what if the price of oil declines significantly?

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Permalink Reply by L.E.D. on October 15, 2008 at 6:10pm

The reduction of the price of oil and gasoline is the direct result of reduced demand. What would you expect from reducing our consumption of oil, prices to stay the same? No, they will go down. T.B. Pickens talked about reducing our demand on foreign oil by 30 percent would reduce the "700 billion" by 30 percent but that's not true, it'll reduce it by much more than that because it will not only reduce quantity imported but also cost per barrel.
This reduction in price of oil and gasoline may be in part due to economic problems but also due to the choice of americans to use less gasoline

Robert, why not buy a fuel efficient car? I think it's important to switch big rigs, dump trucks, farm equipment, construction vehicles, buses, trash trucks, taxis etc to NG, and they should get the monetary resources (subsidies, tax credits) and help first because those motors run for a much larger percentage of the day than our vehicles and consume a lot more fuel per unit time of running. We might end up freeing up too much diesel, which is why car companies should add diesel and CNG options to personal vehicles. We should demand the availability of CNG cars soon from car makers (especially american car makers) but if you are in the market for a new car now, get an efficient one (2009 chevy cobalt XFE gets 37 mpg on highway, prius gets around 46 mpg).

If you have a huge SUV or truck and you have extra cash and you really want to do something, don't sell the SUV, just let it sit on the driveway and get a fuel efficient little car. If you sell the SUV someone will drive it eating up gasoline.

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Permalink Reply by Robert D. Jones on October 16, 2008 at 8:57am

Morning L.E.D.

The original premise on which this discussion was based was, what do we need to do to keep the focus on getting off foreign fuel sources if the price of oil declines to the point where people no longer felt an economic pinch. I will state categorically that, even with the recent economic downturn, people never really reached that position. That statement is based on the fact that sales of products, such as I-pods, fancier and fancier cell phones, and other non-essentials has remained high. Further, you don't see the proliferation of people going to public transportation or doing much more than slightly reducing their driving.

And, whether we believe it or not, the price of petroleum is influenced by factors outside our control. The primary factor is total production versus need. The folks that produce the oil (OPEC, in particular) are feeling the pinch of reduced oil prices, so, they are (stupidly, in my view because low prices will reduce our National will to develop viable alternatives) reducing production.

In any case, even if oil keeps going down, we still need to remove our dependence on potential enemies for whatever amount we need. That fact is why I got on board the Pickens Plan in the first place and it is why I stay active. I started this discussion topic because I feared we would encounter exactly the problem we face today. We have a Congress that is firmly against any real alternative fuel development and, potentially, a President that will agree with their position making any real progress virtually impossible. For the record, I am an independent voter. I said what I said based on what the candidates say and what the Congress has done.

All that being said -- my point regarding CNG as the touted best alternative by the Pickens Plan is that it contains a basic flaw. It ignores the simple fact that CNG fueling stations are not commonly available across the nation AND the severe limitation on the ability of private citizens to convert their vehicles to use that fuel. These are hard facts that no one seems to address except to say that we should all buy new cars that run CNG. Last time I looked, only one car manufactured to run on CNG was for sale in the US (California). It was a Honda Civic and fairly expensive (compared to the gasoline model). In my opinion, ignoring that reality undermines the whole plan, because it indicates a lack of planning forethought leading to a less than forthright statement of the problem/solutions space. It needs to be addressed and resolved sooner, rather than later.

I'm all for fleet users converting to CNG. In fact, the city of Houston uses CNG for their bus fleet. Several other public and private entities also have converted their vehicles to use CNG. Wonderful, as far as it goes.

But, if you look at the freeway traffic here in Houston -- or in any other large metropolitan area -- the potential for reducing petroleum dependence far exceeds that encompassed by the various vehicle fleet operators. And the restrictions imposed by the EPA are, according to what I have read on the various CNG kit/conversion providers web-sites, are the primary factor limiting the availability of certified change-out components. The concept that you can change out a Ford F-150 (don't know what engine) to CNG in something less than an hour (as per another responder) simply underscores my point. If a kit allowing my Ranger to run on CNG and gasoline were available, I would install it, particulary if it took less time than required to replace the brakes. I would also install the home fueling station needed to fuel it. I think there are many, many other people that would do the same -- not for economic or even environmental reasons, but because they agree that outsourcing of a major resource is contrary to national security -- and this is something they can do personally and individually to help the Nation.

