Half-baked opinions, served lukewarm.
I would like to present Reasons 1 through Thirty-Six Point One Three Billion why the U.S. is currently fighting a war in Iraq:
DALLAS (AP) — Exxon Mobil Corp. posted record profits for any U.S. company on Monday — $10.71 billion for the fourth quarter and $36.13 billion for the year — as the world’s biggest publicly traded oil company benefited from high oil and natural-gas prices and solid
I would like to present Reasons 1 through Thirty-Six Point One Three Billion why the U.S. is currently fighting a war in Iraq:
DALLAS (AP) — Exxon Mobil Corp. posted record profits for any U.S. company on Monday — $10.71 billion for the fourth quarter and $36.13 billion for the year — as the world’s biggest publicly traded oil company benefited from high oil and natural-gas prices and solid demand for refined products.
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Like the RIAA
Not to trivialize the war, but this reminds me very much of the RIAA. In the midst of record profits and larger-than-ever profit advancements, they claim music piracy is killing the industry.
The reality was that their gross earnings grew slightly less than the overwhelming amount they expected them to.
Ditto with the oil industry. I have very little sympathy for THEIR plight in the wake of the New Orleans disaster following Hurricane Katrina. It’s obvious they just got right back to business.
—
Matthew P. Barnson
They have a name for this.
It’s called a Wrong Direction fallacy.
So here’s reason number 36,130,000,0001: to maim Bob Woodruff. (I’m suprised the US didn’t just hire a mob enforcer, but going to war makes it look much more like somebody else’s fault, right?)
But No
How dare you write such unpatriotic trash! Now, when the United States is fighting for democracy, freedom, and the American Way, you dare state that we would be in some far-away country over something as petty as a natural resource! Why don’t you stare at a flag and get your priorities in order!
*chuckle*
Meanwhile, while we’re stretched too thin on the battlefront, China is secretly building up a presence in our back yard.
If Bush opens his State of the Union address with the words, “I have been an idiot, and I apologize”, then I might listen. Otherwise, why bother? He’s in the energy industry’s pocket.
My $.02 Weed
Oh yeah
Well, in September, when I was paying $40 to fill up my Camry, all I was thinking about was lining the pockets of Exxon executives. The American Dream in action!
— Ben
I agree in part but explain
I agree with your point that the oil companies are making FAR too much money but I am confused about one thing. Explain to me how fighting in Iraq is a benefit to Exxon Mobil. I just don’t understand.
Inventory management
Here’s a high-level view:
1. Exxon buys oil at $x. 2. The value of the oil in their reserves goes up or down. Since 2003 it has gone up $y. This timing coincides with the war, the increase in instability in Venezuala, the meteoric rise in petroleum demand in India and China, etc. (To keep the war part in perspective, note that the annual output from Iraq is less than the U.K.) 3. When Exxon sells the oil in its inventory, it realizes all of the profits on the appreciation of the inventory ($y-$x). Ergo, the war, with whatever role it played in increasing oil prices, increased Exxon’s profit.
But WAIT! Exxon is continuing to replenish its inventories! Yes folks, it’s buying inventory at high prices–a transaction that does not impact earnings. So, what’s going to happen in a few years when oil prices go back down? Thats right–Exxon’s going to take a bath ($y-$x < 0). Are we going to pay back the windfall taxes then? How do the oil companies make "FAR too much money?" Think for a little while about your life without oil (wood-burning stoves, subsistence farming, etc.). Hmmm, maybe they do create value, which you (and everyone else on this blog) are clearly willing to pay for. There are alternatives, you know. (Biking, moving to a more urban area, etc.) Companies only make “too much money” in an economic sense in the absence of competition, which clearly is not the case in the oil industry.
I understand
I understand the supply/demand, increased value of inventory based on current price part of commodities trade. My question is in what way has the war in Iraq specifically benefitted the oil companies. It is a common accusation that we are at war for oil. I have yet to hear an explanation of that point. As a result, I don’t know what foundation the claim has.
