Oil hits record over $78...

[Jeremiah]

By BRAD FOSS
AP Business Writer

WASHINGTON

Oil prices surged to a record above $78 a barrel Thursday in a market agitated by escalating violence in the Middle East and the threat of supply disruptions there and beyond.

The latest surge in oil shook stock-market investors' confidence, though economists said most U.S. consumers and businesses appear to be absorbing higher energy costs surprisingly well.

U.S. gasoline demand continues to rise in spite of near $3-a-gallon pump prices, core inflation remains relatively low and the U.S. economy is forecast to grow by roughly 3 percent in the second half of the year.

"Two years ago I might have said that $70 or $75 a barrel would be some kind of a tipping point. Now I'm not so sure anymore," said Nariman Behravesh, chief economist at Global Insight, a private forecasting firm.

Still, Behravesh said lower-income Americans are suffering disproportionately from higher energy costs and "I could certainly make a policy case for helping them out on a temporary basis."

Light sweet crude for August delivery settled at a new high of $76.70 a barrel on the New York Mercantile Exchange, then continued climbing in after-hours electronic trading, when volumes are significantly lower, to $78.35. The rally came as fighting between Israel and Lebanon intensified, explosions hit Nigerian oil installations and a diplomatic standoff dragged on between the West and Iran over its nuclear program.

The previous Nymex settlement record of $75.19 was set July 5. The previous intraday record of $75.78 was posted two days later.

Adjusted for inflation, oil prices would need to rise to about $90 a barrel to exceed the highs set a quarter century ago when supplies tightened in the aftermath of a revolution in Iran and a war between Iraq and Iran.

Today oil prices are being pushed higher by rising global demand and worries that the world's limited supply cushion would not be adequate to offset a lengthy disruption to output in major producing countries, such as Iran or Nigeria. There are also concerns about the risks hurricanes pose to U.S. production.

The latest fear being priced into the market is that the conflict between Israel and Lebanon could spill over into other corners of the Middle East, the region that produces nearly a third the world's oil and contains almost two-thirds of its untapped reserves.

Israel intensified its attacks against Lebanon on Thursday, imposing a naval blockade, twice hitting Beirut's airport and blasting two Lebanese army air bases near Syria. Hezbollah fired more than 100 rockets into Israel, which said one also struck the port city of Haifa. More than 51 people have died in two days of violence following the capture of two Israeli soldiers by Hezbollah militants, who have financial links to Syria and Iran.

Iran has threatened on more than one occasion to use oil as a weapon if the United Nations uses economic sanctions or some other punishment in its dispute with Tehran over its nuclear program. While OPEC's No. 2 supplier has not raised the issue of withholding oil from the market in a sign of solidarity with Hezbollah, the possibility is no doubt influencing oil traders' actions.

"It plays psychologically in people's minds," said Larry Goldstein, president of the Petroleum Industry Research Foundation, a New York- based industry-financed think tank. "You don't have to hear them say it."

In Nigeria, government officials said twin explosions hit oil installations belonging to an Italian oil company in the volatile southeastern delta region. Elsewhere, militants attacked a group of 11 boats carrying supplies to Chevron's offshore oil fields Wednesday, killing four navy sailors who were escorting the convoy, Brig. Gen. Alfred Ilogho said Thursday.

"The oil price has become a register of geopolitical tensions and fears," said Daniel Yergin, who heads Cambridge Energy Research Associates.

Yergin said petroleum supply-demand fundamentals are improving, with global oil inventories and spare oil-production capacity rising, but clearly not enough to offset the geopolitical unrest.

The surge in oil prices rattled stock market investors, sending the Dow Jones industrials sharply lower for the second straight day. Shares of Wal-Mart Stores Inc., the world's largest retailer, slumped 2 percent on the New York Stock Exchange on concerns that high energy prices are cutting into consumers' discretionary income.

"The economy took $50 oil in stride," Yergin said. "It's clearly not taking $70 or $75 a barrel in stride. This is a rougher adjustment."

With U.S. oil companies such as Exxon Mobil Corp. and Chevron Corp. earning record amounts, some members of Congress have proposed taxing "windfall" profits in order to finance energy assistance programs for the poor, but the idea does not have wide support.

The energy-policy debate in Washington right now centers around efforts to repeal the ban on offshore drilling and to fix a law that allows oil and natural-gas companies to avoid billions of dollars of royalty payments on offshore drilling leases.

Critics say Congress has failed in its approach to deal with soaring energy costs because it has not given as much attention to curbing demand as it has to adding supplies, such as a hotly debated proposal to open an Alaskan wildlife refuge to oil drilling.

"We too often forget that the United States is far and away the biggest consumer of oil," said Tyson Slocum, an energy expert at Public Citzen, a Washington-based consumer watchdog. Slocum said the country needs to invest more in public transportation and to sharply increase automobile fuel-economy standards.

__

[Flagg]

In my opinion, the current spot price is rising for 3 reasons:

1.) "Risk premium" that some estimate at 10-15 dollars a barrel due to issues in Iraq, Iran, the Kablamistans, North Korea, nationalization of energy assets in Russia, Venezuela, Bolivia, and now the expanding conflict related to Israel.

2.) US dollar denominated inflation....the more dollars that get printed and created out of thin air...the more expensive things get priced in dollars.

3.) Shrinking excess oil production capacity.....did anyone know that China's auto sales grew more than 50% year over year?

I think the possibility of much higher energy prices is rising......

The good news is that Natural Gas is still cheap by comparison.

