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Thread: How will oil prices affect diving?

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    RBW Member DeepGeek has a spectacular aura about DeepGeek has a spectacular aura about DeepGeek has a spectacular aura about DeepGeek has a spectacular aura about DeepGeek has a spectacular aura about DeepGeek's Avatar
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    How will oil prices affect diving?

    Oil closed at $144 per barrel on Friday. OPEC predicts $170 by year-end, it's not impossible $200 per barrel will become the norm in 3-5 years.

    There are a number of implications of this for diving. Most can be worked around, some not. What I'd like to know is, how are divers and skippers in your area responding to the change? Not just this year, but what are the options 5 years on from now? What's the gas price near you now?

    We've got a number of effects, from mild to major.
    1. The boats will need more fuel, more cost. Mitigate this by packing in more divers, doing fewer long offshore trips, cave-diving? What level of fuel surcharges are people getting hit with this season?

    2. If you drive to the dive site, your gas prices are getting higher. This could be mitigated by taking the train (as I routinely do) or more sharing. Would be easier if more day skippers provided simple bailout for shallower dives and weights? Rebreather bottles aren't often allowed on public transport, so perhaps one person in a group does the gas run.

    3. Flights are getting more expensive, luggage is getting expensive. Mitigate by taking less and renting more at the destination (down to the level of deco regs)? Ship ahead of time?

    4. Remote dive locations will probably close, as Bikini has done: http://www.rebreatherworld.com/showthread.php?t=19535
    After all, more expensive flights, fewer people, more expensive to resupply... Could more 'brokering' of whole liveaboard charters a couple of years out re-open them?

    5. Will fills get more expensive?

    Based in NY, personally I've seen prices for local charters, fuel, etc climb by the region of 20-30% since last year. Marine diesel now well over $5.
    Train and taxi prices have not shifted much, I'm grateful to others for the help they give me in running my little rebreather bottles to the boat for me.
    I've noticed flights to the Caribbean are more expensive this year, about 200 bucks more on a previously $800 flight (generalism). Diving from Florida and shipping the rebreather down is a more compelling option for winter diving.
    Finally, I've not seen a big increase in gas fills, I don't change bailout fills much and the little bottles are pretty much fixed-price no matter how empty. Anecdotes suggest He fills are going up, but hitting the OC guys more.

    One take-away from this is... perhaps rebreathers will fare better than tech OC divers in this change. Less to shift around, less to fill?

    How will this affect North America, UK, Europe, Egypt, Australia...?

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    Re: How will oil prices affect diving?

    Quote Originally Posted by DeepGeek  View Original Post
    Oil closed at $144 per barrel on Friday. OPEC predicts $170 by year-end, it's not impossible $200 per barrel will become the norm in 3-5 years.
    Well from my specific point of view there's two major contributors:

    As a club-diver, with a club where the cars needed to tow the big alu-RIB have become scarce, we face a real problem if we want to keep our boat. Its a great boat for diving, but we will perhaps be forced to change to two smaller ribs instead.

    The general economic trends will cause people to have less money to spend on diving including less money for transport from club-area to harbour and the actual cost of running the RIB. Currently a day-trip (two dives) run in at about 60-70$ so its not bad at all, but we are feeling how expensive the big tow-cars are, and they are now our resource-problem.

    So as a diveclub we face some troubles to come.......

    Nicolai

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    Re: How will oil prices affect diving?

    seeing major reduction in # of divers' willig to pay for multi day deep trips that cost some $$. boats cx'l trips-

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    Re: How will oil prices affect diving?

    Thanks to rising costs of oil, the most obvious is the $5 to $25 per-person/per-day fuel surcharge charter operations have to levy on their customers just to keep operatoring.

    Diving is not a cheap sport, even for our open circuit brethren. It all comes down to what you are willing to do/pay to stay with it.

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    Re: How will oil prices affect diving?

    People love to yell about gas prices but do startlingly little about it.

    Gas prices at the pump in the US are up over 30% in the last year. In the same time, gas sales have dropped about 1%. That's so inelastic it's incredible.

    Unfortunately it's WHY oil prices will go to $200+. Demand just isn't reacting to supply side changes.

