Oil & Gas

[Quest4Less]

Perhaps a little naive but...

Why can't the Canadian Government take back Petro Canada, build it's own refineries, and sell gas for any price it wanted - say 50 cents / litre?

Apparently Canada may have as much (or more) oil then Saudi Arabia.

Cut out the rich oil barons and keep all the money? Use it to build roads, improve public transport.... etc...??

Best of all say "Fu*k you" to OPEC....

Why not????

[Keebler Elf]

I thought people wanted the gov't to get out of business ventures? I always used to hear people railing on the gov't for owning Petro Can, so they divested. Now we want them to take it back???

Besides, all we'd be doing is hooking people even more on cheap gasoline. Instead of trying to encourage alternate fuels, more fuel-efficient cars, conservative, etc.

[lickrolaine]

The cost of production for petroleum,in Alberta,is very high per litre.The tar sands only are profitable when fuel prices are high,when prices are low,they stop production,period.If fuel prices stay high and go higher,Kline is a hero!Maybe it is time more then nat gas and petroleum flowed east,like maybe some money too,lol.As a Canadian I feel we all have some sort of ownership to this nat resource? Oh no here we go again,"let those bastards in the east ride bicycles,and freeze in the dark!

[Goober Mcfly]

Not to mention a little thing called the "free market economy".

[Weekly]

Remember when the Ontario government sold Suncor a few years back in the 90s. They could have paid off the debt if they had kept those shares. I think Ottawa has more control at the pumps than people realize with or without an oil co. stake.

[Kommander1975]

Cut out the rich oil barons and keep all the money? Use it to build roads, improve public transport.... etc...??

Best of all say "Fu*k you" to OPEC....

Why not????

You are naive if you still don't know that the canadian gov't charges 44% tax on every liter of gasoline, and even when we are having our blood sucked they refuse to lower it.

Why are they going to refine oil themselves when the saudis do it for them and they still make big bucks $$$ ?

[Cardinal Fang]

Perhaps a little naive but...

Why can't the Canadian Government take back Petro Canada, build it's own refineries, and sell gas for any price it wanted - say 50 cents / litre?



Why would you sell it at "50 cents/litre" when you can sell it on the open market for far more?

[oldjones]

Hope you put your hardhat on as soon as you pressed submit Post. Curious where you came by the idea that the government, anymore than any other business owner, could sell gas for "any price it wante, say 50¢ a liter".

If it prices below cost, any business, even government-owned, will have to dip into a pot of money somewhere to make up the difference. Like they say about how you make a small fortune selling books: start w/ a large fortune. The governments fortune is large, as large as the extra taxes you must want to pay so your neighbours can fill their SUVs w/ 50¢ a liter gas. How large is that fortune?

I can't speak to the wisdom of buying back PetroCan—though I never thought they should sell it; it was making money for them—but if they're raising taxes, I'd raise the GST on all but the really stingy econocars, and treble the taxes on the gas they guzzle.

At $2 a liter maybe we'd at last see more than one person per car idling up the DVP or out the Gardiner at 5PM. Hey split two ways you're even, four ways, you'd be doing better than good ol' buck a liter gas. And think of all the buses and streetcars and Go trains and windturbines that fortune might buy. 'Cause I bet it'll take more than $2 gas to get people to see their cars are the problem.

[Meister]

Hope you put your hardhat on as soon as you pressed submit Post. Curious where you came by the idea that the government, anymore than any other business owner, could sell gas for "any price it wante, say 50¢ a liter".

If it prices below cost, any business, even government-owned, will have to dip into a pot of money somewhere to make up the difference. Like they say about how you make a small fortune selling books: start w/ a large fortune. The governments fortune is large, as large as the extra taxes you must want to pay so your neighbours can fill their SUVs w/ 50¢ a liter gas. How large is that fortune?


I guess the Venezuelans must be really dumb, because you can buy gas there at 12 cents/litre.

[johnhenrygalt]

Perhaps a little naive but...

Why can't the Canadian Government take back Petro Canada, build it's own refineries, and sell gas for any price it wanted - say 50 cents / litre?

Apparently Canada may have as much (or more) oil then Saudi Arabia.

Cut out the rich oil barons and keep all the money? Use it to build roads, improve public transport.... etc...??

Best of all say "Fu*k you" to OPEC....

