Gas Prices

[Ninjahedge]

Just a helpful link.

If it is already here, just change the addy to your link...

http://www.newyorkgasprices.com/

[WizardOfOss]

Lowest $2.59, highest $3.55. Not too bad. Here in the Netherlands it's $6.50 per gallon at the moment...

[NewYorkYankee]

Gas prices are the same in NY as they are here in TN. I thought they would be much higher.

[ryan]

Most regional gas price differences are due to differing state taxes (which is why Jersey has such low prices). The whole gas price story is a typical media hype meme. Adjusted for inflation, prices are approaching the 80's energy crisis, but it's not as dramatic as all the buzz would indicate:

http://liberalserving.typepad.com/photos/uncategorized/gas.gif

from inflation data (http://inflationdata.com/Inflation/Inflation_Rate/Gasoline_Inflation.asp)

[normaldude]

Most regional gas price differences are due to differing state taxes (which is why Jersey has such low prices). The whole gas price story is a typical media hype meme. Adjusted for inflation, prices are approaching the 80's energy crisis, but it's not as dramatic as all the buzz would indicate:

http://liberalserving.typepad.com/photos/uncategorized/gas.gif

from inflation data (http://inflationdata.com/Inflation/Inflation_Rate/Gasoline_Inflation.asp)

1) Your chart is using old data. Gas prices today are approaching $3/gallon.

2) Your chart conveniently starts with the record high spike, to give it an appearance of declining gas prices.

3) The energy crisis of the 70s and early 80s were horrible. Long lines at gas stations, gas rationing. And that was temporary (Arab oil embargo). Today's high gas prices could be a permanent long-term trend (growing oil demand from China & India, and peaking oil production).

The age of cheap oil might be over.
http://www.peakoil.net/uhdsg/GrowingGap.jpg

[lofter1]

America's biggest policy mistake over the past 30 years has been the failure to have a serious discussion and then enact programs and incentives to move this country towards alternative energy sources and away from petroleum based fuel.

The writing has been on the wall, but those with pockets to fill can't seem to look clearly at the long term. And a few of those deep pockets will get much, much fuller during the upcoming crisis.

[Ninjahedge]

I am sure E-M has been researching alternate sources and the like.

But if they have come out with an alternate, they are not going to even try to sell it now. They would be undercutting themselves.

They will wait, like any good buisnessman, until the demand can warrant them to introduce the new line without losing profits. Say when gas lines come back. They will be able to sell the same fuel source as if it were equivalent to gasoline at $5 a gallon (energy wise).

Or something similar.


As for the inflation adjustment Normal, the point of the post, and graph, was to show that even though it is bad, it is not as bad as the worst we have ever had. It is not saying that it will not get worse, but the media has a tendency to hype EVERYTHING.

This will be used as a political tool.


Me, I drive 7500 a year. My car gets 25mpg average. that's about 300 gallons a year. Even if prices doubled, go to $6 a gallon, OVERNIGHT, the cost to me would only be $900 a year. $75 a month.

I am not worried on that front.

OTOH, vacations (plane fare), deliveries (UPS/FedEx) and heating (PSE&G) will be a nightmare.

[normaldude]

As for the inflation adjustment Normal, the point of the post, and graph, was to show that even though it is bad, it is not as bad as the worst we have ever had.

According to your chart, record high gas prices (inflation-adjusted) were around $2.94/gallon. That was during our worst energy crisis, with long lines and gas shortages

We're hitting $3/gallon gas all over the country.
http://www.cbsnews.com/stories/2005/09/01/katrina/main810903.shtml
http://www.nbc4.tv/news/4923834/detail.html

According to GasPriceWatch.com, the average is now $2.99/gallon.
http://www.gaspricewatch.com/new/

Some places have hit nearly $6/gallon (but that's likely a temporary spike).
http://us.news3.yimg.com/us.i2.yimg.com/p/ap/20050901/capt.gagb10409010035.katrina_oil_gagb104.jpg

So at what point do you recognize that we're hitting record high gas prices, and approaching a serious energy crisis? Gas prices (inflation-adjusted) are now setting record highs, above what they were during our worst energy crisis ever.

