Fuel prices

[Sprint100]

Just saw a report that oil surged to $66 a barrell and many airports are facing or have already faced shortages.
I'm just preparing my greeting to higher ticket prices and higher training/rental prices.

[caliginousface]

yeah if oil production was to keep up to the supply and demand rule oil should be at like $380 a barrel. no joke.

[FO_SHIZZLE]

But isn't the problem coming from a bottleneck at the refineries and not a lack of pumping?

I remember in college reading something about OPEC, and it said the ideal goal price for oil was around $20 a barrel. OPEC worried that if it charged more than that, it would cause the world to gear up alternative fuel sources, therefore rendering OPEC useless. I guess that whole plan fell by the wayside.

As far as the airline ticket prices going up....it's about time. Right now you can fly across country for cheaper than you can drive it on just gas alone, not to mention the time it takes (in days), hotel, food, auto wear, etc. That is insane.

[Chris_Ford]

[ QUOTE ]
But isn't the problem coming from a bottleneck at the refineries and not a lack of pumping?

I remember in college reading something about OPEC, and it said the ideal goal price for oil was around $20 a barrel. OPEC worried that if it charged more than that, it would cause the world to gear up alternative fuel sources, therefore rendering OPEC useless. I guess that whole plan fell by the wayside.

As far as the airline ticket prices going up....it's about time. Right now you can fly across country for cheaper than you can drive it on just gas alone, not to mention the time it takes (in days), hotel, food, auto wear, etc. That is insane.

[/ QUOTE ]

Increasing fares that only cover your increased cost don't really help your bottom line... In fact, they'll often hurt it more than help it.

[tonyw]

They already raised the prices in response to the higher fuel costs. Now if only they made those hikes bigger, so they'd actually make money on the tickets.

[USMCmech]

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But isn't the problem coming from a bottleneck at the refineries and not a lack of pumping?

[/ QUOTE ]


Yes, lack of domestic refining capacity is the major reason for high gas prices. Every single refinery in the US is running at 100% capacity. About 35 cents per gallon is directly atributed to this reason alone.

There was an explosion in Texas City which knocked out 3% of the total US refining capacity due to that unit being offline.

There hasen't been a new refinery built in the US since the late 70s. Since that time hundreds have been shut down.

Due to the high gas prices, oil companies are SLOWLY making plans to expand refineries. However this means investing billions of dollars and will take 5-10 years.


Actually the 100yr average price of oil adjusted for infaltion is about $55 per barrel. So the price of oil isn't out of line, we have just gotten spoiled durring the 90s with cheap gas.

[BCTAv8r]

Fuel prices are ridiculous. For 100ll it's $4.50 for the cheapest at KBCT when 10 minutes south at KPMP it's $3.40. And what sucks even more is that I gotta rent the airplane wet at my flihgt school at KBCT. If I rented it dry I could put some fuel into it, fly over to PMP and put more there.

[wheelsup]

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OPEC worried that if it charged more than that, it would cause the world to gear up alternative fuel sources, therefore rendering OPEC useless. I guess that whole plan fell by the wayside.


[/ QUOTE ]

I wish the world would go to alternative sources of power. Man, if the whole world went to hybrid cars and left the oil to the boats, planes, and trucks, we could see oil back to $20 easy. But I guess no one wants to do that...maybe when gas hits $5/gallon?!?

My next car will be a hybrid HANDS DOWN. I'm seriously worried about the future of our careers.

~wheelsup

[Grabo172]

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I'm seriously worried about the future of our careers.

~wheelsup

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[flyover]

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Due to the high gas prices, oil companies are SLOWLY making plans to expand refineries. However this means investing billions of dollars and will take 5-10 years.


Actually the 100yr average price of oil adjusted for infaltion is about $55 per barrel. So the price of oil isn't out of line, we have just gotten spoiled durring the 90s with cheap gas.

[/ QUOTE ]

All right on. We're still about 30% below the record price of oil adjusted for inflation.

And of course any new refineries in the US meet fierce opposition from enviromental groups and others. But, obviously, we need to do it.

[flyover]

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They already raised the prices in response to the higher fuel costs. Now if only they made those hikes bigger, so they'd actually make money on the tickets.

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And if only we realized that just as the supply of oil is set by supply and demand, not the cost of production, so are ticket prices set by supply and demand, not the cost of supplying seats. So if you want to see higher ticket prices start accepting that some hubs are going to need to leave the market.

[caliginousface]

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My next car will be a hybrid HANDS DOWN. I'm seriously worried about the future of our careers.

~wheelsup

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i'm glad i'm not the only one. has anyone seen www.lifeaftertheoilcrash.net ? that site and the bunch it links to really makes you think what the hell is going to happen.

[Icaro]

[ QUOTE ]

I wish the world would go to alternative sources of power. Man, if the whole world went to hybrid cars and left the oil to the boats, planes, and trucks, we could see oil back to $20 easy. But I guess no one wants to do that...maybe when gas hits $5/gallon?!?

