I don't buy this at all. Crude to the refinery and Gas at the pumps is paid for weeks and months in advance. Sometimes years. Prices, on the other hand, rise and fall based on what happened YESTERDAY. It's all perception. When I worked for a Mobil...and granted this is just one station, but he raised prices literally on a whim. If there was talk of higher prices in the news, he raised them. If any other station went up a single penny, he went up 2. He had a killer location.

Never once in all the time I worked there did I see him set a price in accordance with actual cost.

Someone is scamming us all. It's one thing to make a profit. It's another thing to gouge people on what is a necessity for so many. The taxes people want to complain about aren't changing every 6 months. Prices are. Blaming it on Congress doesn't tell nearly enough of the story.

The problem of the gas spikes comes down primarily to two factors:

1) Oil is a commodity, and it is the traders to help to determine the prices. With Iran doing its nuclear sabre-rattling, that is causing nervousness in the market, with fears of reduced availability of oil...less product, higher prices.

2) All the oil in the world won't help if we cannot refine it. The last new refinery in this country was built in the 1970s. A number of refineries in the Gulf are still shut down thanks to Katrina, or only working at a partial capacity. Until enviro-NIMBYism is tackled, don't expect the constuction of new refineries to alleviate the shortage of REFINED petroleum products.

3) The restriction of drilling for new oil sources locally. We are not allowed to drill in the Gulf, yet Mexico is, and reaping the benefits. No drilling in Alaska...hell, no drilling in Utah or Colorado. Until enviro-NIMBYism is...yada, yada.

These three factors are the main source of the higher gas prices.

The average oil companies profits run about 9%...compare that with other companies who run 11-15%. And oil companies have no say-so over the price of the commodities market.

Those are the facts, and until the three points are addressed, get used to $2.50+/gallon prices.

If the government REALLY wanted to help they would:

1) Allow one formula standard for gas across the company instead of each state requiring it's own formulation...which is cheaper/easier...one formula for all, or a refinery having to do 50 formulations? Ever noticed that since fast-food restaurants have added a whole bunch of new crap to their menus, the speed of service has dropped significantly?

2) Decrease the amount of federal tax per gallon. Yeah, I can see Congress rushing to do that one.

I'm going to pre-empt mak, John Goodman right here and say that Bush does not control the oil companies, all his stocks are in blind trusts so he can not manipulate the market to his advantage (that goes for Cheney as well). Haliburton is not in the oil commodities market.

If you want to actually argue the merits of my above points, I will discuss them with you in a rational and logical manner. If you want to be wankers instead, I will promptly make fun of you.

JimK -- there is one factor I don't think you are considering.

That gasoline the dealer purchased "yesterday" (as in: paid for months ago) has to be replaced at TODAY'S wholesale prices by the dealer, if he is to fill your tank tomorrow (or months from now)

Here is a couple of articles that illustrate who is REALLY "profiting" from oil:

http://www.taxfoundation.org/publications/show/1139.html

http://www.taxfoundation.org/news/show/1168.html

Maybe what we need is the inverse of a windfall-profits tax ... a windfall-tax-revenue-rebate, back to all of us.

Consider that pulling oil from the ground is an expensive, risky, and long-time-horizon business. We love to beat up on Big Oil, but perhaps the rewards they reap are a fair exchange for the long-term capital investment ... and dry holes ... they have to endure.

And for that matter, when times are bad in the oil patch, does government step in and help, in proportions commensurate with the taxes it collects during the boom times?

I don't buy this at all. Crude to the refinery and Gas at the pumps is paid for weeks and months in advance. Sometimes years. Prices, on the other hand, rise and fall based on what happened YESTERDAY. It's all perception.

The reason, in part, is that retailers place their orders for gas weeks or months in advance. They have to anticipate what the cost of the refined fuel will be months from now. If crude spikes, it can be surmised that refining costs will also go up, hence they must recoup the money NOW when they place future orders. That is not to say that there might be some unsrupulous price increases among some retailers, but this is important: it's the local retailers that set the pump price...it is not set at the oil company headquarters.

Thank you Rich, you provided links to my argument.

We love to beat up on Big Oil, but perhaps the rewards they reap are a fair exchange for the long-term capital investment ... and dry holes ... they have to endure.

