what if the price of oil declines significantly?

Replies to This Discussion

Permalink Reply by John Blanchard on July 29, 2008 at 7:02pm

You make a valid point that if oil prices drop enough, people will again become complacent. OPEC may be counting on this complacency.

One way to prevent this complacency is to get the word out that, while $2.50 per gallon would be nice (relatively speaking, of course), $0.70 per gallon would be even better. The only way we'll get to this price is to reduce demand, which can be done by using oil as only one of many sources of energy.

▶ Reply to This

Permalink Reply by Rexrino on July 29, 2008 at 7:33pm

There could be some politics involved, this close to the elections. If the Picken's Plan is adopted it could have world wide implications. It could drive Oil prices down still further.

It should follow that, as Alternative Energy sources are adopted and refined to achieve greater growth, with the added benefit of a cleaner world, Oil could become a backup to the alternative systems. This could reduce it's value and the profits of those who depend on it for income.

I don't think any of our solutions will serve in the short run to bring our country to a more stable, economic base with an increase in the value of our dollar. I do think it can happen in the long run. This will not be the first time America has had to sacrifice for a better future.

If we can alter the way things are done in Washington, as well as gain popular support for a plan such as Picken's, I think we can reestablish our station as the most powerful leader in the world. At least, I hope so.

▶ Reply to This

Permalink Reply by Rexrino on July 29, 2008 at 11:01pm

You know guys, I understand the need to do something and I've given it a lot of thought. How do we get the attention of the Politicians and Business Profiteers?

The one thing we have, that they want, is the money in our pockets. If we keep it there, they are going to try all kinds of ways to get it from us. It's like that commercial where "... would you like to have banks and loan agencies fighting over you..."

I'm not sure what you would call it but I like "Target Spending". If we targets a certen Oil Company and only purchased their gas for a month, I think it would be noticed. If we all purchased the same brand of Ice Cream or Milk, or Bread, Or, we didn't purchase anything at all, I'm sure we would get someones attention. The reason this type of technique has not worked in the past, is because of the lack of communication. No, we have the internet.

During the Civil Rights era, the Blacks used the very effectively to get Montgomery Alabama and other states and counties to come to terms with their desires. It was called Boycotting and it worked.

This may not work with the average person or those who are not into the Internet but for the average middle-class citizen or the Internet savvy person, they might just be persuaded to come on board.

One such trial might be to get everyone to set a limit, per month on Gas purchases and not go over that limit, even if the price comes down. I think there are enough people out of work and tight fisted with their money that it might work.

It's definitely got the eyes of most states as revenues from sales are declining rapidly. All we would have to do is target our money and get a bunch of others to do the same.

Walmart is starting to do a thing with Local Produce. They want to buy local produce and sell it in their stores to reduce transportation costs, etc. It will also boost the revenue in local economies by keeping the money closer to home. It could a ploy, to capture a market then distribute that market to certain clients but who knows these things?

▶ Reply to This

Permalink Reply by Robert D. Jones on July 30, 2008 at 7:28am

Rexrino has a lot of good point here. Anyone have specific suggestions as to a product/company to boycott?

The concept of purchasing only so much gasoline is OK, but there are folks that can't comply based on their driving (to work?) requirements. Along this same vein, however, we might get a response with a suggestion that folks deliberately limit their driving to what is ABSOLUTELY essential. Based on my observations, that would certainly drastically reduce consumption and have a two-fold benefit.

Now, how to get the information spread beyond this particular group of people?

Bob Jones
Houston, Texas

▶ Reply to This

Permalink Reply by David DeZan on July 30, 2008 at 7:44am

Robert,

I have the same fear. In fact, back in June I was talking with a home heating oil distributor (I live in New England and we're going to be faced with $5.00 a gallon heating oil this coming winter), he was telling me to hold out on locking in on prices because the price of oil will go down. His prognostication turned out to be correct. However, how far down it will go remains fuzzy. Whether it goes down to $80 or $100/bbl we'll still see gas prices in the high $2 or low $3 and people will get complacent. In fact, that's already happening, even to myself. The other day I saw a station with gas at $3.87 and thought to myself, Wow! cheap gas.

People will always do what is easiest and cheapest and that's what needs to be played upon in order to make this (or any other plan work). If you tell people they've got to fork over $25K for a new natural gas powered car they are going to fight you on it. Especially if gas stays below $4. Somehow we have to convince people that if they don't do something about it now, the next time this happens (and it will) we will see $5 and $6/gallon (or more) gas.

