Pelosi in exchange with McCain backers
By Berny Morson, Rocky Mountain News (Contact)
Published August 26, 2008 at 12:43 p.m.
Updated August 26, 2008 at 12:43 p.m.
UNION STATION - House Speaker Nancy Pelosi wanted to know if those people chanting "drill here, drill now' really meant it.
"Right here? You want to drill right here?" Pelosi asked as John McCain supporters began their chant. "Can we drill your brain?"
Pelosi was holding a press conference to tout Democratic proposals to solve the energy problem when the chanting begans. She and several other speakers said only renewable energy can bring a lasting solution.
Following her remarks, Pelosi left without taking questions.
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August 26, 2008
12:59 p.m.
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Dusty_Piniella writes:
Finding and using renewable energy sources is good and all but there has to be something to bridge the gap between now and then. The only way to fix the energy crisis NOW is to drill NOW. Otherwise you will see 8, 9, and $10 gas until these renewable sources are brought to market.
Drillheredrillnow.com
August 26, 2008
12:59 p.m.
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timeandagain writes:
That is Pelosi's idea of snapping back? "Can we drill your brain?"... That is something my 7 year old would retort...Wow, she is an even more shocking idiot than I thought!!
August 26, 2008
1:01 p.m.
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coarizona writes:
Poor Pelosi...only hears the voices in her head.
August 26, 2008
1:04 p.m.
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oofda writes:
it is incredible that the very people dems hurt with the no drill policy is their own constituents!
August 26, 2008
1:06 p.m.
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Dick_Tater writes:
Nancy Pelosi, Howard Dean...Dems should really think about who they want speaking for them.
August 26, 2008
1:07 p.m.
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junglegymco writes:
Sadly, it's the lies purported by the republicants that have forced all politicians to support the virtually completely useless idea of additional off-shore drilling and opening of ANWR. We still haven't drilled most of the wells that have leases in the gulf. It takes YEARS to find oil and even longer to get it out. But let's ignore that FACT and assume we could get very last drop of oil by drilling holes every 2 miles. Even then, we'd still only BARELY make a dent in worldwide consumption. It's time to educate Americans to the FACT that this is 99.99% a DEMAND side issue. We need alternative fuel research anbd development, more fuel efficient cars, better public transport and on and on and on . . . Check it out: http://www.time.com/time/business/art...
August 26, 2008
1:12 p.m.
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Dusty_Piniella writes:
junglegymco....see post #2
August 26, 2008
1:18 p.m.
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DenverDan writes:
Pelosi, I love you
xoxoxoxoxoxoxoxo
August 26, 2008
1:19 p.m.
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holicheese writes:
"Right here? You want to drill right here?" Pelosi asked as John McCain supporters began their chant. "Can we drill your brain?"
It was either "Can we drill your brain?" or "So is your face!"
What an absolute troll she is! What is she 9? Well, 9% approval rating, yes. Worst Speaker EVER!
August 26, 2008
1:31 p.m.
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marine76 writes:
10 years ago they said drilling for more oil wasn't the answer. Global warming, polution, and all that. Alternative fuel is the answer, we should put all of our eggs into alternative fuel research. So now, 10 years later, where are we? Still researching alternative fuel. And now the world has higher demand so it's that much worse. So what are we going to say 10 years from now? It's a good thing welfare checks are direct deopsited now or we'd have democrats worried about the problem too. The mail man doesn't take public transportation.
August 26, 2008
1:50 p.m.
