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Remembering the 1974 and 1979 oil crises, predicting the future
If gas prices continue to rise I'm wondering if history will repeat itself in terms of diesel offerings and sales spikes.
A friend and I were trying to recall what happened following the first two oil shocks and came up with this list. I've also added some predictions to the list. Hoping the diesel fans out there can add to the list (history and predictions), correct any errors and provide commentary / perspective. I'm also interested in links to articles related to this topic. 1. There were two previous oil shocks, #1 in 1974 and #2 1979 2. The triggers were Arab oil embargo and Iran hostage crisis 3. MB diesel sales skyrocketed following both shocks, reaching 50% of MB total US sales in 19xx 4. Mercedes created a turbo diesel version of their S-class called the 300SD. This was a unique offering for the US market only. 5. At the height of diesel popularity 85% of S-class sales were the diesel version. 6. GM V8 diesels were introduced in 1977 and made up x% of GM sales on the models they were offered (most popular year) 7. VW diesels were introduced in 1977 and made up x% of VW sales (most popular year) 8. By 1982 fuel prices had fallen and diesel sales began to wane 9. Diesels sales will rise as clean diesels enter the market but won't sell in signifcant numbers until fuel costs $5 / gallon, yes or no 10. Fuel (gas or diesel) prices have peaked, yes or no 11. Fuel prices will be $x per gallon by 2010 12. In the US diesel fuel is taxed 6% more than gasoline. The government will make the tax the same or lower for diesel to encourage good behavior, yes or no 13. Diesel prices will forever remain higher than gas due to other factors such as refining capacity, infrastructure, etc. 14. Diesels will never match hybrids in terms of US acceptance, the dirty image is too hard to shake, yes or no 15. Low sulfur diesel fuel will never be easy to find 16. Clean diesels will be eligible for the same customer tax credits as hybrids, yes or no (note in case of hybrids these run out for a manufacturer after 60,000 units sold) 17. The next president of the United States will be... Look forward to your thoughts and thank you! Pete Last edited by ivorysl; 03-12-2008 at 11:51 AM. |
#2
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The first oil shock was in 1973 not 1974. The first two were political crises. What we have now is driven by market forces. It is not going away until we reduce demand, which ain't going to happen short of a global depression or switch to alternative energy sources.
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80 300SD (129k mi) 82 240D stick (193k mi)77 240D auto - stick to be (153k mi) 85 380SL (145k mi) 89 BMW 535i 82 Diesel Rabbit Pickup (374k mi) 91 Jetta IDI Diesel (155k mi) 81 VW Rabbit Convertible Diesel 70 Triumph Spitfire Mk III (63kmi)66 Triumph TR4a IRS (90k mi)67 Ford F-100 (??) |
#3
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I understand the current spike is not driven by political events (supply, uncertainty) but am wondering how much of the run up is due to the weak dollar and inflation of all commodities.
If really supply-demand driven, when will fuel prices peak and at what $ / gallon? I know no one knows for sure but value opinions here as much as what the experts are saying. |
#4
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Well, first of all, the gas lines were because of enforced price controls enacted by liberal politicians. This was a feeble attempt at controlling a commodity and the end result was a disaster!
What most people do not understand is going market price means just that. Just because you have a full tank in the ground you purchased for sale at $2.50 a gallon doesn't mean you can continue to sell it at that, unless your a fool, because as a retailer, you will have to refill your supply at $3.00 when this current supply runs out! If you do not raise your prices immediately, your going in the hole and losing money on the fuel which is why most fuel stations these days have a convenience market attached to it. This is the only way these stations can survive, by impulse sales! Most staions now don't even bother to mark up their fuel anymore because of the rapid market fluctuations. It's a lot easier to add a McDonalds or other things to your convenience store to make a profit on because these items reflect a more stable environment. Last edited by Knightrider966; 03-12-2008 at 01:43 PM. |
#5
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Third world sapping up lots of diesel
From what I've read recently, developing countries like India and Pakistan, China, etc. are using huge amounts of diesel. In a lot of those countries diesel seems to be much more their primary fuel than gasoline. I wonder to what extent that's driving up the price in the U.S.
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'81 300CD - 180K, cannot be killed by any conventional means '99 Ford Escort - good MPG |
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RRGrassi 70's Southern Pacific #5608 Fairmont A-4 MOW car 13 VW JSW 2.0 TDI 193K, Tuned with DPF and EGR Delete. 99 W210 E300 TD Turbo, chipped. Still needs EGR Delete, 228K 90 Dodge D250 5.9 Cummins/5 speed. 400K |
#7
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Well, you've covered a lot of ground there:
First, we have to recognize that this is a worldwide market. Even though the U.S. is the biggest single consumer, that's only about 20% of the worlds consumption. Second, the U.S. obtains a little less than half of it's oil from OPEC nations, but OPEC controls enough of the production to essentially set the market price. From OPEC's point of view, the problem is market volatility; they want a nice steady $90US+ market, they do not want to see their market crash to $30US like it did in the 90s. Third, part of the U.S. price issue is the weak dollar which is being (partially) driven by the trade deficit (including oil). The fed is also contributing to this by lowering rates and dumping more dollars onto the currency market. Fourth, we all have to understand that the amount of energy (including oil) used by china and india will increase drastically over the next few decades. This is likely to affect the energy markets more than anything the U.S. does. In my opinion, the only reasonable course of action for the U.S, is to minimize their dependence on these imports. It appears to me that the only way that will happen is if oil prices increase significantly. At $3-5/gallon there is very little incentive to reduce consumption, at $6-8/gallon there might be a noticeable difference. The only question is how to get there; do we want a retail tax of a couple of dollars per gallon to drive the price, do we impose a duty on imported oil only to drive the price and encourage domestic production, do we mandate mileage limits and impose "gas guzzler" taxes, do we offer tax incentives to get rid of residential oil heat? |
#8
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well as a professional HVAC installer, no tax incentive will get rid of oil furnaces. too many customers positively refuse to use any other type of heat. gas scares them, electric is too expensive, nope. oil is the only way to heat older generation homes. another 20 years, and maybe all the oil die hards will be gone, but not until.
