Friday Open Thread

As crude oil hits $75 a barrel...

[editor's note, by Yankee] Hey! Tomorrow's Earth Day! Do you have any plans to increase your own or others' awareness of the energy crisis? I hope to check out some of the events at Earth Day New York (especially the giant earth images).

Speaking of Matt, I wonder what NY Times editor John Tierney is thinking now a days about his bet with Simmons. Tierney claimed to be a devout follower of Julian Simons' theory that commodity prices always head downwards.

It was way back on August 23, 2005 that they made their $10,000 bet; Tierney swearing that crude would head down while Simmons warned that Twilight was near for the Desert. Whose your sooth sayer now Tierney? Inquiring non-economists want to know.

It's early in the game still.  

Mr. Simmons said he favored a simpler wager, based on his expectation that the price of oil, now about $65 per barrel, would more than triple during the next five years. He said he'd bet that the price in 2010, when adjusted for inflation so it's stated in 2005 dollars, would be at least $200 per barrel.

Tierney's probably not worried.  Yet.

Probably not but you know it's creeping into his head, "mmm, I could end up looking like a total jackass  . . . but the price won't keep going up, will it? of course not, of  course not."
Sorry for busting in here but......

Who is in charge of new open threads?

(Not a comment to you, just near the top....190 comments is to many!!)

Tierney might not be worried... but imagine sitting in the executive suite with the big guys at Ford or GM today and watching that NYMEX number run.

Those guys aren't smelling spring today, they're smelling toast.  

I bet a lot of politicians are smelling toast, too.  If this keeps up, energy prices are going to be the #1 issue for the election this year.
http://www.msnbc.msn.com/id/12408574/

Some survey data from MSNBC. Results below based on 77,416 responses.

21% respondents report it costs more that $50 to fill their tank.
76% have not changed driving habits due increased prices.
64% Of those who have changed habits now stay home more often.
31% will change habits when price reaches $3.25.
76% say they will not change driving habits. They have to drive.

The price is $3.17 at relatively moderate station down the block from my office. They held at $2.99 for a while then leaped to $3.11 and now $3.17 Probably will hit that magic $3.25 tomorrow. (This is Northern California BTW.)
76% say they will not change driving habits. They have to drive.

I think that pretty much says it all.  I have to drive too, because I'm required to have a personal vehicle for work (which they reimburse me at 45 cents/mile).  I brought up gas prices with my manager this morning and he has no idea whether our company will adjust the reimbursement...all he said is, "they usually update it in summer."  So in the meantime, we're all getting poorer.  

My personal responce to such a poll:

I will not yet change my driving my habits until I move closer to work. I already combine trips to use less fuel. Hopefully, I'll live a litre away or less, and have the option of that evil Pace bus.

I would sooner move closer than use the bus as the alternative. (I have possible areas mapped out)

In a push come to shove, I'd rather use a motorcycle or God/Allah/Buddha Forbid, a bicycle, enabled by living closer to work than use that bus.

Compared to even pre-peak Europe, $3/gal is cheap. I'm getting a laugh, surely for now. For those peak-ignorant types: Get Over It! You ain't seen ANYTHING yet!

I will if the opportunity crops up, carpool, though this creates sub-optimal cases. (some people dawdle at the end of the day while I scramble to my car)

One thing's for sure. Peak Oil promises to be a ride of a lifetime, the economic equivalent to a C-130 with upholstered seats like a Pace Bus on a flight through Hurricane Katrina's eyewall! Buckle up! Just for fun, you won't see the evils of Pace buses at the <href>www.pacebus.com</href> website.

Hmm, Erf day, let's see...... I'm considering going to the Make Magazine "Makers Faire" this weekend, and have already decided the train's the best way to get there, maybe I'll just go carfree for the weekend.

I do have errends, bank trip, etc but I can walk 'em, it will do me good.

In my neighbourhood, I walk around, but I leave the car at home on weekends. Not having kids helps. Much shopping I can do by walking or using the CTA (but not Pace), and the CTA is a weekend option. It's that I really despise the Pace buses in Chicago's suburbs. They run once an hour at best and non-existent as the norm, plus their climate control problems, which is inexcusable when looking for ridership.

Unlike most drivers, I'm aware of energy use as I weekly keep track of fuel consumption and all but calibrated the gas gauge onboard my car. That way, I know how much money to put down to ensure it tops off when I get my weekly load of gas. I took a day off and this morning, I loaded onboard 5.0? gallons of gas but drove 144.5 miles for the previous week. 28.9mpg. I live .6 of a gallon away, yet I have coworkers who live 4 gallons away. Guess who's the real fool? The bloke with the 4 gallon commuting mission!

