I looked on this link and I saw there was no thread for the most popular subject in the US news EVERYDAY....the prices of gas. I know it's affecting everyone world-wide, but some of us, like me, live in the country and don't have the previlege of mass public transportation in the big cities. What do all of you think about it??? You think the government is trying to rip the gas user's off, or the almight "Oil Barrons" are getting richer and richer??? Let's here your thoughts.....
"There might have been things I missed, but don't be unkind, it don't mean I'm blind, but there it is......"
You think the government is trying to rip the gas user's off, or the almight "Oil Barrons" are getting richer and richer???
Well, that's a given.
Still, I think the problem is that the US can no longer dictate the price of oil. Sometime in the 70s (I know you remember our first oil crisis) the US started importing more oil than it could produce. Before then, we were a biggie in the oil industry and could basically tell OPEC what the prices could be. Our domestic oil has been steadily dwindling, and now the Saudis are sitting pretty with industrialized China and India bidding on their oil. The US will not see gas prices go down again in our lifetime (unless it's some temporary stunt done for political reasons).
Then there's the problem of peak oil. Some people believe we have already passed this. There's some evidence that the Saudis are lying about the amount of oil they can pump because whoever has the most oil gets to call the shots over the other OPEC members. But they don't seem able to deliver what they promise, so it looks like their huge field is petering out at last. Yes, we all need to look into alternative energy sources, but more than that, we need to develop a less resource-intensive lifestyle. The US went crazy building a suburban lifestyle that can only be maintained with lots of oil-- to run the cars, repair the roads, pipe gas to the homes, etc. It's not sustainable, even if we didn't have outside competition for the remaining oil. There's just not that much left that we can squander it on big cars, big homes, and miles of roads crossing big empty nothings.
All you've got to do is choose love. That's how I live it now. I learned a long time ago, I can feed the birds in my garden. I can't feed them all. -- Ringo Starr, Rolling Stone magazine, May 2007
For all I know, Ringo might be a yogi disguised as a drummer! - George Harrison
Yes, we all need to look into alternative energy sources, but more than that, we need to develop a less resource-intensive lifestyle. The US went crazy building a suburban lifestyle that can only be maintained with lots of oil-- to run the cars, repair the roads, pipe gas to the homes, etc. It's not sustainable, even if we didn't have outside competition for the remaining oil. There's just not that much left that we can squander it on big cars, big homes, and miles of roads crossing big empty nothings.
Agree entirely: the "oil economy" has had a good run for the last century, but it has to come to an end. This is a Thomas L Friedman column from the New York Times the other day:
Truth or Consequences
By THOMAS L. FRIEDMAN Published: May 28, 2008
Imagine for a minute, just a minute, that someone running for president was able to actually tell the truth, the real truth, to the American people about what would be the best — I mean really the best — energy policy for the long-term economic health and security of our country. I realize this is a fantasy, but play along with me for a minute. What would this mythical, totally imaginary, truth-telling candidate say?
For starters, he or she would explain that there is no short-term fix for gasoline prices. Prices are what they are as a result of rising global oil demand from India, China and a rapidly growing Middle East on top of our own increasing consumption, a shortage of “sweet” crude that is used for the diesel fuel that Europe is highly dependent upon and our own neglect of effective energy policy for 30 years.
Cynical ideas, like the McCain-Clinton summertime gas-tax holiday, would only make the problem worse, and reckless initiatives like the Chrysler-Dodge-Jeep offer to subsidize gasoline for three years for people who buy its gas guzzlers are the moral equivalent of tobacco companies offering discounted cigarettes to teenagers.
I can’t say it better than my friend Tim Shriver, the chairman of Special Olympics, did in a Memorial Day essay in The Washington Post: “So Dodge wants to sell you a car you don’t really want to buy, that is not fuel-efficient, will further damage our environment, and will further subsidize oil states, some of which are on the other side of the wars we’re currently fighting. ... The planet be damned, the troops be forgotten, the economy be ignored: buy a Dodge.”
No, our mythical candidate would say the long-term answer is to go exactly the other way: guarantee people a high price of gasoline — forever.
This candidate would note that $4-a-gallon gasoline is really starting to impact driving behavior and buying behavior in way that $3-a-gallon gas did not. The first time we got such a strong price signal, after the 1973 oil shock, we responded as a country by demanding and producing more fuel-efficient cars. But as soon as oil prices started falling in the late 1980s and early 1990s, we let Detroit get us readdicted to gas guzzlers, and the price steadily crept back up to where it is today.