Here is what I know. Despite the fact that Iraq has the second largest oil reserves in the world (about 100 billion barrels) it has only 2000 wells in operation. (compare this to more than one million in Texas alone). This tells me 1) that Iraq has hardly been a major competitor in the market and 2) liberating that oil (you see, so little has been explored because of years of war and post-1991 sanctions) would actually make Iraq a major competitor. Hardly the sort of thing the American oil companies would be clamoring for.
So again, I ask, in what way does going to war in Iraq line the pockets of American oil companies?
Why are we at war?
I don’t know how being in Iraq benefits the oil companies, but I do believe we’re in iraq because of oil, not only the oil in Iraq but in the whole area.
If it’s not oil, then why?
Is it because of terrorism? Saddam was a very non-religious leader who didn’t really get along with Al-Quaida. And what about the other countries where freedom is curtailed and terrorism occurs? We don’t have our forces massively deployed there, and why not? Afghanistan I can understand because it was imediately post-9/11 and Al Quaida was there, but then why Iraq and not Iran and Syria? I think terrorism was much more in those two countries than in Iraq.
Is it because of Israel? Possibly, but I think we want Israel there because Israel is an ally and gives us another friendly presence in this oil-rich area.
Is it because GW’s daddy was called out by Saddam? I surely hope not, but I don’t discount it, either. Maybe the military hawks talked Bush into this war to see how our military would do. I hope this isn’t true because it makes warring for oil seem like a noble cuase in comparison.
I know it’s bad debate ettiquette, but can you see ANOTHER reason why we’re so heavily invested in this war with Iraq? I can’t, that’s why I think we’re there because of oil. If we get a friendly presence established in Iraq, then we have a source for those 100 billion barrels of oil reservces as well as a base of operations close to Iran, Syria, and Asia in general.
THAT’S why I think we’re in Iraq.
As for the record numbers oil companies are pulling in, is that revenue or profit? And who says that oil prices will ever fall? I bet you’ll never see oil priced fall such that the oil companies will take a big hit on their inventories. We’re at this level of gas prices now that we’re never going back.
If it’s simply a case of the oil companies buying low and selling high, then more power to them. But I wonder who determines the price of oil? If somehow the oil companies are complicit in causing those prices to go up, then I cry foul. Why should I suffer at the pump just because of the threat of an oil supply shortage? Raise prices when a shortage actually occurs, not because someone cries wolf.
My $.02 Weed
Oil!!
Yeah… that worked out well.. its cheap now!!
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No Blood For Oil
My guess is that the US intended for the “democratically-elected” government of the new Iraq to be so grateful to the US for their freedom that they would give US oil companies excellent and exclusive deals on their oil.
They didn’t anticipate that the Iraqis would choose to elect an America-hating fundamentalist theocracy.
— Ben
Blood Because Of Oil
Similar to Matt’s opinion, my belief is that the U.S. is at war because of oil.
1. Over the past 50 years, the U.S. has been dependent on Middle East oil for its energy. Although the current % of oil imports from the Middle East to the U.S. is around 20% of total oil imports, it was not always this low of a %. 2. U.S. presence in the Middle East over the past 50 years was because of this dependency on oil. 3. U.S. presence in the Middle East came in the form of an economic presence and a diplomatic presence. The economic presence was manifested by U.S. companies providing capital and a market. Diplomatically, the U.S. allied with Israel. 4. As a result of this presence, people in the Middle East came to hate the U.S. over time. Religious leaders rallied the poor and the unemployed around a ‘street gang’ mindset. A target and a mission was in place. 5. The U.S. did not reduce its dependency on oil nor its presence in the Middle East. As the U.S.-based oil companies grew and became chief stalwarts of the U.S. economy, U.S. reliance on the continued success of these oil companies for jobs and GDP growth equally grew. 6. Foreign profit and surplus from the oil industry were poured into anti-Israel and anti-U.S. actions. The outcomes of this were evident in terrorist attacks that have spanned the last 25 years, the most recent being the Cole bombing, Yemen attacks and 9/11. 7. Because of 9/11 and the realization that the anti-U.S. groups have marshalled capital and military operations, the U.S. invades Iraq and Afghanistan to keep the fight overseas and deter access to domestic soil to continue carrying out further terrorist attacks.
