Re: DON TIBERONE- YOU SHOULD HAVE LISTENED TO ME


Don Tiberone <DonTiberoneNOSPAM@xxxxxxx> wrote in message
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Bill Reid <hormelfree@xxxxxxxxxxxxxxxx> wrote in message
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Why don't you answer this. If price tanks due to lower demand, why would
anyone increase production? Who's going to buy up all the new production
if
there's no demand for it? Duh!

Just because nobody's buying something doesn't mean somebody not
only produces it, but produces more of it. Years ago I worked for a very
(in?)famous company that wound up burying about a $1.5billion worth
of unsold inventory in the southwest desert. They had been told for
years by their distributors the stuff wasn't selling, but that didn't stop
them from not only producing but actually adding a shift to the factory.

Hell, why do you think the federal government pays farmers NOT to
plant crops? Now that's a "cartel" quota that actually has some teeth
in it, because sure as hell if they didn't pay the farmers, each individual
farmer would , EVEN WITH THE INFORMATION ABOUT THE
OVER-SUPPLY, just go right ahead and try to make money THE
ONLY WAY THEY KNOW HOW, right on up to bankruptcy...

As to who would buy it, well, obviously nobody, at least right now,
but the chronic over-supply of oil over the previous 25 years clearly
caused the prolifigate over-use of oil in the US in the last few years.
Over time, the market adjusted to the abundance.

According to you, we can use 50% less oil right now.

No, not right now, I've repeatedly said there was inertia in the system,
specifically re-tooling and manufacturing and market replacement inertia.
But take a look at the latest auto sales figures, and realize that the
vehicle replacement market is now heavily weighted towards vehicles
that have 100% better fuel mileage than the previously-popular monster
SUVs.

Using your logic, many
companies will increase their production 50% to make up for the loss of
demand.

If they can without bankruptcy, they may do exactly that. And remember,
since you keep changing the topic, I was talking about OPEC "cheating".
I'm talking about COUNTRIES not only exceeding their quotas, but
raising production, while other COUNTRIES, specifically Saudi Arabia,
as the "swing producer", attempting to balance out the overall quotas...

That's all nice and all but once agian, who's going to buy up all
the new supply if there's no demand for it?

Strategic Petroleum Reserve? Fertilizer makers who decide they'd
rather use cheap oil than truck in tons of cow manure? Yuppies dusting
off their old Hummers they thought they'd never drive again and taking
a lot of pointless trips? Man, you just don't get anything about how
economics works...

Once again, ignoring the facts.

No, the fact is that when YOU talk about OPEC you talk about the
last two years, then try to switch the topic to natural gas in the last
three months, and even then you're wrong (if "they" are trying to raise
the price of natual gas, they're doing a poor job of it)...

Like I said, ignoring the facts. Natural gas was just an example.

An "example" about another topic is not a "fact". If you have any "facts"
about OPEC, I've asked you to post them. Did you post them?

Oil production has always been far greater than supply.

BUT WHO HAS BEEN BUYING ALL THAT OVER-SUPPLY??!!???!!!
WHAAAAAA??!!!?!?!!

OPEC didn't pump all
out in the past couple decades because they didn't have to. The world had
many millions of barrels of spare capacity. Both demand and production
have
been going up.

What's your point?

LOL. Imports are at record highs. That's why inventories are high.

This is one of those pieces of "only on Usenet" logic that deserves a
moment of silence just to savor the pristine beauty of the non-sequitur.
Aaaaand...now we're done.

You're the one babbling about record inventories.

Not "babbling", just one of those pesky "facts". Just something in
the news, you know...

Demand
continues rising as well. We continue importing as much oil as
possible.
Gee, wonder why.

To build up the Strategic Petroleum Reserve? See, you're not the only
one who can proffer a non-sequitur as a "fact"...

There was no build for the SPR. It was BP trying to make up for the loss
of
Prudhoe Bay, by buying up as much oil as possible to avoid a forced
majeure.

Yup, like I said, they're running scared. They know a "shock" will
kill them quicker than the slow death that will occur if they are truly
at "peak production"...

For someone who supposedly has so much experience, it's kinda sad you
don't
understand how companies tend to increase production as prices rise to
take
advantage of price increases. Not the other way around.

So five years ago, were they ACTUALLY pumping MORE or LESS
oil than when the price was much higher a few years earlier?

And since you probably don't have any access to a long-term database,
how about comparing oil "production" versus price in the last year?
Just
the "facts", ma'am...

Huh? The price was higher a few years ago? What price are you talking
about?
Oil was about 30-40 bucks a few years ago.

Once again, your limited time frame is showing...

....and the lack of "facts". I'll take two columns of time series, please,
production, and price of oil. That's what I call "facts"...

