Actually, no...they didn't. The oil crisis in the 70's wasn't caused by government regulation of prices. It was a direct cause of the US govt's support for Israel during the Yom Kippur War that pissed off the majority of OPEC members who decided to put an embargo on oil to the US. Nice revisionist history book that you studied though. Are those available directly from the Fox News website?
Would you like some links to sources:
Wiki's take
Energy Information Administration's take
Canadian Govt's take
All of those are saying that it was OPEC's embargo. Do you have links to your sources saying that it was price caps? I'd really like to see them.
Hey look at the wiki chart and tell me if you notice anything of interest in it.
And it still doesnt change the fact your utiliti comparison is invalid.
Yeah, I do. Everytime someone started anything with Iraq ro Iran, the Bushes made a sh*tload because they have been in the oil industry for decades.
Now, back to the topic at hand? Where are you getting your revisionist history that the US govt put caps on oil industry prices and caused them to sell their wares to other countries causing the 1973 oil crisis?
yep, if taxes on the product were lower, we as consumers would see lower pump prices. i know this will never happen, god forbid the US gvt makes a sacrifice and cuts spending and "pork" programs for the greater good of us working stiffs.
1979, is more what I am talking about.
And in the chart I was more specifically talking about Reagan erasing price controls and the drop on the price of oil. Funny thing is if you read the chart what they want to do now is what they did back then, with terrible results.
Price control, windfall profit taxes, ridiculously high price of oil.
But I can assure you if they can sell the gasoline elsewhere for a higher profit they will, why wouldnt they? Price controls never work in an open market system like this, except to screw the people it is supposed to help over.
btw this was right from your link
The crisis was further exacerbated by government price controls in the United States, which limited the price of "old oil" (that already discovered) while allowing newly discovered oil to be sold at a higher price, resulting in a withdrawal of old oil from the market and artificial scarcity. The rule had been intended to promote oil exploration. This scarcity was dealt with by rationing of gasoline (which occurred in many countries), with motorists facing long lines at gas stations.
In the U.S., drivers of vehicles with license plates having an odd number as the last digit were allowed to purchase gasoline for their cars only on odd-numbered days of the month, while drivers of vehicles with even-numbered license plates were allowed to purchase fuel only on even-numbered days. The rule did not apply on the 31st day of those months containing 31 days, or on February 29 in leap years ? the latter never came into play, as the restrictions had been abolished by 1976.
OPEC was why the price went up and the war
Price controls is why there wasn't any gasoline at the service stations to sell
Failure of price controls
Those old enough to remember the gasoline crisis of 1979 may recall sitting in long lines of cars at filling stations, waiting -- sometimes for hours -- to reach the pump. This was one of the most common consequences of price control throughout history -- a shortage. Yet how many Americans ever made the connection between the price controls of the 1970s and the gasoline shortages of the 1970s? How many have noticed that they haven't been waiting in gasoline lines since Ronald Reagan got rid of the price controls on oil?
Why do price controls cause shortages? There are basically two reasons: supply and demand.
People will not supply as much at a lower price as they will at a higher price. Some oil wells that will repay their costs and earn a profit when the price of oil is $25 a barrel will not cover their costs when the price is $15 a barrel. Some people who will rent out a bungalow in their backyard when rents are high will not bother when rents are low. Some farmers will give up farming when food prices are kept below the point where they can earn a living.
On the demand side, people will demand more when the price is kept artificially low by price controls. Before rent control laws were passed in Sweden, less than one-fourth of unmarried adults there had their own separate housing units, but afterwards more than half did. People buy more of anything that is cheaper. With more being demanded and less being supplied, shortages are inevitable, whether with housing, food, medical care or whatever.
It is not just the quantity supplied that declines under price controls. Quality also declines.