I read yesterday that Exxon Mobil pocketed $121M a day during their record 4th Q profit run. I wonder how much the avg. U.S. soldier earned a day during that same timeframe?
Irony
The irony is that the US gets less than 20% of its oil from the Middle East. So if we were able to decrease our dependence on oil by a fifth (through fuel-efficient vehicles and alternate forms of energy), we could deal politically with the Middle East without having the albatross of economic necessity hanging around our necks.
— Ben
Word of the day
Fungible: being of such a nature that one part or quantity may be replaced by another equal part or quantity in the satisfaction of an obligation <oil, wheat, and lumber are fungible commodities>
So, if oil is fungible, what does that mean economically?
1. Oil pulled out of Texas and oil pulled out of Iraq have the same value. Even if the US only used Texas oil, the cost of that oil (economically) would be the opportunity cost–in this case, the cost on the world market.
2. If we reduce our use of oil, prices will go down around the world. (It’s classic supply and demand.) Getting oil out of the ground in Texas costs a lot more than getting it out in the Middle East, so if world oil prices drop, it’s not worth pulling it out of Texas. Would you seriously insist on paying $40/barrel for Texas oil over $20/barrel for OPEC oil?
3. This isn’t a consequence of fungibility, but it’s important to point out–saying oil prices will never go down flies in face of oil pricing history. An economic downturn will send prices right back down.
Bears
And that brings us to tonight’s word.. Colbert
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“Would you seriously insist
“Would you seriously insist on paying $40/barrel for Texas oil over $20/barrel for OPEC oil?”
If it meant not being beholden to a load of psychopathic extremist theocratic yahoos? HELL YES.
— Ben
I Bet
I bet if we paid $40 a barrell for Texas oil for any appreciable amount of time, OPEC oil would drop to a new all time low.
Unless China picked up our slack.
My $.02 Weed
Matt’s Opinion
I believe that was Ben’s opinion, not mine. I believe that the reasons we are currently busy “keeping the peace”, and having thousands of our soldiers dying there every year, is very very complex and rooted in European, American, and Middle Eastern politics, colonialism, and — dare I say it? — religion.
Oil is tied in, but I think the focus on oil ignores the heart of the disputes in the area. They began with Muslim conquest of the area around 700 AD, and then hostilities resumed in earnest 400 years later, due to mounting hostilities. In 1095CE, Pope Urban called Christianity to arms at Claremont.
This was a result of Muslim campaigns spreading across southern Europe. Unfortunately, although proponents call the religion the “religion of peace”, in fact there is plenty of justification for spreading the word by the sword in Islamic theology. At the time of Pope Urban’s call, Muslims controlled Sicily, had settled large portions of Italy and Spain, and were threatening many areas north of Rome.
The initial Christian raids were against these areas, and enjoyed a great deal of success. Eventually, crusaders pushed as far as “The Holy Land”. Realistically, though, this short-lived success was a footnote in Muslim history, as they retook completely within 200 years. However, the legacy of these wars — the intensified focus of Islam on the jihad — lives with us even today. The more militant factions of Islam considered the loss of Jerusalem to be divine punishment for failing to continue jihad in defense of occupied territories.
Even then, thogh, Europe was considered more of a political enemy than a religious one. Jews and Christians were considered “People of the Book”, and unlike the kaffir (which I, as a non-believer, am considered), they were not allowed to be enslaved or forcefully converted.
The intensified focus on jihad, however, gained prominence in mainstream Muslim theology due to Western colonialism throughout the 19th and early 20th centuries in the area.
I realized while writing this that there is entirely too much history to even briefly gloss over the events. Suffice to say that the establishment of a Jewish nation via immigration from 1897 through 1939, the Declaration of the Establishment of the State of Israel in 1948, subsequent wars to defend the territory, and strong US and European support of Israel throughout the entire time have not made us very popular.
