Thanks for reminding me. I don't know how I forgot all that. Recalling Jimmy Carter's fireside chat and the bomb it was - if Obama were to do the same thing today everyone would go out and buy fire places!


>The 1973 crisis was caused by the embargo which ended in 1974. The 1979 was due to other factors including but not limited to the government imposed price controls, the Iranian revolution, and Carter's piss poor leadership. Lowering the white house thermostat, wearing sweaters and telling the country to use less energy and live with "malaise" accomplished nothing but to strengthen prices.
>
>I understand that OPEC is a cartel but Alan mentioned the oil companies.
>
>>I believe it's been called a 'cartel' since OPEC was formed, wasn't it? Or are you referring exclusively to the oil companies like BP and Exxon?
>>
>>On the 1970 oil crisis, the crisis was due to Arab nations instituting an oil embargo against the U.S. and Western countries as a retribution against the emergency re-supply effort that helped Israel withstand Egyptian and Syrian forces during the Yom Kippar War. I'm amazed how many forget that.
>>
>>>Free market? What's "free market" about every oil company charging exactly the same prices at the pumps. Do you find that when you want to buy a camera, or shoes? They may not call themselves a cartel, but I certainly don't see anything that remotely resembles competition among them.
>>>
>>>>In 2007 Exxon Mobile had $334 billion in expenses and $404 billion in revenues. Subtract out a cool $30 billion in taxes and what's left is $40 billion which is an 8.3% return on investment.
>>>>
>>>>http://finance.google.ca/finance?fstype=ba&q=NYSE:XOM
>>>>
>>>>There are 5,382,000,000 shares outstanding, so that $40 billion equates to $7.43/share or 8% based on share price of $92.87 on Dec 31, 2007.
>>>>
>>>>I'd say that jives quite nicely.
>>>>
>>>>There is no need to revert to the lessons we already learned in the 70s. Taxes and regulation are not the answer. The free market is the answer. A few cases in point.
>>>>http://www.siouxcityjournal.com/articles/2008/06/04/news/top/4e608d46402d5adb8625745e00110beb.txt
>>>>http://www.columbiatribune.com/2008/Jun/20080609News002.asp
>>>>http://sunpost.net/content/view/1997/190/
>>>>http://www.industryweek.com/ReadArticle.aspx?ArticleID=16495- The irony of me linking this is purposeful
>>>>
>>>>How about this in your neck of the woods.
>>>>http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/09/afx5096008.html
>>>>
>>>>More energy, of all types, benefits us all. High oil prices are the perfect way to get the ball rolling.
>>>>
>>>>>How does that 8.3 percent jive with this:
>>>>>
>>>>>Exxon Mobil, the largest oil company, reported at the start of this month a record 2007 profit of $40.6 billion, earnings that trounced any other company. Royal Dutch Shell reported the largest earnings of any company in Britain, at about $31 billion.
>>>>>
>>>>>http://www.iht.com/articles/2008/02/17/business/rnrgoilcos.php
>>>>>
>>>>>I still think this is the culprit:
>>>>>
>>>>>With all the money Big Oil is making - the top five publicly traded firms pocketed over $120 billion in 2007 alone - and with an election on the horizon, it's easy to see why.
>>>>>
>>>>>http://money.cnn.com/2008/05/06/news/economy/oil_profits_tax/index.htm?postversion=2008050612
>>>>>
>>>>>And now this:
>>>>>
>>>>>http://www.nytimes.com/2008/05/14/business/14refine.html
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>>>>First off lets make the giant leap of faith and suggest that oil could be taken out of the free market.
>>>>>>>>
>>>>>>>>Do you expect the oil companies to continue to pour their billions of profits into further research and development of resources?
>>>>>>>
>>>>>>>Yes. Absolutely. their record profits this year (big double digits) compounded over their record profits (big double digits) from last year compounded over their record profits (big double digits) from the year before. Yep.
>>>>>>
>>>>>>The oil companies have re-invested and distributed those profits already. Have a look at their research and development budgets and their dividend histories.
>>>>>>
>>>>>>>>Do you expect the supply to increase or decrease?
>>>>>>>
>>>>>>>Stay the same. Maybe decrease some. I bet they'll keep working on supply since they are still making absurd profits on a strategic industry for most of the planet.
>>>>>>
>>>>>>You've got to be kidding. Please point to a real world example where supply has not gone down when a previously free market item was taken off the free market.
>>>>>>
>>>>>>>>Do you expect demand to increase or decrease?
>>>>>>>
>>>>>>>Decrease in the US. Eventually some people will not be so stupid as to buy huge new SUVs.
>>>>>>
>>>>>>SUVs are a small part of the demand.
>>>>>>http://www.eldr.com/article/politics/products-made-oil
>>>>>>
>>>>>>Do you expect the American population to decline anytime soon?
>>>>>>
>>>>>>>>Exactly what would you hope to accomplish by taking oil off the market and can you justify attempting that effort, given the historical results when this type of measure has been attempted previously. Price caps do not work, in fact, they make matters much worse.
>>>>>>>
>>>>>>>If this were an industry that was slightly out of control, then minor regulation or jail terms for abusers might work. As this industry has moved into the twilight zone of extreme price gouging of a strategic resource (it isn't just the arabs folks), nationalization of the industry makes a lot more sense.
>>>>>>
>>>>>>There has been a substantive worldwide demand increase, piss poor resource management, a weakening dollar and massive speculation as money heads from other falling investments into oil. There are many forces at work and just like before the market will sort it out.
>>>>>>
>>>>>>Last year the oil industry returned profits of 8.3% which is right in line with expectations. If there was gouging involved then they're doing an awful job.
>>>>>>
>>>>>>>>>What's wrong with this picture?
>>>>>>>>>
>>>>>>>>>"This is unsustainable and counterproductive," Mr Hayward said. "All it means is that we have less money to invest in new production."
>>>>>>>>>
>>>>>>>>>According to the BP boss, the oil industry faces the dual challenge of increasing production and climate change.
>>>>>>>>>
>>>>>>>>>Oil prices this morning fell from Friday's record high after Saudi Arabia's oil minister Ali al-Naimi said the rapid increase in prices was "unjustified". Opec, of which Saudi Arabia is a leading member, is insisting that the oil market remains well supplied despite the surge in prices.
>>>>>>>>>
>>>>>>>>>However, according to a forecast by Goldman Sachs, the price of crude oil could reach $150 a barrel this summer. "Prices will plateau, not collapse," Jeffrey Currie, the head of global commodities research, told the conference in Kuala Lumpur. "Demand keeps going up but supply can't keep up."
>>>>>>>>>
>>>>>>>>>
>>>>>>>>>http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/09/bcnbp109.xml
>>>>>>>>>http://www.reuters.com/article/topNews/idUSWAT00963020080609?feedType=RSS&feedName=topNews&rpc=22&sp=true
>>>>>>>>>http://www.breitbart.com/article.php?id=D916O20G4&show_article=1
>>>>>>>>>http://www.breitbart.com/article.php?id=080609171236.r6lvrx2s&show_article=11
>>>>>>>>>
>>>>>>>>>Hmmmm....
>>>>>>>>>
>>>>>>>>>Every time a market analyst forecasts rising oil prices, it happens. Amazing that they are never wrong. Yet there doesn't seem to be any more demand that a year ago. No less oil available than a year ago either. I'm with the oil minister on this one. Time to take oil off the market?