We must not make that mistake again. Therefore, what our mythical candidate would be proposing, argues the energy economist Philip Verleger Jr., is a “price floor” for gasoline: $4 a gallon for regular unleaded, which is still half the going rate in Europe today. Washington would declare that it would never let the price fall below that level. If it does, it would increase the federal gasoline tax on a monthly basis to make up the difference between the pump price and the market price.
To ease the burden on the less well-off, “anyone earning under $80,000 a year would be compensated with a reduction in the payroll taxes,” said Verleger. Or, he suggested, the government could use the gasoline tax to buy back gas guzzlers from the public and “crush them.”
But the message going forward to every car buyer and carmaker would be this: The price of gasoline is never going back down. Therefore, if you buy a big gas guzzler today, you are locking yourself into perpetually high gasoline bills. You are buying a pig that will eat you out of house and home. At the same time, if you, a manufacturer, continue building fleets of nonhybrid gas guzzlers, you are condemning yourself, your employees and shareholders to oblivion.
What a cruel thing for a candidate to say? I disagree. Every decade we look back and say: “If only we had done the right thing then, we would be in a different position today.”
But no politician dared to do so. When gasoline was $2 a gallon, the government never would have imposed a $2 tax. Now that it is $4 a gallon, the government should at least keep it there, since it is really having the right effect.
I was visiting my local Toyota dealer in Bethesda, Md., last week to trade in one hybrid car for another. There is now a two-month wait to buy a Prius, which gets close to 50 miles per gallon. The dealer told me I was lucky. My hybrid was going up in value every day, so I didn’t have to worry about waiting a while for my new car. But if it were not a hybrid, he said, he would deduct each day $200 from the trade-in price for every $1-a-barrel increase in the OPEC price of crude oil. When I saw the rows and rows of unsold S.U.V.’s parked in his lot, I understood why.
We need to make a structural shift in our energy economy. Ultimately, we need to move our entire fleet to plug-in electric cars. The only way to get from here to there is to start now with a price signal that will force the change.
Barack Obama had the courage to tell voters that the McCain-Clinton summer gas-giveaway plan was a fraud. Wouldn’t it be amazing if he took the next step and put the right plan before the American people? Wouldn’t that just be amazing?
Erm...sorry, but isn't that what's happening at the moment? The American recession, and the poor dollar are dictating the price of oil.
Sorry, I don't know much about how our recession is affecting other people. (Remember, I live in the insular land of denial; go straight ahead with blinders on.) So I'd be happy to hear more. What I meant to say above is that (based on my elementary understanding of oil prices) when the US lost the ability to flood the market at will, it lost the ability to dictate what the standard price should be. Now that power rests with the people who still have the largest reserves left.
Great article, Geoff. I'm glad to see this type of thinking in print!
the McCain-Clinton summertime gas-tax holiday, would only make the problem worse, and reckless initiatives like the Chrysler-Dodge-Jeep offer to subsidize gasoline for three years for people who buy its gas guzzlers are the moral equivalent of tobacco companies offering discounted cigarettes to teenagers.
Don't forget that we right now subsidize gas-guzzling cars. You can get a huge tax incentive if you buy a Hummer - 8 mpg. The whole popularity of our gas-guzzling SUVs is so they can be built on a truck engine and therefore escape those irritating environmental and fuel-economy measures that our government was at one time so foolish as to impose on cars. Let the US never be accused of thinking long-term or proactively when a powerful lobby has gifts to throw around.
So our government is at this moment incenting people to buy unregulated, gas-guzzling machines, while at the same time we're fighting a war for oil. Does this strike anyone else as particularly insane?
As to "help" for poor people making under 80,000 a year-- how times have changed! My first salary was under $6,000. Wow.
All you've got to do is choose love. That's how I live it now. I learned a long time ago, I can feed the birds in my garden. I can't feed them all. -- Ringo Starr, Rolling Stone magazine, May 2007
For all I know, Ringo might be a yogi disguised as a drummer! - George Harrison
Let the US never be accused of thinking long-term or proactively when a powerful lobby has gifts to throw around.
Or a politician smells votes to be scrounged, especially votes from dummies, or a group of people that a politician takes for a wagon load of dummies. The McCain / Clinton gas tax holiday absurdity is a wonderful example of this: never mind the bad economics involved, just think of the near impossibility of getting such a thing through Congress and signed by the president before summer. Utter rubbish; and the sad thing of course, as we saw in the primaries, is that there are people- quite a few of them in fact- who will swallow such impossible ham-fisted pandering. To that extent, our political class is justified in taking us- or some of us- for dummies.