Keep in mind that the American savings rate is now 0%, with people deep in debt, faced with rising health care & college education costs, and stretched to the limit. A family of 4 with 2 cars (mom & dad), can use 800 gallons of gas/year. If they were used to $1.20 gas, then $5.20 gas would mean +$2400 more in expenses/yr or +$200/month. Additionally, high oil prices will affect virtually all goods & services because of transportation costs. If the above family was barely making ends meet, they would have to make some serious lifestyle changes.

If the age of cheap oil is over, USA will likely have to completely retool, and be more mass-transit focused. If peak oil theorists are correct (global oil production will hit a peak in 2008, then start declining), then USA spent the last 70 years building a living arrangement with no future (oil dependent suburbia).

There's an interesting documentary called "End of Suburbia", which discusses peak oil and suburbia.
http://www.endofsuburbia.com/
http://www.endofsuburbia.com/previews.htm
http://www.netflix.com/MovieDisplay?trkid=73&movieid=70022083
http://www.torrentspy.com/search.asp?mode=torrentdetails&id=218669

[NewYorkYankee]

I am MOVING this Sunday. gas prices in Tn right now are about 3.20 for the cheapest. Its worse in GA with prices above 5 bucks.

[lofter1]

Yeah its $5 in North Carolina and $6 in Georgia.
Which makes no sense ... It's gouging, pure and simple.

Sure, when the next truck load of fuel is delivered to the station at a higher rate than before then it would make sense that prices would go up. But to raise prices in anticipation of higher costs is simply an operator trying to get a load of cash in his pocket now in case deliveries dry up in the future.

[lofter1]

Thousands Complain to Feds on Gas Gouging
Sep 01 7:52 PM US/Eastern

By H. JOSEF HEBERT
Associated Press Writer

WASHINGTON

Soaring gasoline costs prompted thousands of complaints Thursday to federal officials about alleged price gouging and demands by some members of Congress for an investigation into gasoline markets.

The Energy Department reported more than 5,000 calls to its price gouging hotline from motorists around the country, although officials emphasized there was no way to immediately determine how many of the allegations were valid.

Department spokesman Drew Malcolm said the reports were being turned over to the Federal Trade Commission.

The states with the most complaints were North Carolina, Georgia, New York, Pennsylvania, Texas, Illinois, Tennessee, New Jersey, Michigan and South Carolina.

Meanwhile, attorney's general from a number of states held a telephone strategy session to discuss the rapidly escalating gas prices and possible investigations into gouging. Prosecution for price gouging is generally a state matter unless it involves some form of collusion or other activity in violation of federal antitrust laws.

Gas prices jumped 35 cents to 50 cents a gallon overnight in some areas pushing to well over $3 a gallon after Hurricane Katrina shut down nine Gulf Coast refineries, disrupted gasoline pipelines to the Midwest and East and stopped 90 percent of the oil production in the Gulf of Mexico.

"If we get consumer complaints about (gasoline) prices, we'll look at those complaints to find evidence of anticompetitive conduct," said John Seesel, the FTC's associate counsel for energy issues.

But Seesel said the FTC has no jurisdiction over an individual gas station operator raising his price, no matter how high, unless there is some collusion among retailers. A number of states, however, have anti-gouging statutes. Following FTC policy, he declined to say whether any investigation were underway.

On Thursday, Attorney General Troy King of Alabama initiated a private telephone conference with a number of his colleagues from others states to discuss strategy in response to the rising gas prices and reports of huge overnight spikes by some gasoline retailers. No details about the private discussion were available.

There have been isolated cases of unusually huge price jumps, including a gas station in Georgia that briefly charged $6 a gallon when competitors ran out of gas. In Michigan, there was a price jump of nearly $1 a gallon overnight, although prices then receded, according to Rep. Fred Upton, R-Mich., who drove around his district on Thursday to gauge prices.

