I personally didn't make any specific predictions about April 1, Sept. 9, etc. because I knew that it is easy for most businesses to conceal and temporarily work-around these date failures. However, I am now making what I consider to be a conservative prediction for next year regarding the oil industry, and would love to hear about any evidence that would offer a serious challenge to my claim.

Here it is:

I predict that by July 1 of the year 2000 gasoline prices will exceed $5.00 per gallon in a majority of the United States (at least 34 states) and that it will most likely be rationed as well.

Bring it on Polly BAAAABY!!!

The basis for my prediction? In my research I've discovered that the huge Fortune 500 oil companies like Exxon, Shell, Texaco, no matter how financially powerful they are, still rely on hundreds of smaller companies that provide electronically operated valve switches, flow mechanisms, monitoring equipment, etc., etc. The problem appears to be that many of these smaller suppliers either can't afford to rebuild their entire product line at their cost, or simply don't care whether their products are compliant if the customer has already bought them.

Most of these companies are privately owned and I doubt that any are on the Fortune 500, so they don't even feel obligated to disclose any of their status. If it would cost them their entire profit margin to remedy these problems just to help out the big boys like Mobil and Chevron, then what's the point? If the major oil companies want to sue them they won't get much, so they would be better off to takeover these smaller suppliers and use what assets they have to their advantage. But this is where the big boys missed the boat - they haven't done that yet because they didn't want to spend the money!

Here is a good link for those interested in researching this:

oil related businesses

(About 10" down on the left side you'll see "Oil and Gas Products" under the red "Industry Websites" header)

This is the subcategory with links to the "Instrument/Electronic" category:

electronic oil products

I think we're going to see a lot of clever "passing-the buck" strategies as I noticed from this supplier:

"In most microprocessor based Products, the date data is transmitted from the Product over a communication line to an external system (e.g. 'logging' of an event) which is not manufactured by Brooks. (their emphasis, not mine) Brooks does not assume any responsibility for third party hardware, software or firmware which is used in combination with the Products or with which the products share information, and it is important for you, the customer/user, to determine proper operation of any third party hardware, software or firmware."

In other words, even though our product spits out bad 2-digit data, the other guy is to blame because his equipment doesn't know how to intepret it.

I wish I would have become a lawyer - there is a fortune to be made next year!

-- @ (@@@.@), September 12, 1999

Answers

Oops! Screwed up that last link - here's a goodun for ya:

"readiness" disclosure

-- @ (@@@.@), September 12, 1999.

I consider myself of the doomer ilk, but if your prediction is true, that alone would cause huge econonomic problems rivaling "The Great Depression".

-- Anonymous99 (Anonymous99@Anonymous99.xxx), September 12, 1999.

To Senor @@@@@@@@@ or anyone else that can answer:

coinciding with this information is the current situation with opec which is currently holding meetings to drive up prices irrespective of y2k. Having traded oil futures (options) last year about this time. (six months before it doubled) shuckks!! Anyway the dilemma is thus: It seems as obvious as Autumn coming that oil prices,natural gas etc. is going to sky rocket! in the next few months. Dont know when (if) bank runs are going to start and then there is the digital debacle next year.

Anyone else considering Oil futures (options) delivered say around Nov.??

-- David Butts (dciinc@aol.com), September 12, 1999.

You got that right guys! The reason I call this a conservative prediction is because I really think this will occur much sooner, with much higher prices. The oil industry operates on "just-in-time" inventory just like everyone these days. We've got enough stashed for about 60 days of normal supply. A 10% reduction in the supply is probably going to at least double prices at the pump.

I count 180 suppliers just in the electronics section, and this is just the ones that have web page links on this page. Think all those products will continue to function flawlessly?

-- @ (@@@.@), September 12, 1999.

IHAVE BEEN WONDERING ABOUT THE NATERAL GAS SEPERATION AND CLEANING STATIONS YOU KNOW THE ONES THAT PULL THE POISON OUT OF NG. I USE TO HELP CLEAN RIGHT OF WAYS FOR OIL COMPANIES AND ON OCASION WE WOULD RUN ACROSS ONE OF THE PLANTS .THEY ALWAYS SAID IF YOU HERD SIRENS RUN AGENST THE WIND. JUST WONDERING.

