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Are Oil Companies Greedy?

Return on Investment

May 2, 2006

Or are consumers and politicians greedy to expect oil companies to take huge risks drilling for oil in hostile environments without compensation?

Who is greedy?

In our Bob Brinker FREE discussion forum mrs1123 joined many others in accusing the oil companies of greed with this statement :

But if foreign companies charge us $72.00 per barrel there is nothing but greed that prevents the U.S. oil companies from selling the oil within the U.S.A. that comes from U.S. soil at a much lower price such as $40 per barrel.

Here is my reply:

You said you've followed Brinker for a long time. If so, you probably have 5 or 10x gains in some MSFT. To prove you are not greedy, please sell me those shares at a "fair rate of return" which we can call the rate of inflation if that makes you comfortable. That should put MSFT shares purchased in the early 1990's at $5, give or take. Heck, to prove I am not greedy; I will give you $10 for each of your MSFT shares! Aren't I a nice guy!!!

[MSFT was selling for about $24 a share that day]

[This link shows my original message with a chart of MSFT Stock price.]

The oil companies took far more risk than you and I took in buying MSFT and other stocks in the 1990's. Intel used Billions of its capital to build IC manufacturing plants in the US and countries friendly to the US. Exxon and other oil companies had to drill many dry holes in places where hurricanes destroy drilling platforms and oil rigs. They also have to go to places like the Middle East where terrorists want to blow them up. Don't you think they deserve a fair return on their investment? The reason the oil they discovered is so valuable now is because of the risks of getting more of it from the Middle East are high. Roughly one third of the price of oil is due to fear over Iran getting nuclear energy plus speculators and supply/demand issues related to not having enough refinery capacity. Finally, environmental laws that force Californians to use ethanol even though we have sophisticated refineries that can make clean burning gasoline without giving ethanol welfare payments to the middle states in the US who voted for Bush also drive up the price.

All I've seen the oil companies do is take huge risks to deliver a product their customers in the US were too stupid to find alternatives for. We could be using clean nuclear power today at a fraction of current electricity costs to charge plug in hybrid electric vehicles... but no, we wanted big ole SUV's and oil dug out of the ground in Saudi Arabia for $6 a barrel. Were you volunteering to pay $40 a barrel 10 years ago so the oil companies could make a profit on their reserves?

Back in 1993 I went to COMDEX, a show in Las Vegas for technology vendors to share the latest we were working on with customers. I was working on the infrared technology that my Nokia 6682 cell phone has (Nokia was one of our big customers) for printing images without wires or cell phone charges. I took some time off talking to potential customers about our new technology to look at office productivity offerings. I had become very effective as a project leader using email, word processing software and spreadsheets. It was clear to me that companies like MSFT and Intel would benefit greatly from commercializing this technology for average, non-engineer, users who are not experts with computers. As such, I invested in MSFT for $2.43 a share, IBM at $11 (they had the competing platform to Windows that I thought had a chance) and Intel at $3.67. I took a big risk investing in technology companies at a time many thought nobody else but engineers would find low priced computers useful.

Are you saying I am greedy to want to charge you many times more than what I paid for these stocks?

= + = + = + = + = + = + = + = + = + = + = + = + = + = + = + = + = + = + = + = +

Needless to day, Mrs1123 has yet to take me up on my offer to take those appreciated MSFT shares off her hands at a "fair price." Do you think she is greedy?

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Kirk Lindstrom:

DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice.

The copyright of the article Are Oil Companies Greedy? in Investment is owned by Kirk Lindstrom. Permission to republish Are Oil Companies Greedy? in print or online must be granted by the author in writing.

Comments

May 2, 2006 9:14 AM

Lcha :

Are oil companies Gr?

Did Gr get cut off?

