Why Gas Won't Get Cheaper

[pup2]

Tagal na pala nitong thread na ito. Well para kumpleto ang datos, malapit na sa 55 ang gaso from 40 3 years ago (when people were already freaking out).

As usual, pinoys are very quick-reacting. As we speak LPG installers are mushrooming, there are brisk sales in CRDi, sub compacts, and motorcycles and many larger vehicles are being converted to LPG and flex fuel.

Also, traffic has begun to improve to MUCH more satisfactory levels now. Can carpooling be far behind?

In the distant future it's hybrid (as an interim measure) and/or hydrogen fuel-cell technology going mainstream which we hope to save us from this nightmare. Perhaps we can still have the last laugh at the oil cartels ... we hope.

[tidus1203]

Right... Fossil Fuels are not increasing as we use them they will decrease over time. LPG and other cheaper fossil fuels are just stop gap measures eventually we need other ways to create energy rather than burning fossil fuels...

[mikaztro]

Green car is the way to go. Hydrogen fueled cars. How about solar powered or Wind power? :D

[mikaztro]

Maganda din yung vehicle sa "Back to the Future"movie...yung garbage powered flux capacitor na DMC sports car.

[tidus1203]

Hydrogen is very promising. Hydrogen is the most abundant element in the universe... Wind mahirap na since kung di mahangin wala na, same with solar pano na kung tagulan

[ghosthunter]

Hydrogen is very promising. Hydrogen is the most abundant element in the universe... Wind mahirap na since kung di mahangin wala na, same with solar pano na kung tagulan

Hydrogen is promising but it is still very costly to implement into personal transport use. For one, although hydrogen is one of the most common elements in the universe but it is mostly found bonded to another element which forms a very stable compound. It takes a lot of energy to split hydrogen from it's stable bond. A major part of the cost of hydrogen will be the cost to produce that energy. Solar and wind might be "free" (once the systems are installed) but the amount of power produced is not enough to produce hydrogen on the scale to fuel a small town, much less to fuel a city full of cars.

Second problem of hydrogen is the energy density is very low if it is left uncompressed. The solution is to compress hydrogen so that a "full tank" of hydrogen will give you a reasonable range. Unfortunately that hydrogen tank will become quite large and heavy with insulation. A smaller tank is fine for short trips but you will not be driving long distances on hydrogen yet in your personal car.

Third problem of hydrogen is the system to use it. Although a standard internal combustion engine can be used, it's conversion of chemical to mechanical energy is relatively poor. The more efficient alternative is the fuel-cell which converts free hydrogen/oxygen into water and produces electricity at the same time. Sounds great but fuel cell technology is still expensive and not yet practical for the typical consumer just yet.

Although I do foresee hydrogen mass and personal transport in the future, I think it would still be more than 15 years down the road before we start seeing practical applications beyond pilot programs used to study it. It would also require the political will to push the development of support infrastructure like enough hydrogen filling stations open to the public so it would be practical to own a hydrogen fueled car.

For the immediate future, alternative fuels and hybrid cars is the answer. Unfortunately, current hybrid cars are still too expensive for most people to purchase. Alternative fuels, on the other hand, is cheaper and can make use of the existing vehicles. The major obstacle in this is the lack of proper information disseminated to eliminate unfounded fears based on ignorance of the facts.

[aku]

While I personally believe that the soaring price of oil is the long-delayed kick in the head we've needed to get us into more efficient energy sources, the fact of the matter is, before we get there, lots of people are getting hurt by the increased costs.

So, to help ease the worries a bit, let's take some lessons from history and economics:

http://biz.yahoo.com/hftn/080606/060...tune.html?.v=3

[SIZE=3]Fortune[/SIZE]
[SIZE=3]Why the oil boom will eventually bust[/SIZE]
Friday June 6, 10:21 am ET
By Shawn Tully, editor at large

High-flying tech stocks crashed. The roaring housing market crumbled. And oil, rest assured, will follow the same path down.

Not everyone agrees. In an echo of our most recent market frenzies, some experts pronounce that the "world has changed," and that the demand spikes, supply disruptions, and government bungling we face now will saddle us with a future of $4, $5 or even $10 a gallon gasoline.

But if you stick to basic economics, it's clear that the only question is when - not if - prices will succumb.

The oil bulls are correct in their explanations of why prices have jumped. It's indisputable that worldwide demand has surged, chiefly driven by strong growth in China, India and the Middle East. It's also true that most of the world's reserves are controlled by governments in places like Russia and Venezuela that mismanage production, thus curtailing supply growth.

