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More gas pains

(Author's note: this piece was prepared Monday evening, about three hours before Kim's posting on Bush ordering an investigation into gas prices.)

Once again, gas prices are rising, and people are howling. I'm feeling the pinch, too -- I don't have a great deal of discretionary income, the Shaggin' Wagon isn't the most fuel-efficient vehicle around, and my daily work commute is almost fifty miles round trip. In short, It's getting painful here too.

A lot of people are getting angry about it, too, and once again I'm one of them. There really isn't a sensible reason why prices are rising, apart from the fact that apparently the market will bear it.

Where I'm differing from the crowd, though, is where to put the blame.

Some are blaming the oil companies. I'm no fan of them, but I really don't hold them responsible for this. They have good times and bad, just like any other business. Besides, I strongly suspect that I own a little bit of oil stock through my 401K plan, as do many others. (Yup, I just checked -- one of the funds I'm in has 2.6% of its money in Chevron and ExxonMobil.) Besides, the spikes have involved the price of crude oil, and they buy that crude for refining.

The producers? Yeah, I guess I can blame them, too, but I happen to be a bit of a capitalist. I have an instinctive reaction to not want to meddle with the free market system unless absolutely necessary -- and then only minimally. "The power to tax is the power to destroy," after all.

As my incredibly feeble understanding of the matter goes, the folks making out like bandits here, who are driving the prices up and up, are the speculators. They are the ones who believe that oil will be worth more in the future, that prices will continue to rise dramatically, and they want to make their money off betting on that happening.

And as tempting as it is to smack them around a bit, I'm not going to. They are risking their own money, and if they are wrong, they will be the ones who get hurt the worst.

We've seen it before. I recall the dot-com boom of the 90's, when I simply could not imagine how the hell all these internet startups were worth so damned much money. I figured there must have been something I didn't grasp that explained just how the hell they were staying afloat without actually making a profit.

It turned out that I was smarter than the geniuses, as was proven in the dot-bomb implosion.

And that's just what I hope happens to these speculators who have driven gasoline prices to the point where I'm feeling the pinch, and a lot of others are struggling, too. I so look forward for the day when gas and oil prices take a big hit, come back down to what I consider reasonable levels, and all those speculators making money hand over fist today take it in the shorts -- and hard.

I just don't trust the government to fix the problem without making it worse.


Listed below are links to weblogs that reference More gas pains:

» The Glittering Eye linked with Workers of the world!

» Conservative Outpost linked with Daily Summary

» chez Diva linked with Gas Prices & Political Panic

» Texas Rainmaker linked with More Pain in the Gas

» Unpartisan.com Political News and Blog Aggregator linked with Gas Prices Have Politicians Talking in Washington

» The Pretend Pundit linked with The Real Reason for High Gas Prices

Comments (57)

I'm not so sure of this.</p... (Below threshold)

I'm not so sure of this.

I see the price of gas sitting in the ground spike with the slight change in the price of oil or the slightest quiver of Middle Eastern politics. However, when the price of oil falls just as far or further just as fast, the price of gas takes a long time to return to drift down. I'm not so sure the price of gas for speculators ever sees anything close to an equivalent downside to it upsides.

Speculators perform a valua... (Below threshold)

Speculators perform a valuable service: They incur risk that other market participants don't want to bear. Many companies not in the oil/gas industry have oil or natural gas as a large portion of their costs. They want to have some kind of assurance that if the price spikes, they don't go out of business. So, they buy futures. From speculators who bear the risk (I'll deliver X barrels of oil to you in Y months at Z price, regardless of the market price in Y months.) The company reduces it's risk, and the speculator expects to make a profit. Both players in the market get something they want: the speculator a chance at a profit, the company reduces risk.

Full disclosure: I once worked at a division of a power company (electricity generation) that bought coal and sold electricity on (relatively) open markets in large part on the futures markets. Such markets would not exist without these speculators.