"Prices are averaging $3.19. It's as high as $3.58 from $2.61 on Tuesday," said Upton in a telephone interview. "My sense is the supply and demand equation does not fit a 60-cent (a gallon) increase in the last 36 hours."

"In Illinois, prices are reported to have shot up 50 cents per gallon overnight and the state attorney general received more than 500 reports of price gouging," nine Democratic members of the House Judiciary Committee wrote the FTC, asking the agency to step up its review of gas markets. "These increases go far beyond anything justified or relating to the market disruptions caused by Hurricane Katrina," wrote Rep. John Conyers of Michigan, the committee's ranking Democrat, and the other members.

[lofter1]

Judiciary Democrats call for inquiry into gas price gouging

RAW STORY (http://rawstory.com/)
http://rawstory.com/news/2005/Judiciary_Democrats_call_for_inquiry_into_gas_pric _0901.html

Democratic House Judiciary members Conyers, Nadler, Meehan, Sanchez, Weiner, Jackson Lee, Boucher, Wexler, Van Hollen and Schultz called on the Federal Trade Commission investigate gasoline price gouging resulting from Hurricane Katrina, joining a similar call by the House Republican chairman of the House Energy & Commerce Committee, Rep. Joe Barton (R-TX).

Barton told a local paper he thought that increases of 20 cents per gallon Tuesday within his district might be “excessive, given that the industry in Texas is stable.”

Hearing about $1/gallon increases, Barton said, “If that’s true, that’s something that needs to be investigated and prosecuted,” Barton said. The rise in wholesale oil and gas prices “does not justify a $1-a-gallon gasoline price increase.”

The Judiciary Democrats' letter, which follows, was copied to RAW STORY (http://rawstory.com/).

#

We are writing as members of the House Judiciary Committee, which has jurisdiction over the antitrust laws, to ask that you commence an immediate investigation into reports of price gouging in gasoline markets across the nation.

There are numerous reports of massive increases in gasoline prices. For example, today's Washington Post reports price increases of as much as 88 cents per gallon in a single day. Some stations in Georgia are reported to be charging as much as $6 a gallon. In Illinois, prices are reported to have shot up 50 cents per gallon overnight, and the state attorney general received more than 500 reports of price gouging.

These increases go far beyond anything justified or relating to the market disruptions caused by Hurricane Katrina. As a result, we would ask the FTC to look into the various causes of the recent increases, identify the price gouging by opportunistic sellers and take any and all actions to end price gouging immediately.

You have examined similar issues for Congress in the past after other periods of price increases, and we find it essential that you complete an analysis for us today based on current market conditions. As time is of the essence, we would like to receive a status report on any preliminary findings as promptly as possible, but no later than September 15, 2005.

[lofter1]

Record Number Of New Yorkers Report Gas Gouging
September 02, 2005
http://www.ny1.com/ny1/NY1ToGo/Story/index.jsp?stid=1&aid=53224

Around the country and here in New York, federal and state officials are fielding thousands of calls from people about price gouging at the pump, but some local lawmakers are taking steps to prevent the practice.

Officials say they received a record number of calls from New Yorkers. The Federal Trade Commission is investigating the allegations.

As motorists across the state watched prices soar literally overnight, some think they may be getting ripped off.

State Attorney General Eliot Spitzer and Governor George Pataki say violators could face thousands of dollars in fines.

The City Council's Transportation Committee is also supporting legislation that is designed to stop gas gouging by prohibiting gas stations from increasing prices more than once in a 24-hour period.

A violation would be punishable by fines ranging from $500 to $10,000. The bill will be proposed next week.

"We just want to make sure there's no exploitation of consumers of any kind and certainly we're not going to tolerate any kind of price gouging for gasoline," said Councilman John Liu.