Woooooo............Geoff.........good stuff posted on the gas thread. Down here in Arkansas, there's "pages" of people waiting to buy the Prius. And these "fool" "soccer moms" and there gas-hog SUV's????? Oh well, I'm glad I drive a Honda and don't have far to go for anything. My Honda Accord gets great mileage. And down here, today, gas hit an all-time high at 4 dollars for regular unleaded.
"There might have been things I missed, but don't be unkind, it don't mean I'm blind, but there it is......"
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Depressingly self explanatory, this:
Oil Prices Skyrocket, Taking Biggest Jump Ever
By JAD MOUAWAD Published: June 7, 2008
The rise in oil prices turned into a stampede on Friday with futures jumping a staggering $11 a barrel to set a record above $138 a barrel. The unprecedented surge came as the dollar fell sharply against the euro and a senior Israeli politician once again raised the specter of an attack against Iran.
Oil prices have doubled in the last 12 months, and are up 42 percent since the beginning of the year. Oil futures surged $10.75, or 8 percent, to $138.54 a barrel on the New York Mercantile Exchange, their biggest jump since contracts began trading in 1983. The record rise brought a two-day jump of over $16 a barrel, after Thursday 5.5 percent gain.
“This market is going to shoot itself in the foot,” said Adam Robinson, an energy analyst at Lehman Brothers. “It is searching for a price that will build a safety cushion in the system — either as inventories or as spare capacity. This takes time. But the market has gotten extremely impatient and is not willing to wait.”
The latest jump came as the dollar lost more than 1 percent against the euro amid bleak economic news that fanned recession fears. The unemployment rate surged to 5.5 percent in May, the government said, the biggest increase in more than two decades.
Friday’s negative news pricked a budding sentiment in Wall Street that the financial system was on the mend and stocks fell sharply. The Dow Jones industrials lost 394.64 points, or 3 percent, to 12,209 points, with financial stocks showing the biggest drops. The broader Standard and Poor’s 500-stock index fell 3 percent, its biggest drop since February.
The strong volatility in energy markets in recent weeks continues to puzzle traders. Prices keep rising despite a lack of shortages in the market, and strong evidence of lower consumption in industrialized countries. But investors are caught in a bullish mood, focusing on the perceived risks to future oil supplies and the growth in oil demand from emerging economies, where fuel prices are subsidized.
Even as uncertainties abound about the fundamentals of the energy market, geopolitical tensions in the Middle East regained center stage after Israel’s transportation minister and a deputy prime minister, Shaul Mofaz, said Friday that an attack on Iran’s nuclear sites looked “unavoidable” if Iran didn’t abandon its nuclear program.
Iran is the second-largest oil producer within the OPEC cartel and exports close to 2 million barrels a day. Because the world has few supplies to spare, any interruptions in Iran’s exports could push prices to higher levels. The world currently has about 3 million barrels a day of spare capacity, and consumes 86 million barrels a day of oil.
“The return of the Iranian risk premium calls for a careful assessment of the potential oil supply impact of military strikes on Iran,” said Antoine Halff, an analyst at Newedge, an energy broker. The “comments bring home the point that the dispute over Iran’s nuclear program remains unresolved and that the risks of military confrontation are indeed increasing.”
Investors also reacted to the latest forecast by a large Wall Street bank that oil prices would keep rising. Morgan Stanley predicted that prices would spike to $150 a barrel in the next month because of strong demand from Asian economies.
The threat of a strike by Chevron’s workers in Nigeria also fueled concerns that some production could be shut down. A similar strike by Exxon Mobil workers last April, which lasted a week, reduced Nigerian output by 800,000 barrels a day, or nearly a third of the country’s daily exports.
A strike might delay the start of Chevron’s 250,000 barrels-a-day Agbami project, the country’s largest offshore venture, which is slated for June 15.
One view that has been gaining ground is that the commodity market is caught in a speculative bubble akin to the housing or technology bubble of the late 1990s. That theory was raised by politicians in Washington and a slew of OPEC producers, who blame speculators for the staggering oil rally. Speaking before Congress recently, George Soros, a prominent hedge fund investor, said the current oil markets presented some characteristics of a bubble.
