Gas prices set to destroy United States

[discojoe]

@Discojoe:
You're missing one important detail from all of that, a very meaningful step the U.S. could take to drive down oil prices.

Oil is right now a lucrative market. Too lucrative, for both the EU and the United States. In the interest of national security, oil should be made much, much harder to profit from. Raising oil investment taxes to astronomical levels will short circuit the exploding price growth. Couple this with incentives to sell off existing oil stock. Do non-countries need gold reserves? No, so why do they need oil? Leave oil reserves in the hands of countries, and keep the investors far, far away.

If after all this the price of oil is still high, we know that investor speculation is not a factor of it. At least then we will know point-blank with whom the blame lies, whether with the Saudis or whomever.

Also, oil is too vital to leave in the hands of profit seekers, who may be inclined to greed. Instead, oil management should be left to non-profits which, like the United States Postal Service, have only their own financial solvency in mind.

I think it quite likely our president has, in light of this palpable solution, a conflict of interest with those of the United States.

Sounds terribly inefficient.

[Blaze]

thanks discojoe for posting these threads about oil. they are important perspectives and i have no doubt that our leaders won't engage in honest discussion with th american people about what is really going on here.

the only thing i would add would be that local and state municipalities should also create more public transportation infrastructure so as to reduce american dependence on cars. interesting....people in my area are starting to take the bus to work. imagine that.

[iAnnAu]

One of the things that occurs to me as I watch gas prices rise even as I read headlines about how oil companies report higher profits than the previous year - as a trend continuing through the last *several* years - is that obviously the oil companies fucking own our government.
To oversimplify the story, govt once upon a time did not regulate utilities. About a century ago, during a particularly strong winter, coal companies arbitrarily tripled the price of coal, and hundreds of people in NYC froze to death. So the govt stepped in and said that even though coal is a consumer product, since it is necessary for maintaining a threshold of quality of life, companies cannot be purely profit-motivated. This (again, this recounting is oversimplified) is part of why the govt regulates certain sectors of our economy, such as electricity and water - if people are truly dependent upon a good for substistence, that good *must* be available for a price that nearly every citizen can afford.
That the govt allows oil companies to raise prices on gas when the average American obviously must buy gas means that the oil companies have carefully invested in the corruption of our officials.
I hate to be a conspiracy theorist, but it's the only thing that makes fucking sense. It's not that I think gas should return to a dollar a gallon - but at whatever price it's sold, oil companies *should not* be making such disgusting profits from what is essentially a utility.
When as little as ten years ago we were paying a dollar a gallon, that price was possible because the government subsidized gas. And paradoxically taxed its sale ... but my point is that even at over $3.50 a gallon today, that subsidy is *still there*. Why is the government subsidizing a company that continues to post higher and higher profits each year?

[discojoe]

One of the things that occurs to me as I watch gas prices rise even as I read headlines about how oil companies report higher profits than the previous year - as a trend continuing through the last *several* years - is that obviously the oil companies fucking own our government.
To oversimplify the story, govt once upon a time did not regulate utilities. About a century ago, during a particularly strong winter, coal companies arbitrarily tripled the price of coal, and hundreds of people in NYC froze to death. So the govt stepped in and said that even though coal is a consumer product, since it is necessary for maintaining a threshold of quality of life, companies cannot be purely profit-motivated. This (again, this recounting is oversimplified) is part of why the govt regulates certain sectors of our economy, such as electricity and water - if people are truly dependent upon a good for substistence, that good *must* be available for a price that nearly every citizen can afford.
That the govt allows oil companies to raise prices on gas when the average American obviously must buy gas means that the oil companies have carefully invested in the corruption of our officials.
I hate to be a conspiracy theorist, but it's the only thing that makes fucking sense. It's not that I think gas should return to a dollar a gallon - but at whatever price it's sold, oil companies *should not* be making such disgusting profits from what is essentially a utility.
When as little as ten years ago we were paying a dollar a gallon, that price was possible because the government subsidized gas. And paradoxically taxed its sale ... but my point is that even at over $3.50 a gallon today, that subsidy is *still there*. Why is the government subsidizing a company that continues to post higher and higher profits each year?

