High gas sucks... I hope we all get raises to help offset fuel prices

It was reported in todays Longview paper that big boats going full bore pulling skier or tubers may be using as much as a gallon every two minutes of $4 gas. That equals about $120 per hour.

My boat at full throttle with a little 120hp engine pulls close to 15gph which equates to $60 per hour, so I'd believe those big ski boats could be running that much

If our congress would OK drilling in the arctic and the offshore areas that are now off limits, even though it would be years before that oil is in the pipeline, I believe you would see a much sooner drop in gas costs because of the fear among speculators of more supply in the future. We are the only country that refuses to develop our own resources to the fullest. It has been estimated that drilling in ANWAR would affect less than 1% on the land in that vast unpopulated wilderness. China is drilling off the coast of Cuba less than 90 miles from our shores, and yet our companies are not allowed to do the same. A percentage of every dollar we spend for gas ends up in the hands of people that want us destroyed. Think about it and call your Congressmen.

The politics of oil shale

Fortune talks to Sens. Orrin Hatch and Wayne Allard about the roadblocks to oil shale production.
By Jon Birger, senior writer

NEW YORK (Fortune) -- You'd think this would be oil shale's moment.

You'd think with gas prices topping $4 and consumers crying uncle, Congress would be moving fast to spur development of a domestic oil resource so vast - 800 billion barrels of recoverable oil shale in Colorado, Utah and Wyoming alone - it could eventually rival the oil fields of Saudi Arabia.

You'd think politicians would be tripping over themselves to arrange photo-ops with Harold Vinegar (whom I profiled in Fortune last November), the brilliant, Brooklyn-born chief scientist at Royal Dutch Shell whose research cracked the code on how to efficiently and cleanly convert oil shale - a rock-like fossil fuel known to geologists as kerogen - into light crude oil.

You'd think all of this, but you'd be wrong.

Last month, the U.S. Senate's Appropriations Committee voted 15-14 to kill a bill that would have ended a one-year moratorium on enacting rules for oil shale development on federal lands (which is where the best oil shale is located). Most maddening of all - at least to someone like myself not steeped in the wacky ways of Washington - the swing vote on the appropriations committee, U.S. Sen. Mary Landrieu, D-La., voted with the majority even though she actually opposes the moratorium.

"Sen. Salazar asked me to vote no. I did so at his request," Landrieu told The Rocky Mountain News. A Landrieu staffer contacted by Fortune doesn't dispute this, but notes that Landrieu did propose a compromise which Republicans rejected.

Arghh!

She was speaking of U.S. Sen. Ken Salazar, D-Colo., who has emerged as the Senate's leading oil shale opponent. Salazar inserted the aforementioned moratorium into an omnibus spending bill last December, and in May he proposed a new bill that would extend the moratorium another year.

Salazar's efforts have essentially pulled the rug out from under Shell (RDSA) and other oil companies which have invested many, many millions into oil shale research since the passage of the Energy Policy Act of 2005, which established the original framework for commercial leasing of oil shale lands. (Last year, oil shale represented Shell's single biggest R&D expenditure.)

Salazar says he's simply trying to slow things down in order to ensure environmental considerations don't get trampled in the rush to turn western Colorado into a new Prudhoe Bay. But, ironically, his bid to extend the moratorium comes at a time when his fellow Senate Democrats have been blasting Big Oil for not reinvesting enough of their profits into developing new sources of energy.

I recently spoke with Republican U.S. Sens. Orrin Hatch of Utah and Wayne Allard of Colorado, the two lawmakers working hardest to end the oil shale moratorium. Here are some excerpts from the interviews:

Fortune: Why do you consider developing oil shale such a high priority?

Sen. Hatch: We have as much oil in oil shale in Utah, Wyoming and Colorado as the rest of the world's oil combined. Liberals and environmentalists can talk all they want about wind, solar and geothermal - all of which I'm for - but last time I checked, planes, trains, trucks, ships and cars don't run on electricity. 98% of transportation fuel right now is oil. Ethanol is the only real alternative, and we're seeing that ethanol has major limitations.

It's pathetic. Environmentalists are very happy having us dependent on foreign oil. They're unhappy with us developing our own. What they forget to say is that shipping fuel all the way from the middle east has a big greenhouse gas footprint too.

