Crude Oil: Black Gold or Black Menace?
With all the publicity nowadays surrounding the price of Crude Oil, I resolved to write an enlightening article on the backdrop of the so-called “Black Gold.” I’ll briefly go over history, environmental effects, pricing and the future of the thick black sludge that is coveted by every major economy in the world. Hopefully you can reach a better point of view on the subject.  The history of Crude Oil is too immense to discuss in this brief editorial so I will limit it to a general overview. The first oil wells were drilled in China in the 4th century. They where as much as 243 meters deep and were drilled utilizing drill bits attached to bamboo poles. The contemporary history of crude began in 1846, with the breakthrough of the process of refining kerosene from coal by Atlantic Canada’s Abraham Pineo Gesner. The first rock oil mine was built in Bobrka, Poland the following year. These breakthroughs rapidly spread around the world, and Meerzoeff built the first Russian refinery in the mature oil fields at Baku in 1861.  James Miller Williams in Oil Springs, Ontario, Canada in 1858, excavated the first commercial oil well drilled in North America. The American petroleum industry commenced with Edwin Drake’s discovery of oil in 1859, near Titusville, Pennsylvania. The industry matured slowly in the 1800s, driven by the demand for kerosene and oil lamps. It became a major national business in the early part of the 20th century. With the introduction of the internal combustion engine came a need that has largely sustained the industry to this day.  While we all need to get to work in some way or another, rarely does anyone consider the environmental effects of the fuel that powers our mode of transportation. Yes we know that the emissions from are cars, buses and trains have a green house effect on our delicate environment; but what about the rest of our ecology? Oil extraction is costly and occasionally environmentally detrimental, although Dr. John Hunt from the Woods Hole Oceanographic Institution revealed in a 1981 paper that over 70% of the reserves in the world are associated with visible macroseepages, and numerous oil fields are found due to natural leaks. Offshore exploration and extraction of oil agitates the encompassing marine environment. Exploration could call for dredging, which stirs up the sea bottom, stamping out the ocean plants that nautical creatures need to survive. Not to mention the typical Crude Oil and refined fuel spills from tanker ship accidents. All of these factors have tainted frail ecosystems all over the world. Petroleum products are priced like most commodities: supply and demand. While this may sound simple, the actual start to finish process can be a lot more complex subject. References to oil prices are generally related to the spot price of either WTI/Light Crude as traded on New York Mercantile Exchange (NYMEX). Priced by the barrel, Crude Oil is rapidly becoming the most costly commodity on the market (second only to Gold). Oil pricing is extremely reliant on both its grade and location. The vast majority of oil will not be traded on an exchange but on an over-the-counter basis, typically with reference to a standard crude oil grade that is quoted via a pricing agency such as Argus Media Ltd or Platts. It is often claimed that OPEC arranges the oil price and the real monetary value of a barrel of oil is in the area of $2, which is equivalent to the cost of extraction of a barrel in the Middle East. These appraisals of costs disregard the cost of finding and developing oil reserves.  You can’t talk about the future of oil without talking about the “Hubbert Peak” oil theory. This hypothesis depicts the long-term rate of production of conventional oil and other fuels. It assumes that oil reserves are not replenishable. It also predicts that future world oil production must unavoidably reach a crest and then decline as these reserves are exhausted. Like every other theory of any importance it is highly controversial. “When will the Oil actually start to run out?” is the big question. No matter how you look at it, our society needs to concentrate more efforts on either alternative fuels or more fuel-efficient modes of transportation. While I’m sure that the oil won’t peter out in my life time I would like to think we can leave this world a better place for future generations. In closing, I hope this article has given you a better understanding of the topic and made you a more informed consumer. So the next time your grumbling at the price of gas, at least you’ll understand what you re complaining about. If you would like to read more on the topic of Crude Oil, you can vistit http://www.crudeoilrefineryhome.com/ or read one of the books listed at the end of this article.  Books about the petroleum industry: James Howard Kunstler (2005). The Long Emergency: Surviving the Converging Catastrophes of the Twenty-first Century. Atlantic Monthly Press.  C.J. Campbell (2004). The Coming Oil Crisis.  Peter Odell (2004). Why Carbon Fuels Will Dominate the 21st Century’s Global Energy Economy. Multi Science.  Amory B. Lovins (2004). Winning the Oil Endgame. Rocky Mountain Institute.  Vaclav Smil (2003). Energy at the Crossroads : Global Perspectives and Uncertainties. The MIT Press.Stephen Nelson is a professional commodity trader that specializes in the energy market. http://www.crudeoilrefineryhome.com/
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Changing the Adversarial Nature of Car Sales
Consumers have an adversarial attitude towards car dealers, and I can’t say blame them. The retail auto industry has done so many things to create an atmosphere of confusion and intimidation that many car buyers understandably dread the buying experience. Not only do some dealerships encourage their sales staff to engage in dishonest tactics to fleece customers, many have proven themselves to be sexist as well. I always wondered how the salesmen for those particular dealerships came home at night and looked their wives or daughters in the eye. Being a dealer myself, I have encountered the best and worst that the business has to offer. While my turnover is quite low compared to most, I have hired sales associates with prior experience over the years. I have also fired more than a few of these “professionals” within a week of hiring them. Why, you ask? I don’t mean to sound trite, but I do business by the golden rule. As a result, I won’t tolerate dishonesty on the part of my sales staff or the condescending attitude that I notice many dealers and salespeople take toward their customers. I also refuse to use the dubious tactics that many dealers use to nickel and dime more profit out of every customer that enters their showroom. Now, let me tell you what the results of following the golden rule are… I don’t have an adversarial relationship with my customers. Sure, more than a few have stepped into one of my sales staff’s offices ready to do battle, but we quickly alleviate their anxiety by doing something that I can wholeheartedly recommend for any business. We give them honest, fair and respectful treatment. I know this might sound like a novel approach in the auto industry, but it’s the only way to do business in my opinion. If more dealerships would stop trying to treat every sale as though it were the last one they will ever make and concentrate on building a good repoire with their clientele, they would enjoy the success that I do. I would bet that my profit margin is, on average, a bit below that of most other dealerships. Still, I never have a shortage of customers, most of which return for their next purchase. Many of my long term customers will wait for me to find the car they are interested in before buying from another dealership. Why? Because they know that when they drive off my lot, they have been treated fairly and have received a good value for their money. More importantly, I can go home at night knowing I run an honest business and that I can take pride in considering myself part of the community I do business in. That’s worth a lot more to me than a few extra bucks. I wish more of my competitors felt this way as well, because it would benefit our industry as a whole to change our sales philosophy for the better. To learn more visit Spanos Imports of Daytona Florida visit http://www.spanosimports.com/
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