Without profits there is zero incentive to be efficient. Reducing profits reduces efficiency and therefore raises prices.

Another thing to understand is that 75% of price of gas added between 2004 and today has gone to federal taxes. The federal government is a direct beneficiary of the higher price of gas.

That said, the main reason we are seeing higher prices is due to a combination of a global growth in demand and market anxiety over the Iraq War. The problem in Iraq is that if there is a significant disruption to Iraq's oil output, there will be a temporary global shortage, which would inevitably include a price spike.

It's more complicated than all this, but a good link on this subject may be found in my signature.

[FDG]

Without profits there is zero incentive to be efficient. Reducing profits reduces efficiency and therefore raises prices.

No no no, let's not invent ourselves economics experts. What you say here is EXCLUSIVELY valid in a perfectly competitive market, which is not the case of oil!

[discojoe]

No no no, let's not invent ourselves economics experts. What you say here is EXCLUSIVELY valid in a perfectly competitive market, which is not the case of oil!

First, let's not use reflexive verbs like "invent ourselves" in English where they don't belong.

Second, you are wrong.

Global demand does affect oil prices, and whether or not this is caused by an oil cartel or an open market is irrelevant.

As to the Iraq War, I don't see how you can dispute that.

[discojoe]

Oh, and as to this comment:

Without profits there is zero incentive to be efficient. Reducing profits reduces efficiency and therefore raises prices.

Yes, you could reduce the companies' profits on sale or whatever, and the gas would still always sell at profit (and maybe that would be beneficial to the economy) but what I was referring to was what sounded like the suggestion that gas should become some type of socialized commodity with artificially capped prices. The only problem is that this was already tried in the 70s, and it only resulted in a huge spike in demand for gas, long lines, short hours of operation, and poor allocation of gas based on demand.

Profits were reduced and efficiency declined.

[Blaze]

huh. the increases are 75% tax??? that is effed up.

in a local county in my region, they are offering to reduce the tax on gas by 10-15%....guess this is a pittance compared to what they're getting. how are the taxes broken down? like the feds/state/county each get what percentage?

[Not A Communist Shill]

The tax probably isn't going into some hole in the ground is it, though?

The man in this article four years old ago argued that oil was too cheap at $40 a barrel (at the time), and that it should be around $182 a barrel. It's 'only' at about $115 a barrel at the moment.

http://news.bbc.co.uk/1/hi/business/3777413.stm

It should be possible to artificically increase the price of oil at a constant rate, as this is obviously preferable to sharp fluctuations.

[Not A Communist Shill]

First, let's not use reflexive verbs like "invent ourselves" in English where they don't belong.

It's a bit unfair to criticise FDG's English, really...if I didn't know he was Italian I would have presumed it was his first language. The fact that he is Italian (well, I think it's a fact) just shows how good his English is! I think it's fairly obvious what he meant...

I hope on the fateful day that Earthlings meet Martians that the occasion isn't spoilt by pedants.

[Blaze]

The tax probably isn't going into some hole in the ground is it, though?

no...prolly not. i'm sure it's funding the war in part.

The man in this article four years old ago argued that oil was too cheap at $40 a barrel (at the time), and that it should be around $182 a barrel. It's 'only' at about $115 a barrel at the moment.

http://news.bbc.co.uk/1/hi/business/3777413.stm

It should be possible to artificically increase the price of oil at a constant rate, as this is obviously preferable to sharp fluctuations.

good article. the biggest question remaining is that of cars.

[misutii]

The tax probably isn't going into some hole in the ground is it, though?

