How High Will They Go?

[chrisfisher]

Call me crazy, but Big Oil's reign may have a real challenger... There is a company called ESSTOR that has come up something called a "ceramic battery" (technically not a battery, but they call it that to gain better public acceptance). ESSTOR is a small, private company in Texas (Keller I think, and then moved to Austin). The "battery" received a patent last year, and a Canadian electric car company called Zen Motors has invested millions of dollars into ESSTOR this year. At this point, I'm sure you are saying, "ya, so what?" Here's the kicker: the ceramic battery plugs into regular household electric sockets and fully charges in 5 minutes... "fuel economy?"....it gets 500 miles to the 5 minute charge. It reportedly can produce enough "horsepower" to compete with a Ferrari (depending on how the car manufacturer configures it). Obviously, when you charge your battery you use an electric provider that probably uses oil. However, 5 minutes in a wall plug consumes considerably less fuel than filling up with 20 gallons. If you happen to live in an area that provides wind based electricity, you could conceivably be oil free in 2008 (assuming you can purchase a Zen car). This is NOT science fiction! This ceramic battery exists and Zen plans to release cars with this technology in 2008. There are blog discussions (i.e. pure speculation) that once GM, Ford, etc. realize what is happening that there will be huge bidding war for ESSTOR.

BTW, I am very pro-capitalist. However, oil is at the center of nearly every problem in the world today including social, cultural, political, environmental, and military. We can end our problem in the Middle East if we end reliance on oil, and thus stop funding the war against ourselves. The Middle East’s second largest natural resource is sand, which I'd love to feed them with. Their economies will collapse if the world stops buying their oil. I, for one, have made living an oil free life a priority for all the reasons discussed above, plus the fact that I am tired of getting raped by Big Oil simply because "I can tolerate it."

Edited May 25, 2007 by chrisfisher

[LongJim]

Some excerpts from Ed Wallace's FWST column which I referenced earlier in this thread. Bolding is mine.:

*********************************************

“Since 2000 we have stockpiled gasoline in summer in four out of seven years; the only year in which we had a serious downturn in gasoline reserves during summer was 2003, when reserves fell by 14.4 million barrels. Amazingly, 2003 was also the year in which gasoline prices fell by 4.2 cents per gallon — during that same high-demand period.

One thing is certain: The oil majors internationally have often had to do business in the messiest moral circumstances imaginable. Maybe it is best summed up as “A process requiring great moral flexibility, knowing that the procurement of oil at any cost is the main thing keeping America mobile and therefore economically successful.”

That said, the heavy veil that covers the internal workings of this industry makes it all too easy to mislead the public on the real state of the oil business today. And these days it too often seems like there’s a well-orchestrated PR campaign to justify the too-high price of gas.

While that supposition could be incorrect, consider the sheer volume of coverage of the oil business and its potential demise, T. Boone Pickens’ loud insistence that Peak Oil has already occurred, and the constant warning that we don’t have enough refineries to produce all the gasoline our nation demands.

Recent History Lessons

Think back to last year. The news treated us to non-stop discussions on why oil topped $78 a barrel on the futures market. The media worried 24/7 about the potential for another destructive hurricane season, maybe a war with Iran. And endlessly we heard about warfare in the oil regions of Nigeria, about Al Qaeda hitting the oil facilities in Saudi Arabia, about Russia taking control over its energy industry, about China’s rising economy siphoning oil and gas out of “our” national gas tank, and so on. And we’ve all heard of the “terrorist premium” paid for oil, often quoted as $15 a barrel.

However, did you know that last year, during the summer driving season, not only did we have sufficient gasoline to meet the nation’s demand, but we also managed to put 8.1 million more barrels of gasoline into our national reserves?

Surprised? That’s right, in spite of all the serious gas supply trouble you read and heard about last year, we were actually stockpiling it from the last week of April to the last week of July.

More important, since 2000 we have stockpiled gasoline in summer in four out of seven years; the only year in which we had a serious drawdown in gasoline reserves was during the summer of 2003, when reserves fell by 14.4 million barrels. Amazingly, 2003 was also the year in which gasoline prices fell by 4.2 cents per gallon — during that same high-demand period. So much for the theory of supply and demand determining prices, but let’s repeat for emphasis: In four of the last seven years, we put gasoline into reserves during the critical summer driving months. Therefore, today’s low reserves does not mean there will be a shortage. (Yes, there’ve been refinery problems this year, but that’s also been true in past years. — EW)

[UNTFan23]

Chris, do you have a link to the company or a newspaper article? I'm rather curious about this.

[UNTflyer]

it is nice to know that the refineries are making a $40 profit per barrel right now according to the news.

Not even close. I don't know what "news" you got that from... but according to Fool.com:

"In the industry, this is expressed at the "topping margin," or the value of the products minus the cost of the raw material. From this you must deduct the cost of doing business. Energy costs alone are nearing $2 per barrel. The enormously expensive catalyst costs, capital expenditures, labor, etc., quickly cut the net value. As of today, the "high profit margins" in the industry allow for the obscene net profits of about $2 per barrel, or about $0.05 per gallon. That's a net profit margin of less than 3%."

http://www.fool.com/investing/dividends-in...ion-insult.aspx

Your number of $40/per barrel would mean oil companies would be profiting $1.2 trillion a year (that's global consumption of 30 billion barrels x $40)

[untbowler]

Not even close. I don't know what "news" you got that from... but according to Fool.com:

"In the industry, this is expressed at the "topping margin," or the value of the products minus the cost of the raw material. From this you must deduct the cost of doing business. Energy costs alone are nearing $2 per barrel. The enormously expensive catalyst costs, capital expenditures, labor, etc., quickly cut the net value. As of today, the "high profit margins" in the industry allow for the obscene net profits of about $2 per barrel, or about $0.05 per gallon. That's a net profit margin of less than 3%."

http://www.fool.com/investing/dividends-in...ion-insult.aspx

Your number of $40/per barrel would mean oil companies would be profiting $1.2 trillion a year (that's global consumption of 30 billion barrels x $40)

yup stupid me for watching Communist News Network. Damn guess you can not watch any news channel today.

[UNTflyer]

yup stupid me for watching Communist News Network. Damn guess you can not watch any news channel today.

Well I do think the media hypes up the high price of gasoline. Oil companies make an easy target when they profit $10billion in a quarter, but the issue isn't profits. The issue is our government will not allow oil companies to expand exploration to desolate areas of Alaska and known fields in the Gulf in order to increase production and lower prices.

[greenminer]

Just an FYI for this thread, I drove from EP to Dallas and back again last weekend for the career fair; then to Brenham and back this weekend. Prices are all over the place.

I saw 2.99/gallon Saturday and Sunday on 290 between Brenham and IH-10, and the middle-of-nowheres in the Panhandle have it as high as 3.54.

crazy times.

[gksmith]

Prices dropped a little recently. Maybe 5 cents. Seeing a lot more <$3/gal around Lewisville.

Still some gougers out there thought.

[UNTflyer]

Yup, because peak gasoline demand is usually right before Memorial Day... which is usually about the same time when the refineries have completed the conversion to summer blends and can meet the demand.

Supply & Demand wins out again.