-- bill (harleybl@gorilla.net), September 12, 1999.

--@: If I'm not mistaken, it looks like some of the valves and instrumentations are used not only in the oil industry, but in power plants as well; especially those powered by natural gas. I am sure this is what our utility company means when they say "we are in touch with our vendors to make sure they are Y2K compliant."

-- ~~~~ (~~~~@~~~.com), September 12, 1999.

Fortunately for you, most will have tired of laughing at the Doomies after six months of the Y2K BITR. I however will be here quoting another foolish Tinfoil prognostication gone wrong:

"I predict that by July 1 of the year 2000 gasoline prices will exceed $5.00 per gallon in a majority of the United States (at least 34 states) and that it will most likely be rationed as well."

--@ Septwember 12, 1999

-- Y2K Pro (y2kpro1@hotmail.com), September 12, 1999.

~~~~, Yes you're correct. Some of these instruments are also used for chemical processing systems as in water, etc. This page has a bunch of diagrams and in each case it is hooked up to all kinds of electronics: examp les Amazing. The electronic mechanisms are even more prevalent than I had thought. Do they think they're going to be able to manually bypass all these things? Here is a cool one that shows the date "1999" going thru the meter. Notice how they din't put "2000"!



-- @ (@@@.@), September 12, 1999.

Thanks for the prediction. It is not inconsistant with what Dog Gone posted as the state of readiness of his oil company.

Of the 30+ systems that won't make it by December, most will finish over the the next 3 months or so. I certainly expect at least 3 months of screwed up supply lines, for EVERYTHING.

-- K. Stevens (kstevens@ It's ALL going away in January.com), September 12, 1999.

I ask for evidence or at the very least reasonable challenge, and what does Y2K Pro have to offer? As usual, nothing but hot air.

-- @ (@@@.@), September 12, 1999.

The oil industry says "don't worry, be happy".

Check out http://www.api.org/ecit/y2k/899issuepaper.html

Regards,

-- Uncle Bob (UNCLB0B@Y2KOK.ORG), September 12, 1999.

I just visited the Brooks site. It is truly AMAZING that electronics is used. Why did they switch from ANALOG Pneumatic control??

The vast Chemical Industry Infrastructure used to have Pneumatic controls FOR SAFETY. Using Electronics used to require Explosion Proof Enclosures and was a feature that was in favor of Pneumatics. Sensors transmitted 4 to 12 psi signals to flapper and bellows type process controls. They are Y2K compliant because the only input was compressed air.

If you think refinery explosions are a problem now, just wait for the ROLL!!!

-- K. Stevens (kstevens@ It's ALL going away in January.com), September 12, 1999.

--@: Thanks for the diagram, VERY INTERESTING! I'll be lurking to see if anyone takes you to task on your prediction.

-- ~~~~~ (~~~~~~@~~~~.com), September 12, 1999.

Wow K. Stevens!

You know a lot about this stuff! Do you work for one of these industries? There hasn't been much in the news about these suppliers, I suppose because they are not public companies.

In the diagram above when it says "secondary electronics" do you think they are referring to a third party or their own product? I get the impression that if it is a third party device they aren't really concerned with whether or not it can handle "2000".

-- @ (@@@.@), September 12, 1999.

anyone remember the song>''day,s of wine & roses''

-- i-believe. (dogs@zianet.com), September 12, 1999.

In answer to your question. The PRIMARY electronics are inside the Mass Flow Meter, which is in the nature of a mass spectrometer for measuring VERY Small flows. The valve is being leak tested. Compressed air is used for general testing. Helium is used when you must make sure that a valve will not leak even an infinitesmal amount (Helium is the most difficult gas to contain)

The secondary electronics refers to the signal processor, in this case probably a digital multimeter. The 1999 is NOT a date, but is the standard way to indicate a digital display's capability, nominally in this case "31/2 Digits, with a max of just under 2000.

BTW, I know the answer to the question I posed...digital technology got its nose under the tent with Data Logging, and proceded to swallow the entire control function. Anyone who tells you that they didn't know that dates were involved is lying or seriously misinformed...how do you LOG data without dates??

-- K. Stevens (kstevens@ It's ALL going away in January.com), September 12, 1999.

@@@@@,

You can take your prediction and stick it will all the other predicitons that didn't come true, the last one being 9/9/99.

-- (sickofthis@crap.com), September 12, 1999.

Thanks kstevens...

