Of course Exxon Mobil would predict this based on business-as-usual projections. It makes them look profitable. Never mind the fact that in 20 years we might all be creating hydrogen from salt water or using geothermal heat or solar thermal technologies. These guys are disingenuous and making record profits and we have got to get away from fossil fuels.

I've heard that oil companies have bought up many alternative energy patents in order to keep them out of circulation. Pretty sick and shortsighted.

Brett, I was paying a pound a liter for petrol in the UK last month. That is over $7 a gallon.

Shannon,

Perhaps you should educate yourself as to why these "disingenuous" companies are making "record profits." Let's just mention a few ways.

Economics 101 introduces to us a fairly simple concept: supply and demand. When the supply of a good remains steady, either arbitrarily or through normal happenstance, or decreases and demand increases, prices will also increase. Thus we have the following possibilities:

1) Supply increases more than demand = prices decrease.

2) Supply remains constant while demand decreases = prices decrease.

3) Supply increases less than demand = prices increase.

4) Supply decreases more than demand = prices increase.

There are other possibilities but those cover the topic here.

Now let's see how these evil companies are making those "record profits."

Just focus on point 3 above, how does government assist in allowing supply to increase at a slower rate than demand? Rephrasing the question, how does government assist in helping the oil companies make "record profits?"

There are a number of ways:

a) Over 90% of the liquid oil reserves are owned by state entities (like OPEC) that limit the supply in order to keep prices high. End result is increased prices and thus "record profits."

b) In this country, most Democrats and some Republicans vote against legislation allowing drilling in ANWAR, which would increase supply and decrease (or at least stabilize) prices. End result is increased prices and thus "record profits."

c) Some coastal states (FL and CA) limit or altogether ban drilling off of their coast lines. Once again demand is increasing but supply is not increased. End result is increased prices and thus "record profits."

d) The EPA has not allowed a new oil refinery to be built in this country in almost (or perhaps over) 30 years. Thus even if we had the oil, we couldn't refine it because our refineries are max'd out. End result is increased prices and thus "record profits."

e) There are something like 40 different blends of gasoline in this country. Not all blends are located near one another so if one state is running low on their gas reserves, gas reserves from another state may have to be shipped there. This will tend to increase the price and thus the profit to the oil company.

f) Ethanol in gasoline cannot be shipped via pipelines due to the nature of the product. It has to be shipped via truck or rail. This adds another layer of cost that a company will surely tack on a profit to, which I don't blame them for doing.

All of these examples have a common theme: government involvement. Government is the reason for every single price increase shown above. Thus they are also responsible for the "record profits" realized by these evil companies.

Finally, guess the profit on a gallon of gasoline...

It's about 10 cents.

Now guess the tax on a gallon of gasoline...

It's about 50 cents.

The company does all the investment, exploration, shipping, refining, marketing, selling, etc. and they make only about 10 cents per gallon.

The government does nothing and takes 50 cents. And please spare me the whine about government putting that to the roads. Anyone who has ever driven through Pittsburgh knows better.

Shannon,

From which episode of Captain Planet did you get your rant?

Well said Shannon. Oil is their livelihood. Of course they are going to say that we will still be 80 percent dependent on it in 2030. They want us to believe that. We need to find a way around it. If you ask me, exxon mobil is no more than a corporate thief.

Todd C,

Well said. Bravo!! But, alas; I fear it falls upon deaf ears. Take, for example, Gabe. To him, ExxonMobil is nothing more than a corporate thief. Obviously, he didn't pay attention in Econ 101.

Gabe,

So, what is your answer? How are you going to solve the so-called energy crisis? I'm truly interested in hearing your answer.

Todd C,

BTW, major oil companies make in excess of 80% of their profits through the exploration, development, and sale of crude oil. Maybe Gabe and Shannon should obtain and refine their own oil. Or, ride their bikes, walk, or whatever.

Yes oil companies make lots of $, but that's not because they charge an unfair price for their product, that's because of volume. On a cents per dollar of revenue basis, the oil companies make about half what the pharmaceutical companies make (9.5 vs, 21.6), just to name one more profitable industry, but not the only one.

As a person with a chronic disease that requires high priced drugs, I don't resent the pharmaceutical profits. Both oil and pharmaceutical companies face enormous risks of failure in their ventures, expensive equipment, and quite extended commercialization horizons.

People are anxious to get away from fossil fuels due to political, societal and environmental angst. So am I. It'll happen. But it will happen when the market drives in that direction. That's the lowest cost path. And while we don't like paying at the pump or the pharmacy counter, let's be glad we have these business entities that add quite a bit to our quality of life.

Rebuttals based on the belief that AGW is real carry little if any weight. The classical AGW fingerprint of a tropical hotspot in the troposphere predicted by IPCC GCMs isn't there. There are too many holes and qualifiers in the AGW argument, as succinctly pointed out by John Carter's YouTube videos, and others.

Gabe:

In following the comments on this thread, can you tell me what the government is, if EXXON is a corporate theif?

Government intervention is needed up to a point, problem is, they try to appease everyone and everything. Leads to the problems we are all experiencing right now.