I drive a minivan and my no... (Below threshold)
Mac Lorry:

I drive a minivan and my normal commute is about half highway and half city. Driving normally I get around 17 MPG, but if I drive to save fuel I get 20 MPG. That's a 15% savings without changing where I drive only how I drive. When gas prices are in the $3.00 a gallon range I also think ahead and try to combine trips to reduce the number of miles I drive. It's not that I can't afford to pay $3 or even $5 a gallon, it's that I know some asshole is making lots of money on high gas prices, so I want to do my part to reduce demand. I expect many people could do the same thing, and if enough people did just that there would be a 10% to 20% drop in demand and prices would come down. I may even start driving my motorcycle to work and it gets over 50 MPG.

(moonbat warning: read no f... (Below threshold)

(moonbat warning: read no further if you hate Sean Hannity and Fox News):

Yesterday afternoon, Hannity had Neil Cavuto and Gene Henssler. I didn't catch all the discussion, but some points did stick in my mind.

- The government makes more "profit" in the form of taxes than the oil companies from the sale of gasoline.

- The market seems to believe that the price of oil is in a bubble based on the fact that the value of oil company shares is not higher. It is therefore reasonable to assume that the price of oil is going to fall dramatically in the near future.

- This sort of bubble has happened before (anybody remember in the '90s when oil was at something like $15 per barrel?). Oilmen remember it and, fearful of another bubble bursting, are not especially inclined to begin high cost / high risk projects such as oil exploration when the probability of VERY lean years is on the horizon.

- Government regulation does absolutely nothing to encourage oil exploration or refinery construction.

- Government regulation regarding additives and other blending that changes during the course of the year ("winter" gas vs. "summer" gas) combined with little or no surplus production capacity leads to supply shortages and hence price spikes as the seasons change.

I'm not an economist, but I suspect that the price of gas is controlled by rather more complex forces than simple greed on the part of the oil companies (thanks to AughtSix for providing another piece of the puzzle).

One of the problems with th... (Below threshold)
Steve L.:

One of the problems with the entire debate about fuel prices is that too many people know absolutely nothing about how the market works. They run around making invalid assumptions and get all worked up over them.

During last summer's price spike, I heard the statement, "They're charging us more for oil they've already purchased," over and over again. Actually, the oil companies are not charging for the oil they already have, they are charging for the oil they will have to purchase to replace the oil they are selling.

The best analogy I have heard about this used coffee as an example. Suppose that you like to have 5 cans of coffee on your shelf. You are paying $2 a can for those 5 cans. Now, the price of coffee rises to $4 a can for whatever reason. I come to you and ask you to sell me a can of coffee. How much would you sell it to me for? If you sell it for the $2 you paid for it, you will lose $2 when you have to buy a replacement can since the price has risen. If you sell it to me for $4, you break even as it will cost you $2 to replace it. Unfortunately, the people accusing the oil companies of price gouging see the extra $2 as price gouging even though you ended up with no extra money in your pocket.

Everyone seems to forget the destruction of a large portion of our domestic oil industry in the late 80's when oil prices fell to ridiculously low levels. Producers couldn't even afford to pull oil out of the ground. As a result, the oil industry tanked and still hasn't fully recovered.

How did one occupant... (Below threshold)

How did one occupant per gridlocked
vehicle in suburbia originate?

Politicians only give us what we
signal we want. We elected them.
Who's to blame for an electorate
that wants politicos who tell them
what they want to hear?

"V" asked the same question in his
purloined video conference to the

"And where once you had the freedom to object, think, and speak as you saw fit, you now have sensors and systems of surveillence coercing your conformity and soliciting your submission. How did this happen? Who's to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you're looking for the guilty,


Government requirements, na... (Below threshold)

Government requirements, national and especially regional, are a major component of the current spikes. There is an ethanol shortage right when they are having to drop MTBE and move to ethanol, for instance. And this is the season for moving from winter to summer blends, inherently disruptive as it shuts down refining completely briefly for the changeover, when there is no refining capacity to spare, thanks to our pals Nimby and - wow - the government.

There's a great post linked in the latest Carnival of the Capitalists that ends with a map showing all the different blend requirements. I had no idea it was that bad.

- Government regul... (Below threshold)
- Government regulation regarding additives and other blending that changes during the course of the year ("winter" gas vs. "summer" gas) combined with little or no surplus production capacity leads to supply shortages and hence price spikes as the seasons change.

I wish I could find the national map of fuel blends. It's amazing how many there are. Lifting those requirements, meaning any gas could be shipped to anywhere in the nation, would do a lot to lower prices.

