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The real problem is that I (and apparently a lot of other people with way more money than me) prefer to use my/our swimming pool(s) to store oil as an alternative to having $ in the bank due to the bearded mad man printing like crazy. Before he stops I just have the incentive to extend the pool and buy up the strategic reserves on borrowed cash - so I completely fail to understand how your "solution" address the real problem?!?!?
Only total war will require the Reserve to be used and only for Essential Military use.
When this thing blows over and we are all back to 50 dollar oil, the Government will do well to build additional stocks across the Nation. And open Anwar, start drilling both coasts and Gulf etc etc etc.
Or go back to horsemanship and Steam train technology that did very well for a hundred years.
Killing The Dollar Soflty with QE
Killing The Dollar Soflty with QE
High oil means high profit. Money for D.C. and Wall Street lads. It is simple math--- more money equals more graft. More fuel tax equals more graft. Graft Gone Wild
WTF! Does anyone here believe the Obama or anyone else is doing things for the benefit of the country? We are now living in suspended animation - everyone knows (who isn't a sheeple) that the game is over. It's like we're watching an RPG round flying in slow motion toward a depot filled with gasoline. We can't stop it, we know what the end result will be, and we're frozen in anticipation. CD laid it out nicely. On his deathbed, after drinking the hemlock, Socrates asked his friend to settle up a debt - he owed someone a chicken, and asked his friend to repay it. Wanted everything squared away as he passed into a new world...
"On his deathbed, after drinking the hemlock, Socrates asked his friend to settle up a debt - he owed someone a chicken, and asked his friend to repay it."
True story: Socrates' friend, a banker, kept the money, and told the chicken farmer that Socrates's final words were: "F--- that chicken farmer, I'm defaulting." As the banker was leaving Socrates, he asked, "So how's that hemlock doing you?"
1) No one has mentioned China and India's exploding consumption that is far outstripping the rate at which the black stuff comes out of the ground.
2) Fukishima . . . the quake . . . the tsunami . . . translates into immediate road repair, cars back on the road, joined by 15 zillion bulldozers that get 0.5 miles/gallon, plus huge Honda gasoline powered electric generators to replace the electricity that will NEVER AGAIN be produced from those nuke plants. Sorry sports fans, the quake is going to ramp UP Japan consumption, not reduce it.
3) Oil was climbing in price before Libya hit the radar screen, for the simple reason that China and India are exploding and geology . . . is going to win this battle.
This is an example of being in love with a story. We're talking about todays price; today, when alll the storage elements are full and all the tanker fleet is anchored out and full; we're talking about how to accunt for the price today, not in some future world where there is a functional shortage.
Price is not informative. In a world where most oil transactions are via non public long term supply contracts China/whoever . . . price is not informative. The trucks can stop delivering food to the shelves just as suddenly at $3/gallon as $4/gallon.
The thread is about the SPR, and its use to supply the military when it needs to, to prevent being conquered and enslaved. Not particularly price relevant.
BTW, it is my understanding most of the floating storage of early 2010 was Iranian, and they sent the boats to port in December. It's not out there now.
Fukushima is of course oil negative (apologies to Northern Japan of course.) If Libya had been approached with even the remotest sense of finality I think oil price speculation could have been crushed. Since we are approaching Libya "with moderation" then we have the "drip, drip, drip" of oil torture. A "we shall see approach" I guess.
Oil prices are high because where the hell else is the liquidity supposed to GO? What good does it do to release the SPR when storage is FULL. Brent is up becasue Libya supplied a significant amount of Europe's crude. Releasing the SPR does nothing about this. It's traders needing something to do with their Fed supplied liquidity that are driving this situation. It will be interesting to see if the morons at the White House are capable of understanding this. The clue will be whether they try it. Regardless they will demagogue it and blame the oil companies. But if they're dumb enough to try it as a solution it will be enlightening - it will show an utter ignorance of the entire global energy market.
"Oil prices are high because where the hell else is the liquidity supposed to GO?"
PMs, of course.
As painful as it will likely be, I for one think we need a good solid crisis here in the USA.