Another group of council members is calling for a change in the way the city taxes gas. Now we pay more than eight percent sales tax on the price of a gallon, so the higher the price, the more we have to shell out.

Lawmakers want the tax changed to a fixed rate so we don't get stuck paying more when prices jump.

“Every time the price of gasoline goes up, we're gouging the residents of the city,” said Queens Councilman Tony Avella. “It's really unfair.”

Don't expect to see prices drop anytime soon, though. Both pieces of legislation likely won't be addressed until the next council meeting September 15th.

The gas tax legislation would also have to be approved by the State Legislature, and while the Senate has scheduled an emergency session for September 20th, the Assembly is not scheduled to meet for months.

In the meantime, New Yorkers who think they've been cheated at the pump, can call the State Consumer Protection Board at 1-800-214-4372 or go to www.nysconsumer.gov (http://www.nysconsumer.gov/).

Meanwhile, 26 nations are going to release 60 million barrels of crude oil and gasoline to help the energy crunch caused by Hurricane Katrina.

The Bush administration will release 30 million barrels of crude oil from U.S. reserves.

The foreign fuel is being released by the Paris-based International Energy Agency over the next month.

It will add up to about two million barrels a day coming into U.S. markets.

Fears of escalating fuel prices spread across the country this week as damaged Gulf Coast refineries and fuel lines shut down.

Gas prices in New York City have broken the $3 mark as the entire country feels the effects of Hurricane Katrina at the pump.

At one Queens gas station, the price of regular gas rose from $3.27 per gallon on Wednesday to $3.47 per gallon on Thursday – a 15 cent jump.

And experts say the increases are far from over.

Energy experts say that privately-owned stations could be facing an even greater gas shortage than the present one. That's bad news for New York City drivers, since most stations in the city are run by private operators and not by corporations.

"The mom-and-pop stations and the grocery stores that don't necessarily have tied-in branded relationships with the big oil companies are moving down to the bottom of the list for getting their deliveries of gasoline," said Justin McNaull of the AAA.

"I thought maybe in two years it would be $5 a gallon," said one New York motorist NY1 spoke to. "But now I see we won't have to wait that long."

And yet it could still be worse. In Georgia, the cost of a gallon of unleaded gas is approaching $6 in some spots.

The sudden price increase had come about because Hurricane Katrina knocked out several oil platforms and a number of refineries in the Gulf of Mexico.

On Wednesday the president agreed to tap into the country's emergency oil reserves in the hope of lowering prices at the pump.

Still, the sky-high gas prices could keep many people at home this Labor Day weekend.

It's usually a big driving holiday and this year was shaping up to be. An AAA survey conducted before the hurricane indicated a slight increase in the number of people who were planning Labor Day weekend travel, but it's not clear if that will still be the case.

With still-rising gas prices and shortages around the country, some hotels say they're already getting cancellation calls.

AAA says members are calling to ask about gas availability at popular vacation spots.

[lofter1]

Oil Firms Turn Katrina Into Profits, Clinton Says

N.Y. Senator Criticizes Lack of National Leadership, Freedom From Imports

By Dan Balz
Washington Post Staff Writer
Saturday, September 3, 2005; Page A10

http://www.washingtonpost.com/wp-dyn/content/article/2005/09/02/AR2005090202079.html

SYRACUSE, N.Y., Sept. 2 -- Pressed by constituents alarmed by skyrocketing gasoline prices in the aftermath of Hurricane Katrina, Sen. Hillary Rodham Clinton (D-N.Y.) accused oil companies of manipulating energy markets to enhance profits and decried a lack of national leadership for a plan to free the country from dependence on foreign oil.

"I want to go after the oil companies and the oil speculators and the manipulators of the money, because they're the ones who I think are really behind this," Clinton told an audience in Elmira Heights on Thursday. "You have a hurricane, and all of a sudden you see prices going up like that. That has . . . everything to do with people trying to make money off the backs of this tragedy."