May 2, 2006 11:09 AM

Obscene profits

<blockquote>"But if foreign companies charge us $72.00 per barrel there is nothing but greed that prevents the U.S. oil companies from selling the oil within the U.S.A. that comes from U.S. soil at a much lower price such as $40 per barrel."</blockquote>

Apparently many people are ignorant of what an "open" market means! If oil sold at $40 pb anywhere (in quantity) within the US (or anywhere's else, for that matter), the tankers would be lined up at the US ports to buy up as much US oil as they could carry away! I bet Canada and even Mexico would reverse their pipelines to the US and buy— not sell— as much oil as they could store or resell elsewhere!

Oh; but we can control oil reexports (not with existing trade treaties we can't) and we net import oil anyways. Sure, let the oil companies subsidize our SUVs and Hummers— anything, but that we should have to do it, or change our lifestyle! I have a better suggestion; why not let the Government subsidize oil— all they have to do is eliminate the taxes on gasoline— would cut the price in half!

______________
The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.

May 2, 2006 11:18 AM

Lcha :

Ah, now the question can be answered.

Yes, absolutely, oil companies are greedy. So are technology companies, drug companies, cookie companies, insurance companies, health acre companies, auto companies, governments of all kinds, yada, yada, yada.

Have you ever heard of ANY company publicly state that they have enough profits and they will now embark on a plan to curtail the growth of profits? That would sure make the G part of a PEG calculation easy wouldn't it. It would also get any CEO of a company that wasn't actively 'greedy' fired in a second.

The oil companies did not manufacture best selling SUVs that got 12 MPG. Nor did oil companies bring back the Hemi. If we as a country had not gone down this wasteful auto path we would not be in this oil situation today. There are a myrid of other causes as well but I don't have the time to cover them now.

Oil companies have a duty to their shareholders to extract as much profit out of the current energy market as they LEGALLY, and I want to emphasize LEGALLY, can. If anyone thinks oil companies are making too much profit, I suggest buying oil company stock, thus becoming an owner, and profiting from the good fortunes.

There are only 2 entities I blame for our current energy situation. Our government, both parties, for not having a cohesive and comprehensive energy policy for the past 20 years and the American public for WASTING such a valuable resource for what amounts to auto ego satisfaction.

Stepping off my soapbox now...

May 2, 2006 12:24 PM

Lcha :

Here is the CA Energy Commission breakdown on gasoline revenue distributions per gallon:

http://www.energy.ca.gov/gasoline/margins/index.html

This CA site has the breakdowns you asked for Kirk.

May 2, 2006 1:13 PM

Lcha :

So taxes are by far and away the largest variable component of gasoline that can be lowered since Oil company profits are far less than the taxes collected by governments. Yet who is yelling in Congress about being greedy?

So why do the oil executives that get called before congress prepared with a GIANT whiteboard that outlines in cartoon detail just this information. If they are being forced to be a part of a circus, they should show just who in the room are the real clowns. And maybe educate the public on the gasoline issue just a little.

The oil companies have always done a poor job at promoting themselves. It's time they stepped up and started playing PR hardball.

May 2, 2006 2:00 PM

Im Smile :

how much of that tax is used for the intended purpose?

infrastructure roads inter & intra state roads (feds funding back to the states)

There is no easy way out of this mess - our dependency on oil.

Technology will save our butts in the end

Till then try driving less, or a smaller more efficient vehicle.

Oh yeah we can't since we want what we want when we want it regardless of the cost as long as it is not our lives on the line in the short run.

May 14, 2006 3:27 PM

Don Tremblay :

You think you guys have it bad. As a Canadian living in Calgary, Alberta in the middle of the richest energy reserves on the continent, you would think we might get a break! NOT!!!

70% of our oil is exported to the US and our oil prices are determined by US markets, because Canadian crude is not traded in the markets. Canadian oil companies are price takers and they love the current setup.

I wouldn't mind it so much if there was one main logical market influence but no, if its not NYMEX, then its OPEC, or NY HARBOR. Kidnapings, international tensions, or if it gets cold or the oil sheek's dog gets a cold, ITS ALL LAME EXCUSES FOR MARKET TRADERS TO SPECULATE ON PRICES. That is the problem.

