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Re: Will oil price ever come down?
Old 06-29-2005, 01:25 PM   #41
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Re: Will oil price ever come down?

Well, you have to look at the profit motivations, and the cost of adoption.

Most 'alternative energy' schemes require a fair amount of r&d along with a huge amount of capital costs and expenses to implement even modest schemes. Profitability from most of these approaches is simply not there now and may not come to fruition until either technology cuts the costs or oil prices simply become so high that the alternate methods become more attractive.

So what company will lay out hundreds of millions or billions of dollars to develop these technology improvements with a profit window thats 5-10+ years away? Not one I'd be investing in.

Then you have to incent consumers to accept early adoption of some of the individual opportunities like solar and wind. I'd bet a good chunk of change that Nords wouldnt have implemented his solar system if he wasnt getting a tax credit and if the government hadnt legislated that his electric company had to buy back his extra generated energy.

There are big problems with a lot of the alternatives that need to be worked out. Nukes leave too much spent fuel. Wind requires a lot of real estate in places people like to live, hence high RE prices...and then you have those pesky bird lovers. Solar is too expensive and often uglier than local HOA's will permit. Even in aggregate, with decent technology improvements, its tough to see these alternates providing even 20% of our needs within the next 10 years.

Unfortunately our current pace is slow and incremental when we need fairly large and rapid change.

None of this mentions that we've taken a stance on electing people to high office lately that have a vested interest in keeping the oil gravy train running as long as possible. Thats a whole 'nother can of worms.
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Re: Will oil price ever come down?
Old 06-29-2005, 01:37 PM   #42
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Re: Will oil price ever come down?

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Re: Will oil price ever come down?
Old 06-29-2005, 02:34 PM   #43
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Re: Will oil price ever come down?

Quote:
Originally Posted by Notth
Then you have to incent consumers to accept early adoption of some of the individual opportunities like solar and wind.* I'd bet a good chunk of change that Nords wouldnt have implemented his solar system if he wasnt getting a tax credit and if the government hadnt legislated that his electric company had to buy back his extra generated energy.
Survey respondents & focus groups lie.

People claim that high gas prices or high utility costs would drive them to alternative transportation or power sources... but then they don't actually give up driving their car (alone) or pay the capital expenses of a system.* Every survey of consumer attitudes has failed to find a financial commitment to that stated belief.

Hawaii has the nation's highest per-capita generation (~35%) of hot water from solar collectors.* That's because the state gives a 35% tax credit (CREDIT, not just an income deduction!) and HECO gives a $750 rebate on a $1700-$2500 system.* So an actual owner's cost is only $620-$1150 and it's paying back at an average of $10-$15/month per household occupant.* When the enabling legislation had nearly run out in 2003 the installers were overwhelmed with work but there were no jobs scheduled for after the expiration.

Business Week has an interesting article on the economics of alternative energy.* Despite $60 oil, consumers are addicted to subsidies, either by tax breaks or by purchasing the extra power.* HECO only does net metering-- you can drive your electric bill down to the $16 minimum monthly "customer service" charge but HECO doesn't buy more than you consume.* Germany, Japan, & Spain's photovoltaic programs actually pay four times the rate for residential power.* (The logic is that encouraging more homeowner's generating systems will delay the utility's painful, lengthy process of building additional generating plants.)* The surge of subsidized PV consumers has also been driving down system costs by 5%/year, so PV panels are quickly becoming another electronic commodity.* (I'm gonna have to factor that into my spreadsheet and my decision on when & how much to pay for that additional 2 Kw of PV panels.)* HECO is slowly working with the state & installers toward a pay-for-production system instead of net metering, but the whole project hinges on whether they're buying power at retail rates (16 cents/KWhr) or wholesale (4 cents/KWhr).* That's a big impact on whether I stop at 3 KW of PV panels (our inverter's capacity)... or 30.

HECO has just started paying Oahu customers to install a load-shedding box on their electric water heaters (assuming you don't have one of the above solar collectors).* They pay you $3/month for the privilege of shutting your water heater off for up to an hour if load shedding becomes necessary.* I doubt they can even tell whether the box is still hooked up to our water heater!
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Re: Will oil price ever come down?
Old 06-29-2005, 06:22 PM   #44
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Re: Will oil price ever come down?

Notth:* I understand your critique;* what is your suggestion?
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Re: Will oil price ever come down?
Old 06-30-2005, 12:30 PM   #45
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Re: Will oil price ever come down?

