Oil Prices Drop, Sadly

The price of oil dropped $2.19 today, to $117.91, spurring a stock market and dollar rally. Sounds like good news. Except that it’s dropping because the market thinks more people won’t be able to afford to drive their cars as much. Who’s up for a “staycation?”

Oil Prices Tumble Again; Stock Markets Surge [NYT] (Photo: hanapbuhay)

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  1. What did this word “Staycation” come into existance? This is the second time I heard it today, and the second time I have EVER heard it. The “real” reason that the prices are dropping will soon follow in the form of a “plot” to lower prices to ensure a Republican gets into office. I really think it’s that people are getting a little more rational, and not freaking out when the speculators try to get them in a frenzy, and the prices will relax.

  2. Ben Popken says:

    @Git Em SteveDave displays attention-grabbing vanity: I heard it in a Raymore and Flanigan home furnishing ad the other day.

  3. chiieddy says:

    @Git Em SteveDave displays attention-grabbing vanity: It’s been buzzing around all summer. It’s called, what I did for vacations as a kid. You know, living on the Jersey Shore and going to the Jersey Shore an hour south for a week for vacation.

  4. snead says:

    Agreed, it is an annoying, bullshit word that I’ve only heard in Daily Show montages of idiot network news anchors and now, on Consumerist.

  5. dante1337 says:

    just market forces at work. Its not something to be sad about.

  6. Colleen says:

    the price is obviously dropping because of these people…
    [consumerist.com]

  7. @Ben Popken: OK. Did they invent it? I guess I’m like George Carlin sometimes and like to know where a word came from. I know words sometimes surge in popularity, like “gravitas” did during one election season, but I had never heard this before.

    @chiieddy: I lived 10 minutes away from Seaside Park and only visited there like 10 times in 4 years. I rarely visit the shore, even though I live here. I think it’s b/c of my severe dislike of Bennies.

  8. InThrees says:

    The market thinks that because it’s true. So much of our economy and way of life is built on people working relatively low-paying jobs far enough away from home and in areas without sufficient mass transit that most of those people have to drive to work. Fuel costs, meltdown, general market malaise in response to this “not-recession” all add up to lower consumption across the board.

  9. Bladefist says:

    I’m confused. Your sad because oil prices dropped, and the economy is doing better? I’m honestly confused.

    Oil prices dropped because speculators learned that Americans wont put up w/ those prices. Politics for alternatives came on heavy, and demand shrunk several percent.

    Americans: 1
    Speculators: 0

  10. balthisar says:

    Well, this kind of sucks. I try to offset the depreciation of my real property (i.e., my house) due to a popping bubble that was never supposed to happen, with investing in oil futures (the price can only go up, right?)! Now that oil is dropping, too, I guess I need to recoup those double losses with something else. Didn’t GM spin off the Hummer division? That can only go up now that oil is falling, right? Time go make some trades…

  11. Jevia says:

    “Staycation” was created because people still took “vacation” time, but couldn’t afford to actually go anywhere, so they “stayed” home.

  12. No_Pants says:

    Does it sound like good news? Just curious.

  13. cashoverass says:

    I don’t agree this is why prices are dropping. It would be sad if the ONLY reason prices were dropping was because the economy was too terrible for anyone to drive. and yes, we are all driving less.
    However, prices have been inflated. Everyone knew they were inflated for months. From OPEC head honchos to wall street. It was a bubble and speculators(the main reason prices were so high) are pulling out. Finally

  14. dante1337 says:

    This is good news, I dont get why consumerist always has to be cynical and pessimistic.

  15. Oil prices down,
    Stock market up,
    Dollar getting stronger,
    People driving less (less accidents, traffic).

    Nothing sad about that news.

  16. Average_Joe says:

    @balthisar: It was bound to happen. Speculators drove up the costs artificially and there was always going to be the point where people finally got scared prices would go back down and try to get out before that happened. Is this it? Probably not. But if prices to go down and stay there, the people playing the futures market will only get what they deserved for trying to siphon money out of people’s pocket books.

  17. They’ve been using “staycation” down here in FL for the last couple of months. Trying to get people to stay instate at Florida resorts not flying to other places to go on vacation.

  18. pastabatman says:

    @Bladefist:

    “Americans wont put up w/ those prices”

    I don’t think Americans had a huge say in the matter. Yeah, they drove less, causing less demand, but really it’s more a combo of that small fraction added to struggling economies around the world.

    Like for instance, China just jacked their gas prices up by cutting down on some subsidies.

    I think Americans don’t really get a full +1 point for this one.

  19. Counterpoint says:

    @Bladefist: @dante1337:

    I’m confused as to why this is a bad thing as well…

    Prices are dropping because energy prices have become a huge deal in politics, and no matter who is elected their policies should downwardly affect gas prices. Either Obama & his alternative energy credits will lower demand, or McCain and his new drilling will increase supply. Either way, regular ole Americans win and oil prices lose.

  20. MercuryPDX says:

    @Git Em SteveDave: I’ve heard it used in radio commercials (since around May) for the local travel board.

    [livinglocal2008.com]

  21. ThinkerTDM says:

    @Bladefist: Oil prices have dropped, that’s true. Is it a significant drop? Not at all. Prices are still higher than they were 2 years ago- but Americans seem to think that Jesus has risen because they are lower than a month ago.
    Suckers.
    So- prices are still high, honest people are still getting it in the ass, and speculators are *still* making record profits.