Why not????

Section 92A of the Constitution Act (formerly the BNA Act) places jurisdiction over non-renewable natural resources in the hands of the Provinces, not the federal Parliament. Without the cooperation of the provincial government of Alberta, it would be very difficult for the federal Parliament to create a "made in Canada" gasoline price; and for political reasons, a second Trudeauesque "NEP" is not an option.

[oldjones]

I guess the Venezuelans must be really dumb, because you can buy gas there at 12 cents/litre. And it will cost you how much to driive down there and fill up? Venezuela's sitting on top of the stuff, like parts of Alberta, which is about as far away.
BTW isn't V's neighbour Equador having some pretty serious civil disorder because the government proposed selling gas at world price instead of subsidizing it at under price?
Your gov't can sell it's oil at the cost of getting it to the pumps and make not a cent. But the taxes they now take from each liter would have to come from somewhere, and the only place is your pocket and mine. And if they're selling to you at cost, they're not selling to the Americans for a profit (nor are they taking profits from millionaire Canadians who'sd also be buying at cost) so that money too has to be made up somewhere. Taxes.
Taxes come from everyone. I don't see any upside for the population as a whole being taxed so you or anyone can have cheap gas. Given that the health cost of cars and their pollution, and their death rates are worse than, tobacco, worse than handguns, worse than heroin, I'd say it's time the taxes on gas went up.

[Meister]

I don't see any upside for the population as a whole being taxed so you or anyone can have cheap gas.
I agree, hence my comment that the Venezuelans must be dumb.

[WhOiSyOdAdDy?]

Looks like Alberta will have surplus larger than $7Billion... and it looks like it will not be long before oil tops $100 per barrel!

I think we should prepare for a nice, long recession... people need gas and will have to cut back in other areas of spending.. while the cost of all good must rise as a result of significantly higher fuel prices. the same thing will happen in the usa... affecting our exports and jobs here... I do not see a bright future.

[lickrolaine]

Looks like Alberta will have surplus larger than $7Billion... and it looks like it will not be long before oil tops $100 per barrel!

I think we should prepare for a nice, long recession... people need gas and will have to cut back in other areas of spending.. while the cost of all good must rise as a result of significantly higher fuel prices. the same thing will happen in the usa... affecting our exports and jobs here... I do not see a bright future.

The same statement was made in 1973-4 when the USA had a fuel crisis.We can only hope we get the same ride for the next 30 years that we got then,lol!
Remember when they came here with their 50 gallon barrels to buy gas,lol,they had odd and even days (license plates,or "tags") when they could fill up.The most unsettling part was when the newscasters did a report from the interstates on Sundays,with no traffic,cause all the toll roads were closed that day!Try that shit today and you would have a big problem,lmao!

[baltimoron]

This reminds me of a Bill Maher joke on complaints about gas prices.

He was talking about how much people pay for a gallon of other stuff. Considering that a gallon of gas is a necessity, which gets you where you need to go, how much do you pay for a gallon of perrier? And a gallon of Starbucks is, like, a million dollars....

[strange1]

...If I wanna buy a new house I gotta pay an extra $200,000 more than I did 2 years ago! ...
Damn, Where do you live?

[Fork Master]

Peak Oil is coming soon and we're all doomed ;) but who I blame are people in urban centres sucking up all the gas when they should be on Transit.

Here's my post from last year about "My TTC Subway Plans", I've made modifications since then,

http://terb.ca/vbulletin/showthread.php?s=&threadid=67499

[anon1]

I read somewhere recently that one third of the current price of oil is due to speculators. It's oil futures that are being traded, not oil itself. Commodities traders are bidding up the price of oil and making a killing, all out of OUR pockets.

[oldjones]

I read somewhere recently that one third of the current price of oil is due to speculators. It's oil futures that are being traded, not oil itself. Commodities traders are bidding up the price of oil and making a killing, all out of OUR pockets.
You'll have to explain that. If twelve people want to buy a thing, it'll get sold to the highest bidder won't it? Now if the highest bidder says "hey guys, I've decided to sell what I just bought, start bidding", there's nothing wrong with that is there? The other eleven people don't have to bid at all, in which case Mr. Lucky either keeps what he bought, or begs them to buy it below his cost. Or the other bidders just keep on raising the price beyond what he paid. As if he hadn't bid and bought at all. What's wrong with this picture; how would you fix it?