I won’t cast the Muslims as the victims, though. They are responsible for their share of aggression in the area. But the reality of the situation is that religious and political antagonism in the area has been almost unrelenting for a thousand years. Oil is simply the latest catalyst for aggression, and the body count is continuing to escalate on both sides with, IMHO, no end in sight.
I don’t know that there can be an end. Only, at best, a temporary truce in the war of a thousand years.
And it’s all complicated enough to make my head hurt. I’m going to go work on getting my next model airplane flight-ready. That, at least, I can understand.
— Matthew P. Barnson – – – – Thought for the moment: /* now make a new head in the exact same spot */ — Larry Wall in cons.c from the perl source code
There Is An End
There will be an end when the standard of living in the area rises enough to make life worth living.
When you’re young, and you see not much opportunity in your life, while your enemies live like fat kings, it’s possible to be convinced to strap bombs onto yourself and die for your beliefs.
When you’re young, and your future is bright, then throwing your life away in an ideological pursuit loses some luster.
Give the people a sense of a future, and petty conflicts will not seem so important.
If it wasn’t for the fact the Israel is wealthy compared to the other countries in the area, I don’t think there would be such hatred against each other.
Look at France and Germany. Japan and China. France and England. They’ve had some rough and tumble history with lots of wars and aggression. But now that they’re wealthy nations, they keep the aggressions on the fields of sports.
My $.02 Weed
My $.02 Weed
Sam the analyst
Pretty good points, Sam.
I’d take a different stance on GWII though, which I view as an unavoidable result of Desert Storm. Here’s the flow on that:
1. Saddam initiates aggression against Kuwait. 2. Kuwait’s allies defend it, driving out Iraqi forces. 3. Saddam signs a treaty, agreeing to weapon’s inspections, disarmament, etc., ending the war. 4. The US and its allies set up operations in Saudi Arabia to enforce the treaty. 5. Saddam begins flagrantly violating the treaty, essentially voiding its surrender. This is, effectively, an act of war. 6. The US stays in an uneasy standoff. 7. 9/11 happens. Reasons cited by Osama include 1) the US-Israel alliance, 2) the presence of US forces in Saudi Arabia, and 3) the suffering of Iraqi’s under the Oil-for-UN favors program (Saddam not being to blame, apparently.) 8. The US needed to deal with the issues, and that meant withdrawl from the Iraq area or responding to Saddam’s acts of war. 9. Given that North Korea, Iran, Syria, and other “rogue” states are keen to push back on the US to see how much they can gain, to give up and walk away would have sent a dangerous message to enemies around the world.
Are you suggesting there should be a relationship between these two numbers? It sure seems like that what’s you’re doing, but I thought I’d clarify.
I read yesterday that the sun is 91 million miles away. I wonder how far geese fly when they migrate?
Of Course, But
Yes, but I think the reason for that chain of events culminating in U.S. military deployment is because of the preceding oil dependency on that region. The same international aggression that kicked off that sequence (GWI) is similar to conflict in other parts of the world — Rwanda, Sudan, e.g. — but the U.S. doesn’t commit its military because there’s no oil involved.
I read yesterday that Exxon Mobil pocketed $121M a day during their record 4th Q profit run. I wonder how much the avg. U.S. soldier fighting in Iraq earned a day during that same timeframe?
Converging
Actually Rwanda and Sudan are civil conflicts, not wars between sovereign states.
If Kuwait didn’t have oil, would we be their ally? Unfortunately, this is a hypothesis contrary to fact. We have lots of allies for lots of different reasons, all of which are deemed to be in our national interest. Securing resources is clearly in our national interest (I guess there can be disagreement on that), so we make the appropriate alliances. But if China attacked Japan, which has no oil, you can be sure we would retaliate in kind. I can hear the cries now: “No blood for Playstations!” What do we get from Israel? It’s a grand chess game, Sam, and if you can’t think more than one move ahead, you lose. Hence our perpetual involvement in European wars.