Too many speculators and I wonder how many of them work for the oil comapnies. Who are these guys anyway??

REALLY - I would like to know. Its not a US or Canadian crude oil price you want - its a prefered gasoline price at the pumps - a made to order Canadian or US gasoline price. Why not?

May 14, 2006 4:31 PM

Just look at the size of the oil market, and you will realize that no small group of 'speculators' can influence the markets that much— they simply don't command that kind of cash! The people running up the price of oil are us— ordinary people around the world just 'topping off' their gas and oil tanks— because they're afraid of a sudden stoppage!

<blockquote>a made to order Canadian or US gasoline price. Why not?</blockquote>

It's next to impossible to isolate a local market from the world market (you wouldn't believe the tricks that would get pulled to bypass any embargo). In the end, the market would become so distorted that the price would probably wind up even higher. We could always freeze out China and India, except, China is busy buying up oil companies all over the world— even in Canada!

May 14, 2006 5:37 PM

Im Smile :

no small group of 'speculators' can influence the markets that much? they simply don't command that kind of cash! The people running up the price of oil are us? ordinary people around the world just 'topping off' their gas and oil tanks? because they're afraid of a sudden stoppage!

Anyone but Norm "topping off" their gas tanks and fear a "sudden stoppage".

http://themessthatgreenspanmade.blogspot.com/2006/05/tales-of-commodity-bubble.html

" Insana: I read one statistic today that suggested that hedge funds are controlling one billion barrels of oil - a lot of these charts have gone parabolic. Some hedge funds want to short the stuff, but every time they try, they get killed."

"Kudlow: How about these new ETFs Ron? They're all piling in like a momentum play which means they're going to get their heads chopped off."

$$$$$$$$$$$$$$$ & $$$$$$$$$$$$$$$

http://online.wsj.com/public/article/SB114468248061221847-zsOBXa0iiTlMdPZamQHqc11f_mQ_20060417.html?mod=mktw

"Buff Brown, president of WHB Energy Research and an energy-investment consultant, attributes more than $20 of crude's $60-plus per-barrel price to this passive-investor phenomenon. Other experts think that figure is high. Commodities officials at some Wall Street firms say the trend might be contributing $10 to oil's price.

Politicians and industrial producers often blame fast-trading hedge funds for pushing up and even manipulating energy or precious-metals prices. Ali Naimi, Saudi Arabia's oil minister, told energy executives at a conference earlier this year: "I think all of you know of the impact of funds in the market" and said $15 of oil's price, then about $63, was "not supported by fundamentals."

May 14, 2006 7:26 PM

<blockquote>Insana: I read one statistic today that suggested that hedge funds are controlling one billion barrels of oil</blockquote>

Horrors! Assuming that were true (and I very much doubt it— that kind of spare storage capacity just doesn't sit around waiting for a hedge fund in order to be filled), that's about 16 days worth of oil at today's consumption rates! If you are talking about future deliveries, that should take care of itself; one day, they are all going to have to take delivery!

"Oil Consumption

"However, while petroleum analysts equate 'Product Supplied' with consumption, there is a lag between petroleum delivered into the market and petroleum actually consumed. The product may sit in a tank belonging to a wholesaler, a retailer, or even a consumer before it is used. We cannot capture these small movements and therefore can be surprised by short-term volume fluctuations as these tanks are unexpectedly filled or emptied. [Thus, the methodology may overstate "demand" or "supply" at one point, and understate it at another.
http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/Demand_text.htm#Measuring

<blockquote>Ali Naimi, Saudi Arabia's oil minister, told energy executives at a conference earlier this year: "I think all of you know of the impact of funds in the market" and said $15 of oil's price, then about $63, was "not supported by fundamentals."</blockquote>

R-i-g-h-t! Great, sterling source of information. What is Hugo Chávez' opinion? What is Putin's take?