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junglegymco writes:
Dusty_Piniella
Read the article I quoted (see my first post). And see SimpleMind's post. It's a disingenuous argument to say that opening up offshore drilling will impact current energy prices with any significance. We may need to do it sometime, but we need to first drill where leases have been already been granted (but NOT drilled), and where there's already open area to drill (i.e - the Gulf), but NO leases have been sold. As an FYI - even if we opened up every offshore drilling opportunity (and thereby threatened massive environmental damage off the shores a number of states - really pissing them off, not to mention potentially destroying their economy in the event of an oil spill), it still takes YEARS to figure out where to drill. THEN the leases are sold, more studying done, and maybe - just maybe - some drilling begins. From start to finish is about 20 years before one drop of oil comes out. Sadly, it's the general public like yourself who has bought into the mis-information that's been disseminated, primarily (I think solely, actually) by the Republicans. As a result, there is a little bit of self-fulfilling prophecy with oil-speculators buying into energy futures and taking advantage of the frenzy created by media hype. It's kind of like someone posting a blog that a stock is going to take off and then they take advantage of the rumors that get spread and falsely drive the price up even more by selling their stock when it's artificially high.
August 26, 2008
2:10 p.m.
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marine76 writes:
Pelosi said it was only 10 years until we'd see any oil from drilling. Therefore it's not worth doing. I agree with others on this blog, we need to do a combination of things. Oil is what we use now. We don't have an alternative fuel that works yet. We need to continue to research that, but we need oil until that's found. I don't believe that it would be 10 or 20 years until we see anything from drilling. But I do believe it will be 10 or 20 years before we have an alternative. What are we supposed to do in the mean time?
August 26, 2008
2:22 p.m.
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pelosisafool writes:
We can put a man on the moon with a computer that was less powerful than todays disposable calculator...we built a nuclear bomb in approximately 6 years without a computer...but the brain deads will have you believe that it will take at least 10 years to drill a hole in the ground. Jungle Gym says 20!!! Some of the finest fishing in the Gulf of Mexico is around the environmentally hazardous oil rigs. Jungle Gym needs to stick to playing on the playground and not get involved when grown ups speak.
August 26, 2008
2:34 p.m.
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junglegymco writes:
pelosisfool - You are true to your name; a fool. Idiot, actually. Try reading what the EXPERTS have to say: http://www.time.com/time/business/art...
I know you probaby believe that Jeb was out a huntin one day and shot a hole in the ground and up came a bubblin' crude. Put the dunce cap back on and stay in the corner while those of us with an IQ over 5 talk about how oil is actually located and recovered.
August 26, 2008
2:41 p.m.
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navymom writes:
junglegymco writes: "From start to finish is about 20 years before one drop of oil comes out."
And you know this how? Are you a drilling engineer? Do you work in the oil and gas industry that you have first hand knowledge?
I do. Wells in North Dakota have been drilled and citizens there are reaping the benefit from royalties less than 2 years after work was begun. Here in Colorado, although I am talking about natural gas not oil, wells are producing in less than two years. I know because my and my husband's company services the oil and gas industry.
I will admit that it may take longer offshore, but if we don't start we will never reap the benefit.
Part of what makes the process a long one is protests filed when leases are sold. The recent Roan Plateau leases generated over 40,000 filed protests and one lawsuit from an environmental group. Each one of those protests has to be addressed and dismissed or allowed. After the protests are taken care of the lawsuit, which could take years, will go forward.
On top of that, each state puts regulations on the industry that can prevent or slow drilling. Permits have to be approved and can be denied, even when a lease is owned. Colorado's new rules, that are being implemented this fall unless stopped somehow, can prevent companies from drilling for 3 months out of the year or prevent it altogether in some areas where there are leases to protect a toad, prairie dog and other animals but put people out of work.
If it was a simple as buying a lease and going out and drilling, we would already have more oil and gas. It isn't that simple, but people listen to those that would have you believe there is nothing more to it, so the oil companies must not really be serious about drilling after all. They never check the facts themselves.
Many of us who are pro-drilling have said that we are also pro-alternative energy and renewable energy. We just believe that all options should be on the table.
I read the article on CNN to which you refer as support of your stand. I agree with parts and disagree with parts. You have to remember, that any news person cites sources and reports with their own bias. Fox is conservative and reports from the conservative view (although more balanced in general) and CNN is liberal and reports from the liberal view.
