So, apparently Oil Companies are price gouging gas prices...

[Dkg]

...For the summer season by lowering the supply that the oil refineries are producing, meaning LESS oil, creating greater "demand", having an excuse to raise gas prices.

EVERYONE with half a brain realizes this, yet nothing is being done.....why??
Since when did this become legal practices?

I'm young and naieve, humor me.

[Kramer]

Its because our government is a fuking disgrace! Totally driven by money. Republicans and Dems both suck! Theyre all phonies.

IMO, there shouldnt even be taxes on gasoline at all. The government is making a fortune on these times.

Gas is a necessity, not a luxury. Everyone needs it, it shouldnt be taxed!

And of course it should be regulated. Then when election time comes, they wonder why there is a sparce turnout. I think the people are getting it, finally. Theyre all crooks! Both sides of the aisle! :evil:

[atltrickster1]

...For the summer season by lowering the supply that the oil refineries are producing, meaning LESS oil, creating greater "demand", having an excuse to raise gas prices.

You are right about the current shortage of available refining capacity; many refineries have been experiencing delays in completing recently "scheduled maintenance", not to mention the recent fire at a major plant (can't remember the name of it). Many attribute these "upgrades" and "necessary maintenance" changes as being the end result of disruptions in the global supply chain of crude.

Relatively speaking, crude oil that originates from the Middle East and African countries such as Nigeria is much cleaner and cheaper to refine or process than its North American counterpart. Recent violence in Nigeria (google "Nigeria oil") combined with the increase in volatility of the Middle East has led many refining companies to no longer depend on oil from the region with absolute certainty, thus leading to the need for upgrades in the anticipation that it will be more difficult to process future crude supplies.

Finally, while refineries are processing less crude, this does not translate into a "creation of higher demand." Historically speaking, there has more or less ALWAYS been a higher demand for oil during the summer months due to the fact that it's "driving season" and people must cool their homes/offices.



Since when did this become legal practices?

I'm young and naieve, humor me.

When was it ever an illegal practice? These firms aren't behaving the way they are as a means of punishing the consumer.



Republicans and Dems both suck! Theyre all phonies.
I couldn't agree with you more on this point :)



IMO, there shouldnt even be taxes on gasoline at all. The government is making a fortune on these times.

Gas is a necessity, not a luxury. Everyone needs it, it shouldnt be taxed!


Taxes, as much as everyone hates them (including me), are necessary as a way of mediating consumer demand for the product by internalizing the many external social costs of driving such as air pollution, increased health costs, etc. (google "the true cost of driving"). In FACT, countless studies have shown that the government isn't taxing us ENOUGH to cover all of these costs, essentially meaning that we all receive a subsidy to drive. Kind of funny how the government says "we are too reliant on oil" when they are the ones responsible for making it that way.

Finally, as a way to go ahead and head off some reactions to my comments, I do NOT work for an oil company nor am I a very political person. I'm simply an economics and finance student in my final year of university and happen to actively keep up with the market and current events.

[tsafficianado]