BTW, they are pumping more oil now. Today max production is about 85
million
bpd. It was slightly less a few years ago.

"Facts" please. "Slightly less a few years ago" doesn't cut it...

The thing is, if you truly understood these issues, you wouldn't have
to "wait" for "us to do it", you'd KNOW pretty much exactly when it
was going to occur, and trade accordingly.

Like I said. I'm still waiting.

For what? As I mentioned, the latest auto sales figures are for ME
this thing called a CLUE.

Are you waiting for the price of oil to collapse and/or loss of oil
revenue or are you waiting for a CLUE?

And I'm not talking about energy used for industrial purposes. I'm
talking
about our fleet of cars. Yeah sure there's electric cars and CTL
technology.
I'm still waiting for them to replace oil. And you must be one of
those
naive folks who believe in ethanol as well.

Last issue of "Car and Driver", they tested a diesel version of a BMW
sports sedan side-by-side with the gasoline version. The performance
of the two was almost identical (diesel had slightly better
acceleration,
gasoline slightly higher top speed), fuel mileage was 44% better for the
diesel. Then in the sidebars all the editors opined that they'd rather
have the gasoline engine car because they "liked the sound of the
engine better".

When you finally grasp those simple "facts", you will understand
that Americans are using up to 60% more oil than they need (remember
it takes much less oil to "make" diesel fuel, and you need much less of
the
precious "light sweet crude") just because they don't "like the sound of
a diesel engine".

That's a 60% difference for a "performance car", similar in lack of
actual required practicality to any Hummer. Then subtract another
50% or so if the new compensation for peeny-teeniness becomes
"getting good gas mileage in my economy car" rather than "I've got
the biggest most useless piece of junk on the block".

60% less oil? Hey Einstein, with plug-in hybrids, we wouldn't even need
any
gas, period.

Well, actually I think the idea behind a plug-in hybrid is that you
would run as much as possible on battery power, and only switch
over to the gas engine on long trips. So you would still need some
gas sometimes.

Even that is a half-ass piece of tooling-inertia technology. Toyota
only sells gas engine hybrids with transmissions because they've
got literally $billions of sunk costs for gas engine and transmission
manufacturing plants. Four-stroke gasoline engines are phenomenally
wasteful of fuel in general, and also require the use of transmission to
drive the car, which chews up another 15%-20%, in addition to
almost always being run at sub-optimal operational speeds and
throttle angles.

Take the same basic car but powered only by electric motor(s) with
no transmission with an only as-needed optimally-run small diesel
electric generator, and you've got a car that gets a nation-wide
average of about 100+ miles per gallon of fuel. Ramp up the
production of "bio-diesel" with just a fraction of the cost of
capital sunk into the oil "business" and good-bye Exxon-Mobil et. al.

Eventually battery technology will improve enough that we'll
all be using electric cars.

Well, maybe, maybe even probably, but that is fantasy technology.
However, again, read the above carefully, get somebody to read it
to you until you understand it.

The points are the following:

* ALL vehicles will be driven exclusively by electric motors without
transmissions, just like EVERY train for the last 60 years
* This transition from the wasteful use of the admittedly exciting-sounding
gasoline engine to drive vehicles will result in the reduction of at least
80% of the oil consumed, quite possibly to be replaced by "bio-diesel"
(also known as "Mazzola")
* This is all possible with technology that exists now and has existed
in most cases for DECADES or even OVER A HUNDRED YEARS

Using your logic, OPEC will increase their
production 100% to counter this.

I predict another rise in terrorism as a last gasp from the disenfranchised
populations of the oil producing countries, followed by a brilliant flash
of sudden nuclear energy to clean the globe of the parasites...

LOL. Yeah, who's going to buy it from them?

Uh, in your fantasy scenario, nobody...

What a joke.

They won't be laughing in the mideast, or Texas, I'll tell you what...

Here's how it works: if oil is cheap, we use oil. If oil is
expensive,
we
use the alternatives, and use much, much, much less oil.

Like I said, you agree with me. Why are you arguing this?

Because you've never said that, in "fact", you argued with it, just
above...

Uh no. I specifically stated how high oil prices would lead to development
of alternative energy. You then proceeded to rant that we already have
alternatives available. Like I said, I'm still waiting for us to use them.

I mentioned that we may be "boiling the frog" here. I think I figured
out who the "frog" is...

You never specifically disagreed with me. I already know we have
alternatives available, some of which I've mentioned, but that doesn't
mean
we aren't trying to develop more, like hydrogen (which I'm skeptical of),
cellulosic ethanol and perhaps nano-powered solar cars in the far out
future. We wouldn't be throwing tons of money into hydrogen if oil prices
weren't so high.

