How far will it go??

robzablob

New Member
This is a very broad subject with a wide variety of answers. I'll try to keep it within the aviation aspect of the spectrum but if I trail off, my apologies.

How far will oil prices go up before all carriers go under?? There certainly has to be a breaking point. I watched a show on the travel channel last night, and some guy (forgot his name, some airline industry analyst) said that no aircraft is designed to fly efficiently on $100 per barrel of oil. The airlines are just getting by, but barely. Actually some of them arent.

How rich do these people feel they need to be?? And by "they" I mean the oil companies and the places where the oil comes from. They are making HUGE profits, record breaking even, yet they still want more. I suppose it all comes down to greed. But how much money does it take before one realizes that its just money?? If no one can afford oil or oil based products anymore, how do they expect to keep getting the profits that they currently take in??

It doesn't make sense to me. Is there really a "shortage" of oil??

I asked a lot of questions and I dont necessarily want them answered, its not really that kind of post. It's more of a discussion about the current oil situation and its affect on the airline industry/whatever else...

Robbie
 

CoffeeIcePapers

Well-Hung Member
The government will bail the airlines out again, or go to regulation. I see maybe 2 mainline carriers being left. They are horribly mismanaged and most of them probably deserve to go belly up.

It is a free market economy, the oil companies are in business to make money. There isn't a shortage of oil.
 

sldauby

New Member
There is no shortage of oil.

We need to commence drilling in ANWR, the Gulf of Mexico, and other places in order to increase our domestic supply of oil. There is all this talk of people wanting to get off foreign oil. Well, this is how we need to do it.

The way I see it, these oil prices are completely artificial. In other words, the prices are set by whatever people "feel like it." For example, take the stock market. You frequently hear that "DOW futures aim lower due to investor uncertainty." At the end of the day, the stock market dropped. The only reason the market dropped was because of some investors were a bit "scared," yet there was nothing substantial to begin with that resulted in this view.

I see this as the same with oil. Price per barrel goes up and down over a range of several dollars per day. Why? With such high prices and people are driving less frequently, demand is decreasing. As a result, supply is increasing. Prices should be decreasing then!

It's all the environmentalists who prefer protecting the ducks and caribou and preventing us from maintaining our standard of living instead of allowing companies to pursue further drilling and coal-to-oil programs.

My 2 cents.
 

germb747

Well-Known Member
If no one can afford oil or oil based products anymore, how do they expect to keep getting the profits that they currently take in??
Demand for gasoline in the U.S. has dropped about 1% in the last year, but the demand for oil in places like India and China are growing at an unbelievable rate. The higher worldwide demand, coupled with a weak dollar, continue to drive up prices. Actually fuel is still relatively cheap in the U.S. Try $9-$10 per gallon in Europe.
 

CirrusMonkey

No Real Usefulness
Demand for gasoline in the U.S. has dropped about 1% in the last year, but the demand for oil in places like India and China are growing at an unbelievable rate. The higher worldwide demand, coupled with a weak dollar, continue to drive up prices. Actually fuel is still relatively cheap in the U.S. Try $9-$10 per gallon in Europe.
Taxes over there on gas is a *****!
 

typhoonpilot

Well-Known Member
There is no shortage of oil.

We need to commence drilling in ANWR, the Gulf of Mexico, and other places in order to increase our domestic supply of oil. There is all this talk of people wanting to get off foreign oil. Well, this is how we need to do it.


It's all the environmentalists who prefer protecting the ducks and caribou and preventing us from maintaining our standard of living instead of allowing companies to pursue further drilling and coal-to-oil programs.

My 2 cents.

The key statement is in bold. When you go to the desert where the oil is drilled I would ask if you see any trees, any ducks, any caribou? They have money, yes, but they have nowhere near the scenery or outdoor lifestyle that we can enjoy in the USA.

I've been riding around on the Indian River for the last few days. Did some fishing and enjoyed the nice weather and scenery. Before that I was down in the Keys for lunch on the water and later I'm going to the mountains of Utah for some hiking and mountain biking. I can't do that in the Middle East.

Imagine now if there was a great big oil rig right in the middle of the Indian River. Now, how does that change the experience that I have just enjoyed? Imagine if I'm hiking in Utah and don't see any animals or hear any birds. How does that change the experience? What if the blue sky is blotted out by soot and other pollutants?

