Conrad gives farmers solutions for oil prices
By KATINA TENGESDAL, Staff Writer, ktengesdal@minotdailynews.comArticle Photos
High oil prices are affecting farm practices and livelihoods and Sen. Kent Conrad, D-N.D., was at Jon Erickson's farm near South Prairie Tuesday to discuss his plan to ease the crisis.
"The best relief (from high oil prices) in the short term is reining in (oil market) speculation. For the longer term, we have to expand production and conserve use," Conrad said.
"One third of the price of oil is speculation. For $5,000 to $7,000, you can control a $100,000 contract in oil. That's pretty attractive to big money. If oil goes up 7 percent, you've doubled your money," he added.
Besides getting better control over oil market speculation, Conrad has four other points in his five-point plan to lower gas prices that focused on more long-term solutions. They include increasing domestic oil production, promoting fuel efficiency and alternative fuel vehicles, offering incentives for the development and production of alternative fuels, and developing coal-to-liquid fuels.
For farmers and business leaders dealing with higher prices, action on those plans would be welcomed.
"The cost to fill these (diesel) tanks the last four years has doubled, or more. Just the cost of putting in an acre of land has gone up significantly," said area farmer Jon Erickson.
"In '01, I spent $25,000 for fuel. The past years, it's been over $50,000," he added.
In addition to rising diesel costs, the rising costs of fertilizer is also causing concern.
"This fall, there's going to be a question of whether to apply fertilizer if the price is this high," Erickson said.
Farmers can only hope that commodity prices remain high to offset production costs.
The higher oil prices have
affected the price of constructing and repairing roads as well.
Dana Larsen, Ward County Highway Engineer, explained that asphalt products are the leftovers of a barrel of oil. With the rising oil costs, the costs of asphalt products has risen. In 2004, Larson said, asphalt was $125 a ton, while it was $390 a ton in 2006.
"That's a 312 percent increase. That's huge. That's where it's really hitting us," Larsen said.
Conrad hopes to do something about high oil prices with legislation.
"We really need people to get behind legislation that would make a difference," he said.
Conrad is a member of a group of 10 senators from both sides of the aisle who have requested that the Senate hold a one-day energy summit as soon as possible after the Fourth of July holiday.
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arly2242
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07-03-08 11:25 PM
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Oil speculation control is not the answer. As usual the left want to blame it on someone else - big oil or big business. Everyone does a little speculation each and everyday - stock markets are a good example. The oil speculators are betting the price of oil will go up. If the price of oil goes up and they bought it low, the speculators can sell it and make a profit. But there are risks in doing this as well. If the price of oil goes down, the speculators could lose money. Let the market work and keep government out of it. Other than the defense, what does the government do well? EJHICKEY is right on. If the market was to hear that the government was to allow drilling off shore or in Anwar the speculators would see that the price of oil will probably go down as a result of extra oil on the market. Conrad, like many in Congress and the Senate should take a course in simple economics and quit playing politics with our lifes and our future
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ejhickey
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07-03-08 4:41 AM
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Senator Conrad does not know what he talking about. Does he seriously expect us to believe that if all so called speculators were eliminated from the market that oil would drop below $100 per barrel? And just who are speculators anyway? Is anyone who buys a futures contract in oil? Every oil futures contract has a buyer and a seller- someone who bets that the price of oil will go up or down. Those positions have to be liquidated within a certain time frame. if there is n one to buy the contract at higher price or the price paid, guess what - the person holding the contract loses money. Senator conrad makes it sound easy to make money in oil futures. If all it takes is $5000 to 7000 to buy a contract and double your money why is everyone doing it? Why aren't farmers doing it in order to pay for the price of fuel? The reason is because the futures market is not a one way elevator that only goes up. That elevator goes down too.
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Shorty
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07-03-08 12:40 AM
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It is really sad that Conrad never comes to the cities and talks to the people who are paying big prices for food, Natural gas, gasoline and elect and so forth. He brags about 22 yrs of service and it is all to the farmers. I guess he is not worried about high prices,because he can give himself a pay raises at midnight,while America sleeps and gets loans at 1 percent. He has allot of things to answer but won't face the public and has very closed TV sessions ,while no ones knows he is in the area They all need to have the old town meetings None of them have the guts to stand up before a non selected crowed and answer to the public.I guess you have to earn the title SENATOR.
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