I agree with you that oil is a demand-side issue. Oil is traded on the world market and yes, it will always be a world commodity.
Part 2 in next post.
August 26, 2008
2:41 p.m.
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navymom writes:
Where I disagree with most and the argument that I make is the job issue. If we drill here in this country, we put people to work in good paying (my drivers make 60K plus a year) jobs which in turn pumps more money into the local economy, state economy and the federal coffers in the form of taxes. Yes, the oil companies will continue to make their 8% profit, which is only an average profit margin, but they will be transferring money into our economy instead of foreign economies.
In the meantime, let's continue to work on other solutions.
I would add a caveat here, I think that you will find that when alternative energies are common, people will complain that they are paying too much for wind energy, solar energy, hydrogen or whatever form of energy takes the place of oil. They will complain that the companies are making too much money and government should do something about it. It is a fact of life in the United States, that those that do not have will complain about those that have and want the government to take from those that have to support those that have not. It is human nature and part of our move to more socialism.
August 26, 2008
2:44 p.m.
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tbizzy writes:
Pelosi believes natural gas is not a fossil fuel:
http://blogs.wsj.com/environmentalcap...
She has a great grasp on science. If its going to take 10 years or more to develop wind or solar, why bother? That's the same attitude they have when it comes to drilling.
August 26, 2008
2:52 p.m.
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marine76 writes:
All I see is one side trying to find a solution. Most are in agreement that we have to use what we have now while we look for something better. The other side says it will take to long when in fact all they are trying to do is promote their own agenda. Save the .......... (fill in the blank). Saving the environment is very important. Can't we have both?
August 26, 2008
3:10 p.m.
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pelosisafool writes:
Jungle Gym, I think you fell off the monkey bars one too many times. So you have an IQ of what, 6 maybe? Are you seriously trying to point to Time magazine as a credible source on oil exploration? Try Life next time, there are more pictures. Your hero claims that stopping the delivery of 70,000 bbl. of oil per day to the strategic petroleum reserve will have an affect on price, but an additional 1,000,000 bbl of oil per day from ANWR will have no effect? Love to hear your explanation on that, perhaps you can get the answer from Entertainment Tonight. You said 99.99% of the issue is a demand side problem? Are you finding it hard to find gasoline? Do you think we should add more supply to the equation? Here are some numbers you probably will not find in Time, there is at least 4,000,000,000 bbl of oil in the Bakken Formation. (the Democrat Governor of Montana would be happy to prove that as a fact to you) In ANWR there is at least 16,000,000,000 bbl of oil. We have over 2,500,000,000,000 bbl (that would be 2.5 trillion, I know you can't count the zeros as you do not have enough fingers) in shale oil. Again, look at what your glorious leaders in the Democrat party did for you, they are holding 70,000 bbl a day from our Strategic Petroleum Reserve in order to affect price...it will take 228,571 days of 70,000 per day to equal the known reserves in ANWR. Think those oil company profits are disgusting? Guess what the government made off of the same amount of gasoline that the oil companies made? Multiply the oil company profits by 5, that is a good approximation. Natural gas and coal are going to be your next lesson.
August 26, 2008
3:14 p.m.
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marine76 writes:
I like the way that Pelosi says that the first 100 days of Obama's term will see a lot of things done. Bush gets all the blame, what have the senate and congress done to help America since the Dem's took control. Why can't we work together to make it work? Everything is someone else's fault. It's not a game, it our future.
August 26, 2008
3:21 p.m.
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junglegymco writes:
navymom -
First, the article was from Time. And FYI - CNN with right-wing columnist Glenn Beck is hardly liberal. But that fact aside . . .
