Will 5.00 Fuel Prices Hurt Racing Even More? (3 Viewers)

[Randy]

At least we still have the freedom to come to this forum and discuss it, unlike people in many countries whose leaders would love to be running this one.

At the risk of getting banned for life, we have some elected officials in our country that would love "to be running this one" too.

 

[yoda]

I hope you are right. I really do, but the price just went up 5 cents in the last few days. And this is all based on a prediction by the former president of Shell Oil...

Pretty sure he's in the speculation game now, and figuring out how to turn his retirement stock options into a few more hundreds of millions... Hmm- let's see: have a press conference and get folks in a tizzy?

Yeah, that'll do it...

Speculators put the gas prices at $2.50, $3.00 and $4.00... All good for capitalism, as long as we give them a soapbox

Did Speculation Fuel Oil Price Swings? - 60 Minutes - CBS News

 

[Jeff]

Oil reserves are one of the most widely held natural resources in the world. Yes, there is probably some price manipulation (OPEC is getting a little better at working as a union, and the crack spread on refined products seems to usually move the right direction for certain profit interests), but by and large we are all free to profit/lose on the price of oil. Why do many in this thread act so hopeless? Many of these companies are publicly traded, commodities market are clearly open to the bankers/speculators and you! . . . if you know what direction oil prices are headed in the future I guarantee you can make a hefty profit off it!

If oil companies did control energy prices I guarantee two things would be significantly different than the are . . . the btu price disparity between gas and oil would not exist and prices would be much more stable (but albeit slowly rising).

Many of you seem to want regional price regulation . . . I don't see that as a solution. I would love to see natural gas supported as a bridge fuel for the general public, but dang folks think through what you are arguing. This is supply and demand . . . the supply is exceedingly broadly provided and demand is what you control.

By comparison . . . go try to invest in gold . . . let me know how close you can buy relative to the market quoted price. If you get within 20% on a single transaction you just bought yourself a few hundred pounds worth.

 

[rocketman]

We go though truck and trailer tire like crazy too. On one trip alone we blew out 2 truck tires. The guy at the tire store said "yep August is blow out season"

 

[clwill]

Trying desperately to keep this on track here... really. If we could keep it down the "what effect does the price of fuel have on racing?" we're good. When we start down the politically charged "why" is when we get into areas that can't end well. And will cause your moderator to get involved.

So... how much influence did fuel costs have to do with all the teams moving to Indy? I know there were lots of reasons: cheap land, low cost of living, talent concentrating there, friendly business environment in Brownsburg, and so on. But the fact that it's centrally located must have a lot to do with it, no?

 

[Randy]

So... how much influence did fuel costs have to do with all the teams moving to Indy? I know there were lots of reasons: cheap land, low cost of living, talent concentrating there, friendly business environment in Brownsburg, and so on. But the fact that it's centrally located must have a lot to do with it, no?

Yes and no. But you may not want to know the "no" part.

CLW, you are asking loaded questions while telling people to keep the politics out of it. Fuel costs were 10% of the reason. The rest is the political atmosphere with the state legislature shoving CARB (California Air Resources Board) regulations, state and local taxes, permits, fees, workman's comp, etc. on the people who create the jobs here. The state government makes businesses out to be the enemy here in California and treats them like their personal piggy bank which is why they are leave the state at an alarming rate. Those same reasons are why the buildings in Bill Simpson's (former) Gasoline Alley in Torrance are now a bunch of non racing related entities occupying the buildings and why Force left Yorba Linda and is looking to lease his complex on Savi Ranch. Other states run TV adds here telling business to relocate to their more business friendly state.

Here's one:

YouTube: Nevada Development Authority California Business Commercial

Call Force, Bernstein, Bill Miller, etc and ask them why they left the Peoples Republic of Kalifornia.

I suggest you lock this thread and start one discussing nitro percentages or something. You can't ask where milk comes from and at the same time tell everyone you are the moderator and therefore we can't mention the cow.

RG

 

[clwill]

This thread was not "why is fuel so expensive" ("where does milk come from") it was "how will expensive fuel effect racing" ("do racers like to drink milk?").

I have no problem with your point that government policies have pushed businesses to leave California. I am sure that is a part (maybe a large part) of the reason why they left. But my question wasn't "why did they leave California?" That's just the question you seem to want to constantly answer.

My point, and it's still an interesting question is, why Indy? If you're right, they would have gone to Las Vegas. Warm, only 4 hours away, friendly business climate, plenty to do, lots of housing. But they didn't. They went 2,000 miles away to Indy. Seems that "centrally located" saving time and fuel, must have been a major portion of the choice of Indy.

 

[rocketman]

It's impossible to discuss this issue without bringing up politics because it's one of the key elements to supply and demand. When an administration or congress does not allow domestic oil drilling that plays a part in the supply side.

Sadly, Randy is right on the money concerning California and I wonder when NHRA will move its headquarters to Indy. I suppose though that the highest paid at NHRA like their LA lifestyles but something will have to give at some point.