Steve LYour coffee... (Below threshold)

Steve L

Your coffee analogy is not bad. The only problem is that when the replacement cost reverses, the pricing policy lags way behind or occurs not at all.

If the oil companies were simply recovering their raw material cost increses, there would not be the absurdity of their obscene 4th quarter profit increases. Cost recovery should not result in the sort of profit increases that were posted in December.

The 1st quarter oil company reports are due this week or next & the widely held anticipation is that they will again be outrageous.

I'd like to have anyone who can, explain why cost recovery also produces obscene profit increases.

There is no doubt that mark... (Below threshold)
Charles Bannerman:

There is no doubt that market forces drive the cost of gas at the pump. I won't even go into that discussion.

The real problem is that we are dependent on a resource we don't control. We have put ourselves at the mercy of foriegn countries who are going to sell to the highest bidder. You can't blame them for that since most of them have no other resources to sell. Saudia Arabia would still be a nomadic society if it were not sitting on top of an oil field.

Since we have not developed an alternative to oil on a large enough scale to stop using gasoline as our primary fuel, we either must buy from foriegn sources or develop our own sources at home.

We have allowed environmentalists to dictate energy policy by preventing drilling in areas where there are known reserves and by preventing exploration for oil in other areas.We have also allowed them to prevent the construction of refineries to process the oil when it is available.

We have nobody to blame but ourselves for putting politicians in office who roll over for the environmentalists.

I remember what Signal Hill in Long Beach, Ca and what Huntington Beach, Ca looked like in the 60's when oil derricks were sitting there uglying up the area. I don't advocate a return to that careless approach but drilling and extraction technology has developed to the point where an oil field can be almost invisible. Additionallt, drilling and extraction can be clean.

We need to develop our own resources and refining capacities.

The Bush family fortune is ... (Below threshold)

The Bush family fortune is based largely on oil. Isn't the dope in chief's request for an investigation into high gasoline prices sort of like putting the fox in charge of the hen house?

We are still not paying Eu... (Below threshold)

We are still not paying European prices at the pump.

maggysturn:Actuall... (Below threshold)


Actually, the Bush money doesn't come directly from oil.

It comes from selling supplies and services to people who look for oil.

OPEN ANWAR!... (Below threshold)
John Kerry:


If oil companies, as the so... (Below threshold)

If oil companies, as the sock-puppet apologists are wont to claim, are just recovering costs or passing costs along to the consumer, why do oil company profits skyrocket even faster than prices at the pump?

I mean, if I buy a can of coffee for $2 and sell it for $2.50, my profit is fifty cents. If the price of coffee goes up to $2.25, and all I'm doing is raising my selling price in a normal, reasonable, and commensurate fashion, how come suddenly my coffee store is making $36 billion *more* a year?

Also, I'd like to see just one of these sockpuppets who pathologically squeal, "It's NOT price gouging" when the oil companies raise their prices in lockstep, show me a valid, actual example of something that *would* be price gouging. Then I'd like to see them stammer out an explanation of how - *exactly* - this valid example of price gouging differs from what the oil companies are doing right now.



Damn, mak44, that was a cog... (Below threshold)
John Irving:

Damn, mak44, that was a cogent and well-stated point. The counter to it, why last years record profits were by no means "obscene," is the huge financial risk oil campanies were under during the hurricane season. If Rita had hit slightly differently, they'd have been out pretty much that entire profit margin.

Sansouci:Citicorp ... (Below threshold)


Citicorp posted 33% profit for Q4 '05.

That obscene enough for you?


And how many are going to d... (Below threshold)
Eon the terrible:

And how many are going to donate to GREENPEACE to oppose drilling in the ANWR? i say SCREW GREENPEACE

Jaysomething else ... (Below threshold)


something else to put in your pipe & smoke...

On the other Wizbang gas thread, Kim, in her original post, points out that the poor besieged oil companies barely manage to eke out an infinitesimal 9 cents/gal. profit.

Poor thangs... Exxon paid its CEO Raymand $51 mil in 2005 & relegated him to post retirement poverty w/ a paltry 400 mil tin parachute retirement package.

At 9 cents/ gal, Exxon would have to acquire 255,721,649 barrels of oil w/ resulting gas production of 19.4 gallons of gasoline/barrel in order to just break even for this one retirement cost package.

