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Forum » EV Forums » Environmental Discussion

Offshore drilling, will it affect the oil price soon?

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Written on: 05 July 2010 [22:15]
ecoadmin Administrator Topic creator registered since: 20.07.2007 Posts: 517	Jeff Rubin warns that we will soon see oil prices three times as high as now. One major driver in this increase he sees in the likely stop of offshore drilling. According his opinion BP will not be able to pay for the costs of the cleanup and therefore companies might flinch from continuing offshore drilling due to the the risks involved. What is your opinion on the subject? Will it have an effect or will other factors like the hunger for oil by developing countries drive the oil demand/price up? Or will this all be peanuts compared to the approaching third depression like Paul Krugman or Robert Shiller (Economists) predict it (with possibly falling oil prices...)? ecocarforum.com - Green Car Network
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Written on: 07 July 2010 [00:17]
iamian registered since: 23.02.2009 Posts: 107	While I have no doubt they will continue to jack up the price as much as they can as often as they can.... Triple current gas prices? not going to happen ... that's just fear mongering. At least not in the next 5 years... 10 years would be the fastest ... and even that I think it unlikely... double in 10 years is more likely. I expect BP to do the same thing Exon did ... spend ___ amount of money ... and then when it shows that that amount of money is just the beginning of what is needed to fix the mess ... they will do exactly what Exon did ... they will fight it in court for ~20 years ... after ~20 years of appeals Exon had the pay out reduced to 1/10 of what it started as... and it was 20 years later. BP already set the the token ___ ... the money they already spent and $20 Billion more... if people try to go after BP for even $1 Billion more than that $20 ... expect it to sit in courts like Exon did for ~20 years. Also it has nothing to do with 'fear' of loosing money ... when the world has numerous companies going bankrupt ... unemployment at high rates... major companies like GM declaring Bankruptcy ... BP was ready to hand out ~$15 Billion in profit sharing to it's stock holders ... BP is not in debt ... they have massive more than $200 billion in sales per year ... and more than $200 Billion in assets ... and they continue to turn a profit every single year... even when large banks fold ... BP and Exon still post large multi-Billion $ profits. And even if it came to it ... they could operate at a loss for years on the huge amount of assets they own ... that won't happen as they continue to turn a profit every year. And just like the Exon fight for ~20 years ... in 1 or 2 years the public will loose interest in BP and the oil spill ... no matter what the damage is ... within less than 5 years there just won't be enough public interest to keep pushing the issue... and BP will be fine. Also remember some of this drilling is in international waters ... ie no one has any authority to make them pay for anything ... it is outside jurisdiction. Also remember that the amount of oil being lost in this spill as large as it is ... is still insignificant compared to the size of the oil industry and the amount of oil still be consumed. Also keep in mind ... legally BP already has federal protections that cap the maximum they can be held liable for ... In other words ... if tomorrow Exon had a major problem that made this BP spill look tiny in comparison ... it doesn't matter if it completely destroys all the ecosystems and economies of the U.S. ... legally their liability has a maximum cap... Last I read it was like $75 Million per Spill Currently our system puts a cap on the : Oil Spill Liability Trust Fund ... a maximum of $2.7 Billion... total in the fund for all claims... which is a fund paid for with tax dollars ... maintained by the U.S. Coast Guard. The $20 Billion BP already put aside ... is already more than enough to cover their legal liability ... which I suspect is no accident ... they chose a number that would give them good legal ground to stand on... should anybody later ask them for even $1 million more. And if it comes to it ... if the price of oil gets hiked up ... any pressure on BP to fix their mess will evaporate. Lastly ... if getting the oil ends up costing 100% more ... that just means they sell the oil for 101% more ... when the public complains enough about how expensive it is ... and the cost to get the oil drops by ~40% ... they will drop what they sell it for by ~39% ... So while I don't see it happening ... if the price of oil was triple tomorrow ... people would pay it... they would bitch ... but they would pay it... and in less than ~5 years they would get desensitized to it ... and they would raise the price again ... $3 a gallon is triple $1 Gallon ... the majority of people on the road are old enough to remember $1 per Gallon ... and yet today $3 a gallon isn't high enough for them to change anything in their life style. 2000 MT Honda Insight MIMA & FAS equipped ... PHEV in progress. Franken E-Bike 36V NiMH 600W Hub-Motor.
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