    Americans: 0
    Speculators: 1

  22. TomCruisesTesticles says:

    “When you’re born, you get a ticket to the freak show. When you’re born in America, you get a front-row seat.” Sometimes, I feel the thanatos in me. Much like Carlin said, I just sit back and enjoy watching the world tear itself apart

  23. ARP says:

    @Bladefist: Oil prices dropping is good and the Dow going up is good. But I suspect its a temporary increase as the economists are predicting more sour times for end-consumers.

  24. failurate says:

    I love my house. But I also love all-inclusive resorts in 3rd world countries. So torn… staycate? or vacate?

  25. @ThinkerTDM: But what people also rarely talk about is that oil prices during the 90′s were ridiculously low, and sooner or later this was going to correct itself. Now granted, it did go in the other direction a lot further than many people believed, but an upwards correction was coming. Take Southwest for instance, who thought that this was going to happen so they took a huge risk and locked in oil contracts at higher than market value at the time. Now they look like geniuses.

    Supply and demand is still the rule. And gas in the US is still cheaper than just about every other western nation.

  26. “it’s dropping because the market think more people won’t be able to afford to drive their cars as much”

    Next week I’m taking a flight to New Mexico, where I’m renting a car and driving all over the state, more than 700 miles when all is said and done. So, HA! That’ll show ‘em!

    Waitaminute…

  27. snoop-blog says:

    Gas is expensive but we only spent an extra $200 on a 2,400 mile road trip. Road trips are still my fav and I will never stop doing them.

  28. Chairman-Meow says:

    Oh noes! Those poor-poor speculators! Now what will they do with all those bizillions. I’m sure they are all taking stacations now that oil is falling faster than a prom dress on prom night.

    Won’t somone think of the Speculators children!

  29. Tiber says:

    @Counterpoint: Or they might do nothing at all. Obama’s plan is intended to fund research; research which probably won’t make its way into the real world for several years, if at all. McCain’s offshore drilling will take years to build the new rigs, and won’t have a real effect for even more years. I heard government studies say it won’t have a real effect until 2030. Either way, oil prices will still be the winner for a long time to come.

    Remember, take anything a politician says with a grain of salt, buried in a pile of salt, located in a salt factory.

  30. Chairman-Meow says:

    @LastVigilante: I put over 1000 miles driving through Arizona & Utah back in May visiting all those beautiful National parks. During that week of driving, I watched gas prices go from $3.50 / gal to $4.07 / gal.

    Vacation was still a blast and we loved every minute of it

  31. Bladefist says:

    @pastabatman: I read demand went down 3%. That’s pretty huge.

    @ThinkerTDM: Well I agree. I think *some* people are just happy prices are down. But I think a lot of people still realize we’re a long way from where we should be. If America forgets what oil prices should be, and accepts this price as okay, then it just proves ignorance is expensive. It’s also the biggest commodity in America :)

  32. Bladefist says:

    @Tiber: I’m not taking a partisan view on this. I will agree on your research. It takes years. As far as the McCain thing. I’ve heard some oil/energy experts who are vastly confused where this “10 years before it helps” argument. They said it may take 10 years to find the best place to drill, and get permits, etc etc …. But for ANWAR and Offshore- That research has been done.

    And if allowed to drill, it would take weeks to setup ANWAR, and months to setup off-shore, and the effects are nearly immediate. I am not an expert. I am just half-way quoting “experts”. And they have no clue how the media gets their data.

  33. HIV 2 Elway says:

    @snoop-blog: Cheers to that.

  34. stevejust says:

    China’s been trying to clean its air for the Olympics. It’s not just high prices here (and globally) that’s restricting demand, it’s also that a huge and relatively new market has just dropped out of the competition for oil barrels. After the olympics are over and things in China go back to normal, prepare for the increasing prices again.

    Speculators or no. While I agree that a hole lot of the problem is due to speculators, the real problem is that gasoline has just been terribly underpriced for so long that it seems outrageous now that gas prices are starting to closer reflect reality.

  35. ekasbury says:

    Hell, I can’t even afford a staycation. It looks like I’ll be taking an imagication this year.

  36. Angryrider says:

    Well, so much for the push for alternative fuels.
    Feed me, Seymour!

  37. matt314159 says:

    Just got finished with a summer “staycation” here myself. I live in SoCal, so we went to Palm Springs (an hour away), stayed at one of those timeshare resorts ($99 for 3 nights, if you sit through their 2 hour presentation), used a couple $25 restaurant.com gift certificates that we bought at 70% off to check out the local cuisine on the cheap, then splurged and rode the Palm Springs tram up Mount San Jacento and had a picnic of PB&J sandwiches at the top. We all had a great time and the total expenditures for four days with four people, lodging, food, transporation, and entertainment was about $300

  38. nursetim says:

    Perhaps people are inflating their tires.

  39. Bladefist says:

    @Angryrider: Capitalism is pushing alternative fuel. A lot of places are currently researching it. Some for the environment, some for the profit. Some both (T Boone Pickens)

    @ARP: Ya, I believe we half only just recently hit the half way point. But I believe oil speculators have learned a valuable lesson.