How rude for the Middle Class American to bitch about filling his gas tank when companies like Exxon are faced w/ such monumentally serious cost factors.

BTW at 21 mil. barrels/day US usage, that's a 12+ day supply of energy for 280,000,000 people, not counting the 12 to 20 million illegals that are in the US sopping up extra quantities of energy.

And that's just 1 executive. No wonder that poor Big Oil is so unfairly encumbered. Afterall, there's so many executive salary & retirement packages that have yet to be funded &, with diminishing proven oil reserves, so little oil left to fund them.

Hmmm.1. What I'm c... (Below threshold)


1. What I'm curious about is where is drilling in ANWAR amidst all of this? What about the restrictions on drilling off the east coast of the USA? The fact that oil companies are forbidden from drilling off the coast of Florida?

2. Ethanol also cannot currently be carried by pipelines, only by truck. So this regulatory boondoggle by the federal and state governments forces the price of gasoline upwards, irrespective of any ethanol shortages.


Frankly all of this is just an artifact of government meddling.

It's worth noting that 9 ce... (Below threshold)

It's worth noting that 9 cents per gallon, at current prices, is at or slightly below 3%.

I have a bank savings account that pays 3%.

Obscene, isn't it?

[email protected] mak44... (Below threshold)


@ mak44

The 1st quarter oil company reports are due this week or next & the widely held anticipation is that they will again be outrageous.

When you've got gross sales in excess of $300 billion dollars then your profits are going to be large in number, but not necessarily in percentage. It's the same principle in taxation that tends to trip people up.

Does it offend you that Exxon-Mobil makes about 9.2% profit on gross sales? If that's the case then would it really piss you off to realise that Microsoft makes about 4 times that?

So why aren't you screaming at Microsoft?

Well, well, well (ptp) Joh... (Below threshold)

Well, well, well (ptp) John Irving

So now, not only do the pitiful beleagured Oil Companies need to cope w/ obnoxious gov. regs, shareholder expectations, outrageous Greenpeace machinations and greedy A-Rab well-head producers, but now they must cope w/ SERIOUS HURRICANE RISKS and so must recover even more in profits to salve & heal their battered corporate bodies after having barred Katrina & Wilma at the door. Of course their obscene profits are after the costs of the hurricanes, but they are surely entitled to some good compensation & rewards for the mighty service they have rendered during National Tragedies.

No doubt, in the Golden Age of so-called robber barrons, poor ole John Rockefeller was much maligned for being the first to begin w/ profit accumulation to plan for the coming 21st century hurricanes.

Just as in Toynbee's History of Civilizations, Western Civilization was unique to have had 3 Ages of Expansion thru the development of 3 different phases of capitalism, beginning w/ Mercantile capitalism in the Rennaissance as the Instrument of Expansion.

As most of us know, all good things come to an end; we have reached that end with the 4th Age of Capitalism & it is called Predatory Capitalism.

Edyou show a few d... (Below threshold)


you show a few dim signs of rational thinking, but then your light goes out.

For example: When you've got gross sales in excess of $300 billion dollars then your profits are going to be large in number, but not necessarily in percentage

If total sales include vastly increased cost run-ups of the natural resource, please explain why profits increase.

AND you say further above: Ethanol also cannot currently be carried by pipelines, only by truck. So this regulatory boondoggle by the federal and state governments forces the price of gasoline upwards, irrespective of any ethanol shortages.

Then kindly explain how Brazil,w/ a 2nd world economy and w/ a land mass similar to the USA, has been able to achieve total ethanol independence thru, gawd forbid, government edict; or are we just ignorant? Brazil's energy neeeds weren't solved by government edict but rather a super stealth capitalistic initiated enterprise that no one saw coming in spite of a dumb government?

The Republican administrati... (Below threshold)

The Republican administration has done a piss-poor job of preparing this nation for the inevitables we all knew were coming.

IGNORING global warming...

FAILING to seure our borders...

DOING NOTHING about our dependence on foriegn oil...

Let's not even talk about the failure to reform Social Security....

It's time for Americans to flush the toilet and rid our government of the do-nothing, self-serving Republicans currently in power.