The man in this article four years old ago argued that oil was too cheap at $40 a barrel (at the time), and that it should be around $182 a barrel. It's 'only' at about $115 a barrel at the moment.

http://news.bbc.co.uk/1/hi/business/3777413.stm

It should be possible to artificically increase the price of oil at a constant rate, as this is obviously preferable to sharp fluctuations.

I think that if it was actually made public how much oil there was in fields/reservoirs currently accessible to humanity then the price would be even higher in all honesty.

[munenori2]

It's a bit unfair to criticise FDG's English, really...if I didn't know he was Italian I would have presumed it was his first language. The fact that he is Italian (well, I think it's a fact) just shows how good his English is! I think it's fairly obvious what he meant...

I hope on the fateful day that Earthlings meet Martians that the occasion isn't spoilt by pedants.

+1

[tcaudilllg]

huh. the increases are 75% tax??? that is effed up.

in a local county in my region, they are offering to reduce the tax on gas by 10-15%....guess this is a pittance compared to what they're getting. how are the taxes broken down? like the feds/state/county each get what percentage?

In those nations which have high oil taxation, distances to be crossed are usually very small compared to those of the United States for a long trip. A lot people ride buses or use trains instead. The U.S. population is sparser due to the size of the country, and so buses and trains are less practical than in Britain, France, or any other relatively small nation.

Those taxes are used to pay for the socialized aspects of those nation's economies, such as health care and education. I think those nations should be wary that those who disagree with socialization of said industries have a lot to gain by seeing those taxes revoked.

In the U.S., oil taxes have not changed since 2000, when the national average price for a gallon of gas was $1. Even then, those taxes only exist to fund road construction and repair work.

Discojoe has gone on an anti-Democrat rail without looking at the facts, and it's making him look stupid. The California blackouts of 2003 showed just how irregular energy markets are compared to demand driven markets. Oil is not a demand in modern society; it is a genuine social need, and the only check on how much people will pay for it is their own measure of its cultural worth: if you give up oil, you're going to have to replace it with something or stop driving... and if enough people do that, cultural response begins to set in and norms begin changing. That's one reason demand/supply laws do not apply to oil; the other is that it's extremely difficult to found an oil company on the international market. (this is called "market barrier to entry") If oil is so profitable, then why isn't there a new crop of oil companies trying to get a piece of the pie? Because, there are barriers to entry owing to conditions that are not market-related.

In any event, I think the markets are becoming gradually pathologized by these (ultraradical) theories proposed by the $187-a-barrell guy whom was just previously quoted here, and that we simply have not had much experience with pathologized markets before so we don't know how to deal with them when they appear. Pure markets do not work, as has been demonstrated again and again in history. Those who say they do and genuinely believe it, are extremists.

[Not A Communist Shill]

You make some good points, but if there is a lower density of people in a country compared to another, it shouldn't necessarily mean you have to travel further to work. You have cities, towns and villages where appropiate, and you go to those places when you have to. Americans are richer than the citizens of any other country...on average at least, and if they are sparsely populated, it means they should have more resources to exploit per person.

If you can't get a job because oil is too expensive, then you'll have to try and get a job closer to home, so you spend less money on oil. If the companies run out of people to work for them because people can't travel by car to work, then they'll have to put up wages or go out of business. If all the companies go out of business because nobody can work for them, then all the unemployed will have to find other means of getting enough to eat etc., otherwise they'll starve. If this happens, then people will die, and the population will decrease to a level that the land is able to support.

Really, it makes sense to sell the oil at a more realistic price if it means people take the appropiate action against decreasing oil stocks.

[discojoe]

It's a bit unfair to criticise FDG's English, really...if I didn't know he was Italian I would have presumed it was his first language. The fact that he is Italian (well, I think it's a fact) just shows how good his English is! I think it's fairly obvious what he meant...

I hope on the fateful day that Earthlings meet Martians that the occasion isn't spoilt by pedants.

I agree. I was just being a smart ass back to him.