The only thing that's jacking up the price here is the number of people who want the stuff. Insulate your house better, take transit, get everyone you know to do likewise and watch the price of oil go down.

You might have a case if you were complaining about oil barons holding the stuff off the market to make an artificial shortage and raise the price. But since they ain't makin' any new oil, I think we'd best be grateful someone's sensible enough to ration the stuff.

High prices make a market for expensive Alberta crude and postpone the day when there just isn't the supply to meet the demand. Lower the price; use it up faster; run out sooner.

[tboy]

Jones: Sorry dude, but you're wrong about your "supply and demand" comment. Sure, the current situation where china has increased the demand on the product accounts for some of the increase but speculators (I forget which show it was on) account for about 30% of the price of oil, gas and other petroleum based commodities.

IMHO this is artificially increasing the cost of an essential product.

Personally I don't think any speculation should be allowed to occur on food, water, petroleum, or other essential products or services.

Just think: ontario alone produces enough milk to supply just about the whole country. In total, Canada produces enough milk for every undernourished country in the world. The only reason we don't pay 40 cents for 3 bags of milk is because of the purchase, and subsequent dumping, of millions of gallons of milk by our wonderful government.

BTW: I forget what the exact number was but it was advertised that of the 44% taxes on a litre of gas, less than 1/10th of 1% goes back into roads, research or ?? relating to the transportation area.

[Meister]

Isn't OPEC setting output rates?

[train]

Speculative factor-

yes it's hard to imagine some of the large daily jumps being caused by anything else other than speculation. We will eventually get to see how much because if it is solely speculation eventually the bubble will burst . I think the 5 year trend is still up though as consumption is outstripping supply.

Government ownership-

Oh lord , I thought , as consumers, we all wanted LOWER prices . Last thing you want is Gov bureacracy/inefficiency added to the mix. Besides they are making a fortune on the taxes....they don't want the price to fall. How else do you think that the Liberals can be so corrupt and incompetent and still run a federal surplus ? Oil related taxes.

[oldjones]

Jones: Sorry dude, but you're wrong about your "supply and demand" comment. Sure, the current situation where china has increased the demand on the product accounts for some of the increase but speculators (I forget which show it was on) account for about 30% of the price of oil, gas and other petroleum based commodities.

IMHO this is artificially increasing the cost of an essential product.

Personally I don't think any speculation should be allowed to occur on food, water, petroleum, or other essential products or services.
… Okay. Define "speculator". Be sure you distnguish between the naughty speculators 'artificially' jacking up the price of something they buy in order to sell at a profit, and a virtuous wholesaler or retailer 'legitimately' jacking up the price etc. etc..

While you're at it, better also define "essential", since you brought it up. If I freely chose to live miles beyond any transit system how can my car be essential? It wasn't essential that I have a two car garage and a 4000sq ft home on a 1/4 acre lot at the price of a downtown semi where I walk to the streetcar was it?

Demand for oil is increasing by a coupla billion barrels a year every year, and it's at 80 odd bill now, with most Chinese still pedalling to work. Last I heard no one was making any more oil. The Arabs' productivity's declining and our production and theirs both need high tech and high prices to be profitable at all. The last gusher stopped spouting out of the ground on its own long ago. The supply is shrinking, and the dificulty and cost of getting at it is increasing. So when was that ever a receipe for lower prices, speculators or no?

[oldjones]

Isn't OPEC setting output rates? Canada and Mexico sell more oil into the US than the Arabs, and we don't belong to OPEC. You don't think OPEC just pulls aany old number out of a hat do you? They charge what the market will bear in order to cover their costs and future projuctions. Don't like it, don't pay it. The price will come down, at least until someone says, "Screw you, at that price I'll leave the stuff in the ground".

You're Canadian PetroSheik: How much of your company's profit are are you willing to give up by charging less than OPEC? How much will your shareholders give up? And don't forget, your oil is much more costly to produce than the Saudis', your "Screw you" moment comes sooner.

[Meister]

They charge what the market will bear in order to cover their costs and future projuctions.

What costs? If some of the OPEC states can sell gas to their own folks for pennies it means that we are not talking about some real tight profit margins.