A very logical, straight forward, presentation of fact. What a gem!

Helium makes sense as the *bugger* gas to control considering the

periodic law. Although I was beginning to think the most difficult

gas to control is .... well, you knprow.

3 1/2 digits < 2000, hmmmm, what would be the response of a meter, to a poll of a field of >= 2000?

By the by, in water systems we often use carbon dioxide for leak testing, as sensors are cheaper and less exotic than those for the inerts. Sometimes is amazes me that 'they' haven't used radioactive materials, since it would not require the proximity tolerances gasses have.

-- Michael (mikeymac@uswest.net), September 12, 1999.

Dear sick, I find these predictions extremely interesting because they are made by interpreting the information at hand. You may argue that they misinterpreted the information or that the information was incorrect or incomplete, but the predictions made here are made in good faith. A certain kind of courage is required to make these predictions. It takes no courage at all to anonamously insult the the poster. Besides,WAYAH(who asked you any how)

-- Lumber Jack (johnsellis@webtv.net), September 12, 1999.

Sick Of,

Just curious, if you don't have any reasonable challenge to our guesses other than "it won't happen" than what the hell are you hanging around this forum for? Trying to pick a fight? In your case I would enjoy that much better in person! The reality is that you are the lowest form of troll on the entire Internet because you can't even find a site where you enjoy hanging out.

-- @ (@@@.@), September 12, 1999.

I've long been saying: GASOLENE $5.00/gal., Apple/$2.00, Unemployment Rate 20% and climbing rapidly by July 2000. And this is absolute best case; Power stays on, no more than 2% of banks fail, no nuclear/chemical disasters, no bank runs, no widespread infrastructure failures, no inner-cities coming unglued from the suspension of Gov't supported checks, in fact, almost little or no visible problems which the public would see (all most unlikely), and still a $5.00 gallon of gas by July. Oh, and the DJIA below 1200 by June 2002.........

-- Dan (can't@thistime.com), September 12, 1999.

I'm sure you will see Andy Ray and his buddies peddling their sorry asses around town cuz burger flippin doesn't buy $5/gal gas.

-- Porky (Porky@in.cellblockD), September 12, 1999.

"It's tough to make predictions, especially about the future." Yogi Berra

"An economist is an expert who will know tomorrow why the things he predicted yesterday did not happen today." Laurence J. Peter

-- quoter (quoter@quoterrr.com), September 12, 1999.

Prices moves in a very non-intuitive way. You may be right in your prediction of valve failure which affects crude oil refinery but prices might not move up as you expect.

Looking at the bigger picture, if y2k does negatively impact all those embedded chips etc, manufacturing production, transport etc would slow considerably which reduces demand for crude oil products. This in turn reduces prices.

Government rationing? I certainly hope they learned their lesson back in the 1970's. Rationing and price controls usually have perversely unintended effects

-- Sandwich (anon@anon.com), September 12, 1999.

If a small refinery explosion makes the price of gas go up 20 - 40 cents a gallon, how much will it go up if 10% of our total supply of crude is interrupted? Hmmmmm.

Since I happened upon this Brooks company page in a random search, I think it is fair to make an assumption that they could be representative of other similar suppliers to the oil industry. Of the list of instruments they have posted I count 9 out of 79 that have date sensitive functions. That is about 11.3%.

If this is representative of the entire oil industry then there are an awful lot of date-sensitive devices out there. What will happen if even just 1 out of 10 of those still doesn't function? That is assuming that they somehow managed to take devices that are currently being used and either fix or replace 9 out of 10 of them. What are the odds of that? What about the mechanisms that are 20 or 30 years old and we don't even know whether they have date functions.

I think next year is going to be God's way of telling us that we should no longer continue to use oil because it is destroying our planet and oil companies have been too greedy to do anything about it. Poetic Justice, in a way.

HEY POLLIES! What's up? I'm still waiting. Pro's got no good news, Sicko's got no good news, guess that clinches it. This one's a definite. Take it to the bank (if they're open). Get used to riding a bike, cause it's gonna be a long, hot, expensive summer.

-- @ (@@@.@), September 12, 1999.