Mak44 If you dont li... (Below threshold)
John Kerry:

If you dont like their products price , than dont buy it! simple enough to just ride your bike.

mak44, if I'm not mistaken,... (Below threshold)

mak44, if I'm not mistaken, ethanol is still a minor energy source in Brazil although they have made great strides in preparing for its larger role by mandating the increased availability of "Flex-vehicles". I was under the impression their energy independence is very much due to the increased mining of domestic oil supplies. Along that line we would do well to revisit the ANWR I guess.

LEE I live in minnes... (Below threshold)
John Kerry:

I live in minnesota, there is no global warming! its colder than hell 75% of the year, it froze this morning even.
All of the other things You stated have been blocked by the dems, your beef is with them.

Yep, by golly, we need to i... (Below threshold)

Yep, by golly, we need to inact all of those "stick it to those evil oil company" tactics like windfall profit taxes and/or price controls that worked oh so well when they were tried in the 70's. Worked like a charm back then didn't it?

Here's an even better idea, let's pass a law requiring oil companies to be "not for profit" corporations. By my quick math, back out about $.60 of gas taxes, and then removing the 12% profit margin that XOM reported last period, would drop the local price of gas here from $2.95 to $2.67. All would be right with the world at that price, right?

If you think that "profits" or a questionable payout to one exec is the root cause of our pain at the pump, you're not seeing the big picture. Wall Street and its analysts tend to be "big picture" types, go look at how the stock prices of "big oil" has fared in the last 12 months (the period of the most egregious "obscene profits"). Compare the price tracks of major oil companies like Exxon-Mobil (XOM), Chevron (CVX), Shell (RDS-B), and BP (BP) against the standards of the DJIA, NASDAQ, and S&P. During this period those companies have at best "kept pace" with some of the stock barometers, but mostly have fared worse on average. Exxon-Mobil has underperformed all three standards in the past 12 months. If you want to maximize your profit in the stock market, "big oil" looks pretty lack luster. For an industry fueled by money, Wall Street doesn't seem too impressed with the oil profits that are making all of those headlines. If "Big Oil" were gouging, don't you think Wall Street would reward them via their stock price?

Dave DAnwr has pro... (Below threshold)

Dave D

Anwr has proven resources that could supply the US in total for a mere 100 to 200 days. Not much relief there.As to Brazil, they are energy independent w/ ethanol accounting for 40%. So I was in error about complete ethanol reliance.

In the 1980's Brazil imported 80% of its energy. But thru gov regs & mandates they are independent.

The cars that run totally on ethanol can be fueled at half the cost of a gasoline fill-up in Brazil.

AND my basic point in the above post was that Brazil has solved the ethanol transport problem that some other blogger was using as an excuse for the situation in the USA.

GizmoBetter keep y... (Below threshold)


Better keep your day job cause you'd be out on The Street panhandling as an ex-broker.

In the past year, BP shares have increased by 25%, COP by about 32%, Occidental Petroleum (OXY) 48%, MRO by 65%, SUN by 68.5%.

The fact that XOM was a piddling 14% increase in share yalue over 1 year just points out the outrageousness of the CEO Raymond 451 million package, which, as I pointed out before would require the processing of nearly 256 million barrels of oil w/ a 9cents/gal markup just to pay out the package.

That XOM was an underperformer is likely reflected in its management compensation packages.
Even so XOM's y-t-y stock increase easily exceeds the DOW, Nasdaq and S&P.

Perhaps the stock yards are your real area of expertise rather than the stock market.

How can your summation of A... (Below threshold)

How can your summation of Anwar be correct or validated, 100-200 days proven reserves? we have,nt used it so it cannot be proven.

Ethanol is no answer , it would be taxed with the same vigor as our current fueling options, that is the base problem here "TAXES"thats the real gouging going on, state and fedral beauracrasies using oil sales and social security taxes/witholdings. this is what has to be dealt with! and until it is if you vote for the same idiots its your problem.

CurlyLarryMoehow a... (Below threshold)


how appropo your moniker; it presages the content of your post.

John in Minnesota said:<br ... (Below threshold)

John in Minnesota said:
"I live in minnesota, there is no global warming! its colder than hell 75% of the year, it froze this morning even."