______________
The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.

May 14, 2006 8:40 PM

Im Smile :

I'm yanking your speculator chain... in fun only.

$$$$$$$$$$$$$$

Ali Naimi, Saudi Arabia's oil minister, told energy executives at a conference earlier this year: "I think all of you know of the impact of funds in the market" and said $15 of oil's price, then about $63, was "not supported by fundamentals."

R-i-g-h-t! Great, sterling source of information. What is Hugo Chávez' opinion? What is Putin's take?

Good response Norm. I got a chuckle out of that one. I ask the same sort of question when I hear the Bush administration say...

But the intelligence from the French and the Russians said that Saddam had weapons of mass destruction too...

In fact I heard this today... maybe Newt G. said it today in a defensive moment I can't remember....

Anyway my response just like yours... consider the source - who gives a flip what some foreign government who has competing interests says...

***********

however that aside there are huge dollars in hedge funds that can and do move markets, if the trend goes far enough one way the demand for asset performance (greed) begins to fulfill the prophecy (what I call artificial demand - aka commodity speculation).

May 15, 2006 12:17 PM

<blockquote>however that aside there are huge dollars in hedge funds that can and do move markets, if the trend goes far enough one way the demand for asset performance (greed) begins to fulfill the prophecy (what I call artificial demand - aka commodity speculation).</blockquote>

All right! Now we are on the same wave length! I have never denied that the (herd-like) action in the hedge funds can unsettle any market, and it's why I try never to trade any (relatively small) market in which hedge funds have assumed a large poition, such as EMs or gold. It's getting harder and harder to avoid hedgies, which are a disaster waiting to happen. (What do you suppose will happen when they have to begin taking delivery of all that oil?)

Where you and I differ is that you believe it is possible to remove 'speculators' from any free market without doing major harm. (Just read history; it's been tried since at least the time of the Romans— never with success!)

May 15, 2006 1:01 PM

Lcha :

I took my daughter to the Houston Grand Prix this Friday as I won 2 tickets in a door prize. Let's forget the $35 each ticket was priced at for now.

Cost for Lcha for the race:

Drove 35 miles round trip. At 23 mpg and $3 gas that came to $4.56.
Parking $15 (obscene)
20 oz. Sprite $4.00 (obscene)
16 oz. beer $7.00 (obscene)
foot long corn dog $4.00
Fajita wrap $8.00 (obscene)

Out of the $48 we spent, not including the tickets, our gasoline portion was quite reasonable. And yes, all of our expenses were completely voluntary, but if I was going to scream about obscene profits, I wouldn't be starting with the gasoline.

May 15, 2006 1:20 PM

Lcha :

Here is a link to a nice pdf put out by AAA on total driving costs for 2004.

http://www.aaawa.com/news_safety/pdf/Driving_Costs_2005.pdf

Gas was $1.93 then. For a Ford Taurus driven 15,000 miles per year and assuming gasoline is $3.00/gallon, the gas costs would be about 13 cents out of the 57 cents total costs per mile. And 30% of that 13 cents for gas is taxes remember.

So, 77% of the costs of driving is non-gasoline related.

May 15, 2006 1:37 PM

Lcha :

Interesting driving stats thru 2002 for the U.S.:

http://www.infoplease.com/ipa/A0004727.html#

May 15, 2006 2:03 PM

Lcha :

Total passanger car miles travelled in 2002 : 1658640 million miles

Ave miles per gallon 2002: 22.1
Gallons gasoline used: 75 billion

You get 19.4 gallons of gasoline per barrel of oil.

In 2004 we imported 876 million barrels of oil from the Persian Gulf.

If we increased our passanger car average miles per gallon by 6.5 to 28.6 MPG we would save 17 billion gallons of gasoline per year. That works out to 876.2 million barrels of oil.