Clinton repeatedly took aim at record profits rolled up by energy giants during the last quarter as crude oil prices have continued to rise. Her rhetoric was at times angry, exasperated, frustrated and passionate. "You just cannot convince me that they are not manipulating this market," she told another audience near Newark, N.Y.

Citing Exxon Mobil Corp.'s record $7.64 billion profit in the past quarter as evidence that the government needs to take action, she said it is time to send a message to the industry that "they're being watched" as consumers deal with rising prices. "If we don't fight Big Oil, this country's going down," she said. "We're not going to have the standard of living and the quality of life, and we're not going to be able to control our future."

Clinton sparred with one constituent who called for a rollback of state and federal gasoline taxes to ease the pain of increases that have pushed prices well above $3 a gallon in many places since the hurricane hit Monday morning. Clinton said that will not solve the problem.

"We can get some temporary relief, but that's not the answer, and we don't have the leadership we need to stand up and fight for what should be the answer and the sacrifices people should be willing to make," she said.

The anxiety and anger felt by motorists was evident at nearly every turn in her travels throughout the Finger Lakes region of Upstate New York. She made clear she shared the concern.

"I think it's time to send a clear message to what has become the most profitable sector in our entire economy that they're being watched," she said in explaining her call for an inquiry by the Federal Trade Commission. "I think human nature left to itself is going to push the limit as far as possible, and that's what you need a government regulatory system for: to keep an eye on people to make the rules of the game fair, to make a level playing field and not give anybody some kind of undue advantage."

Clinton criticized the new energy bill, which she opposed, as inadequate to solve the country's long-term energy problem. She said the United States has regressed over the past three decades, since the first oil shocks of the early 1970s. "We've had 30 years to do some things we haven't done," she said. "In fact we've gotten, we've gone backwards in many respects.

"I am tired of being at the mercy of people in the Middle East and elsewhere, and I'm tired frankly of being at the mercy of these large oil companies," Clinton said.

© 2005 The Washington Post Company

[Ninjahedge]

First of all, the law making it illegal to change gas prices more than once a day is SMALL CONSOLATION!

Who cares? They will simply raise it $1.00 overnight instead of $0.50 twice that day. The prices can, and still will, soar unless something else is done to make sure there is some buffer between gas cost to the distributor and sale price.

Maybe a tax that is leveed on the profits made that is illegal to charge seperately? Somethingthat increases the tax on the gas so it becomes GREATER the more they raise their prices? It is not as if the tax is added after you purchase, as in other areas.

Make a flat out rule, that if the price you post is more than %% above your cost, an additional tax is due on the gas pumped until a ceiling is reached where no matter how much you increase it, you do not make any more profit.

Of course, you know that would be a shock to most companies and we would feel it, but at least the money would be going to government where a small % might actually be spent on something we use rather than into the pockets of the gas station owners.


As for gas being profitable?

Well, DUH!

[normaldude]

I prefer to let the gas stations charge whatever they want (assuming no collusion, or anti-competitive behavior). Let the market decide the price based on supply & demand. When you engage in government price fixing (like with gas prices in the 1970s), you end up with gas shortages, and long lines at the pump.

Oil & gas prices are driven by supply & demand. Supply is now pretty much maxed out, so it's not like Exxon or OPEC can just ramp up supply like they could in past decades (the recent dip in oil prices was from USA & Europe releasing their strategic oil reserves, and that's a one-time event, not a sustainable strategy).

There's only so much oil floating around the market, and everyone is bidding for it. American SUV drivers, growing economies like India & China, etc. Oil isn't a product like Microsoft Windows, where Microsoft could crank out millions of additional copies of Windows CDs at near zero incremental cost.

With oil supply maxed out, dropping demand is a better way to bring down the market rate for oil & gas. Government could just impose deeper sliding scale tax breaks for fuel efficient vehicles, and impose sliding scale taxes on gas guzzling SUVs (and allow businesses to apply those taxes as tax credits, so businesses that need trucks aren't hurt).