I don't think it takes any courage to make some overblown prediction about $5 gasoline in a forum like this. I think there will be some problems and a spike in gasoline prices but your $5 outlook reminds me of the overstated projections in past Mideast conflicts that never even came close to fruition.

If you're so sure, and want to do something really courageous, go set up a commodity trading account. With the +95% margin inherent in NYMEX gasoline futures, you can control 42,000 gallons with only $2,500. I see July 2000 gasoline is trading at 62.31 cents / gal (this excludes state and fed taxes, truck transportation and a retail margin). When this one contract position goes to, lets say $4.63 /gallon, you'll be able to pocket a cool $168,000 on a $2500 investment. Or go out and buy a few of these gasoline futures contracts and retire for life with all the y2k provisions easy money can buy. Talk is cheap.

-- Downstreamer (downstream@bigfoot.com), September 12, 1999.

You are all assuming a dollar will still be worth a dollar July 1, 2000.

Maybe gas will be 20 dollars a gallon, or 200.

Maybe gas will be five rolls of toilet paper a gallon. :-)

-- Deborah (infowars@yahoo.com), September 12, 1999.

Downstreamer, no real challenge to the prediction, huh? Face it, $5 a gallon looks very optomistic to me based on the evidence. But you don't want to look at the evidence, do you? I didn't think so.

-- Bummer (inafunk@totallybummedout.com), September 13, 1999.

Ah-Ha! That Deborah is a smart cookie! Now you're thinking girl. The economic factors - the devaluation of the dollar due to shortages of all products. Veeeery perceptive. You married?

-- @ (@@@.@), September 13, 1999.

Downstreamer, I for one am going to be Very LONG Crude Oil Options - waiting for a slight pullback, but now is no time to penny pinch. I have an S&P 500 Put Option, and will get more. Hopefully I'll be able to get the money out in time to do something useful with it. Talk is cheap and trading isn't easy, but you have to go with this one.

Gregg

-- Gregg Abbott (g.abbott@starting-point.com), September 13, 1999.

--@,

(blush) You have my respect. I really expected to get attacked or ignored for posting that.

Yah, I'm very married.

-- Deborah (infowars@yahoo.com), September 13, 1999.

Shucks!

Yah, very married? You sound like a Valley Girl, totally! (just teasin). Well, damn, sounds like your hubbie's got the perfect Y2K companion - a thinker. Best of luck to Yahs.

-- @ (@@@.@), September 13, 1999.

LOL, I almost spilled my nailpolish. Like, OH MY GAWD! I think you really do know me!! Totally! I'm doing my nails right now!! [not kidding] They were really grody!

Stay cool, dude.

-- Deborah (infowars@yahoo.com), September 13, 1999.

Oooooooooooo baaaaabbby ... I got a ting for nails. Don' geh me essided now girlfriend! You awesome babe. Babraham Lincoln.

Sweet dreams.

-- @ (@@@.@), September 13, 1999.

OK Pollywoggers,

I'm taking some other factors into consideration here, and still sticking to my guns. The "Sandwich Theory" is very valid, and the "Deborah's Foresight Factor" is also definitely significant (see above). On top of this, I'm looking at the "Greedy Bastard Oil Executives" phenomena (already witnessed during refinery fires), which counteracts the other two factors, so I'm still sure that it will hit $5.00 a gallon sometime between now and July.

If I am wrong I will shoot a crow, cook it, make a sandwich out of it (I am permitted to have sourdough bread, miracle whip, and perhaps a tomato slice), and I will eat it in front of witnesses. I will post a photo of me eating it on the Internet.

What would a Pollywog be willing to do if I am correct?

-- @ (@@@.@), September 13, 1999.

"@," I will be relieved if it's ONLY $5 a gallon! Seriously!

-- Gayla (privacy@please.com), September 13, 1999.

Gayla,

Yes, I agree. I think even some of our own GI's might be having a bit of denial on this one because no one wants to think about having to pay that much. There's a first time for everything though and from what I've been able to research it just seems that it would take a near miracle for all of these oil industry mechanisms to continue without glitches. It is so systemic. Besides the oil production facilities, you've got the supertankers and tanker trucks that deliver it, the gas stations, etc. We've seen what can happen when the supply is reduced even slightly, and I don't think we can count on oil corporations to do us any favors. Could be a bright side though, if it turns out that alternative forms of energy finally become more feasible. That's what I really hope for.

-- @ (@@@.@), September 13, 1999.

The pros have been long crude oil futures since March 1999. Nothing personal but time and time again, it seems that when the amateurs and novices decide to get join the bandwagon it is a good time to cover those longs.

