Gas Prices

[AndysDaddy]

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...just complaining about payng for a product that is cheaper than ever in present dollars.

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This is an oft-repeated statement that is just plain false. In fact, in inflation adjusted dollars, gas has been this expensive only once before in our history - 1980 & 1981. Historical gasoline Prices (CA)
So will you, Rush, and every other Bush/Big Oil apologist stop trying to convince me that gasoline is not expensive.
--
Scott

[nicky g]

On a related note, why do people keep saying that one of the reasons for high oil prices is lack of refinery capacity? How would that increase oil prices? Surely it would act as a constrain on demand for oil, given that less of it can be turned into something useful, therfore lowering the price? I can see why it would increase gasoline prices at the pump, but people keep referring to it as a factor in the high price of a barrel of crude.

[adios]

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On a related note, why do people keep saying that one of the reasons for high oil prices is lack of refinery capacity?

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It's not the only reason but here's an explanation of this one. FWIW, since gasoline is in demand, refiners will pay more for crude oil to refine. I have some problems with this reasoning as well which I'll get to at the end.

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How would that increase oil prices? Surely it would act as a constrain on demand for oil, given that less of it can be turned into something useful, therfore lowering the price?

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I don't see it that way. Less supply means higher prices.

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I can see why it would increase gasoline prices at the pump, but people keep referring to it as a factor in the high price of a barrel of crude.

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Here's what I don't get. The stuff I've read basically states that since refining capacity is tight, refineries are running full bore which leads to malfunctions of equipment and such. Therefore in order to pick up the slack in supply, refiners that can produce more gasoline will pay higher prices for crude since they know they can sell the gasoline (probably at higher prices). What I don't get is this, if refining capacity is so strained (capacity utilization in the U.S. is something like 96% from what I've read) where does the extra capacity to produce more gasoline come from? Perhaps it's from non U.S. refiners, not sure.

As an aside there's alot of debate whether or not the current price of oil is sustainable. In the long run I actually agree with what Cyrus has posted. I read an article today about the acquisition of oil reserves by China and India as well as strategic relationships with oil producers like Iran. My take is that the demand in those countries is forseen to be growing at a rapid rate. Even though the percentage of people using fossil fuel burning vehicles represents a fairly small percentage of the population, there's obviously alot of room for growth in the usage of fossil fuel burning vehicles.

[adios]

How much of this increase since 1970 is due to more stringent fuel emissions standards in California. My understanding is that California has the highest gasoline prices in the country because of their more stringent emissions standards. Now if we're talking about a barrel of light sweet crude oil then my understading is that to reach an inflation adjusted high it would have to go to $90 a barrel. You can't look at the price of a gallon of gasoline and hang the increased prices entirely on the oil companies. The cost of clean air emssions and taxes are also major contributers. I'm for clean air but it comes at a price and in another thread, I maintained that it's more or less a regressive tax on the less affluent. In other words the price for clean air is not borne fairly among income groups (bruiser I submit that just logical thinking will get you to see this). So what would you propose doing to improve the situation?

Taxing the crap out of oil companies?

Make everybody buy an expensive new car?

Provide mass transit solutions?

Develop a costly and expensive infrastructure to ween the U.S. from fossil fuel (including making people buy new expensive vehicles most likely)?

Relax clean air standards?

All of the above, none of the above, what?

[ptmusic]

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How much of this increase since 1970 is due to more stringent fuel emissions standards in California. My understanding is that California has the highest gasoline prices in the country because of their more stringent emissions standards. Now if we're talking about a barrel of light sweet crude oil then my understading is that to reach an inflation adjusted high it would have to go to $90 a barrel. You can't look at the price of a gallon of gasoline and hang the increased prices entirely on the oil companies. The cost of clean air emssions and taxes are also major contributers. I'm for clean air but it comes at a price and in another thread, I maintained that it's more or less a regressive tax on the less affluent. In other words the price for clean air is not borne fairly among income groups (bruiser I submit that just logical thinking will get you to see this). So what would you propose doing to improve the situation?

Taxing the crap out of oil companies?