  40. scoopjones says:

    I agree with the point about the Olympics. One of the driving forces for the sudden surge in oil prices was China rushing to rebuild its cities in time for the Olympics. When a country with five times our population puts its economy into overdrive, the rest of the world suffers for it with higher gas and food prices. When I was in Beijing two years ago, most of the capital was being torn down and rebuilt with new super highways, subways and high-rise buildings. However, the Chinese have overbuilt now, and the air pollution was so horrendous just before the Olympics that they had to take millions of cars off the road and shut down factories, and the pollution is still there! Amazing what they’ll do to save face.
    I personally think gas prices are about to drop off a cliff. We’ll see a tumble, then they’ll start to rise again and stabilize at a lower level. I’m already seeing stories about the oil bubble bursting.

  41. Canino says:

    Wait a minute. I thought the story was that speculators reselling contracts over and over drove the price up. Democrats made it sound like speculators always bought at a higher price than the person before. Now speculators aren’t doing that any more? Why did they stop? Don’t they want to make more money? Someone call Chuck Schumer and get the answer, please.

  42. mackjaz says:

    It is bad news… obviously neither our government nor the free market will ever wean us of our addiction to oil. Does anyone not believe that our planet is warming? Burning oil is not a long-term success strategy.

    The only way we will make positive change (alternative fuels, conservation, etc.) is if we are forced into it. I have seen that human beings are capable of incredible accomplishments, providing someone forces them to do so.

    I commute 60 miles a day, and yes it hurts financially, but it’s time we woke up from the postwar dreamworld of $1, $2, or even $3-a-gallon gasoline.

  43. Trai_Dep says:

    @Counterpoint: Numerous smart people have pounded the numbers and allowing Big Oil to drill in damn near everyone’s backyard, for free, would have negligible impact on prices and even then, not for many, many years.
    I.E., allowing Big Oil to despoil our coasts *might* result in ten-twenty cents/gallon relief, right around when Obama finishes his second term. Then only have an impact for the next two Presidential terms (and that’s optimistic).

    No magic wands here, people. Or Pixie Dust. Were that were so.

    Besides, Big Oil already has thousands of leases allowing them to drill which aren’t being exploited. Let ‘em eat what’s on their plate before we let them go for seconds.

  44. Hongfiately says:

    @Bladefist: Saying “it’ll take x years,” is a perpetual excuse to do nothing; it isn’t even an argument. President Clinton vetoed an ANWR bill in 1996. If it would have taken ten years, that’s two years on we’d be now. Some of those same people have been saying “it’ll take ten years” for more than ten years. Zeno’s dichotomy is not a valid energy policy.

  45. Bladefist says:

    @Hongfiately: Agreed. I can’t believe this:

    Paris Hilton is right. Drill now, Research now. Both sides start now.

  46. Hongfiately says:

    @Trai_Dep: Wrong. A future increase in the supply of a scarce good will lower it’s current price.

  47. Hongfiately says:

    @Bladefist: She is absolutely right. The two are not mutually exclusive as some would have everyone believe.

  48. RagingBoehner says:

    @Bladefist: I agree that speculators will probably learn a valuable lesson. But isn’t it their lesson to learn?

    The “speculators” have just as much a right to purchase oil as you and I do. And they have the right to sell it to anyone they want at a price that both parties accept.

    If they get caught holding a futures contract for a few hundred barrels at $150 a barrel and it drops to $100 or less, they’re effed. That’s the whole point of a free market — it carries both risk and reward. That said, I hope they all get caught naked with high priced contracts as the price gets back to a more reasonable level.

  49. The_Gas_Man says:

    Your source article has one quote by one man at one bank, and then never addresses his quote. I don’t buy this notion that prices are falling because they think people won’t be able to afford gas, and certainly not because one Australian guy’s quote made it into a NYT piece.

  50. mackjaz says:

    @Hongfiately: But for how long? 10, 20, 30 years? Why not branch out now while we still have time? If we can slow down our monstrous demand for oil, we can decrease the amount we need to import, and we can use our domestic supply for the few cases where only oil will work.

    So here’s my offer: I will agree to support domestic drilling, and maybe even ANWR, IF we change the national speed limit to 55, begin building massive solar and wind arrays in the vast, vast stretches of desert in the midwest. Too expensive you say? With the cost of the Iraq war, we could have laid out more than enough solar panels to power this entire country. What a shame.

    You can’t kill my wildlife and despoil my wilderness unless you’re willing to make sacrifices.

  51. RagingBoehner says:

    @Hongfiately: Honestly, I think the best reason to drill for oil off coast is that it’s there. Why leave something valuable in the ground? Even if it doesn’t have a large impact on prices it will generate jobs and tax revenue, and make our cars go. It’s worth opening up a gold mine even if it’ll take 10 years to get the gold out.

    In fact, the BEST time to drill would be when prices are high.

  52. Hongfiately says:

    @RagingBoehner: Right. Speculators don’t just make money by “driving prices up”. They make (and as you’ve said they can lose big) money when price moves in either direction.

  53. Gopher bond says:

    @ekasbury: win for “imagication”.
    lolz

  54. Tiber says:

    @Bladefist: Thanks for leaving personal views out of this. Though I have my views, I tend to try and be politically neutral (which is why I said both sides won’t have an impact) unless the discussion is already partisan.

    If I remember what I saw on the Daily Show correctly, the 2030 estimate comes from a study done by the government itself. However, I believe the study was about when the oil would “have an effect”, not necessarily when the oil would reach the market. The segment didn’t go over the details of the assignment, so I’m not sure how they define it. Even if you ignore the time it takes to find and drill the oil, there’s no guarantee that it will do much of anything to the price. Sure, Econ 101 will tell you more supply = lower prices, but it depends on how supply we’re talking about (think % increase, not total increase), and a bunch of other factors related to the real world.

