Gas Prices Surge!
Posted in Environment, Money, Politics by George
“Because supply and demand are so tightly bound,” Comey said, “if we could just reduce the demand a little bit individually, a couple gallons a month, it would have a meaningful impact.”
This is not really an article, just a link, to the following article: Gas prices hit record; motorists hit ceiling.
Read it. Mark my words - gas prices will jump to over $4 per gallon for a period this summer. This isn’t about price gouging. It’s because we’re running out of fuel, and we’re demanding more and more.
April 22nd, 2006 at 4:03 pm
I blame the Chinese.
April 23rd, 2006 at 8:01 am
Oil is grossly overvalued on the world market. They have a supply premium built in which is jumping up the price. Another problem with gas prices is that we don’t have nearly enough refineries in place to make gas and so gas prices will jump because of it. The reason we don’t have those refineries is two fold. Some shut down because of Katrina. The other reason is that hippie lefties won’t let the new ones be built. We have a major refining capacity problem that we choose to ignore.
I also can’t believe people are so ignorant as to actually blame President Bush for the gas prices.
April 23rd, 2006 at 11:06 pm
hm…the senior senator from ryan’s home state seems to have a plan
http://www.msnbc.msn.com/id/12451034/
dunno if it is feasible or not…
April 24th, 2006 at 2:50 pm
There might be some pretty serious pressure on oil prices, but over $4/gallon seems unlikely–if only because public discontent around $3/gallon is usually enough for the government to step in, cutting into our strategic oil reserve to artificially keep prices from getting much worse.
April 24th, 2006 at 6:48 pm
Republican congressional leaders on Monday urged the Bush administration to investigate whether oil companies are gouging consumers at the gasoline pump and if market speculators are pushing up fuel prices.
see link here
Pathetic. People need to stop pretending there isn’t fundamental supply and demand problem with gas. The key reason prices are high is because WE’RE RUNNING OUT OF FUEL.
April 25th, 2006 at 9:29 am
There is currently a huge shift in demand for oil (from China and India) and that is in part driving up the price. However, to argue that that is the sole reason for the increason is unrealistic. Gas prices are only partly determined by the cost of crude oil. Other factors include refining capacity which is severly limited in this country. Seasonal spikes also occur quite reguraly in the lead up to summer.
Also it is simply not true to argue that we are running out of fuel. The key is how to extract and use this fuel. Shale oil and Oil Sand reserves (conviently located almost entirely in the US and Canada) are enormous. Creating the technology neccessary to extract this oil at a cost effective level is the test. There has been a lot of progess in this recently and it looks quite promising. With the cost of oil at $70 a barrell the research will continue because the market is sending the company’s a signal.
April 25th, 2006 at 10:24 am
I don’t see what everyone’s up in arms about relative to prices. It’s market forces, that’s all — it’s not Exxon that sets the price, so blame market forces, not Exxon or the other oil companies. Oh, and blame India and China. But mostly China.
There are those, including OPEC, that blame market speculators and hedge funds for the sucking sound of money coming from your wallet into the wallets of those the invisible hand is helping, but I’m told that’s a lot of hogwash.
Speculators are actually good for the market.
http://www.global-change.com/articles/TRM_IA_REPRI...
You do have a few hedge funds in your portfolio to equalize or trump the loss at the pump, right?
April 27th, 2006 at 1:11 am
The LA Times has a pretty good article on this today.
Why Gas Prices Won’t Go Down
By Elizabeth Douglass, Times Staff Writer
April 26, 2006
The steps proposed by President Bush on Tuesday to rein in soaring gasoline prices would do little to cut fuel costs for outraged motorists before the summer driving season, industry experts said.
That’s because the factors driving today’s record gasoline prices are varied and complex — and beyond the reach of presidential dictate. They include a shortage of refining capacity, rampant speculation in oil markets, oil company choices about fuel additives, unrelenting gasoline demand and high industry profits.
Adjusted for inflation, the price of gasoline is just below its all-time high set in the early 1980s.
U.S. gasoline stockpiles have been drained in recent months because of lower output at domestic refineries — some still suffering from hurricane damage along the Gulf Coast and others undergoing longer-than-normal spring maintenance.
Gasoline traders also fretted that there could be supply glitches as some refiners switched to adding ethanol to summertime fuel instead of MTBE, or methyl tertiary butyl ether — an additive known to contaminate groundwater. A government agency recently warned that such disruptions could increase price volatility and cause brief gasoline shortages.
Analysts also said U.S. gasoline supplies should soon swell because more refineries have returned to full fuel production and tanker loads of imports are on the way. Barring new troubles, they said, retail prices should start falling on their own before Memorial Day.
Looking ahead, though, experts see a continuing struggle to keep up with steadily growing demand for oil as well as for gasoline, diesel and other fuels.
