Gas is relatively cheap here in New Jersey. Regular is about 3.47/9 and 93 octane is about 3.67/9 (give or take a few pennies depending upon where you buy it). Unfortunately the price of everything else has skyrocketed.

Without question the main contributing factor is the price of oil, but the price itself is only half the problem, the other half of the problem is how fast it has increased. Had it increased as a slower pace, the economy might have had a chance to absorb some of the increase and find some new level of equalibrium, but because of the rapid increase it has created a knee jerk reaction throughout the rest of the economy causing a spurt in all the rest of the prices.

Wages, of course, have not kept up with the increase and that too has created problems. Cost going up faster than salaries creates a decreased demand throughout the marketplace and ultimately a stagnant economy.

Welcome back to the 1970s. We are once again in stagflation. Ironically, the villian is once again the barrel of oil and the rapid increase in price.

Not to get political but if a few dollars had been invested into the research and development of alternative energy sources a lot of this might've been prevented.

 

Is chicken feed still made from grain? I thought modern chickens were raised on chemicals so they could be sent to market in 2 months rather than a year.

 

Reduce the demand for beef so the cost of grain goes down so the cost of ethanol goes down. Then you can buy an ethanol car. that will save more gas for my boat!

 

The Shadow knows.....

 

I have yet to hear or understand how releasing oil from the reserves will change the situation long term. It might help for 2 to 6 months, but then things will be worse

 

[QUOTE=ralper,Apr 26 2008, 10:21 PM] Gas is relatively cheap here in New Jersey.

 

Bill,

I don't think further exploration/exploitation of Alaska or the Gulf would make much difference in the long run, but I do agree that nuclear energy could and should be part of the solution. I also think the government should have sponsored research and development into other alternative energy sources such as wind and solar and others that might have been thought of had more dollars been invested. By now we should have been well on our way to freedom from oil.

Like you I think the demand for bigger and more powerful vehicles has been a major contributor both to oil prices and global pollution. Like you I'd like to see every SUV and pickup crushed. Certainly any engine bigger than 6 cylinders should be taken off the road, and six cylinders allowed only by special permission. Given my druthers there'd be no passenger vehicle on the road heavier than 3,000 lbs. Anything bigger than a Civic is just too big.

I too think the demand for oil by India and China will prove to be a problem, but I think that's still a generation or two in the future. Hopefully by that time we will have developed some alternative energy sources. For right now I think the problem is the oil cartel and the market manipulation by big oil and those who profiteer from the increased prices.

 

I wish I could agree with you that the problem was that far away but the chinese economy is growing at 15-25% per year.
They are rapidly transitioning from an agrarian to industrial economy.
Until now a large part of the economic growth had come from exports.
I suspect they have reached the critical mass where future growth can come from internal consumption.
I seriously think this problem is less than 10 years away, potentially shorter.

 

I highly doubt that the Chinese economy can continue to grow at that pace indefinately and I think there are probably more oil reserves than we currently know of. Moreover, as the price of crude continues to rise it becomes economically feasible to extract shale oil of which there is supposed to be an enormous amount.

I'm not saying that the competition for oil from the industrializing nations, and especially China and India, doesn't represent a problem, but I think we still have some time.

 

1. What do you do if your family won't fit in a Civic. I have younger friends with 4-5 kids. A Civic is not going to haul them all around. Also, why is it ok for people to suck up fuel powering boats but not a vehicle large enough to carry your family?

2. For the most part, the "manipulation" has not been by the big oil companies. It is more a result of a flight to commodities as the dollar weakened and the economy started to tank. A measurable part of the increase in the price of crude is due to your friendly hedge funds and other speculators. And it doesn't appear to be headed for change anytime soon. (I added that comment because usually when I say things aren't going to change, they do and I'd like to see cheaper oil. )

3. In the case of the oil sands, etc., the price of getting the product out isn't cheap either in dollars or commodities. The U.S. is shipping diluent (naphtha is the preferred) into Canada for this purpose now. You're using a fairly pricey commodity to produce another. It becomes a point of diminishing returns.