So, by increasing our passanger auto efficiency by 6.5 MPG we could eliminate our Persian Gulf oil imports. At $70/barrel that would reduce our current accounts deficit by $61.3 billion per year and keep that much money out of Mideast Countries hands as well.

6.5 miles per gallon folks. Just for passanger cars! Think about that on your next auto purchase.

May 15, 2006 2:37 PM

Im Smile :

here here...

my next vehicles going forward will be FFVs and possibly FFV hybrid if available - waiting on Toyota :) and prompting my local dealership as to when for FFV Toyotas.

May 15, 2006 2:49 PM

Im Smile :

Where you and I differ is that you believe it is possible to remove 'speculators' from any free market without doing major harm.

All I want to do is shift who pays for the speculation to those who benefit currently and away from the consumer.

If no will for a WFSPT then at least decouple spot from futures and let the speculators reside in the futures market. Nymex rule change would accomplish this without any disruption.

The problem is the dim witt legislators do not understand the depths of the speculation...

Today you are seeing a lot of the unwinding of speculator positions. More to come... why should consumers pay for speculators greed?

You are wise to stay away from areas where hedge funds have a big position.

May 15, 2006 8:29 PM

<blockquote>If no will for a WFSPT then at least decouple spot from futures and let the speculators reside in the futures market. Nymex rule change would accomplish this without any disruption.</blockquote>

If you check out the example I gave of one way spot markets are coupled to futures markets, you will see that no action of Nymex, pro or con, was involved, nor of anyone you could easily identify as a 'speculator.' How do you prevent someone from holding oil in storage off the markets in the hopes of a better price? Rest assured. for every law or rule you can come up with to 'separate' and 'sterilize' markets, speculators will find a way around them inside or outside the law. In fact, why not begin by cleaning up Wall Street! Just applying existing laws should do it!

Ordinary people used to play the same games with their checking account 'float', back in the days when it took 3 or more days for an out-of-town check to clear. They didn't have any 'futures' speculators in Ancient Rome— but they probably had as many speculators. Speculation/gambling is as inbred in the human psyche as drinking fermented spirits, string games, telling 'tall tales,' ...

May 20, 2006 5:36 AM

Steve Thompson :

http://www.wtnh.com/Global/story.asp?S=4882017&nav=3YeX

(Cornwall-WTNH, May 9, 2006 6:10 PM) _ In tiny Cornwall Connecticut there's a man trying to take on Big Oil over the issue of high gas prices.

He wants you to stop buying gasoline after Memorial Day.

* by Chief Political Correspondent Mark Davis

The Berkshire Country store has the only gas pumps serving the approximately 5,000 residents of Cornwall and Goshen.

The owner is trying to organize a five day gasoline and diesel boycott because, he says, Big Oil is getting even higher prices around the world and we're next.

"The reality is, I believe, in twenty-four months you're going to see six bucks a gallon gasoline unless the American public is willing to take a position," says Walter Dethier, Berkshire Country Store.

His plan is for people to enjoy the Memorial Day weekend, gas-up, and then stop buying gas for the next five days- May 30th though June 3rd. He thinks it will disrupt the big oil companies' supply lines and leave them with tons of gasoline.

Steve Guveyan of the Connecticut Petroleum Institute says a boycott won't work.

"There's heavy demand in India, there's heavy demand in China, even Europe is using more diesel and gasoline. If, somehow we ended up with a lot more petroleum product here being unused, we would just ship it there," says Steve Guveyan, CT Petroleum Institute.

Walter is getting support from politicians in both political parties and his customers.

"I think it's a good idea and I think it'll get a message across a little bit stronger than what's getting out there now," says John Delayo, Warren.

"Well, I'd be willing to try it, if it makes an impression," says Jean Vitalis, Cornwall.

He's getting attention from radio talkshows. Walter got national attention last August after Hurricane Katrina when he turned off his gas pumps in protest of high gas prices. He's hoping that this story spreads across the nation too and that some kind of a boycott actually will do some good.