[Violet Fashion by Mindy]

The whole supple and demand issue is artificially being constructed by the oil companies and speculators to drive up the price to increase profits. That’s it.

For sure China, India are using more oil. But oil companies have closed down refineries, refused to build new ones and are using cost prohibitive refineries. Result?

High prices because current policy of the oil companies is to enhance profits. Not to invest in new refinery technologies to lower consumption because that will result in lower profits. Not to build new infrastructure because that will increase overheads.

Screw the oil companies. There behaviour in the past 10 years is one of arrogance. They should be nationalised IMO.

[wubanga101]

The whole supple and demand issue is artificially being constructed by the oil companies and speculators to drive up the price to increase profits. That’s it.

For sure China, India are using more oil. But oil companies have closed down refineries, refused to build new ones and are using cost prohibitive refineries. Result?

High prices because current policy of the oil companies is to enhance profits. Not to invest in new refinery technologies to lower consumption because that will result in lower profits. Not to build new infrastructure because that will increase overheads.

Screw the oil companies. There behaviour in the past 10 years is one of arrogance. They should be nationalised IMO.
sounds a bit commie there:)

[Irish]

sounds a bit commie there:)

He Is Wright in what he is saying!!..I drive a family saloon car.,1.5 engine.

here In Ireland its costing us €1.20 a LITRE of petrol!!..

Its crazy,and its gonna get worse..all because of greed.

[Violet Fashion by Mindy]

sounds a bit commie there:)

You make that sound like it's a bad thing

[mattnwnc03]

sounds a bit commie there:)


sounds a bit fed up like me, we just hate being screwed over by whitey.

[wubanga101]

Im just saying it as I see it...not that I am disagreeing though.

[Kilgor]

The whole supple and demand issue is artificially being constructed by the oil companies and speculators to drive up the price to increase profits. That’s it.

For sure China, India are using more oil. But oil companies have closed down refineries, refused to build new ones and are using cost prohibitive refineries. Result?

High prices because current policy of the oil companies is to enhance profits. Not to invest in new refinery technologies to lower consumption because that will result in lower profits. Not to build new infrastructure because that will increase overheads.

Screw the oil companies. There behaviour in the past 10 years is one of arrogance. They should be nationalised IMO.


Check out this report by 4 corners on Peak oil.

http://abc.net.au/4corners/special_eds/20060710/

[Violet Fashion by Mindy]

I'm at work so I can't look at it. But what is the jist of the program.

[akd]

The whole supple and demand issue is artificially being constructed by the oil companies and speculators to drive up the price to increase profits. That’s it.

For sure China, India are using more oil. But oil companies have closed down refineries, refused to build new ones and are using cost prohibitive refineries. Result?

High prices because current policy of the oil companies is to enhance profits. Not to invest in new refinery technologies to lower consumption because that will result in lower profits. Not to build new infrastructure because that will increase overheads.

Screw the oil companies. There behaviour in the past 10 years is one of arrogance. They should be nationalised IMO.
Profit Averages for Last Five Years by sector (in cents per $ of sales)

1. Banking (17.3)
2. Pharmaceuticals (16.2)
3. Real Estate (10.8)
4. Insurance (7.7)
5. Health Care (7.7)
6. Software & Services (7.6)
7. Consumer Durables (6.8)
8. Food, Beverage & Tobacco (6.7)
9. Oil & Natural Gas (5.8)
10. All U.S. Industry (5.5)
11. Utilities (5.2)
12. Retailing (3.4)
13. Telecommunications (3.3)

So, based on profits, should we nationalize all U.S. industry?

Would you also like to see price increase in consumer goods 1970-2006? Guess what is no where near the top? Guess what is at the top?

[Flagg]

The whole supple and demand issue is artificially being constructed by the oil companies and speculators to drive up the price to increase profits. That’s it.

For sure China, India are using more oil. But oil companies have closed down refineries, refused to build new ones and are using cost prohibitive refineries. Result?

High prices because current policy of the oil companies is to enhance profits. Not to invest in new refinery technologies to lower consumption because that will result in lower profits. Not to build new infrastructure because that will increase overheads.

Screw the oil companies. There behaviour in the past 10 years is one of arrogance. They should be nationalised IMO.


Actually Fortune magazine came out with an article recently dispelling this common belief.

In a nutshell:

The international market for energy is HUGE

Even the biggest couple of oil companies combined in the world control only a small percentage of total traded volume making market manipulation by oil companies statistically impossible.

Any oil refineries being shut down in the West is primarily due to legal/environmental/NIMBY issues...same goes for new construction.

There are HEAPS of new refineries being built in places like China, where NIMBYism is not an issue.

Energy companies ARE investing massive amounts of money into capital projects because they now possess the cashflow to do so profitably.......only a fool would want to build a refinery when oil is $10 a barrel like 5-6 years ago when oil majors were losing money with every barrel sold.

There are HUGE lags in brining new production on stream and into the marketplace:

Discovering new fields costs big money using big brains and supercomputers to guestimate the best test holes.

Drilling new holes costs about $500K a day per rig at the moment...if you ca Get A RIG that is.

New discoveries are getting smaller and are more challenging(ergo $$$) to reach.

Building recovery and transport infrastructure costs BILLIONS and takes years....and the more challenging the location the higher the price and the longer the time.

Building a refinery to turn it into useable product is another billion(or more if it is heavy crude since light/sweet is getting harder to find) and takes another 5 years from start to turn key running.