    Pretty much I’d say that both proposals have their merits and their risks, but either way I’d advise against holding your breath. For the most part though, I’d say Obama and McCain are telling us what we want to hear.

  55. Hongfiately says:

    @mackjaz:

    But for how long? 10, 20, 30 years?

    Ahh, the corollary to “it’ll take x years” is “it’ll only last x years.”

    The 1002 Area of ANWR is a desolate Arctic mud plain, far away from the wilderness area.

    That national speed limit of 55 did wonders for the economy in the late 70s. Now I just need a tire gauge to go with my sweater.

  56. synergy says:

    I’ve been doing staycations for 8 years. It’s been great. It means I paid off my insane credit card debt racked up during my insanely stupid immature years, paid off a sensible car, and will have enough bank come January to pay all of grad school. Woo!

  57. synergy says:

    @ThinkerTDM: I like to tell my husband that 2 years before he married me there was a gas station on my way to work that had gas at $0.8999/gallon. Those were the days! (Yes, less than 7 years ago.)

  58. synergy says:

    Whoops. I got a little happy with the nines. It should be $0.899. :)

  59. Trai_Dep says:

    @Hongfiately: You’ve cracked open an Econ book and read the introduction. Congratulations!
    Okay, current prices in a market economy are set – in part – by anticipated events. However, they have to be significant events of a reliable nature.
    If the experts in the DoE – who know more of such things than you and I – state unequivocally that drilling wherever Big Oil wants to will take years to produce results and the reserves added to the global supply are insignificant, then it won’t have any impact worth mentioning. Unless you assume that global markets are stupid (this would be a bad bet, by the way).
    Until you have the resources of the US Department of Energy hiding under your desk, you have to cede to the experts.

    Related note:

    Know-Nothing Politics
    Republicans, once hailed as the “party of ideas,” have become the party of stupid..

    Know-nothingism – the insistence that there are simple, brute-force, instant-gratification answers to every problem, and that there’s something effeminate and weak about anyone who suggests otherwise – has become the core of Republican policy and political strategy. The party’s de facto slogan has become: “Real men don’t think things through.”

    [www.nytimes.com]

  60. mackjaz says:

    @Hongfiately: Yes, I know there was widespread failure to adhere to the speed limit, but I trust you get my point? Unless Americans are willing to give up some of their irrational exuberance and show some restraint, I will never support short-term (depends on your perspective, eh?) blind adherence to big oil’s status quo. And we all know how important my personal support is!

    In thirty years, where will we be? In exactly the same place, except the ANWR will be trashed, and our kids will be having this very same discussion. How about we… plan ahead?

  61. snowburnt says:

    @Bladefist:

    The way I understand it the major bottleneck to getting oil to customers isn’t the crude, it’s the refineries…refineries that have been closing down and going into disrepair because the oil companies have been passing their profits on to share holders for short term gains rather than reinvesting in their own infrastructure.

  62. mackjaz says:

    @Trai_Dep: This discussion has been very civil.

  63. synergy says:

    @ekasbury: I think you win Comment of the Week! I need to steal that imagication. :D

  64. kaptainkk says:

    So sad that we have very few environmentalists around. How about we stop raping this planet of all it’s natural resources? Start focusing on alternatives and population control. Why does no one seem to care about future generations! It’s the I want it now, the cheaper the better mentality that will be the demise of planet Earth.

  65. Trai_Dep says:

    @RagingBoehner: Problems are that accidents happen. Too many to bother citing. And when they do, they’re ruinously expensive to clean up. And it’s us that pay for it, rather than those whose fault it is.
    There are also tens of billions of dollars in fishing, gaming, tourism – every other sector besides Big Oil, in other words – that’s destroyed when tankers crash, pipes burst, aquifers poisoned or environments despoiled.
    Hence, we’re selective about where Big Oil gets to drill. Is the trade-off worth it once the true costs are factored in compared to the benefits? Not so much.

  66. Trai_Dep says:

    @mackjaz: ?
    It still is. Citing a topical, appropriate column by the US’ paper of record isn’t uncivil…

  67. mackjaz says:

    @Trai_Dep: I guess I was referring your less-than-respectful comment about cracking open an econ book.

  68. Hongfiately says:

    @Trai_Dep: Global supply seems like a static concept, but it isn’t. Markets are dynamic because supply is a variable that is dynamic. That’s right out of the textbook and onto the trading floor. Oil is down another $4 today and there’s been a 20% decline from its high in July. That’s not insignificant. Oil traders are selling their contracts short precisely because an increase in supply is a very real possibility. So, while “years to produce oil and bring its refined derivatives to market” is accurate, the statement of “years to produce results” just isn’t being played out in the market.

  69. Bladefist says:

    @snowburnt: That’s a good point. Also, we could reduce the price of gas by having a national, 1-type of gas, instead of every state having their own mix of gasoline.

    @Trai_Dep: Why do you call it Big Oil? Do you stop at Big Cheeseburger, before going to Big Retail?

  70. Tiber says:

    @Hongfiately: If it were going to increase tomorrow, maybe. But if it’s not going to happen for months, much less years, none of the people trading it will care.