this topic should rightly be in politics/religion, no?
i think you really just want to vent and don't really want an answer, but here goes anyway.....
first, there are a couple of basic flaws with your premise.
>lowering the supply that the oil refineries are producing, meaning LESS oil, creating greater "demand<
lowering the supply does not increase the demand, supply and demand are two different variables.
>meaning less oil<
There is plenty of oil, albeit at prices considerably higher than eight years ago, the shortage in supply is in gasoline. This is in some part due to the fact that there have been numerous refinery outages this spring due to failures and planned maintenance. The actual root cause is the fact that worldwide demand for gasoline is escalating hyperbolically and the refinery capacity is not keeping pace.....it takes a long time to build a refinery and it costs a lot of money and in the case of almost all commodities the lag in bringing new capacity on line during times of rapidly rising demand is considerable. In the U.S. there is the further constraint that ZERO new refineries have been buiilt in the last 20 YEARS while consumption has spiralled upward. Several of the major refinery concerns, including Tesoro, Valero and Chevron have made applications to build new facilities but ALL have been rejected in large part due to 'environmental concerns' of the same political party that wants to blame 'big oil' for the higher prices and tax them for making a profit. By the way, in the last eight years the price of reactor-grade uranium has increased by 1200% far outstripping the 6-fold increase in the price of a barrel of oil. The price of nickel has increased by a similar amount as has the market price of many strategic metals. These are, like oil, symptomatic of massive increases in demand (China/India etc) that are overwhelming the existing infrastructure. From 1850 to 2000 the U.S., Western Europe and Japan emerged from agrarian economies through industrial to modern economic status.....one fifth of the world's population in 150 years. In the current 30 years HALF of the world's population want to make the same transition. It doesn't take much imagination to recognize that infrastructures and resource reserves that could barely accomodate the pace of the last century will be strained when the transition rate increases by a factor of 12.
Adjusted for inflation the lowest price for a gallon of pump gasoline in the entire history of the US occurred in 1999, just 8 short years ago. At the same time Americans were shunning efficient vehicles for SUVs (You know, STATUS utility vehicles) with seating capacity for eight for their solo drives to their job forty miles from home through deadlocked city traffic. The problem is consumers and to a slightly lesser degree their moronic, myopic and ostrich-like legislators. Last year when the price of gas topped $3 there was a huge media frenzy over hybrids but as soon as the price dropped below $3 Toyota couldn't give them away.
America has about 6% of the world's population and consumes about 24% of the world's supply of fossil fuels. Think that can go on idefinitely? The Chinese demand for personal vehicles is miniscule but in fifteen years it will be the largest car market in the world and when that day comes you will REALLY be howling about the price of gas because it will be $10 a gallon. Any moderately intelligent person could have seen this coming forty years ago and NO Congress in the last forty years has done the first solitary thing to address the issue. We have continued to drown our addiction for oil, we have continued to pour trillions of dollars into the coffers of barbaric herds of post-neanderthal civilizations who want to kill us, we have placed ourselves on the brink of economic collapse with the resulting trade imbalance and we have done nothing to postpone the energy apocalypse we now face.
What do the great minds in Washington want to do? 'Windfall profit taxes', of course. It's o.k. for Nike to spend four dollars manufacturing a pair of sneakers and then sell them to your kids for $175, it's o.k. for Coke to put 30 grams of sugar and 12 ounces of water in a bottle and sell it to your kids for 50 cents, but heaven forbid Exxon Mobil making a measly 8% profit margin after spending trillions of dollars exploring and building oil resources and then charging almost as much for a gallon of oil that you gladly pay for a gallon of bottled water. Absurd.
Price gouging? The federal government and various states have intiated over a hundred inquiries and investigations into allegations of price gouging in the oil/gas industry in the last fifteen years and NONE of them, ZERO, Zilch, has produced any evidence supporting those contentions.
Regulation? Yes, good plan. Thee is no better way to increase the cost of something exponentially than to let the federal government start regulating it.
Do something about it? Sure....learn something about the issues and support candidates who have a clue (Hillarity and DuhDorgan are perfect examples of the antithesis). Ride a bike, get a hybrid, use public transportation, walk, park that SUV, be a part of the solution instead of making noise.

[Dkg]

tsafficianado, no I am looking for answers, but I'm not looking for excuses for these outrageous prices. you can't tell me that these ridiculous price hikes are unavoidable or simply due to Americas oil being less pure, refinieries outages, increased summer travel, or the fact that America uses a lot of resources. There is PLENTY of oil to be used currently. They could pump and buy TONS of oil to be stored so that there would be less of a demand but they aren't going to do that b/c then they couldn't charge as much.

These guys are making, hand over fist, record breaking profits year after year. I'm talking BILLIONS. and they aren't paying that much more for oil right now than there were last year. Refiniery outages or not, the math just does not add up

I'm seriously begining to think that Bush's 8 year term was nothing more than ploy to secure more oil money for His and Dads buddies.