[discojoe]

huh. the increases are 75% tax??? that is effed up.

in a local county in my region, they are offering to reduce the tax on gas by 10-15%....guess this is a pittance compared to what they're getting. how are the taxes broken down? like the feds/state/county each get what percentage?

It's not that the increases are 75% tax, but that they are 75% taxed.

[Not A Communist Shill]

I agree. I was just being a smart ass back to him.

WTF is a reflexive verb anyway?

[discojoe]

WTF is a reflexive verb anyway?

Verbs where the direct and indirect objects are the same.

[discojoe]

In those nations which have high oil taxation, distances to be crossed are usually very small compared to those of the United States for a long trip. A lot people ride buses or use trains instead. The U.S. population is sparser due to the size of the country, and so buses and trains are less practical than in Britain, France, or any other relatively small nation.

Those taxes are used to pay for the socialized aspects of those nation's economies, such as health care and education. I think those nations should be wary that those who disagree with socialization of said industries have a lot to gain by seeing those taxes revoked.

In the U.S., oil taxes have not changed since 2000, when the national average price for a gallon of gas was $1. Even then, those taxes only exist to fund road construction and repair work.

Discojoe has gone on an anti-Democrat rail without looking at the facts, and it's making him look stupid. The California blackouts of 2003 showed just how irregular energy markets are compared to demand driven markets. Oil is not a demand in modern society; it is a genuine social need, and the only check on how much people will pay for it is their own measure of its cultural worth: if you give up oil, you're going to have to replace it with something or stop driving... and if enough people do that, cultural response begins to set in and norms begin changing. That's one reason demand/supply laws do not apply to oil; the other is that it's extremely difficult to found an oil company on the international market. (this is called "market barrier to entry") If oil is so profitable, then why isn't there a new crop of oil companies trying to get a piece of the pie? Because, there are barriers to entry owing to conditions that are not market-related.

In any event, I think the markets are becoming gradually pathologized by these (ultraradical) theories proposed by the $187-a-barrell guy whom was just previously quoted here, and that we simply have not had much experience with pathologized markets before so we don't know how to deal with them when they appear. Pure markets do not work, as has been demonstrated again and again in history. Those who say they do and genuinely believe it, are extremists.

That was disjointed and almost impossible to follow, but in that last paragraph you say that "pure" markets do not work. Are you referring to oil or to "pure" markets in general?

[tcaudilllg]

1) dwindling oil stocks are not a pressing concern.
2) If you think our current cultural living norms are unsustainable, then frank discussion -- NOT market manipulation -- is the way to achieve change. Market manipulation will only be thwarted by those who are primarily concerned with making life more enjoyable for themselves and others. (those people you deride as "feeling entitled") There are a lot of these people (myself included) and if you don't approach us frankly we're going to take control of the market ourselves... starting next year when our guy is president. (and we will in all likelihood have congress, too, so nothing will stop us). One of these solutions might well be the NGO-ization of energy, if you can't give us a better alternative.

You can't just tell people to stop doing what they like, unless you are ready to give them something just as fun to do instead.

[discojoe]

How can cultural living norms be sustained if we're not living in a price-coordinated economy?

[tcaudilllg]

How can cultural living norms be sustained if we're not living in a price-coordinated economy?

Energy is just different. It's like food: you could charge a ton for it, and people would still buy it because the alternative would mean producing their own -- which most people wouldn't be able to do nowadays anyhow. That doesn't mean we should charge $10 for gallon of milk and basically suck up the entire American living. (and obviously there would be consequences even larger than those, just as the gas prices are crippling the airline industry today.) You see, food does not obey supply/demand laws, nor does ANY needed commodity. Governments intervene to keep the price of any given food (except for the specialty stuff) pretty much as low as possible. Even specialty providers must keep their pricing near to the subsidied products so as to compete with them.

Supply and demand only works with wants, never needs. (in fact, I don't think it was ever proven that supply and demand works with needs at all -- the supply must always remain above demand in need-based situations, simply because scarecity become a dire circumstance otherwise).