    On the RIB - check out the value of your big Al boat first. I suspect you'll find it's dropped a bit. This is part of why people are unable to react to gas price changes - they're locked into their current technology because anyone stuck with a guzzler is... err... stuck!
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    Andy Favata CCR-Wrecker has a spectacular aura about CCR-Wrecker has a spectacular aura about CCR-Wrecker has a spectacular aura about CCR-Wrecker has a spectacular aura about CCR-Wrecker has a spectacular aura about CCR-Wrecker's Avatar
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    Re: How will oil prices affect diving?

    I think the price of fuel and "reported" condition of the economy are keeping divers at the keyboard. Case in point, we could only manage 4 divers for the Doria this year.Andy

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    Re: How will oil prices affect diving?

    Quote Originally Posted by aainslie  View Original Post
    Gas prices at the pump in the US are up over 30% in the last year. In the same time, gas sales have dropped about 1%. That's so inelastic it's incredible.
    In this, as in so many things, the US is probably the exception rather than the rule: it is more wedded to oil than most others. Gasoline consumption in Japan is down around 4% year-on-year. The trouble with your comment "do something about it" is that most people need gasoline to go to work in the US - so the question is how much the gasoline price must rise before it is no longer economically viable to go to work?

    There have been a lot of conspiracy theories about why the oil price is so high: usually, when people can't explain something in the markets, they blame the hedge funds. But I think the trouble is that most people's pricing models for oil over-emphasise the impact of the US economy (which has fallen from 31% to 25% of global GDP over 2001-2008) and under-emphasise China. China usually burns a huge amount of coal, but in the run-up to the Olympics it is burning oil to reduce pollution: that will soon reverse. The Chinese also tend to be fairly inept in their inventory control. Finally, the oil price, in inflation-adjusted terms, is well above the previous peak of 1981. There comes a point where a slowing global economy works with sky-high commodity prices to engineer a crash. That has happened many times before. WTI was off 2.5% overnight to $141.71., though it's a bit of a stretch to suggest, from the chart, that that was an inflexion point.

    Here in Japan, I use a train to get to my diving and train to get to work. We have high prices but deflation. Dive operators need the business in the stuttering economy, and I suspect they wouldn't dare hike prices to cover the increased fuel bill. When I fly elsewhere in Asia, the increased cost of fuel is offset by other costs being lower. At the moment, oil is a minor irritation not a lifestyle threat.

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    Re: How will oil prices affect diving?

    I predict more cave diving to go with $200/barrel oil. No boat necessary.

    Note to self: Invest in Florida property with springs and cunderwater cave system entrances and wait for water to go to $200/barrel.

    Serious biz, a boat ride is getting more expensive. Already some captains are charging a fuel surcharge. Cave diving in Florida is too easy and inexpensive to take much of that.

    Paul

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    Re: How will oil prices affect diving?

    I believe that the US Economy is in for a very rough ride in the next few years.

    The Oil bubble will burst in time, as did the Real Estate Bubble & the Stock Market Bubble of a few years ago. In the midst of a bubble the majority of "experts" all predict much higher pricing.

    The current supply/demand relationship is out of kilter with the current pricing.

    We probably won't see "Cheap" oil again, but I would think you'll see it around $100.00 a barrel.... but it will go higher before it settles out.

    There will be lot's of pain here in the US and probably Worldwide. We have a huge Debt here in the US and no one wants to face up to it. The US Dollar is in the Crapper. There are a few ways to reduce the debt. A combination of less spending and increasing taxes, neither of which are very popular. The other way is to pump up the system & create high inflation, which allows payment of the debt in cheaper dollars... also not a great solution.

    None of this bodes well for diving, particularly in the Northeast US.

    Florida diving is still a real bargain as the sites are not far from the docks and the distance to the boats is relatively close. You can get a great day of diving in for under $100.00.

    Here in the Northeast, a day of diving can easily run $250.00 and up, if you include all costs. ( Charter fee, Gas to and from the boat, Tank Fills, etc.) That doesn't include meals & a room if you need one.

    That's a lot money for and hour or two underwater. It would buy a lot of Lobster & Scallops!

    I sure hope this situation doesn't last too long or get too deep.

    Richie

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    Re: How will oil prices affect diving?

    Quote Originally Posted by CCR-Wrecker  View Original Post
    I think the price of fuel and "reported" condition of the economy are keeping divers at the keyboard. Case in point, we could only manage 4 divers for the Doria this year.Andy
    might u consider joining the Norness trip with capt chuck?

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