But rather than forming a permanent new plateau for prices - as the bulls contend - those forces are causing a classically unstable market that's destined for a steep fall.

In a normal oil market, the cost of producing the last, most expensive barrel of oil needed to satisfy worldwide demand sets the price for every barrel the world over. Other auction commodity markets work much the same way.

So even if Saudi Arabia produces at $4 a barrel, if the final, multi-millionth barrel required to heat houses and run cars costs $50, and is produced, for argument's sake, at a flagging field in West Texas, the world price is $50. That's what economists call the equilibrium price: It's where the price that customers are willing to pay meets the production cost, including a cushion, naturally, for profit or "the cost of capital."

But today, the sudden surge in demand and the production bottlenecks have thrown the market radically out of balance.

Almost exactly the same thing happened in the housing market. And both housing and oil supply react to a surge in demand with a long lag. In housing, the lag is caused by restrictive zoning and development laws, especially in coastal markets like California and Florida.

So when the economy roared back in 2002 and 2003, builders couldn't turn out homes fast enough for buyers armed with those cheap mortgages. As a result, prices spiked. They no longer bore any relation to the actual cost of buying and improving land, or constructing and marketing a new house (at some reasonable profit margin). Instead, frenzied buyers were setting the price.

Because builders were reaping huge windfall profits, they rushed to buy and develop land. And sure enough, those new houses were ready just as buyers were retreating to the sidelines because they could no longer afford to buy a home. That vast overhang of unsold homes is what's driving down prices today.

The story is much the same with oil, with a twist. A big swath of the market isn't really paying that $125 a barrel number you hear about seemingly every hour. In China, India and the Middle East, governments are heavily subsidizing oil for their consumers and corporations, leading to rampant over-consumption - and driving up prices even more.

But sooner or later the world won't keep paying those prices: Eventually, the price must fall back to the cost of that last barrel to clear the market.

So what does that barrel cost today? According to Stephen Brown, an economist at the Dallas Federal Reserve, that final barrel costs just $50 to produce. And when the price is $125, the incentive to pour out more oil, like homebuilders' incentive to build more two years ago, is irresistible.

It takes a while to develop new supplies of oil, but the signs of a surge are already in place. Shale oil costing around $70 a barrel is now being produced in the Dakotas. Tar sands are attracting investment in Canada, also at around $70. New technology could soon minimize the pollution caused by producing oil from our super-plentiful supplies of coal.

"History suggests that when there's this much money to be made, new supplies do get developed," says Brown.

That's just the supply side of the equation. Demand should start to decline as well, albeit gradually.

"Historically, the oil market has under-anticipated the amount of conservation brought on by high prices," says Brown. Sales of big cars are collapsing; Americans are cutting down on driving. The airlines are scaling back flights.

We've learned another important lesson from the housing market: The longer prices stay stratospheric, the worse the eventual crash - simply because the higher the prices and bigger the profit margins, the bigger the incentive to over-produce.

It's even possible that, a few years hence, we could see a sustained period of plentiful oil supplies and low prices, meaning $50 or below.

A similar scenario occurred following the price explosion in the 1970s and early 1980s. The price spike caused the world to cut back sharply on oil consumption. By the mid-80s, oil prices had fallen from almost $40 to around $15. They remained extremely low for two decades.

It's impossible to predict how the adjustment this time will take shape, just as it was in housing. There the surge in supply came in places the experts swore there was "no supply," and wouldn't be any. Builders found a way to extend vast tracts of homes into California's Inland Empire and Central Valley, and even build "in-fill" projects near the densely-populated coasts.

An earlier bubble is also instructive. In the early 1980s silver prices jumped from $10 to $50 on the theory that the world was facing a permanent shortage of silver. Suddenly ads appeared asking homeowners to bring their tea sets and jewelry to Holiday Inns for a big price. Silver supplies poured from seemingly nowhere, out of America's cupboards, of all places.

And so it will be with oil. We don't know where the new abundance will come from, from shale, or tar sands or coal or an OPEC desperate to regain market share. We just know that it will appear. With prices like these, it always does.

[pup2]

Ang masakit lang niyan. When the oil bubble does burst, I doubt the guys left holding the bag will still be the evil, panic-mongering speculators like *****. Most likely, it'll be the average sods who were a little too late jumping on the bandwagon or never figured the bandwagon might soon run out of 'gas.'

[tidus1203]

The hard thing with bubbles is you know its there but you never know when it will pop.

[mikaztro]

Kaya mga kapamilya at kapuso....mag bike nalang tayo! Libre na...exercise pa.