This will encourage people to sell their 10mpg gas guzzling Hummer, and buy a 50mpg Toyota Prius.

Additionally, government could start charging more congestion-pricing tolls on highways/bridges/tunnels, and apply that money to improve mass transit.

Of course, 95% of Americans will oppose the above ideas since they've become addicted to cheap gas, and believe that a cheap McMansion & SUV lifestyle is some sort of constitutional entitlement. So in the next few years, I expect the public to howl & complain, and pressure government to impose ineffective price caps, which will lead to gas shortages & gas lines. Eventually, people will grudgingly accept that they are not entitled to cheap gas for their SUV, and adjust their consumption accordingly (ditch gas guzzling SUVs, and turn more to fuel efficient hybrids and mass transit).

[NYCResident]

Eventually, people will grudgingly accept that they are not entitled to cheap gas for their SUV, and adjust their consumption accordingly (ditch gas guzzling SUVs, and turn more to fuel efficient hybrids and mass transit).

Agree 100%.. Unfortunately, I don't think people are going to start changing their behavior until gas hits $4 - $5 - and stays there.

[Ninjahedge]

Unfortunately, allowing a small segment to control pretty much our entire economy like that would be disastrous.

It is not just the SUV Soccer Mom that will be effected here. Public transportation even in many of the major cities (take a look at ALL of CA!!! Talk about ironic!) SUCKS!

It is SO bad!

Having gas prices double in a month 'just because' would bring our economy to a screeching halt. Letting a few guys gouge based on fear on something that is no longer a luxury, but needed in order to GET to work and DO our jobs is not exactly a fair comparison. That is only two steps away from indentured serviture.

I DO think, however, that we should "encourage" the production of more efficient means of transportation. Things like "autopilot" for long interstate highway trips to minimize gas consumption, hybridization and alternate fuel source vehicles, and improvement of mass transit systems (including NYC).

Both taxes and tax credits should be awarded to push us in these directions, while netting the same overall contribution.

We'll see how that goes.

[lofter1]

If this doesn't make people scream and shout ...

http://rawstory.com/news/2005/Group_Internal_memos_show_oil_companies_limited_re fineries_to_drive_up__0907.html

Group: Internal memos show oil companies limited refineries to drive up prices

RAW STORY (http://rawstory.com/)

http://rawstory.com/images/other/refinerystory.gif
Internal Texaco memo, March 1996

The Foundation for Taxpayer and Consumer Rights (FTCR) today exposed internal oil company memos that show how the industry intentionally reduced domestic refining capacity to drive up profits, RAW STORY (http://rawstory.com/) has learned.

The three internal memos (http://www.consumerwatchdog.org/energy/fs/) from Mobil, Chevron and Texaco illustrate how the oil juggernauts reduced refining capacity and drove independent refiners out of business in an effort to increase prices. The highly confidential memos reveal a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage major refiners to close their refineries in the mid-1990s.

"Large oil companies have for a decade artificially shorted the gasoline market to drive up prices," said FTCR president Jamie Court, who successfully fought to keep Shell Oil from needlessly closing its Bakersfield, California refinery this year. "Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty."

"It's now obvious to most Americans that we have a refinery shortage," said petroleum consultant Tim Hamilton, who authored a recent report (http://www.consumerwatchdog.org/energy/rp/) about oil company price gouging for FTCR. "To point to the environmental laws as the cause simply misses the fact that it was the major oil companies, not the environmental groups, that used the regulatory process to create artificial shortages and limit competition."

The memos from Mobil, Chevron and Texaco show the following.

-- An internal 1996 memorandum (http://www.consumerwatchdog.org/energy/fs/5105.pdf) ( http://www.consumerwatchdog.org/energy/fs/5105.pdf ) from Mobil demonstrates the oil company's successful strategies to keep smaller refiner Powerine from reopening its California refinery. The document makes it clear that much of the hardships created by California's regulations governing refineries came at the urging of the major oil companies and not the environmental organizations blamed by the industry. The other alternative plan discussed in the event Powerine did open the refinery was "....buying all their avails and marketing it ourselves" to insure the lower price fuel didn't get into the market.