Comparing apples to oranges is always a dangerous thing. To say " . . .citizens there are reaping the benefit from royalties less than 2 years after work was begun" is NOT the same thing. You're talking about profits to landowners, NOT gasoline price reduction to consumers. From the time we ALLOW offshore drilling to the time the CONSUMER (read here CONSUMER, NOT THE PERSON WHO OWNS THE LAND AND GETS ROYALTIES) gets a 3 or 4 cent reduction at the pump is still likely 2 decades. OK, maybe 15. There's MANY studies that the USGS has to do before the land can even begin to be leased, simply to make sure that we're drilling in the best place. From there the land is leased, more studies, and perhaps finally some drilling. As an oil company employee it's easy for you to understate the envrionmental impact and to be upset when protests are filed, so let's be reminded of some of the very real dangers of oil extraction, refining and transporting. see: http://www.losco.state.la.us/admin/ne...
To the extent that there are good paying jobs; yes, but also VERY dangerous (as you should know). I think it's great that we'd have those jobs here - if they stay here. I have no problem with oil companies making money; it's what companies exist for.
Are you an economist? Do you have a degree in business? Well, I do and I can tell you that SimpleMind hit the nail on the head when he said OPEC will simply reduce their output to keep oil prices high. The U.S. has 3 % of the WORLD'S oil reserves but uses 24% of it. OPEC will make sure worldwide oil prices stay high - and we will NEVER have enough domestic oil to supply our country's need, or to keep the prices low enough at the pumps to support the continuing gas-guzling behemoths that Americans seem to demand. We need to look SERIOUSLY at other alternatives before we try and sell the American public the, "Drill our way out" of our gluttony at the expense of not only significant environmental damage, but economic damage to the fishing industry etc if /when another oil disaster occurs. And that's COMPLETELY ignoring the fact we simply can't drill enough oil out of the ground - EVER - to offset oil prices with any significance. Offshore drilling is a FUTURE LIMITED potential solution, but should NOT be the one we're trying to sell to the American people; it's snake oil at its best.
August 26, 2008
3:32 p.m.
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pelosisafool writes:
Jungle Gym, why post a photo of a fuel oil spill that occurred after a collision? Lets ban air travel because an airplane went down. Get rid of swimming pools because someone drowned. You asked Navymom if she was an economist or had a degree in business. Way to deflect and attempt to invalidate her by implying that because you supposedly have a degree you know better than her. I will bite, I have a BS in Economics and Computer Science. Today we call that Econometrics. When you studied economics, what did you learn about cartels?
August 26, 2008
3:47 p.m.
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junglegymco writes:
pelosifool -
Keep the dunce cap on and make sure to try and get the facts correct. Obama wants to swap 70,000,000 (not thousands, as you "accidentally" stated in your post) barrels of oil for an immediate price reduction - something Bush Sr. did in after the spike in oil prices after the first gulf war to help bring prices down (it worked). Did you actually READ the article on offshore oil drilling? Most economists agree that WORLDWIDE oil consumption will increase by 30% by 2030, so 75 billion gallons of oil that MIGHT be in the untapped ANWR and offshore drilling areas are a drop in the bucket in WORLDWIDE consumption. Oil Shale? Are you KIDDING? There's also likely oil maybe in mars, but that doesn't make it economical to get. Much of the oil shale you talk about shares that same dubious distinction: retrieving and refining it are not easy (or cheap) prospects. You apparently think we can still go out a huntin and shot up some bubblin crude. As for oil profits - I have no problem with oil companies making money.
August 26, 2008
4:29 p.m.
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zivo24 writes:
Shaggy and Timeandagain proove, once again, how foolish they are.
It wasn't Pelosi who said "Can we drill your brain?"
Maybe if you both had some remedial reading skills you would have read the article and understood that it was the "protestors" chanting that.
Anyone who believes we can drill our way out of this issue without creating other consequences is as big a fool as Shaggy and Timeandagain.
Brazil went to a biofuel strategy more than 10 years ago that is paying off today as gas prices soar.
Why are they being more proactive than us?
http://www.msnbc.msn.com/id/8262015/
August 26, 2008
4:52 p.m.