Rising fuel demand in the U.S., boosted largely by economic growth, has for years outpaced production from domestic refineries — making the market more susceptible to the availability and price of imported supplies. The same is true for oil.
The situation is made worse by the meteoric growth in oil and fuel consumption in the hot economies of India and China. Soaring demand there is straining the ever-precarious worldwide oil balance as well as creating stiff competition for imports.
Such deeply rooted problems are not easily or quickly solved, said Daniel Yergin, chairman of Cambridge Energy Research Associates, an industry research firm in Massachusetts.
What counts in the short term is demand, he said, noting that prices retreated when consumption dropped amid the price surge that followed last year’s hurricanes. For immediate effects, Yergin said, “it’s really not what the administration does — what really matters is what consumers do.”
April 27th, 2006 at 10:10 am
Great article!
April 27th, 2006 at 1:55 pm
i guess the idea is that we are f-ed anyway…so we should look for alternative means of fueling, forget hybrids…getting 2 times as far on a tank of gas doesn’t counteract the fact that china and india will have 1/3 of the world population guzzling soon.
April 27th, 2006 at 2:05 pm
This is a really great (albeit long) article on the future of oil.
http://www.reason.com/0605/fe.rb.peak.shtml
If you dont’ want to read all of it read some and then skip to the bottom third. George should espeically read this.
April 27th, 2006 at 3:52 pm
I have three main problems with this article:
1) It’s way too long so I skimmed a lot of it
2) It seems like they really rely on the fact that there “could” be a lot more oil out there. It also acts like people who are worried about running out of oil are intentionally bending facts to make it look like we’re running out of energy. I think people are worried for a reason.
3) One of the biggest reasons to get away from oil is the fact that it’s causing a lot of pollution. This article doesn’t really seem to care that burning oil for the next 50 years will do quite a nice job of messing with the environment (assuming we’re not extinct by then).
April 27th, 2006 at 3:53 pm
Even so, it was interesting.
April 27th, 2006 at 3:55 pm
The worst idea ever to fix gas prices
Giving a $100 rebate to taxpayers to help them cope with high gas prices is the dumbest idea I’ve ever seen.
Translation: “I know gas prices suck, but here’s $100. Consider voting for me again.” Can anybody say bribe?
April 27th, 2006 at 3:57 pm
Well I think from reading the article it makes a good point that people are playing fast and loose with the facts when they make doomsday scenarios. It then does a good job of pointing out why those arn’t the case and why we should actually be quite optimistic.
Your right that it avoids the environmental issue but it made no pretense about that.
April 27th, 2006 at 3:59 pm
Thats pretty much waht it is. What can you expect when you have one party blaming the other for the high gasses prices and demanding that they do something. In the short term there is not much the govt can do short of drastic non-market solutions. Phony problems beget phony solutions. I blame a whole host of weak leaders on both ends of the political spectrum.
April 27th, 2006 at 7:04 pm
Giving a $100 rebate to taxpayers to help them cope with high gas prices is the dumbest idea I’ve ever seen.
Woohoo! $100.00! Ka-Ching! I’m buyin lotto tickets!
First, empty the treasury through wars, corruption and cronyism. Add tax incentives to oil companies during their most profitable cycle ever (otherwise, if you didn’t give incentives, they’d get out of the biz that’s putting them in the poorhouse), and later as the price of gas rises and markets adjust demand, jump in and insure that neither consumer behavior nor volume drops.
Why don’t they just give $100 for every taxpayer directly to the oil companies and cut out the middleman? They could just back up a long convoy of 18-wheelers to the treasury and take it directly to ExxonMobil. I guess that would look bad though.
But they could write a check and pass it under the table…
April 28th, 2006 at 7:04 pm
Democrats said the plan was doomed to failure because Republicans attached the rebate plan to opening up the sensitive Alaskan waters to drilling, an idea that repeatedly has failed to pass Congress in recent years.
But they were careful not to come out against the tax rebate idea itself. “The $100 rebate — no one’s against that,” said Sen. Charles Schumer, D-N.Y. “But what’s going to happen five months from now and 10 months from now and 15 months from now, when the price stays high because they haven’t touched Big Oil?”
These Democrats better not be screwing me out of my $100! I’m gonna get me five $10 scratchoffs and 50 quickpicks. Maybe I’ll scratch them right there at the counter and maybe I won’t. Depends on how I feel.
10 months from now I’ll have won millions through my lotto investments and leave my concern over gas prices to those of yor that ain’t millyunaires. 15 months from now I may be pennyless but what a ride; I’ll worry about it when it gets here — hell I may drop dead before gas even gets to $4 so why get worry lines.
America’s the land of second chances, ain’t it? Go Republicans!!!!
http://www.msnbc.msn.com/id/12521259/