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<p>Didn’t say you weren’t allowed to. In my opinion it’s just pretty damn hypocritical.</p>
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<p>It isn’t going to die during your career so that’s irrelevant. </p>
<p>Who do you think makes the industry less environmentally unsound? The people complaining about it?</p>
<p>Oil companies are not responsible for the price of oil/gas so I don’t see how they’re “pillaging our collective wallets”.</p>
<ol>
<li>Working in an industry thats super risky both in short and long term</li>
<li>say goodbye to family or social life if you are in the field</li>
<li>hard/stress</li>
<li>you are hated because you try to earn a living. liberal arts majors are jealous they majored in a puffball degree and work at McDs, so they become “Climate activists” and try to ruin your life by asking the oil industry to “spread the wealth” in the name of “environmental justice”. Ever notice the people at the campus dining halls who are collecting signatures for the latest pet project ? (Stop keystone XL, ban fracking, etc). Most of them are unpaid volunteers who want you out of a job. Petroleum engineers Laugh at them and move on, its good revenge considering they are trying to destroy the industry you work in…</li>
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<p>I spent four years in Louisiana and saw first hand the conditions as well as the largesse that the oil industry deals in. There’s lots of money to be made, working conditions are tough, and the demand will keep growing.</p>
<p>On the other hand, one needs to remember that the economy is a zero sum game, meaning, that those $80k starting salaries and $20k bonuses and the like are paid by high gasoline prices by everyone else. So unless one is a fourth generation oil worker of some kind, eventually it catches up with the rest of the country. It’s not a case like Apple where the purchase of its products is optional. Oil is part of the economy, period.</p>
<p>So, consider the implications of those nice starting salaries with gas in the $5-6 a gallon range if the oil companies have their way. Oil prices nearly destroyed this country’s economy last time they went to record highs - the oil industry learned well from that experience and they have been ‘restrained’ this time. But eventually there’s a breaking point… </p>
<p>When the oil prices crashed in the 80’s there were TV commercials in the South Louisiana & Houston areas “don’t burn your house (to avoid foreclosure)” and the infamous bumper sticker “Dear God, please give us another oil boom, we promise not to piece it away like we did the last one”.</p>
<p>So, consider those high salaries along with the impact the industry has (and will have) to the rest of the country. Personally I don’t see another oil crash coming, but eventually something’s got to give.</p>
<p>Most people have no idea that there is even something called Petroleum Engineering. I applied at a few schools, got accepted but due to tuition being high, I decided to go for an IE degree, in-state.</p>
<p>PE is a great choice for a single person with no kids who doesnt mind working his ass off and living in the middle of nowhere when necessary.</p>
<p>Only thing that scares me about this major is that, it is cyclical and too narrow.</p>
<p>In the case of an oil bust, I dont even know what a PE could do for living. IE is broader and not dependent on one particular type of industry.</p>
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Tangential, but this is completely wrong according to my understanding of modern economic theories. Carry on…</p>
<p>Hardly tangential - if the economy is ‘growing’, and everyone shares equally in this ‘growth’, then higher salaries and prices can be tolerated to some extent. When we’re stuck in this 2007 to current depression-by-any-other-name situation, with stagnant wages, pretend low inflation, and out of this world high real inflation, kindly reassess whether the issue is tangential or not.</p>
<p>The fact is that as it stands, we’re spending more on energy than on food in this country, zero sum or not. Every additional dollar that is taken out of the consumer to pay for highly expensive energy is one less dollar that is not spent elsewhere in the economy. The energy sector, unlike lots of other sectors, is not very human capital intensive, and unlike lots of other sectors, has consumers left with few alternatives.</p>
<p>Put more bluntly, raise the price of gasoline to $6/gallon and see what happens to a lot of ‘non-mandatory’ consumer spending, then tell me whether the pie expands or not.</p>
<p>Modern economic theories are just that…</p>
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<h2>Just so we’re clear: you’re making an argument based on dubious applications of economic theories, and then justifying the argument by suggesting that economics as a science can be ignored?</h2>
<p>I’m not an economist, granted, but from my understanding of it, it’s not an exact science to begin with, and not a science, period, once politics and other, ehem, non exact parameters are considered.</p>
<p>I am also a realist who has, as a hobby, studied the energy industry. Finally, I am an engineer that works in an industry that absolutely depends on disposable income (consumer electronics) so I have first hand experience of the impact of high energy costs on my customers’ disposable income.</p>
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<p>They have to find people who love the smell of napalm in the morning.