[tboy]

Jones:

Speculator: someone who doesn't own oil or oil producing equipment or property, is not involved with the exploration, production, or distribution of oil, someone who is sitting in an office somewhere making money on other people's backs/work/risk.

Distributor/producer/refiner/retailer: These peoples own a vested interest in the correct management of their product and deserve to make a profit for their efforts. As stated elsewhere market trends would dictate what these companies could sell their product for.

the problem with speculation of oil is that the person(s) making the money, and raising the prices does not, and probably will never even actually OWN any oil. My problem with this, and some other stock market practises is that I believe in order to sell something, you have to actually have it to sell.

At this moment in time, I can actually go to the stock market and sell 100 barrels of oil at x price. I don't own any oil, I have no intention of taking posession of 100 barrels of oil but I can still do that. At some point in the future, if my understanding is correct, I do have to promise to purchase the oil at some point (I think that is called futures and I don't believe it actually involves the possession of the actual oil!)

[tboy]

Ontario, I agree, the same principal can be applied to all commodities. The difference here is that IMHO oil is an essential product. Due to the governments of days gone past, we have been made extremely reliant on our vehicles: to move products, to move ourselves, and to live outside the urban environment.

For all those public transit activists, if only 10% of us left our cars at home on any given day, public transit would be in complete chaos and couldn't cope with the demand.

I always wondered what our society would have developed into if the internal combustion engine wasn't invented or fuel wasn't so readily available......

BTW, I took a job across the street from my home due to the high cost of fuel. So during any given week I bet I use my truck, maybe 2 days for a couple of hours max each day.

[someone]

Perhaps a little naive but...

Why can't the Canadian Government take back Petro Canada, build it's own refineries, and sell gas for any price it wanted - say 50 cents / litre?
50 cent gas. I see that you are not a supporter of Canada meeting its Kyoto commitments.

[superquad1968]

The same argument can be made for any product on the futures/options exchanges. If you buy options on Dell shares do you really expect delivery? You can buy any kind of futures- orange juice, pork bellies, electricity, gold, silver, etc. Why should oil be different? The effect it has on the market is that it allows companies to accuarately predict future pricing. That stabilizes the market- it doesn't distrupt it.

Oil is moving today all because of the fear premium. It will come down hard by the end of the year. And if you don't believe me, go buy oil futures yourself!

or;

http://moneycentral.msn.com/content/CNBCTV/Articles/Dispatches/P127454.asp

$100/barrel might mean $1.50/L. Scary

[Paladin]

There are just under 260,000,000 shares of Petro Canada issued. The shares closed at $92.91 today. The goverment would have to offer around $125 to $150 per share to buy back Petro Canada. This would cost the taxpayers $32.5 to $39 billion to buy back the company.

Let's hope that oil prices rise to around $100 US per barrel and gas prices rise to around $1.60 per litre. The people who own oil and gas stocks will make a lot of money. It will be like the height of the dot-com stock boom. These people will have lots of money to spend on SCs, MPAs and SPs, as well as buying luxury goods.

[superquad1968]

There are just under 260,000,000 shares of Petro Canada issued. The shares closed at $92.91 today. The goverment would have to offer around $125 to $150 per share to buy back Petro Canada. This would cost the taxpayers $32.5 to $39 billion to buy back the company.

Let's hope that oil prices rise to around $100 US per barrel and gas prices rise to around $1.60 per litre. The people who own oil and gas stocks will make a lot of money. It will be like the height of the dot-com stock boom. These people will have lots of money to spend on SCs, MPAs and SPs, as well as buying luxury goods.

Money I've made has gone to pay for my gas so it's a wash :)

[RogerRabbit]

http://money.cnn.com/2005/08/25/pf/gas_gripes/index.htm

* Gas gripes: readers speak up
Readers weigh in on how rising prices at the pump have taken a toll on their lives.
August 25, 2005: 10:32 AM EDT

NEW YORK (CNN/Money) - To cope with rising gas prices, some people are driving less -- or changing vehicles.

Some are cutting back elsewhere in their budgets. Some are taking more drastic measures.

And with gasoline rising to an average of about $2.60 a gallon -- and oil prices staying high -- it doesn't look like prices at the pump will retreat anytime soon.

CNN/Money invited readers to write in and share stories about how they are coping.

Below are Thursday's selections. (See gripes from Tuesday and Wednesday.)