In a nutshell......from the time a new, economically feasible field is discovered until the actual recovered refined product is running your Toyota Landcruiser is approximately 8-10 years......that's a looooong time and an opportunity for energy prices to shoot much higher.

So in a nutshell:

Are energy companies enjoying record profits?

Yes....I'd say deservedly so after getting crushed a couple years back at $10 a barrel....if they received no subsidies then, they should not be taxed excessively now.

Are energy companies manipulating the multi-trillion dollar energy market?

No....that would equate to a 1000 independant retail petrol stations conspiring to manipulate pricing.......it's nearly impossible.....I put this theory in the same category as a staged moon landing....too many people would be involved to keep the dirty secret, and proof of it, from getting out.

Do we run the risk of yet another 73/80 energy crisis?

Yes......while I believe the market is most efficient and governments should remain as hands off as possible, the incredibly long lag between the stimulus(energy demand curve is out accelerating supply curve leaving little "wiggle room") and the response(increasing capacity to avoid a supply/demand crunch) is excessive and I"m starting to think we are in a bit of trouble.

I equate us to being on the Titanic at the moment...we can see the iceburg, we're starting to turn to avoid it, but we can't exactly turn a gigantic global economy on a dime, so at the very least we're going to bump into it....we probably will not sink...but it's going to spill a lot of martinis in the process.

[Violet Fashion by Mindy]

Some nice points but I can’t help but to disagree with a lot of it.

I disagree with the government hands off approach. Simply because the oil companies are acting for their own benefit and not the national interest. For example say a company buys oil at $60 a barrel which equates roughly to $1.30 a litre at the pump. They buy enough oil to supply the refinery for a month at this price. 1 week into the month a bomb in Saudi Arabia sends prices to $75 a barrel. Despite buying at a lower price they instantly raise the price at the pump to reflect the price of oil on the market. Not what they purchased the oil at. This equates to huge profit margins by the oil companies. Even though they already have their supply and demand dose not change.

Hence in my opinion, the oil industry because of it’s strategical importance to the national economy like railways, ports, water, power, and phone companies need to be nationalised. Have a fund set up to ensure continued investment in new technologies.

Government ownership of business is not a bad thing. There is enough evidence that proves government ownership can work with the right legislative procedures in place. For most of the 20th Century many of Australia’s iconic companies were wholly owned by the government and we did not see the large inefficiencies that have plagued many other nations nationalisation efforts.

Pacific National
Queensland Rail
And the other Railways
Australia Post
Telstra
All of the electricity and water companies
Commonwealth Bank
QANTAS
ADI

Have all at one point in time were government owned or still are government owned. And the ones that are still government owned provide the government(s) with a handy dividend each which if done right can foster lower taxes. And with lower taxes we all know what that means don’t we? Increased consumer spending, increased employment.

Apologies for going off topic a bit. Got carried away J

[Kilgor]

I'm at work so I can't look at it. But what is the jist of the program.

COLIN CAMPBELL, ASSOCIATION FOR THE STUDY OF PEAK OIL: Every oilfield has an individual profile of - it's found, it eventually ends, it has a peak or plateau in between. And when you add up all the individual fields, naturally, that gives a corresponding pattern for the country or region and eventually the world as a whole. The way to study this is to look at every individual country and every individual field and put them together, which in fact I have done.

JONATHAN HOLMES: United States land-based production peaked way back in 1972. The discovery of Alaska's giant Prudhoe Bay field reversed the decline briefly. But, despite all America's technology, the curve has proceeded downwards.

Country after country has followed a similar path. Russia, Venezuela, Indonesia. According to Chevron, in 33 of the world's 48 most important oil producing countries production has already peaked. Australia's peak crude oil production was passed in 2000.

[AOCBravo2004]

Simply because the oil companies are acting for their own benefit and not the national interest.

That is what is called capitalism. The whole purpose of business in our society (America) is to make as much profit as possible.

[Flagg]

Some nice points but I can’t help but to disagree with a lot of it.

I disagree with the government hands off approach. Simply because the oil companies are acting for their own benefit and not the national interest. For example say a company buys oil at $60 a barrel which equates roughly to $1.30 a litre at the pump. They buy enough oil to supply the refinery for a month at this price. 1 week into the month a bomb in Saudi Arabia sends prices to $75 a barrel. Despite buying at a lower price they instantly raise the price at the pump to reflect the price of oil on the market. Not what they purchased the oil at. This equates to huge profit margins by the oil companies. Even though they already have their supply and demand dose not change.


Again, you are only sharing one side of the coin.

If a long-term supply agreement is reached at $60 a barrel, and either the Australian dollar strengthens dramatically while the contract plays out or the international spot price drops because the world suddenly starts acting like the Care Bears..then said company is under serious pressure to reduce prices.

The oil company takes the RISK of buying a long-term supply contract, therefore deserves the REWARD( or conversely punishment if their strategy fails).

Your example uses ONE oil company as if it is a monopoly...ALL the oil majors operate in Australia's case, no single company controls a market monopoly, EACH operates independantly and in competition with each other. If ONE company wishes to expad it's market share it has two choices, invest in retail infrastructure and/or reduce prices...there is a limit to how many petrol stations can be built out without cannobolizing sales, therefore the only other optioin is competing on price.....by having multiple players each trying to profit competing with each other the fair market price is reached.

Unfortunately, the huge increase in spot price which has migrated over to retail prices in the past year has really ticked people off and they are looking to blame someone......unfortunately, few if any are taking responsibility for their own actions and pointing the fingers at themselves for being so overly dependent upon petroleum.