    @RagingBoehner: The original idea was that there are a lot of hurricanes in the Gulf of Mexico, and if a rig was hit badly, there’d be an environmental disaster. Technology greatly lessened the risk, but the law stayed on the books. When Katrina came around, the offshore rigs didn’t leak, but the refineries on land nearby weren’t so lucky. Some argue the rigs and refineries are related; others don’t believe so. This is just an FYI as to why some might not want to drill for it.

  71. Techguy1138 says:

    The oil drop is prices is primarily due the to the fact the speculators are predicting that the US will be unable to purchase fuel. If the economy was going great guns as it has been then we’d buy no matter what.

    The fall is less due to choice and more due to economic necessity. That slow down is expected to hit China as the slowing US economy reduces factory orders. There has already been layoffs happening in China due to the economic slow down. That in turn has reduced the industrial demand for oil to ship products and run factories.

    It not so much a win as a sign of a global economic contraction.

    Sort of like the claiming the tax burden on Americans is less than before and realizing that is because unemployed people pay less in taxes.

  72. snowburnt says:

    @Bladefist: Also, the guy with the really cool name (T. Boone Pickens) says we should all switch to natural gas because it’s currently cheaper and has fewer emissions…plus it’s very plentiful in the US

  73. Consumerist-Moderator-Roz says:

    @Trai_Dep: Partisan political attacks are not allowed.

    Let’s keep things on topic and no name-calling (backhanded or otherwise).

  74. ARP says:

    @Bladefist: Part of the problem is that as soon a prices drop, consumption will increase and push prices back up. Yes, that’s the nature of the economy, but the result is that I don’t think drilling everywhere will lower prices because the historical American response has been to consume even more.

    @Hongfiately: You meant the tire guage and sweater as a joke, but keeping tires inflated would save more gas than offshore drilling would provide. Turning down the thermostat would save more energy than offshore drilling and ANWR combined. Seems foolish to mock someone when they’re actually right and you’re wrong, no?

  75. Hongfiately says:

    @mackjaz: I get your point, but the 55 mph national speed limit did absolutely nothing for the economy in the 70s. Me? I’m with Sammy Hagar.

  76. @Trai_Dep:

    Numerous smart people have pounded the numbers and allowing Big Oil to drill in damn near everyone’s backyard, for free, would have negligible impact on prices and even then, not for many, many years.
    I.E., allowing Big Oil to despoil our coasts *might* result in ten-twenty cents/gallon relief, right around when Obama finishes his second term. Then only have an impact for the next two Presidential terms (and that’s optimistic).

    No magic wands here, people. Or Pixie Dust. Were that were so.

    Besides, Big Oil already has thousands of leases allowing them to drill which aren’t being exploited. Let ‘em eat what’s on their plate before we let them go for seconds.

    If you’re going to make specific statements like this, it’s really more effective to provide proof. I’m not saying you’re wrong – I’m just saying I have no reason to believe you.

  77. RagingBoehner says:

    @Tiber: Fair enough. I’ll concede that there’s some risk of spillage if you drill offshore — but is that quantifiable? For example, is driving an oil tanker from the Persian Gulf more or less risky than a stationary oil rig?

    Also — what of the argument that most of the leases are unused? My understanding is that’s so that others don’t “drink their milkshake” so to speak — that just because you don’t have a rig on top of an area doesn’t mean you’re not extracting oil from that area. Any geologists out there know more about this?

  78. ARP says:

    @Tiber: The rigs did leak. That’s just a talking point by Faux News and pro-drilling folks. Here is a link to satellite images of those spills. The rigs leaked 750k gallons. In the industry, anything over 100k gallons is considered a “major spill.”

    [www.katrinadestruction.com]

    [skytruth.mediatools.org]

  79. @ARP:

    You meant the tire guage and sweater as a joke, but keeping tires inflated would save more gas than offshore drilling would provide. Turning down the thermostat would save more energy than offshore drilling and ANWR combined. Seems foolish to mock someone when they’re actually right and you’re wrong, no?

    I’m going to make the same suggestion to you as I did Trai_Dep. If you’re going to make specific claims like this, you really need to provide some link or proof.

  80. Hongfiately says:

    @ARP: Increasing production of oil and natural gas isn’t done for conservation purposes.

    Keeping your tires inflated and being sensible about energy use are sound advice — properly inflated tires are more of an immediate safety issue than anything else, but I digress. Again: good tips, practical advice. But as the basis of a national energy policy? Not ready for prime time.

  81. Bladefist says:

    @ARP: The tires inflated comment, made by Obama is true. Inflated tires, make better gas mileage. He stated 3% better. He is right.

    But, he also stated, in his first comment ever about it, that if we all inflated our tires, we wouldn’t need to drill. This is wrong for a couple of reasons.

    1) He is assuming everyone’s tires are not fully inflated. If all our tires were under pressurized, and then we pressurized them, then yes, we could save a ton of money. But most people, have tires with plenty of air. Most service stations check tires when you do oil changes. So therefore, he isn’t going to be able to make up that 3%

    2) If everyone inflated our tires, things would look good. But then we would be like, aight, that helped, what else can help? Oh, we should drill. See, so it’s never going to end.

  82. jonworld says:

    @Git Em SteveDave displays attention-grabbing vanity: I believe that Steven Colbert used that word to describe John McCain while Barack Obama was touring the Middle East and Europe a few weeks ago.

  83. Hongfiately says:

    @ARP:

    I don’t think drilling everywhere will lower prices because the historical American response has been to consume even more.

