The real pros get theirs comped by the companies who use them in ads.
Mark - question for you re: Oil Biz - why are the oil companies making record profits instead of allowing the prices at the pump to be a bit more reasonable? I'm not picking on you but it irks me any time I hear the oil companies making record setting profits while the poor people who need to drive to work are making way less. Oh, and to keep it on WDW, think about all those people who can't afford to go anymore because they can't pay the cost of the gas to drive there.
That's a good question and I get it a lot when I venture out of oil country. Oil companies are not much different than other companies. We are in business to make our shareholders money. We do that by finding, producing, and selling oil and gas. When we have some to sell, we look at all the possible buyers and sell it to the one willing to pay the most money for it. Our customers look at all the possible sellers and buy it from the one offering the lowest price. It's that combination that determines what the price will be.
If you are willing to pay me $105 / barrel, GDad is willing to pay me $100 / barrel, and 0bli0 was willing to pay me $90 / barrel, I'm pretty much obligated to sell it to you. If I don't, I'm giving away value that my shareholders own. They'll fire me and probably sue me as well. Even if I was running my own private company, why would I sell it for less than the most I could get? If I offered to sell it for $90 / barrel, which person would I sell it to? If I sold it to 0bli0, who valued it at $90 / barrel, wouldn't it make sense for him to turn around and sell it to you for $105 / barrel and keep the difference?
Back in the 1970s, we decided as a nation that gas prices shouldn't get too high or people wouldn't be able to afford it. We set a price ceiling on gasoline. The problem was that there were too many people willing to buy at that artificially low price and not enough people willing to supply at that price. The result, as any economist could have predicted, was that we had gas shortages. I remember waiting for hours in line to get gasoline.
Even worse than the shortages the artificially low prices caused, was the impact on getting new supplies. Because we were limited in how much we could sell the oil for, we couldn't afford to invest as much in finding and producing more of it. The high prices we have now have spurred an incredible amount of activity in finding and producing more oil. In the longer run, that increases the supply and keeps prices from going still higher. If the future is anything like the past, we will eventually increase supply beyond the current demand and prices will come down again. Hopefully for me, they won't collapse like they have done in the past.
There are a lot of reasons why gas prices have gone so high recently. At the heart of the matter is the simple fact that there is more demand for oil at a lower price than there is supply to meet that demand. Demand has been increasing as people around the world are using more gas. More people around the world are buying cars and the cars they are buying are bigger and faster.
We have also had several supply problems. In Venezuela, they have shifted control of oil fields to people that are less skilled or less motivated to produce them well and their production has dropped. Production in Iraq has dropped because of the conflict there.
Another factor in the rise in oil prices is that the dollar is worth much less than it was just a few years ago. Oil prices are set on in an international market. For a variety of reasons, people around the world value dollars less than they did a few years ago. Because they value dollars less than they did, they demand more of them for their oil. The price rise of oil has been much less for people with Euros than for people with dollars.
Another factor that is keeping prices higher than they otherwise would be is that owners of the oil in the ground have been charging us more to produce it. We produce a lot of oil in Algeria and they have been adding new taxes on our oil production. That raises the cost of producing oil there and makes it less attractive for us to invest more money their to increase our production.
It's not just third world countries that are increasing our cost of production. Even here in the US there are people in the government that want to go back on the contracts they signed and start charging us more money for the oil we produce in the Gulf of Mexico. There are others that want to change the tax laws to increase taxes on oil and gas companies. These will have the effect of lowering our profits, but they will also decrease the supply of oil without hurting the demand. That will cause prices to go higher.
If you want lower gas prices, you've got to either lower the demand for oil or increase it's supply. You can do your part to lower demand by decreasing the amount of oil and gas you use. This happens naturally when prices go higher because people find ways to avoid using so much. As long as high profits are being made, people will be working on supplying more oil so that they can get some of those profits.
So don't blame me for high prices. I'm doing my part to increase supply as much as possible. And just as I don't expect anyone to spend more for my oil than they would for anyone else's oil, don't expect me to sell my oil to you for less than someone else is willing to pay for it.
I suppose a long rambling discussion about oil prices wouldn't be complete without talking about "peak oil." There is a finite amount of oil in the ground. Every year, we increase the amount of it that we produce. Some day, that won't be the case and production will start to decline. People refer to the point in time when world oil production goes down as "peak oil." No one is sure when that will be because no one knows for sure how much oil is left to be found and what future demand will be. Some people think that peak oil is coming very soon and others think that it is many decades away.
When we hit peak oil, supply won't be increasing, it will be decreasing. If demand keeps growing, prices will climb ever higher and higher prices won't result in more supply. People will be forced by higher prices to find alternatives for their energy.
To some extent, that is happening already. The viability of solar and wind energy has increased dramatically in the last few years. Partly that is because we are getting better and producing solar and wind energy more cheaply and partly it is because they are cheaper relative to oil.
We are also able to produce oil that would not have been cost effective in the past. There is a lot of oil that is very expensive to produce. A good example is mining tar sands and converting them to oil. When oil is $20 / barrel, no one will touch tar sands. When oil is $100 / barrel a lot of people are investing in them.
Prices are critical in an economy because they tell people what is to supply. High prices for energy are sending a clear signal to everyone to provide more energy and to use less of it. Don't blame me - that's just shooting the messenger.
Now I'm curious to see if any will actually read this entire off topic post.
It is a heck of a lens though! Fantastic quality, one of the best lenses of its type according to reviews. (It's actually a rebadged Kiron, actually, and Vivitar also sold a version.)