-- An internal Chevron memo (http://www.consumerwatchdog.org/energy/fs/5103.pdf) ( http://www.consumerwatchdog.org/energy/fs/5103.pdf ) states "A senior energy analyst at the recent API convention warned that if the US petroleum industry doesn't reduce its refining capacity it will never see any substantial increase in refinery margins."

-- The Texaco memo (http://www.consumerwatchdog.org/energy/fs/5104.pdf) ( http://www.consumerwatchdog.org/energy/fs/5104.pdf ) disclosed how the industry believed in the mid-1990s that "the most critical factor facing the refining industry on the West Coast is the surplus of refining capacity, and the surplus gasoline production capacity. (The same situation exists for the entire U.S. refining industry.) Supply significantly exceeds demand year-round. This results in very poor refinery margins and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline. One example of a significant event would be the elimination of mandates for oxygenate addition to gasoline. Given a choice, oxygenate usage would go down, and gasoline supplies would go down accordingly. (Much effort is being exerted to see this happen in the Pacific Northwest.)" As a result of such pressure, Washington State eliminated the ethanol mandate - requiring greater quantities of refined supply to fill the gasoline volume occupied by ethanol.

Abridged and edited from a release.

[Ninjahedge]

Um, as bad as this is, would it be better to make it so that gas was MUCH cheaper and we used more of it?

Pricing be ignored, what would happen if we had no "shortage" of gasoline? How fast would we be using it and how soon would we really run out?

[lofter1]

^ IMO, the important point of the article is that the Oil Companies (Surprise, surprise) were acting in COLLUSION with one another and MANIPULATING the market.

[Ninjahedge]

REALLY??!?!?!?!

I would have never thought of that!!! ;)

And I suppose you say they had something with getting a man in the White House too!!!!!! :)

They have been pulling a "DeBeers" on Oil for a long time now. The only difference, we do not need diamonds to function. We can live without them. If they were to halt the supply immediately, there would be a small ripple effect.


Damn, I need to go out in the back a' shootin for food....
(And up from the ground came a' bubblin........ ;))

[normaldude]

Unfortunately, allowing a small segment to control pretty much our entire economy like that would be disastrous.

USA became the richest, most powerful country in the world with that "disastrous" strategy of letting the market determine the price of gas. We tried government price fixing in the 1970s, and it led to gas shortages, long lines, and recessions & stagflation.

Our biggest mistake was not having higher gas taxes, which would have promoted fuel conservation, and given the US government a mechanism to smooth out oil price spikes (by temporarily rolling back gas taxes). Shifting gas taxes would have been a better way for government to control gas prices than hard price ceilings. And the higher gas tax revenue could have been used to build better mass transit for America.


Having gas prices double in a month 'just because' would bring our economy to a screeching halt.


Um, as bad as this is, would it be better to make it so that gas was MUCH cheaper and we used more of it? Pricing be ignored, what would happen if we had no "shortage" of gasoline? How fast would we be using it and how soon would we really run out?

In the past 70 years, when oil prices were cheap, we should have had much higher gas taxes. US gas taxes only work out to be about 40c/gallon. Most other 1st world countries (Japan, Germany, France, etc), have much higher gas taxes, and consumers pay twice as much per gallon at the pump. As a result, people in those countries tend to drive smaller cars, live closer to cities, and have more extensive mass transit systems. In most of the US, people snobbishly look down upon mass transit as a sort of slavery for poor people.

Higher gas taxes would have made sense to compensate for health care costs (1% of Americans are killed or injured in car accidents every year), pollution, strategic reasons (a heavily gas dependent, gas importing economy is very vulnerable in world wars, when free trade breaks down), and to fund the usual road/highway infrastructure.