Obviously not an easy one. It starts with leadership that recognizes and is willing to act on energy and pollution problems. I dont and havent seen many electable candidates that would take that step, and of the candidates that are serious about it, I dont think they'd be very good at other matters presidential. Nader comes to mind, but aside from good entertainment value watching him screw up the old boys club at capital hill and bumble his way through foreign affairs, somebody like him might be exactly whats needed for 4 years just to get the ball rolling.

Without that leadership right from the top and belief and conviction at many levels in the govt, I think we get squat. We're a mercenary military trying to grab for the oil under the guise of 'spreading democracy'.
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Re: Will oil price ever come down?
Old 06-30-2005, 01:14 PM   #46
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Re: Will oil price ever come down?

Quote:
Originally Posted by Notth
We're a mercenary military trying to grab for the oil under the guise of 'spreading democracy'.
If our soldiers are mercenaries, I think they don't know it yet. I do believe that the "leadership" has the oil grab in mind. Similar plans were a big part of how WW2 got started; and this may be of how the next big war gets started too.

Living within our means just doesn't seem American of late.

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Re: Will oil price ever come down?
Old 06-30-2005, 03:55 PM   #47
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Re: Will oil price ever come down?

Quote:
Originally Posted by Notth
Obviously not an easy one.*
Without that leadership right from the top and belief and conviction at many levels in the govt, I think we get squat.* We're a mercenary military trying to grab for the oil under the guise of 'spreading democracy'.
You're right;* there are only a handful of outlying (no pun intended) congressmen who ever talk about this issue in a straightforward, knowledgable manner.
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Re: Will oil price ever come down?
Old 06-30-2005, 04:00 PM   #48
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Re: Will oil price ever come down?

Without good leadership proactively turning the ship, I suspect it'll hit some rocks here and there. I trust in our ability to get over stuff but these slow creeping problems tend to get well out of hand before they get better.

The tough part is the conversion time. While cars can be turned over in a decade, busses and trucks are in service for a lot longer. We might be looking at 10-20 years once a viable alternative energy source for homes and transportation is available before its widely implemented.

I'd focus on advancing hydrogen separation, fuel cell development and trying to push solar technology efficiency up and cost down.

I've read some other papers that suggested that the cost and complexities of broad onesy-twosy alternative energy implementations wouldnt work at all, that we'll all end up migrating to semi-urban central mini cities that grow their own food and produce all their own local products and services. I kind of doubt that will happen, we're just too married to independent transportation.
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Re: Will oil price ever come down?
Old 06-30-2005, 05:43 PM   #49
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Re: Will oil price ever come down?

For a moment I want to return to the original question-"Will oil price ever come down?"

Ever is a long time, and if the oil price has permanently gone up it will be a first for any major commodity. Certainly a big recession ought to pull it down, or a "hard landing in China". A nuclear war between India and Pakistan might be amazing, but it could as easily send oil up as down.

An interesting thing to ask is "have we moved to a considerably higher trading range, more or less permanantly? I see no reason why this is not possible, even likely.* Even if the US and Europe manage to cut down on the growth rate of usage, it is highly unlikely that China or India will do that(barring recession) for many years. I read recently that China now has the largest road system of any nation other than USA. You don't build roads for bicycles and mo-peds.

Also, the bid by Chinese oil company CNOOC for Unocal indicates that for their needs and expectaions anyway, today's oil price, to the extent that it is reflected in Unocals asking price, seems OK.

So demand should continue to increase. That leaves supply, a very knotty problem. My own non-specialist opinion is that supply will have a* hard time keeping up, and so overall prices should stay relatively high. Whether that is $60 a bbl seems unlikely, but what it might be I don't know. I also think that it is likely that the real price of oil and natural gas will increase over time. I owe a lot of my retirement to oil and gas investments. Still, $60 seems pretty high in the near to intermediate term.

I am holding, not buying, and O&G is somewhat less than 20% of my invested assets.

Ha
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Re: Will oil price ever come down?
Old 06-30-2005, 09:59 PM   #50
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Re: Will oil price ever come down?

Ha...I think we'll bounce up and down but $50 may be our new floor. I have a funny feeling the supply isnt going to be as good as a lot of people think.

Very odd...my morning coffee tasted a little weird so I had it tested. Extremely high concentrations of estrogen. How strange.
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