    Don’t leave out efficiencies that have come over time thanks to technology. Engines, vehicles and entire supply chains are a lot more efficient than they were in years past.

  84. @ARP:

    The National Academies said:

    “47 million gallons [of oil] seep into the ocean naturally from the seafloor [per year].”

    I understand that we’re releasing unfortunate amounts of crude into the ocean, but what of the 47 million gallons per year that naturally enter the ocean?

  85. lockers says:

    @Ben Popken: You know, a lot more people may follow your comment policy if you yourself don’t make personnel remarks. He did not say anything good or bad about ‘staycation’, just that he had never heard of it. I think it’s highly hypocritical of you to continually post PSA telling people to not make personnel attacks, then make one yourself.

  86. consumerd says:

    @Git Em SteveDave displays attention-grabbing vanity:

    it’s the same place “Thundersnow” came from. “Staycations” came around as a popular thing this year because of the gas prices.

  87. Counterpoint says:

    1st, to “drilling would take 10-20 years to make an impact.” There is already infrastructure for drilling in many areas, most notably the Gulf of Mexico. Opening up more of that area for drilling wouldn’t take 10 years to see a benefit. Also, increasing the supply will lower the cost. It might not be less than today’s price due to an also increasing demand, but it will be much lower than the future price if no supply is increased.

    2nd, addressing the “evil speculators.” Speculators are a normal part of market economies. They are also the reason the oil price has declined so sharply lately, by speculators selling oil short. They are no more evil than people who kept buying overpriced dotcom stocks in the early part of this decade. Stupid maybe, but not evil.

    Finally to the inflated tires people: how many people do you know who drive around on flat or low tires? Even if a vast majority did and we saved 3% on gas prices, why not do that and drill? Why stop at only a 3% savings if you can have more?

  88. Gorphlog says:

    @Trai_Dep:

    They have been saying it will take 5 to 7 years to see any effect of drilling for about 20 years now. If we wouldve started 20 years ago we would already have been seeing benefits for several years. That excuse is a lame one because eventually that time will come but you have to start some time.

  89. dequeued says:

    @Bladefist:

    I disagree that we should “let the market find a way”
    Oh, don’t get me wrong, the market will always find a way to iron out any irregularities, but we may not like the way it does it.

    Perhaps gas will go up to $8 a gallon, and our poorly designed government controlled highway system will be useless to most Americans, bringing us to the brink of complete economic collapse.
    After which we will finally start taking alternative energy seriously.

    But of course, all of this could have been avoided by having some tax dollars directed at a energy research.

    The fact is, the free market sucks for some things.
    Usually the market wont choose the “best” technology, just the cheapest.
    And by cheap I don’t always mean in dollars, just cheap as in easy to use or less overhead.
    Why do you think Microsoft Windows is so popular?

    We wouldn’t have computers today if the military didn’t throw billions of dollars at computer research for several decades.
    IBM was content to manufacture clocks and typewriters, and never would have invested that kind of money in research.
    No one would.

    You really think the oil companies will invest in what could potentially be their own obsolescence?
    Of course not! They have shareholders to answer to!

  90. Techguy1138 says:

    @david_consumerist: Staycation is older than that THe first place I heard it was on “Corner Gas”
    A CTV production and I think I was watching an episode that was a couple of years old.

    It had nothing to do with gas and everything to do with being to lazy to plan a real vacation.

  91. @Bladefist: Why do you call it Big Oil? Do you stop at Big Cheeseburger, before going to Big Retail?

    I do shop at Big Box Retail and get my phone service from the Dark Side.

    (It’s totally fair to call it Big Oil. Exxon had revenues of a little over $400000000000.00 last year. If anything, we should call it “Ginormous Oil”.)

  92. @Bladefist: Oh and “Big Cheeseburger?” Merely $22b last year. Exxon had twice that in profits after taxes.

  93. Dave on bass says:

    OK, let me ask anybody who’d like to respond, a question:

    - I’m a typical middle-class American consumer, but with a little bit of an eye on conservation. (I used 200 kWh less in July 2008 than in July 2007 because of changes in power usage at home, for example)

    - I have an OK mortgage – I can make my payments, have a decent interest rate, altho my house has dropped in value such that I’m upside down, but still…

    - I drive now, a car that is more energy-efficient than any I’ve had before, at an average 28+ MPG in my personal usage records.

    That said, there are a couple cars that I would *love* to own, that get worse gas mileage – and if gas goes down just enough, I’d probably pick one of them up, considering the lower prices for lower-MPG cars these days… For instance, at $3 a gallon I would still love driving certain cars or trucks that get 15 MPG, considering what I would pay for that car or truck. (This assumes the car prices don’t react as fast as the pump does)

    My question: Do you see a time when automotive enthusiasts would be able to buy and enjoy the cars they love, even as the whole price rise, or even Peak Oil “thing” looms? Or did this point in time simply pass, never to be seen again? I’m just curious here, and the question was spawned by the comment that said as prices go down, demand will go back up, and prices will go back up to folllow.

    Cheers
    Dave

  94. @Michael Belisle: Commas, please? Eyes…crossing…

    Or maybe that’s the Large Hadron Collider starting up….

    [www.engadget.com]

  95. Dave on bass says:

    BTW, I quite enjoy “Staycations” – mainly because I like the time off work, but can’t find too many places that warrant spending the $$ it would take to vacation there. So, I like to stay home and tackle stuff around the house, or just vegetate.