Not to mention goverment interference, mandates, regulations, formulae, taxes, enviromental restrictions....etc.

You're welcome, James.

Now all we need to do, Rich, is sit back and wait for mak to storm in and proclaim:

1) Bush controls the world oil conspiracy.
2) Big Oil is funding Al-Qaeda
3) We went to war for Iraqi crude! (which, by the way, we are still waiting for that windfall)
4) Bush is a facist
5) Bush is a neo-con zionist
6) Bush tortures harmless brown people, and kittens.

James ...

You forgot one ...

7) You Pavlovian puppies ...

Is this what lemmings sound like, just before they go off the cliff?

Given my history I'll probably end up going head-to-(empty, shrunken)-head with him sooner or later:

Well, to take credit, it was my correction that allowed him to use "Pavlovian Puppies"...before he was using "Pavlovian Pussies", which, while alliterate, was totally inaccurate vis-a-vis the good scientist.

Is this what lemmings sound like, just before they go off the cliff?

No, lemmings have the sense to be pushed off the cliff by a Disney documentary director in relative Elysian silence.

Pity we cannot say the same for our Mak-daddy.

Of course, there is no way in hell that Congress will think about removing the taxes that they have placed on every gallon of gas. Why should they? the Democrats are probably rejoicing at the high rpices, a lot of them want to see gas at $10 a gallon just to punich people with big cars. The only downside is that the oil companies are getting the $$ and not them.

It's supply and demand. More supply, same demand = low price. High demand, low supply = high price. Oil is a fungible commodity, bought and traded in the world market with a variety of derivative instruments to hedge against price shocks and risk.

You two beanbags don't have a clue what you're talking about. But it's interesting to see your determined opinion on global economics. Try taking a basic course in economics before spouting off.

Here's a clue: since oil is a fungible commodity, adding supply in the US --by drilling more -- won't help unless supply is significantly affected. This scenario is unlikely AND meaningless unless demand is also simultaneously curtailed. Or if demand significantly decreases.

In the mean time, I hope gas goes up to 10 bucks a gallon (with an additional 10 buck Hummer tax) and you right wing douche bags have to pay 200 bucks from a trip to your retarded NASCAR incest-fests.

To pay for all your oil addicted greasy asses, no choice but to get in bed with King Abdul-la-la. Once, more idiotic right-wing policies to the rescue.

Would,nt it be a thing of beauty to have Bush hold a press conference which He is tomorrow by the way, and declare a national emergency and order anwar and all other oil locations to start producing now, as well as ordering the building of new refineries? what do you think the lefts response would be? there would be abject fear ..

Let's play another hypothetical game here, genius.

Wouldn't it be great if you woke up tomorrow and realized that your douchebag president has an approval rating of 33%, is hated by the rest of the world and mangles the English language even more than you?

Hmmm...oh wait. That actually happened.

Hey single digit i.q. ,what an apt name you chose, fits you perfectly.

The rest of the world hates us ? brilliant you unimaginable buffoon !whos your president hmmm Jaque Chirac i bet. i wondered when the transients were going to show up on this thread.

ZERO I.Q.

Franken has a warm wet one waiting just for you!

dont forget to say thank you now.

You two beanbags don't have a clue what you're talking about. But it's interesting to see your determined opinion on global economics. Try taking a basic course in economics before spouting off.

I have taken a number of courses in Economics, so I do have a clue about what I'm talking about. Neener-neener.

Here's a clue: since oil is a fungible commodity, adding supply in the US --by drilling more -- won't help unless supply is significantly affected. This scenario is unlikely AND meaningless unless demand is also simultaneously curtailed. Or if demand significantly decreases.

Adding supply will help if more crude can be directly sent to the refineries, instead of shipping it in. You are correct that this is unlikely, for the following reasons I pointed out in my initial post. A glut of local crude would curtail fears about supply shortages from the M.E., therefore traders will not have the incentive to drive the price up--hence the final cost of refined petro comes down. Demand does not have to significantly decrease, as long as SUPPLY significantly increases...more supply, lower prices. Simple economics. Did that not get covered in YOUR econ class?

In the mean time, I hope gas goes up to 10 bucks a gallon (with an additional 10 buck Hummer tax) and you right wing douche bags have to pay 200 bucks from a trip to your retarded NASCAR incest-fests.