It's about the music, man..."I am in a band that just got signed to a independent label and we are about to start touring. Because gas prices, if we don't sell merchandise, we don't eat." -- Tavis W.

Cutting back on EVERYTHING..."I've done the following: quit eating out; wearing anything that needs dry cleaning; I'm doing my own hair; canceled the newspaper subscription (I read it online); not renewing any magazine subscriptions; had the "home" phone turned off, just using my cell phone (cut back on minute plans)....whatever it takes!!!" -- Mel

A new thief in town..."Recently I received a call from my credit card company to report a number of fraudulent charges. Can you guess what the thieves charged? Gasoline, of course! Go figure!" -- Carol C.

Brown bagging..."I used to spend $7 per day for lunch or $35 per week. Now I take lunch to work and it costs about $3 per day ( $15 per week). The extra $20 savings is shifted to the tank. I'd rather put that savings into my 401(k). Also I stopped going to Starbucks and lowered my Lottery ticket purchases." -- Mark S.

Extreme measures...? "I've had to switch from Charmin to newspaper." -- Stacey

Trading down..."I traded in my BMW for Nissan Altima 2.5S because gas prices are making me sick to my stomach. I'm from Yonkers, N.Y. and finding a gas station with the lowest price is like striking gold. If I find one, it's just funny how reality bites: Porsche, BMW X5, Ford Mustang, Mercedes are all lined up for the cheapest gas station in town!

Loving the bug..."I am doing quite well with gasoline prices at record levels. More than two years ago I purchased a 1974 VW standard beetle with a 1600CC engine in anticipation of rising gas. My daily round trip commute is 52 miles and I get 36 miles to the gallon with my bug. My cost for filling up the fuel tank is $21. FYI: I sold my gas guzzler on 8/1/05." -- Max D.

Walking off the job..."Because of the rise in gas prices I had to leave my job. I worked on the east side of Detroit and lived about 85 miles away. I have had to make the decision the leave a good job to look for local employment that probably wont pay more than $9 an hour. Also because of the gas prices I cannot afford to drive to and from college so I have chosen to take all online classes, which is a big disappointment. -- Justin E.

Check back for more reader responses. And send us your story at gasprices@cnn.com.

what have you given up or cut back on, because of high gas prices?

:)

[oldjones]

Jones:

Speculator: someone who doesn't own oil or oil producing equipment or property, is not involved with the exploration, production, or distribution of oil, someone who is sitting in an office somewhere making money on other people's backs/work/risk.

Distributor/producer/refiner/retailer: These peoples own a vested interest in the correct management of their product and deserve to make a profit for their efforts. As stated elsewhere market trends would dictate what these companies could sell their product for.

the problem with speculation of oil is that the person(s) making the money, and raising the prices does not, and probably will never even actually OWN any oil. My problem with this, and some other stock market practises is that I believe in order to sell something, you have to actually have it to sell.

At this moment in time, I can actually go to the stock market and sell 100 barrels of oil at x price. I don't own any oil, I have no intention of taking posession of 100 barrels of oil but I can still do that. At some point in the future, if my understanding is correct, I do have to promise to purchase the oil at some point (I think that is called futures and I don't believe it actually involves the possession of the actual oil!)
Well your definition fits all those folks who bought long term gas supply contracts for a fixed price. It's what OPG does and the airlines, all sorts of business and not just for fuel. Bakeries do it for flour. Coke does it for sugar. Starbucks for coffee. Maybe your mom did it for her natural gas.

It's also called hedging. In order to assure yourself of a supply of whatever, you pay some one whatever to deliver it at a specified time in the futurefor a price the two of you agree on today. Can't see anything wrong in it. Might even call it smart. Maybe you could explain what's wrong here. More to the point how would you ever be able to stop people from entering into such agreements?

Now you did say you thought people shouldn't sell things they don't actually have. But if we were rigid about that commerce would grind to a halt. I need widgets to build into the framistats my company makes. I call you up and order 12,000 to be delivered 1000 each month. Do you refuse the order because you don't have 12,000 on the shelf? More likely you say, "Done, and my terms are 10% now and the balance in 12 even payments on delivery , let's settle on a per unit price". Then you rush out and buy the raw materials and start makin' widgets. Just like many other businessmen, you sold the promise to deliver what you didn't have. It just is not a retail world. Only retail works as you described

[anon1]

Chavez said Venezuela could supply petrol to Americans at half the price they now pay if intermediaries who "speculated ... and exploited consumers" were cut out.