Price controls is why there wasn't any gasoline at the service stations to sell
Failure of price controls
Those old enough to remember the gasoline crisis of 1979 may recall sitting in long lines of cars at filling stations, waiting -- sometimes for hours -- to reach the pump. This was one of the most common consequences of price control throughout history -- a shortage. Yet how many Americans ever made the connection between the price controls of the 1970s and the gasoline shortages of the 1970s? How many have noticed that they haven't been waiting in gasoline lines since Ronald Reagan got rid of the price controls on oil?
Why do price controls cause shortages? There are basically two reasons: supply and demand.
People will not supply as much at a lower price as they will at a higher price. Some oil wells that will repay their costs and earn a profit when the price of oil is $25 a barrel will not cover their costs when the price is $15 a barrel. Some people who will rent out a bungalow in their backyard when rents are high will not bother when rents are low. Some farmers will give up farming when food prices are kept below the point where they can earn a living.
On the demand side, people will demand more when the price is kept artificially low by price controls. Before rent control laws were passed in Sweden, less than one-fourth of unmarried adults there had their own separate housing units, but afterwards more than half did. People buy more of anything that is cheaper. With more being demanded and less being supplied, shortages are inevitable, whether with housing, food, medical care or whatever.
It is not just the quantity supplied that declines under price controls. Quality also declines.
dullard
Elite Member
- May 21, 2001
- 26,040
- 4,681
- 126
1) Price caps/floors always have VERY severe drawbacks no matter what you are selling. Sure, the gasoline would be slightly cheaper, but there will be long, long gas lines (anyone here remember waiting in line for hours to get your gas?). That is, if you can get it at all. Or often to maintain profits with lowered price, the quality of things decline (how well maintained are the low income housing in your city?)
2) Gas prices honestly are not a big issue. On the grand scheme of things, it is a minor cost for most people. Why place the severe drawbacks from #1 on us to save a couple dozen dollars a year? Price caps/floors have benefits, but they must be weighed against the drawbacks. In this case, the benefit is minimal and the drawback is severe (which is often the case with most products). Thus, it isn't a good idea.
3) Gasoline isn't a high profit industry. Oil is high profit. Exxon and the other OIL companies made a killing because oil went up in price, not because gasoline went up in price. Basically, your proposal is attempting to fix the wrong problem.
2) Gas prices honestly are not a big issue. On the grand scheme of things, it is a minor cost for most people. Why place the severe drawbacks from #1 on us to save a couple dozen dollars a year? Price caps/floors have benefits, but they must be weighed against the drawbacks. In this case, the benefit is minimal and the drawback is severe (which is often the case with most products). Thus, it isn't a good idea.
3) Gasoline isn't a high profit industry. Oil is high profit. Exxon and the other OIL companies made a killing because oil went up in price, not because gasoline went up in price. Basically, your proposal is attempting to fix the wrong problem.
Hayabusa Rider
Admin Emeritus & Elite Member
- Jan 26, 2000
- 50,879
- 4,268
- 126
dullard
Elite Member
- May 21, 2001
- 26,040
- 4,681
- 126
False, Pimentel still uses efficiency data from the 1980s (since then there have been massive increases in crop yield and great reduction in energy use of ethanol plants). Studies using later data show ethanol from corn is right around break even energy wise (some show a slight gain, others show a slight loss).
Pimentel has been a far extremist on the calculations for ~3 decades (always using the worst case scenario data and ignoring all improved techniques).
Interesting comparison of ethanol efficiency studies.