[atltrickster1]

Dkg,

You are correct in saying that by increasing the available supply of gasoline that prices would go down. However, the key element in this situation is the fact that the United States currently does not have the capacity to do so due to the lack of refining capacity (unless the government cuts into U.S. strategic reserves, which are back to their normal level by the way).

In terms of the record breaking profits that oil companies are making (due to the huge demand for oil products and high worldwide crude prices), yes, it is emotionally infuriating to think that these organizations are benefiting by "punishing" us with high prices (which as was stated previously, the result of free market mechanisms, not an attempt to "fix prices"). However, the fundamental goal of ANY private firm is to be profit-maximizing; without generating a profit, what reason do they have to stay in business?

Most importantly, one should consider the inflation adjusted price that consumers have paid for gasoline over the past several decades. In real terms, the price of gasoline has risen VERY LITTLE considering the dramatic increase in worldwide demand for it.

Trust me, as much as find fault with MANY of the policies advocated/pursued by the Bush Administration, I do not believe that this issue can be legitimately attributed to their lack of governmental competence ;)

[tsafficianado]

Dkg...why are you complaining about the profits of oil companies? Are you a capitalist or a Marxist? We (US) live in a capitalist society and, as atltrickster pointed out, it is a primary objective of a corporation to maximize profits. The major oil companies make profit MARGINS, the critical metric, of about 8% currently and have done far less in the past. The expenses involved in o&g exploration are enormous, the costs for drilling and extracting and refining are high and going higher, it is an EXTREMELY capital intensive business. There are thousands of companies in dozens of other sectors that make MUCH higher profit margins than the oil companies without the high cost structure or the business risks but you aren't complaining about them....why is that? The oil majors are making huge amounts of money in large part because they sell a LOT of product. The statement that 'big oil' is making record profits year after year is, simply, not accurate. There have been many years when their profit margins were much lower than they are currently. Why would you single out one sector of companies that make REASONABLE profit margins yet not complain about Nike or CocaCola or Pepsi or Altria or some of the other hundreds of companies with MUCH higher profit margins?
There is PLENTY of oil to be used currently.
>>They could pump and buy TONS of oil to be stored so that there would be less of a demand but they aren't going to do that b/c then they couldn't charge as much.<<
Again you suggest that increasing supply will reduce demand, when this is in practice the opposite of reality. Demand is a function of consumer choice. Increasing supply will. all else equal, reduce price and elicit higher demand. That is why, in the nineties when oil/gas prices were historically low in terms of REAL dollars, people demanded higher horsepower and these silly SUVs and abandoned any concern about conservation. In Europe for example the price of pump gasoline has long been MUCH higher than in the US and for the most part Europeans drive much smaller, more efficient vehicles. Americans are on the whole resource pigs and when supply is constrained we pay the price, which is AS IT SHOULD BE.
Personally I ride motorcycles and I estimate that I used 200 gallons of gasoline in 2006, about a quarter of the national average. Other than lashing out without regard for the facts what have YOU done to reduce the impact? Public transportation, walk, ride a bike, carpool, more efficient vehicle, set back your thermostat in winter or raise it in summer? The rants of misguided liberal politicians about windfall profit taxes, rationing and regulation are not going to fix the problem. 300 million Americans complaining about the price of pump gas without regard for the facts is not going to fix the problem. 300 million Americans taking some personal initiative to reduce their own consumption is the ONLY thing that will reduce the problem, barring some technological miracle.
The simple fact is that the only thing that will make the public alter their behavior and reduce consumption is the pain at the pump, that is how economics works. Legislative attempts to temper the process only serve to interfere with the market forces that will eventually compel people to start making wiser decisions about energy resources that are limited and dwindling.

[specialk]

You can't look to the government for help..............on any issue, they are dysfunctional. We need to do it ourseleves. We need to make our problem, big oils problem. what do you think would happen if nobody bought Exxon/Mobil products anymore???...Now they have a big problem, so let E/M figure out what to do, when they aren't selling product anymore, then you'll see action.