..... from another thread.

[oldjones]

Chavez said Venezuela could supply petrol to Americans at half the price they now pay if intermediaries who "speculated ... and exploited consumers" were cut out...... from another thread.
No intermediaries, means you personally have gotta get the oil outta the ground, refine it into gasoline and put it in you car. Which does you a lotta good if you live in Toronto, 'cause that oil's in Venezuela. No intermediaries means you drive there and back on roads you build.

WE need those intermediaries to fuel our luxury lifestyle, living in this hostile climate with personal transportation always at the ready and all the infrastructure that supports us. And it all costs, and it all runs on gasoline and competes with you to buy it. Price goes up.

Of course a socialist pol is going to blame the profit-takers for high costs, and he's dead on. A speculator is define as anyone making more profit than I like. You too can have cheaper government supported gas; just decide how much you're willing to pay in taxes instead of profits and vote. TANSTAFL.

[anon1]

Your argument takes it to the ridiculous logical extreme.
No one is advocating the elimination of "VALUE ADDED" intermediaries, but the avoidance of "NON-VALUE ADDED" middlemen.

[lonely guy]

All of this oil-crap just makes me invest into fuel cell technology (which is starting to produce large-scale designs for ships, subs, and buidlings....cars are a long way out before they become practical due to their small powerplants.).

Someday, this will all be moot when fusion power plants (combined with superconductive powerlines) will produce all of the energy we need. Fusion powerplants will also provide electrolosis plants the needed energy for producing Hydrogen as well. I can imagine the massive amounts of fresh water this can produce as well.

[Fork Master]

The USA wants oil prices to be as high as possible because of how petrodollars artificially inflate the US currency. Before a country buys oil, they must first buy US dollars to pay for the oil. That's a lot of artificial demand on USD's.

That's why Iraq was invaded, Saddam switched to petroeuros. lol

http://www.informationclearinghouse.info/article9936.htm
http://www.informationclearinghouse.info/article9698.htm

[oldjones]

Your argument takes it to the ridiculous logical extreme.
No one is advocating the elimination of "VALUE ADDED" intermediaries, but the avoidance of "NON-VALUE ADDED" middlemen.
My argument actually is that it's ridiculous to imagine that you or anyone else can distinguish between them. It will certainly never happen if people don't or can't make the distinction clear in their own statements.

Paying off the loan that financed the exploration, or the drilling equipment certainly increased the oil's costs, but adds no value. Same for the the loan that paid for the supertanker. Actually coming up with an example of a non-value added transaction that should be prohibited is impossible IMHO.

The commodity trader buying and selling futures was mentioned, but he only exists because the oil company wants/needs the money now, not six month's later when the stuffs crossed the ocean been refined and you finally swiped your card at the pump. Ooops not so fast, when the non value-added credit card company at last gets the dough from your bank.

You can drive over to Petrolia ON and watch the same pumps that made the world's first commercial oil field still bringing up oil. Every time there's an oil crisis, someone gets the bright idea of interviewing the guy who owns most of the wells. He buys his gas at the pump same as us. If anyone could eliminate the middlemen, wouldn't it be him?

[Diode]

Someday, this will all be moot when fusion power plants (combined with superconductive powerlines)

Question my friend. How are we going to super cool thousands of kms of power lines? The cost would be outrageous...and we would consume huge amounts of fosil fuels to suppy the added power required.

I'll admit, there would be amazing benifits to the elimination of I2R losses...but the cost would kill us.

[Meister]

The USA wants oil prices to be as high as possible because of how petrodollars artificially inflate the US currency. Before a country buys oil, they must first buy US dollars to pay for the oil. That's a lot of artificial demand on USD's.

That's why Iraq was invaded, Saddam switched to petroeuros. lol

http://www.informationclearinghouse.info/article9936.htm
http://www.informationclearinghouse.info/article9698.htm

That's not necessarily in the best interest of the US. I think the US would rather have a lower dollar for 2 reasons. It cranks up the domestic economy and it reduces the value of the debts they owe to foreigners.

Case in point, the US did nothing when the dollar tanked against the Euro and the Yen in the last 2 years.