Walter was interviewed for 20 minutes today on the Truckers Channel on XM Satellite radio and, he says he got a lot of support from truckers.

Jun 6, 2006 5:48 PM

Tyson Yunkaporta :

nobody ever seems to talk about where this oil comes from, eg. <a href="http://boriginalrights.suite101.com/blog.cfm/khanti_poetry">khanti</a> land - indigenous peoples continually under seige from mining companies and government.

i'd like to know about investor ethics, and would even like to see an article about this posted in this section. is the dollar the bottom line, or is there anybody out there who would refuse to invest in a company that contributes to aboriginal genocide and displacement? is there anybody who would refuse to invest in a pharmaceutical or agricultural company that acquires its assets through indigenous <a href="http://boriginalrights.suite101.com/article.cfm/IntellectualProperty">Intellectual Property</a>
theft via gatt, etc?

<a href="http://boriginalrights.suite101.com/article.cfm/indigenous_knowledge_theft">Indigenous Knowledge Theft</a> has always been a source of wealth for western corporate prospectors.

i address a lot of these issues in my suite 101 section <a href="http://boriginalrights.suite101.com/">Aboriginal Rights</a>. i would be interested to know the views and values of investors around these issues.

Jun 6, 2006 8:31 PM

Tyson Yunkaporta :

yeah, did seem a bit spammy - not intentional. was looking for the right place to post it - kept finding better ones. was going to delete others when i finally settled on separate ethics topic, but figured they'd just be lost in the vast ocean of posts anyway.

thanks for responding - wasn't sure you'd even see it. have done a fair bit of mutual linkage with other suite writers like this and thru guest articles.

and nah, not a lot of oil in australia. but we do get a lot of hassles over uranium and bauxite etc. they even like to do testing on our land. we always get the same stuff about "it's just wilderness" or "just wild animals". but that concept of wilderness is something that is always used to take the native out of the landscape - extinguish native title. there is a lot of oil stuff going on like this - you just don't hear about it in the press. this is especially bad with siberian indigenous peoples.

the ipr's stuff in the international arena is off-topic, but fitting well with the ethics topic i started (the one that's deleted). vandana shiva's work on this is particularly insightful.

i'd still really like to see you do an article on investment ethics in general. i'd be happy to link to it from my site or even host a blog about your opinions on this - whatever they may be.

thanks again for the response - hope there is some common ground for us to interlink - although our topics do seem diametrically opposed in a lot of ways, so understand if it's not on.

tyson yunkaporta

Jun 6, 2006 10:47 PM

Tyson Yunkaporta :

email link in the welcome message on my site

Jun 7, 2006 6:02 AM

Lcha :

I don't have any personal experience about how indigenous peoples land is treated over most of the world. Only the general perception that indigenous peoples have gotten the short end of the stick the world over, but that topic is another forum.

I do, however, have personal experience on how indigenous peoples, mainly Native Americans, are compensated by oil companies in Texas. They receive the same compensation as any landowner. They receive lease money in exchange for the right of exploration companies to be on their land and to drill on their land. They receive damages in these exploratoin companies should damage the land in a non-prescribed manner and they receive royalties on the hydrocarbons that are extracted from their land. All terms are negotiated and the final contract is mutually agreed upon by both consenting parties.

In addition, archeological and or environmental surveys are conducted prior to exploration, at the exploration companies expense, to ensure there is not a negative impact in these areas.

Jun 7, 2006 6:40 AM

allancoleman :

the Alaskan natives were given millions to settle their land claims before the Transalaskan Oil pipeline was built . that money was used to form 13 native corporations that generate profits now for their members . they were also granted contracts to work on various projects in the oil fields and will have a large part of the Natural Gas project to bring natural gas from the north slope to markets ( Chicago ) in the mid - west . some of these native corporations also were granted timber and mining rights on their lands outside of the oil fields and they too generate profits and jobs for their members . indigenous peoples in Alaska means something different now in Alaska than it did in the past .