Environmentalism has it's place. It's to prevent the destruction of our "standard of living" and quality of life from being ruined by big business who only care about profit and personal power.

Could more drilliing be done in the USA? Yes, probably but it shouldn't be done at the expense of our environment because the oil will run out in time. If we ruin the landscape and destroy the animals in the process then what do we have? We have no oil and no quality of life.

The short term solution of drilling for more oil is just that, short term. Nuclear power plants; solar energy; battery powered automobiles; inner city living without long commutes; and numerous other methods will keep both our environment and standard of living high and they are longer term solutions.


Typhoonpilot
 

tonyw

Well-Known Member
The other thing that people say about drilling for oil that's so wrong is that just saying we'll do it means that we'll get dropping prices.

Petrobras announced they were going to start drilling offshore and that they found a reserve with 33 billion barrels. That 33 billion barrels is more than we have in the Arctic Refuge or off the coast of California or off the coast of Florida.

Know what the price of oil has done since then?

Gone up by 40-50 percent.

Saudi Arabia is expanding a field which will give it the ability to produce 1.7 million additional barrels per day. They took the media on a tour of the place.

Know what the price of oil has done since they did their publicity bit?

Gone up.

Also amusing to me is the "we don't drill here" mantra, which is simply not true.

Riddle me this. Which country has the most oil wells?

Saudi Arabia? Russia? Iran? Venezuala? Norway?

Wrong.

It's the United States.

And we'd have even more if there weren't a bunch of oil companies sitting on their asses and NOT drilling where they already have the rights to do so.

I say drill where you're allowed to first and then come talk to us about new places AFTER you've pumped all the oil out of those places.

I've seen these oil companies burn us before and I don't feel like getting burnt by them again. Back when they started drilling in Alaska for the first time, we were told this was the key to energy independence.

That was back when we imported something like 60 percent of our oil.

Now?

We're importing more.

Fool me once, shame on you. Fool me twice....we won't get fooled again.
 

germb747

Well-Known Member
The short term solution of drilling for more oil is just that, short term. Nuclear power plants; solar energy; battery powered automobiles; inner city living without long commutes; and numerous other methods will keep both our environment and standard of living high and they are longer term solutions.
:yeahthat:

It's time to innovate and become more efficient. To draw a parallel to the past, we're handwriting everything when we need to invent the printing press. Simply drilling for more oil only delays the inevidible. The reality, however, is that there has to be financial incentive to innovate. That is, the alternative has to cost less than the status quo, so as the price of oil continues to rise, we'll seek out more efficient methods. Until then, expect rough times ahead.
 

Italianaviator

Well-Known Member
I fully agree with Typhoonpilot. You have to weigh the benefits with the cost. And not just cost as in a dollar sense. Yeah if that extra drilling is going to dramatically bring the price of oil back to 30-40 dollars a barrel then i'm all for it but in actuality extra drilling in Alaska and other parts of the US will only drop the price of oil by 10-20 cents a gallon and then thats not until approximately 10 years from now when the rigs get built.
 

sldauby

New Member
Imagine now if there was a great big oil rig right in the middle of the Indian River. Now, how does that change the experience that I have just enjoyed? Imagine if I'm hiking in Utah and don't see any animals or hear any birds. How does that change the experience? What if the blue sky is blotted out by soot and other pollutants?
Oh I understand totally. I don't want to see oil rigs everywhere either (or wind farms). However, the amount of space we need for the rigs is so small compared to the size of where we're drilling that it doesn't matter. For example, we only need 1,000 (one thousand) acres in Alaska in order to drill the oil available there. Last I checked, Alaska is a HUGE state! Plus, the caribou don't seem to mind.

Don't get me wrong, we need other methods to eventually replace oil. However, we are the Saudi Arabia of coal and we are pretty high up there in terms of oil amounts; we need to use everything available to us.

And we'd have even more if there weren't a bunch of oil companies sitting on their asses and NOT drilling where they already have the rights to do so.
It is entirely possible that the oil companies were given land that does not have any oil (or sufficient amounts worth drilling for). I say we exchange the rights with land that is gauranteed to have large amounts of oil (e.g., ANWR, North Dakota, Montana, etc.).

