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Environmentalism ad absurdum

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Spano

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I couldn't believe my eyes when I saw this story and read the actual details. The BP Prudhoe Bay oil field is being shut down for a period of several days, cutting 8% of U.S. crude production and at least partly causing a $1 rise in world oil prices. What could cause BP to take this action? Why, an "oil spill", of course. But let's read what this spill consists of:

BP took action after discovering severe corrosion and a spill, estimated at four to five barrels, from a Prudhoe Bay oil transit line. The oil company said the spill had been contained and a clean-up effort was under way.

That 200 gallons of oil on the ground at an oil field in the middle of nowhere should require "containment" and a "clean-up effort" is absurd enough, let alone shutting down the entire field. What's worse is the company's statement:

"We regret that it is necessary to take this action, and we apologise to the nation and the state of Alaska for the adverse impacts it will cause," Bob Malone, the BP America chairman and president, said.

"We will not resume operation of the field until we and government regulators are satisfied it can be operated safely and pose no threat to the environment."

These are the kind of statements that make me feel like the destruction caused to industry by environmentalism is well-deserved. The man is practically asking for more.

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The statements are really a way for BP to spin a problem with their business into a public image plus. Basically, they've got a lot of wear on their line and the small loss they experienced is a wee bit like a small crack in the pipes of your house. The problem isn't the crack and tiny amount of water per se, but the rotten pipes lining your house. The leak is just a symptom of a major problem. If you don't fix or replace the rusting rotting pipes in your walls, you are going to have to spend a great deal more money than you would have otherwise.

BP is playing into the hands of the envrironmental movement by lying prostrate in front of a Gaia totem pole and begging forgvieness. That is ultimately self destructive and pretty pathetic in my eyes. They did admit that they are going to have to replace 70+% of the line. You don't do that unless there is a seriously ugly problem with it. No business in their right mind would do that. It's going to take months probably to fix the problem.

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The statements are really a way for BP to spin a problem with their business into a public image plus. Basically, they've got a lot of wear on their line and the small loss they experienced is a wee bit like a small crack in the pipes of your house. The problem isn't the crack and tiny amount of water per se, but the rotten pipes lining your house. The leak is just a symptom of a major problem. If you don't fix or replace the rusting rotting pipes in your walls, you are going to have to spend a great deal more money than you would have otherwise.

BP is playing into the hands of the envrironmental movement by lying prostrate in front of a Gaia totem pole and begging forgvieness. That is ultimately self destructive and pretty pathetic in my eyes. They did admit that they are going to have to replace 70+% of the line. You don't do that unless there is a seriously ugly problem with it. No business in their right mind would do that. It's going to take months probably to fix the problem.

BP's media campaigns of late leave little doubt the amount of pandering to the green-freaks they are willing to engage in for the sake of public relations. I'm surprised that they didn't pull some sort of stunt like this sooner, considering all of the maggot infested hippies they've been using in their comercials. If BP goes belly up, here is one person who will not lose a second's sleep over it.

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I'm surprised that they didn't pull some sort of stunt like this sooner, considering all of the maggot infested hippies they've been using in their comercials.

Great way of putting that!

I hate those friggin commercials where they pucker up and do some major hippie *ss-kissing.

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I agree with everyone. It's a case of a good company with bad management. The lack of maintanance on their bread and butter pipeline is pretty indicative of how the rest of the company is run. From personal experience knowing people that have worked for them, they give lip service to things like maintanance of their employees and their equipment.

Of course, it's catching up with them slowly. Their tuckus kissing commercials really rile me. If they'd only stick 1/2 of that money back into improving their human and natural resources, they'd be better off.

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I will hold my judgement. Though it makes good sense for BP to artificially contract supply, especially after they have collected windfall revenue as a result of panic buying based upon world events. (interesting that last week saw a slack in demand).

But a crude oil pipeline is a special animal. The oil fractionates as it moves down the open tube, just like a liquid chromatograph. You get tar build up in sections that could mask significant issues.

They pump an insulator (oil) through conductive pipes, this is the recipe for a battery. There is a HUGE galvanic potential. And thus a great risk for rapid and extensive galvanic corrosion.

