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How will the greedy Oil Companies impact vette development?

2.6K views 35 replies 14 participants last post by  OldVetteFan  
#1 · (Edited)
Rick Conti has just posted some red hot "leaks" about future increasing HP for the Corvette. This spurred some side discussions about the rising gas prices we are seeing. IS this DeJaVu? Have the oil compainies decided to kill the "Golden Era of Performance II" by raising prices and gouging? How will the actions of the oil companies affect the future performance developments of our icon?

I thought this discussion shouldn't "polute" Rick's LS3 & LS9 news, yet this could impact our fun futures. What do you think?

Are vette buyers immune to the rising gas prices?
Will the market pressures require better gas milage from the vette?
 
#2 ·
Longtimer said:
Rick Conti has just posted some red hot "leaks" about future increasing HP for the Corvette. This spurred some side discussions about the rising gas prices we are seeing. IS this DeJaVu? Have the oil compainies decided to kill the "Golden Era of Performance II" by raising prices and gouging? How will the actions of the oil companies affect the future performance developments of our icon?

I thought this discussion shouldn't "polute" Rick's LS3 & LS9 news, yet this could impact our fun futures. What do you think?

Are vette buyers immune to the rising gas prices?
Will the market pressures require better gas milage from the vette?
IMO rising gasoline/oil prices will cause the price of everything to increase. Natural gas indexed to petro price will rise as well. There's no end to the ripple effects.

The resulting decrease in household discretionary income will impact sales of all cars even the vette ( lots of people fit payments into making their vette dream come true-a vette may be a trivial expense for some but certainly not all owners ).

So GM may be forced to make the vette less expensive and more stingy on fuel. Though many would say it isn't so IMHO sharp gas price increase will definitely reduce vette sales. It is, as you say, absolutely deja vu for those of us old enough to have seen it in the 70's.

Gas price increases won't IMO decrease INITIAL Z06 sales. However, the old discretionary income problem will eventually impact sales of even that beast.

Really now, who needs a factory street car faster than the new Z06? Or even the base C6?

We are witnessing the end of an era. We lived in it and enjoyed it-the cheap oil and energy that is. It molded our experiences and expectations. For me it was 30 cent a gallon 102 octane leaded premium for my SS396 to gulp. However, the future will be much different and may not suit the tastes that we have developed.

We are going to have to change our habits.

I think the C6 gets great mileage for what it is. It may do well relative to other performance cars due to this. nearly 30 mpg highway or more is just plain unreal for a 400 hp car.
 
#3 ·
Oil prices do not reflect sales on supercars.

With the current exchange rate of 1.22 Dollar for an Euro the gallon of premium here is 4.63 Dollar.
And the showrooms are still full of Porsches, Maseratis, Ferrari and Corvettes.
Don't think a Mercedes S-Class or a 7 BMW has a better milage than these cars. And the roads are full of those ships.
 
#4 ·
These are great points but I think the question is this:

Can the technology make up for it?

The fuel prices have gone up. Way up! But have we seen the regulations change? If the government does that then there will be a problem! Yes the rising fuel prices did not help in the 70's but didn't the regulations the government set really change everything? It took decades for the automakers to get back up to these performance numbers that we are now again enjoying.

I do agree that the price of gas will have an effect on sales of high performance cars. We will see how much.

But if new regulations on emissions happen again there will really be a problem! For us that love performance cars anyway. They will still build them and people will buy them. But they won't be like the cars we know now. I only hope the technology does not take as long to catch up this time!

So the more people that drive fuel efficient hybrids the better as far as I am concerned. Maybe they will leave the Corvette alone!

And some government enforced regulations on the oil company's would not hurt either!
 
#5 ·
Longtimer said:
Are vette buyers immune to the rising gas prices?
Will the market pressures require better gas milage from the vette?
I think that for the most part Corvette buyers and owners are immune to gas prices. Look to Europe where gas prices have been artifically high for decades. High performance cars still sell there. Besides, inflation adjusted, even the recent run up in gas prices doesn't push them to historic highs.

Adjusted for inflation, even the 30 cent a gallon prices of the glorious 60s are $2.40 a gallon in today's dollarettes. During the 70s, gas shot up to an inflation adjusted price of $5.60 a gallon. Inflation adjusted, we've been living in a period of historically low energy prices until very recently. They're still below historic highs.

