is commonly known doesn't mean that it's factually correct.

Please let us know when the Democrat party plans to stop standing in the way of new drilling, new refineries and new nuclear power plants.

And also, when will that douchebag Ted Kennedy drop the fuck dead so that he can stop preventing the building of that wind farm off the New England coast just because he doesn't want the view ruined where he sails.

However since half of them are true 80% of the time, four out of five people recommend them to their patients who chew gum.

Crash6 wrote:

What doe the fifth one recommend?

Brushing.

glfredrick wrote:

What does the bear do in the woods?

Whatever the fuck he wants.