NOT DIRECTLY: TAX THE CRAP OUT OF GASOLINE ITSELF

Make everybody buy an expensive new car?

EVENTUALLY YES

Provide mass transit solutions?

YES

Develop a costly and expensive infrastructure to ween the U.S. from fossil fuel (including making people buy new expensive vehicles most likely)?

YES

Relax clean air standards?

NO, RAISE THEM

All of the above, none of the above, what?

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-ptmusic (caps used for lack of time)

[FishHooks]

The price hasn't gone up from $50 to $125, the price of crude has gone up about 50% in the last year and the price of gas at the pump has gone up about 35%, so its more like that $50 has gone up to about $68 which isn't that much of an inrcease.

[adios]

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When will it stop?

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The long term trend is up. Ray is right though about more effecient vehicles.

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I think the government could pass a law saying that all new cars sold in the US after say.......2020 must depend on something other then fuel. This could be done today if they wanted to. This way we will slowly ween our selfs of oil. We can still have gas stations for the older cars sold before 2020 but after about 20 years after that oil will almost be obesolite(sp).

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Well the current energy bill is providing tax breaks for hybrids and many states are following suit. I like the idea and I like the time frame but this is easier said than done. There are many problems with this proposal:

1. We don't probably don't have the infrastructure to support this change. It will cost lot's of $.

2. The less affluent will find such vehicles prohibitively expensive IMO.

3. You're probably killing the U.S. auto industry with this proposal. GM and Ford are hurting as it is. Not saying that the government should subsidize GM and Ford but it does have an economic impact and jobs will be lost.

4. You're going to have to enlist popular support for such a proposal because the lobbies in Washington opposed to this are way too strong.

Just a few off of the top of my head.

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We will always use oil based products, lawnmowers, dirtbikes, etc. I also know that what Im saying is a long way off, but we need to start acting NOW! IMO the govt.(including the Dem. party) doesnt want to change anything, fact is (not sure of the numbers) people, very few, are making multi-multi billions a year profit off us.

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I have nothing against companies making a profit fairly. The lack of an energy policy for so many years has it's costs. As stated above, special interests are aligned against big changes. I'm not sure what needs to be done but I see alot of our problems, including those in the Middle East, as stemming from our dependence on fossil fuel.

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This includes business that we dont connect to oil, but ther must be some connection.

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What's wrong with businesses making a profit fairly? If they're making them unfairly how so?

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To some up my post Id say America is getting fleeced by or own people and a few foriegn Govts. They have billions even if we manage to make a couple million threw out or own life there is no comparison to the money they scheme from us and that is why the make the polices(billions start govts) and when a bussiness deal goes bad over billions its not just I will sue you, its WARS, killings, and other very bad things. IMO Iraq war now is just a business deal gone wrong between the wealthest people in the world.

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I think that OPEC has basically done what it's wanted to do i.e. provide cheap oil for years to make the rest of the world totally dependent on fossil fuel. Chickens are coming home to roost and the cost of weaning the rest of the world from fossil fuel is going to be very high. People in the rest of the world are accountable for their behaviour that let things get to this point. BTW you are buying stock in oil related businesses aren't you?

[coffeecrazy1]

Whatever.

Glad to know that you don't give a damn about the value of a dollar.

If McDonald's prices went up 35% in the last year, they would not have any customers any more...and that would be significantly less money. So, spare me the "it isn't that much of an increase" bullcrap. Why the hell are you defending price increases, anyway?

[adios]

Thanks for the reply. IMO all of your recommendations will raise the price of gasoline(thus having a disproportionate impact on the less affluent) and increase taxes substantially.

Not stating that you're solution is unworkable and also not stating that I disagree with the goals necessarily. Perhaps we should start a thread on mass transit solutions.

[FishHooks]

Everyone is overreacting, I'm sure there are things in your life where you could save that $18 a month your loosing on paying extra for gas. No one likes tht increase, but it's not enough to really affect anything or our economy, it would have to reach $5+ dollars a gallon for it to start really taking effect in most peoples daily lives. Just because your argument was overstated and I pointed it out, no need to start flaming, this is why this forum sucks.