I don't see market pressure in this car segment for very high mileage cars. The C6 already does quite well, getting a real 28 MPG highway. What would be of much greater concern would be government mandates for greater fuel economy. That would be outside intervention in the market, and could sharply disrupt it. Panic pressure on the government to "do something" is the greatest danger. Government almost always serves us best when it does nothing.
 
#6 ·
Big Cat said:
And some government enforced regulations on the oil company's would not hurt either!
What kind of regulations would you impose?

Maybe if Federal, State, and local governments didn't require eighteen different gasoline formulations

http://api-ep.api.org/filelibrary/ACF2C5.pdf

then perhaps we wouldn't have some of the price issues we're currently seeing.

Additionally, the majority of our gasoline is refined from Light Sweet Crude. The technology exists to refine lower grade crude (cheaper!) into gasoline, but we don't have refinery capacity/capability to do so (can't find reference - sorry).

The Chinese and Indian economies are creating additional demands for Crude Oil. If we had the will to tap into the oil off the Florida coast as well as ANWR, then we would supplement the oil we import.

I won't even start on Nuclear power - our biggest issue there are political problems, not engineering problems. We can solve the engineering problems (and generally have - look at the Navy's use of nuclear power).

Prices will go up, as they should in response to increased demand. This will make otherwise formerly uneconomical solutions more cost effective, and they will come into use. Eventually, the cost of gasoline will stabilize.

I suspect that the biggest impact for the auto industry will be big trucks and SUV's - not sports cars.

Steven
 
#7 ·
oldcorvettef said:
What kind of regulations would you impose?

Maybe if Federal, State, and local governments didn't require eighteen different gasoline formulations

http://api-ep.api.org/filelibrary/ACF2C5.pdf

then perhaps we wouldn't have some of the price issues we're currently seeing.
Yep, that's a problem.
Additionally, the majority of our gasoline is refined from Light Sweet Crude. The technology exists to refine lower grade crude (cheaper!) into gasoline, but we don't have refinery capacity/capability to do so (can't find reference - sorry).
High sulphur sour crudes are abundant. They don't command the price of sweet crudes, but that's because it costs more to refine them, and the companies don't want to pay that cost as long as they can get sweet crudes.
The Chinese and Indian economies are creating additional demands for Crude Oil. If we had the will to tap into the oil off the Florida coast as well as ANWR, then we would supplement the oil we import.
Yep, demand is increasing rapidly as China and other nations move away from peasant economies and toward industrial economies. But drilling off the Florida coast, or even tapping the ANWR, would barely put a dent in that demand. The entire ANWR is estimated to only be enough to supply 1.5 days of global demand.
I won't even start on Nuclear power - our biggest issue there are political problems, not engineering problems. We can solve the engineering problems (and generally have - look at the Navy's use of nuclear power).
Now this is the big one. With our utilities increasingly switching away from coal and to oil and natural gas, they now represent over 50% of our oil and gas demand. Replacing that demand with clean safe nuclear power would eliminate the squeeze on fossil fuel supplies, sharply reduce greenhouse gas production, and nearly eliminate our problems with acid rain. Utilizing well understood breeder technology, we could secure our energy future for thousands of years to come. No breakthroughs required, we've known how to do this for half a century. Fear mongering has kept us from fully utilizing this plentiful clean technology.

Prices will go up, as they should in response to increased demand. This will make otherwise formerly uneconomical solutions more cost effective, and they will come into use. Eventually, the cost of gasoline will stabilize.
Yes, as the price approaches $70 a barrel, exploiting tar sands (of which we have a huge supply in North America) becomes nicely profitable. At $90 a barrel, converting coal (of which we have a 3,000 year supply in North America) to synthetic gasoline becomes profitable. If the market is allowed to work, there will be no shortages. But there's the rub, between the fear mongers, the shortsighted enviroweenies, and the natural tendency of governments to meddle, I fear the market won't be allowed to work.
 
#8 ·
What kind of regulations?

This is not a supply and demand issue. The oil comany's are making record profits! The Queen of England owns a big part of BP. She really needs the money. They are price gouging! They need to be regulated.

It is the government's responsibility to protect the consumer. I just don't think they are doing a good job of that with this peticular issue. And I don't think they will be doing so soon.