I was willing to overlook "beanbag" but your final paragraph has reduced you to another DU/Kos flame-thrower who cannot convey a different point of view without an insult or a wrong assumption. I do not drive an SUV (which I see is pointless in the smooth roads of the city), nor do I watch NASCAR. (What, watching a bunch of cars circling round and round? About as entertaining as watching a guy hit a golfball and walking after it.)

Speaking of SUVs...I seemed to notice many SUVs in my city which have old fading "Gore" or "Kerry" stickers. A few, who obviously do not comprehend the word "irony" also have--I kid you not--:

"NO BLOOD FOR OIL!"

SINGLE DIGIT: Apropos.
33% huh? Well, I guess that means I won't be voting for Bush again next election.
When the rest of the world gets to vote in our elections, then I will give a rat's arse what the rest of the world thinks of us.

Is it me or are are liberals just incapable of stating a single argumentative sentence without resulting to name-calling and rabid BDS?

Here we are having a discussion about what is leading to higher oil prices and how to curtail it, probably a discussion going around every kitchentable and water cooler, and the liberals respond with douchebag president and you right wing douche bags. (A pattern? Perhaps a certain LA Times columnist or two of his alter egos are paying us a visit.)

Are the liberals angry or just plain mad, in the psychological sense?

Bush Orders Probe Into Gas Prices

Foxes To Investigate Henhouse Pillage

Well, if higher gas prices accelerate development in alternative fuels, I'm all for them. I'd rather have higher prices now than shortages later. And screw building new refineries. We need to pour resources into nuclear, wind, solar, ethanol and biodiesel.

Now excuse me while I go back to removing the engine from my VW. It's finally time to convert to electric.

and you right wing douche bags have to pay 200 bucks from a trip to your retarded NASCAR incest-fests.

Sour grapes has such a, well.... sour taste.

And I should have mentioned. "NASCAR incest-fests," as opposed to what?

Leftist psuedo-envior-winnies burning gallons and gallons of fuel attending the lastest NFL showcase of wife-beaters, rapists, steroid inflated blimps and sexual abusers?

Is it me or are are liberals just incapable of stating a single argumentative sentence without resulting to name-calling and rabid BDS?

No, it's not just you.

And screw building new refineries. We need to pour resources into nuclear, wind, solar, ethanol and biodiesel

Well, the enviro-lobbyists have all but killed new nuclear energy development in this country. When was the last time we built a new reactor?

Wind works somewhat when, get this, there is WIND blowing. What happens when you have a calm day? By the way, Kennedy stopped development of a wind turbine farm because it would clutter up his wonderful view of the Atlantic.

Solar--we've been working on this for 30 years, and the main problem is much of the potential energy from the sun is absorbed by the atmosphere...and like wind, what do you do when it's overcast or it's nighttime?

Ethanol/Biodiesel is promising, but still in the early stages. Still there is some hope.

We've been chasing the "alternative energy" tail for the past 30 years or so, and we have made minimal progress. Now, if you wish to be phillanthropic and throw some of your money into research, please feel free.

I'll take the refineries for now. That, at least, is a proven technology.

Well, the enviro-lobbyists have all but killed new nuclear energy development in this country. When was the last time we built a new reactor?

1996, Watts Bar reactor in Tennessee. However, capacity has increased due to upgrades in recent years. And as far as development, the generation IV reactors look very promising, though implementation is years away.

Wind works somewhat when, get this, there is WIND blowing. What happens when you have a calm day? By the way, Kennedy stopped development of a wind turbine farm because it would clutter up his wonderful view of the Atlantic.

Wind and solar are of course not at the level where they can be the sole source of energy for any area, but by complementing existing sources you can conserve dramatically. A complementary nuclear/solar/wind grid would provide uninterrupted power with minimal pollution. Plus as storage continues to be developed, solar and wind become more and more viable.

Ethanol/Biodiesel is promising, but still in the early stages. Still there is some hope.

Look at Brazil where ethanol burning flex cars outsell gasoline-only cars now.

We've been chasing the "alternative energy" tail for the past 30 years or so, and we have made minimal progress. Now, if you wish to be phillanthropic and throw some of your money into research, please feel free.