▶ Reply to This

Permalink Reply by Robert D. Jones on July 30, 2008 at 8:25am

My fear isn't that the price of gasoline/heating oil will go higher. That is simply an economic factor (granted it could be a big one and could trigger events just as could the worst case scenario outlined below). People show a huge ability to adjust to those over time -- as you point out. Classic case, different subject -- but on point. I can remember when the price of a pack of cigarettes was something like a quarter and I heard people say that if the price went up to 35 cents a pack that they would quit smoking. Those same folks are smoking now with the price around $5 a pack (don't hold me to the price -- I don't smoke and don't know exactly.)

Same situation regarding gasoline -- except one has to have transportation and one doesn't have to smoke. As the resource concerned becomes more vital and the price approaches some critical number, the rising fear causes people to sometimes do irrational things. That brings me to my primary worry. When folks start playing with critical resources, they can hit criticality without warning and catastrophy results. For example: In the case of crude oil....

Worst case scenario --

One or more of the source countries implements a selective oil shut-down to force the US, Europe, and others to comply with their wishes. Since I seriously doubt we would stand still for the resource blackmail, it is highly likely that:

1. There will be a local war over ownership/control of petroleum resources, primarily in the middle east.

2. The local war would escalate into a world war as other nations observed the control of petroleum resources going to a single entity. They might decide that was too dangerous to their security which would cause various political (meaning state and nation) entities now either neutral or hostile to one another becoming allies. The world would then be divided into two elements, both hostile and both having nuclear weapons.

The only way to mitigate (note, I didn't say eliminate -- who knows what the future holds)that situation is to create an environment where we (as the largest consumer of petroleum products) are no longer dependent on oil in quantities that can not be produced internally (should the need to become self-sufficient in that area arise). Takes the edge off, so to speak.

If we can do that, I believe that it will go a long way to accomplish many of the goals we can all advocate.

Bob Jones
Houston, Texas

▶ Reply to This

Permalink Reply by Rexrino on July 30, 2008 at 11:02am

You could be correct about the Middle East situation. The fact that some companies have the rights to drill and produce oil in that region does not imply that our army will stay there and protect them. Sound's like a job for Blackwater.

With the Iraqi emphasis on us getting out and the continued violence between the separate factions, I think this will be an ongoing thing, with the force directed towards disrupting Oil production.

If I were a China man and a Russian, I'd wait for the troop withdrawals then move in. If I were a European, I'd stay out of the way and wait for the winner to arise and start negotiations with them.

I think we are just doing all the ground work, only to see all the benefits handed over to those countries in that region.

We will still end up having to negotiate with the countries in our part of the hemisphere. Perhaps we should get to the job and let the Middle East go.

We could always hand a state over to Israel and let them move everything over here. :)

I doubt it would stop the fighting over there in the least.

▶ Reply to This

Permalink Reply by Rexrino on July 30, 2008 at 10:54am

The Grey area is, after the elections, there will be no political incentives to keep prices low. I imagine the real market forces will take over at that time and we will get a real glimpse of the true state of affairs. This should happen during the coldest times of the year.

Robert, I think I may know the person who gave you that advice. He was in www.lifeaftertheoilcrash.net ??

▶ Reply to This

Permalink Reply by Robert D. Jones on July 31, 2008 at 7:27am

Morning,

Agree that the more difficult time is between elections. That's when things get done more or less on their merits.

Nope, came up with that all by my lonesome. But I did go to that site to check it out. Interesting.

▶ Reply to This

Permalink Reply by Brad Joesten on July 30, 2008 at 11:00am

We must be willing to follow someone. I completely agree with the analogy I saw about a Camel being the Thoroughbred Horse Designed by Committee.

We cannot degenerate this into a mob of "Chiefs" all demanding the others to be the "Indians". No offense to any Native Americans, it just happens to fall into the easy to understand verbology, right along with "Too Many Cooks Spoil the Sauce/Soup".

We completely agree with the ideas of keeping our wonderful government out of this. We have been legislated to death with partisan crap politicking.

