Gas prices

smglbrth

Shawn - Although I've never met you I like you already. Personally, I think this is all designed to make everyone move into inner city government sponsored housing so you don't have to own a vehicle to "pollute the atmosphere", which IMO is a crock. What you stated was exactly why I live farther away from town as well. People like the city, fine. People like purchasing hybrids, fine, it's your money and your decision. However, persons shouldn't pass judgement on what another person buys for transportation. It's like arguing about which amp is more efficient so we don't have more coal plants running...

shawn474

Also, just for the record, just because you drive a hybrid or a "more efficient" vehicle it doesn't you are any more environmentally concious than a guy who drives a HumVee. IMHO, the majority of people who drive those types of cars do so to "save" money; not because they are truly concerned with the environment. In actuality, due tothe high cost of hybrids, it takes close to a decade to justify the cost of gas savings vs. a fuel based economy car.

Carpoolers, public transportation users, etc. carry much more weight to me than people who drive hybrids in terms of being environmentally concious. I plant trees in my back yard (at least 2 a year) because I like trees and I think it somehow helps the environment. I use my truck to haul the trees from the nursery!

tonyb

Exactly Shawn, I have a gas sipper, well, not by todays standards, but an old Honda Accord. Not to save the environment but to save a few bucks since the wife drives 100 miles a day round trip. The arguement usually goes "but if everyone drove a hybrid/electric car, gas prices would come down." Seeing that Europe has all small cars, and fewer cars, I see higher gas prices, not lower. Gas prices are artificially raised and lowered, and used more so as a tool to force a given reaction from the public or from countries.

Just today I saw a story that Chucky Shumer was asking the State department/Clinton to ask the Saudie's to up the supply of oil. Up the supply ? You just put the kabosh on the Keystone deal. I think if they would require a certain percentage of all oil taken from American soil to have to stay in America, and allowed more refineries, you'd see gas under 2 bucks again. You also have to ease up on regulations too. There are so many different requirements state to state on gas that it makes it hard to refine and sell. Katrina was a perfect example. Gas was available from other states but they couldn't use it due to regulations on the mixture.

Say one thing, do another. Point out the villian while accepting no responsability for your actions. Thats government folks, one big illusion, like a Vegas magic show.

smglbrth

TonyB you bring up a good point. Whenever someone points out, or compares the U.S. to Europe it really gets my goat. People want us to be another Europe and follow their lead? No, I don't think so. If someone really likes the European mindset/politics/economy then MOVE ON OVER, I sure as heck won't stop you. Oh yes, pay more for fuel while you're at it.

Ooops, guess I got a little off topic, sorry, back to regular scheduled programming for this thread...

TouchOfEvil

Change

jflail2

tonyb wrote: »

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I think if they would require a certain percentage of all oil taken from American soil to have to stay in America, and allowed more refineries, you'd see gas under 2 bucks again.

I don't think that's even mathematically possible at this point.

heiney9

jflail2 wrote: »

I don't think that's even mathematically possible at this point.

Of course it is. The prevailing issue right now is lack of refining capacity because our refineries are very, very old. Of course there are other underlying issues too as there are a multitude of factors that influence gas prices.

H9

cnh

We all know that "oil" is a finite resource right? So why continue to try and squeeze blood out of a rock? There are other sources of energy and this is not to wave the "green" flag. But just to say energy independence is about finding new and renewable sources that make us less and less dependent on the vicissitudes of countries that really do NOT like us!

So wean off gas, and there are lots of other. Nuclear sure as long as we're safe about it, wind and solar depending on where they're useful and not an eye sore! Coal, as long as we keep it "clean" in generating electricity (after all my old state (Pa) has tons of it), natural gas. Fuel cells, hydrogen. And more. Sure we can still use oil, but phase that out slowly. The technology is already available for that transition and you wouldn't need "heavy" handed gov't to do that either.

Oil. When I was a kid way back in the dark ages before this country became a YES/NO chorus of Progressives vs. Conservatives, all our textbooks talked about how that was a dead end because it would dry up. Admittedly, there is still oil around today that was not anticipated in the 60s but we're merely prolonging the inevitable.

cnh

tonyb

Sure a mixture of enegy sources is desireable, but not artificially excluding the ones that are agenda driven. All enegy is finite, we don't have a single source that isn't. Oil will someday run out, but it hasn't, and technology hasn't caught up with needs yet. There simply isn't enough of any single source other than fossil fuels that could replace it on the scale we need it to. When oil runs out, then maybe another source will emurge but I highly doubt one will come about before then.