Markets trend in anticipation of an event. After that event, there are no longer reasons to trend in that same direction. More than likely, prices will go the other way when the big players have had enough and unload.

97% of all beginners lose when trading commodities. The attrition rate for professionals is about 15% per annum.

-- Sandwich (anon@anon.com), September 13, 1999.

Downstreamer's trade plan should also disclose that you can lose $168,000 or more on your $2,500 investment. Commodities is a funny business.

-- Sandwich (anon@anon.com), September 13, 1999.

Opps, sorry, you can't lose more than $26,170.20 (not $168,000) on those gasoline futures. (Price of gasoline won't go negative, I hope!)

-- Sandwich (anon@anon.com), September 13, 1999.

Right on Samwitch! Your stats are correct. Its a tough game...and its one I've played for 10 years now. I'm with Greg, long bull spreads in the oil sector and short S&Ps.

You want specifics on refuting the $5 / gal prediction?? The oil industry is NOT testing every chip but they are doing statistical sampling. Whereas their are some considerable y2k risks in other areas they are NOT finding extensive problems with embedded chips, flow meters and the areas you cite.

One thing that's very apperant with this forum: One guy with some expertise will post some good info and we all learn from it including the guys making the $5 gasoline predictions. These companies making the electronic components and the oil company individuals that are testing the integrity of their systems are professionals and vastly more knowledgable than our $5 predictors.

These companies care about their products including compliance aspects. These guys have been focusing on and discussing these issues with their oil customers for years. You read some posted legalese and you contend you know more about it than they do.

Further your deficient assessment on business is naive. Both private and public companies care about their products and the y2k compliance issue. They ARE on top of it. Your dribble on how oil companies should take over their electronic component suppliers makes no sense.

Oh, and by the way, I currently work for a company that supplies electronic components to the downstream oil industry. Of all the company functions, meetings and conventions, I've yet to run into one individual who thinks US embedded systems are gonna cause any big oil system failure type problems- Spit out some bad dates or something minor - yes, but not the kind of refinery explosions or system failures this group is envisoning. Think about what you are doing. You 'research' things on line for a few days and you have the nerve to bag on industry professionals (and their products) who have spent their whole careers refining their industry knowledge and products.

Oil and gasoline prices will continue to escalate. Figuring $35 crude and $8 gas cracks, we might see $1.50 gasoline on the wholesale and futures level. Your $5 prediction is worth nothing more than your level of expertise in this realm.

-- Downstreamer (downstream@bigfoot.com), September 13, 1999.

@

I strongly agree. I've done some discreet checking of folks who work in the industry. I've also talked with Electrical Engineers who have been involved in firmware remediations.

As one told me last week, "It's going to be a real mess next year".

My guess is that little if any gas will be available for private purchase, greatly increasing the severity of the economic slump.

-- Jon Williamson (jwilliamson003@sprintmail.com), September 13, 1999.

@=Midwest Mike

-- (none@none.none), September 13, 1999.

Sandwich:

I love this phrase::

" I may be ignorant about alot of things, but not about my own ignorance"

On an option call, which is different than a futures trade. Your losses are limited to your investment. The swings are not as great

-- David Butts (dciinc@aol.com), September 13, 1999.

A poster named @@@@@ made a firm prediction. I'm sure you will come back here with your REAL name and eat your crow like a good little pessimist?

It would be easier to just ignore your prediction, wouldn't it? That's what *I* predict.

BTW, your hypothesis on WHY fuel will be $5 a G is absurd; THAT is why no one is answering you. Much like Gary North or Ed Yourdon, you talk about things you have NO HOPE of understanding.

-- IRONy MAN (marvel@comic.book), September 13, 1999.

gasoline options are way too thin to trade without great slippage. Plus you have to pay a hefty theta decay for just holding them. Also, likely "Murphy's Law" scenarios are: 1) the underlying futures rally after the options expire worthless, 2) long dated options over the new year can't be cashed out due to exchange closings.

Commodities is a harsh business!

