Re: "oil wil be capped at $40 per barrel"


<jefft0@xxxxxxxxx> wrote in message
news:1145653988.540007.66620@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
A few years ago, when oil prices had been under $30 per parrel for a
long time,
analysis wrote off gasoline synthesis (from methanol, coal, etc.)
because of cost.
This posting from 2003 was typical:

http://groups.google.com/group/sci.energy/browse_thread/thread/1b9d35a39fd27
0d1/10cf29c9c4cfc4b4

"The business types I'm aware of who have invested in this enterprise,
have admitted its a long shot, because oil would have to be $40 per
barrel or more - over an extended period - for this system to be
profitable."

Because cost of synthesis was assumed to be around $40 per barrel,
people
said that this would cap the effective price of oil. (Do you remember
this talk?)

So are these conversion technologies going to "kick in" with oil now
above $70 per barrel?

It's not that simple because it's not text book supply and demand. While
tight supplies and high demand are the trigger, there is a lot of collusion
and monopolistic practices involved in the recent run up of prices. In a
simple text book case, tight supplies would squeeze everthing including
profits and everybody would be scrambling to increase supply. Under the
present system, there is little incentive to increase supply including
synfuels and alternatives because profits are increasing even faster than
raw petroleum. There is little competition and in some cases, oil companies
are buying each other up. Look at the recent $400 million retirement package
for an Exxon executive as an illustration of the greed and excesses in that
industry. OPEC is a monopoly that sets crude prices. While American
companies are not a part of OPEC they, none the less, benefit from OPEC's
price fixing and are only too happy to throw up their hands and say "what
can we do?" while they laugh all the way to the bank.
What we see is unfettered, laissez-faire, do what the hell you want, screw
the public, capitalism. What is needed is a few rules and regulations with
taxing policy to encourage companies to be good corporate citizens. We need
to revisit and enforce the anti trust laws originally placed against
Standard Oil in 1912 because we've been down this road before. We need a
government that cares about the general public as much as it cares about
it's corporate friends in high places. Corporations should be allowed to
make money but they should not be allowed to screw the public while certain
politicians deal out special favors to them and write blatant giveaway
energy bills. And, we need a government that is more interested in helping
forward the development of alternative fuels than it is in waging war.



.

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