I read yesterday that the Sun is 91 million miles away. I wonder how far geese fly on sunny days when they migrate?
(Looks like a guilt by association play, to me, combined with appeal to emotion.)
When Iraq attacked Kuwait
When Iraq attacked Kuwait, I had no problem with the US and the coalition bringing the pain upon Iraq.
When Iraq, uhm, what exactly did Iraq do this time? When Iraq had weapons of mass destruction…wait, uhm, no. When Iraq built nuclear waeapons, oops, no proof of that. When Iraq looked at GW funny, then let’s throw soldiers into the fray.
If China attacked any country, then by all means we need to jump into the mix to keep imperialism at bay.
Israel is a pro-US presence in the Middle East. Since there’s a lot o’ oil there, we kinda like having that friend there.
Granted, we goofed when we gave that land to form Israel back in the day. We should have given them land somewhere not in the middle of their enemies. That was a big boo-boo.
Again, my thing is why have the oil prices risen so much? Is it because it’s costing that much more to get the gas to my tank, or because factors are raising prices outside of cost. If Exxon is somehow involved in the price increases, then they should be shot. if they’re just lucky enough to have bought low and sold high, kudos to them.
What is the airspeed velocity of an unladen swallow?
My $.02 Weed
See above…
As I mentioned above, what Iraq did “this time” was violate their peace treaty, restarting the war. The US had the option to walk away anyway, but not without consequences (WMD proliferation, North Korea/Iran relations, etc.). And, as anyone who looks past the mainstream press can tell you, a lot of people (including Iraqi army officers) still believe he had WMD.
Exxon makes a decent profit (11% last quarter); the oil industry average is around 7.7%. Compare that to Microsoft some time. Oil companies do not form an oligopsony. Quite to the contrary, it is the producers who push the price around through a nice cartel you know well as OPEC.
Since 2003, China has increased imports 400%. When a war breaks out, countries start hording, increasing demand. When Hugo Chavez rallies the prolitariat, people get antsy, and start hording. India is also growing rapidly. This is the reason even OPEC cannot keep the barrel prices where they want them. (Too high = investments in alternative fuels = bad for OPEC)
Funny Timing
I grant you Saddam was disobeying his peace accord, but why invade him when we’re heavily deployed in Afghanistan? Seems the timing was bad from a logistical point of view while the political timing was good to ride the 0/11 tide.
My $.02 Weed
Another direction
This takes the question in a different direction entirely. We can argue the strategic decisions till we’re blue in the face and still hold valid differences of opinion. I’m more interested in helping people realize the US had the moral perogative to retaliate once Saddam resumed the war. I honestly don’t know what timing would have been ideal, but I do feel pretty confident that waiting for France and Russia to decide to attack their sugar-daddy would have been too long…
I have no basis for judging if we’re overextended. We still have a lot of soldiers in the US and other areas, so it seems like we’re shy of 100% utilization. But if people use “overextended” to mean we couldn’t handle an unanticipated third conflict, that could be true. It’s obviously much too complicated for the media to really report (e.g. plenty of Predators, short on the C-130’s, plenty of MRE’s, short on ammunition, etc.) , so I’m dubious of any single-word assessments.
Not According To The State
http://fpc.state.gov/fpc/12492.htm
That would be continued conflict carried across soverign states.
Reasons #1 through Thirty Six Point One Three Billion that the U.S. was not engaged in leading military operations in Africa when millions of people were dying..no oil.
I read yesterday that Exxon Mobil pocketed $121M a day during their record 4th Q profit run. I wonder how much the avg. U.S. soldier fighting in Iraq earned a day during that same timeframe?
Is it just me?
Is it just me, or is this phrase giving deja vu all around?
—
Matthew P. Barnson
Twisted wars
Well, given my point on what it means to be an ally (for whatever reason), I’m not sure this discussion is still relevant, but the Rwandan genocide (which is what I presume you believe we would have stopped if Rwanda had an Eiffel Tower or made Playstations) occured during a civil conflict. DRC got involved when the Hutu murderers fled there and Rwanda wanted them back; it became an international war after the horrific slaughter was done. I see no reason for the US to defend DRC in this case–they were acting much as Afghanistan did in 2001, harboring organized criminals against humanity. I see no inconsistencies with Middle East policy, once you analyze root causes of the different conflicts.