Governments can't increase the supply of oil because it's a non-renewable resource. (yes, ANWAR is off-limits until the technology DRASTICALLY improves). However, the chief producers of oil have traditionally produced enough product to meet the expected demand (which is calculable across nations by taking into account their respective living standards). According to reports, they still are -- however, market speculation is unbalancing the pricepoint. I point the finger at the oil companies, who are themselves investing their own resources into the oil commodity. (if there is no concrete data on their investment strategies, I postulate that evidence of such manipulations will be uncovered upon closer inspection). Additionally, one should ask what, if anything, the oil companies are doing to increase oil market speculation. Are they running ads? Are they lobbying hedge funds? It's not like it means anything to invest in oil for a non-crude refiner, which means that the only people who have anything to gain from oil trading are the oil companies themselves. It's a cunning device worthy of Enron, but we should not blind ourselves to it any longer.

[discojoe]

Energy is just different. It's like food: you could charge a ton for it, and people would still buy it because the alternative would mean producing their own -- which most people wouldn't be able to do nowadays anyhow. That doesn't mean we should charge $10 for gallon of milk and basically suck up the entire American living. (and obviously there would be consequences even larger than those, just as the gas prices are crippling the airline industry today.) You see, food does not obey supply/demand laws, nor does ANY needed commodity. Governments intervene to keep the price of any given food (except for the specialty stuff) pretty much as low as possible. Even specialty providers must keep their pricing near to the subsidied products so as to compete with them.

Supply and demand only works with wants, never needs. (in fact, I don't think it was ever proven that supply and demand works with needs at all -- the supply must always remain above demand in need-based situations, simply because scarecity become a dire circumstance otherwise).

Governments can't increase the supply of oil because it's a non-renewable resource. (yes, ANWAR is off-limits until the technology DRASTICALLY improves). However, the chief producers of oil have traditionally produced enough product to meet the expected demand (which is calculable across nations by taking into account their respective living standards). According to reports, they still are -- however, market speculation is unbalancing the pricepoint. I point the finger at the oil companies, who are themselves investing their own resources into the oil commodity. (if there is no concrete data on their investment strategies, I postulate that evidence of such manipulations will be uncovered upon closer inspection). Additionally, one should ask what, if anything, the oil companies are doing to increase oil market speculation. Are they running ads? Are they lobbying hedge funds? It's not like it means anything to invest in oil for a non-crude refiner, which means that the only people who have anything to gain from oil trading are the oil companies themselves. It's a cunning device worthy of Enron, but we should not blind ourselves to it any longer.

As cute as it is reading your theoretical version of how economics works, I'm sorry to have to point a couple problems.

First, you're just downright wrong about what effect subsidies have on food prices. The federal government subsidizes farmers and protects them from global competition, making prices artificially higher than they would be in a freer market. We're actually paying around 30 billion dollars more each year for food, in addition to higher taxes which go to the idiot farmers' subsidies.

You're also wrong about supply and demand. It appears everywhere, in every economic system. Even in a socialist centrally planned economy, supply and demand can be observed by the complete failure of the system to distribute resources where they need to go. Why were there warehouses full of surplus supplies? Because there was no price-data to tell the manufacturers where to send their supplies, and because there were no middle men who could more efficiently transport them to where there was demand, all because "profit" was seen as evil. Instead of each manager at each point of sale being able to adjust prices as needed based on the individual circumstances of their particular establishment, central planners told them how much of each item they'd be allocated, and for how much they were to sell it. This results in massive inefficiency and widespread poverty, because too many goods were going to places where there wasn't demand, and too few to where there was great demand. So here we can see supply and demand telling the idiot socialist government to change their laughable economic policy.

In works with food too. Milk will be more expensive in some parts of the country because it is in greater demand. The higher prices help to allocate the resource to where the demand for it is highest. While each person must always have some type of food, that doesn't mean they won't buy a cheaper brand whose costs of production are lower, allowing them to charge less and save the customer money.