Once I park my car on a Friday, I don't have to touch it until the Monday morning mission to work. That's the way it should be. And all walking-inaccessible shopping done enroute on an afternoon commute. Why waste gas? Given the copious energy use of cars, it could be thought as a road-only aircraft. If you had to pay for that jet fuel, would you waste it? Of course not!. Why more people don't seem to care about fuel use as they drive is hard to fathom, unless they are a Jeff Skilling. (or some airline pays for a pilot's fuel use as he "drives")

My outlook is that basically there is no bright future while we are on this stupid detritus trajectory. So my approach is get through the detritus NOW. Burn it all. Burn it as fast as you can. I used to put $20 in the tank ... now its $30 ... soon ? who cares. As long as I still have some money for food, and the gas stations still have gas who cares. And fortunately my utils are included in my rent so I can help send us back to Olduvai as good as anyone else by leaving the air conditioner on max all the time even (gasp) when I'm out. Yeah, I want this money dominated bank controlled society to fail, so that something better can replace it. I want to be part of the solution but I need to get there .... so ... walk if you're desperate, bike if you gotta, drive if you can -- burn it. Burn it all.
I hope you're not a troll, but your thinking sums it up for most people. Assuming you are sincere, sooner or later, as gas prices climb, you WILL have to make crappy choices. That is one major point behind us Peak Oil people.

I don't know your commute's mission profile, but I know that gas prices if high enough will force you to change behaviour.

You may:

  1. take the bus

  2. carpool if possible

  3. use a motorcycle, scooter or even a bicycle

  4. LOSE YOUR JOB

If that's not enough reason to be aware of fuel consumption, I don't know what is. Yes, your car is your (road-only) aircraft.
Mad Maxout,

I'm pretty sincere yeah, but I suppose I'm lucky -- I work from home. I own a bicycle, but live in the burbs and need to use the car to get anything done. I'd max out about CAD$8 a litre which would have me spending probably about $400/month on gas, (right now its $50-100 with $1.00/liter) before moving to the city (Toronto) where public transit is pretty good.

If I lose my job, I'll find a new one, or do whatever I need to do. I'll find a way. I'll survive. And when my luck runs out ... life will catch up with me.

If the S is going to HTF (and I believe it will) then I just want it to hurry up and do so. Cascading systems failure.

Hate to shine the sun on your funeral procession, but you left out the most surprising bit:
Mr Simmons said, however, that there was no need to fear a recession.

He pointed out that higher oil prices meant more revenue for producing countries, which in turn would help to fuel global growth.

Ain't that something? You guys are all stressing out about depression, nuclear war etc. etc. And MATT SIMMONS says we don't even need to worry about a recession!

Discuss.

I'm still going "WTF mate?" over parallel stories saying that the US stock market is the highest it's been since Jan. 2000, so at least in that sense, we're prospering.  How long that'll keep up is anyone's guess.

There're also a bunch of conflicting (at least at face value) reports saying that a) people can't afford these prices and are pawning items off to fuel their tanks, and b) it hasn't changed demand levels one bit for the past week.  

BTW, "PO Debunked" is one of the sites I check almost on a daily basis.  Good job on it :)

Just keep in mind, the Dow Jones going up does not equate to the average Joe in the US being better off.  Most US companies are barely holding their heads above water right now by culling the herd and cutting costs everywhere.  They are doing anything to not increase retail prices.  

We have lost most of our office assistants, have online payroll and benefits (fewer HR personnel), and office supplies are non-existent.  My analytical team has gone from eight people three years ago down to three people this year and we are supporting more products and groups than three years ago.

I know this not unique to my company.

JMO, but price is not as important as production levels.  High prices and volitility indicate that surplus production has dried up.  The world is currently producing more crude than it ever has, so life is good.  If production starts to fall... then we have problems.
Who left it out?

I quoted those lines in a previous thread.  

And went on to explain why I think Simmons is an optimist...

You betcha.  And the rich get richer.  Good for them.  Tell you what-- if we have a nuclear war, I won't worry about recession either :)
In a severe push come to shove (like a Mad Max flick) being rich would lose its glamour quick. Too many people with pistol-grip crossbows with laser pointers hoseclamped to them. Kevlar works against bullets but not arrows. (speed/weight profile difference)

So, the rich will effectively imprison themselves until a dieoff ensues to near-completion. It in their interests that a dieoff occurs as completely as possible. To foil that strategy, whether intentional or not, is to ensure there are people thriving without them so as they emerge, they can be taken out with said crossbows. If you are a cynic, this is a perfectly good reason to get the word out as a case of "if nothing else".