Yeah if that extra drilling is going to dramatically bring the price of oil back to 30-40 dollars a barrel then i'm all for it but in actuality extra drilling in Alaska and other parts of the US will only drop the price of oil by 10-20 cents a gallon and then thats not until approximately 10 years from now when the rigs get built.
Then what are we waiting for? President Clinton said during his presidency that we weren't going to drill in new places because the benefit wasn't going to be present for another 10 years. Well 10 years later, I sure would have liked that oil now!

That's like saying: "Oh well, I won't save up for retirement as I won't need it for another 20-30 years."
 

intern_mike

E-175 f/o
The main reason the price of oil continues to rise is due to the market. By that I mean all variables associated with said market. The main reason the price at the pump has gone up so much is the speculation that prices are on the rise. Basically, there is so much riding on the fact that the price of oil will increase (investments in oil companies/fuel futures) that the market price is driven up (price per barrel). Then the US oil companies add their own market driven increase to the final pump price. What I find reprehensible is that the US oil companies, with more money than God, happily add this markup. All the while leaving us screwed. It's like capitalism without a soul. Since we cannot control the price of oil, the only thing left to do is opt out all together. I like hydrogen :)
 

pilot602

If specified, this will replace the title that
This goes beyond simply oil.

This country has a sickness and it's called the corportation.

The top CEO in this country is paid an $89-million/year salary. This does not include stocks, bonuses, gym memberships, etc.

By comparison, the median household income - which is comprised of usually two incomes - in this country is around the $40,000/year mark. If you divide 40k into 89-million, 2,225 people could be individually paid the median household income per year. Think about that. Two-thousand and two hundred twenty five people. Human beings with familes, mortgages, health bills, grocery bills could be paid $40,000 per year for what this company pays one person.

No one person deserves that. You cannot not justify that. Ever.

Now consider what the top, even 5% of management makes as a whole and that figure will easily match the CEO's compensation if not exceed it. There's another roughly 2,000 people who could be employed at 40k per year.

We're up to a total of nearly 8,500 people that would be buying gas, gorceries, houses, cars, PS3's, etc. but instead that money is paid to a handful of people who shelter the money in off shore accounts and other tax shelters.

The economy isn't driven by big business it's driven by the 300-million citizens that live, work and consume in this country. And the thousands upon thousand of small businesses that are owned and operated by those same people.

Need proof? Look at the housing and credit crisises. Where's big business now?

Everyone loves to wax poetic about the "free market."

This is not, nor has it ever been, a free market. Business screams for government intervention when it needs it or it keeps them from going under or it will help their bottom line and screams to be left alone when they feel it will cost them money to do the right thing, pay taxes or regulate safety. Need proof? look at what the fortune 500 pays in lobbyist salaries.

Enron was not the exception it was the rule. They simply got caught because you can only hold th 12th largest economy in the world hostage for so long before someone notices.

Until people realize that the company is not the CEO, it is in fact the employee, nothing will change. The middle class will cotinue to erode. Prices of everyday goods will continue to rise. Inflation will continue to outpace the average wage increase and one day people will find themselves wondering what hapened to their comfortable little life.

Need proof? Look at your pay stub.
 

ppragman

FLIPY FLAPS!
This is a very broad subject with a wide variety of answers. I'll try to keep it within the aviation aspect of the spectrum but if I trail off, my apologies.

How far will oil prices go up before all carriers go under?? There certainly has to be a breaking point. I watched a show on the travel channel last night, and some guy (forgot his name, some airline industry analyst) said that no aircraft is designed to fly efficiently on $100 per barrel of oil. The airlines are just getting by, but barely. Actually some of them arent.

How rich do these people feel they need to be?? And by "they" I mean the oil companies and the places where the oil comes from. They are making HUGE profits, record breaking even, yet they still want more. I suppose it all comes down to greed. But how much money does it take before one realizes that its just money?? If no one can afford oil or oil based products anymore, how do they expect to keep getting the profits that they currently take in??

It doesn't make sense to me. Is there really a "shortage" of oil??

I asked a lot of questions and I dont necessarily want them answered, its not really that kind of post. It's more of a discussion about the current oil situation and its affect on the airline industry/whatever else...

Robbie
Turbine engine birds don't operate very efficiently on $100. Piston birds operate a hell of a lot more efficiently compared to turbine birds at expensive oil prices. At the end of the day, we're going to see a resurgence of Navajos and Barons flying people around. It will be good.
 

Sidious

Well-Known Member
As painful as this may sound I believe this oil shock is good for us.