I have put some money into it (and I was serious about converting my car to electric. I just picked up the batteries this week), but if you think minimal progress has been made you haven't been paying attention.

I'll take the refineries for now. That, at least, is a proven technology.

With no future.

Mantis -- my day job involves designing electronic power-conversion and battery-management equipment, so I have to ask ... what chemistry and make of batteries are you planning to install in that Bug? And what kind of speed/range performance do you anticipate?

I do agree there has been progress ... but mass-market, cost-effective alternatives to fossil-fuel power are still elusive.

Even hybrids are "not quite there yet" for the average American -- many are finding out that the fuel-savings is less than anticipated.

That's not for lack of trying ... a lot of my salary during the 1990's was earned designing battery test equipment that went into EV R&D, and even equipment for production use. Other technologies were pursued at simiar levels.

The limitatons -- contrary to the conspiracy theorists -- have been located at the nexus of the laws of physics and basic economics.

As for wind and solar ... the need for base-load power as backup limits their usefulness ... and they have their own environmental impacts (both require the development of a LOT of space per MW when implemented on a large scale ... and in the case of solar, that's a lot of SHADED ground unless you place it on buildings). As storage technologies develop, their usefulness will increase ... but we aren't there yet.

As for nuclear ... the problem is primarily political. Keep in mind that the most strident oppositon is permeated with "watermelons", who care not one whit about economic performance, for they consider its pursuit part of the problem.

BTW, when did they START building Watts Bar?

Decrease the amount of federal tax per gallon. Yeah, I can see Congress rushing to do that one.

Hell, our lovable government here in No.Carolina recently RAISED the gas tax. When asked if he'd consider a temporary reduction / moratorium, Gov. "Tax Hike Mike" Easley basically told us all to f*** off, the government NEEDS the money.

Is it me or are are liberals just incapable of stating a single argumentative sentence without resulting to name-calling and rabid BDS?

No, it definitely ain't just you. Most of 'em are stark staring mad.

...the generation IV reactors look very promising, though implementation is years away.

I'm pleasantly surprised that we have a lefty who can talk rationally about using nuke power instead of screaming about Three Mile Island and mutations. Unfortunately, I think the odds of getting a nuke plant built in this country given the current political climate are not very good.

Now excuse me while I go back to removing the engine from my VW. It's finally time to convert to electric.

Interesting. You're doing the work yourself? How much does it cost to do the conversion, and what is the expected operating cost?

I've noticed also that some folk are monomaniacal when it comes to BSD and namecalling. But whatever - they've got to live in their own heads but I don't have to join them.

Re Watts-Bar - they started building it in 1973. So - 23 years from start to output. That's pretty impressive. So using that as a model we could see the first of the Gen IV reactors come on line as early as 2029!

I'm sure the Democrats will propose this any day now, and do what they can to expedite the process. That way, they could be seen as actually DOING something about the problem. (And I could only HOPE that Bush proposes it, though that proposal would be the kiss of death for the idea as far as the Left is concerned...)

J.

Bush Orders Probe Into Gas Prices

Foxes To Investigate Henhouse Pillage
Posted by: cavjam at April 25, 2006 02:14 AM

Cavjam:

You hit the nail on the head. And today we see Bush's approval ratings drop yet another percentage point (to a dismal 32%). The only amazing thing about this is that there are still people (with obvious limitations on intellectual capacity) who can admit to themselves that in this crisis, as in all other crises we've come up against in the last 5 years, the Bush administration is a complete and total failure. And most of them seem to be big fans of Wizbang too. Go figure.

As someone stated earlier, if the right-wing want to blame someone for the terrible state this country is in, they need look no further than their own mirrors.

So Kim

If the poor disadvantaged oil companies are barely ekeing out 9cents/gallon profit, how do you explain the obscene explosion in Corporate Oil Company profits?

Surely you're not going to argue that Oil's obscene profits explosion is a result of selling vastly larger quantities of gasoline at outrageously higher prices!

As you quoted Gigot in your post, the new government regs may have added 10 to 20 cents/gallon. Where is the other $1.25 to $1.50 coming from? You ain't seen nothing yet.

Just wait til the 1st Tropical Depression gets named and $4 gas will be here before the nascient depression gets off the coast of Africa.