Yeha Pimentals research has been proven worthless many times over
On these forums as well bad data, bad hypothesis
"Comparison of USDA and Pimentel Net Energy Balances" -- "The USDA analysis clearly shows, contrary to the Pimentel paper, that US farming and ethanol manufacture are very energy efficient, and that the energy content of ethanol delivered to the consumer is significantly larger than the total fossil energy inputs required to produce it. USDA estimates that ethanol facilities produce at least 1.23 units of energy as ethanol for every fossil BTU included considering all energy inputs related to corn farming, corn transport, ethanol production, and distribution and transport of finished ethanol." Full report:
http://www.ncga.com/public_policy/issues/2001/ethanol/08_22_01b.htm
"Pimentel clearly does not understand the economics of ethanol manufacture
Only Dr. Pimentel disagrees with this analysis. But his outdated work has been refuted by experts from entities as diverse as the USDA, DOE, Argonne National Laboratory, Michigan State University, and the Colorado School of Mines. While the opponents of ethanol will no doubt continue to peddle Pimentel's baseless charges, they are absolutely without credibility,"
On these forums as well bad data, bad hypothesis
"Comparison of USDA and Pimentel Net Energy Balances" -- "The USDA analysis clearly shows, contrary to the Pimentel paper, that US farming and ethanol manufacture are very energy efficient, and that the energy content of ethanol delivered to the consumer is significantly larger than the total fossil energy inputs required to produce it. USDA estimates that ethanol facilities produce at least 1.23 units of energy as ethanol for every fossil BTU included considering all energy inputs related to corn farming, corn transport, ethanol production, and distribution and transport of finished ethanol." Full report:
http://www.ncga.com/public_policy/issues/2001/ethanol/08_22_01b.htm
"Pimentel clearly does not understand the economics of ethanol manufacture
Only Dr. Pimentel disagrees with this analysis. But his outdated work has been refuted by experts from entities as diverse as the USDA, DOE, Argonne National Laboratory, Michigan State University, and the Colorado School of Mines. While the opponents of ethanol will no doubt continue to peddle Pimentel's baseless charges, they are absolutely without credibility,"
Hayabusa Rider
Admin Emeritus & Elite Member
- Jan 26, 2000
- 50,879
- 4,268
- 126
You may be correct about him. I confess that I haven't looked at this as closely as some. It seems many people I have looked at don't add all the energy costs and make ethanol sound like a wonder. It seems he took those into account.
Tell me, how much of the corn crop would it take to make a significant difference to the energy equation , and what if there is a drought?
Two questions. How much corn (or whatever product)
trenchfoot
Lifer
- Aug 5, 2000
- 15,795
- 8,375
- 136
here's what hawaii is doing with gas caps
hawaii's gas cap law
presently there is legislation on the table to repeal this law.
after months of living with this law, especially after hurricane katrina, hawaii's gas prices are still one of the highest in the nation (if not the highest).
there is heated debate going on at our state legislature, and at present, it looks like the lawmakers that want the gas cap law repealed is in the majority in one chamber, with the other about ready to cave in.
prior to enacting this law, hawaii gas prices was alot higher than conus prices when averaged out. the law was enacted to force the two refineries in the state to sell their gas at prices that were more in line with what refineries in the conus was charging.
the formula that was set by our legislature to determine the price of gas (wholesale) still makes the price appreciably higher than conus. nice try, but it looks like the refiners got to the right people before the pricing formula was set.
hawaii's gas cap law
presently there is legislation on the table to repeal this law.
after months of living with this law, especially after hurricane katrina, hawaii's gas prices are still one of the highest in the nation (if not the highest).
there is heated debate going on at our state legislature, and at present, it looks like the lawmakers that want the gas cap law repealed is in the majority in one chamber, with the other about ready to cave in.
prior to enacting this law, hawaii gas prices was alot higher than conus prices when averaged out. the law was enacted to force the two refineries in the state to sell their gas at prices that were more in line with what refineries in the conus was charging.
the formula that was set by our legislature to determine the price of gas (wholesale) still makes the price appreciably higher than conus. nice try, but it looks like the refiners got to the right people before the pricing formula was set.
I tend to agree with people who say price capping is generally a bad idea, BUT I wonder about the impact on oil due to the market forces at play here. As that recently posted, incredibly condescending article from Ben Stein points out, oil prices are more about trading and speculators than the basic supply and demand. He points out what we've been hearing from conservatives for months now, you can't blame the oil companies because the rising price is NOT their fault, it's due to factors outside of supply and demand entirely.