We rant and rave about dependence on foreign oil and how we are held hostage to militants and terrorists who can change the Dow by 400 points by blowing up a pipeline in the middle of the desert. But what if this caused us to change our lifestyles? Not just for a year, not for two but to completely change the way we were raised.

People innovate during times of need, it is a proven fact. When there is no need to change then why do it? That is how we have viewed oil in the past, we have the technology to change and we have the brains in this country to really put it to use. And now we have a need to put it to use. Anytime there is a transition it is painful. But we will make that transition. I am very optimistic about our future.

Every generation has their challenges and it is how we deal with those challenges that will set a president for our children. The world will not end because of high oil prices, instead I believe we are painfully entering a new age of energy consumption and I promise you the U.S. will be at the forefront. Things will be tough but it will not end.
 

pilot602

If specified, this will replace the title that
As painful as this may sound I believe this oil shock is good for us.

We rant and rave about dependence on foreign oil and how we are held hostage to militants and terrorists who can change the Dow by 400 points by blowing up a pipeline in the middle of the desert. But what if this caused us to change our lifestyles? Not just for a year, not for two but to completely change the way we were raised.

People innovate during times of need, it is a proven fact. When there is no need to change then why do it? That is how we have viewed oil in the past, we have the technology to change and we have the brains in this country to really put it to use. And now we have a need to put it to use. Anytime there is a transition it is painful. But we will make that transition. I am very optimistic about our future.

Every generation has their challenges and it is how we deal with those challenges that will set a president for our children. The world will not end because of high oil prices, instead I believe we are painfully entering a new age of energy consumption and I promise you the U.S. will be at the forefront. Things will be tough but it will not end.
This isn't the first oil "crisis" this country has been through yet here we are, still suckling the teet of the middle east.

We don't learn.

I agree only if we actually move off oil. If we don't we'll deserve every war fought over the stuff from here on out.
 

germb747

Well-Known Member
The top CEO in this country is paid an $89-million/year salary. This does not include stocks, bonuses, gym memberships, etc.

By comparison, the median household income - which is comprised of usually two incomes - in this country is around the $40,000/year mark. If you divide 40k into 89-million, 2,225 people could be individually paid the median household income per year. Think about that. Two-thousand and two hundred twenty five people. Human beings with familes, mortgages, health bills, grocery bills could be paid $40,000 per year for what this company pays one person.

No one person deserves that. You cannot not justify that. Ever.

Everyone loves to wax poetic about the "free market."

This is not, nor has it ever been, a free market. Business screams for government intervention when it needs it or it keeps them from going under or it will help their bottom line and screams to be left alone when they feel it will cost them money to do the right thing, pay taxes or regulate safety.
Interesting discussion, but government intervention or not (save for the minimum wage law), nobody is paid a salary on the basis of what's fair, right, or equitable. They're paid the market value for what their labor happens to bring to the table. Good leadership is worth it's weight in gold, and as the cliche goes, "you get what you pay for". Every employer and employee has to look at opportunity costs; i.e. why work here when I can get paid more to do the same job somewhere else? If somebody can explain to me why an "ordinary" worker like you and me making $40,000 / year is worth as much to a company as a quality CEO, then I'd like to hear that argument. Unfortunately, the supply of quality pilots / middle managers / front-line employees are much higher than the supply of quality CEOs, therefore my market value is less and the boss's market value is more (much more).

Now as for those who build themselves golden parachutes while driving a multi-billion corporation into the ground, those aren't leaders, those are crooks and probably belong in prison.
 

Champcar

Well-Known Member
We just went through this a few years ago and yet nothing has changed again. They do not learn, this is why I don't feel bad for the airlines. Let them all go under, I can drive.
 

pilot602

If specified, this will replace the title that
Interesting discussion, but government intervention or not (save for the minimum wage law), nobody is paid a salary on the basis of what's fair, right, or equitable. They're paid the market value for what their labor happens to bring to the table. Good leadership is worth it's weight in gold, and as the cliche goes, "you get what you pay for". Every employer and employee has to look at opportunity costs; i.e. why work here when I can get paid more to do the same job somewhere else? If somebody can explain to me why an "ordinary" worker like you and me making $40,000 / year is worth as much to a company as a quality CEO, then I'd like to hear that argument. Unfortunately, the supply of quality pilots / middle managers / front-line employees are much higher than the supply of quality CEOs, therefore my market value is less and the boss's market value is more (much more).