Already well-off people live in gated communities - prison camps. It's a gilded prison, but a prison all the same. As time goes by, they will want bunkers. THEN they will effectively imprison themselves. I wouldn't be surprised if Bush and Co. has a bunker system with Osama bin Laden as the housekeeper. (OK, a conspiracy theory) If more than some strategic-design minimum number of people survive, the bunker people will be held to account due to the intervening legends. They will end up toast. I wouldn't want to be 80 years old and emerge from an old coal mine only to have that red dot on my chest abd >thoomp!< that arrow makes it Game Over. Especially after 35 years underground. Yeecchh.

5 euro/litre? That's enough to get me to consider taking that evil Pace bus again! Assuming $1.00 per E1.00 (don't know how to make the euro character) E5/L is a whopping $18.90/gallon!  THAT'LL cause some demand destruction. I already intend to move closer to work to hedge against gas prices just to keep gas costs manageable. A price like that would equal 1/4 of my income even as I use "only" half a gallon each way.

We might have found a possible upper range for a critical gas price. A postal worker bailing out despite a 1/2 gal commute could be an upper end. Vast demand destruction will occur WAY beforehand. People who work for the postal service make comparatively good wages, so a price like $10/gal could be about that critical price that screws over so many people that the economy sputters into a depression, as in "I can't come to work becuse the gas costs too much".

If that "expert" is right about $20/gal gas by 2010, we are in for one rough ride. A ride that'll make a Cessna in the middle of Katrina look smooth.

Bicycle! Bicycle! Biiiiiicycle!!

I want to ride my bicycle, I want to ride my biiiiike!

Honestly, the humble bike is the most effecient transpo of anything. Easy to do 50 miles a day, a person can ride all day at 10MPH which means in 10 hours they can do a "century" or 100 miles.

Look for bikes to get really big if this gets that bad.

As I've said to my local gas station guy, this isn't a gas crisis, because I'm old enough to remember a gas crisis. When I see bicycles all over, mopeds advertised on local and national TV, and kids (like us) growing up knowing how to siphon gas, then I'll call it a gas crisis.

No doubt the bicycle is the most efficient vehicle ever invented. A special case come up with me. Until cars and SUVs are grounded, I get startled easally due to anxiety problems, which is my own problem. I have no problem with the idea of a bike using up calories. :) I have a metabolism so bloody efficient that I could pedal a bicycle to the state line and back on one Snickers bar. I drink diet soda, and joke that if I drank a regular soda I would have to jog to the state line to burn it off.

Good thing I'm not a Canada goose. Give me a stomachful of greasy fries and I could pull a Steve Fossett - and still gain weight. As far as bicycle use, the main deterrent in my case is my own being easy to startle. Burning half a calorie is perfectly cool, and I'd like to do it. But that easy-startle deterrent is there. That'll take some SEVERE gas prices to overcome. More than enough to cause world economic catastrophe. That deterrent really sucks for me. The same anxiety problem exists if I attempt to swim, something I can't do.

what about the rubber tires - those won't be particularly easy to maintain/replace, will they?
Also chains, gears and bearings go. My bicycle needs an overhaul. I have it serviced every year or so and it surprises me how fragile bike components are, never mind the amount of punctures I get per year. I pedal about 20 miles a week, a third of it off road as that is the shortest route. I don't know if they manufactured bikes to last much longer many years ago, but current bikes don't seem to last long (or at least with me using them).
You are quite right about the flimsiness of most current-production bikes. They are glittery throwaway machines.

Get an old bike and work with a master mechanic.

In regard to punctures, I've had only one during the last 5,000 miles of riding, because some of my tires have the kevlar inserts, and with the others I squirt goop into the inner tubes that self-seals around thorns, nails, slivers of glass, etc. Before I aggressively attacked the puncture problem (about thirty years ago) I might get four flats in a month--especially in the sping time, when the snow and ice melted to leave all sorts of sharp nasty things on road shoulders and bike trails.

A sturdy bike need not be expensive. As a college student I had an old Raleigh 3-speed that I rode rain or shine for many years, up and down steep hills in Berkeley--bought it used for $20 and sold it after four or five years for $15, and except for the usual tires and chain and brake pads, I don't recall replacing anything on the bike, except for a spoke or two. Especially if you live in England, I don't think you can do better than an old Raleigh, but there are other fine old English bikes too.

Now that I am old and wise, I am partial to fat tires and massive and heavy and extremely strong steel frames, and with fat tires at relatively low pressures you can go through mud, sand, gravel, slush, and over forest floors--pretty much anywhere a mountain bike can go, except you have to walk it up steep hills because of no exceptionally low gears.