[Smell</a> of Napalm Scene - Apocalypse Now - YouTube](<a href=“http://www.youtube.com/watch?v=6OnOvrTugiA]Smell”>http://www.youtube.com/watch?v=6OnOvrTugiA)</p>
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I’m sorry, but you’re just straight up wrong. Any science can be abused by people who don’t know or don’t care how to use it properly. That does not make it any less valid as a science.
Not an exact science? Neither is physics, chemistry, biology, or ESPECIALLY engineering. There is only one “exact science,” and that’s mathematics.</p>
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Let’s address this with one concept from economics: elasticity. When you don’t especially need something, changes in income/price will really affect your buying habits. Consumer electronics are rather price elastic, because if you don’t have the money, that’s one of the first things you cut. Not that you won’t cut gasoline, but the fact is that a car is one of the most efficient ways to get to work, which is just about a necessity. The amount people buy changes less with the price of gas than with the price of electronics.</p>
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The only thing that separates economics from other sciences is that people who are completely clueless about economics are more likely to think they actually understand. An unfortunate side effect of being politically relevant.</p>
<p>You seem to be missing the point in an effort to score a point or two… I have taken a couple of economics classes at the college level and I understand price elasticity, supply and demand, and so on. </p>
<p>Thing is, energy is a commodity that is extracted by monopolies, processed by monopolies, and sold by monopolies, while rampant speculation is occurring at every level of the supply chain. Expecting economic theory to explain energy pricing is like expecting zoology to describe the Easter Bunny. </p>
<p>The bottom line is that if the price of energy goes much higher than where it is, common sense and even economics will tell us that turning the US into a third world country will impact everyone regardless of the lucky souls who start with 6 figure salaries as petroleum engineers. </p>
<p>My birth country of Elbonia took 20 years to go from developed to developing to “dear Foxconn please assemble iPhones here” thanks in part to great economists and political theorists who said it would not happen. Heck, the government there was full of Western educated luminaries… The USA is headed down the same path thanks to similar theorists so pardon me if I do not share your confidence in economics theories.</p>
<p>You severely overestimate the effect of oil on the US economy as a whole.
But hey, it seems that you’re more interested in comics than truth. Not really that much more that needs to be said.</p>
<p>@turbo I think the point is that it’s a little confusing - possibly even disingenuous - to use the language of economics to make arguments that aren’t supported by economics. Unless and until you concede that your views go against generally accepted theories, it just looks like you don’t know what you’re talking about… sort of like saying “the globe is flat” (the language already buys into the theory that the Earth is round, indeed spherical, but argues that it is flat - a contradiction in terms).</p>
<p>Ok… Either of you kindly explain whether increasing energy prices at a time when the US economy is demonstrably not growing wage wise or employment wise are tolerable.</p>
<p>If they are, and you believe $6 gas in the USA would be no different than $7 in Europe then by all means petroleum engineering is an awesome idea. After all, the economy could handle $4 gas so $5 or $6 will not turn us into a third world country.</p>
<p>If they’re not tolerable, then at some point one of various things will happen, none of them likely to be good for the employability of petroleum engineers.</p>
<p>There. No economic theories were harmed as part of the above paragraphs :)</p>
<p>
[Petroleum</a> Engineers](<a href=“http://www.bls.gov/oes/current/oes172171.htm]Petroleum”>Petroleum Engineers)</p>
<p>36,410 petroleum engineers * $147,470 mean annual PetE wage = $5,369,382,700 total annual PetE wages</p>
<p>[How</a> much gasoline does the United States consume? - FAQ - U.S. Energy Information Administration (EIA)](<a href=“Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA)”>Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA))
$5,369,382,700 / 134 billion gallons = $0.04/gallon</p>
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It really won’t. But even “monopolies” can’t put the price at whatever they want with impunity.