[bassman2546]

I have a simpler theory.

George W. Bush, the oil tycoons and the auto industry are all working together. Bush is a dictator who wants his billiions in oil (hence why I'm sure he has Bin Laden on speed dial). He wants the excessive tax dollars from the citizens of America. Why no one has assasinated this guy is beyond me. What did Lincoln and Kennedy do that was so bad.

The auto industry is quite capable of producing a high-efficient gas vehicle for an economical price. Because they are working with the Oil industry they choose not too. You can buy a highly fuel-efficient car. BMW makes one. Yes and it costs upwards to six digits to buy it. Hence by buying this vehicle you've already given in to paying for your excess fuel up front by pumping out an extra 60-70g's for the vehicle. What a great concept!

Don't expect a new government to be any different. The next President may not have the personal greed of a Bush but have you ever heard any government, once in power, say they will do something about the excessive gas prices? No, and they never will to lose all those tax dollars. The only time you will hear a political party be in favor of price cuts at the pump is when they are gathering votes for the next election. Beyond that, they could give a flying fuck about cutting prices.

Get on your bikes and ride!

[whatislove]

Appreciate this post, well written and true except I'm not understanding the foreign aid part.


this topic should rightly be in politics/religion, no?
i think you really just want to vent and don't really want an answer, but here goes anyway.....Think that can go on idefinitely? The Chinese demand for personal vehicles is miniscule but in fifteen years it will be the largest car market in the world and when that day comes you will REALLY be howling about the price of gas because it will be $10 a gallon. Any moderately intelligent person could have seen this coming forty years ago and NO Congress in the last forty years has done the first solitary thing to address the issue. We have continued to drown our addiction for oil, we have continued to pour trillions of dollars into the coffers of barbaric herds of post-neanderthal civilizations who want to kill us, we have placed ourselves on the brink of economic collapse with the resulting trade imbalance and we have done nothing to postpone the energy apocalypse we now face.

[Tranny 411]

the government always talks about prosecuting gougers but have you ever heard of anyone actually being charged other than a small gas station in the boonies? its all part of the "Bush Plan". :twisted:

[tsafficianado]

whatislove.....
i assume you refer to the line about 'pouring trillions of dollars into....etc'?
i am alluding to the trillions of dollars we export to Saudi Arabia and Iran and Irag and UAE and Venezuela for oil so we can feed our addiction.

as long as i'm rambling on, here's a suggestion someone might have come up with in late 1970s after the second oil supply shock in a decade, although of course the public would never have bought into it.
congress could have initiated a 'special' excise tax on pump gas at the rate of 2 cents per gallon, to be increased by two cents per gallon every year forever. today that tax would be on the order of 60 cents per. this incrementing tax would have served to encourage conservation, would have resulted in the public demanding more efficient vehicles sooner, would have reduced our consumption and our oil imports and our trade imbalance and reduced the piles of cash we bleed into the middle east, would have reduced the depletion of the limited fossil fuel reserves, would have reduced the environmental damage from combustion, and the reduction in demand would have REDUCED and smoothed the market price increases and fluctuations that disrupt our economy....and in fact the acutal COST of a gallon at the pump would probably be no higher than it is today and in fact may have been lower. at the same time this excise task would have raised trillions of dollars which COULD have been used to subsidize development and deployment of alternative energy solutions and the result would be that today we would me much closer to resolving the energy crisis in america rather than trembling on the precipice of energy armageddon. this tax would have been a regressive tax unfortunately, but the economic burden would have been partially or fully alleviated by the downward impact on market prices. it is unfortunate that apparently no one promoted this approach thirty years ago, because now with the explosive ramp in demand from Chindia and the rest of the emerging economies it is, sadly, too damn late.... the reductions proposed by the government and the potential efficiencies that can be realized with hybrids and other mitigating technologies will be wholly dwarfed by the skyrocketing demand when a couple billion Chinese and Indians pick up a ride.