Thanks for that stunning contribution to the betterment of our children's futures, and their children's futures, John. Glad to hear there isn't a problem. Now unstick your tongue from the flagpole and go back into the house... your hot chocolate is ready.

LEEThank,s for the... (Below threshold)
John Kerry:


Thank,s for the contribution to the betterment of our childrens futures?? what the hell are you talking about? do you work for State Farm or something? there is a problem, its called Global ignorance and Your the chairman of the board.

Hey JohnThanx for ... (Below threshold)

Hey John

Thanx for your expert climatological assessment & your observation about global warming from your observatory in Minnesota.

In recent years the Atlantic has gotten a degree, maybe 2 warmer & I can imagine that up there in the MN arctic, your global climate research laughs at the Atlantic and leaves you wondering, "So where's the temp benefit for me?"

This season will pretty nuch tell the story about global warming if that extra degree or two becomes the monster engine for the hurricane season like '05 or the current Cyclone season in the Southern Hemisphere. But then, you wingnuts can rely on a modern-day Moses to raise his staff and it will all go away.

As to ethanol in Brazil u... (Below threshold)
Steve Crickmore:

As to ethanol in Brazil unfortunately, ethanol prices have risen so much recently in Brazil, in the last month that motorists' rage ihas been directed at the surge of price hikes for ethanol at the pumps, rather than those serving gas, for cars are now getting slightly better mileage from gasoline or the same as ethanol in the fuel flex cars which account for most of the new cars in Brazil..Sugarcane the raw product of ethanol like oil, is a volatile commodity subject to wide swings in prices depending on supply, and the Brazilian federal government in encouraging the enormous expansion of the eco-friendly fuel flex cars, didn't see fit to anticipate the hightened demand on the nation's sugarcane supply at the same time.

[email protected] mak44... (Below threshold)


@ mak44

you show a few dim signs of rational thinking, but then your light goes out.

Well I certainly think of you being a utterly incompetent asshat so I suppose that's fair.

If total sales include vastly increased cost run-ups of the natural resource, please explain why profits increase.

What the hell are you talking about?

hen kindly explain how Brazil,w/ a 2nd world economy and w/ a land mass similar to the USA, has been able to achieve total ethanol independence thru, gawd forbid, government edict;

Probably because they don't produce the frigging ethanol 1,000+ miles away from the nearest refinery.

And are you so certain that they are ethanol independent?

Ed is correct that ethanol ... (Below threshold)
Mac Lorry:

Ed is correct that ethanol cannot be transported by existing U.S. pipelines. That doesn't mean such pipelines couldn't be built, just that they don't exist today in the U.S. Thus, ethanol must currently be trucked from where it's produced to where it's blended with pump gas.

According to the most recent study I could find, ethanol produces 35% more energy than is required to produce it. In other words, for every 10 gallons of ethanol that goes into pump gas, it took the energy contained in 6.5 of those gallons to produce the ten. Some of that energy is from coal or nuclear used to produce electricity. Some of that energy is from natural gas used to produce electricity, dry corn, or supply heat for processing. Some of that energy is from oil used to till the land, harvest the crop, and transport the corn and then the ethanol.

Other studies show that there are substantial unrealized costs associated with the mass production of ethanol, at least using existing technology.

David Pimental, a leading Cornell University agricultural expert, has calculated that powering the average U.S. automobile for one year on ethanol (blended with gasoline) derived from corn would require 11 acres of farmland, the same space needed to grow a year's supply of food for seven people.

David Pimental is one of the few researchers who claims ethanol production uses more energy than the ethanol contains. Even if you don't believe that, he makes some good points about how much land is needed to produce ethanol.

Note that some of the pages I have linked to are not the studies themselves, but news stories that contain links or references to the actual studies, so don't be lazy and complain because I didn't link to the study. I figure most folks want the summary first and then will look for the detail if they are interested.

"In the past year, BP share... (Below threshold)

"In the past year, BP shares have increased by 25%, COP by about 32%, Occidental Petroleum (OXY) 48%, MRO by 65%, SUN by 68.5%.


Perhaps you heard, but BP announced today that profits fell in Q1 2006 vs 2005. Which would seem to fly in the face of the lynch-mob's conventional wisdom. Even if you remove the $1.1B in Q1 2005 profits they reported from divestments, you'd still have an essentially flat earnings report for the previous quarter.