Alas, I can't remember the source, and it's from a few years ago so it may have changed, but apparently the production of a car uses about the same resources as that needed for producing 40 bicycles.  The cost difference between running a bike and a car are phenomenal (brake pads, tyres, chains/sprockets, oil/grease, ball-bearings, just one or two of the equivalent of those in a car having to be replaced could get you a basic bike). This is excluding the cost of "food that you'd pretty much eat anyway" versus petrol.  

The main problem with bikes these days is that they're being built/designed either for "weekend dawdlers" or high performance racers/mountain bikers.  The former don't mind it being crap because they can always get another one and they're not doing much mileage anyway, the latter prefer lightweight over reliability.

The latest oil price tracker on the right hand side bar seems to be having trouble. It looks like it gets occasional zeros in the price values and then auto scales itself so that the real daily variation shrinks to be almost indiscernible.
Oil Rises to a Record $75.35 on Concern About Iran, Nigeria

April 21 (Bloomberg) -- Crude oil rose to a record $75.35 a barrel in New York on concern that shipments from Iran and Nigeria will be disrupted as the U.S. increases output of gasoline for the summer driving season.

Nope, nothing to see here people. Lets move on. The sky is not falling... let's go, keep moving... Oil is going back to $20. hurry up, quickly now. Have faith in market forces, theres no such thing as Peak Oil. let's go.....

(note sarcasm)

Actually such talks in appropriate moments (without the sarcasm) are our only chance not to go down with a complete breakdown... $150-200 per barrel, hyperinflation or a dolar collapse will not help the world become a better place.
Sorry, it was a bad attempt at humor on my part.  :)  I was following the price of oil all day and I'm still amazed that the stock market doesn't go down and that people think this is all just a temporary thing.
nah... nothing to be sorry about. Personally I think that the system is completely screwed if we found ourselves in a situation like this. Or, maybe more likely we screwed ourselves with that same good old virtue, called greed.
Why not? A dollar collapse and $200 oil would force USA to ASAP become more efficient in producing more value and living per m3 of oil.
That is what Matthew Simmons says.  

Mr Simmons said record oil costs so far have yet to derail growth in oil demand or the world economy. He said western countries needed to adjust consumption patterns.

He suggested that rather than hitting a ceiling at $100 a barrel, prices needed to go "far, far higher" in order to help change consumption patterns and to fund the development of alternative energy sources. Sources which could not compete with oil available at $40 a barrel were now becoming economic.

Hello Leanan,

Gee, I can hardly wait to see what oil prices do when the first hurricane forms in the Atlantic with all the other geo-political events going on. Here is the list of 2006 names with some editorial freelancing:

Hurricane Alberto  VO5  lather, rinse, and repeat-just getting started w/CAT 1 thru 5s

Hurricane Beryl of no oil

Hurricane Chris[t] $5.00/gal of gasoline ! Holy Crap!

Hurricane Debby Devastation

Hurricane Ernesto  Yergin will still be ernestly saying $35/bbl

Hurricane Florence Nightingale: Cat 5 into Houston at 2am

Hurricane Gordon 's Gin-Gimme a drink cause I cannot get gas

Hurricane Helene  ?

Hurricane Isaac Asimov--this baby's a sci-fi classic!

Hurricane Joyce  a Rolls-Royce of a hurricane-high dollar damage all the way!

Hurricane Kirk  Captain, Captain, she can't take anymore!

Hurricane Leslie  Yes, less and less platforms lie above sea-level

Hurricane Michael  All boats ashore, cause this is the biggie!

Hurricane Nadine  No, the nadir of FEMA response to helping people

Hurricane Oscar  This one is must see TV!

Hurricane Patty  Right thru Miami!

Hurricane Rafael A true masterpiece of destruction!

Hurricane Sandy Beaches left in downtown Boston

Hurricane Tony ?

Hurricane Valerie ?

Hurricane William Tell-a big arrow straight thru Long Island

Maybe some other poster can think of something for Tony, Valerie,and Helene. My guess is a big hit in the GoM again is good for instant $5/bbl.

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

toto,
Good point.
Murphy's Law predicts that the Hurricanes will hit at the worst possible moment and not until then. ;-(
Murphy's Law is "anything that can go wrong will", and I hope it's Hurricane Michael that KICKS SOME ARSE. That's my real-life name, and I'd love to have a retired hurricane name as a namesake. Especially if it sinks Florida. Texas would be a good target for my namesake. Rev it up, baby! With the GoM already at 80F, this year promises to be a good productive hurricane season. I came to totally hate the South. Let 'em have it!