Fortune: Any hope of changing Sen. Salazar's mind? After all, he says he's not opposed to oil shale production in principle.

Sen. Allard: His mind seems pretty set. His argument is, if we delay this, it gives us an opportunity to phase it in gradually. But he's got it turned around. We need the rules and regulations in place first. When the oil companies go to bid on their leases, they need have some idea what their royalties might be and what their remediation requirements might be [for restoring the land at spent drilling sites].

Fortune: Have you talked to Shell about this?

Sen. Allard: We have, and they've indicated a great deal of frustration. They've put it this way: Look, we can't continue to invest millions and millions of dollars in this kind of research without seeing some light at the end of the tunnel.

Fortune: Sen. Salazar insists he just wants to take things more slowly.

Sen. Hatch: Sen. Salazar and the Colorado governor [Democrat Bill Ritter] say they don't want it to happen too fast. Well, the existing law that I sponsored [which became part of the 2005 energy act] makes it abundantly clear that each governor gets to decide how quickly developments should move forward in their respective states. [Salazar and Ritter] know that. What they're really doing is making sure that the governor of Utah and the governor of Wyoming never gets to make that decision for themselves.

Fortune: One of Sen. Salazar's environmental concerns involves water and the big draw on local water supplies required for oil shale production. Based on my reporting in western Colorado last year, this seems like a legitimate concern. What's your take on this?

Sen. Hatch: Let's compare it to ethanol. Corn needs about 1,000 barrels of water for the energy equivalent of a barrel of oil. That's a crazy amount of water, but it's worked out alright so far because corn is grown in rainy areas, for the most part. But if you want to increase the amount of ethanol, you're going to have to go to irrigation, and then there will be major water limits on how much we can afford to grow.

On the other hand, the Department of Energy estimates that oil shale will require three barrels of water for every barrel of oil.

Fortune: Of course, water is a lot scarcer in western Colorado than it is in Iowa.

Sen Hatch: It is, but remember the oil companies are going to use and recycle the water. And while we're on the environmental impact, let's talk about land use and wildlife habitat. One acre of corn produces the equivalent of 5 to 7 barrels of oil. One acre of oil shale produces 100,000 to 1 million barrels.

Fortune: With gasoline at $4, why this isn't this more of a front-and-center issue for consumers and voters?

Sen. Hatch: I'm generally the last guy to lambaste the media, but generally you do not hear these facts. We're sending $600 billion annually to enemies of our country. If one acre of oil shale produces 1 million barrels of oil, that's 1 million barrels that we would not be importing from Russia and the Middle East. People are going to go berserk when they find out that all along we had the capacity, within our own borders, to alleviate our dependency in an environmentally friendly way.

Ironically, the local governments in Colorado's oil shale areas do support oil shale development, but it's being stopped by the ski-resort elites. A couple months ago, an article came out about how the city of Aspen was being besieged with building applications equating to about $2 million in development a day. Now if those nice, rich people in Aspen really cared about the environment, they might save an acre or two of those beautiful forests they're building on and support some oil-shale development in the not-so-nearby and not-so-beautiful oil shale areas of Colorado.

Fortune: Has oil shale development always been a partisan issue or is this something new?

Sen. Allard: It is something new. The issue with the Democrats now is they want to cut off any source of carbon. And there are those in the Senate who believe the more expensive you make gasoline, the less driving people do and you force conservation by making driving so expensive people can't afford it.

First Published: June 6, 2008: 2:14 PM EDT

Why oil prices will tank

All of this whining over the price of oil and that the oil companies are making too much profits is BS. I don't consider myself a expert on the situation but I do have some very strong feelings on it. First lets look at things from a big picture point of view.

1. Listening to the various news broadcast and talk radio has me convinced that a majority of people think that 100% of the oil pumped is manufactured into fuel oils of various kinds ( Gasoline, Diesel, Heating etc.) they have to remember that only a portion of the oil pumped world wide is used as Gasoline. the rest is used to make other things we need and use every day. Plastics, solvents, Paint etc.