Now as for those who build themselves golden parachutes while driving a multi-billion corporation into the ground, those aren't leaders, those are crooks and probably belong in prison.
And how is that theory working out for us as a society, as a country?

That's what I thought.

Here's the deal.

People don't want to chage the status quo for a multitude of reasons. But at the core of each of us there is this belief, instilled in us from birth and re-enforced through the media, children's stories, church, etc. - that one day we too can be rich/famous/powerful if we just work hard enough (this convienetly benefits those in power but that's a whole other discussion). So we're all taught one day we're going to be rich and when that day comes we don't want to pay taxes or be told how much we can make.

The problem is if you're born into the middle class or blue collar labor or whatever your social status the bleak and harsh reality is you're probably going to die in that same social class. Yes, there are exceptions but if everyone were the exception we'd see the top 1% of wealth in this country distributed among a greater percentage than the current 1% of the population. At the time of the "big crash" in '28 the top 1% was distributed among the top 5% of the population. So, for the last nearly 100 years wealth has been trickling up the social ladder, not down.

So with this little jewel ingrained in us people don't make the choices that are best for them now. Need proof? Look at our curent administration and the 12 years of republican controll of congress. Record national debt. Record credit card debt. Out sourced jobs. Inflation out pacing wages. To say we are in a mess is an uderstatement. Democrats are just as guilty, btw but it has been almost 20 years of Republicans in power.

The '80's are just now coming to the cash register and we're paying for it.

As to what a CEO is paid, I never said a CEO shouldn't be paid accordingly. But 2,225 people in exchange for one person? It has nothing to do with what's fair, or equitable or right it has to do with bottom line. How does a board of directors justify so many resources being spent on something with such little return.

However, let's look at a little hypothetical.

Let's assume we all agree that Joe Schmoe is the single bet CEO ever to grace the face of hte Earth. No one can argue his skills. Give him a company where there are zero employees. No one will work for the company because of "X" reason. How long will that compnay survive without employees? Take a different company with the worst CEO on the planet. Give him a company that has employees who will show up every day (albeit disgruntled) and how long will that company stay in business in comparison to the first.

Leadership is essential, yes. But a captain of an empty ship, regardless of his skills, will soon find himeself adrift on the seas and watch helplessly as a mutinous ship sails by and it's captain is strapped to the bow mast with a dagger in his heart.

One individual employee is not worth the equal of the CEO, but as a collective they are more important to the sucess or failure of a given company than the CEO and his top managers.

I'm glad you brought up the supply and demand argument. I love it when people bring this old time favorite out of the closet. If you take the roster of the FAA's "active" pilots (appropriately rated, i.e. commerical/atp) and pair them up to just part 121 jobs the ratio is about 2 pilots for every 1 job. When you include part 91 operators, part135 operators and government operators the ratio drops significantly. That is not an oversupply. By comparison the colleges and universities of this nation pump out MBAs (the only real "requirement" for a CEO position - much like the commericial or atp rating not withstanding experience) like the plague pumped out corpses. Yet CEO compensation as a whole has increased in the 1000's of percentages in just the last 20 years. Law schools in this country have been graduating roughly 12 lawyers every year for every one law job yet the median starting income or a lawyer (at a firm) is over 100k per year. The median starting income across the board is still nearly 60k/year.

The law of supply and demand works great in a sterile environment like a college classroom. It's just like communisim. On paper it works great. In the real world, with real people, and real power, and real back-room deals it gets corrupted. Sure it's still there and works a little but more often than not you have things like the Futures and Commodities exchange where as little as 100 people guess at what other people are going to do and artificially influence the price of goods like, say oil.

Again, supply and demand would truly work as it's taught in a completely free market but as we all know it's not a free market by anymeans so supply and demand simply doesn't work the way everyone likes to think it does.
 

esa17

Well-Known Member
One thing about "how rich do these people need to be" that needs to be considered is just how relative those huge profits are. The oil companies are only making about 10% profit which isn't a great deal. Sure they're pulling in $40 billion but they are selling $400 billion. They make a lot because they sell a lot, not because they are gouging.

If we as a nation would stop spending and acting with total disregard towards personal responsibility this problem and many others would take care of themselves.
 

HeyEng

NAHB Doesn't Give a Crap
Seeing how this QUICKLY went from an airline discussion to a pissing match *again*...I think it needs to go to the lav.
 
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