Governments can't increase the supply of oil because it's a non-renewable resource.

Here's how it actually works:

Oil producers can in fact increase the production of oil. The reason they don't is because oil, like you said, is non-renewable. This means that it is in their interest to charge higher prices for their product over the course of its limited lifespan, getting the highest amount of return possible. If an oil producer were to raise production to meet demand, prices would decrease, so OPEC bands together to set production and price levels in order to maximize their rates of return. This is not in our interest, and we should take measures to limit the influence OPEC has over the global energy market.

I point the finger at the oil companies

Whereas I point the finger at OPEC, the actual problem.

[olduser]

i point my finger at the modern lifestyle. however, industrial processes have spared me endless backbreaking labor.

there are two options for the oil crisis(which is predicted to peak at around 2020): War, or collaboration. Discojoe's model insists upon war.

The Chinese need cars to drive 8 blocks too.

[UDP]

too bad they don't have plugs for electric cars in Bakersfield

Steinbeckwould defecate in his trousers.

[discojoe]

i point my finger at the modern lifestyle. however, industrial processes have spared me endless backbreaking labor.

there are two options for the oil crisis(which is predicted to peak at around 2020): War, or collaboration. Discojoe's model insists upon war.

The Chinese need cars to drive 8 blocks too.

The "collaboration" model insists upon idealistic nonsense that will never, ever happen and isn't even worth talking about.

[olduser]

The "collaboration" model insists upon idealistic nonsense that will never, ever happen and isn't even worth talking about.

what about space stations?

[discojoe]

what about space stations?

What are you talking about, and how is that in any way comparable? What exactly is your plan?

[olduser]

What are you talking about, and how is that in any way comparable? What exactly is your plan?

nations collaborate in the name of science.

http://en.wikipedia.org/wiki/Interna..._Space_Station

i don't have a plan, i don't think i am capable of righting the world-- but i do know a fucklot more about hydrocarbons than most people. and i also know that these problems won't be solved by people in white houses, but people in white coats.

[discojoe]

nations collaborate in the name of science.

http://en.wikipedia.org/wiki/Interna..._Space_Station

Thank you, I already have a pretty good overview of the international space station.

While I enthusiastically support any effort to accelerate scientific progress - especially where energy is concerned - I don't think alternative energy solutions are going to be economically viable any time in the next two decades. In the meantime, we must depend on fossil fuels, and we must have a stable, reliable source to maintain our standard of living.

[discojoe]

i don't have a plan, i don't think i am capable of righting the world-- but i do know a fucklot more about hydrocarbons than most people. and i also know that these problems won't be solved by people in white houses, but people in white coats.

I agree, but white houses can create incentives to help speed the process along.

[olduser]

Thank you, I already have a pretty overview of the international space station.

While I enthusiastically support any effort to accelerate scientific progress, especially where energy is concerned, I don't think alternative energy solutions are going to be economically viable any time in the next two decades. In the meantime, we must depend on fossil fuels, and we must have a stable, reliable source to maintain our standard of living.

agree about progress. think we should seriously SERIOUSLY lower our standard of living. seriously--the wind can dry clothes.

anyway, i have to train, peace be upon you!

[discojoe]

agree about progress. think we should seriously SERIOUSLY lower our standard of living. seriously--the wind can dry clothes.

Train away, but when you return I ask you this:


How can we realistically lower our standard of living in a way that does not dramatically affect both civil liberties and the economy? To lower our standard of living is to forcibly restrict consumption and to become inefficient, and that means widespread poverty.

[olduser]

Train away, but when you return I ask you this:


How can we realistically lower our standard of living in a way that does not dramatically affect both civil liberties and the economy? To lower our standard of living is to forcibly restrict consumption and to become inefficient, and that means widespread poverty.

if things changed slowly then i think it would be feasible to lower our standard of living.