  96. RagingBoehner says:

    @Michael Belisle: The Federal Government have revenues much larger than that, but no one seems to notice the had expenses much larger than that. Hey, at least Exxon can balance their own budget.

    Plus, they pay many more times in taxes what they earn in profit. Not that it’s a bad thing — but the biggest winner in Exxon’s ascendancy is the U.S. Treasury.

    Since we’re citing sources here: [www.exxonmobil.com]

  97. @jammadave: Dave, looks like it all depends on two factors:

    1) Your concern about the impact your actions have on the environment, meaning a. do you believe in climate change, and the currently hypothesized causes, and b. Do you care about being hassled by environmentalists.
    2) How much money are you willing to spend in pursuit of your love of cars?

    I think the answer to your question will be found in your feelings about those two points.

  98. Techguy1138 says:

    @jammadave: Get the car you want but don’t make it a daily driver. It’s really that simple.

    Depending on tastes you can even get an older car american with a 6 that is light on gas.

    As frame of reference. I had a 1978 Pontiac Le Mans 4 door with the v8 305, no ac. I could get over 30 mpg highway and mid 20′s city. It sat 5 comfortably and had plenty of torque even though it was only a 305. That as 100% stock and the engine was not maintained as it should have been.

    If you were to install an electronic fuel pump and or a fuel injection system,with an eye to efficiency, I’d bet you can do even better.

    I am keeping my eye out for an old tempest, nova or chevelle with a stock 6. I’m pretty sure one of those things tuned up nice will net you in the 20′s mpg consistently. Modify the engine to modern standards and you’d get more HP and better MPG.

  99. Tiber says:

    @ARP: My bad. It’s not that they didn’t leak, it’s just that the leak from the rig itself was relatively small compared to how much it might have leaked without the newer technologies, and compared to the amount that was spilled by other means. Most of the leaks came from where it was stored offshore. Here was where I read about this.

    @RagingBoehner: Potentially yes. The ban on offshore drilling is specific to the Gulf of Mexico, which is an area which has a lot of hurricanes. They are free to drill in other parts of the ocean. A tanker can get weather forecasts and avoid the storm. An offshore rig is fixed in place, so dangerous climate is a major issue. In fact, the ban started because a rig was hit by a hurricane, and caused a major oil spill.

  100. @InfiniTrent: Commas, please? Eyes…crossing…

    Glad I could be of service. I left the commas out to drive home the point that there are so many zeros you’ll struggle to count them.

    @RagingBoehner: Plus, they pay many more times in taxes what they earn in profit. Not that it’s a bad thing — but the biggest winner in Exxon’s ascendancy is the U.S. Treasury.

    There’s no doubt that they pay significant taxes (according to some guy it’s more than the bottom 50% of individual US taxpayers). I’m not fan of a windfall profits tax because it’s bad and misguided economic policy, so they don’t need to convince me.

    But there is some considerable spin on that page that I’m not even going to try to decode. Mostly because corporate taxes are out of my league (but i’ll guess that foreign income is taxable, so it’s stupid to say “We paid more in taxes than we made in domestic income). And This chart would make Edward Tufte cry.

    Overall, they are not paying more in taxes than they earn in profits. Their income sheet would beg to differ.

  101. Bladefist says:

    @Michael Belisle: I read they pay $3 in taxes for every $1 profit. I’m not going to stand behind that. But I read that somewhere. Obviously you can twist stats to make them say what you want.

    But ya, I mean, the provide oil to all of america. Everyone is their customer. They make money. You prefer they not? They have also had record losses (which is where the subsidies come in)

  102. @Bladefist: I read they pay $3 in taxes for every $1 profit.

    I found a link where the Tax Foundation says that. That’s over a 25-year-period, including a silly windfall profits tax in the early 80s.

    At first glance, I see 2 problems:
    1) They included taxes at the pump, which were paid by you and me, not the industry. I’m not about to let the industry take credit for taxes I paid.
    2) They included royalty payments, which are only taxes if you believe that corporations should be able mine oil in your back yard without paying you a dime.

    In reality, according to Exxon, their effective tax rate was 44% in 2007, which is of course 84¢ of taxes for every $1 of profit.

    They make money. You prefer they not?

    I got no problem with them making money.

  103. Hongfiately says:

    @Michael Belisle: Good exchange here between you and Bladefist.

    84 cents of tax on a dollar of profit sounds pretty high to me. Folks who launch projectile sweat because of record oil company profits don’t consider (or bother with) a couple of things: 1. the oil bidness is boom or bust, and 2. look at the revenues and examine their margins, which are pretty small.

  104. HooFoot says:

    Don’t worry, oil will go back up and the dollar back down after the election is over.

  105. Rolcol says:

    utah still has one of the highest gas prices in the country. It sucks. People have complained to the governor but nothing major has been done.

  106. sam-i-am says:

    I’m going to pretend that you didn’t just say “staycation.”

  107. Grrrrrrr, now with two buns made of bacon. says:

    Good. I’m glad the price of oil is down. The economy is hosed anyway, so it’s not like the slide in oil prices is going to screw things up any more than they already are.

    Besides, now it’ll be interesting to see if everyone finds a different excuse to explain the high cost of goods and the grocery shrink ray.

  108. whatevernever says:

    Prices have dropped by what 3 cents? Wow!

    Wait till next year when gas is at $4.75, it usually seems to go up a full dollar then the year before at the same time of the year.