a lot of heating unit manufacturers would be seriously damaged if oil furnace demand stopped. but like the typewriter salesman, that may be a good thing.
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John HAUL AWAY, OR CRUSHED CARS!!! HELP ME keep the cars out of the crusher! A/C Thread "as I ride with my a/c on... I have fond memories of sweaty oily saturdays and spewing R12 into the air. THANKS for all you do! My drivers: 1987 190D 2.5Turbo 1987 190D 2.5Turbo 1987 190D 2.5-5SPEED!!! 1987 300TD 1987 300TD 1994GMC 2500 6.5Turbo truck... I had to put the ladder somewhere! |
#9
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One of our problems in this country in terms of attenuating this problem is that the actions taken both by government and consumers tend to be much more about feeling like one is doing something positive than actually DOING something positive. E85? How could anyone possibly think that would be a good solution? Biofuels are of a course a legitimate possibility ... but E85 is among the least sensical biofuel option to the point of being a little embarassing for our country. We're doing a similar thing with hybrid technology. Hybrid technology is a fantastic option for city-driving applications and has a lot of potential. But what are we doing? We're putting hybrid systems in big, dumb, physically inefficient SUVs and then calling ourselves "green." The problem is this: We're trying to use new technologies to maintain, without sacrifice, our current way of life. There is nothing that will sustain our current way of life. It isn't possible for everybody to have everything, to have it now, and to have it the way they want. The fact is, new technologies can leave us with a very good, sustainable and even fun transportation system. But it won't work if we try to make it exactly the same as our current transportation system. It's going to require changes, some of them unpleasant. The government doesn't want to venture into that unknown, because, in their defense, it will be met with so much resistance from our population's pampered, ignorant sense of entitlement that it will never fly. So they feed us weak, designed-to-fail, half-hearted alternative programs that can only cause loss to the transportation industry and eventually consumers. I love the US, and think we're so far ahead of most of the world in well, pretty much everything. But when it comes to the automotive/transportation world, we've sort of embarassed ourselves, and continue to do so.
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1987 300D, arctic white/palomino--314,000 miles 1978 240D 4-speed, Euro Delivery, light ivory/bamboo--370,000 miles 2005 Jeep Liberty CRD Limited, light khaki/slate--140,000 miles 2018 Chevy Cruze diesel, 6-speed manual, satin steel metallic/kalahari--19,000 miles 1982 Peugeot 505 diesel, 4-speed manual, blue/blue, 130,000 miles 1995 S320, black/parchment--34,000 miles (Dad's car) |
#10
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Penske, for instance, has much higher Diesel prices in Tempe at their Fairmont location than the Glendale location just because they sit on it longer than Glendale! Glendale has more traffic, so they refuel more often and adjust their prices more quuickly, Fairmont almost always lags behind by sometimes as much as two weeks. Sorry, I'm not being sarcastic, but I have been in this business too long to not figure out how it works! The next time your trying to fill up and a Semi is in the parking lot filling the service tanks in Arizona, say hello. Some of you will be driving on fuel delivered by Knightrider966! |
#11
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#12
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I have another one for you:
18. Government imposed regulations on utilization of biomass processed from the human or livestock food supply turns out to be disastrous for the U.S. economy, yes or no
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Scott C. 2006 E320 CDI (120k miles) FOR SALE: 1998 E300 Turbo Diesel - Black w/Tan Leather - Euro delivery (236k miles) |
#13
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I remember when Jimmy Carter was president the price of Peanut Butter doubled almost overnight. If oil companies are showing record profits(record being the operative word) The price of a barrel of oil has not doubled but fuel prices have almost tripled. This has only happened since we invaded Iraq. (wmd my a??) Alternative energy is viable but no single thing will change our culture. All the alt tech is out there it has to be up to you to invest in it. Don't expect gm or mobil to do this until they can make a commodity out of sunshine.If you as an individual buy solar, go veggie with your 300 sd and put up a wind tower then you as an individual won't be effected as much by corporate lobbied profits.(/rant) |
#14
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__________________
80 300SD (129k mi) 82 240D stick (193k mi)77 240D auto - stick to be (153k mi) 85 380SL (145k mi) 89 BMW 535i 82 Diesel Rabbit Pickup (374k mi) 91 Jetta IDI Diesel (155k mi) 81 VW Rabbit Convertible Diesel 70 Triumph Spitfire Mk III (63kmi)66 Triumph TR4a IRS (90k mi)67 Ford F-100 (??) |
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