Again, you're talking about fantasy technologies. Read the above
about existing technologies again, or as I've suggested, get somebody
to read it to you. THE ALTERNATIVES HAVE BEEN HERE ALL
ALONG.

It's not a question of "development" or heaven forfend "invention".
It's a simple (ha!) question of re-tooling and re-orientation...

BTW, apparently
oil isn't expensive enough considering we're still using record
amounts
of
oil.

There's inertia in the system, as I've mentioned. The problem for
the oil business could be the future inertia if economizing and
alternatives
become the new standard operating procedure. We're kind of "boiling
the frog" here; a REAL "energy shock" would be watershed event
that means the end of the "oil industry"...

Again, it happened before, everybody knows it, except strangely, you,
Mr. "Facts". It literally took decades to get the price of oil up again
after the devestation of CAFE et. al. back in the '70s.

Uh huh. According to you, if we use alternatives, OPEC will increase
production even more to make up for the loss of demand and the end of
their
industry. That's your argument not mine.

They'll do whatever they can. If the world is running out of oil, their
options will be very limited.

And I never said the OPEC would IN THE FUTURE raise production
if prices dropped. I specifically said that there was always "cheating"
on "quotas" IN THE PAST that compounded the effect of oil price
declines.

What they do IN THE FUTURE will depend on what they CAN
DO WITHOUT BANKRUPTING THEMSELVES. In fact, what
will probably happen is all oil companies will go bankrupt at some
point in the future.

Duh, isn't that what I said? OPEC doesn't want expensive oil.

Sure, as part of your brain-dead assertion that somehow OPEC has
been able to control the price of oil like flipping channels with a
remote
control. And as usual, even the statement "OPEC doesn't want
expensive oil" is wrong; MOST OPEC countries LOVE expensive
oil, as I've tried to impress on you, BECAUSE THEY'RE MAKING
SO MUCH FRIGGIN' MONEY OFF IT (you really think a retarded
blowhard like Chavez is worried about the price of oil being too high?).

You're the one babbling about how expensive oil prices will kill OPEC. I
simply agreed with you.

That's smart, because I'm alway right about everything, and never lie...

However, currently, all oil producers are having a GREAT time...just
like the dot-coms a few years back. Things change, and quite often the
people in the "business" are the last to know things are changing,
particularly
the dumb ones...

Most of what you say doesn't contradict what I say.

Except the parts of it that do.

Seems like you're spending more time agreeing with me.

Only in those sporadic instances when you're correct...

You spent more time agreeing with me. Like when you ranted multiple
paragraphs about alternatives.

Why do you call MY facts "rants"? And your "examples" are "facts"?

And other than the nonsense about
responding to lower prices by increasing production.

Oh no, that absolutely is not nonsense. You MUST understand
that or your understanding of the OIL business is very defective.

I use facts.

Oh, yeah, your natual gas "fact", I forgot...

You use speculation.

We're all speculators on this (diesel) bus...

I used natural gas as an example since
it's already tanked. Oh, but it'll be different for oil, right?

"It's already tanked"...beautiful.

No it hasn't. Natural gas "tanked" from 15 to 5. That's like oil dropping
to
less than 27.

I can't believe how clueless you are on this topic, but now you're just
having basic problems following the discussion.

You see, I'd be wary of implying that oil is DEFINITELY going to
"tank", because if you take the "peak production" theory seriously (and
I do), oil may never "tank". There is a difference between being on
either
side of the mountain, you know...

It will tank if we use your argument about lower demand leading to more
production. Remember, that's your argument not mine.

You have a very, very, very, very, very, very simple mind, the kind
that can't grasp a lot of "facts".

I'm still waiting for this reduction.

Us speck-a-laters don't "wait" for things to happen, we PREDICT them
in advance and that's how we profit. Sorry that future events will take
you
by surprise...

I'm already profiting. That's why over half my portfolio has been in
gold/oil the last few years.

You and Chavez are buying drinks for everybody...

Which is why you always
see Saudi Arabia trying to assure the markets, that we have plenty
of
oil
and how overvalued the price of oil is. And how they can increase
production
anytime they want.

They may be whistling in the dark. Again, if we're on the downhill
slide of "peak production", OPEC and the oil companies and all
associated idiots are going to be like a car company announcing,
"It's getting really expensive for us to produce cars, so expensive
that
nobody can afford them any more, so nobody's buying them, but other
than that, business is GREAT!"

Yeah ok. Now stop agreeing with me. LOL.

NO, YOU STOP AGREEING WITH ME!!!!!!

Ok but first you should stop typing multiple paragraphs just to agree with
me. LOL.

THOSE ARE "FACTS", YOU ***!!!!!!!!

---
William Ernest Reid
Post count: 431



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