Yes, you're right that the companies you mentioned "beat the street" in the past 12 months. However, only BP (and to a lesser degree COP) is a major player in the market. The 2005 revenues for Marathon, Oxy, and Sun added together were less than 1/3 of Exxon-Mobil's. Taken as a whole, during the times of high gas prices following the Summer 2005 driving season, plus the high prices post-Katrina/Rita, plus the high winter fuel oil and gas prices, and now the latest Iran/Niger/Iraq oil jitters, the industry's stock hasn't enjoyed the kind of price boom you'd associate with a "break out" industry.

I know it's only natural to want easy simple solutions to this problem, but the world energy market is a complex multi-varient system. Taxing oil companies for "windfall profits" won't work... we've tried that in the past. It won't give us $1.99 gas. Restricting oil executive pay won't do it either. The only thing that will work is adressing supply and demand.

Things like ethanol might go a long way, but the capacity isn't there yet, but more is on the way. A ethanol plant is being built about an hour north of me. There also a big question of cost. Last week our Gov. had a joint press conference with GM and a local retail store chain that the chain was install 20 E85 fueling locations around the state in short order. Missing from all of the PR, was info about the price of the fuel. I've heard that until the industry hits critical mass, it's still going to be a fair more expensive than gasoline. The lack of any mention of E85 pricing in all of advertising, instead relying on the selling point of it being a renewable fuel and will help reduce dependence on foreign oil, tells me what I've heard is right. We obviously haven't come near the cross-over point for a cost advantage.

Maybe Mak Maybe?I... (Below threshold)
John Kerry:

Maybe Mak Maybe?

I only hope we would get a couple of degrees higher here! im getting older and feeling the cold more intensely every year. Clintonian Cronies like yourself will just have to hope Big Bad Bush doesnt send Hurricane Hillary right up your patuzzi just for shits and giggles.

John KerrySo your ... (Below threshold)

John Kerry

So your last resort is to slime??? It's typical of you fascisti-always your fallback position for any discussion Bush Bedpans like you can't handle.

Another thing about ethanol... (Below threshold)
Mac Lorry:

Another thing about ethanol is that it contains less energy per gallon than gasoline does. If you switch from gas to E85 you can expect about a 25% reduction in mileage. Given that the price if E85 is only about 15% less than regular gasoline, it will cost you more to drive using E85. Here's a chart with more details.

Mak scroll up a bit... (Below threshold)
John Kerry:

scroll up a bit yourself to your last response ( but than you wingnuts can raise up a modern day moses to wave His staff and it will all go away)

Deserving of an equal response.

clinton chronies like you cant face the truth!

Someone murder mak44... (Below threshold)
Mak's mom:

Someone murder mak44

The pragmatic answer to U.S... (Below threshold)
Mac Lorry:

The pragmatic answer to U.S. energy needs is that conventional sources must be expanded at the same time alternative sources are researched and developed. We need to use coal and nuclear where possible to generate electricity. We need to explore and develop domestic sources of oil and natural gas. We need to build excess refinery capacity. All of these things have been neglected in the past 20 to 30 years mostly because of environmental concerns.

On the other side of the equation, we need to greatly improve the mileage of passenger vehicles. Small doesn't mean unsafe anymore as cars like he 2006 Honda Civic have some of the highest crash ratings. A minivan can haul most of the things suburban residents need to haul and they get from 25% to 40% better mileage than a pickup truck. Some minivans, like the Honda Odyssey will blow the doors off even 300HP full sized pickup trucks, so you can keep the macho factor and save gas too.

Hopefully this topic won't mutate into a discussion about global warming again, but there's growing evidence that what we're seeing is a natural reoccurring cycle that has already happened twice since Roman times. Increased CO2 may make the effect warmer, but this gas also greatly benefits the biosphere.

If I were elected supreme grand Ayatollah I would start building nuclear power plants at government expense. Open most of the U.S. to oil and gas exploration and production. Mandate a lower speed limit for large SUVs and pickups. Subsidize building state of the art oil refineries in non-hurricane non-earthquake areas. Subsidize wind, and solar energy production. Subsidize bio-fuels research and production. You get the idea. The problems is not that there's no means of gaining energy independence for the U.S. it's that our political system doesn't seem able to set a workable course and stay on it. It's not just the republicans, its as much or more the fault of democrats and the environmental extremist lobby that has their ear.