I read yesterday that Bill Gates is worth $46.6 billion dollars. I wonder how fat the average American worker is?
Too fat, on average. That
Too fat, on average. 😛 That was easy. Give me another one.
Much Like
Much like the U.S. got involved in Iraq ‘after’ Saddam had killed and tortured his own people — one of the main reasons for entering Iraq, as touted by the Bush administration. I’m glad you still don’t see the difference, and that you’re so interesting in helping us all realize that the U.S. had to invade Iraq for moral prerogative reasons. It’s called streams of black oil pouring into the pockets of the U.S. economy.
Real reasons, fake reasons
Bush has to say stuff like that to appease leftists, who tend to be a little light on the logical thinking side ;). Only appeals to emotion will work with some people.
You’ll remember that he used WMD on his own people. Thus it was presented as evidence that he had had WMD, either still had them or was trying to get them, and was happy to use them. I don’t remember the Kurds being a focus of the PR per se (although they were certainly included as evidence of the Bathist governments lack of moral sovereignty).
As I recall
As I recall, Bush’s reasonings for invading Iraq were that they A) had WMDs and B) were an Axis if Evil state who supported terrorism. Since this was on the heels of 9/11, you would have thought that it was the terrorists who perpetrated the 9/11 attacks, but it’s pretty well known Saddam couldn’t have cared less about Islamic terrorist groups.
I think when we tore Afghanistan apart, we sent a message we would be messed with. I personally thnk we could have messed with Iraq’s WMD capabilities without deploying a sizable chunk of the armed forces over there. That’s what Special Forces guys live for. I posted a link earlier that showed we ARE over deployed. North Korea thumbed their nose at us but we stayed out of there. Why?
Maybe it’s because there’s more oil in Iraq than North Korea? We probably have had “moral right” to invade a lot of countries in our history, but we pick Iraq when we did? Smack in the middle of the Islamic world which doesn’t care for us? When we’re already heavily deployed in Afghanistan? When the world isn’t behind us? Why?
I pick oil. Logically you can make 100 different cases, but intuition, not emotion, leads me there.
My $.02 Weed
Why we invaded Iraq
I’d like to take this thread in a different direction, lest we begin to believe that the war in Iraq is ONLY about oil. Surely, that’s a motivating factor, but that’s not why we’re there.
The war in Iraq has been in the works since at least 1997, with the formation of the Project for the New American Century, the neo-conservative “educational organization” which includes such prominent neocons as Dick Cheney, Paul Wolfowitz, Donald Rumsfeld, Eliot Abrams, and Jeb Bush. As early as 1998, members of the PNAC lobbied President Clinton to “finish the job” in Iraq. In September 2000 (a full year before 9/11), PNAC released a paper entitled “Rebuilding America’s Defenses”, which detailed the following strategy for the Middle East:
When 9/11 happened, the neocons saw the perfect excuse to put their plan into action, and this is the exact plan they have followed. But of course, it’s not working. The war in Iraq was not nearly as easy as they suspected. The Muslim world did not stand idly by and let Hussein fall. And, of course, “democracy” in the Middle East has achieved nothing but stronger Muslim theocracies. But of course, no one in this administration is willing to admit that they screwed up.
Just sayin’.
— Ben
Huh
While I admit I skimmed, I didn’t see any such strategy in that document. It seemed more a document to state how to transform the military to be ready for the 21st century. They seemed more worries about China than anyone else, deservedly so. I welcome a page number for that exact strategy.
The document is definitely pro-military, and I was distrubed by the statement that we need to take control of space.
And Oil IS the reason we’re there, because why would we have a strategy for the Middle East if there wasn’t oil there. Is there an African strategy? No, because they haven’t found much oil in Africa.
