Of course, in the news its all about the threat of terrorism in Saudi Arabia and other middle eastern countries, Iran re-starting its nuclear program etc. etc.
The real reason is simple: demand is now starting to outstrip supply and peak production (as its known)is upon us. This wont be helped by China's (and India's) economic boom.
Why else are no new refineries being built, or petrol stations shutting down?
Not a pleasant thought, but its time to face reality: life after oil
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8< SNIP 8<
Personal insult removed. DD
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The problem with the 100 year oil reserves is, as stated, extracting it. There are already oil fields where the energy needed to extract the oil is almost equal to the amount of energy in the oil being extracted.
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Mike Farrow
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I agree completely with the original poster and Mike. The fact of the matter is we will never run out of oil, it may become too expensive to use as a viable source of energy but it won't run out. Wells get capped off with about 70% of the oil remaining in them, simply because after that the oil ceases to flow out under natural pressure and requires force to extract. I'm all in favour of fuel prices going up another 50% to say £1.50 a litre with the additional 50p or so spent on funding development of new energy sources that are effective, and suitably scalable for our energy needs.
I don't see the current price as crippling, so much as a psychological barrier is about to be reached. It costs approximately 10p a mile in fuel to run a car doing 43mpg. Total fuel cost for a motorist doing 10k a year = £1000. Most people spend more than that a year on alcohol. A 20/day smoker spends that in a little over six months. It's less than 10% of a minimum wage salary over a year.
Example, it was 8 miles from Uni to my house last year. I did 48mpg, or 9p/mile, so the journey cost me 72p. It cost 90p to get there by bus. It took 20 mins by car and 45 by bus. By the time my time was taken into account too (based on what I earn working for the union) that meant I was £3 better off every time I went to campus by car not bus.
Should we really be saying the energy companies are bleeding us dry, when in reality we should be looking for new ways to power vehicles. Hybrid technology like the Lexus Rx400 should be employed over a wider range of models. Not everyone wants an eco friendly but ultimately dull looking Prius, but if you put hybrid technology into a Focus or a 3-Series, even if it saves a few mpg each then it's worth it. If every car on the roads improved it's mpg by 2mpg, based on 10k/year at 30mpg each on average then we'd save 13.9 million barrels of fuel a year, about the same as the we use each day. And that's just one country doing that, make that change worldwide and the savings become huge. I'd rather see us putting effort into reducing use in the first place in other areas though, like reducing unnecessary packaging on products. It just so happens that road transport is an obvious use of energy and one that is relatively easy to control and constrain for the majority of the population.
/flame suit on/
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Plenty of petrol stations shutting down i assure you. i can think of 10 within the last few years within the Bristol City Council area, and a few beyond. i can think of one new one, maybe two, so that's a net loss of eight / nine in a medium sized city.
Total / Fina / Elf are auctioning theirs off for redevelopment.
Petrol stations are being squeezed by supermarkets, in both the big and Tesco Express (and others) version. The petrol operation is a bolt on to the main grocery business. Small garages struggle to compete on price and convenience.
IMO of course
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Despite the gloom and doom regarding reserves of oil, it's estimated that there's enough still available for around another 100 years at least.
The main problem is the ever increasing difficulty and cost of extracting these reserves.
As already pointed out many petrol stations have closed but this is due to simple economics. It's not profitable enough.
The high cost of fuel is mainly due to the 80 per cent or more Governemnt taxation imposed on it.
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The high cost of fuel is mainly due to the 80 per cent or more Governemnt taxation imposed on it.
You make the tax sound a lot cheaper than it is. 80 percent isn't the tax rate on petrol, it's the amount of the cost of the petrol that's taken up by tax. The actual rate at which petrol is taxed is more like 3-400%.
Of course, like alcohol duty, petrol isn't taxed by rate, it's just Xp per litre.
Let's say (for example) that now petrol costs 90p per litre. 20p of that is the cost of the petrol itself and 70p is tax. If the cost of oil doubled it'd still only go up to £1.10 a litre. If petrol stations halved what they were charging for petrol it'd still cost 80p a litre. That's why Americans feel it a lot more than we do when crude oil goes up - they pay a lot less tax so the difference is more noticable. There's not a lot any oil company can do to lower the cost to us. If you want to halve your fuel bill buy a car that does twice as many mpg. It's the only way to avoid paying the tax.
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I think this is splitting hairs a bit...:-)
No matter which way you look at it, without the Government's exhorbitant rake-off petrol, as would be the case with alcohol and cigarettes, would be very reasonably priced.
The figure of 80 I mentioned was intended to represent the minimum percentage of the cost of fuel that New Labour collects which, IIRC, involves both excise and VAT duty.
Perhaps describing it as "a minimum of 80p in the pound goes into the Treasury coffers" would be more appropriate?
As for oil companies they are not allowed by law to use other areas of their business to subsidise fuel supplied to road users; in fact a major oil company recently revealed that, despite notching record profits mainly due to high crude oil prices, it lost £186m on marketing and retailing fuel at its UK petrol stations.