So if you see a small corrosion issue, its good bet that

A. The problem is bigger than what you see and

B. The other areas are covered in gunk.

Any good industrialist knows that a stitch in time saves nine. Why wait for a larger spill to take corrective action? :)

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There is no good reason for BP to restrict supply today.

When I see their Public Relations practices, I don't know if reason is high on BP's list of priorities, emotions are enjoying a fairly stable tyranny over there. Having said that, in the short-term there has been some gains amongst some in this field, but long term this will result in a drop in demand as people start consolidating their petroleum needs. This current ebb and flow of the oil market reeks of Pragmatism, just like our current political scene.

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Though it makes good sense for BP to artificially contract supply,

Zzz ZZZZZzzzzzz Oh yeah ! Hooked a live one! :D

There are lots of good reasons to constrain supply. For BP, they drive the price up, and make greater profit on less product. That’s the way to run a business. For the market as a whole its good, because increased profits provide incentive for investment into expanding production capacity. Ultimately this sort term “gouging” is good for the consumer since it will broaden future supply.

Further the increased prices for oil encourage, exploration for and, implementation of alternatives. And this is the direction we should be going. Oil is too valuable to burn. We should be pushing hard for renewable sources, and reduction of consumption. What better stimulation can we have than necessity?

And how about those Sharia law crazies? Don’t they gain their economic influence from oil? Wouldn’t it be nice to put them out of business? What better way than to reduce the consumption of their products?

Edited by Musashi
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There could be situations where it would profit a company to sell less of a product than it can. However, in this particular example:

  • crude oil,
  • the current demand/supply situation, and
  • the best estimates of the future (inter alia, as reflected in the price of oil-futures)

BP would lose by restricting supply. It is in BP's interest, and in the interest of other producers to pump as much oil as they can to fill the little remaining refining capacity that exists. There is a high probability that the price they can charge today is significantly higher than the price that will be present a decade from now.

As for the environmentalism points, and the issue of whether resources are limited, take a look at the following threads:

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And how about those Sharia law crazies? Don’t they gain their economic influence from oil? Wouldn’t it be nice to put them out of business? What better way than to reduce the consumption of their products?

How about we drill for more of the product here at home and build a few dozen more refineries. We can put the towel-head cartels out of business without all the sandal wearing, reefer smoking, tree hugging nonsense.

P.S. - Am I the only one who sees Oil companies losing out in the long-term by virtue of an economic slow down caused by a shortage of the fuel to run the engine of this country. Granted, causing Atlas to Shrug visive the Oil market might be a good method of vengence against the statists, but let's build Galt's Gulch before we do it please.

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(That's not a word; what you're trying to say is "vis-à-vis.")

dictionary.com

Actually it is a word, though it is out of place here. I have actually never really used the word that much in print so my sounding it out may be a bit off. Credit that to our brilliant public education system, I've learned more about proper spelling after graduating high school than I did while in school.

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How about we drill for more of the product here at home and build a few dozen more refineries. We can put the towel-head cartels out of business without all the sandal wearing, reefer smoking, tree hugging nonsense.

I know in other threads, folks have suggested that oil supply will go on forever, but it won’t. It is a finite resource, one that has been drawn down in Pennsylvania, and Texas, and California, and yes even Alaska. The domestic options for oil are limited in the US. Our best opportunities lay in gains in efficiency.

P.S. - Am I the only one who sees Oil companies losing out in the long-term by virtue of an economic slow down caused by a shortage of the fuel to run the engine of this country. Granted, causing Atlas to Shrug visive the Oil market might be a good method of vengence against the statists, but let's build Galt's Gulch before we do it please.

Oh no. I see the opposite. The net margins should increase for oil companies, as you’ll have more buyers chasing a smaller supply. The only fair solution to a shortage is the free market. If you want my scarce oil, pay me more than those other guys and it is yours. The greatest need will always rise to the surface as this situation foments. And the big winner is the seller.

BTW this type of situation happens all the time in our Eve universe. At Taggart Transdimensional we get to explore market volatility on a routine basis. Come try the game if this sort of stuff intrigues you.

