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PeakOil is You

Energy Consumption (merged)

How to save energy through both societal and individual actions.

Re: Why do energy producers subsidize oil consumption?

Unread postby mekrob » Sat 10 Nov 2007, 23:30:04

Man other large oil producers, such as the U.S., Norway and Canada don't subsidize oil consumption, except perhaps indirectly by highway spending.


Speak for Canada and Norway. The US government spends half a trillion dollars a year on subsidizing oil through the military to make sure that it is other nations like Zimbabwe, Myanmar, and other African nations that are facing shortages and not us. And that that will be the status quo in the future as well, for as long as the oil runs.

20,000,000 bpd x $80/barrel (average)= $1.6 bln/day -> $500-600 billion/year. So the real price of gasoline in the US is closer to $4-5/gallon (at least), rather than $3/gallon. That's a pretty large subsidy. (I know this isn't the best way to look at the subsidy as much of the defense budget would exist w/o a need for oil protection, but just an estimate to show that the subsidy does exist and is substantial.)
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Re: Why do energy producers subsidize oil consumption?

Unread postby Tyler_JC » Sat 10 Nov 2007, 23:31:23

Denny wrote:Well, one other way things cold be made more logical is to have a form of the GST (or whatever its called in these places) rebate paid to lower income people, not tied to oil consumption.

It would even be smarter for these coutnries to subsidize food. But, not oil.

I did hear of the Iranian riots, but perhaps the government there did not build the case well in their budget before parliament first.

Regardless of the issues, I cannot see any minister of finance going along with a crazy scheme of using government money to buy oil products, when it cannot even control their use, and when it could upset the budget balance. Like any other outfit, the government wants to make a profit, see the cash flows in equaling those out at least, and I'd think that would apply to all countries.

Man other large oil producers, such as the U.S., Norway and Canada don't subsidize oil consumption, except perhaps indirectly by highway spending.


1. The United States is a massive oil importer, subsidizing oil use at this point would be ludicrous. Moreover, the United States indirectly subsidized oil use up until the 1970s and prices were very low. At that point, the Texas Railroad Commission (the OPEC of the USA) allowed 100% allowable production, also known as, America Peaked!

2. Norway has a massive sovereign wealth fund which is fed by oil revenues. In the future, this money will subsidize future consumption.

3. Canada and the UK get a large budget subsidy from oil revenue. This keeps taxes lower than they would be otherwise, allowing for more private consumption.

Essentially, it is impossible to be a large oil producer without using oil money to subsidize your economy.

Oil is just so darn profitable that it's existence becomes a curse if your economy can't diversify away from it in time.
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Re: Why do energy producers subsidize oil consumption?

Unread postby dissident » Sun 11 Nov 2007, 11:56:23

The generalizations in this thread are a bit too sweeping. Russia does not subsidize its domestic oil price. Gasoline has a price only a few cents cheaper per gallon than in the US. It does subsidize domestic natural gas consumers, but the domestic gas price is being ramped up to export price levels at about 15% per year.
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Another peak oil consumption anology

Unread postby Harlequin » Sun 11 Nov 2007, 23:12:33

It's one I think is really good!

Basically I was sitting here surfing the forums and eating a bowl of almonds and I realised, my almonds and oil are not that different.

An analogy can easily be drawn thusly;

Consider that I bought, say, ten kilos of almonds and put them in a very large bowl and decided to chow down.

Now such a huge mass of almonds, being eaten one-by-one would appear to be almost limitless in supply, (takes an hour to eat like, half a kilo) and indeed they do slowly replenish themselves (via trees)

However, for my purposes they may as well not replenish themselves because given that it takes months for almonds to grow, but only a few days to deplete my store of almonds, there's no way the creation of new almonds can be faster than my consumption.

The only difference is that is doesn't get harder to get new almonds from my bowl as I go down.