Brett $3.09??? OMG! I thought $2.75 was a pain in my neck. Come fill up in Jersey! Lol, you will waste more gas getting here from State College but what the heck! Lol. Reply: I know Jersey is usually a good place to fill up. Went to school there for 4 years........just too many cars!

I don't ever fill up at Exxon because that are always 20 cents more than everyone else. (Reply: Out here, everyone around town has the same exact price all the time, seriously. You might catch a spot that is slow to change the price like everyone else during a maximum period of an hour or so, but that is it.)Right on the main road here Hess is charging $2.75 the the Exxon just down the road is charging $2.98! I personally have never seen gas go over 3 dollars since Katrina.

Anyway I was a little off topic...

Do I personally think that we need to get away from fossil fuels because of "global warming"? NO! We do need to find other sources of energy though because prices are CRAZY, $7 a gallon in the UK Patrick? What time of the year was it? I drive to school every morning and its costing me big time. It's 36 miles from here to my school and it wastes a lot of gas since I drive an SUV. Yes an SUV. We need something else and everyone agrees with that one. Hey, theres always fusion. Lol.

tell me something gabe, just what do you propose as your way around it?...fossil fuels provide the standard of living for this great country...it allows for the freedom to do most of which you care to do at a relatively modest cost...it heats and cools your home so that you are comfortable whining on a blog about someone else making money because your too jeaulous to see thru to the truth...to quote a favorite movie line of mine "you can do what you want with us (skeptics), but we're not going to sit here while you badmouth the United States of America!!!"

Awwww, look at Todd and Paul defend their precious little oil companies. Isn't that cute?

I'm sure they -- along with others -- have stock and mutual funds invested in Exxon so they have a vested interest in maintaining the status quo.

Shannon hit the nail right on the head. Exxon is telling their shareholders and employees what they want to hear. Namely, that business is good and it's going to get even better. What company doesn't do that?

In 20 years or so, Exxon will be suffering the same fate as GM is suffering right now. That might seem hard to believe at the moment, but just watch.

At least the government will be taking away their subsidies, errrrrr, I mean "tax incentives" very soon.

Back when Carter was President sometimes you had to wait three hours for gas or couldn't get it at all. That really sucked. Reply: Wasn't that the gas shortages of 1973? Maybe my memory is wrong, but if I am right, that would be
the Nixon years.

If gas was not available, the AGW groupies would quickly forget all that nonsense and be worried about something serious for a change. In about one or two hours global warming neurosis would be a malady of the past.

Patrick Henry: Well said. We finally agree on something!

Paul: I don't have all the answers. But I surely don't want to just keep letting the oil companies steal from the American people. I guess your willing to pay whatever the oil tycoons throw at you. So I guess you won't mind paying 4 dollars a gallon for gas in the near future. Sounds foolish to me.

Darren: I completely agree. The gov't is a thief right now too. Can thank Bush for that. He loves giving breaks to his big corporate buddies. Probably getting omething out of it himself.

Sammy k: Fossil fuels come at a price. I don't believe that burning fossil fuels is worth harming this great planet of ours. Second of all I heat my home with wood not natural gas or propane. So fossil fuels aren't keeping me warm while
i listen to you babble on this site supporting companies making billions and billions in profits every year. Jealous? About what? then ripping the public off? I think not. Maybe you are. You sound like that kind of person. Badmouth the USA? I am badmouthing corporations stealing from the American PUBLIC! That is not badmouthing the USA. Come on. Think. I'm sorry sammy k. I don't love and admire these corporations like you. And yes, corporations like these are thiefs. Your just to brainwashed to see it. Hope you enjoy paying 3.10 at the pumps. Ain't it grand?!?!

Some very good early season snow in Europe.

"Snow has fallen across Austria this week transforming many resorts into winter wonderlands. Over a metre of snow is expected in the next few days at Lech (20/30cm) following 20cm of new snow on Thursday."

http://www.igluski.com/snowreports.cfm?resortid=194&btn=yes

Mark,

Big oil will be around long after you've gone to meet your maker. And I truly hope you live longer than 20 years. There's plenty of oil left in the ground, not to worry. It's just a little harder to get out. It just ticks you off that capitalism works and you've invested your money in windmills.

Gabe,

Did you read Todd Cs post? It's called supply and demand. As long as the left gets in the way of any serious exploration and development; the supply is not going to be there and you'll be paying out the wazoo. So, if you want cheaper gas, tell your left wing friends to quit whining and let the drilling begin. Otherwise, go invent a hydrogen fuel cell that doesn't take more energy than it produces to do the same amount of work of a gas engine. And I hope you feel safe traveling in a electric airplane.

if we are going to be still using oil in 2030 then what about the oil supply running out? what is going to happen then? all of this won't even matter because the economy will crash.