on the other hand, the alternate paranoid theories about the collusion of the government and the oil companies and the auto industry to decimate the american economy may be right. after all, general motors puts a gun to everyone's head and forces them to buy suvs rather than hybrids and minis and civics, the fbi stakes out mass transit stations and threatens people who want to ride, and the empty hov lanes probably have spikes in them to kill anyone who is audacious enough to attempt a car pool. how adolescent is that? or 320 people can work themselves up into a cyber-frenzy about boycotting one gas marketer for one day and really sock it to the devil himself, Exxon. that'll work, huh?

the outspoken politicos want to abandon capitalism and force non-market solutions (windfall profit taxes, regulation, etc) on the problem when anyone with a shred of sense knows those solutions only and always make the problem worse. as atltrickster correctly noted the price of a barrel of oil and a gallon of gasoline are extremely inefficient and in time they WILL become more efficient and then we will ALL be walking.

[White_Male_Canada]

the government always talks about prosecuting gougers but have you ever heard of anyone actually being charged other than a small gas station in the boonies? its all part of the "Bush Plan".


Uhh, yeeaahhh :screwy We need a Hugo Chavez to take control of free enterprise ! -------------------------------------------------------------------------------------------------------



The House of Representatives is considering the Federal Price Gouging Prevention Act (H.R. 1252), a measure that would supposedly “protect consumers from price-gouging of gasoline and other fuels.”

The law claimed it would do this by making it “unlawful for any person to sell crude oil, gasoline, natural gas, or petroleum distillates at a price that—(A) is unconscionably excessive; or (B) indicates the seller is taking unfair advantage unusual market conditions (whether real or perceived) or the circumstances of an emergency to increase prices unreasonably.”

“The American people want to know why oil companies are making soaring profits,” Sen. Henry (Scoop) Jackson said. “The American people want to know if this so-called energy crisis is only a pretext, a cover to eliminate the major source of price competition.” Oops again. That’s from 1974, not today.

“If a few great oil companies are permitted to manipulate prices for the next few years as they have been doing since 1920,” a Senate committee wrote, “the people of this country must be prepared before long to pay at least a dollar a gallon for gasoline.” Oops, sorry -- my mistake. That’s not a new report, it’s one written by Sen. Robert La Follette in 1923.

Think back to the La Follette era of the 1920s. Then, gasoline was a true commodity. It was the same whether one bought it in Maine or California. But today, various states and local governments require oil companies to deliver specific blends tailored to their desires. That makes it more difficult for refiners and thus more expensive.

A leading example of this is ethanol. The federal government requires ethanol be added to our fuel supply. This increases the price of both corn and gasoline. If lawmakers would end the era of “boutique fuels,” gas prices and food prices would come down.

What Washington shouldn’t do is attempt to set prices. During his hearings back in 1974, Sen. Jackson complained that he could never find an open gas station. Dealers kept running out of gas and shutting down. Well, that’s completely predictable. Back then, the oil industry was operating under federally-imposed price controls. That meant Washington was artificially limiting the free market’s ability to make gasoline available.

Note that after Hurricane Katrina and now today, with gasoline costing more than $3 per gallon, there are no long lines for fuel and no stations closed for long periods of the day. The price went up, but the system didn’t collapse. Again, the market works.

For decades, politicians have attempted to determine the “fair” price of gasoline. Meanwhile, they’ve been meddling in ways that artificially drive up the very prices they say they’re trying to control.

If lawmakers actually want to help consumers, they should stop legislating and allow a free market in gasoline.

There’s a lesson here, if lawmakers will learn it. The federal government has failed -- badly -- to regulate gasoline prices before, and if it tries again it will fail again. That’s because it’s virtually impossible to beat a market economy.

In a free market, consumers get to decide what they’ll pay for a product. If the price is too high, they won’t buy it. Few people owned plasma televisions when they cost $6,000, but as the price has plunged, such TVs have become more common.

http://www.townhall.com/columnists/column.aspx?UrlTitle=driving_up_prices&ns=RichTucker&dt=05/18/2007&page=full&comments=true

[guyone]

The problem with Americans is they have it too good.