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rickg19611 writes:
zivo24..... only an Obama supporter could be so uninformed..... it was Pelosi who made the deranged statement about wanting drill American's brains.....
Read the link below that CONFIRMS it and then you can apologize for calling other, more informed and educated posters, "foolish". While you're at it... try catching up on your own advice about "remedial reading skills".
"Pelosi paused and asked the group, “Right here?” Seeming to enjoy the back and forth, she followed with another question: “Can we drill your brains?” "
http://www.politico.com/blogs/thecryp...
August 26, 2008
9:02 p.m.
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navymom writes:
zivo24 writes: Maybe if you both had some remedial reading skills you would have read the article and understood that it was the "protestors" chanting that.
Read the post an, as I have told many on these threads, get a grammar lesson.
"Right here? You want to drill right here?" Pelosi asked as John McCain supporters began their chant. "Can we drill your brain?"
Let us dissect this portion of the report. "Right here? You want to drill right here?" is a direct quote of Speaker Pelosi's words as indicated by the next sentence. "Pelosi asked as John McCain supporters began their chant." "As John McCain supporters began their chant is a dependent clause which tells when Speaker Pelosi asked her question.The final sentence, being a direct quote that does not identify a new speaker, is also the direct words of Nancy Pelosi.
Any one who paid attention in high school English would have been able to understand the mechanics of this portion of the report.
As for the words themselves, it was a fairly childish response on her part.
August 26, 2008
10:10 p.m.
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pelosisafool writes:
Jungle Gym, wrong, wrong, wrong. 70,000 bbl per day is the correct figure, it is not an accident. Congress voted to stop adding to the strategic reserves in order to lower prices. We were adding 70,000 bbl per day. Not any longer, that 70,000 is supposed to make a big difference but adding 1,000,000 bbl per day will do nothing. Makes no sense does it? Not only will you find this in your beloved Time, but every major news organization will report it as well. Look at the congressional record, the truth will set you free. These facts I am stating are easily verified. Even you can find them, get your parents to help you if you need. Obama wants to swap light, sweet crude in the reserves with sour, that is oil with a heavy sulfur content. To the average Joe and the below average Gym, that might sound mighty impressive until you learn the price difference is insignificant, especially when you are talking a mere 70,000,000 bbl. George HW Bush released...are you ready for this??? A whopping 35,000,000 bbl of oil during the first Gulf war. It wasn't done all at once either, it was done in two equal draw downs many months apart. Guess where oil prices were then? Somewhere around $30/bbl. not the $130/bbl. that our do nothing congress is facing. Even then, prices only dropped a few dollars per bbl. You never told me about what you learned about cartels. I had the distinction of getting my economics degree during the second oil crisis so you can bet that was something that we poured over in minute detail. You did not even touch my question about supply. Jed very well could have shot a gun and oil could have bubbled up from the ground. There are natural oil seeps all around the world. ANWR is one of those places, oil actually bubbles out of the earth, like a spring. Ever heard of the La Brea tar pits in Los Angeles? WOW! It is actual oil that seeped to the surface! More oil seeps naturally in the Gulf of Mexico in a year than what the Exxon Valdez spilled, actually about two times that amount. Oil in shale? Not economical at $27/bbl, but get to $40/bbl, it becomes economical, AT THE OLD WAY OF EXTRACTING IT EVEN! It is truly amazing what advances are being made with microwaves being used to break the oil down from the rock so it can be extracted by, get this, simple drilling. Typical hysterical liberal compares extracting oil right here in the good old USA with trying to bring hydro carbons from another planet that is 35 million miles away. Jungle Gym, you are a defeated loser. You are the epitome of the typical modern day liberal, a helpless, useless ward of the state. You need to step aside you defeatist fool and let the doers in this society fix the problems that you are so frightened of. You have been fun to mess with because you talk about something that read about in Time magazine but truly have no idea of what you talk about.
August 26, 2008
10:40 p.m.