Brett,

The worst gas shortages were under Carter. That was why he started the Synthetic Fuels Corporation (which indirectly employed me) and attempted to turn western Colorado, western Wyoming and Eastern Utah into an oil shale wasteland.
Reply: I know there were many problems under the Carter admin. as well, but the one that sticks out is the 1973 episode.

a new gasoline shortage and continuing economic problems brought Carter's popularity at home to an all-time low by July, 1979. In a televised speech, Carter said that the United States was facing a "crisis of confidence." He promised to provide strong leadership, and he outlined a new energy program...
http://ap.grolier.com/article?assetid=a2004720-h

Fortunately we were rescued by Reagan. Too late to save democracy in Iran, but at least Colorado was spared.

-85F forecast for Greenland next week.
http://www.wunderground.com/cgi-bin/findweather/getForecast?query=72.58000183,-38.45000076

Send Barbara Boxer back for a follow up report on the hot weather.

Patrick:
I live in the UK and our fuel prices have just reached about �1.09 per litre. Previous to these rises it was thought that when fuel breached the �1 per litre value, people would begin to change their modes of transport in favour of less expensive modes such as public transport. This is not happening nor will it happen. People in the Uk like most other places like convenience and comfort and this means filling the car up with fuel, no atter how expensive. Environmental considerations including possible AGW do not really have a great deal of say in these matters i'm afraid. The only time i can see prices falling again by any decent amount is when China and the likes take up less of the worlds available oil supply and maybe when the U.S dollar recovers.

Shannon:
Are there reliable indicators of the level of energy production for hydrogen, geothermal and solar that would replace oil over the next 20 years? If so, how much do they indicate a drop in oil usage? If not, on what would the oil companies base their projection?

The simple fact is, until the cost of oil based products are too painful for a larger portion of the population, there will not be sufficient effort to develop the other energy technologies and the distribution infrastructure.

Until that happens, oil use will continue to increase and drive prices up.

Michael.Mcnaughton,

Hi Michael,

I'm always amazed how much petrol and beer costs in the UK. The high costs never seem to inhibit consumption of either however. Houses also seem to be very expensive there, but people still shelter their families and drive to work. I doubt there is anything Whitehall can to do stop people from protecting their families, though the Lib-Dems seem to keep trying.

As far as China goes, they have survived a hundred years of war and genocide which killed many tens of millions of people over the last century. Now they are enjoying prosperity and the mobility of automobiles, and I doubt they are going to get too worried about the possibility of an extra couple of heat related deaths every summer. Rice production generates huge amounts of GHG, but they like to eat and drink just as much as Americans and Brits.

Anonymous-

The oil supply is not in imminent danger of running out. Known oil reserves for the last twenty years have amounted to roughly forty years worth of oil. This is because oil companies look for prospective oil reserves for only about forty years in the future. There are also huge amounts of oil that we haven't even found in existence. Take for instance this mornings news from Brazil that they found an offshore reserve that holds nearly forty percent again of all the oil drilled in Brazil's history.
Also oil won't just run out instantly causing the economy to crash. It will eventually become very hard to drill, thus sending prices up. By that point hopefully all of our research will have payed off and we will have a viable alternate to petroleum. Ethanol works, but the energy yield is only about seventy percent that of petroleum, thus making it comparitively inefficient. As the oil becomes gradually harder to find and drill, prices will rise and people will either deal with it or slowly phase out use of petroleum. Regardless of when this happens, it will be relatively gradual. Not to say that it won't have any economic implications. I would imagine also, that as oil starts to become rarer to come by, the wealthier nations will be able to continue using petroleum based fuels for longer than the developing nations. Citizens in America for example, are capable of paying more per gallon of gasoline than, say, people in china. Forgiving government intervention (subsidy, incentive...) I would assume this would mean that nations such as China and India would have to cut well back on their useage of petroleum much before the U.S and much of Europe. It may be enough to extend our useage of oil for a fair amount of time.

A very good site that has a lot of charts and graphs dealing with this stuff is {www.bp.com}. If you go to the top left of the page, click on "tracking the third trillion". On that page, on the right side there are links to a few different energy sources (oil, nat. gas, and coal), click on oil, this leads to a page with many charts and graphs and such that deal with all aspects of the oil industry.

If anyone else has an opinion on the capability of nations to pay for rising oil prices, and the implications that would have on other nations, such as the U.S, I would like to hear it.

Regards, Elliot

"Big oil will be around long after you've gone to meet your maker. And I truly hope you live longer than 20 years. There's plenty of oil left in the ground, not to worry. It's just a little harder to get out. It just ticks you off that capitalism works and you've invested your money in windmills."

Of course oil will be around, but Exxon won't be #1 in 20 years.

History tells us that every economic boom is associated with some type of breakthrough technology or idea. The next economic boom will be spurred by alternative energy, nanotechnology, and sustainable business practices.

The right-wingers whose entire view of the economy boils down to, "Preserve the status quo and keep taxes low," really have no understanding of how many more variables -- and more important variables -- there are to the economy.

Capitalism is great; unconstrained capitalism isn't. History has shown that "market corrections" due to unregulated capitalism has resulted in much more pain to the economy than any regulations have. Look no further than the Great Depression, the S&L scandal, the dot-com crash, or the current housing slump, as evidence.