Hence in my opinion, the oil industry because of it’s strategical importance to the national economy like railways, ports, water, power, and phone companies need to be nationalised. Have a fund set up to ensure continued investment in new technologies.

Government generated innovation?!?!?! Yeah right......without the opportunity to take big risks for a chance at a bigger reward the answer will be what it always has been with nationalized services........@ss-covering and wastage from being spending other people's money and not held to account.


Government ownership of business is not a bad thing. There is enough evidence that proves government ownership can work with the right legislative procedures in place. For most of the 20th Century many of Australia’s iconic companies were wholly owned by the government and we did not see the large inefficiencies that have plagued many other nations nationalisation efforts.

Pacific National
Queensland Rail
And the other Railways
Australia Post
Telstra
All of the electricity and water companies
Commonwealth Bank
QANTAS
ADI

Have all at one point in time were government owned or still are government owned. And the ones that are still government owned provide the government(s) with a handy dividend each which if done right can foster lower taxes. And with lower taxes we all know what that means don’t we? Increased consumer spending, increased employment.

Apologies for going off topic a bit. Got carried away J

I think you paint an overly rosy portrait of nationalization.

Any industry government owned is likely to receive:

*preferential treatment(NO government can truly treat an industry fairly if said government owns one of the biggest players in said industry....would you let Bill Gates be responsible for regulating the software industry in Australia? If not, then why let a government regulate an industry in which it possesses vested interests...it is patently unfair and infringes on the citizens owning shares in the competition)
*huge barriers to entry for private competition(Who wants to enter an industry where the government is your competition?)
*political intervention(Where there is money, there is power, there is influence, and no mater what barriers you put in the way, governming party minions will be pulling strings)

Without competition, prices always creep in one direction........upwards.

With nationalized oil public pressure would SCREAM to reduce prices or the government would be sacked....so prices would be reduced...at the expense of something else because in effect tax dollars would be paying for any petroleuem price reduction...simply shifting money feom one department to another.

Then the worst part happens....in Australia's case....Australians would then enjoy lower than market priced petroleum products...since Australians are both incredibly eutreprenuerial and even more dodgy it would take about half a picosecond before a black market developed to illegally export under-priced "black gold" to places like New Zealand that possessed no government intervention.

If you don't believe me, do some research on the very same thing that is happening to your north.....in order to keep the lemmings happy that is exactly what has happened and the amoutn of illegal activity and corruption it has generated is simply staggering.

That boat don't float

If you feel you are a slave to petrol prices, work the problem, reduce your own personal dependancy and regain your freedom.

My only personal issue with rising prices is the distinct lack of energy prices being an integral part of official inflation index publication.

If energy costs were added(as they should be) we'd be showing a MUCH higher(and more accurate) inflation figure.

[Flagg]

COLIN CAMPBELL, ASSOCIATION FOR THE STUDY OF PEAK OIL: Every oilfield has an individual profile of - it's found, it eventually ends, it has a peak or plateau in between. And when you add up all the individual fields, naturally, that gives a corresponding pattern for the country or region and eventually the world as a whole. The way to study this is to look at every individual country and every individual field and put them together, which in fact I have done.

JONATHAN HOLMES: United States land-based production peaked way back in 1972. The discovery of Alaska's giant Prudhoe Bay field reversed the decline briefly. But, despite all America's technology, the curve has proceeded downwards.

Country after country has followed a similar path. Russia, Venezuela, Indonesia. According to Chevron, in 33 of the world's 48 most important oil producing countries production has already peaked. Australia's peak crude oil production was passed in 2000.


I believe in Peak Oil.......but it's a question of degree.

Some peope are putting on their aluminum foil hats and building bunkers in Idaho...I'm more of a "glass half full" Peal Oil believer.

One fundamental problem I have is the inherent weakness in our system of government...short election term cycles.

Why deal with a long term problem when you are not incentivized by doing so?

A western politician that suggests raising taxes to put into place a long term plan for energy independence that we NEED (without showing an immediate payback to his/her constituents) is doomed come the next election when the people will elect a politician to give them what they WANT(more SUVs and cheap credit to buy more Chinese made rubber dog poop).

I'm not a fan of dictatorships(or government intervention)...but I envy the power a benign dictatorship would have in making long-term positive changes NOW that could soften the blow for the little guy who gets hurt the worst when we see energy prices REALLY climb.

[Kilgor]

I'm not a fan of dictatorships(or government intervention)...but I envy the power a benign dictatorship would have in making long-term positive changes NOW that could soften the blow for the little guy who gets hurt the worst when we see energy prices REALLY climb.

yes, a bit of pain now will save alot of pain later. But western politics and oil consumption are so short sighted that its going to come back to bite us on the arse.. and hard.

People laughed at jimmy carters energy plans but look at the situation now .

[foxtrot023]

In my opinion, the current spot price is rising for 3 reasons:

1.) "Risk premium" that some estimate at 10-15 dollars a barrel due to issues in Iraq, Iran, the Kablamistans, North Korea, nationalization of energy assets in Russia, Venezuela, Bolivia, and now the expanding conflict related to Israel.

2.) US dollar denominated inflation....the more dollars that get printed and created out of thin air...the more expensive things get priced in dollars.

3.) Shrinking excess oil production capacity.....did anyone know that China's auto sales grew more than 50% year over year?

I think the possibility of much higher energy prices is rising......

The good news is that Natural Gas is still cheap by comparison.