It's only in a true crisis that people change.
Yeah that works...this isn't a movie...or a romance novel...or a cartoon.
People get scared. Humans in a herd are amazingly dumb on the best of days. Now panic the herd after decades of being taught they are the most important thing in the universe...yeah, it will go down like that, it would be a prison riot except the only ones organized are the gangs.
Bring it on.
Inventory numbers are skewed, this country burns through 21 mbpd so the 70 odd days are wrong-try about 40 days. Funny thing is that the SPR inventory is purchased with good ole taxpayer money and while the goobermint says RELEASE they mean sell to conoco exxon etc and in turn they sell it right back to us as a refined product--seems like a double shaftaxation. The US cannot control the price of world oil period- not anymore anyways. The energy plan is nothing more than a colossal clod fuck.
We need, and can benefit from, a federal energy plan as least as much as the Soviet Union could benefit from a five year agriculture plan. I have been told, however, that the free market and competitive bidding could take care of the problem; without a futures market. Probably, just a rumor.
What should the price of gasoline be when a new pickup truck costs $36000.00 ?
The strategic petroleum reserve is for emergency's,not to control prices!!!!
There is no trigger. There is no shortage. Raise margin requirements and oil drops 20% overnight
Yes, but let's raise them on PMs instead.
Trigger is going to be an USA default on its debt obligations by means of devaluation of the USD.
The trigger is simple: Poll numbers.
Since it doesn't have much of an effect, he better wait until much closer to election day.
First things first. Did Godman, the Morque, and Shittybank unload their off-shore tankers yet? You know......
The ones the bought with our tax dollars and held for higher prices. We have driving season soon. Don't we?
sticker shock and awe
I get the feeling Obama would feed the seed corn to the proles to buy votes to be mayor of a future ghost town.
Any politician would. Thus the problem with the government running everything.
75 days away from USA going 100% bicycle!
I drive a truck, but ride my bicycle to work one or two days a week when the weather's nice. My adult son recently bought a scooter instead of a car as his first vehicle. People (aka the Mass Market) will react naturally to changes, and the water will find a new level (borrowed from my earlier comment above). We don't need the SPR to be tapped for market manipulation. We'll adapt on our own without being told what to do or where to go.
There should be no price that triggers a release from the SPR.
The purpose of the SPR is to provide supply in the event of a disruption, specifically at the time, if the Soviet Union invaded the Middle East. It was not intended as a market manipulation tool. Not mentioned in the article is the fact that, if the SPR is tapped for market manipulation purposes, suppliers have a strong incentive to throttle back their production. The net effect would be a significantly smaller drop in crude prices than anticipated.
Team Obama has failed to put together a real energy plan, and is now panicking they will get rightly crucified by voters when gas hits $4 or $5. People should see Obama tapping the SPR for what it is, a shortsighted reactionary impulse by a bunch of academic morons who don't have a clue how the real world works.
There's a ton of oil in the US to be tapped to give us time for technological innovation to develop a lasting solution to our energy needs.
"There's a ton of oil in the US to be tapped to give us time for technological innovation to develop a lasting solution to our energy needs."
The technology for electric, hybrid and natural gas cars already exists and has for over 75 years. Our problems are not technological.
There's a ton of oil in the US to be tapped to give us time for technological innovation to develop a lasting solution to our energy needs.
...sigh...energy plan? You mean dismantle an infrastructure that required around 90 years to get to the point you or I can drive anywhere and fill up the tank for a "reasonable" process and price with fuel pumps that gauge the amount of energy sold to the fraction?
Listen, it's fine to pretend that there was a plan, there COULD be a plan, there MIGHT be a plan. But let get this straight, nobody in the engineering universe has been asked ever to develop one. Ever. It's all political crap. The reason no engineer in their right mind would ever lend their name to any of this is a simple reason. One guy taught us all the effort of an engineer going political. ONE SINGLE GUY. His name was Thomas Midgley Jr.