I do agree with you however that the trucks and SUV's will suffer the most.
 
#9 ·
Big Cat said:
This is not a supply and demand issue. The oil comany's are making record profits! The Queen of England owns a big part of BP. She really needs the money. They are price gouging! They need to be regulated.
Of course this is a supply and demand issue. The oil companies are demanding your money, and you are supplying it. If you think their demands are out of line, don't supply them any money until they reduce their demands. What, you want the gas? Well that's demand, and the oil companies will supply it, for a price. That's the way a free market works.
It is the government's responsibility to protect the consumer. I just don't think they are doing a good job of that with this peticular issue. And I don't think they will be doing so soon.
Oh, BS. It is the government's job to GET OUT OF THE WAY and let the market work.
 
#10 ·
Government regulation has got us where we are today as mentioned earlier with all of the stupid different blends required for each part of the country. That and the fact that we haven't built a refinery for the past 25 years. A Ford Excursion puts out less particulate matter in its exhaust than an 85 Chevy sprint yet we still have these rediculous regulations. The Corvette is 75% more efficient than most common SUVs on the road right now...I doubt the fuel cost is going to cut down much on its sales. Many people who buy Corvettes have enough disposable income that it doesn't matter either way.
 
#11 ·
This is fun!

I was not talking about the regulations each state has on emissions etc. I can't get 93 octane here. And I think it is rediculous. I don't want regulations of that nature. As I said earlier that is what I'm afraid of. And that would change the Corvette.

I was talking about the price. The government broke up Standard Oil 100 years ago for a reason. There is a Texas Oil Man in the White House. That is my point. He won't do anything about the prices. A previous Administration would have.

Of course I have to buy gas. And I can afford it. But that does not mean I can't complain about the price. And I most certainly am not going to stop driving my Vette because of it.....
 
#12 ·
Big Cat said:
This is fun!

I was not talking about the regulations each state has on emissions etc. I can't get 93 octane here. And I think it is rediculous. I don't want regulations of that nature. As I said earlier that is what I'm afraid of. And that would change the Corvette.

I was talking about the price. The government broke up Standard Oil 100 years ago for a reason. There is a Texas Oil Man in the White House. That is my point. He won't do anything about the prices. A previous Administration would have.
If the President could do anything about gas prices he most definitely would. High gas prices do nothing to help either party politically. The current situation has nothing to do with the oil companies gouging anyone either. The price of a barrel is what is making it so high...that means the big bad oil companies you are talking about it are paying tons more for it before they get a hold of it to start refining it. People are paying more for oil everywhere in the world because demand is up. The only thing that will bring it down right now is less worldwide demand or greater worldwide supply.

Please let me know what a previous administration would have done to lower gas prices...I'm very curious.
 
#13 ·
Big Cat said:
This is fun!

I was not talking about the regulations each state has on emissions etc. I can't get 93 octane here. And I think it is rediculous. I don't want regulations of that nature. As I said earlier that is what I'm afraid of. And that would change the Corvette.

I was talking about the price. The government broke up Standard Oil 100 years ago for a reason. There is a Texas Oil Man in the White House. That is my point. He won't do anything about the prices. A previous Administration would have.

Of course I have to buy gas. And I can afford it. But that does not mean I can't complain about the price. And I most certainly am not going to stop driving my Vette because of it.....
You're right - this is fun.

Let's assume that you become Dictator for a day, and you repeat the same solution set that Richard Nixon did in the early 70's - you enact a price freeze on gasoline.

What do you think will happen? Do you believe that the refineries will happily continue manufacturing and distributing gasoline in the face of higher prices for crude oil? I don't think so.

Nixon's solution resulted in long gas lines and angry consumers - there wasn't a shortage of crude - but there were plenty of producers that weren't willing to produce at the government mandated price.

What's your solution?


The price of crude is driven by current supplies as well as expectations of future supply and demand. As long as China and India continue to demand the same crude oil the US does, and their economies continue to grow, then the price of sweet, light crude will stay high. The refineries and the oil companies don't control that price -there is a GLOBAL market for crude.

In the case of oil, there are significant infrastructure problems that have to be addressed. Since it is difficult to build refineries in the US, we haven't added significantly to our refinery capacity over the last couple of decades, nor have we made our current refineries capable of using lower grade crude to make gasoline.