No, we don't want to depend on countries that hold us hostage, don't like us, but by the same token, we have oil, countries that are friendly to us have oil, but government keeps saying no to the friendlies while supplying funds for drilling to the ones that hate us. Where is the logic in that ? We need to get our heads screwed on straight if we want it to change.

nooshinjohn

Not so certain anymore that I buy into the notion that oil is a finite resource, but I do believe that an infinite amount of pressure is being brought to bear to make it appear that way. In this country, the need for energy has quickly outpaced the available supply. Back in the day, we could bring new energy sources on-line seemingly overnight as needed. I remember an expansion of capacity at a refiner in the Twin Cities going from groundbreaking to full capacity in less than a year. Today it takes a decade to get an approval to build a storage tank on-site.

We do have a shortage alright, but is a shortage of vision and a shortage of brains on teh part of our elected officials and the people that voted for these idiots that present the larger problem imho...

tonyb

nooshinjohn wrote: »

Today it takes a decade to get an approval to build a storage tank on-site. ..

I don't know if you saw it John, but John Stossel did a story on what it took to open a lemonaid stand infront of Fox studios in New York on the sidewalk. I think he said something like 65 days....he didn't even finish the process. We are talking a card table setup with lemonaid. He had courses to take, licenses, permits, had to get blessings from different departments, had to have a fire extinguisher, porta potty, and it goes on. Everyone along the line has their hand out.

tonyb

One thing nobody brought up.....the devalued dollar. What do you think happens when you keep printing money ? That dollar buys less, thus prices rise...hello. So all those bank bailouts, GM bailout, Insurance company bailouts, stimulus funds, welfare and other freebies.....you pay for all that by way of a devalued dollar. It's a tax increase on everyone, the rich could care less if the dollar lost value, they have the reserves and resources to carry them. It hits the middle and lower incomes hard.....but they stand there and sell you a story about how well they are looking out for you, the average joe. Now the Fed is looking to print even more. Why ? Because government refuses to cut spending and you have to get the money somewhere. Yeah, they are redistributing the wealth all right, from your pocket to their rich friends. Then when you cry about gas prices, the blame game kicks in to quickly redirect the public anger.

Tour2ma

Excellent talking points, tb... hit all the high notes. And here I thought we were borrowing the money... which would be silly since we own the printing presses. But if we're just printing the money, why does that debt counter keep climbing? And how does that counter work anyway? What's it plugged into?

Here's the problem with your theory... inflation (a word you did not use, but is what you were talking about) is not selective. What other raw materials' prices are increasing at, or near, the same pace as oil? Copper? Coal? Pork bellies?

Also the value of the dollar does not explain the lockstep movement of our gas prices with other countries.

For more than the above countries you can go here. Base chart is UK, but you can add whatever country you like. You'll note that even in countries where austerity is now the law of the land, e.g., UK and Greece, prices are on the rise. Why do you think that is?

Per energy futures trader and expert, Dan Dicker, data shows 60% of oil price fluctuations are speculation driven. Half of that is purpose driven, e.g., transportation companies hedging their future energy costs (airlines, FedEx, etc.), but the other half is just investing for fun and profit. In either case we all pay.

Dan's also shown that while real world events, e.g., Iran and the Strait of Hormuz, do create price spikes, speculation amplifies (hey, it's an audio site) their impact. He's shown how price volatility increased after regulations, which restricted oil speculation were repealed in the 90's. Add to this the shrinking gap between oil supply and demand, primarily due to China and India growth, and the price beta is increasing even more.

Dan feels the underlying crude price in a speculation free world is in the $80-90/bbl range.

Dan says non-interested speculation in oil futures ought to be done away with... pure and simple. I agree.

heiney9 wrote: »

Of course ($2.00 gas) is (possible). The prevailing issue right now is lack of refining capacity because our refineries are very, very old. Of course there are other underlying issues too as there are a multitude of factors that influence gas prices.

Yup.. that damn lack of refining capacity (which is being utilized at rates in the mid-80% area) is restricting our gasoline exports to record levels.
http://content.usatoday.com/communities/ondeadline/post/2012/02/us-exported-more-gasoline-than-imported-last-year/1

Refinery age is a non-issue. Equipment is constantly renewed. Control systems have been modernized producing unparalleled yields. Sites may be old, but they've been expanded, rounded out. The oft sighted lack of "new, grass-roots" refineries is a canard. The truth is no company is going to invest in one with peak Domestic gasoline consumption so few years down the road... if it's not already in the rear-view mirror.

As for $2 gas? Possible, but highly unlikely. The Saudis in particular and OPEC in general will constrict world supply to maintain prices at or above the $2 level. That is what they did the last time (late 2008) gas was under $2/gal. And at that time oil had fallen to under $50/bbl. Well below Dicker's estimated underlying price.

As for the simplistic supply and demand argument. The issue is not "oil supply", it is "low cost oil supplies", AKA "light sweet crude"... on land... near the surface... and free flowing.

