Quote:
Originally Posted by CDSmith
The party line at the time was "world oil supplies are running low", meaning they were able to calculate when we might run out. Thus prices 'had' to go up. 'Had' to. Oil industry is constantly reminding the world that "we have only 50 years of oil left", "only 75 years of oil left", "only 100 years of oil left".
Meanwhile in other oil-producing nations the prices at the pump are super low. I've heard for years now that gas is still only pennies per gallon in Venezuela, certain parts of the middle east, etc. I'm not saying they should be that low here but christ, our prices should be lower than $4+ per gallon, being that both the US and Canada are major oil producing nations as well.
Reason for high gas prices here: gas tax.
And that's fine, we'll all pay it, either happily or not so happily, doesn't much matter. But are we not tired of hearing about "limited oil supply" when the obviously keep finding new ones?
Sorry, I'm not changing my mind. Prices should go down accordingly, just at they go up accordingly.
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It doesn't work like that. For a starters it doesn't have a lot to do with the actual amount of oil left. A hundred billion, two hundred billion, three, it doesn't matter. What matters is the production capability which is always a tiny fraction of the reserves vs the demand which is always going up. It would take many decades to produces that oil. It doesn't even sound like the first drops will be produced for a couple of years.
You're drinking a milkshake while someone is slowly refilling your glass from a massive vat.. If you're drinking faster than the vat is refilling it doesn't matter if there is a gigalitre of milkshake left, there is none in your glass and that's what actually matters.
Then of course you have the issue that it's a world commodity. It doesn't mean jack that America might have another 160B in reclaimed reserves because it's going to be sold to the highest bidder.. basically that vat is feeding a couple of hundred other milkshakes.
Now, to show it's not all the evil O&G companies, look at natural gas in the US over the last 5-6 years. It's a domestic market (can't export it yet) that really did experience an excess to demand situation from fracking. The excess made natural gas so cheap they lost money drilling for it. Same companies, drilling with the same rigs, sometimes in the same hydrocarbon deposits (gas caps are found over oil) but one resource (oil) is "the bad oil companies keeping gas high and never letting it come down" the other associated resource (natural gas) crashes in price so low people lose money drilling it but no one says "yay those awesome nat gas companies making it cheap to cook or heat my house"!
The reason oil states generally have cheap prices for their locals is they are largely socialised producers and cheap oil is a low cost form of welfare. Hell, Saudi Arabia is essentially a welfare state. Blame capitalism