Flagg, good post

I would only add that demand is not going to diminish but increase and India and China continue to develope.

Folks, in a nut shell this is basically it, except that the risk premium is more in the order of $20-$25. Trust me when I tell you folks to kiss goobye to $20-$30 USD per barrel, those days a long gone and will never come back. The most optimistic price we can see if everything calms down is $45-$55 per barrel. The choices are simple- electric cars and more nuclear/Wind/Solar/Tide/fusion power. I hope all of this ramps up R&D dollars into fusion.

The stock market is watching oil like a hawk, since it has a very direct impact on inflation, which in turn affects the FED rate, which in turns affects LIBOR, credit cards car home and all kinds of loans.


ed. Word of advice, be careful with credit cards, home payments and loans, they will go up, try to dimish debt to the max unless you have a fixed rate for the duration of the loan. Bearish Structured notes are being called, which means that the main trade banks (Lehman, UBS, Calyon, etc) fear that inflation will continue to go up. The FED rate will probly be raised to 5.5% and then the fed will go into a wait and see pattern.

[Greek soldier]

Oil affects global development very negatively. Russia, Iran and the ME countries are now making billions of $$$...

[kraf001]

Oil affects global development very negatively. Russia, Iran and the ME countries are now making billions of $$$...
well Iran alone had 400% increase in oil revenue since 2003!... a gallon of fuel is 34 US cents in Iran..

[vryhpyammoadded]

For sure China, India are using more oil. But oil companies have closed down refineries, refused to build new ones and are using cost prohibitive refineries. Result?

Well, it looks to me that those industrious little buggers in China better get cracking and build a bunch of refiner…


There are HEAPS of new refineries being built in places like China, where NIMBYism is not an issue.

LOL, too late…


I equate us to being on the Titanic at the moment...we can see the iceburg, we're starting to turn to avoid it, but we can't exactly turn a gigantic global economy on a dime, so at the very least we're going to bump into it....we probably will not sink...but it's going to spill a lot of martinis in the process.

Best allegorical comparison ever!

[Flagg]

well Iran alone had 400% increase in oil revenue since 2003!... a gallon of fuel is 34 US cents in Iran..

Since fuel is essentially subsidized in Iran compared with border nations, is there much of a black market of fuel being illegally exported into Turkey/Pakistan?

[Authority25]

When the oil reaches its peak, there might be a fall in the western World.

[Violet Fashion by Mindy]

I think you paint an overly rosy portrait of nationalization.

Any industry government owned is likely to receive:

*preferential treatment(NO government can truly treat an industry fairly if said government owns one of the biggest players in said industry....would you let Bill Gates be responsible for regulating the software industry in Australia? If not, then why let a government regulate an industry in which it possesses vested interests...it is patently unfair and infringes on the citizens owning shares in the competition)
*huge barriers to entry for private competition(Who wants to enter an industry where the government is your competition?)
*political intervention(Where there is money, there is power, there is influence, and no mater what barriers you put in the way, governming party minions will be pulling strings)

Without competition, prices always creep in one direction........upwards.

With nationalized oil public pressure would SCREAM to reduce prices or the government would be sacked....so prices would be reduced...at the expense of something else because in effect tax dollars would be paying for any petroleuem price reduction...simply shifting money feom one department to another.

Then the worst part happens....in Australia's case....Australians would then enjoy lower than market priced petroleum products...since Australians are both incredibly eutreprenuerial and even more dodgy it would take about half a picosecond before a black market developed to illegally export under-priced "black gold" to places like New Zealand that possessed no government intervention.

If you don't believe me, do some research on the very same thing that is happening to your north.....in order to keep the lemmings happy that is exactly what has happened and the amoutn of illegal activity and corruption it has generated is simply staggering.

That boat don't float

If you feel you are a slave to petrol prices, work the problem, reduce your own personal dependancy and regain your freedom.

My only personal issue with rising prices is the distinct lack of energy prices being an integral part of official inflation index publication.

If energy costs were added(as they should be) we'd be showing a MUCH higher(and more accurate) inflation figure.

Meh

We subscribe to different economic thoeries. That's all I have for now. :)

[kraf001]

Since fuel is essentially subsidized in Iran compared with border nations, is there much of a black market of fuel being illegally exported into Turkey/Pakistan?
try 60% :-( Iran doesn't need to import a drop of fuel if there was no illegal export! (I made a more detailed post (http://www.militaryphotos.net/forums/showpost.php?p=1757668&postcount=23) about this before)

[Flagg]

try 60% :-( Iran doesn't need to import a drop of fuel if there was no illegal export! (I made a more detailed post (http://www.militaryphotos.net/forums/showpost.php?p=1757668&postcount=23) about this before)

See Minardiau? Nationalizing is the devil :)

[Violet Fashion by Mindy]

Nah

Handled correctly it can be good practice. The companies I mentioned previously were cases in point.

Even the companies that are still owned by the reletive state and federal governments are run like a company. They follow the same accounting rules as any other company. They are expected to make money and in most cases they do.

There is a huge difference between government owned companies and nationalisation of industry. Provided the correct regulations are in place nationalisation can be benificial.

There is problems with monopolies forming. However Ansett competed with QANTAS quite well whilst QANTAS was government owned and even managed at one point to have more market share then the government owned airline .

[Irish]

See Minardiau? Nationalizing is the devil :)

The Govn't takes a big wad of tax(In Ireland Anyway) from oil revenue so I can't imagine that making it any better.