My Ranger (which runs on gasoline or ethanol) gets 18 mpg, city and co

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Permalink Reply by Greg R. on October 29, 2008 at 3:52pm

My brother converted his Toyota 4×4 to CNG here in Alberta back in the 80's. It ran economically and cleanly, as advertised, and he could flip a switch and run on gas when a CNG refueling station wasn't nearby. All well and good until he hit a moose one night. I'm not sure whether he had recouped the conversion costs by then or not.
In spite of the above, I'm also not convinced CNG is a panacea. I am inclined to think electric cars will be the answer in 10-15 years, fuelled in part by efficient cogeneration plants fired by NG and synthetic gas derived from North America's still-plentiful coal reserves. Yes, wind and solar and even nuclear will play a role too, but the fossil fuel plants have better economics, and cogen will address much of the GHG concerns (and eventually sequestration will address even more).
In the meantime, I think Alberta's oil sands plants, like them or not, are going to be a very big piece of the transportation puzzle. (Yes, they're energy-intensive, so the Greens hate them. But the technology is proven, and they're here, not somewhere in Siberia or the Middle East.) And the Pickens plan will hopefully help people stay focused on the need to reduce reliance on non-friendly energy providers.

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Permalink Reply by Robert D. Jones on October 31, 2008 at 8:41am

I have a close friend (handball partner) who bought and drove an electric powered Ford Escort way back in the seventies. He liked the car (it would keep up with traffic, etc., ) except that the battery maintenance was "a pain". Contually refilling the cells that were located in the trunk and the engine compartment.

The company that manufactured them apparently put a pretty stout electric motor in place of the original engine and wired the throttle pedal to provide variable power. The transmission was used just as if it were gasoline powered. He plugged it in every night and drove it twenty or thirty miles to and from work every day. We were kidding last evening that he was almost forty-years ahead of his time.

Bottom line, I see no reason that electric cars would not be reasonable substitutes. The generation of electricity by various means would not be a limiting factor. I lived in an all electric house in an area where power was obtained from a nuclear plant and it cost a tenth of the amount paid for the same amount of electricity from a non-nuclear power plant in a different municipal utility district less than a mile away. That was in the early eighties. Seems like we would have learned something -- but, based on the forced limits on what you can do to recycle spent fuel rods (see Congress) and the fear factor instilled by people who ignore the actual safety record -- we are twenty-years behind the rest of the world in terms of nuclear power.

I agree that the oil sands/oil shale available, along with clean coal and other petroleum based power sources will cover an amazing amount of the usage (clearly enough to eliminate the need for middle-East petroleum. That will be the short term answer. The long term (in my relatively well informed opinion) will be hydrogen fuel -- either direct combustion or fuel cell produced electricity.

The only thing in question is who wins the Presidency here and how much emphasis is directed on the development program. That will determine how long it will take to get that kind of renewable energy on board.

Finally, we need to keep focus -- even when the price of gasoline is less than $2.00/gal -- as it is here right now.

Bob Jones

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Permalink Reply by neil cox on October 31, 2008 at 10:17am

Hi Bob: In the 70s, the vehicle likely had at least 23 deep cycle 6 volt lead acid batteries, with 3 filling caps on each battery, so it was tiresome to add water once per month; oftener if he was over charging his batteries to be sure he would make it home each evening.
As the batteries aged making it home became increasingly doubtful. Did he replace the 23 plus batteries at a cost of about $1000? Neil

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Permalink Reply by Robert D. Jones on October 31, 2008 at 11:00am

Didn't ask him, but he eventually sold the car to some guy in Colorado who made a living selling solar panels, etc., to folks that lived out in the boondocks -- remember this was almost forty-years ago. The guy painted it bright yellow and installed solar panels on the roof -- of course that wouldn't keep the car running, but was good advertisement -- I guess.