I think its interesting that you complain about the regulations that prevent gasoline stations from selling 93 octane in your area, but you want to create regulations to stem the tide of higher gas prices.

I also don't think that any other adminstration would have done anything about the price of gasoline. Okay, there's Tricky Dick, but I don't think that's exactly what you're looking for as a solution (or maybe it is - I don't know).

My solution? Fast track nuclear power stations, fast track new refineries, and let the market get the job done.

Steven
 
#14 ·
shopdog said:


Yep, demand is increasing rapidly as China and other nations move away from peasant economies and toward industrial economies. But drilling off the Florida coast, or even tapping the ANWR, would barely put a dent in that demand. The entire ANWR is estimated to only be enough to supply 1.5 days of global demand.


I've heard that about ANWR, but it doesn't pass the 'reasonableness test' - if there's so little oil up there, then why would a profit maximizing firm want to do anything with it?

Would you invest millions of dollars and years of effort to get 1.5 days worth of crude?? Even the insipidly stupid managers at the company I work for aren't that dimwitted!

Steven
 
#15 ·
As far as sales and price, I don't believe the Corvette will be more affected than any other auto line. Will we see another drop in power like in the 70's? Not as significant a drop I believe. Look at the land ships that guzzle much more gas than the Corvette: the H2 that I saw putting $91 is his tank last night, the F250 with the twin tanks getting nearly single digit highway mileage, etc.




My solution? Fast track nuclear power stations, fast track new refineries, and let the market get the job done.

Steven [/B]


I agree with you on several points, but there are a few more factors to overcome. Yes, power production is one of the most fuel consuming, least efficient, most polluting industries out there, but it is that way by DESIGN. Billions are spent each year to PREVENT upgrades to existing power plants b/c they are operating under regulations enacted at the time of construction. Instead of power companies upgrading, making their plants more efficient, or building non-fossil burning plants, they prefer to do what the gas stations and oil companys do: pass that cost along to the consumer. It's a daisy-chain of price increase. If oil costs more, refineries and oil companies charge more for it. Then, in turn, the power companies simply charge the consumer more. There is no way to break that chain until a genuine lack of fuel (or demand) exists.

From the standpoint of efficiency, the automobile is much more efficient than fossil power plants. Most coal plants can only dream of more than 30% efficiency. Natural gas is much better, but supply and pollution issues remain.

So why do we get stuck with higher power bills and gas prices? Because we don't have anyone to defer the cost to.

The only thing we can do individually (other than with our vote) is attempt to reduce demand. For example, many of us have a Corvette as a second vehicle. Let's make sure that our primary car is as efficient as it can be. If you buy a new car, there's nothing wrong with a hybrid or econobox to go back and forth to work.

We can also make sure out homes our better insulated. In many localities, the International Energy Conservation Code is just now being adopted; that means many older homes and businesses were built with minimal insulation for maximum profit by the contractor.

Personally, I'm in the process of equipping my house with solar panels. From my calculations, I will have a net negative power consumption from the utility. That means I will get a check from Dominion/Virginia Power each month instead of a bill. I realize that may not be a practical thing for many people (the initial investment may be large or you may live in an apartment/townhouse) but to some it is a reasonable alternative. Perhaps I've just got too much environmentalist in me...

A statement was made that government has no effective means of regulating costs without regulation that would choke the entire premise of free market economy. That is not exactly true. Yes, fuel costs could be regulated, but an even better alternative is to provide more incentives for switching to alternative fuels. Provide those incentives to industry, not just a little tax break to the consumer for buying a hybrid car. Set an example by improving government facilities in the same way. The energy market does not need the iron fist of regulation, rather, it needs encouragement to move in the right direction.
 
#16 ·
oldcorvettef said:
I've heard that about ANWR, but it doesn't pass the 'reasonableness test' - if there's so little oil up there, then why would a profit maximizing firm want to do anything with it?

Would you invest millions of dollars and years of effort to get 1.5 days worth of crude?? Even the insipidly stupid managers at the company I work for aren't that dimwitted!

Steven
!.5 days of world demand is about 90,000,000 barrels of crude. At $60 a barrel, that's nearly 6 billion dollars. Would your company invest millions to make billions? Mine would. Of course it'd cost more than millions, but most commodity companies are happy to make a few percent above prime on their investments. So even if it cost in excess of 5 billion to bring the field online, they'd still be interested.
 
