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Automotive News & Views How does gas at $4 and higher impact you?
2183 messages, Last post on Nov 21, 2009 at 5:13 PM
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Replying to: kdhspyder (Sep 23, 2008 10:34 am) The ability to buy more oil and gasoline is determined by personal income. Despite growth of the Asian economies and growth of a middle-class, you are missing the fact that the developing world still does not have the individual purchasing power of the typical person in the U.S. The typical upper-middle income person in China may make $10K/year. If they now spend $1,500/year now on oil and gasoline (15% of income) whereas in the U.S. say $40K income - this is 3.75%. Now if gasoline goes up 10% each year ... do the math ... the person in China could not devote 25%, 35% ... of his pay just to gasoline. So the Chinese demand will wither with increasing cost very quickly. And the Chinese government or any other government can not subsidize high volumes. The average Euro. or U.S. citizen certainly is les affected by oil/gasoline increases than the people of the poorer nations of the world. |
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Replying to: kernick (Sep 23, 2008 1:07 pm) The oil demand in China will go nowhere if not UP.
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Replying to: larsb (Sep 23, 2008 10:19 am) I do agree with you. I think that the money will be the least problem with building power lines, gas lines, wind farms and solar arrays. It will be environmentalist blocking right of ways, NIMBYS blocking wind and solar, and greenies blocking progress of any kind. I cannot list all the obstructors to a power line that is needed to get from the solar arrays that are planned to the people that need the electricity. Many are the same people screaming for alternative energy and EVs. |
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Replying to: larsb (Sep 23, 2008 1:38 pm) Notice how quickly China and India dropped their subsidies on gas when oil shot to $140 per barrel. When our economy started to tank the World markets followed. Even Russia with its surplus of oil went into free fall. I have to agree with Kernick The World market will only support a certain level of oil pricing. Notice how a few speculators tried to get oil going up yesterday? Today it dropped back down $13. It will go back below $100. How far is hard to tell. |
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Replying to: kernick (Sep 23, 2008 1:07 pm) In the US there are 305 million people.. excluding the very young, the very old, the infirm and the prisoners ( !!!! ) there are about 265 million potential drivers. In the US there are about 265 million vehicles on the road. One vehicle for One driver here. We are a 'mature' market. In China there are 1.5 Billion people. Using about the same percentages there are potentially 1.3 Billion drivers. However relatively it has far fewer vehicles on the road at present. In fact there is only 1 vehicle for every 7 potential drivers. In India there are about 1.0 Billion people but they are much much farther behind with only about 1 vehicle for every 17 potential drivers. In both places the governments subsidize(d) the price of fuel to make it more affordable to the growing middle class. In both places with a premium on land space it is not the home or individual dwelling that's a status symbol of the newly affluent....it's a vehicle. The growth in demand and the increase in fuel usage may be in vehicles like the Tata Nano but the sheer number of drivers in these two countries will draw more and more resources there. Then there's Indonesia.....
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Replying to: kdhspyder (Sep 23, 2008 10:34 am) " Or... you can just plan that prices will fall...and hope. I prefer to plan for the worst and benefit when it doesn't occur. Wanna bet against $4.50 - $5.00 gas next spring? " I'll be taking that bet sir, please write it down. Long term I see oil rising again but in the short term, oil doth love it's extremes. We may see $75 before we see $150. Congratulation on the purchase of your hybrid. You, the hyper miler were willing to convert at a far lower price than $4/gal.but global slowdown does not portend well for your peak oil hypothesis. Evident economics in place contradict it, The Goldman Sachs analyst is in agreement with you, but many hedge funds ,supposedly brilliant, contributed to yesterdays 30% intra day move on an expiring contract. Chin-India on sir, But Indonesia? Isn't the exchange built on a dirt road with burros moving items of commerce? And doesn't Indonesia possess a gnp less the poorest zipcode in Cleveland ? The Asian contagion of '97 was based on fears of weakness in the Thai Baht. Lmao, Or so to speak. Putting the kart back in Jakarta. An alternate point of view.
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Replying to: larsb (Sep 23, 2008 10:19 am) This is a tough nut. Pickins' ideas are very appealing, and he's right that the drill here drill now thingy is not enough to really provide meaningful change. Finding the political and social will, and the room in real daily life budgets, to pull this off is no easy task. |
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Replying to: kdhspyder (Sep 23, 2008 4:40 pm) $4/gal gas to us is relatively $16/gal to them. If gas goes up $0.50/gal to $4.50, it has 4X the effect on developing countries. Lower income people and countries are forced to "blink", and demand decreases. It is the same thing in this country right now. Lower income people either didn't have money for gas, or they're skimping on other things to buy gas, while people who are better-off maybe don't really care about the price now. It all comes down to personal income. And China and India and such have much larger populations but their economy isn't as large as the U.S. So on a per capita basis U.S. citizens will be able to afford gas/oil long after people making $5,000 - $10,000/ year "blink".
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Replying to: kernick (Sep 24, 2008 9:18 am) |
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Replying to: 1stpik (Sep 22, 2008 5:56 pm) It's worse than that. Back in the late 70's we looked into the possibility of going off grid with our own wind system. The cost was staggering. Worse though were the government roadblocks. A structure high enough to gather worthwhile wind was taller than allowed by zoning laws. It would have required about 100K in studies, permits and variances to get approval. In effect the local government talked a good game about conservation but when put to the test told us to "drop dead". I doubt things have changed much in the last 30 years.
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