[perdurabo]

He Is Wright in what he is saying!!..I drive a family saloon car.,1.5 engine.

here In Ireland its costing us €1.20 a LITRE of petrol!!..

Its crazy,and its gonna get worse..all because of greed.
duno about your country but we have similiar prices and 90% of petrol is goverment tax, i agree 100% greed, goverment greed that is, nationalization would change it for worse.

[Kingswat]

it amazes me that as soon as the oil prices go up, they raise the gas prices around the world, yet the gas that is in the gas stations didn't come from the oil that day, therefore the price shouldn't need to be raised. It takes about 20 days for the crude to be turned into gas and shipped to the stations. So all this crap with the gas prices going up everyday is just an excuse for the oil company execs to fill their pockets.

[Greek soldier]

^^ The same happens here, even though the prices in the Commodity Markets are forward oil contracts (e.g. August contract)...

Cleptocracy at its bests...

[Clarsachier]

quotes for the house. California and the Feds bumped up their rebate incentives so that we'll only have to pay less than half the cost. The electricity providers are saying that they can't possibly keep up with demad, in the short term.

Right now, it looks like about $40K for a 1100 watt system. Installation issues will raise the price higher.

That's about $225.00 per month, using a real estate equity loan. But, the price of electricity has doubled since Ahrnold got into office so, this is a great
deal.

[Flagg]

quotes for the house. California and the Feds bumped up their rebate incentives so that we'll only have to pay less than half the cost. The electricity providers are saying that they can't possibly keep up with demad, in the short term.

Right now, it looks like about $40K for a 1100 watt system. Installation issues will raise the price higher.

That's about $225.00 per month, using a real estate equity loan. But, the price of electricity has doubled since Ahrnold got into office so, this is a great
deal.

$40 THOUSAND for 1100 watts!?!?!

That's robbery even for a federally subsidized system.

The reason I'm surprised is that I've been researching a system for our wee castle.

What I've found is the following:

Solar water heating seems to offer the best ROI. For our particular location it's guaranteed to pay for our entire hot water needs(anywhere from 25-40% of average home electricity costs) for about 9 months out of the year, and about half for the remaining months.

My Excel spreadsheet says about 5-6 years for it to pay for itself..but our case is a simple, easy to retrofit house facing the right way.

As far as solar electric...prices I've found without even trying to screw for price are currently under $10 NZ a watt which would make for $11k NZ for panels(under $7k US). Other than that all you need is a couple of grand for an inverter, some wiring and a sparky to tie you into the grid(assuming you're allowed to in your locale)....unless I've missed something.

What I found is that one of the biggest costs is the batteries.....IF you can grid-tie you can "Sell" juice back to your power company when not using it....it all comes down to whether you can "sell" at retail or wholesale price...obviously the best situation is one where you can take out what you've put back as a wash and negate the need for batteries.

I'm no pro, but that's what I've found recently.

[Clarsachier]

$40 THOUSAND for 1100 watts!?!?!

That's robbery even for a federally subsidized system.

The reason I'm surprised is that I've been researching a system for our wee castle.

What I've found is the following:

Solar water heating seems to offer the best ROI. For our particular location it's guaranteed to pay for our entire hot water needs(anywhere from 25-40% of average home electricity costs) for about 9 months out of the year, and about half for the remaining months.

My Excel spreadsheet says about 5-6 years for it to pay for itself..but our case is a simple, easy to retrofit house facing the right way.

As far as solar electric...prices I've found without even trying to screw for price are currently under $10 NZ a watt which would make for $11k NZ for panels(under $7k US). Other than that all you need is a couple of grand for an inverter, some wiring and a sparky to tie you into the grid(assuming you're allowed to in your locale)....unless I've missed something.

What I found is that one of the biggest costs is the batteries.....IF you can grid-tie you can "Sell" juice back to your power company when not using it....it all comes down to whether you can "sell" at retail or wholesale price...obviously the best situation is one where you can take out what you've put back as a wash and negate the need for batteries.

I'm no pro, but that's what I've found recently.

Thank you, Flagg. I'm getting a couple of installation quotes which I will share. (My contribution to creating an energy efficient USA!!!!)

The way it works in my area is this ; It's like a bank account - we're tied into the grid, during the day the solar array pumps electricity into the grid which makes our electric meter turn backward, (assuming we're using less than is generated). During the night, we use energy from the grid.

As long as the meter is negative, we don't get an electric bill. But we don't get paid for the energy. (This is Kalifornia, after all.) I believe that the key is to buy enough panels so that your average yearly energy needs are met, but
not exceeded - i.e. we'll feed more into the system in the summer than we will
in the winter but we are taking more out in the winder. It needs to balance.
Also, I'll look into some kind of storage arrangment, but batteries are expensive and require maintenance.

Yes, we're getting ripped off. But more by the power companies. Our electric
has gone up 45% in the past year!!!

I'm a bit foggy as to why this is, I know the rate increase is tied to increased demand. It's quite alarming.

[Flagg]

Thank you, Flagg. I'm getting a couple of installation quotes which I will share. (My contribution to creating an energy efficient USA!!!!)

The way it works in my area is this ; It's like a bank account - we're tied into the grid, during the day the solar array pumps electricity into the grid which makes our electric meter turn backward, (assuming we're using less than is generated). During the night, we use energy from the grid.