#17 ·
RTGordon said:
[I agree with you on several points, but there are a few more factors to overcome. Yes, power production is one of the most fuel consuming, least efficient, most polluting industries out there, but it is that way by DESIGN. Billions are spent each year to PREVENT upgrades to existing power plants b/c they are operating under regulations enacted at the time of construction. Instead of power companies upgrading, making their plants more efficient, or building non-fossil burning plants, they prefer to do what the gas stations and oil companys do: pass that cost along to the consumer. It's a daisy-chain of price increase. If oil costs more, refineries and oil companies charge more for it. Then, in turn, the power companies simply charge the consumer more. There is no way to break that chain until a genuine lack of fuel (or demand) exists.

From the standpoint of efficiency, the automobile is much more efficient than fossil power plants. Most coal plants can only dream of more than 30% efficiency. Natural gas is much better, but supply and pollution issues remain.
Oh, dear, no. Automobile peak fuel efficiency approaches 27%, but average efficiency is much worse, around 9% to 10% for the average mix of driving. In other words, we rarely operate our engines at the peak thermal efficiency point, which for a combustion engine is fully loaded at an RPM 80% of the peak torque RPM. Most of the time we're opeating well below that point, rarely we're operating above that point. This is why a properly designed hybrid can do so much better. In theory, its engine can be sized so that it mostly runs at the peak efficiency point, charging batteries when load demand is low, and using that battery power when demand is high. In theory, that allows a hybrid to approach an average efficiency near the peak efficiency of a combustion engine, ie around 27%. But in practice none of the hybrids currently on the market actually achieve this. They have engines which are too large, and batteries which are too small to realize the full efficiency benefits of hybrid operation. (There are good engineering and cost reasons why that's so.)

Meanwhile, the average fuel efficiency of the worst fossil electric generating plant in the US is about 30%, combined cycle plants have hit 52% efficiency, though they're more typically in the mid-40% range because of nitrogen oxide limits placed on them by the EPA. That's close to the Carnot cycle limits, which are set by physics to be a function of the difference in inlet and outlet temperatures.

Now it is true that many older plants in the US aren't being updated to be more efficient. That's because EPA rules say they'd have to go through the same process required of new power plants to get relicensed. That takes on the average 12 years, and costs billions of dollars. But if they keep the plant the way it is, they avoid all that, and can continue to operate under the rules in force at the time they were licensed, often 30 or 40 years ago. There's no benefit to the power companies to upgrade efficiency anyway because the rules of the state PSCs allow them to tack a fuel cost adjustment onto consumer bills.

Now if power companies were allowed to do upgrades without having to go through the relicensing process, and if the state regulators didn't automatically grant them fuel cost adjustments in their retail rates, then you'd see all those older plants being vigorously updated to higher efficiency. But the current regulatory structure penalizes companies for doing that, so they don't.

Still, even given all that, average US fossil fuel power plant fuel efficiency is more than 3 times that of the average fuel efficiency for automobiles.

The only thing we can do individually (other than with our vote) is attempt to reduce demand. For example, many of us have a Corvette as a second vehicle. Let's make sure that our primary car is as efficient as it can be. If you buy a new car, there's nothing wrong with a hybrid or econobox to go back and forth to work.
That's a good choice for some, but many are in my situation where my Corvette is my economy car and my second car is actually a truck/SUV/large sedan necessary for the family for those times when a two seater just won't do. A commuter car would have to be a third or fourth vehicle in these cases, and for many families (though probably not for most Corvette owners) that'd be cost prohibitive.

We can also make sure out homes our better insulated. In many localities, the International Energy Conservation Code is just now being adopted; that means many older homes and businesses were built with minimal insulation for maximum profit by the contractor.
True, insulation generally has a relatively short payback. It is a good investment.

Personally, I'm in the process of equipping my house with solar panels. From my calculations, I will have a net negative power consumption from the utility. That means I will get a check from Dominion/Virginia Power each month instead of a bill. I realize that may not be a practical thing for many people (the initial investment may be large or you may live in an apartment/townhouse) but to some it is a reasonable alternative. Perhaps I've just got too much environmentalist in me...
Almost certainly you do. If you do the sums, your real cost per kWh for solar electric is 3 to 5 times conventional bussbar cost. Only because there are government subsidies for solar can you approach breakeven. That's because 1) there is a tax credit for installing solar, and 2) your utility is required to buy back power from you at the retail instead of wholesale power rate. In other words, the utility is forced to subsidize you too. All of the rest of us are paying for those subsidies, in higher taxes and higher electric rates.

