La. Hunter wrote:I believe that the prices of oil and gas are artificially inflated due to the speculators in the market.
Assuming that is true, they will have to sell the oil they are buying today at some point. When people say it's the speculators doing it, you have to ask what they are doing. They are buying oil today and holding it to sell tomorrow at a hopefully higher price. There may be some issue with margin requirements that are allowing speculators to have excessive leverage, which may be leading to a bubble. As we all know bubbles eventually burst (internet stocks, housing, ...) and the price collapses. If it is not a bubble, then the speculators are doing a good thing by taking supply off the market when the price was too low and increase supply in the future when prices would be even higher if the speculators hadn't bought low and sold high. I'm pretty sure none of us on this forum have the background to venture an expert opinion on whether we are in a speculative bubble or seeing real inflation in oil.
La. Hunter wrote:There is currently not a shortage of oil and gas.
There never are shortages in a free market. Price rises to whatever it needs to in order to balance supply and demand. This can happen in a blink of an eye, if there is a supply disruption. Of course, everybody wants to get everything they want to buy for free and sell everything they have to offer for a fortune or at a minimum know what the price will be tomorrow.
La. Hunter wrote:When is the last time you saw a line of cars at the pump trying to fill up before the stations were out.
Price controls. Happens everytime the government artificial sets a price too low.
La. Hunter wrote:Except for post Katrina and Rita
and most other hurricanes. Many states have "anti-gouging" laws. I don't know if LA does. When there is a huge spike in demand, the gas stations cannot raise prices without risk of huge fines, so they simply sell what they have until it's gone and then shut the doors. If they could raise prices, they could afford to pay extra to get additional gas that they hadn't contracted for. People also know that they won't be facing a huge price spike, so they don't plan ahead and store gas for the evacuation when a hurricane is coming. The other issue is the government forbids gas from one region being sold in another regions, so when there is a disruption in supply or a spike in demand, the evil gas companies cannot divert supply from one region of the country to the other.
La. Hunter wrote:While I will admit that we need to find fuel alternatives
If Exxon-Mobil could discover a cheap alternative to gasoline, they could wipe the competition off the planet. The problem is that there simply is no cheap alternative. Gasoline really is pretty good stuff. High energy density, vaporizes well, doesn't corrode common materials, not terribly toxic, relatively cheap to make, not much else you can really do with it, ... All the practical problems that any alternative will run into.
More efficient engines would equally lead to huge profits for the company that brings them to market. Problem is there is only a fixed amount of energy in a gallon of gasoline (less in ethanol), and you can only reduce the energy required to move a car a given distance at a given speed so far. In a practical sense, this almost exclusively leads to smaller cars, smaller engines, and smaller capacities (hauling, tow, etc.). This will force those of us that actually require 4x4 or bigger vehicles to pay a premium on our vehicles to subsidize the sale of little vehicles that people would never buy without the subsidy.
La. Hunter wrote:I still think we have plenty of time left before we encounter real shortages.
Depends if Jimmy Carter's protege wins election and imposes any form of price control on gasoline. If he does, there will be shortages. If he makes it less profitable (winfall taxes, etc.), prices will go up along with the bitching. Although, I heard a theory that if JC II (he thinks he's Jesus Christ, but he's much closer to Jimmy Carter) is elected, the Democrats objections to drilling and other environmental restrictions will suddenly be less important, so supply will increase and prices will fall and they can claim credit.