2. The world economy is growing at a rapid pace. My business is in the area of chemicals and other items used in the construction industry. There is not one single item we manufacture that does not have crude oil at its base. The world demand is high. There is currently a specific amount of oil refining capacity not only in the US but World Wide. The refiners have to make decisions ( based on demand and profitability) on what they will produce from their raw material. 7 years ago there were 5 refineries I could buy one of our raw materials from. Today there is only one. Less Supply increased demand = increased consumer price.

3. Profitability is the key. The oil refining companies have to make a profit. If they don't their stock value goes down or they go out of business all together. Yesterday Congress discussed how to manage the profits of the oil companies. What in the name of all that is good do they think they have the right to control the profits of a private entity. The refining companies make roughly 4% profit on every gallon of gasoline produced. In m business that is considered a loss leader. The governments take is roughly 15% ( via taxes) Why should the government make 15% on every gallon sold when they did nothing to produce it.

4. I am all for the research and development of alternative fuel / power sources. It is innovation that has made the US what it was at one time. But as of now the use of ethanol as a major component / additive to gasoline needs to be removed from the table. It cost more in energy to produce than it saves.

5. The current oil price is derived from the following.
- World demand
- Speculation
- Valuation of the dollar
- World production capacity
- refining capacity

6. So in order to correct the problem we first need to:

1. Increase supply to meet demand. ( crude and refined product)
2. Increase the valuation of the dollar thru sound supply side economics.
3. Remove governmental taxation on the refined product or demand the government provide something to us for all of the Windfall profits they have received.
4. remove the strong hold the environmentalist have over the government. There is not one person that is on this site that I would think is not an environmentalist. The problem is that Environmentalism has become a big business.
5. If the US is unwilling to do these necessities there will always be some other country that is willing to sell us crude oil. But at what cost?

High gas cost has changed not only my fishing , but just about everything in our life. My main hobbies were riding a motorcycle or fishing. Both use gas and both used to be really cheap years ago.
We just bought a house in a town closer to work. Driving 10 miles one way just to get anything is a killer at $3-4 a gallon. Driving 45 miles to work one way was also hurting the bank account.
One of the things high gas prices are going to kill off just might be rural living.

A Voice Of Reason

Click here: YouTube - "Joe, American" Challenges the Presidential Candidates

I think Ranger has something here. I have wondered if it is terrorist related too. Seems to me, it would be an easy way to bring a nation to it's knees, especially for a cause that could not stand against us on the battle field.

I doubt the barrel price would affect the price at the pump much, if at all. It is market driven at this point. Problem is, it is governed by the global market. Like someone else said on this thread, we could stop using 50% of what we currently use with little affect on the barrel price because of the other countries that would still use as much or more. I really think that this may be a terrorist attack to try to crash our economy. If people can't drive to work, they won't buy and spend. If they don't buy and spend, the economy goes in the can.

I think one thing we are missing is that China and India are now using as much if not more oil then we are. So it is not just the American consumer, but it really is a world market that is using the oil and driving up the prices.
Also while our government will not allow off shore drilling, India, China and Cuba are drilling within 50 miles of our coast line.

The biggest gas jump was the week befor Mamorial Day,since then it's not moved alot(even when oil went up $5.00 one day and $10.00 the next day)the gas has stayed the same.BUT July 4 weekend coming up in two weeks.Set back and see what happends to gas prices again.They just raise them when they know we will be buying alot.
??????????TELL ME THIS IS'NT GOVERMENT CONTROL????????????????

I have to give props to whoever mentions the movie "A Crude Awakening"

This is absolutely what's happening. I don't believe we're headed at 500 mph into a brick wall, but Peak Oil is a definative truth that we as a country need to learn about and accept. It's not just speculation that's caused the oil market to get where it's at(and yes, it will get worse). People in the markets are REACTING to fears about the limited supply of easy to get crude oil. They're REACTING to China, India, US demand, finite supply, terrorism, you name it. One thing it's not is blind speculation.

This is probably the single largest reason I don't own a boat. It's not rocket science to understand how this is and is going to effect us from here on out. If your in debt, get out. Pay down that mortgage. Learn to be more resourceful and conservative with what few precious natural resources we have left.