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navymom writes:
junglegymco writes: "comparing apples to oranges is always a dangerous thing. To say " . . .citizens there are reaping the benefit from royalties less than 2 years after work was begun" is NOT the same thing. You're talking about profits to landowners, NOT gasoline price reduction to consumers."
Quit taking one part of my post out of context to make a point. If had read the beginning of the post, you would know that I was refuting your claim that "from start to finish is about 20 years before one drop of oil comes out." The inclusion of the statement pertaining to reaping benefits in the form of royalties was in support of the time frame of under two years. If there is no production, there are no royalties. Oil companies do not pay royalties until a well is producing as royalties are based upon a certain dollar amount per barrel of oil or cubic foot of gas.
Yes, Pelosisafool was off when he/she said 70,000 instead of 70,000,000, but how can you believe that 70,000,000 total that Obama proposes releasing, over a six month period according to Sen. Bingaman of New Mexico, will make a difference in price but the commitment to drilling and production in the United States will make no difference.
In case you question the Bakken Formation figures, here is a link to the USGS report: http://www.usgs.gov/newsroom/article.... . You can google ANWR and the National Petroleum Reserve Alaska to see the figures there.
You also wrote: "Are you an economist? Do you have a degree in business? Well, I do and I can tell you that SimpleMind hit the nail on the head when he said OPEC will simply reduce their output to keep oil prices high."
How can you believe this and yet believe that releasing oil from the Strategic Oil Reserve will bring prices down?
If you had read my post thoroughly, you would have seen that I said oil will always be on the world market. I understand that prices may not come down. The whole point is that if prices don't come down, let's at least keep the money in our own economy by producing as much as we can here while developing other sources of energy.
I understand your concern for the environment, but the truth is drilling is more environmentally friendly than ever before. As for the tanker accident, I agree that spills can be bad but occasionally accidents happen.
What about accidents in the production of renewable energy? Do you really think that any energy form is 100% reliable and safe?
Lastly, you wrote: "We need to look SERIOUSLY at other alternatives before we try and sell the American public the, "Drill our way out" of our gluttony at the expense of not only significant environmental damage, but economic damage to the fishing industry etc if /when another oil disaster occurs."
continued
August 26, 2008
10:41 p.m.
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navymom writes:
Where in my post did I advocate any of this? In fact, I stated that "Many of us who are pro-drilling have said that we are also pro-alternative energy and renewable energy. We just believe that all options should be on the table."
My last two paragraphs said "In the meantime, let's continue to work on other solutions. I would add a caveat here, I think that you will find that when alternative energies are common, people will complain that they are paying too much for wind energy, solar energy, hydrogen or whatever form of energy takes the place of oil. They will complain that the companies are making too much money and government should do something about it. It is a fact of life in the United States, that those that do not have will complain about those that have and want the government to take from those that have to support those that have not. It is human nature and part of our move to more socialism."
I see you did not dispute that because it is true.
Also, look at your link and you will see that the article you cited is from "Time in partnership with CNN".
August 27, 2008
5:46 a.m.
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pelosisafool writes:
Navymom, when I said 70,000, I was talking about the suspension of adding to the SPR. That is what our Democrat lead congress actually did, we have stopped adding to the SPR and that equals 70,000 bbl per day. They claimed that this would help but at the same time claimed that adding 1,000,000 bbl per day would do nothing. (ANWR) I was not talking about any scheme to swap sweet crude with sour to the tune of approximately 70,000,000 that was dreamed up by Obama. The price difference is not that much between the two...it is not enough to alter the price of a barrel of oil...it adds not one additional barrel of oil to the world, it would just move where we store it around, kind of like a shell game. If you took all of the regular unleaded gas at your corner gas station and put it in the storage tank for the premium gas and put the premium gas in the regular gas storage tank what have we done supply wise? Nothing, I have switched where they are stored and that is it. Anyway, I do not want to confuse two different issues, I stick by my 70,000 bbl per day suspension to the SPR that was enacted by congress a few months back. I do not care about Obama's ponzi scheme of shifting the storage sites between sweet and sour crude.