But then there's always 2 sides to every market. Good Luck!

-- Sandwich (anon@anon.com), September 13, 1999.

@,

Your prediction is ridiculous. You provide nothing but mere speculation and then ask others to prove you wrong. It's similar to this:

The Bears will beat Seattle by 5 points next week.

Okay, now tell me that I'm wrong. Bring it on, baby!

Also, I'm sure that you're "research" includes interviews with dozens of people in knowledgeable positions at many of these smaller suppliers so that you have gotten a concrete view of the industry. In order to truly do this, I'm sure that you haven't relied only on items such as magazine or news articles or corporate websites. I'm sure that in order to get a truly broad understanding of the situation, you have worked on this for several month solid, if not a year, so that you are able make a well-informed assumption.

-- CJS (bs@walks.com), September 13, 1999.

No, @'s prediction is like the Bears will beat Seattle by 200 points. Oh we've never had that kind of a spread on a football game?....hummm. Kinda like $5 gasoline.

Good point though. Who have you interviewed in the industry @?

-- Downstreamer (downstream@bigfoot.com), September 13, 1999.

I saw gasoline during the Labor Day weekend for $2.80 a gallon at a little country store. @, you're half-way there. If you want to verify, it was at the Ice House Store and Cafe outside of Pollock Pines, CA.

-- saw it with my own eyes (sawitwithmyowneyes@sawitwithmyowneyes.com), September 13, 1999.

I saw gasoline during the Labor Day weekend for $2.80 a gallon at a little country store. @, you're half-way there.

OH Boy, if you are going to do that, then I can tell you where to find $4.50 gas RIGHT NOW! Little gougy stores in the desert and in the mountains have been famous for doing that sort of thing forever (3.98 for a loaf of bread, 1.25 for a soda, etc.)

I assumed the prediction was for a national average price (or at least statewide somewhere)

Come to think of it, I'll just charge $5.00 a gallon to my neighbors for the few gallons I have in my garage.......then you win your prediction!

-- IRONy MAN (marvel@comic.book), September 13, 1999.

IRONy MAN, just closing up a loop hole that's all. Did you get a laugh out of it? hee hee

-- saw it with my own eyes (sawitwithmyowneyes@sawitwithmyowneyes.com), September 13, 1999.

Even if it goes to $2.00 a gallon on the U. S. national average, it's gonna hurt regardless...especially for the commuters driving SUVs.

Just curious: how high would gasoline have to go per gallon before you really start to feel the pinch? Or the average citizen, for that matter?

-- Tim (pixmo@pixelquest.com), September 13, 1999.

CJS,

Do you actually think these suppliers are giving interviews about the compliance of their products when they could get sued by the oil corporations for millions of dollars in lost revenues? Hell no! Most of them are sitting down with their lawyers right now asking them what they're up against and their lawyers are telling them this:

#1. The general rule of thumb in the business world is "Caveat Emptor" or "Let the buyer beware". (If the buyer didn't ask you if it would work after 2000, and you didn't promise it would, then he's screwed.)

#2. You are not a publicly held company and not required by the SEC to reveal your compliance status.

#3. If you borrow the money you need to fix all this outdated crap your business is going to be in hock for the rest of your life.

#4. The worst that could happen if you are held liable is you file bankruptcy, they can't touch you personal assets, you buy a condo in Miami Beach and retire.

#5. If you're lucky, the Oil corporations will buy your company from you and you'll be richer than if you kept it yourself.

Of course my prediction is speculation. If we were getting honest information from this industry, then there wouldn't be much to guess about. The fact that they aren't telling us much just makes me more certain I'm correct. I'm just looking at the overall size and extent of the problem and I'm seeing the odds overwhelmingly in my favor that there are going to be a lot of failures that can't be fixed quickly, and that this will result in enough oil shortages to turn our economy upside down. Each of these parts suppliers makes very specialized parts and many of them cannot simply be replaced by another manufacturer. As I have said several times before, I also think that the Oil execs are going to exploit even the smallest evidence of a disruption as an excuse to jack prices way up.

none,

@=Midwest Mike? Haven't a clue where that one came from, you must be hallucinating. I wouldn't live in the Midwest if you paid me (no offense Mike).

Irony "Boy",

Not even gonna waste the time.

-- @ (@@@.@), September 13, 1999.