I'm not sure I buy that argument, but if it IS true, wouldn't that mean price capping would be an EXCELLENT idea? If the problem is commodities traders getting all in a lather, wouldn't capping the price to better reflect the TRUE price of oil production be a way to calm the market without hurting oil companies or consumers? Like I said, I'm not sure I buy either argument, but if normal supply and demand aren't to blame for high prices, why are they an argument against price capping? It can't be both ways.
I'm not sure I buy that argument, but if it IS true, wouldn't that mean price capping would be an EXCELLENT idea? If the problem is commodities traders getting all in a lather, wouldn't capping the price to better reflect the TRUE price of oil production be a way to calm the market without hurting oil companies or consumers? Like I said, I'm not sure I buy either argument, but if normal supply and demand aren't to blame for high prices, why are they an argument against price capping? It can't be both ways.
umbrella39
Lifer
- Jun 11, 2004
- 13,816
- 1,126
- 126
See, here's the funny thing about you choosing the Reagan move to drop the price caps as the reason oil prices dropped.....
It could also be argued that that had absolutely nothing to do with the oil prices dropping. What other thing did Reagan do while in office? If you noticed in my above post, I mentioned that anytime Iran or Iraq were messed with, prices soared. Well, when Reagan was in office, he had backdoor policies of dealing with and assisting both nations. I could make just as strong an argument that it was his catering to, or appearance of catering to, both sides that influenced them to go to OPEC and have prices lowered. We are still within the 50 year timeframe for any documentation to prove either one of us right/wrong, but that doesn't discount either argument.
And oil isn't an "open market". Prices are set by OPEC and by traders. The supply and demand curves are manipulated by those who hold the supply. That is the opposite of an open market.
From dictionary.com:
Competition isn't determining the prices, those that control the product are.
The US can replace its oil using traditional crops but it would eat up 75% of all available farmland using both cellulosic conversion and straight fermentation ethanol.
Its why the best promise is in the links here using alagae and growth tubes to make fuel and oil for plastics etc.
ultimately we will have to do both conserve and switch to ethanol as a portable liquid solution.
Its why the best promise is in the links here using alagae and growth tubes to make fuel and oil for plastics etc.
ultimately we will have to do both conserve and switch to ethanol as a portable liquid solution.
3chordcharlie
Diamond Member
- Mar 30, 2004
- 9,859
- 1
- 81
Both of those industries are ridiculously protected and uncompetitve.
As far as oil/gas goes, it's the oil producers who get the windfall profits from high oil prices; a business which has to purchase a significant amount of oil on the open market is not doing any better than before.
For a product like oil, you can't have a price cap, or other market controls unless you're dealing with a net-export industry. During the first OPEC crisis (1974) Canada forced oil producers to supply to the Canadian market below the world price; this was of course very unpopular with those companies, and was eliminated as a policy by the time of the 1978 OPEC crisis. The fact remains that the 1974 crisis did not hurt Canada as much as other countries. However, that was rather clearly a temporary price increase, while the current situation is a little more obscure.
As a net-importer of oil, the US is powerless to enact such a policy.
umbrella39
Lifer
- Jun 11, 2004
- 13,816
- 1,126
- 126
Well put, funny how they turn to Gloom and Doomers when the topic of regulating how much the Oil Companies can screw us in the a$$ comes up. Like they are going to take their ball and leave the US Market just because they might only make 5 billion a quarter.
Why would we have lower demand with a price cap? (We wouldn't)
If anything the demand would increase since the price is lower, and since supply is constant in this example, the only argument against the cap would be that there is less incentive for companies to find new resources. That argument doesn't seem to hold much weight.
TRENDING THREADS
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 25K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes + WCL Discussion Threads
- Started by Tigerick
- Replies: 22K
-
News NVIDIA and Intel to Develop AI Infrastructure and Personal Computing Products- Started by poke01
- Replies: 392
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
Facebook
Twitter