Before you put that boat back out in the water, I'd watch "A Crude Awakening" and go spend a few days on Peak Oil.com. We all owe it to ourselves and our kids to start to do something about it because our government certainly isn't.

OH my Oh My the sky is falling... NOT there is more than 300 years supply of oil left in the ground, and in 300 years it will be EASY to find alternatives to gas... hell in 50 years we will see alternatives that make gas look nearly useless.

Care to support that might claim???

I would also add that we won't run out of oil. What will gradually happen is that the cost of producing this oil will exceed the benifit of doing so.

Gladly, two different discovery channel docs on Oil rigs and oil tankers have made this same comment, that we have at least 30 generations of oil left before running out, assuming a generation is about 10 years that's 300 years. If you assume a generation is 20 years then it's closer to 600 years.

The most recent documentary that I saw was on the history of oil tankers, and how they have evolved into the super tankers of today.

My statement is simply that there is more than enough oil to supply the world well into the future, and the natural progression of technology will make oil obsolete long before we run out.

Using the excuse that we are running out of oil is a scare tacting, and not a logical arguement. It's just natural that technology will far out pace the oil depletion.

Think about it just 100 years ago all power plants were either hydro electric or coal, just 60 years ago we started seeing the first nuclear power plants, just 40 years ago 10mpg was the norm for cars etc. Now 30 is becoming the norm. 40 years ago the 100mpg carburetor was a myth about oil companies buying the patents today it is nearly a reality.

I wouldn't be shocked if by the end of the 21st century our grandkids will be laughing about the great oil scares of the 2000's

It's easy to watch tv, have you actually read some of the research that's out there. There's a reason T. Boone Pickens is trying to get into to wind and solar now. Believe me, I hope that for our kids and grandkids sake, you're right. I do think that with serious and drastic investments in certain technologies, there are answers to this issue. But continually burning oil and other natural resources is not one of them.

It's easy to watch tv, have you actually read some of the research that's out there. There's a reason T. Boone Pickens is trying to get into to wind and solar now. Believe me, I hope that for our kids and grandkids sake, you're right. I do think that with serious and drastic investments in certain technologies, there are answers to this issue. But continually burning oil and other natural resources is not one of them. [/quote]

It's easy to discount what is put into documentaries on TV when it does not furthor your own agenda.

It's a fact that here in the US in Colorado, Utah and a couple of other states we have enough oil to match the output of the Middle East yet the US Government is slowing or stonewalling the legislation that is preventing it from being used to make this country independant.

If Oil is so scarce and we are running out so fast how could this possibly be true?

Michial is correct. There are massive amounts of oil in CO and UT. The government has been stalling for decades on harvesting this natural resource which has made us reliant on the Middle East for oil and has put us where we are today. Plus there has not been a new refinery built in the US since 1977 (thanks to mainly the democrats) and they are running at full capacity. Hold on if one of them gets hit by a hurricane this season. Gas will be well over $5 gallon.

We need to do are part and vote people into office that will put America first and start doing things to make us less reliant on other countries.

4 dollar gas is the result of 90 dollar oil we have not yet seen the price of 130 dollar a barrel oil, be prepared it will get worse.

I hate to break this to you guys, but US domestic oil supplies have been in terminal decline since the early 1970s. I hope you don't think shale is the answer. If so, you'd better learn about EROI.

There are lots of capped wells out there. They're capped because b/c oil was(insert arbitrary number here)it became to expense to force more water, gas, etc down into the well in order to force out more oil. This happens because there's a diminishing return on production from (insert random well here)once the oil will no longer come out under it's own pressure.

All I can think about is if I am going to give premium prices for fuel then why not keep that money right here in the good ol USA by purchasing fuels produced here. So it may cost more to produce US fuel but at least my money is not building weapons for terrorest to use against us.

Yeh it makes me mad that fuels prices are out of sight but it makes me more angry that my money is being sent overseas. No matter what the % of that is.

I Love Crappie:I agree with you that we need to let them know what we think at the ballot box.Now exactly who are we going to vote for.Democrat-Republican-There all the same.I want someone who will stand up and say "I have a plan"and explain how them and their party will get us out of this mess.It appears our "leaders"don't understand that we want action.