Whatcha guys think? I thought it was brilliant!
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Re: Another peak oil consumption anology

Unread postby Opies » Sun 11 Nov 2007, 23:41:29

also, at the start it looks like the almond supply isn't really going down, but as the bowl stats to narrow to it's base, you can see the supply retreating faster and faster
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Re: Another peak oil consumption anology

Unread postby Plantagenet » Sun 11 Nov 2007, 23:54:08

Its not a bad analogy if you add that when you've eaten all the almonds (i.e. oil), then you shift to eating peanuts (coal) and cashews (nuclear) and macadaemia nuts (solar). 8)
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Re: Another peak oil consumption anology

Unread postby Harlequin » Sun 11 Nov 2007, 23:57:43

Exactly, the wonders of tree nuts!
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Oil consumption rate

Unread postby mcmurphy » Fri 04 Jan 2008, 09:09:20

After viewing Dr. Albert Bartlett: Arithmetic, Population and Energy, I started to look around for new data on the latest years oil consumption rates. I found this one and my question is if it is true that US oil consumption declined with 0.6% from 2005 to 2006? Is this trend continueing still, or have i misunderstood the graph?

(I see that my own country Norway has a growth rate of 6.3 witch means a doubleling time of just 11 years..scary even though Norway are very small in the global consumption picture)
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Re: Oil consumption rate

Unread postby pup55 » Fri 04 Jan 2008, 21:48:46

Allow me to respond:

In short, it is true, but it all depends on what you call "oil".

The different information services and sources have slightly different definitions of oil. Sometimes they just include conventional oil, sometimes they include natural gas liquids, sometimes they do or do not include the oil sands, etc.

The BP Review of World Energy, which comes out in June, also says the US declined in consumption between '-05 and '06, by 1.3%.

The source of most of this decline, FYI, is that people almost completely stopped using oil to run electrical power generation. Reason: coal and natural gas were cheaper and little or no problem in making the conversion. The remainder of the oil use, such as by driving in their cars and making plastic, went up like normal.

It will be interesting to see the 07 data when it comes out.

Norway are very small in the global consumption picture


217 thousand barrels per day, that's about 1% of the US total. We probably spill more than that.
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Emerging markets out consume US on oil.

Unread postby dorlomin » Mon 21 Apr 2008, 05:43:49

China, India, Russia and the Middle East for the first time will consume more crude oil than the U.S., burning 20.67 million barrels a day this year, an increase of 4.4 percent, according to the International Energy Agency in Paris. U.S. demand will contract 2 percent to 20.38 million barrels daily, the IEA says.


``The U.S. recession will be a footnote as far as the oil market is concerned,'' says Jeffrey Rubin, chief economist at CIBC World Markets Inc. in Toronto, who has correctly forecast higher oil prices since 2000. ``Supply isn't growing and demand is growing robustly in the developing world.''

Oil will average $120 a barrel for all of 2008, compared with almost $98 in the first quarter of the year, and reach $150 ``by the end of the decade,'' Rubin said.


The Russian government plans to spend some of its new wealth on updating Soviet era transport links. Russia may invest as much as 21 trillion rubles ($895 billion) to improve transportation infrastructure during the next seven years, Transport Minister Igor Levitin said on Feb. 1.


Prices may rise as much as $20 a barrel this summer because of Middle East power needs, Morse said. A hot summer would likely result in more burning of crude oil for power generation and a diversion of natural gas from enhanced recovery of oil deposits.


http://www.bloomberg.com/apps/news?pid= ... refer=home

Interesting times indeed. A slowdown used to mean lower energy costs and that would help a recovery. Now the US will have to adjust to a lower energy using economy during a downturn.
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Consume it, or store it

Unread postby whatpeak » Thu 26 Jun 2008, 09:04:36

The oft quoted Paul Krugman comments on the speculative bubble in his New York Times blog: More on oil and speculation

My search using the nifty new search tool didn't turn up this article, but I might have missed it. There are many interesting comments at the end of the article. Very few comments mention depletion.

The casual observer could point to the tankers sitting of the coast of Iran as evidence of the price (of oil) being above the demand of end users. Party on.
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Re: Consume it, or store it

Unread postby MrBill » Thu 26 Jun 2008, 09:25:49

Demand for high quality physical crude may be higher than we think only looking at the future's price.
Oil refiners are paying higher prices for physical supplies of crude than the futures benchmark used by financial markets, casting doubt on the idea that speculators are responsible for record oil prices, the Financial Times said.