[tcaudilllg]

Whereas I point the finger at OPEC, the actual problem.

Prove it. Give us data. OPEC production volume to the U.S. is today as high as it was in the 90s, if not higher. Although there might have been an average change of say, $20-25 dollars due to their market manipulations, those changes are not in themselves responsible for today's exhorbitant prices. Nor are they investing heavily in oil stocks, because they hardly have the capital for it.

Strike #1. That leaves just speculation of two kinds, anxiety speculation over world events and other market investments. (by Big Oil et al.) Anxiety speculation may well be a cause, but if it is then it needs to be taken as seriously as the events which trigger it and discouraged accordingly.

As for the supply/demand thing, you totally misunderstood what I was saying. Turn off your transcendent function and reread what I wrote.

[discojoe]

As for the supply/demand thing, you totally misunderstood what I was saying. Turn off your transcendent function and reread what I wrote.

You are borderline autistic, and 90% or more of what you write is impossible to comprehend. I'm not going to re-read a bunch of incomprehensible crap just to dispel your idiotic concept of elementary economics.

As to your demand for proof, I hate to link to a Wikipedia article, but it's not like you hold yourself to a high standard of debate anyway, and it really is the best single page for an overview of the situation.

http://en.wikipedia.org/wiki/Oil_pri...s_of_2004-2006

See the section, "September 2006 decreases"

[Khamelion]

gas prices are much worse in other countries. quit your griping it isn't going to help anything.

[tcaudilllg]

You are borderline autistic, and 90% or more of what you write is impossible to comprehend. I'm not going to re-read a bunch of incomprehensible crap just to dispel your idiotic concept of elementary economics.

As to your demand for proof, I hate to link to a Wikipedia article, but it's not like you hold yourself to a high standard of debate anyway, and it really is the best single page for an overview of the situation.

http://en.wikipedia.org/wiki/Oil_pri...s_of_2004-2006

See the section, "September 2006 decreases"

Thank you. A reading of that article turned up this one, which affirms my idea of a mental collusion to drive up oil speculation:

http://en.wikipedia.org/wiki/Peaknik

Matthew Simmons is apparently an alarmist (and probably an extremist, for that matter), who is inflaming fears of an imminent decline in oil production in response to (supposedly) falling supply. These fears are being fanned by the oil companies to drive up speculation.

"Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for the global economy. Although predictions as to what exactly these negative effects will be vary greatly, "a growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day."[1]"

Simmons himself reveals that the geopolitical tensions -- nor even OPEC -- are contributing significantly to the rise in prices. Apparently Simmons is the modern face of the human fear for non-renewable resource loss, a font for projections of this latent anxiety who is simply acting out what to him is the imminent triumph of his vulnerable function. He perceives his vulnerable's antithesis as imminently approaching and is becoming increasingly desperate and radical in his views. However, he is an authority and the object-moralist captains of the oil industry see him as a means by which to deceive the public into believing oil supplies are in danger of imminent collapse. (on which basis they can drive up prices).

[tcaudilllg]

Well well well...

Matthew Simmons, chairman and CEO of Simmons & Company International, is a prominent oil-industry insider and one of the world's leading experts on the topic of peak oil. Simmons was motivated by the 1973 energy crisis to create an investment banking firm catering to oil companies. In his previous capacity, he served as energy adviser to U.S. President George W. Bush.

Matthew Simmons believes the Club of Rome predictions were correct. Simmons is an advisor to the Oil Depletion Analysis Centre. He is a member of the National Petroleum Council and the Council on Foreign Relations. He believes a careful assessment of Saudi Arabian oil reserves is the most significant issue shaping petroleum politics.

Simmons is the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. His examination of oil reserve decline rates helped raise awareness of the unreliability of Middle East oil reserves as the published reports have never been verified.

This man, ladies in gentlemen, is chiefly responsible for the hysteria over oil prices.