Obama mocked the GOP idea that drilling for oil would lower gas prices...

[PaulS]

All of the factors I mentioned affect the supply and demand. Pricing is based on both supply and demand.

Add solar and tax breaks that drove higher demand for solar which inturn lowered the demand for oil. I believe demand is down from a couple of years ago but higher then more than a couple of years ago.

[Jim in CT]

Originally Posted by PaulS

All of the factors I mentioned affect the supply and demand. Pricing is based on both supply and demand.

Add solar and tax breaks that drove higher demand for solar which inturn lowered the demand for oil. I believe demand is down from a couple of years ago but higher then more than a couple of years ago.

"Pricing is based on both supply and demand. "

I get that, I really do. And I agree 100% that things like tax breaks for rich people to drive electric cars, and for solar panels, will result in a slight reduction for US demand. But the price-per-barrel of oil is based on global supply and demand, not US supply and demand, isn't it? Maybe I'm wrong there. Do Americans pay a different price per barrel than people in other countries?

Here's a chart I found on worldwide oil consumption by year, and that line is only going in one direction.

http://www.indexmundi.com/energy.aspx

[detbuch]

Originally Posted by PaulS

Today's paper

http://www.nytimes.com/2015/01/21/bu...ll.html?ref=us

An interesting article. I particularly like the last sentence in which it is admitted that government does pick winners. Also the previous mention that market forces are more powerful than (government)policy.

The article tries to connect successful progress to government tax and "investment" policy. It seems very persuasive, except that the connection is not expanded to include what were the causes, or connections, which made it seem necessary for government to intervene. Inside the small bubble of an immediate "problem" (x) and a possible quick fix, especially a government fix (g), one can be trapped in the perception that, indeed, fix "g" should solve problem "x." what is not seen or discussed is how similar fix "g" solutions helped create problem "x."

When government policies intervene in market forces causing the cost of production to rise above a competitive level, and, therefor, it becomes more economical to produce in other countries, it will then require government "investment" (mucho government bucks) to make up the difference in order to restore production here. An unnecessary inflationary distortion of the market created by government intrusion. Which also causes a rise in consumer costs either in higher prices or in higher taxes.

So then, government, in order to stimulate production, picks a winner. But that distorts the evolution of possible competing producers, especially those who would replace the "winning" product with something different. So, guess what. When an idea surfaces in the market place which would be better than what current "winners" are producing, the cost for bringing new technology to production has been so inflated by government investment and regulation that the government must now pick a new winner and "invest" big bucks again.

And, so, therefor, all costs--production, research, capitalization--are inflated, usually beyond internationally competitive costs. And government becomes even more pervasively involved in the economy. To the point where it seems that the economy cannot grow, or even survive, without the large hand of government assisting or even driving it.

When the automobile started to become feasible as a mass market commodity, it was done so without government "investment." Actually, the federal government at the time had not yet acquired the power to intervene in the market that it has now. If it had, it could have picked winners then--who would it have chosen? Would it have tried to bolster the horse and buggy as more eco-friendly. Or would it have invested in steam or electric power rather than petroleum? We might have had electric cars being mass produced long ago if it had. Interesting. However, the federal government then was more into choosing itself as the winner. So it constantly increased its power, and did so by waging an invested war against capital entrepreneurs under the pretext of helping the poor and the middle class. The government viewed its command and control of the economy as its primary "investment" in the marketplace.

So the economic war between private enterprise and government escalated, with the resulting inflation of costs, to the point where we are today. Entrepreneurship, without government assistance of some kind, either direct grants or tax breaks or preferential regulation, is still possible, but far less probable. The market is far less dynamic, evolutionary, for that, and so moves more slowly in more narrow dimensions and at greater costs.

So the article can say “If there is one key lesson from the shale revolution, it is that public investments in technology innovation can bring a huge benefit for both the economy and the environment,” but it doesn't say why it is so necessary to have such public investments. It doesn't say that before the federal government got so involved in "investing" in the private market, the market had already been investing in itself at far lower costs. And that market grew and evolved in unimaginable ways. And it created higher standards of living--even throughout the battle between private and public investment and production . . . until recent years.

There is a reverse relationship now developing wherein as government control and regulation grows toward some tipping point of private domain being converted to public domain, economic stagnation for so-called "middle" classes is more prevalent, even to the point where the middle class is said to be disappearing. And a point is increasingly being reached where government "investment" is not only necessary, but the sole driving force of economy. The point will eventually be tipped into the complete socialization of the economy.