August 27, 2008
8:15 a.m.
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navymom writes:
pelosisafool, I understand your position. Your second post came up while mine was being typed.
August 27, 2008
8:29 a.m.
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mytwosense writes:
Good morning, navymom. I want to get your opinion about something, because you do come across as if you're really in the industry. Some of these folks, well, I think they just get their talking points from their favorite pundits. Anyway, you said:
"Here in Colorado, although I am talking about natural gas not oil, wells are producing in less than two years. I know because my and my husband's company services the oil and gas industry."
I've heard that over the last eight years, oil and gas production have really intensified here in the West. Especially gas. With that in mind, why are energy prices still going up, up, up? Is this not enough supply going into the market to temper prices a bit?
When I hear that gas production is really strong in the West, it makes me wonder why we're not seeing any relief at all in our utility bills, and indeed, why our utility bills just keep getting higher and higher.
I know some folks will say that wind mandates are why, but I find it a real stretch that those costs would be so much they would completely erase the savings we should be getting with the ramped up production of gas in the West.
Your thoughts?
August 27, 2008
8:35 a.m.
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mytwosense writes:
pelosisafool: "Not economical at $27/bbl, but get to $40/bbl, it becomes economical, AT THE OLD WAY OF EXTRACTING IT EVEN! It is truly amazing what advances are being made with microwaves being used to break the oil down from the rock so it can be extracted by, get this, simple drilling."
Where is this being done, and how many barrels a day are they managing to produce?
August 27, 2008
9:56 a.m.
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wow writes:
John McCain supporters began their chant. "Can we drill your brain?"
---------
In the article about Hillary's unity speech, the Pelosi quote reads,
"Right here? You want to drill right here?" Pelosi asked. "Can we drill your brain?"
RMN is by the most unreliable source of news around. They are second only to The Onion, and probably rank third if you throw in Weekly World News.
Parakeets laugh at the garbage written on this cage liner.
The only reason to read it at all, is to hang out in the comments with you good people.
Fire Kevin Vaughan's fact checker immidiately.
August 27, 2008
11:48 a.m.
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navymom writes:
mytwosense, there are many things that affect the price of oil and gas.
One factor is the fact that oil and gas are commodities that are traded on the stock markets. They are traded on what has become a "world market" at "world market" prices. Even if there is an abundance of the commodity, the price to the consumer is based upon the stock market price, which is dictated by people buying and selling commodities but never actually owning the commodity but just a piece of paper. For instance, soybeans, another publicly traded commodity, can be sold many times over on the market with the buyers never taking possession of any soybeans. They are either sold at a gain or loss. You also have to understand that this is a futures market with trading based upon what people believe the commodity will do in the future. It has nothing to do with today's supply and demand, just the perceived future supply and demand.
Individual stations will replace their product at the price dictated by the market on the day they buy gas. The local gas companies sell gas, in part based upon the market rate, but largely based on rates filed and approved by each state's Public Utilities Commission. For instance Xcel energy just recently asked the Colorado PUC for an increased rate to the consumer in Colorado. Prices go up faster than they come down because the local station or company waits to see if prices are going to stay down or go back up.
Another factor in high energy prices is the high cost of litigating lawsuits from environmental groups, protests to drilling, etc. Every time a group files a lawsuit, corporate attorneys have to go to court to defend their right to extract the product that they bought and paid for when they purchased a lease. As we know from the media, litigation can be extremely costly and long.
Another factor, the building of pipelines. Environmental groups are blocking or slowing down the building of pipelines to move natural gas and oil. An increase in the pipelines would increase the capacity to move more product, thus increasing the supply. Some of the wells being drilled cannot come online until pipelines are completed or expanded. Pipeline capacity is traded on a daily basis or on long term contracts. Companies must buy space on the pipeline and if they are locked into a long term rate, they will not be able to lower prices.