As long as the meter is negative, we don't get an electric bill. But we don't get paid for the energy. (This is Kalifornia, after all.) I believe that the key is to buy enough panels so that your average yearly energy needs are met, but
not exceeded - i.e. we'll feed more into the system in the summer than we will
in the winter but we are taking more out in the winder. It needs to balance.
Also, I'll look into some kind of storage arrangment, but batteries are expensive and require maintenance.

Yes, we're getting ripped off. But more by the power companies. Our electric
has gone up 45% in the past year!!!

I'm a bit foggy as to why this is, I know the rate increase is tied to increased demand. It's quite alarming.


Yeah...I'm not going near ANY batteries to be honest...too expensive...unless I can find free/nearly free golf cart batteries and daisy chain them.

Have a look at Mother Earth News...great mag on sustainable living(once you get past the left-wing bias). And they've got a lot of ads for PV panels.

Maybe consider buying your components directly and then paying an installer to JUST install...in case there's a lot of markup hidden in the installer's quotes.

PV panel prices SHOULD be dropping(since manufacturing prices are dropping) but they don't seem to be......inflation and a recent mad rush by many to install PV systems means PV contractors are BUSY.

House alignment is critically important for a retrofitted system...hopefully your house is lined up well, I've been told it can DRAMATICALLY impact ROI.

[Belrick]

Sigh.
People talk of the greed of oil companies for making a profit yet no mention of there own greed which drives them to burn a valuable resource future generations could of used to create cool stuff like plastic from.

[praetorian6]

Sigh.
People talk of the greed of oil companies for making a profit yet no mention of there own greed which drives them to burn a valuable resource future generations could of used to create cool stuff like plastic from.

I think the arguement here is there is a difference from making a fair profit and bending over the consumers everytime people starting shooting in the mideast...or there's a natural disaster...or it's too hot outside...or it's Thursday...

[caridon]

Solar water heating seems to offer the best ROI. For our particular location it's guaranteed to pay for our entire hot water needs(anywhere from 25-40% of average home electricity costs) for about 9 months out of the year, and about half for the remaining months.

My Excel spreadsheet says about 5-6 years for it to pay for itself..but our case is a simple, easy to retrofit house facing the right way.

As far as solar electric...prices I've found without even trying to screw for price are currently under $10 NZ a watt which would make for $11k NZ for panels(under $7k US). Other than that all you need is a couple of grand for an inverter, some wiring and a sparky to tie you into the grid(assuming you're allowed to in your locale)....unless I've missed something.

What I found is that one of the biggest costs is the batteries.....IF you can grid-tie you can "Sell" juice back to your power company when not using it....it all comes down to whether you can "sell" at retail or wholesale price...obviously the best situation is one where you can take out what you've put back as a wash and negate the need for batteries.

I'm no pro, but that's what I've found recently.

More OT:
Try looking into bedrock heat.
It gives you about 3times as much heatenergy out as you put in electrical energy
And it works all year. (usualy needs 4-5 days downtime a year for maintanence)
It can (with the right equipment) suply you with all your hot water needs
And (again with the right equipment) it can supply you with cold during the summer if that is needed.

Our house (203 appartments) are installing a system that will cut our hetingcosts by 80%.
it has a payback of 8-9 years and the system is garanteed for 20/90 years (pump/drilled holes)
The cost of the pump is only about 15-20% of the system so after 20-30 years you get a "new" sytem very cheap.

/C

[Clarsachier]

More OT:
Try looking into bedrock heat.
It gives you about 3times as much heatenergy out as you put in electrical energy
And it works all year. (usualy needs 4-5 days downtime a year for maintanence)
It can (with the right equipment) suply you with all your hot water needs
And (again with the right equipment) it can supply you with cold during the summer if that is needed.

Our house (203 appartments) are installing a system that will cut our hetingcosts by 80%.
it has a payback of 8-9 years and the system is garanteed for 20/90 years (pump/drilled holes)
The cost of the pump is only about 15-20% of the system so after 20-30 years you get a "new" sytem very cheap.

/C

Geothermal activity in my area is about a kilometer down. Cost to excavate is
about $100. per foot. (Same as well drilling cost.) But, here's a company who
make a unit they say will function without a geothermal source.

http://www.waterfurnace.com/content.aspx?section=residential&page=loop

The Austrians are leading the field in development of 'deep source' geothermal.

http://geoheat.oit.edu/bulletin/bull26-2/art7.pdf

[caridon]

Geothermal activity in my area is about a kilometer down. Cost to excavate is
about $100. per foot. (Same as well drilling cost.) But, here's a company who
make a unit they say will function without a geothermal source.

http://www.waterfurnace.com/content.aspx?section=residential&page=loop

The Austrians are leading the field in development of 'deep source' geothermal.

http://geoheat.oit.edu/bulletin/bull26-2/art7.pdf


The design shown in your first link is the one we (and lots of other places in sweden) use. We are drilling 30 215meter deep holes and will use a teperature diferential of about 5 C (measured betwen water going down and watter comming up from the well). You dont need more than 4-5C diferential to make the system work.

/C

[Clarsachier]

The design shown in your first link is the one we (and lots of other places in sweden) use. We are drilling 30 215meter deep holes and will use a teperature diferential of about 5 C (measured betwen water going down and watter comming up from the well). You dont need more than 4-5C diferential to make the system work.

/C

That's interesting stuff, thanks. It's not for me because unfortunately, my need for heating is matched by my need for airconditioning.

Temperatures here in Southern California are reaching unprecedented highs. It was 108 F Sunday.