This, of course, will reduce the "class structure" to "the people," the government, and the government cronies. The so-called fight for the middle class is really the fight against it. The middle class has traditionally been the class which fought government. The poor relied on government, the rich were in bed with the government, the middle class was the working and consuming class which the other classes depended on for a revenue base. By making the government the revenue base, the middle class is no longer needed. Population can be controlled by contraception and dependence on government largesse doled out in government prescribed quantity and quality. And the cronies will be left on an isolated float of shrinking ice.

This is not necessarily by accident. Many would say it is a good and necessary thing.

[PaulS]

Originally Posted by Jim in CT

"Pricing is based on both supply and demand. "

I get that, I really do. And I agree 100% that things like tax breaks for rich people to drive electric cars, and for solar panels, will result in a slight reduction for US demand. But the price-per-barrel of oil is based on global supply and demand, not US supply and demand, isn't it? Maybe I'm wrong there. Do Americans pay a different price per barrel than people in other countries?

Here's a chart I found on worldwide oil consumption by year, and that line is only going in one direction.

http://www.indexmundi.com/energy.aspx

The price is based on supply and demand and our price is prob. the same as others (ignoring taxes and transportation costs, etc). But if you lower demand (any where in the world) the resulting supply/demand relationship will reset. So if every car in the US now gets 10 extra MPG, then the demand will not be as high. If China is using more oil/gas at the same time as our cars are getting more MPG, the demand may be going up or down (whatever factor is larger). So while I assume the link is showing increasing demand, it would have been higher if our cars were getting lower MPG and if our houses where less energy efficient. Add in less demand bc of solar, wind, nukes, etc (US and all over the world) and add in increased supply b/c of fraking and you end up at an all together different price. We are the world's largest consumer of oil and we have used less and less over the last few years. Partly as a result of incr. supply in gas but partly as a result of (mainly) more fuel efficient cars.

[detbuch]

Originally Posted by PaulS

The price is based on supply and demand and our price is prob. the same as others (ignoring taxes and transportation costs, etc). But if you lower demand (any where in the world) the resulting supply/demand relationship will reset. So if every car in the US now gets 10 extra MPG, then the demand will not be as high. If China is using more oil/gas at the same time as our cars are getting more MPG, the demand may be going up or down (whatever factor is larger). So while I assume the link is showing increasing demand, it would have been higher if our cars were getting lower MPG and if our houses where less energy efficient. Add in less demand bc of solar, wind, nukes, etc (all over the world) and add in increased supply b/c of fraking and you end up an all together different price.

Isn't that the point of Jim's thread?

[scottw]

Originally Posted by detbuch

An interesting article. I particularly like the last sentence in which it is admitted that government does pick winners. Also the previous mention that market forces are more powerful than (government)policy.

yep...shocking that a Progressive Think Tank is in favor of leveraging a swoon in oil prices into a boon in tax revenue that the government could use to pick some of the winners .......

too funny!

[Jim in CT]

Originally Posted by PaulS

The price is based on supply and demand and our price is prob. the same as others (ignoring taxes and transportation costs, etc). But if you lower demand (any where in the world) the resulting supply/demand relationship will reset. So if every car in the US now gets 10 extra MPG, then the demand will not be as high. If China is using more oil/gas at the same time as our cars are getting more MPG, the demand may be going up or down (whatever factor is larger). So while I assume the link is showing increasing demand, it would have been higher if our cars were getting lower MPG and if our houses where less energy efficient. Add in less demand bc of solar, wind, nukes, etc (US and all over the world) and add in increased supply b/c of fraking and you end up at an all together different price. We are the world's largest consumer of oil and we have used less and less over the last few years. Partly as a result of incr. supply in gas but partly as a result of (mainly) more fuel efficient cars.

Worldwide demand for oil (if the chart I posted is accurate) is higher than it's ever been, yet the price has plummeted in recent weeks. That tells me that the recent price drop probably isn't due to an absolute decrease in demand, because there is no drop in demand. Demand is up (though not up by as much as it might be, thanks to insanely expensive yet fuel efficient cars), yet prices are down.

Which is why some economists believe th edrop is due to supply. Some believe that OPEC is keeping supply insanely high, in order to drop th eprice down, to levels so that frakking becomes un-profitable.

There is no absolute drop in worldwide demand to explain th eprice drop. So it's more likely due to increased supply. Does Obama deserve credit for th esurplus in supply? I can't see how...

[PaulS]

Originally Posted by Jim in CT

Worldwide demand for oil (if the chart I posted is accurate) is higher than it's ever been, yet the price has plummeted in recent weeks. That tells me that the recent price drop probably isn't due to an absolute decrease in demand, because there is no drop in demand. Demand is up (though not up by as much as it might be, thanks to insanely expensive yet fuel efficient cars), yet prices are down.

Which is why some economists believe th edrop is due to supply. Some believe that OPEC is keeping supply insanely high, in order to drop th eprice down, to levels so that frakking becomes un-profitable.