August 27, 2008
11:49 a.m.
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navymom writes:
Another factor, even the cost of natural gas is somewhat tied to oil because as oil goes up the cost of production of natural gas goes up. My company, which is small, has fuel costs that currently run $6000 to $8000 per month. Everything that we do from sitting in our office using utilities to driving our trucks to location consumes energy. All of these cost get passed on to the companies we service. The process of drilling consumes energy. Drilling rigs do not run on air. Electricity and diesel fuel are used in abundance. The bottom line is that every industry has increased costs due to high oil prices, higher wages, government environmental mandates, etc. which are passed on to consumers.
Look for natural gas prices to increase even more if the move is made to fuel vehicles with natural gas as many are suggesting. While I agree that it is a cleaner fuel, using natural gas for vehicles will divert natural gas available for heating homes unless we increase the infrastructure needed, i.e. pipelines, to carry enough supply.
As we move to other energy sources, I don't really foresee things being that much different in that companies are in the business to make money. If they can't make money, why stay in business?
As for wind driving up the cost of utilities, here is a link to xcel energy describing how you can commit to 100% wind energy for an added fee per month. Personally, I would argue that even those who don't commit are paying more because as more infrastructure is built the cost is passed on to the consumers.
I am all for more renewables but, being a pragmatic person, I also know that people who are struggling now will have just as hard a time affording renewables. There will always be people who struggle. Looking at other countries that are socialist or communist will show you that it is no different in other forms of government.
As long as we are human, there will be have and have nots. I am in favor of people who have not doing what I have done with no help from the government, work hard, support your family and try to achieve the American dream. I am not there yet, but am working at it.
August 27, 2008
12:45 p.m.
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mytwosense writes:
Thanks, navymom, I appreciate you taking the time to give that information, especially from your informed view as an industry insider.
navymom: "As we move to other energy sources, I don't really foresee things being that much different in that companies are in the business to make money. If they can't make money, why stay in business?"
If we were to move almost fully towards renewable energies for powering our electricity, I agree that we can expect to see price fluctuations still. Particularly based on weather events, until the technologies are advanced enough to circumvent that.
One thing though...our current energy sources are so dependent on each other, that yes, when the cost of one goes up, so do the others. But renewable energies wouldn't have that degree of interdependency...at least I don't think they would.
I'm kind of looking at this from a geographical perspective. For example, solar powering states with a great deal of sunshine, hydroelectric powering places where appropriate bodies of water exist, wind in areas with high winds, and geothermal pretty much anywhere.
It seems to me this would alter both our current grid system, as well as how our various sources of energy are more dependent on each other. That should affect costs, a great deal.
August 27, 2008
2:57 p.m.
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navymom writes:
mytwosense, I appreciate your thoughtful questions and willingness to debate in a civil manner.
You suggest that interdependency is part of the problem and could be solved with renewables. I would suggest that all companies and industries are interdependent and therefore something that affects the cost of one will affect the costs of a great deal of others.
For instance, the trucking industry is dependent upon a large number of companies, i.e. truck stops, office supply companies, utility companies, state and federal agencies, parts stores, safety equipment companies, insurance companies, truck and trailer manufacturers and dealers, etc. Each of these companies or industries are, in turn, dependent upon another set of companies or industries. Some industries could be common to all, such as utilities, government agencies, office supply, etc.. If the operating expense for any one of these industries increases, it will increase the operating expense for all who are dependent upon them for goods and services. While those cost may not be passed down immediately, when they reach a point where the company is no longer willing or able to absorb those costs, they will be passed down, ultimately, to the consumer.
Renewable energy sources will be dependent upon support companies to an extent also, although I will admit, that as I am not in that industry, I am not sure yet to what extent. I am trying to research more to be more knowledgeable on the subject.
Also, never count out the possibility of our government allowing renewable energy to become publicly traded commodities.