A statement was made that government has no effective means of regulating costs without regulation that would choke the entire premise of free market economy. That is not exactly true. Yes, fuel costs could be regulated, but an even better alternative is to provide more incentives for switching to alternative fuels. Provide those incentives to industry, not just a little tax break to the consumer for buying a hybrid car. Set an example by improving government facilities in the same way. The energy market does not need the iron fist of regulation, rather, it needs encouragement to move in the right direction.
The new Bush energy bill does some of that. It encourages a switch from oil or natural gas (our most scarce fossil fuel) fired electric generation to clean coal technology with tax credits, it streamlines regulations for nuclear power plant construction, it offers new opportunities for oil and gas drilling, and it encourages more aggressive stripper well operations. Unfortunately, it also pork barrels in a requirement for gasohol which is a net fossil fuel consumption increase (it takes more oil to grow and process grain for alcohol production than is saved by the use of that alcohol in the automotive fleet, Brazil learned this hard lesson in the 1980s).

Here's a hard fact. There is no new alternative fuel that is cost effective compared to fossil fuels, except nuclear power. We've already dammed the good hydro sites (and enviromentalists are forcing us to tear down some of those dams). Wind is too sporadic and too localized to be viable except in a few specific locations (and the environmentalists have yet to address the effects of large scale use of wind turbines on the local microclimate, ie it steals energy from the local enviroment, and that has effects on meteorological patterns). Solar electric remains too expensive, and is only available at best for about 8 hours a day. Etc.

In the long run (and not all that long either, we've reached the point of diminishing returns with fossil fuels), we are faced with a clear choice. We can revert to a mostly muscle powered agrarian society, or we can embrace nuclear power. It is the only source of bussbar power that we know can economically meet the needs of a high energy civilization for thousands of years to come. Given adequate bussbar power, we can electrify our roadways and run our transport sector off of it too. Synthetic gasoline, hydrogen, etc are only stopgaps, the most efficient use of resources is to have an electric vehicle fleet that is powered by the roadway. We have, or know how to build, the technology to do this efficiently and safely using non-contact inductive couplers on our cars and buried inductive distribution in our roadways.
 
#19 ·
shopdog said:
!.5 days of world demand is about 90,000,000 barrels of crude. At $60 a barrel, that's nearly 6 billion dollars. Would your company invest millions to make billions? Mine would. Of course it'd cost more than millions, but most commodity companies are happy to make a few percent above prime on their investments. So even if it cost in excess of 5 billion to bring the field online, they'd still be interested.
There's more to it than that, though.

1. When discussions of ANWR first begain in 2000, the price of crude was nowhere near $60/barrel.

2. It will take years to develop working fields, and there is significant uncertainty about the future price of oil.

3. You wouldn't pump that 1.5 day supply out in less than a year - I would guess over several years.

4. It's likely that no matter what the current adminstration does with respect to ANWR, some (or many) groups will file suit against it, adding costs and wasting inordinate amounts of time.

5. I'm not sure I would bet my money on that investment yielding any significant return.

6. ANWR reserve estimates I've seen indicate a low end estimate of 5 billion barrels, ranging up to 24 billion barrels.

7. If the Alaska pipeline system is left at current capacity, then ANWR would contribute about 1 million barrels/day. This means that the expected life of the system would range from about 14 to 65 years.

8. One million barrels a day represents more than 1% of the total current demand. Not too shabby when compared to the proportion that some other sources would be.

Thanks for nothing - now I have to reconsider whether or not my stupid management would consider this investment!

Steven
 
#20 ·
FastMover said:
This is thr best d4mm thread I have read in a long time and I am duly impressed by the knowledge
some of our members have
. Good job, I have actually learned something :thumbsup: :thumbsup:
I agree. We have some very sharp contributors here at DC. This should not surprise - after all, we all see the vette as the great car that it is!

So the consensus appears to be that Gasoline prices are not artificially high right now, just moving with demand - and that they will continue to rise. Please feel free to correct me if I've over simplified.