There is no absolute drop in worldwide demand to explain th eprice drop. So it's more likely due to increased supply. Does Obama deserve credit for th esurplus in supply? I can't see how...

I've already said he doesn't deserve the credit for the increase in supply but he deserves some credit for the decrease in demand as a result of his policies being put into place. Pricing is based on 000s of different things. Anything that changes makes a difference. Supply and demand are not monolithic??? they both have many components.

[Jim in CT]

Originally Posted by PaulS

I've already said he doesn't deserve the credit for the increase in supply but he deserves some credit for the decrease in demand as a result of his policies being put into place. Pricing is based on 000s of different things. Anything that changes makes a difference. Supply and demand are not monolithic??? they both have many components.

So you say that...

(1) the price of oil is influenced by worldwide supply and demand
(2) Obama did not do anything to increase the supply

So far, so good...

Here's my #3...
(3) Since worldwide demand is higher than it was last year, the price drop must be due solely to the increase in supply, which Obama deserves no credit for.

Now, I'll concede that without those new cars getting slightly better mileage, worldwide demand, and thus prices, would likely be a tick higher than they are now. But that's not the same thing as saying he had anything whatsoever to do with the current price drop, which seems to be a result of excess supply, which has at least something to do with frakking, which liberals would stop in a nanosecond if they could.

[scottw]

Originally Posted by PaulS

he deserves some credit for the decrease in demand as a result of his policies being put into place.

huh?

"U.S. oil demand reversed course in dramatic fashion in 2013, as the nation's growth in crude consumption outpaced perennial leader China for the first time since 1999"

"The same upward trend can be seen in 2014. Oil and petroleum products use through April is 1 percent higher than last year, according to EIA. In addition, California—which by itself accounts for 11 percent of the nation's gasoline use—has had nine straight months of higher year-over-year gasoline consumption, according to data from the state board of equalization data."


the reduction in demand was the result of a crappy economy...you remember..the one he inherited...so I guess we can't blame him for the crappy economy but he gets credit for the reduction in demand due to the crappy economy?....doubt the current booming economy and lower oil prices will result in lower demand, good thing we have all those average Joe's driving Volts around...does he get credited/blamed for the higher demand now that his policies have created a booming economy(just ask him) and higher demand?


http://insideclimatenews.org/news/20...tpacing-chinas

American consumption of oil also rose last year, by 390,000 barrels a day, or 2.1 percent, to 18.9 million barrels a day. The agency increased its estimate of American oil use in the final quarter of the year,

"Despite the 2013 increases, oil use in most developed countries remains well below the levels of 2007, the last pre-recession year. The United States is estimated to have used 8.5 percent less oil in 2013 than it did in 2007, while demand is down by about 25 percent in Italy and Spain, European countries that were hard hit by the euro area’s problems. Germany stands out, with 2013 usage equal to that of 2007."



http://www.nytimes.com/2014/01/25/bu...asts.html?_r=0

[PaulS]

Originally Posted by Jim in CT

Here's my #3...
(3) Since worldwide demand is higher than it was last year, the price drop must be due solely to the increase in supply, which Obama deserves no credit for.

Now, I'll concede that without those new cars getting slightly better mileage, worldwide demand, and thus prices, would likely be a tick higher than they are now. But that's not the same thing as saying he had anything whatsoever to do with the current price drop, which seems to be a result of excess supply, which has at least something to do with frakking, which liberals would stop in a nanosecond if they could.

I never claimed he or his policies resulted in the price drop. However bc of his policies the price drop was a "tick" greater. demand would have been slightly higher as you say.
Posted from my iPhone/Mobile device

[scottw]

it's a historic increase in production...might get him chiseled into Mt. Rushmore


The increase in United States production in 2013 exceeded the increase of 836,000 barrels a day in 2012. The largest increase before that, of 751,000 barrels, was in 1951, according to the United States Energy Information Administration.

In percentage terms, the 15.3 percent increase in 2013 was the largest since an 18.9 percent gain in 1940.

American oil production fell steadily from the early 1990s through 2008, but has since risen for five consecutive years, largely because of increased production of shale oil. Not since the late 1960s, when production in Texas was peaking and Alaska oil was beginning to come on stream, has there been such a string of annual increases.

As a result, United States oil production climbed to the highest level since 1989, although it remains well below the record production of 9.6 million barrels a day, set in 1970.

The agency forecast that American production would continue to rise in 2014, adding 782,000 barrels, to 8.3 million barrels a day.