But since USA has had decades of low gas taxes and low gas prices, USA has built its entire economy around cheap gas. 70 years of cheap gas has led to a heavily gas-dependent suburban living arrangement, where most Americans need a car to exist.

If we had higher gas taxes in place, then we'd be able to roll back those taxes when oil prices spiked, and smooth out the big price fluctuations. Additionally, if we had higher gas taxes all along, and had high gas prices like other 1st world countries had, then we wouldn't have built such a oil-dependent suburban living arrangement, and would likely have better mass transit.

But we can't do it now. It would be foolish to impose higher gas taxes on top of the massive current spike in oil prices. However, if oil prices do end up crashing down, government should consider higher gas taxes, and keep our gas prices at the pump closer in line with other 1st world countries.

On the other hand, if oil prices continue marching higher over the long run (peak oil, the end of cheap oil), then the best strategy is to focus on sliding scale tax credits for fuel efficient hybrids, sliding scale taxes on gas guzzling SUVs, and more congestion pricing tolls on highways/bridges/tunnels, and use that money to improve mass transit. This would help USA transition to a more fuel efficient, mass transit oriented economy. But as I mentioned above, 95% of Americans would oppose these policies since 70 years of cheap gas has made them believe that a cheap suburban McMansion & gas guzzling SUV lifestyle is a constitutional right.

[normaldude]

The Foundation for Taxpayer and Consumer Rights (FTCR) today exposed internal oil company memos that show how the industry intentionally reduced domestic refining capacity to drive up profits

Blaming "lack of refinery capacity" has been popular in the past few years.

However, it should be noted that a "lack of refinery capacity" would actually artificially decrease crude oil prices, and increase gas prices. If there was a lack of refinery capacity, then there would be a glut of crude oil (stuff that has yet to be refined to gasoline) floating around the market.

But over the past few years & decades, the rise in crude oil prices has been pretty much in line with the rise in gas prices. If "lack of refinery capacity" was really the culprit, the global price of crude oil would not have risen so much.

The real culprit behind both high gas prices and high oil prices is supply & demand. Global oil supply is pretty much maxed out, as all the cheap oil has been discovered a long time ago. Meanwhile, demand continues to increase as Americans drive bigger gas-guzzling SUVs, buy bigger McMansions, expand suburban sprawl. Additionally, demand is increasing worldwide with growing economies like India & China consuming more & more oil & gas.

You can't get away from supply & demand for a finite resource like oil. There's only so much oil floating around the global marketplace, and everyone is bidding for it. Government price fixing policies won't magically create more oil for the market, and it will only lead to gas shortages & gas lines.

[Ninjahedge]

ND, I agree with you on the tax end.

I was not calling for price control on the gas itself, but an accountability on all areas as to how much they could charge without having to pay over a large chunk of it to the US.

Call it this way. If it cost the gas companies $0.50 a gallon to produce and supply their outlets with gas, and they sold it for, say, $0.60, they would be making $0.10 profit. Make the tax on this profit 10%.

Now say they decide to up the price to $1. Profits are now $0.50/gal. Tax THAT at 20%. They would still be making more money, but the ammount taken in by the government would be higher.

Keep doing it like this so that once you pass a certain point, most of the raise would go to the US and not to the industry. You would have to make this a sliding scale that would not clamp too much on private industry, but at the same time allow them to find a floating point where they could balance between demand and profit.

If companies decided to gouge all of a sudden, due to a discontinuous demand or other event, they would not be reaping the entire profit on it.


Other provisions including tax breaks for alternate energy research based not on how much they spend, but on how much they spand compared to their Gross Proceeds would be another interesting tool.


And I agree with your cheap gas development and sprawl theory except for one small point. The US is relatively young. A lot of nations had been around, with their own cities and way of life long before us. They are also not booming in population as the US is now. It is hard to draw a direct correlation between residential development, mass transit and gas prices when you compare the US to Europe, although I definitely agree it is a strong motivating factor....