LA use to have a very vibrant drag racing community and industry but I wouldn't blame it's disappearance on politics. I think it was a combination of other factors:

1. The end of Orange County International Raceway and Lyons before that
2. Skyrocketing costs
3. Aging California based stars like McEwen, Lombardo, Leong, and others quitting.
4. The loss of sponsorships and other lucrative sources of money

I think OCIR and before that Lyons was the glue that kept the whole cottage industry going and now what you see in Indy are the remaining survivors.

 

[twostep]

Seems that "centrally located" saving time and fuel, must have been a major portion of the choice of Indy.

If I'm counting right, 8 races are a lot closer to Vegas than they are to Indy, which would make LV nearly as 'centrally located' as Indy is. I'm guessing the economic climate is the difference. Not sure about Indy but Vegas is in the crapper, unless you're a hooker or a casino operator. There's property tax considerations, the availability of quality employees, housing costs, the overall cost of living, and the fact that ANYWHERE is better than southern California.

Chris, if we limit discussion to strictly HOW $5 gas will effect racers' participation in drag racing, we can close this thread after about two posts. What makes it an interesting, challenging 50-post thread IS discussion of the source of rising prices; the cause-and-effect on every one of us. Such discussion does involve entities and in some cases, certain people, and I suppose parts of it could be considered off the beaten path. A little off-topic? Yeah. Does that bend the keep-it-on-topic rule somewhat? Yeah. Show me a thread that doesn't wander a bit. Members themselves, or one of the mods, always seem to straighten it back out and all is well. Occasionally a thread will run wild and in that case, well, you have the padlock.

But this thread isn't wild; this is a good thread that involves everyone in one way or another. It's much more interesting than rehashing Top Fuel oildowns or whether or not Erica Enders is a good driver. Just edit out any 'politically charged' nonsense that you feel isn't proper and allow the rest to flow as it will. Respectfully....

 

[Nitrohelper]

... the fact that it's centrally located ...

I would say that's the number one reason, not only diesel fuel costs, but all the road cost for the crew members staying in hotels, food , laundry, etc. , vs. at home with their families and at a permanent shop to work in vs. parking lots...
NHRA kept the Safety Safari equipment in Indy during the summer for years before the West Coast teams started moving there...
The second reason was all the support facilites for racing because a lot of the open wheel car teams had moved there in the '80s...

 

[Toejam]

It's impossible to discuss this issue without bringing up politics because it's one of the key elements to supply and demand. When an administration or congress does not allow domestic oil drilling that plays a part in the supply side.

Sadly, Randy is right on the money concerning California and I wonder when NHRA will move its headquarters to Indy. I suppose though that the highest paid at NHRA like their LA lifestyles but something will have to give at some point.

LA use to have a very vibrant drag racing community and industry but I wouldn't blame it's disappearance on politics. I think it was a combination of other factors:

1. The end of Orange County International Raceway and Lyons before that
2. Skyrocketing costs
3. Aging California based stars like McEwen, Lombardo, Leong, and others quitting.
4. The loss of sponsorships and other lucrative sources of money

I think OCIR and before that Lyons was the glue that kept the whole cottage industry going and now what you see in Indy are the remaining survivors.

I wish Virgil Hartman would Chime in here and tell us all why he re-located his business from So. Cal to South Carolina! My guess is Sky-High Taxes and Environmental Regulations had something to do with it!

 

[Randy]

CLW, maybe you aren't old enough to remember some key points and the reason I bring California into the conversation. I'll explain.

Southern California was the birthplace of drag racing. It's where a majority of the suppliers and support for race teams were located. Keith Black. Ed Pink. Arias. BRC, Bill Miller Engineering, RCD, BAE, Crower, Hayes, Simpson, Bryant, Velasco, and on and on. They were here because of the weather, and because a majority of the race teams were here.

The previous poster said it wasn't just politics. OCIR, Lyons and Irwindale all closed. Since I lived through the closure of all three, I can tell you it was all about politics that took them out.

Lyons as given the boot because there were "big plans" for the property and the noise and pollution was upsetting. They bulldosed it and the property sat vacant for decades. OCIR gave way to development even though the current Lt. Governor Mike Curb tried to have it designated as a State Park. Ascot Park in Gardena (huge sprint car track with weekly televised events) was bulldosed because, like Lyons, the politicians had big plans for the property. The property sat vacant for decades.

With no reason to stay everyone left California in order to survive (most teams located in California registered their rigs in other states because the California registration fees for rigs is borderline confiscatory). Companies started setting up shop on cheap land in Indy so one or two of the larger teams followed. Once the door was open and the word was out concerning the business friendly environment the rest headed there, too. But it's not without issues. Many crew members and owners of the teams don't want to live there because of the weather. I know of more than one driver or owner that have spouses that absolutely will not move there because they hate the climate. But the climate is considered a minor inconvenience for the teams compared to the business climate they left in California, sunny skies or not.