If that forecast proves to be accurate, United States oil production will have increased 46 percent over the three years from 2011 to 2014. There has not been a three-year increase that large since the years 1921-24, exactly nine decades earlier.

http://www.nytimes.com/2014/01/25/bu...asts.html?_r=0

[Jim in CT]

Originally Posted by PaulS

I never claimed he or his policies resulted in the price drop. However bc of his policies the price drop was a "tick" greater. demand would have been slightly higher as you say.
Posted from my iPhone/Mobile device

We're mostly saying the same thing.

But the increase in supply, which did likely cause the price drop, is likely tied to frakking. And that's something that liberals never would have allowed if they could have stopped it.

I saw on CNN tonight that the average US family will save over $1,000 in 2015 due to the drop in oil price, which is due to increased supply. How much greater would supply be, and therefore how much lower would prices be, and therefore how much more money would we all have in our pockets, had we been drilling more aggressively?

And I can't wait to see what happens to demand for electric/hybrid cars for the next 12 months, with gas so cheap.

An interesting and challenging mess, not easy to draw a straight line between cause and effect. From where I sit, Obama will continue to claim credit for most good things and dodge responsibility for all bad things. We've come a long way from "the buck stops here".

[Jim in CT]

Originally Posted by scottw

huh?

"
"Despite the 2013 increases, oil use in most developed countries remains well below the levels of 2007, the last pre-recession year. The United States is estimated to have used 8.5 percent less oil in 2013 than it did in 2007, while demand is down by about 25 percent in Italy and Spain, European countries that were hard hit by the euro area’s problems. Germany stands out, with 2013 usage equal to that of 2007."



http://www.nytimes.com/2014/01/25/bu...asts.html?_r=0

Yet the chart I posted said that worldwide demand was at an all-time high in 2014. Who knows what to think...

[Jim in CT]

Originally Posted by scottw

huh?

" good thing we have all those average Joe's driving Volts around...?_r=0[/url]

Excluding all the Volt owners who got burned to death by their penchant for, you know, spontaneously combusting. That's what I want...to pay $35k for a sedan (instead of $19k for an Accord) which, if I'm lucky enough not to get incinerated in, will need to be re-charged about the same time I get to the end of my driveway. Then I need to spend several grand on a new battery at some point, and we have no idea what the environmental impact is of disposing of all these soon-to-be-dead batteries. All in the name of global warming, which may well not exist, because if Al Gore was right, Fargo ND was supposed to be the world's leading exporter of pineapples and sugar cane by now.

[scottw]

Originally Posted by Jim in CT

Yet the chart I posted said that worldwide demand was at an all-time high in 2014. Who knows what to think...

you and Paul are cute, you'd make great room mates

I'm sure it was, it's something we can always expect to hit all-time highs......countries whose demand slumped with the recession are back to previous levels with a few exceptions, developing countries...the slump in demand 2007-now was due to a supply problem(money supply)

I guess we can give O credit for a tick or two in lower demand during that time...for his Cafe standards that don't take effect until 2016 and 2025....for the cash for clunkers program that was a joke we all remember and saving GM and then heavily subsidizing a horribly performing product...the investments like Solyndra and MANY others that didn't quite pan out

.....can we also give him credit for the many ticks up in debt for what we spent on those items?


I like the technology, my next vehicle (looking now for a teenager with a permit) will likely be a Prius or something like that but I don't want the govt picking winners and heavily subsidizing these things as their record had been dismal...particularly with this bunch...thought that was the much hated corporate welfare, I guess it's ok as long a genius progressives are doling it out for their pet projects

[Jim in CT]

Originally Posted by scottw

.....can we also give him credit for the many ticks up in debt for what we spent on those items?


I like the technology, my next vehicle (looking now for a teenager with a permit) will likely be a Prius or something like that but I don't want the govt picking winners and heavily subsidizing these things as their record had been dismal...particularly with this bunch...thought that was the much hated corporate welfare, I guess it's ok as long a genius progressives are doling it out for their pet projects

"can we also give him credit for the many ticks up in debt for what we spent on those items?"

Hell, yes! Spence would give you a different answer...

"for a teenager with a permit) will likely be a Prius "

Good luck, I'm several years away.

[justplugit]

Originally Posted by Jim in CT

"can we also give him credit for the many ticks up in debt for what we spent on those items?"

Hell, yes! Spence would give you a different answer...

"for a teenager with a permit) will likely be a Prius "

Good luck, I'm several years away.

Jim, with the $2500 /yr in savings with Obama Care and now the $1,000 on gas
we'll all be able to able to buy a Prius in 10 years, but with all the new domestic
spending programs O is proposing ,maybe a loaf of bread.
Where is Spence anyway?

[Backbeach Jake]

Originally Posted by buckman

Not as good as Obama's golf tan 😀
Posted from my iPhone/Mobile device

I think that boner was at least 5 shades darker, I was looking for the gold chains .