Mac Lorrya breath ... (Below threshold)

Mac Lorry

a breath of intelligence & reason after John Kerry tried to drag the debate down into political slime.

Anybody ever notice that th... (Below threshold)

Anybody ever notice that the media never diagnoses any of the problems about why gas prices are so high? It's al blah, blah, blah Bush is in cahoots with Saudi Arabians or blah, blah, blah more people are whining (outraged) about high oil prices. It's never, gee why are gas prices so high or what might the causes be. Maybe it's me or is there basically no investigative skills being put to use and real stories being written. Maybe they should instead concentrate on dwindling oil supplies, the finite supply of oil, and how doubling times apply to the supply of oil. You can only take so much out of the ground before it's all gone and with China and India coming online, obviously oil prices are going rise.

A few weeks ago when oil wa... (Below threshold)

A few weeks ago when oil was $60+/-/bbl, an oil industry analyst on CNBC estimated that the then current price of oil incorporated an estimated $10/bbl hedge fund speculation and a $10/bbl premium occuring from geopolitical machinations.

At 19.4 qal/bbl of gasoline, that's roughly a $1.03 premium attributable to so-called free market pricing and inept international saber-ratttling leadership

Lord help me, I agree with ... (Below threshold)
Jay Tea:

Lord help me, I agree with something mak44 said:

"At 19.4 qal/bbl of gasoline, that's roughly a $1.03 premium attributable to so-called free market pricing and inept international saber-ratttling leadership"

Now, if we can only get Iran to quit rattling its nuclear sabers...


Mak only to a leve... (Below threshold)
John Kerry:


only to a level that you would be able to comprehend!

Jay Tea & John Kerry<... (Below threshold)

Jay Tea & John Kerry

What moronic analysis that you exhibit. It's a collective (oh, you probably hate that word)reflection of right-wing stupidity. No wonder America is in the mess it is.

You think that this nation exists in a world where it can petulantly & selfishly insist on having things ordered its way.

Unfortunately for people like you, the rest of the world is having none of this insanity & about 2/3 of the American public seem to be getting there fill as well.

You think that thi... (Below threshold)
You think that this nation exists in a world where it can petulantly & selfishly insist on having things ordered its way.

As opposed to how it really is, where mak44 can petulantly & selfishly insist on having things ordered his (her?) way.

Well, I read all the posts.... (Below threshold)

Well, I read all the posts. Seems as though everyone has an explanation. I personally like the one not mentioned enough--China and India are becoming gas hogs like us. Every resource on this earth is going to run out eventually; I marvel everyday that we still have all that we do. People are notorius wasters and there are a bunch occupying this planet. Unfortunately in a free society we are able to point fingers. This would have been a good thread without the politics and personal inuendo. We are all too blame!

Judith Im sorry Y... (Below threshold)
John Kerry:


Im sorry You feel this way, Me personally i feel no guilt for using what was made for our use!

Unfortunately in a free society we are able to point fingers?? as opposed to Iran for example?where point Your finger and Your liable to have it or some other part of Your anatomy cut off.

And Im innocent, thanks to the blood of Jesus Christ.

John KerryYou are ... (Below threshold)

John Kerry

You are an evangelical wingnut, & no matter how many hosannahs you shout, your god wouldn't piss on you if you were aflame.

And, should your maniacal wingnut views prevail, you & the whole world will be aflame.

In that case, you would isist that you had been god's agent in initiating The End of Days.

Being a rather conservative... (Below threshold)

Being a rather conservative libertarian myself I would simply suspend futures trading in crude and refined petroleum products and see where the prices go. The current run up of prices in these products and the subsequent costs to everyone on the planet I feel is unacceptable. The futures markets were conceived originally to lessen the volatility and price swings of commodities, however the exact opposite is true concerning petroleum products. Every bit of information, be it truth or fiction causes wild swings and increases in price. Seems that the speculators have found a golden goose here. Hopefully the price will tank and all of them will find themselves in the same situation as the Dukes did with FCOJ.

Bill Place






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