As side note. California CARB leads they way with regard to regulation which has killed the racing industry here. Chrome shops, machine shops, t-shirt printing companies, auto painters...everyone who handles some sort of chemicals is levied, fined, inspected, reinspected and permitted to death here in the name of saving the planet and global warming and "paying their fair share." It's tough to get a good chrome job done and most of the high end shops have either closed or moved out of state. Why is it I live in the hub of hot rod land and yet we have to send stuff out of state if we want a decent job done.

It's all related to why the teams are in Indy. And in the beginning it had little to do with fuel prices. The mass exodus started when diesel was south of $2 a gallon.

RG

 

[rocketman]

Here you go! This just in gas to hit 4.00 by memorial day:
Oil's surge in 2010 paves the way for $4 gasoline - Yahoo! Finance

 

[Paul]

One word describes the current run in price, SPECULATION. It is awfully hard to predict future energy consumption when it is unclear what the direction of the global economy will go. When oil was at $125/bbl and gas at $4.25 in mid 2008 did anyone foresee the collapse within 3 months to where oil was $35/bbl and gas was $1.50?

 

[twostep]

Here you go! This just in gas to hit 4.00 by memorial day:
Oil's surge in 2010 paves the way for $4 gasoline - Yahoo! Finance

Well, $4 isn't $5; there's a big difference. Second, this is a prediction from some AP writer. Third, if the national average is $3.07 with crude at $92, $100/barrel doesn't equate to $4. The last time gas was 4 bucks, oil was $140 per.

And we'll survive even if it does reach $4, which I believe it ultimately will. Americans are creatures of habit, and it'll take a lot more than $4 gas for most of us to break them. We'll race less, but we'll still race. The article did have one thing right - Big Oil will survive one way or the other. The whole planet depends on them, like it or not.

 

[twostep]

When oil was at $125/bbl and gas at $4.25 in mid 2008 did anyone foresee the collapse within 3 months to where oil was $35/bbl and gas was $1.50?

Yes. The big power brokers who drove it down, profiting by selling short. If you're unfamiliar with the term, it means selling a commodity at the current price with the stipulation you must buy the same commodity back at a predetermined later date. If you sell your currently-priced oil at $100, agree to buy it back 6 months from now and the price drops to $50, ya done good. The catch is that if oil goes to $150, you lose. The brokers, in collusion with OPEC, Big Oil and God knows who else, ensure that won't happen, of course. US energy consumption remains fairly constant. Ever wonder how all of a sudden we have a 6-month excess with every storage tank in the country overflowing with crude? And 3 months later we're 'dangerously short'?

The same cycle will repeat, once the ceiling is reached and public resistance becomes overwhelming. What is that ceiling? Two years ago, it was $4. Now? Who knows. It may never return to $1.50. But rest assured, it won't remain at $4, either.

Unless you're heavily sponsored, only a handful of people across the country actually earn a living drag racing, not much different from any other hobby. In most cases, it's a matter of how much can you afford to lose. If you can't handle the increased fuel costs, you'll have to park your operation until they become affordable. Pretty much cut and dried, no?

 

[Bob]

I needed to buy a car a few weeks ago. I looked at a bunch of very nice larger V-8 and 6-cylinder 4x4 vehicles (ideal for Colorado winter driving) that were within or close to my budget. The cost of gasoline out weighed the comfort and convenience of any of those vehicles and I bought a very fuel efficient compact car instead.

If fuel prices can and do have an impact on what people buy and use for their personal daily transportation needs, fuel prices will absolutely impact racing and the number of races that many low budget and sportsman racers attend. If the fuel costs to tow to a race amount to more than you could make in purse money by winning a race, that alone will keep you home.

 

[clwill]

Just heard an interview with gentleman credited as the source of the $5 prediction. He's a former president of Shell Oil, now working for the "Citizens for Affordable Energy" lobby and is pressing for more offshore oil drilling.

 

[twostep]

I wish they'd open up the whole Eastern seaboard to offshore drilling. That's not to say I'm ready for a foreign oil company with an abysmal safety record to start drilling in 5000-foot waters. There's plenty of safe, shallow, environmentally-friendly places to drill.

It has to be done. Greenies can whine all they want; the world simply isn't ready to make a wholesale switch to alternative energy. We have enough resources right here in the USA to get by until those options become viable. If that Shell executive gets rich(er) because he was able to spearhead the opening of a new oilfield, hats off to him.

 

[rocketman]

Look at those old Hot Rods and Car Craft mags from the late 60's to the 80's, everything was done in Southern California when it came to nitro racing.

OCIR went bye-bye because the lease owner The Irvine Corp. decided to redevelop the property so that's what I mean that it wasn't the California Politics of today. But you are right that the California politics of today is regulating industries including motorsports right out of California.

And 4.00 gas isn't 5.00 gas but do you think it will stop going up on Labor day? 4.00 gas is the tipping point and we all know that, and there will be hell to pay by all of us when it moves past 4.00 this summer.