It’s very possible to reduce oil consumption if that becomes a real issue. In the short term, start driving less and use more public transportation. In the long term, switch to alternative fuels and get extremely fuel-efficient cars. There is a price at which even addicts will stop buying.</p>
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<p>Sometimes they do, most of the time the standard operating procedure is to indeed set the price as high as they can get away with. Mrs. Turbo has spent the last dozen years in pharmaceutical manufacturing. That realm of the economy seems to have written its own textbook on ‘impunity’…</p>
<p>As for reducing oil consumption, well, we did, BIG time, and we increased local supply, BIG time, and a lot of good that did to oil prices. Thing is, the average consumer does not even begin to understand how rigged the system is. Yet because there’s no choice, we’ll continue to pay.</p>
<p>A few years ago when oil hit $147/barrel, oil companies did indeed panic and started selling at well below cost. Why was it that $147 oil resulted in $4.25 or so gasoline and now we’re in the $95 range yet most of the country sees prices near the $4 mark? Because, unlike the last spike, this time the refiners wisened up and got into the game. Lots of refineries have been shut down, and when price of oil begins to drop, well, a refinery or two have an ‘incident’ (a squirrel eating a power line, for example) and a refinery goes down for a month. Squeeze supply and keep collecting.</p>
<p>Here’s what i see happening in the near and long term.</p>
<p>In the near term, if you have a job, $4 or $14 a gallon, you’ll pay. That’s what will turn us into a third world country. We’ll stop buying everything else to get to work. If you don’t have a job, $4 or $14, does not matter. If you have money, 1% money, or like my neighbors, 3%-4% money, it does not matter. Eventually lots of other businesses will take the fall when demand for their services and products goes away. </p>
<p>In the medium term, say, 10 years from now, we’ll see a lot more hybrids and electrics, maybe reaching 10-20%. At that point, the no-brainer move for Big Oil would be to use its cash hoard to buy public utilities and, imagine that, get into the electricity market. Currently a Nissan Leaf type all-electric runs on a third to a quarter of the cost of a gas car. How long before vehicle electricity @ 240V becomes way more expensive “just because”? Natural gas for vehicles and other energy sources will continue to be priced at the same or similar cost as what gasoline goes for (one only has to look at E85 or diesel for proof). </p>
<p>The long term solution, 20+ years from now, is the return to the cities and widespread telecommuting. This may wean us completely off oil, but it’s 20+ years from now. Ironically, I’m betting my kid’s architecture tuition on the above scenario… </p>
<p>My guess is that PetE’s will do well in the next 10-15 years, but eventually, as you said, the addict will either kick the habit or go down in flames, or, something drastic will have to be done from government policy point of view to avoid turning us into a third world country. Those are the ‘not good’ for long term scenarios I was referring to…</p>
<p>Your idea that prices would reach high enough that it would cause economic retrograde is more than laughable. Neither pseudoscience nor sentiment makes such an assertion anything more than the fantasy of a clueless individual.
Any reasonably competent government would set a price ceiling by about $6. That includes the US government.</p>
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<p>I guess you were not around during the last time this was tried in the US… It was 1973-1974, and price ceilings led to rationing and other rather unfortunate events. I don’t believe any US politician is delusional enough (or gutsy enough) to impose price controls. </p>
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<p>I wish it were, so that I could laugh it off along with everyone else. </p>
<p>I’d provide a bunch of references for either of my assertions, but it’s not likely to be of much help if one is unwilling or unable to understand the relationship between disposable income and energy prices in an economy where stagnant wages and high inflation are the norm. The tougher part is divining the impact of such a situation to the energy market employment picture.</p>
<p>I shall leave with a couple of articles that explain this in more detail:</p>
<p>[Oil</a> Price Shocks and the Recession of 2011? - Reason.com](<a href=“http://reason.com/archives/2011/03/08/oil-price-shocks-and-the-reces]Oil”>Oil Price Shocks and the Recession of 2011?)</p>
<p>[Gail</a> Tverberg on High Oil Prices And GDP - Business Insider](<a href=“http://www.businessinsider.com/gail-tverberg-on-high-oil-prices-and-gdp-2013-1]Gail”>Gail Tverberg on High Oil Prices and GDP)</p>
<p>Best Regards</p>
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Oh yes they would, if prices were spiraling out of control. Ceilings most certainly lead to shortages, but when they are instituted it is done because a shortage is the least important problem with that commodity. It would hurt the economy, but it’s not the worst thing that could happen by a long shot.</p>
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So you prefer to make an assertion with no real backing? </p>
<p>I read both of those articles, and they make a rather obvious point: oil prices being high will hurt the US economy to the point of recession. That’s well-known actually, because shortage of a vital resource tends to do that. International war also tends to lead to recessions when key trade routes are blocked. But a recession is a far cry from economic retrograde, which really only comes about when there’s a collapse of a far more valuable resource of the economy: credit. That was the cause of the first great depression (1873-1896), the Great Depression (the only event that truly caused retrograde rather than just stagnation), and the current crisis. </p>
<p>Frankly, oil just isn’t important enough. A supply shock could lead to recession, but it will never lead to a large-scale economic collapse.</p>