He single handedly invented leaded gasoline and Hydroflorocarbons plus we are now feeling the effects of one of his AWESOME ideas. Gas made from corn. Don't believe me, go look him up. Second year students (well 20+ years ago) were given him as a reason to never, ever, ever, ever get involved with politics...ever...mainly because you end up looking like a complete douchebag.
So until the politicos actually hire career engineers to figure something out instead of picking some fucknut from the TED series of round table discussions that have never left school, it won't happen. All trades people have one thing in common, engineers...nurses...carpenters...techies...plumbers...electricians...doctors...accountants (good ones), if you really want it done, you aren't going to be happy with the outcome.
Besides, I still doubt a cadre of career engineers will get behind any of the fluffy crap the politico's are discussing because it's pointless to fight entropy in term of dwindleing supplies on a planet of 7+ billion people. Sure you have couple of ideas. As an engineer I have an easier one you won't like.
Cut the human population down to around 1 billion. One way or another, with or with out a political "plan" it will get there.
I'm not talking "The road" kind of bad, but pretty close. First to go will be anyone in a hospital and well over their expiry date, the old and young. Then it will be the nervous nellies that can't live with rolling black outs and a complete lack of common sense, they will be the idiots that leave chicken on the counter in the sun while at work and die from shitting their insides out. Then will be the people that expected food at a super market and are shy, since they can't network or gather properly, their caloric intake will drop then they'll get sick and die of common colds turning into pneumonia. I would go on, but the list of urban and suburban neurosis is really endless.
Why do we need to have the population base anywhere what we have? There will/would be a deep sadness, yes, but it's the elephant in the room nobody wants to discuss. The human population simply has become so large that it has shit in it's own collective sandbox.
That's a "plan"? The scenario would be correct for the desired outcome I suppose, but I think others have tried that without success. How about a "plan" that could actually be implemented instead? I'm understanding your eugenic-centric approach but it has its opponents.
It not even a plan, it's just sit back and watch.
Eugenic's is doubtful. It'll be more of where the dice fall. I think people that beat their daily bread from a handful of grass seed and local resources in Africa have a higher rate of surivability than myself and my neighbours, and we make food for a living. But if the plug was pulled tommorrow, or in the more likely scenario, being boiled in a pot with the rest of the frogs. We rely on distribution chains built on 90 year old infrastructure with a cold chain behind it to survive.
The food can grow all it wants, it still need someone to pick it and distribute it/send it somewhere. I can grow 100 acres of corn seed this year. If I drop dead from starvation, the corn just rots if it isn't picked, dried, cured, packaged and shipped in a certain time frame. It's a self serving argument, of course the corn will get picked and managed without me, I only own the land and deal with the brokers on costs. To be honest I would sell corn with the same mark up banks provide the profit to themselves and a bushel of corn should cost around 40 a bushel or a fair trade of 1 ounce of silver. But since the universe is human rich, silver poor and credit/IOU addicted, that won't happen. The riots would start tommorrow. I would discuss that milk should cost around 28 a gallon against real costs and a small 5% profit, but same thing would happen.
Now think about strawberries. Ottawa Valley grows lots of strawberries, if you've eaten strawberry jam in the last thirty years, you probably ate at least one strawberry picked by me once or twice just by the power of large numbers. It's fun, doesn't pay well, but it's something that starts at 5:30am and ends at 9am before markets open...plus it's around $120 cash in my pocket working fast enough per bucket for something that gives me the opportunity to learn spanish (seriously, only white guy there except the owners). The season for picking is only three weeks long and there are a million and one little incidentals to make sure the strawberry is picked properly. Pick it wrong and it turns to mush en route and the farm doesn't get paid on spoilage, pick it right and there are bugs, rats, mice, humans, racoons (pardon in advance) that will gladdly spoil an entire carload of strawberries.
Yet, the entire idea of having a strawberry...single strawberry requires all that infrastructure to deliver a single piece of food. All that infrastructure requires energy...and more importantly, the WILL to deliver it. I doubt I could convince ANY of my kids to jump on one of the horses and ride to Ottawa, 100 Kms away, to deliver a punch in the face to someone they don't like. I doubt they could be convinced to deliver a single strawberry.