  109. Bladefist says:

    @Michael Belisle: Ok. I figured there was some nonsense in that $3 thing, that came from a biased person trying to twist stats.

    IMO, 84 cents is extremely high.

  110. mrearly2 says:

    Blaming the speculators–that’s a smokescreen, to distract folks from fingering the real criminals. The shareholders and owners of large oil companies are laughing all the way to the bank. Shareholders, such as the Rockefeller clan, who have controlling interest (if not sole ownership) in ExxonMobil, etc., have been ripping us off, for a long time. The oil companies have avoided building refineries and use every method they can, to expand their profits at our expense. We are dependent upon the oil companies for their product, when there should be little use for petroleum.
    But there’s plenty of oil, and there will be, for a long time.
    And when it comes to taxes, the DuPonts were at the forefront (c. 1913, at least) of ensuring large, greedy corporations and the super-rich (trillionaires) don’t pay, or pay very little.

  111. BillsBurg says:

    OK, just drove from Williamsburg, VA to Nashua, NH for vacation to visit family. Last Friday, it took 8 hours to drive from Williamsburg to Mt Laurel, NJ where we stayed over night and then took another 8 hours on Saturday to drive from there to NH.

    So tell me again, there are less people driving where???!!!???

  112. Hongfiately says:

    @mrearly2: Regulation and cost are a stumbling block to building new refineries.

    Interesting info about a refinery being built in Arizona that’s going to cost around $3 billion:

    [NPR's All Things Considered]
    [Arizona Clean Fuels]

  113. Hongfiately says:

    Interesting phenomenon how posting drops off when they roll to the second page (+100) and age older than a day. It’s a fast-moving online world we live in.

  114. Hongfiately says:

    @BillsBurg: “Counting the cars on the New Jersey Turnpike, they’ve all gone to look for America…”

  115. AD8BC says:

    @kaptainkk: Rape the planet. Drill through the polar bears and the seals! My truck don’t run on alternative fuels. It runs on evil gasoline from evil big oil!

    It’s how I keep my evil carbon footprint to somewhere close to the size of Cincinnati. That, and, oh yeah, my incandescent light bulbs.

  116. SinisterMatt says:

    @kaptainkk:

    I’m not so sure that population control is the answer. It seems we have done alright up until now, and controlling the population in places like China has generated bigger problems than any threat of overpopulation (for example, they now have a preponderance of men and less women because the culture values males more than females). Granted, we haven’t had almost 7 billion people on the planet at any one time, but I would wager that the earth can support much more than it does now. If resources are used responsibly (in the case of food, distributing it to everyone instead of to your political allies, for example), then there should be enough and to spare for everyone.

    In the case of oil and other resources, I say, it’s there, let’s use it. What other natural use is there for the stuff? That doesn’t mean, though, that we should recklessly consume and not plan for the future. Responsible use by everyone would ensure that society’s use for it continues into the future.

    That said, and any discussion of economics aside (not my strong suit), I think that the fact that the price of oil is dropping is fabulous. Maybe it’s shortsighted of me, but anything that saves me money is a Good Thing (TM).

    Cheers!

  117. SinisterMatt says:

    @mrearly2:

    Actually, I read something a little while ago that said that some of the Rockefellers (who hold a significant portion, but not a controlling piece, of Exxon stock) are trying to get Exxon to look more long-term, but the rest of the board of directors are more focused on reaping the windfall profits.

    Cheers!

  118. SinisterMatt says:

    @SinisterMatt:

    That should be the group of Rockefellers who want to focus long term don’t have a controlling piece of stock. Oops! My Bad.

  119. Pro-Pain says:

    I cut my driving down over 50%. Even when gas prices go back down, I don’t plan to increase this anymore. I found out I actually enjoy walking and riding a bike again. I just hope we continue searching for an alternative solution. Screw oil. This past price raping has been a lesson for the masses. It’s time to MOVE ON FROM OIL. We can do it!!!

  120. smartmuffin says:

    @Pro-Pain: You’re right. Oil is so terrible. The masses would have been much better off sticking with horse and buggy carriages, and heating their homes with wood-burning stoves.

  121. PølάrβǽЯ says:

    When will you people learn how to read Ben’s sarcasm?

  122. timsgm1418 says:

    @nursetim: that certainly solved all of my energy problems

  123. timsgm1418 says:

    @mackjaz: aren’t you the same one that said you drive 60 miles to work?

  124. timsgm1418 says:

    I’ve never understood people complaining about any company making a profit, that’s what they are in business to do. Wouldn’t it be like telling individuals you can only have $100 for example in the bank, because not everybody can save more than that? I’ve never met a single person that said they didn’t want to make a profit. It is possible to lose less gas if that is your main goal. Move closer to work, take public transporation, walk to the store. Don’t blame the oil companies because you want to get to work quicker or more comfortably.
    My job is 13 miles from my house, if gas prices were my biggest concern, than I would walk or buy a bike, yeah I’d have to get up pretty damned early to do it, so I won’t, because I value my convenience and comfort over paying more for gas.
    The tire gauage thing? duh, I remember hearing that when I first started driving in the 70′s. And for people that want the speed limit lowered, go ahead and drive 55 yourself (please stay in the right lane though)

  125. chiieddy says:

    @Git Em SteveDave displays attention-grabbing vanity: My parents are in Matawan and would rent a house for a week at a time in Lavalette. We’d run around the beach, go crabbing and go sailing because one of their friends owned a house in town and let us use their Sunfish.