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... this type of situation happens all the time in our Eve universe. At Taggart Transdimensional we get to explore market volatility on a routine basis. Come try the game if this sort of stuff intrigues you.
I have nothing against games, but games are not reality. Beware the false reality programmed into any game.
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I know in other threads, folks have suggested that oil supply will go on forever, but it won’t. It is a finite resource, one that has been drawn down in Pennsylvania, and Texas, and California, and yes even Alaska. The domestic options for oil are limited in the US. Our best opportunities lay in gains in efficiency.
In the long-term this is a neccessity, but let's tackle your arguement regarding a finite resource. The arguement that resources are finite is not a valid arguement in itself, finite can define any amount between zero and infinite (I concur with the Objectivists that zero does not exist, but disagree with them regarding the existence of the other concept in metaphysics). Give me some hard numbers on how much oil, in gallons, that you think we have left, and then we can talk facts. Furthermore, from what I've read, off-shore oil exploration has alot of promise, of course we'd probably have to either deport or kill some enivornmentalists before we could pull it off. The earth is bleeding oil from the crust under the ocean, it's ready for the taking, and as it's numbers are not yet defined the arguement that it is finite is meaningless.

P.S. - How does efficiency help if eventually we will still end up with no oil? It sounds to me like you are trading one allegedly losing situation with one that is equally as flawed, at least by the reasoning I've seen here.

Oh no. I see the opposite. The net margins should increase for oil companies, as you’ll have more buyers chasing a smaller supply. The only fair solution to a shortage is the free market. If you want my scarce oil, pay me more than those other guys and it is yours. The greatest need will always rise to the surface as this situation foments. And the big winner is the seller.

There is no disagreement regarding the free market (however, we do not live in a free market so until we do I think my senario is more likely, especially if the Socialist Dems. get hold of Congress and pass some stupid windfall tax on oil profits) , but I think we are seeing two separate realities here, and one of them has to be false. I assert that Alaska, Texas, Pennsylvania, and all the other places you mention are not the only sources of oil at our domestic disposal. Leave us not forget research into more efficient ways to extract oil from shale in Colarado and Utah, and this would represent more an increase in supply and less of that in terms of fuel efficiency. I say again, we can correct shortages without the round sunglasses and Jesus beards.

The one who sells high loses to the person with the mind to get more product out at a cheaper price. Such geniuses as Rockefeller, Carnegie and Dow come to mind when we deal in issues of price trends in the free market. You can continue to open Adam Smith if you wish to mold your predictions on the outcome of the free market, I'll stick with Bastiat and Von Mises.

BTW this type of situation happens all the time in our Eve universe. At Taggart Transdimensional we get to explore market volatility on a routine basis. Come try the game if this sort of stuff intrigues you.

I may take you up on this, although I do concur with softwareNerd that this is a synthetic take on reality, one that is highly subject to error vis-a-vis *winks at Inspector* human bias in the parameters that the game is defined within.

Edited by dark_unicorn
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P.S. - How does efficiency help if eventually we will still end up with no oil? It sounds to me like you are trading one allegedly losing situation with one that is equally as flawed, at least by the reasoning I've seen here.
We write about solutions to market shortages. You’ve pointed out non-traditional sources, and new off shore sources. My point was that IMO the most fertile fields were in improving efficiency.

You asked for specific amounts, alas I have none for you. The major oil companies can’t even figure out how much oil they have. Just a few years ago one major company realized that they had overstated their reserves by a huge percentage. My best answer for you is “we will know we are out of oil when we run out.” But I would suggest that if the hand full of crazies that currently provide oil hold as much power as they do… running out can’t be far off.

I may take you up on this(Musashi added: Eve Online), although I do concur with softwareNerd that this is a synthetic take on reality, one that is highly subject to error vis-a-vis *winks at Inspector* human bias in the parameters that the game is defined within.
Agreed it is just a game, but their markets do have thousands of commodities, that hundreds of thousands of players trade. We believe there are price supports put in by the game makers on a few commodities. It is still an interesting sandbox to play in.

Obviously you have a deep education in economics. You could dominate.

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