My next car will be a hybrid HANDS DOWN. I'm seriously worried about the future of our careers.

~wheelsup

[/ QUOTE ]

Show me something with as good energy density per pound as oil. I read about an L-1011 which was modified as a research project to burn hydrogen. They needed to significantly increase the amount of tankage for storing the LH2 to allow the plane to keep it's original range. I guess this means that for aviation, we're stuck with oil, and there doesn't seem to be anything else on the horizon.

Good observation about careers. Makes me worry too.

[FlyOrDie]

Even with fuel prices rising so rapidly the people that can afford to fly will still do so. For example a trip yesterday, we burned about 350 gallons of JetA @ 3.08. The funny thing is we were empty for half the trip... Which is very common for the type of flying we do.

Oh I wish for days when I was paying $1.17 for 100LL in Delano CA...

On the hybrid note I've been watching a company called United Nuclear that's working on a conversion to for existing gas engines. It looks pretty cool.

[SkyJeff]

I think we are going in the direction of ethenol engines.

[tonyw]

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So if you want to see higher ticket prices start accepting that some hubs are going to need to leave the market.

[/ QUOTE ]

You mean like, oh, DFW?

With 80 percent load factors, which are also at historic highs, there is room to raise fares. Lose some Air Greyhound types? Cool, that means I won't have to sit next to someone who thinks it's all well and good to use a Hefty bag as his luggage.

Yes, I am one of those eleetists.

[Doug Taylor]

Delano. Geez, I lived in Tulare for 17 years and never had to stop in Delano!

[Icaro]

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Lose some Air Greyhound types? Cool, that means I won't have to sit next to someone who thinks it's all well and good to use a Hefty bag as his luggage.

Yes, I am one of those eleetists.

[/ QUOTE ]

You've really seen someone do this?

[Stormflyer]

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I think we are going in the direction of ethenol engines.


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Ethanol is a net energy loser, so it won't help us. It requires massive fossil fuel inputs, such as fertilizers, pesticides, and fuel to run a tractor, not to mention that it is energy-intensive to process corn into ethanol. By the time all this is done, ethanol doesn't qualify as a source of new energy. Another thing to consider is that we likely wouldn't have enough arable land for a massive transition to ethanol to fuel automobiles.

In fact, ethanol only appears to make sense because of government subsidies. Other possible ways to make ethanol suffer from a similar problem: their EROEI (energy returned on energy invested) is not good enough.

[flyover]

[ QUOTE ]
[ QUOTE ]
So if you want to see higher ticket prices start accepting that some hubs are going to need to leave the market.

[/ QUOTE ]

You mean like, oh, DFW?

With 80 percent load factors, which are also at historic highs, there is room to raise fares. Lose some Air Greyhound types? Cool, that means I won't have to sit next to someone who thinks it's all well and good to use a Hefty bag as his luggage.

Yes, I am one of those eleetists.

[/ QUOTE ]

Well assuming we could get all the airlines to just tack on across the board fare hikes (supposedly) large enough to be profitable. (Of course this is what they've been trying to do on a daily basis for 25 years, but we'll ignore that). Then the resulting revenue fall would finally drive some airlines out of business. So from that standpoint, it's an excellent plan. Plus it would give you another reason to call management dumb.

[flyover]

Saw a good analysis of this on another site. Record high oil prices were hit during the Iranian hostage crisis, a little over $90 a barrel. And to put it in perspective, the top grossing movie of all time, adjusted for inflation is still: Gone With the Wind.

Adjusted Gross Unadjusted Gross
1 Gone with the Wind MGM $1,293,085,600 $198,676,459
2 Star Wars Fox $1,139,965,400 $460,998,007

Gone With the Wind came out in 1939, when you probably paid a nickel to see a movie.

[SteveC]

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Show me something with as good energy density per pound as oil.
<snip>

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Uranium?

[mpenguin1]

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I remember in college reading something about OPEC, and it said the ideal goal price for oil was around $20 a barrel. OPEC worried that if it charged more than that, it would cause the world to gear up alternative fuel sources, therefore rendering OPEC useless. I guess that whole plan fell by the wayside.


[/ QUOTE ]

Exactly! In order for alternative fuel sources to be explored, the barrel will have to maintain a high price for an extended period of time, like it is now.

Look at Boeing & Airbus right now, pumping technology into producing more effiicent aircraft that use less fuel, the sales of the Hybrid have been increasing, etc.

[mpenguin1]

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But isn't the problem coming from a bottleneck at the refineries and not a lack of pumping?



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High oil prices are being felt all over the world, many factors:

Chaos in the middle east (not just Iraq)
Developing countries such as India & China increasing their imports of oil.
Polictical problems in Venezuela .
Decrease in the discovery of new oil fields.
Threat of Iran starting their Nuclear program
Hurricanes in the Gulf of Mexico
Civil unrest in Nigeria

[Maximillian_Jenius]

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Civil unrest in Nigeria

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...damn those Nigerians,damn them all!!!



-Matthew