On the other hand, apart from its shareholders, those of us with pensions benefit through the big pension funds investing in the shares of successful businesses.
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This I completely agree with. In my home town there are hardly any of the original petrol stations left. Five stations within a three mile radius have closed in the last 10 years leaving only one (inconveniently sited) major and a Sainsburys - which is packed every time I visit and need to fill up. It's not really progress is it.
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It's not really progress is it.
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No, but it's market economics.
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Plenty of petrol stations shutting down i assure you. i can think of 10 within the last few years within the Bristol City Council area, and a few beyond. i can think of one new one, maybe two, so that's a net loss of eight / nine in a medium sized city. Total / Fina / Elf are auctioning theirs off for redevelopment. Petrol stations are being squeezed by supermarkets, in both the big and Tesco Express (and others) version. The petrol operation is a bolt on to the main grocery business. Small garages struggle to compete on price and convenience. IMO of course
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Whilst I'm sure this is probably true, it is interesting to note that all of the ESSO stations within about 5 miles of where I live (West Berkshire) ar all undergoing MAJOR refurbishment.
The reason I emphasize MAJOR is that they have dug up all of the underground tanks and are replacing them with new preseumably larger ones. Does anyone know anything about this, as it has had a knock-on effect locally in that all of the remaining petrol stations in the area are very busy day and night.
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Re digging up the tanks - not sure if they need replaced after a certain amount of time. However, in our petrol station, the tanks are quite old and also quite small. One tank used to be leaded and the other unleaded. Therefore they fed different nozzles at the pumps.. Now of course they are both unleaded but each tank still feeds different (unleaded) nozzles at the pump.
The upshot of this is, depending on which nozzle is used at the pump, one tank can get emptied quicker than the other. This then results in some nozzles getting closed off until the next delivery comes in.
Also, tankers are now carrying more fuel than before, not sure of the exact volume though. So for us to take a full tanker delivery, (part tanker deliveries are not an option as same transportation costs whether 1 litre or 25000 litres!) we need to have both the tanks very low.
Sorry for the long explanantion - basically I am saying that fuel tankers may be carrying more fuel now than the existing tanks can handle so that may be why they are being replaced!
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Are prices that much higher in real terms? Using the RPI figures it seems to show that the real cost of fuel is probably around the same as in the "bad old days" of 1985.
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Yes but we're having to use more of it as average commnuting distances has increased. This is parrtly due to ridiculous house prices meaning that people are living further and further away from their place of work.
I was reading in today's Torygraph that there is about half a million additional cars hitting the roads in India each month. All needing fuel...
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The Oil Companies are still bugeting field development at approx 30 dollars a barrel, but this will have to change as all costs are rising due to shortage of equipment and people and places to go.
I agree with everbody's comments above but would add that Oil is also used for an awful lot of everyday products, apart from the ones we all know, I am pretty sure fertilizer has a large oil input but stand to be corrected as I am an upstream man (driller).
Petrol is just a product of oil, if we all stopped using petrol we would still need Oil and still be facing higher prices for all the by products.
I am hearing a realistic price would be 40-50 dollars per barrel but due to geopolical events this may well not happen.
I noted that somebody talked about India but the big one is China Inc they have but one aim and that is to secure oil supplies and they will, see what they did to Rover - no mercy.
Sorry I could go on and on blah blah, but the bottom line is yes we are running out of easy oil and petrol in the medium to long term will go higher. Short term we are ruled by speculators, politics and mother nature.
For reference Google Hubbert's Peak
A sobering comment I read was - You will only recognise peak production through you rear view mirror.
Jim (this boom time Lord - I promise not to spend all my money on cars)
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The manufacture of various types of plastics also evolve from oil.
A useful read on how petrol is produced by Texaco in the UK is at:
www.texaco.co.uk/Education.htm
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Petrol is now costing $2.60 - £3.00 a US gallon in most of the USA which equates to 40-45p a litre.
Given the large number of gas guzzlers in the USA the fuel costs for many US motorists is now on a par with average UK costs.
Given there is little public transport, outside major cities, 2 car families are the norm.
It is certainly concentrating minds - and not before time.
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Petrol is now costing $2.60 - £3.00 a US gallon in most of the USA which equates to 40-45p a litre. Given the large number of gas guzzlers in the USA the fuel costs for many US motorists is now on a par with average UK costs. Given there is little public transport, outside major cities, 2 car families are the norm. It is certainly concentrating minds - and not before time.
Yes and it still astonishes me how many 'ordinary' people still buy 4 litre Jeeps or other 4x4's with huge engines in the UK.
Still I suppose these are the same people who are always moaning about being broke !
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You are right Cardew, higher fuel prices are definitely concentrating minds in the USA. I heard one reason for the increase was lack of refining capacity -- or more accurately the capacity to refine high quality low emission fuel to meet environmental standards.
Today I saw an article which explores this in more depth.
www.econbrowser.com/archives/2005/08/sweet_and_sou...l
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