Bob

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Permalink Reply by jim ross on October 16, 2008 at 1:18pm

we have to learn how to use and conserve the oil we have.. plastic uses alot of oil to make. if people would recycle more it cut our uses in half. i am saving over 500$ a yr by doing that. i dont have to by as many trash bags. alot of my trash goes to the local recycling center. its not an inconvience at all. in fact its almost a way of life. all my cardboard ,plastic,paper go there. i have changed all my light bulbs over to fluresent bulbs . i would like to be able to afford to change my whole house over to alternative energy, but not in my buget, just a fork truck driver in a factoty, but its 1 step at a time

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Permalink Reply by Robert D. Jones on November 5, 2008 at 6:31am

The question now (after the election) is -- to what extent will the far-left Congress and the most liberal person ever elected President allow actual effort on alternative and internal sources of power to progress. As it appears, there will be no money available to conduct the research needed to determine the more viable of the various candidates -- let alone their aversion to nuclear power and additional drilling. It appears that all the effort will have to come from non-government sources and for that to happen the resulting development must, repeat must, be commercially viable. From what I've heard, even wind power is not viable if oil goes below $50/bbl.

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Permalink Reply by Ray Phillips on November 5, 2008 at 9:30am

Just from what I have read over the past few weeks, you may be surprised by the new president. In several interviews, he has proclaimed the energy problem as his highest priority, after the economy of course. One person, reportedly in the inner works of the campaign, said that people would be surprised to find that nuclear is definitely on the table in the president-elects plans.

Wind and solar are not competetive as energy producers even with oil at $140 a barrel, much less $50 a barrel. The thing about wind and solar is that they are renewable and clean, which many people, even those not traditionally supportive of clean technology, now support. As more and more people turn to wind and solar, the prices on the equipment will come down to more reasonable levels and they will become fairly competetive.

As for the "far left Congress" and the "most liberal person ever elected President," remember that the issue with the Democratic party has been the diverse people it represents, from far left liberals to centrists. This is what has hurt it in most elections, and is not a new thing. Will Rogers is reported to once have quipped, "I am not a member of any organized political party. I am a Democrat." Once sworn in, President Obama is going to have to deal with a wide range to politcal ideals. Plus, the new Senate with its Democrat majority may not have reached the filibuster proof 60 Democratic seats, but some of the new Democratic Senators are centrists who will not fall in lock step with their liberal party-mates. Because of Senate rules, Senator Reid will not be able to run rough-shod over the Senate the way Speaker Pelosi can in the House.

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Permalink Reply by Robert D. Jones on November 5, 2008 at 9:54am

I wait with bated breath to see what the new folks will do. I base my expectiations on what they said/promised during the campaign and their past voting history. I hope I am wrong, but I think the smart money will bet with me.

As to the price/viability/clean technology motivation factors.... Few people I know are willing to double the cost they pay for energy simply to get it from a clean source. I recognize that, as any technology based concept matures, the cost per item will go down. The hooker is to get enough folks to invest in the first place, particularly the kind of folks that can throw a bunch of money into the pot to get it started, plus keep feeding that pot as problems crop up -- waiting perhaps for decades before the technology becomes truly competitive enough to break even, let alone show a small profit. Few can actually do that and as the economic belt tightens on most of us, the liklihood becomes even less. There are a lot more lucrative places to invest money in terms of quicker and, perhaps, even larger returns.

Don't mistake my intent. I believe eliminating the need for foreign power sources is a national security issue first and foremost and, therefore, it must be accomplished if we are to continue to retain our soverignity. After that, it becomes an economic issue and way down the list somewhere it rises as an environmental issue. I think that until we stop trying to sell it as economically feasable or in the best interest of the planet, we will never get the support we need to make it happen.

I posed the question that started this tread because I was relatively sure that the price of oil was inflated -- and that it would relatively quickly reduce to something the people would consider OK, particularly after being exposed to $4.00/gal fuel. Shucks, after $4.00, gasoline at less than $2.00 a gallon (presently availalble where I live) seems "cheap". That removes the economic emphasis and leaves the "green" issue.

In my opinion, there has never been enough "clean up the planet" interest to achieve anything meaninful. Therefore, I wanted to start people thinking about what would actually provide the motivation to continue to pursue sources that were within our control, be they alternate fuels or domestic production of oil and gas.

We'll see what happens.

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