What's missing is mass transportation. I love how people mention bikes and walking and whatever fun leisure activity they do. But to feed, continuiously, a city of a million people. The city becomes less of a market, and more like a parasite of the larger more productive area doesn't it. New york State is a great example. ONE GIANT FANTASTIC city and it sucks the guts out of the entire state.
That's the future. Finding the willingness to actually offer a city food, what is there really to trade with a city. The food is outside...the Quarries are outside...the minerals are outside...lumber...coal...the day of the mega city is going to die. I know people will counter with the idea of grow a garden. Sure, people will have to can most of it. Even then it might only last a month or two. General rule is one acre per person, that's just veggies, fruit and legumes, add animals in there it's up to around 5 acres per person depending on what you want to eat and hoping your neighbours don't kill and eat your catch.
Reason why there is a complete fishing ban in the North Atlantic. Too many hands, too many mouths and not enough time to make something productive. Like people that enjoy peaches and cream corn, if you ever grow corn...peaches and cream corn is young cow corn. It's not a breed, it's livestock food stuff picked six weeks early, only time a human can eat the stuff. But good marketing makes for happy consumers.
As far as a "plan" to fix a gadget...that's what an engine is, a gadget...before that it was a horse and people. No. The best energy sources we have right now that can meet the demands of 7 billion people is oil, coal then nuclear. Everything else is a deficit of energy, IOW, you could use human and animal labour to maximize a return on output.
Actually I do have a plan that doesn't involve mass death. Everyone get used to manual labour, ride a horse and learn to stoke a stove. Our kids and grandchildrens future looks more like steam punk and not at all like buck rogers.
Thanks for your thoughtful reply. Why someone took the time to junk your comment is amazing. Well, maybe not. Obviously the person did not read it, thought it too long, or you have a secret admirer. As someone pointed out in another comment I read today, there will be no surviving the numbers. Whether it be the natural laws of economics and markets, or the mathematics of population sustainability. The thing that must be remembered is that nothing will happen instantaneously (short of a huge natural or man-made catastrophe). Time will cause balancing in the system and -- the strong and/or clever shall prevail. Thanks to the brave naturalists who preceded us, e.g., Darwin, Mendel, Burbank, et al..
Hey I'm no genius, but the only reason WTI sells for $112 is because somebody else is willing to pay $112 for it. Sell that SR for $115-125bbl I'll be happy (I'm a taxpayer).
These clowns will sell it bone dry in a heartbeat if they think there is a political gain in it. They don't give two hoots about the security implications. As the economy falls and gas rises they will feel compelled to do it because they are out of other palliative options.
don't tap the strategic petroleum reserve. There will be a free market for gas at 8 dollars a gallon. I would rather have high gas than price controls and long lines......we aren't entitled to $2.50 gallon gas........
If the unmanipulated free market price of gas is $2.50, we are in a sense, "entitled" to it.
Exactly...I'm glad to see someone else said this so soon into the comments. The SPR is meant to help buffer us from heavy-duty events, such as an OPEC strike or a military attack...anything that would threaten our supply. But if we'll be tapping into it every time the price gets a little uncomfortable, then the Politick-in-Charge (on whatever day of the week that happens to be) will use it to goose votes on the next election cycle. Not good.
I personally want $2.50/gal gas, but we're not entitled to it. Here in SoCal, I filled up yesterday at $4.29 around the corner, and I'm not liking it, but I've also trimmed my miles driven to compensate. You do what ya gotta do. I wish those in charge would just let the markets go free-style and allow the water to find its own level. I'd rather pay a little more and retain a measure of freedom from the SPR faeries, than pay less and become dependent upon them over the long run.
Methinks we all could stand to be reminded what "strategic" means. If the USA is unable to obtain oil, it would have a choice: release the strategic reserves or shut down. There is no inability to obtain oil today. The strategic reserve is not for market manipulation!
Ha ha, you said Trigger. Watch out, nasty stuff going on next door at the Banzai post.
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