Premiums of $5 to $6 a barrel are being paid for high-quality crude used to produce gasoline and diesel fuel, double the level of a year ago and four times the 2000-2008 average, the newspaper said.

Financial markets concentrate attention almost exclusively on prices of oil futures traded in London and New York, and the increase in prices paid for physical barrels of oil has gone largely unnoticed outside the refinery industry, the FT added.

source: June 13 (Bloomberg) --

European crack margins are around $1.69 a barrel at the moment. Not very sexy returns. No wonder the stocks of refiners are struggling at the moment despite oil service cos. and integrated producers doing well.
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Re: Consume it, or store it

Unread postby Serial_Worrier » Thu 26 Jun 2008, 13:31:41

I thought the oil companies were making "windfall profits". :?
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Re: Consume it, or store it

Unread postby Starvid » Thu 26 Jun 2008, 13:55:59

MrBill wrote:European crack margins are around $1.69 a barrel at the moment. Not very sexy returns. No wonder the stocks of refiners are struggling at the moment despite oil service cos. and integrated producers doing well.
Are these mogas cracks? Because I thought diesel and heating oil cracks were fine, just fine.
And it wouldn't surprise me if the rest of the world is dumping surplus gasoline on the US market, depressing US mogas cracks even further and keeping refinery utilisation and prices at the pump down.
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Re: Consume it, or store it

Unread postby Starvid » Thu 26 Jun 2008, 13:56:33

Serial_Worrier wrote:I thought the oil companies were making "windfall profits". :?
Yeah right. I think Exxon has 9 % margins or something like that. Go after Google instead.
Peak oil is not an energy crisis. It is a liquid fuel crisis.
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Re: Consume it, or store it

Unread postby MrBill » Fri 27 Jun 2008, 03:04:45

Refiners are doing terrible at the moment relative to the majors that are benefiting from high crude prices, while the refiners have to pay up for physical barrels. However, have hope. Heard on the street that some sovereign wealth funds (SWF) are buying into the sector. Last spring/summer they were minting money, so they may, yet, have their day (again).
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Re: World Governments Demand US reduce oil consumption?

Unread postby MD » Sun 28 Sep 2008, 05:01:15

bump series.

We're all looking rather prophetic now, aren't we?
Stop filling dumpsters, as much as you possibly can, and everything will get better.

Just think it through.
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Re: World Governments Demand US reduce oil consumption?

Unread postby Dont_Panic » Sun 28 Sep 2008, 08:43:22

MD wrote:bump series.

We're all looking rather prophetic now, aren't we?


Err, how? World governments have done nothing even close to demanding that the US reduce their oil consumption, like you suggested. Consumption goes down when the market forces the price upwards, that's what's happening. Looks like you were totally wrong on this one.
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Re: World Governments Demand US reduce oil consumption?

Unread postby MD » Sun 28 Sep 2008, 08:49:42

Dont_Panic wrote:
MD wrote:bump series.

We're all looking rather prophetic now, aren't we?


Err, how? World governments have done nothing even close to demanding that the US reduce their oil consumption, like you suggested. Consumption goes down when the market forces the price upwards, that's what's happening. Looks like you were totally wrong on this one.


Yes, I wasn't on this one, but others were. There were some strong responses up thread.
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Re: World Governments Demand US reduce oil consumption?

Unread postby Plantagenet » Sun 28 Sep 2008, 16:09:06

MD wrote:
Dont_Panic wrote:
MD wrote:bump series.

We're all looking rather prophetic now, aren't we?


Err, how? World governments have done nothing even close to demanding that the US reduce their oil consumption, like you suggested. Consumption goes down when the market forces the price upwards, that's what's happening. Looks like you were totally wrong on this one.


Yes, I wasn't on this one, but others were. There were some strong responses up thread.


World governments don't have to order the US to reduce its oil consumption

All they have to do is accumulate US debt as the US borrows billions to operate the government and bail out the banks and wall street. This will force the US to devalue its dollar and inflate the cost of oil and other commodities to the point that people will be hurt by high prices and will use less gas and oil.
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