My $.02 Weed
To be fair, and this is
To be fair, and this is coming from a Democrat, mind you, but so far no *African* hyper-religious regimes have spawned worldwide terrorist organizations that have launched succesful attacks against our home soil. So that could potentially be a teensy-weensy little reason why we’re more interested in the Middle East than Africa right now.
Not saying it isn’t self-centered. I just don’t think it always has to do with oil.
Still Killing For Oil
DALLAS (AP) — Exxon Mobil Corp., the world’s largest oil company, reported Thursday the fifth highest quarterly profit for any public company in history, posting gains from higher oil prices that were likely to stoke the furor over outsized oil company earnings.
Will We Ever Know
I don’t blame the oil companies for profitting on our dependence, as long as it’s fair. That’s good business strategy. The current administration’s decision to invade Iraq for oil instead of pursuing other energy sources was a bad, bad decision.
It would quite the evil, diabolical, yet brilliant conspiracy theory to think that the military heads and the oil companies sat down after 9/11 and decided to invade the Middle East.
Short term, the military gets to have a battleground to test its new toys and theories. The oil companies profit from the instability causing higher prices. Long term, the military has a foothold in the oil rich Middle East, which is good for the oil companies as well. You just have to be sure the free market doesn’t pull and end-around and come out with some technology to make oil power obsolete.
You could get real conspiracy theory and state that the oil companies are sitting on the technology already.
Could W be that smart, or surrounded by those that are that smart?
Hmmm My $.02 Weed
Tin foil hat
Well, this isn’t exactly what you said, but the auto industry has had technology to greatly increase gas mileage since the 1970s, but they made an economic decision that implementing such technology would cut into their profits too much, and because the government hasn’t seriously mandated higher gas mileage in 25 years, they’ve been more than happy to sit on it.
It wouldn’t surprise me if the oil industry had similar technology that they chose not to use because it would eat into their profits.
— Ben
Theory Or Fact
I know the current chapter is “Conspiracy Theories”, but is there documentation of this?
I fail to see how coming out with a 70mpg car would hurt profits, especially right now. Given the current American automaker’s financial situations, they’d be doing anything and everything possible to generate sales.
Oil companies, on the other hand, I can understand the conspiracy theories because they’d string us out on oil as long as they can, and then sell us the new technology.
Unless!!!! The car companies are secretly controlled by the oil companies! If it weren’t for Hyundai, I’d buy it.
My $.02 Weed
70MPG…
I drive the automatic transmission version of a car which, in a manual transmission, is capable of well in excess of 70MPG. 150MPG would probably be a benchmark to throw out there that’s not currently anywhere on the map (best we have is a VW diesel rated for 110MPG).
—
Matthew P. Barnson
Sooo….
So, you have a 70 mpg car, right? How’s it selling for Honda?
My $.02 Weed
70MPG? Not quite…
Mine’s the CVT (Continuously Variable Transmission, or automatic-type), so I get about 55-65MPG, depending on time of year. The manual transmission Insight is rated at 70MPG, and I have several acquaintances with lifetime mileages in excess of 80MPG.
The car itself sold like crap the first few years. About 10,000 units in 2000, half that in 2001, then around 1200-3000 every year since. Apparently it’s picked up alot in 2005/2006, though, due to rising gas prices.
Really just a commuter car, though. Two-seater. I think Honda only keeps it in the product lineup in order to accurately claim that they have the highest MPG gasoline-powered vehicle in mass production in the US.
—
Matthew P. Barnson
Lazy
I’m actually too lazy to look up the documentation. 🙂 So you can choose to believe it or not.
(OK, I take that back – a quick search of Wikipedia shows that they made a hybrid version of the 1972 Buick Skylark, but that the program was killed by the EPA in 1976.)
The rationale, if I remember correctly, was that the cost of manufacturing the fancier kind of engine was greater than the estimated increase in sales that would result.
For the record, I don’t think that the car companies are controlled by the oil companies, but I do think that there’s a certain amount of “good ol’ boy” networking in big industries. They all use the same lobbyists, etc., so they have this “you scratch me, i’ll scratch you” mentality.