“I find commodity index buying eerily reminiscent of a similar craze for portfolio insurance, which led to the stock market crash of 1987,” Mr. Soros said earlier this week. But he cautioned that an oil market crash was not imminent. “The danger currently comes from the other direction. The rise in oil prices aggravates the prospects for a recession.”
But many analysts say that fundamentals, not speculation, are driving prices.
“I don’t know how else to say it, this is not a bubble,” Jan Stuart, global oil economist at UBS, said. “I think this is real. There is a whole bunch of commercial buyers out there who are spooked and are buying. You are an airline, right now, you’re scared. I don’t see who would buy at these prices unless they need to.”
Jeffrey Harris, the chief economist at the Commodity Futures Trading Commission, who was speaking before another Senate committee last month, said he saw no evidence of a speculative bubble in commodities. Instead, Mr. Harris pointed out to a confluence of trends that have contributed to the oil price rally, including a weak dollar, strong energy demand from emerging-market economies, and political tensions in oil-producing countries.
“Simply put, the economic data shows that overall commodity price levels, including agricultural commodity and energy futures prices, are being driven by powerful fundamental economic forces and the laws of supply and demand,” Mr. Harris said. “Together these fundamental economic factors have formed a ‘perfect storm’ that is causing significant upward pressures on futures prices across the board.”
All I know is that a month ago I went online to check out prices for a trip to NYC later this summer (I am in CA), and the tickets were about $430 which is what I paid for the same tickets last year. Ok great. I go and check the prices and am ready to buy my ticket last week... $850!!! DOUBLE!!!! Luckily I found some tickets after some searching for about $500 so I didn't really get hit that bad but geez!!
Gas here in the Sacramento, Ca area is well over $4. It's really sad because you can barely afford to drive to work and then you have to pay hundreds of dollars a month just to park your stinkin car at work.
I plan on moving back downtown so that I can start taking the train to work again or hopefully I will live close enough so that I can just walk to stinkin work!!!
^^^^That's alright. Rant all you want. Diesel here in Arkansas is like 4.85 a gallon and steadily going up. What's these poor truckers gonna do??? My husband's job depends on the truckers bringing in freight to the company he works at.
"There might have been things I missed, but don't be unkind, it don't mean I'm blind, but there it is......"
Heather, moving into town sounds like a great option. America is just not set up to handle high gas prices-- it's going to cost people more to commute (which nearly everyone does) than they'll make at their job. I'd say, take your option while you can! Good luck.
All you've got to do is choose love. That's how I live it now. I learned a long time ago, I can feed the birds in my garden. I can't feed them all. -- Ringo Starr, Rolling Stone magazine, May 2007
For all I know, Ringo might be a yogi disguised as a drummer! - George Harrison
Yes, the price of gas needs to go up in order to make alternative fuels economically viable. Why bother with solar/electric etc when oil is still way cheaper?
Alternative fuels did get some attention after the Arab oil embargo in the 70's, but once the price dropped again, the oil companies said forget it. And they're not gonna start trying again now, either. Why? If the oil bubble bursts and the price crashes, most people will lose interest in hybrids and related technologies and they'll go right back to their old habits.
Alternative technologies should get more attention, but there's the minor problem of infrastructure. You could come up with a cheap all-electric car tomorrow and mass produce it the day after that, but how will you get all that new support technology out there?
With oil, the infrastructure (pipelines, refineries, etc.) developed as demand increased, so as cars became more popular, there was an incentive to develop the necessary facililties. Oil was "everywhere", so why not get a car?
Now, a whole new infrastructure needs to be put in; where's it going to go? There was a lot more open space 90 years ago than there is now. Can it run parallel with the oil delivery system? How will it be installed? That's a lot of money for something that's still not being fully embraced.
We dug ourselves in this hole; hopefully we'll wise up and drag our way out, no matter how painful it is.
Yes California is very different than let's say NYC. Back east, everything is closer together and taking buses/trains is alot easier. Here in California everything is so far away, you almost have to drive. Makes it alot harder. I saw some gas around here yesterday at $5
Yes California is very different than let's say NYC. Back east, everything is closer together and taking buses/trains is alot easier. Here in California everything is so far away, you almost have to drive. Makes it alot harder. I saw some gas around here yesterday at $5
Only if you live in NYC, Boston, Philadelphia, etc. Out in the suburbs, mass transit is spotty at best. At least where I live, anyway. During the week you might be able get around, but on the weekend, forget it. You'll be stranded.
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