Gas Prices!

Discussion in 'Free Speech Alley' started by TigerKid05, Apr 22, 2006.

  1. TigerKid05

    TigerKid05 Say Whaa!?!?

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    What is preventing the United States from becoming independent of foriegn oil. We can do it. We pump roughy 48% of our own oil and ethanol is very promising. Brazil did it, why couldn't we do it. Once we take away the oil factor from the Mid-East, we can run the show over there.
     
  2. Broke

    Broke Founding Member

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    Three words: "BIG OIL LOBBYING". Plain and simple, the government won't move to do anything because their pockets are being padded by Big Oil. Which by the way, most politicians are involved in one way or another.
     
  3. red55

    red55 curmudgeon Staff Member

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    The US has 3% of the world's oil reserves, but uses 25% of the world's oil consumption. You do the math. We can't pump our way out of this problem.
     
  4. tiger fan 2001

    tiger fan 2001 Founding Member

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    How about refineries at a reported 98% capacity. Can't hardly get anymore than that to market. It's not a conspiracy folks.
     
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  5. Bengal Buddy

    Bengal Buddy Founding Member

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    Oh God! Here we go with the Big Oil syndrom again. The gas price is what it is today for two reasons: 1)the price of a barrel of crude oil and 2)supply and demand. The oil companies nor the president nor congress has anything to do with #1. The consumer creates demand which affects prices. Supply is a function of two things: exploration and refining capacity. Congress won't allow drilling in Alaska or off-shore drilling, and building new refineries will take years. But despite this some people just HAVE to blame the nasty old oil companies. Scapegoats are so important to the American psychic.
     
  6. TigerWins

    TigerWins Founding Member

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    That's exactly right. We will always consume more oil than we can produce. And we're not the kind of people who like to conserve. Drilling for more oil in the U.S. would help very little.

    Unlike the 70s oil crisis, this is a global consumption problem today. China and India are consuming more oil than ever. I don't see that changing anytime soon.

    Gas prices will go down after memorial day, but I don't think we'll ever see gas less than $2 a gallon.
     
  7. red55

    red55 curmudgeon Staff Member

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    You are misinformed. The price of gasoline is composed of four factors:

    1. The price of crude oil
    2. The costs to refine and transport gasoline
    3. Corporate profits
    4. Taxes

    Obviously, both 3 and 4 are directly controlled by the oil companies and the government. This is what people are complaining about.

    When the price of raw material and production go up, then the corporate profits go up because they base profits on the cost of the raw product plus their own costs to produce it. So in times of shortage when the price of crude goes up, the oil companies make a windfall profit of $ billions. Billions that they haven't really done anything additional to earn. Billions that the consumers are paying for.

    Taxes are based on a fixed price per gallon. So taxes do not go up when the price of the gasoline goes up. Just corporate profits. And they all go up in unison, even the companies that own much of their own oil production and aren't facing the raw product increases of others. This kind of collusion is illegal for most corporations who sometimes face windfall profit taxation to control it. Oil Companies have long been exempt from many anti-trust laws, but this kind of gouging may send Congress back to this issue soon.

    Corporate profits should be based upon what their true costs are, not the often inflated price of the raw product which should simply be passed onto the customer without a major cut going to Big Oil.
     
  8. LsuCraig

    LsuCraig Founding Member

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    Not getting into the cause of the price of gas debate again. But I agree. We can do it and in terms of running our cars and trucks, we will get there. Most of the newer cars on the road today can run either ethanol or gas as in Brazil.

    We'll get there once the technology catches up. The problem with ethanol is it takes gas to produce the stuff. I saw some show on a company in Canada that has a process of using wheat grass to produce fuel that uses no oil or gas to produce. It'll get there but there's going to be bumps and bruises along the way....including high gasoline prices.
     
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  9. LsuCraig

    LsuCraig Founding Member

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    I don't see how corporate profits cause the price of gas to go up. They don't. Fuel is a futures market......if the price goes up of a basic barrel of oil, the price of gas goes up to cover future production. Profits are a byproduct of low supply and high demand like with any market.....gold is over $600 an ounce right now.......does that mean we need to investigate the gold producers? No, high demand, low supply=high price of gold. The profits of the gold producers has nothing to do with that price and neither with oil.
     
  10. red55

    red55 curmudgeon Staff Member

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    Ethanol may help the oil shortage situation down the road, but I fear it wont help the price situation that much. You are correct, it takes a lot of energy to produce ethanol.
     

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