Jun 7, 2006 3:43 PM

axolotl :

......There is currently a video and transcript on abc.net/au - that is Australian Broadcasting. The video is about World Peak Oil being a FEW YEARS AWAY ACCORDING TO SOME PETROLEUM GEOLIGISTS. Exxon Mobil continues to say 30 years or more. Interesting that Peak Oil and Global Warming appear in time together. Both could be false alarms, but maybe it will spur some energy action - hopefully the right kind - in the USA.

Jun 8, 2006 6:59 AM

Lcha :

but maybe it will spur some energy action

I'd like to think so but I doubt it. Our oil problem is primarily tied to automobile use. And Americans seem to have a psychological fixation on cars that borders on obsessive. Our egos are so emeshed in our cars that only a major crisis will spur us to change. Two wars in the Middles East, $3 gasoline and the prospect that our oil supply might start drying up over the next 30 years has not been enough of a crisis.

We will start solving our oil crisis when we start viewing cars as a way to get from point A to point B and nothing more. The folks in Europe driving around in their toy cars have already grasped this.

Jun 23, 2006 9:18 AM

axolotl :

There has been a leak that GM is developing a rechargeable hybrid - development may allow a prototype at 2007 auto shows. I think that there is a large niche market for one and it includes me - a rechargeable is an electric vehicle that is not hostage to overnight recharging or limited range. On the other hand, it means if $6 gas and waiting in lines arrive, a RHybrid owner could survive without being involved. VW has in production a small 4 cylinder that uses both a turbo and belt supercharger. This engine is comparable in mileage and power to the VW diesel, but $3000 cheaper. It appears the advanced diesel designs have expensive high pressure fuel delivery systems. The VW Audi diesel just won the 24 Hrs. LeMans and Peugot has announced a similar car for next year. Finally, an oil company is going to produce an alcohol that can be shipped in pipelines - not methanol or ethanol, but Habernol?????.........for use in autos.

Jun 23, 2006 9:02 PM

I never did figure out what a hybrid could do for you that a compact or subcompact couldn't, especially when you figure on the space & weight for the extra batteries, etc. Now they did make some busses in which the "braking energy" was stored in a giant flywheel— I bet that would have been interesting. But it never caught on— it was hell to make turns with because of the gyroscopic effect of the flywheel. Oh well, another idea bites the dust.

Jun 23, 2006 9:12 PM

Did you mean Hibernol?

Drink Hibernol

4 parts whiskey

2 parts crème de cocoa

dash of honey

1 part cherry Nyquil

Jun 28, 2006 4:39 PM

axolotl :

It is one of the alcohols that starts with an H - heptanol perhaps? Toyota is planning on more and more hybrids. I just simply observe that a lot of people make a lot of short trips that an electric car is ideal for, but the overall disadvantages of an electric are why GM crushed the EV1s. A rechargeable hybrid that could go a 100 miles without recharging would be attractive for a lot of people if the price was right, no?

Jun 29, 2006 7:36 PM

axolotl :

........http://www.calcars.org and http://www.jalopnik.com have some good info. The Prius conversion makes sense except for $10 to $12k for the conversion and I seriously doubt that Toyota would allow a conversion on a dealer's property. The expensive sports car with a 200hp plus motor is interesting - especially the trailer with a generator -gas motor for recharging.

Sep 25, 2006 6:33 PM

Eric :

I would tell the world that prices are coming down as well if my production was in decline. It would buy me the chance to find more oil with out a huge spike. Why would a huge spike be bad for the Suadi's? Because the rest of the world is increasing production at higher prices and it makes what little they have left worth even less.

There is not a lot of time left in there game...they need to find oil and bad. This is why they are paying HUGE day rates to the drillers to move to their side of the ocean.

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