— Ben
Profits are a 2-way street
Perhaps you should have written “the auto industry has had technology to greatly increase gas mileage since the 1970s, but consumers made an economic decision that purchasing such technology would cut into their $3-a-cup coffee habit too much.”
Companies exist to maximize profits, which are then returned to the owners. If the owners (shareholders) want to do something philanthropic (such as subsidize hybrids), then they can do that with those profits on their own. But it’s certainly not the company’s mandate to do so (e.g. the Gates Foundation, as opposed to a Microsoft Charity Department). If consumers wanted a car with great mileage, and were willing to pay a sufficient price, car companies would sell them. It’s that simple. In the late 70’s, people certainly seemed to want more efficient cars, but not at higher prices. And when GM/F/C dropped the ball on this, the Japanese came in with a vengence.
But Why
But why worry about gas mileage when gas is less than a dollar? If I’m not mistaken, the only thing pushing gas mileage in the 70s and 80s was the gov’ts requirements, especially California.
All I’m saying is that IF the car companies have been sitting on super-efficient engines, and they’re not breaking them out now with these gas prices, then they’re idiots.
I’d expect the hybrid cars to explode in the suburb-to-city commuter market. However, there are some pockets of the country where hybrids will take a LONG time to come in. I have in-laws who are yet to fully embrace fuel-injection. Like any social change (and driving qualifies, I believe), it will take a generation or two for the driving mentality to change.
My $.02 Weed
And how much was a soda?
As I’m sure you know, inflation matters.
As this chart (one of many returned by Google) illustrates, gas was actually pretty expensive in the 1979-81 time frame. (And remember, the linked chart shows annual average prices, not summer highs!)
It’s just something to keep in mind next time they talk about “record high” oil prices, which are still about $15 less than the real record. (Better yet, one can use such mistaken thinking to support his/her own political ends: “George W. Bush got more votes than George Washington and Abraham Lincoln combined!”)
Image and Style
My opinion is that the oil for which we’re currently killing people in Iraq goes far beyond the consumer gas pump. That oil is critical for mass transit, transportation, logistics, etc. Besides, you think lower gas prices and better gas milesage is the primary factor when buying cars in this country? I think gas mileage has little to do with the auto purchase decision.
Those tiny little city cars in Europe have been around forever — how come we don’t have them on the streets in hordes here? This is an auto industry that has built itself on status-conscious drivers. You think the marketers and designers at large auto companies are keen on building little, low-powered flimsy steel boxes? No. We need large steel machines that have enough power to run our talking GPS systems. Besides, us Big & Fatties don’t like stuffing ourselves into a compact. This is why I think the auto manufacturers are not heavily linked to oil companies.
Now, please let me get back to seeing how many people we’ve killed today for the (liquid) black market.
Maybe before
When gas was $1.00 a gallon, who wanted a small car? Get one with everything.
When gas was $2.00 a gallon, maybe I don’t need that SUV.
When gas is a consistent $3.00 a gallon, I bet mileage will start to enter the equation. I know my father-in-law factored gas prices into his decision to retire at 62 because it was starting to take almost %50 of his pay for gas when he was driving 2 hours to a jobsite.
Personally, we bought a Hyundai Accent we’ve nicknamed “Putt-Putt” as a daily driver because the F-150 wasn’t cutting it on mileage.
So I think style and image will start to give way to fuel economy, or at least become a significant factor in the purchase decision.
My $.02 Weed
The Iraqis Believe It Too
The Iraqis seem to believe in Reason 1 through Thirty-Six Billion as well. I am reading the results of an Iraqi public opinion survey sponsored by the National Science Foundation asking Iraqis for “the three main reasons for the U.S. invation of Iraq.”
2% chose “to bring democracy to Iraq.” Guess hardly anyone over there bought into the ridiculous line of crap from President Bush that the U.S. invaded primarily to bring democracy and peace to their land.
http://tinyurl.com/kduko