[Flagg]

More OT:
Try looking into bedrock heat.
It gives you about 3times as much heatenergy out as you put in electrical energy
And it works all year. (usualy needs 4-5 days downtime a year for maintanence)
It can (with the right equipment) suply you with all your hot water needs
And (again with the right equipment) it can supply you with cold during the summer if that is needed.

Our house (203 appartments) are installing a system that will cut our hetingcosts by 80%.
it has a payback of 8-9 years and the system is garanteed for 20/90 years (pump/drilled holes)
The cost of the pump is only about 15-20% of the system so after 20-30 years you get a "new" sytem very cheap.

/C

Cheers mate......

I actually have looked into geothermal a little bit.

My problem with geothermal is it seems like relatively new technology.

I almost bought a couple of those water furnances new at auction last year from a company liquidation, but decided against it at the last moment due to some really bad feedback I had read about them.....don't know if it was true...but it was enough to put me off of it for now as I'm no expert.

Let us know how it goes with your installation, I would be quite interested to hear about it. ;)

[vryhpyammoadded]

What I found is that one of the biggest costs is the batteries.....IF you can grid-tie you can "Sell" juice back to your power company when not using it....it all comes down to whether you can "sell" at retail or wholesale price...obviously the best situation is one where you can take out what you've put back as a wash and negate the need for batteries.

I'm no pro, but that's what I've found recently.


I’ve been figuring out the same costs here in sunny Florida and solar looks to free me of this kilowatt hour banditry they charge in my location. August electrics can get as high as $250 and, that’s for 1000 sft, hardly using the AC and living in near darkness! I’ve already settled on a home made water heat system for my new home but am having fits for the very same reasons you discuss concerning the electrical needs. Solar electric is prohibitively expensive but there may be options here in the US with distressed and foreclosed businesses or used telecom, DOD and government back up systems.
I met a guy near Orlando with a nice monolithic dome house that has old used telco backup batteries for his solar setup. He got the idea from the Whole Earth people too. He’s a crazy like a fox old hippie; very cool guy.
I don’t know about alternative battery sources in your neck of the woods and wouldn’t recommend the postage from here. Lead Acid batteries are dam heavy ;)

[vryhpyammoadded]

More OT:
Try looking into bedrock heat.
It gives you about 3times as much heatenergy out as you put in electrical energy
And it works all year. (usualy needs 4-5 days downtime a year for maintanence)
It can (with the right equipment) suply you with all your hot water needs
And (again with the right equipment) it can supply you with cold during the summer if that is needed.

Our house (203 appartments) are installing a system that will cut our hetingcosts by 80%.
it has a payback of 8-9 years and the system is garanteed for 20/90 years (pump/drilled holes)
The cost of the pump is only about 15-20% of the system so after 20-30 years you get a "new" sytem very cheap.

/C

I’ve actually thought about using this idea. Sweet, so someone has already done the development work! I often wondered seeing that underground temperatures three or more meters down was fairly constant at around 15C to 16C that one could somehow use the differential to pump a refrigerant like ammonia using a Sterling engine. Very nice!
Time to go a googling…

Thanx

[caridon]

Cheers mate......

I actually have looked into geothermal a little bit.

My problem with geothermal is it seems like relatively new technology.

I almost bought a couple of those water furnances new at auction last year from a company liquidation, but decided against it at the last moment due to some really bad feedback I had read about them.....don't know if it was true...but it was enough to put me off of it for now as I'm no expert.

Let us know how it goes with your installation, I would be quite interested to hear about it. ;)

Dont know about NZ but upp here in the cold north we have been doing this for the last 30 od years.
The tecnology is not that hard (just a variant of a refridgerator)

The important bit is the geological experience of the contractor (so you get enough heatflow in the wells ) and the quality of the exuipment


http://www.malmberg.se/ (these do our installation, good stuff)
our place:
http://www.malmberg.se/module.asp?XModuleId=6786&page=detail&NewsId=6132

/C

[Clarsachier]

This from a local vendor ;
$30,000. for 6KW array he believes we'll need for our 1-2 KW requirement.
$20,000. installation and hardware. (We're being extravagent - we want a really cool looking setup.)
-$15,600.00 California's current incentive, $2.60 per KW.
-35% Federal TAX incentive. (whatever that means?)
If we finance the remaining US$ 34,400. using our home equity loan, we'll be paying $250. or so in interest alone, per mo.. About equal to our current electric bill. Except, that interest is tax deductable.

We need to discover what the tax incentives really mean. Additionally, if I buy 4 avocado trees - 'we're a farm' :roll: Then everything's s business expense.

So the issue's up to our tax man to determine ;
1: How much money will we actually realize from the Fed incentive?
2: We the state up our real estate tax, based on the 50,000 home improvement?(reassess us)? We couldn't afford that
since Kalifornia already gets us for $4000. per year.
3: What other tax advantages might apply to make this more viable.
4: What type of appreciation will the unit add to our home value?

One thing's certain, energy prices will only go up. So while $300. (tax deductable) interest on a solar system might be currently higher than we are paying for electricity - in 2-3 years, it will probably be a real deal.:-(

BTW, this pricing is based on Kyocera photoelectric panels made under nafta
right over the border. The panels are produced to order. Probably to avoid over production of solar panels which would lower the price of panels. Only
mass production of the panels has the potential of decreasing the cost of
solar energy. There's no technological breakthrough on the horizon for
photoelectric conversion.

Next, I'll be getting a quote from a major corporation. (Home depot.)

[kabex]

$78 bucks? You don't say!

I am very glad. Sorry, Americans.

State-owned oil surely is a nice thing. :D