Ed Begley Jr. has it right. His roof is covered with Solar Panels, he cooks in his back yard with a Solar Oven, and the maintainence is simply brushing off the panels with a broom. I realize that solar panels cost a lot to install. I know that we are Completely Addicted to energy use. We are the biggest consumers of all forms of energy. We love our air conditioning and our cars are a necessity (especially for those of us who live 5 miles from the nearest town) and although we have cut almost 10 BILLION miles off of our driving, the Greed of the Futures market participants is still driving the cost of the gasoline that is left up and they CROW about it!!

It makes me want to throw up that they steal the money from all of us. Poor, Wealthy, Middle Class and all the gradients in between. Our system is rife with corruption which makes the whole battle seem fruitless. We have to stay banded together and not let dissention creep in.

I am in this for the grandchildren, and ourselves. If I can come up with enough money to invest in a single wind turbine on our property, I will do it. We are not wealthy, our land has been in the family for over 105 years. Simply paying my bills is rough in this economy, there is very little to go around for all the needs.

Oil is NOT a Forever source. We must, as a group keep understanding that. We cannot be lulled into complacency.

We are all trying to make ends meet and sometimes it seems like all our efforts are for naught. We must keep trying. Giving up is Not an option.

Brad and Tina

▶ Reply to This

Permalink Reply by Rexrino on July 30, 2008 at 12:35pm

Absolutely. Giving up is not an option.

I am writing this after returning from a horrible scene in the main gathering area of the apartment complex I live in. We have a constant drove of people moving in and being evicted. A couple of hours ago, I video taped a scene where management has taken the contents of a single mothers apartment and piled it in the middle of the gathering area. It was a scene out of a movie.

The poor mother thought she had a few more days to find some help to move her stuff, but it was not to be. A hoard of people living here surrounded the pile and started picking it clean.

The mother alerted the girl but could not stop the people from their carnage. Tears did not even thwart them from their mission of theft. I could hear the conversations explaining their justification for their gruesome plunder. Also taken away was a small box of Series E savings bonds, valued at 117.00 each. We managed to save one. The crowd grew larger as the rumor that a large screen plasma TV was to be coming down soon. it never made it out of the main building. Two computers with LCD monitors never made it either.

Strewn about the pile were baby cloths, cribs and toys of all kinds. Most of the stuff was valuable, not the cheap Walmart kind. I guess that explains the frenzy.

This activity is starting to become common place around Canton Georgia. I asked a yard cleaning crewmember, subcontracted to do apartments what he was seeing around town at the other apartments. He said it is the same everywhere, even in the high priced apartments. People are losing their homes, moving to an apartment and then being evicted. They are moving back in with their parents, those that can, or heading to Atlanta Georgia, where the homeless shelters are starting to feel the strain . It is a sad story to watch unfold. We are moving into hard times, one day at the time, one story at a time.

When I moved into this apartment complex, two years ago, when gas was still well under 3.00/gal, the Parking lot was empty every weekend. Now, it is full every weekend and the young people are hanging out at the pool or in the parking lot with their cars and friends. No one has enough money to pay the high cost of gas, food, and other commodities.

I'm afraid to ask the children I see what their parents are serving them for dinner every night. Everyone is walking to the grocery store and walking home with bags of food or stealing the wheeled baskets and pushing their loads home. The Romaine noodles section is always half full these days.

What are the rest of you people seeing in your neighbor hoods? Are the for sale signs as common place as they are here? I can them one after another all down the road, wherever I travel, in the suburbs and urban,and rural areas.

Here, the average price of new home was around 275,000.00. Now the same home, after the banks process it are trying to be sold for 175,000.00. 100,000.00 overpriced homes.
Those who keep their homes will never be able to sell them. They can't compete with low price the banks are willing to sell the foreclosed homes.

Little by little, we will be herded into areas designed to control the behavior of large populations of unemployed people. In England, they are implementing plans to force those people out of work, into a government subsidized work force. This or course, will mean they will be doing the work once done by private contractors, further increasing the roles of the unemployed. There just doesn't seem to be an answer.

▶ Reply to This

Permalink Reply by Rexrino on July 30, 2008 at 1:02pm

Appendum to the Apartment carnage.

The girl finally showed up with a couple of trucks. One by one, the people that took stuff started bringing it back, including the small box with the savings bonds. It's hard to beat the kindheartedness of Georgia people. I guess, after thinking about it, they felt bad.

▶ Reply to This

• First
• Previous
• Next
• Last