So how does this affect the Vette?
1. gas is getting more expensive = higher costs to individuals and EMPLOYERS.
2. As transportation costs rise, consumer prices rise - pinching individuals' disposable income compounding the gas prices impact.
3. So individuals reduce impulse spending and tighten budgets a bit.
4. Some small companies / entrepreneurs go out of business or trim back severely. Some of the owners of these companies had been driving vettes and / or contemplating a vette purchase - but no longer.
5. Lower demand for the base vette influences GM's decisions regarding investment into future high performance development budgets when people are buying hybrids.

Someone said earlier that exotics and super cars sales are not impacted by fluctuating gas prices / economy. I would agree that Ferrari is impacted little by these factors, but the vette's annual production of 32-35,000 units is a required factor to justify the high value / performance we get.

The vette was targeted by the GM bean counters for extinction in the '90s. We are lucky that the C5 was ever produced. We are also fortunate to have some real car guys at the top of GM right now. However, corporate politics is very volatile in a shrinking economic environment - one which ever increasing gas prices could bring about.

I think that unless GM executes a remarkable recovery during these stressful economic times, GM high performance R&D currently in the pipeline will slow significantly. But I hope I'm wrong.
 
#21 ·
#23 ·
Some mis-information here needs to be cleared up. ANWR holds much more than 1.5 days of total world supply. As mentioned earlier, ANWR is estimated to hold between 6 & 16 billion barrels of recoverable crude oil resource, but it will be very expensive to develop, produce and get to market. ANWR could not be economically developed for only 90 million barrels of oil.

The US will never again be self-sufficient in oil production (we currently only produce about half of what we consume). Any significant addition to domestic supply, such as ANWR that could add up to 1 million barrels oil per day (BOPD) would have a big impact on prices as well as our energy security, in addition to providing American jobs and keeping those dollars in our economy. I've heard the argument that 1 million BOPD of production from ANWR is insignificant because it is barely more than 1% of daily demand. The largest oil field in the world (in Saudi Arabia) produces approximately 7% of daily world demand (and the second largest field only produces about 2%). Do you thinks those don't make a difference?

The comments on increasing the use of nuclear power to generate electricity are dead on. Oil is perfectly suited for use as a transportation fuel, and is too valuable and scarce to continue to use to generate electricity. Likewise, the biggest problem with gas prices in the US today is the lack of refinery capacity to meet continued increasing demand. No quick solution here since we haven't built a new refinery since the 1970's and no one wants one in their back yard, not to mention the tremendous red tape and approval process.

One final comment. The surest way to make a bad situation worse is for government intervention, which never accomplishes the stated goal and always worsens the situation in the long term. For those who say that oil companies are "raping" the public, you may want to check out the information below (taken from a post on the Chevron Yahoo financial message board):

"Most of these yahoo’s slamming “Big Oil” crack me up.

From 2005 Fortune: Profits as % of Revenue

Cvx = 9.0 (Chevron)
Cop = 6.7 (ConocoPhillips)
Xom = 9.4 (ExxonMobil)
Mro = 2.8 (Marathon)

********

Microsoft = 22.2
B of A = 22.3
US Bank = 28.3
WellsFargo= 20.7
Intel = 22.0
Merck = 25.3
Coca cola = 22.1

My question is: Where’s all the outrage!?!?"
 
#24 ·
#25 ·
oldcorvettef said:
[Additionally, the majority of our gasoline is refined from Light Sweet Crude. The technology exists to refine lower grade crude (cheaper!) into gasoline, but we don't have refinery capacity/capability to do so (can't find reference - sorry).
This is a major problem, we do need the refinery capability to refine this type of higher sulfer crude which is stilll in the $30 ~$35 range. However, this is political in nature being special interest groups prevent the construction of such refineries.
 
#26 ·
TexasRedLT4 said:
Some mis-information here needs to be cleared up. ANWR holds much more than 1.5 days of total world supply. As mentioned earlier, ANWR is estimated to hold between 6 & 16 billion barrels of recoverable crude oil resource, but it will be very expensive to develop, produce and get to market. ANWR could not be economically developed for only 90 million barrels of oil.
Yeah, that didn't sound right when I wrote it. It is 1.5 years of global demand.