Saudi oil is not light sweet crude; it is sour crude. Libyan oil is sweet. Bakken shale oil is sweet. Tar sands oil is worse than sour crude.

Oil is most assuredly finite, but technology has found it in areas where it was never seen before (or couldn't even be looked for) and is pulling it from areas where it was previously infeasible. But it costs more...

Sour crude is refinable... but it costs more...

Tar sands oil can be "mined" and refined, but it costs more and more...

Aside: Tar sands oil cannot even be pumped as is. It has to have a cocktail of petroleum distillates added to it to make it "flowable" and therefore pipeline ready. It is also noteworthy that it is significantly more abrasive then other crude oil grades.

I've no doubt technologies will be developed that continue to find new finds and make irretrievable finds retrievable. But it will cost even more...

Bottom line: New oil production costs more than old oil production, so its impact on pricing is diluted.

The answer? CNG...

Kex

I went to Europe last July, and rented a fairly large Opel sedan, described as an "executive" vehicle. Opel is a GM company, I believe. It was diesel powered, of course. You might gulp at the thought of filling that car up at European prices (and we did drive thousands of miles). It cost almost $100 even then, but I had to drive almost 1,000 miles before it needed a fill. Despite being quite a large car, even by U.S. standards, you could drive through city traffic, or set cruise control at 80 mph on the freeway, that vehicle seemed so efficient. So, despite paying higher prices at the pump, Europeans probably don't pay a higher price per mile, even when driving equivalent sized vehicles to the U.S.A.

In SoCal Regular has stabilized recently at $4.39, and $4.59 for Premium. That's about $0.20 below the record high of mid 2008, I think, and we've enjoyed quite a long lull since that record was set. It just doesn't have that big an impact on our family budget here because housing costs are so much higher. Our current cars will return about 22-24 mpg city driving, and we don't need our truck very often. For example, on a vehicle driving 1,000 miles per month, or 12,000 miles per year:

• At 22-24 mpg on average, that's about 45 gallons per month.
• At $3 per gallon, that's $135 per month for that vehicle.
• At under $4.50 per gallon, that's just about $200 per month.
• The difference is less than $70. That difference won't buy much in terms of groceries, and it certainly won't put the slightest dent in either monthly rent or a monthly mortgage payment (neither of which are generally measured in the hundreds here).

Of course, we have more than one vehicle, so the combined gas budget is higher than that. On a side note, I'm going to have to admit that my monthly wine budget far outstrips my monthly gas budget!

I'm a lot more worried about wine! ... :redface: ...

tonyb

70 bucks may not mean a whole lot to some, but to that person making 10 bucks an hour it sure does. There's a whole lotta people in the sub 50k a year catagory that 70 bucks would mean a good deal to. Aside from just the gas prices, everything else is shooting up too so it's a combination that leaves many trying to make ends meet.

Bruce,
Good assesment and breakdown of the different oils. While sweet crude is ideal, I would hope we don't use that for manufacturing purposes and instead use the lower grades. I don't know if we in fact do, but it would make more sense. Sure some oils cost more to refine, but with the lack of refineries, and better technology in that area, I can see why. Also transportation costs has some play in this as well.

Speculation works both ways, but yes, non interested speculation should be done away with.

Thing is, there is alot of area's we can do alittle here and there to help the prices of gas but instead we demonize every thought and keep looking for a one fix solution. Doing alittle is better than doing nothing in my book but instead we seem to be going in the opposite direction.

tonyb

Just as another point, the government makes a good chunk of change on gas taxes. Federal, and state. If we as a country started to use less gas, that tax burden will get shifted to whatever flavor comes along, electric, wind, solar, etc. You don't think they would actually do with less coin, do you ?

The Prez and his energy guy keep chasing policy that increases energy costs, while at the same time subsidizing failed solar companies with your money, and leaving the tax payer on the hook when they go under instead of the investors, who happen to be contributors to the DNC. Can you say crony capitalism ?

quadzilla

tonyb wrote: »

Gas prices were roughly the same from when Bush took office 'till he left. Yes, they fluctuated as gas prices always do but they skyrocketed right before the crash of the markets then nose dived with everything else.

Also keep in mind Obama himself wants higher gas prices, the energy secretary wants prices to match Europes, and just a few days ago told congress he isn't looking to bring gas prices down. Sounds like nobody down there gives two craps about you.

Refineries and regulations are key here.

er... The US is producing the more oil domestically than it has in 8 years. The problem has been getting pipelines in place to transport the oil produced. And Obama is now starting work on streamlining that process. That's how bad Obama wants higher prices; he's doing about as much as possible to increase domestic supply. So points to you for parroting one of the more recent GOP Obama-as-boogeyman memes. <boo>

ryanjoachim

I say we start making electric cars based off of the one Jay Leno has.

You know, the 100 year old electric car that gets MORE mileage than today's electric cars?