Check out the price of a litre of gas in Europe...

[LG]

The problem with Americans is they have it too good.

Check out the price of a litre of gas in Europe...

I'll give you that. Although the difference in price is mostly due to taxation by the governments. The money raised would, in a perfect world, go to improving social welfare measures. Sadly, much of it does not.

[specialk]

or 320 people can work themselves up into a cyber-frenzy about boycotting one gas marketer for one day and really sock it to the devil himself, Exxon. that'll work, huh?


Since you took the time to mis quote my post I thought I would help you out pal. Show me where I said boycot exxon for ONE day?...I'm talking long term brainless. I'm talking about putting our pain on Exxon's back. We'll all free to buy gas everyday of the week anywhere else but Exxon, thus making a LARGE problem for Exxon. Since I'm old enough to remember the past 38 yrs. of pumping gas, and seeing other efforts fail by congress and my fellow Americans, I'm only suggesting something a little different. As far as your tax the piss out of it suggestion....I'll let the other members ream your ass on that idea.

[tsafficianado]

you and who's army is going to put your pain on Exxon's back? harharharharharharhar
and what 'efforts by....your fellow americans' has failed. would that be the purchase of suvs, pickup trucks and luxury sedans for single-occupant transportation, the refusal to use public transportation, the refusal to carpool, the insistence on living thirty miles from where you work, the insistence on living in and heating and cooling mcmansions with 1500 sq. ft per person and the insistence on consuming 4X the resources per capita of others in modern societies?
the 'efforts' of your fellow americans amounts to bitching about paying $3 for a gallon of gas (that costs about $2.75 to deliver to the pump) and then driving over to starbucks and paying $4 for a cup of water with a few fuggin coffee grounds in it. you're real extra there specialk.

[specialk]

you and who's army is going to put your pain on Exxon's back? harharharharharharhar
and what 'efforts by....your fellow americans' has failed. would that be the purchase of suvs, pickup trucks and luxury sedans for single-occupant transportation, the refusal to use public transportation, the refusal to carpool, the insistence on living thirty miles from where you work, the insistence on living in and heating and cooling mcmansions with 1500 sq. ft per person and the insistence on consuming 4X the resources per capita of others in modern societies?
the 'efforts' of your fellow americans amounts to bitching about paying $3 for a gallon of gas (that costs about $2.75 to deliver to the pump) and then driving over to starbucks and paying $4 for a cup of water with a few fuggin coffee grounds in it. you're real extra there specialk.

You've made quite a lot of assumptions about me young fella, few that apply. so when you come up with something of substance let the world know, we'll be right here waitin'.

Oh...and for the record boy genius, this topic was dicussed in depth a year and a half ago in the P+R section. Of course you wouldn't know that cuz your a rookie who doesn't know how to use search function. Here's the link, which includes a comment on page 9 from me, sounding somewhat like you at times blaming my fellow Americans....enjoy.

http://www.hungangels.com/board/viewtopic.php?t=6665&postdays=0&postorder=asc&highlight=gas+prices&start=0

[ds5929]

In '88, I bought a Chrysler LeBaron convertible. 2.5L 4cyl engine, 5-speed stick shift. It was a beautiful full sized car with enough pep to outrun most of the other cars on the road. On the open highway, on a drive from St.Louis to Atlanta, it got 44 mpg. Five years later, with 105,000 miles on the odometer, it clocked in at just a hair under 40 mpg.
Get that baby in 5th gear, put the cruise control on, and you barely knew the engine was running. Wish every day I had'nt traded it in.

[tsafficianado]

i made no assumptions about you k, i made observations about the 'efforts of your fellow americans'
do YOU think empty HOV lanes, empty public transportation systems, gas guzzling personal vehicles, 45-minute drives to work in traffic, mcmansions and delirious consumption of resources is the answer? do YOU think people are using reasonable logic when they complain about $3 gas but gleefully shed $4 for a friggin cup of crappy coffee? exxon is NOT the problem, GM is NOT the problem, your fellow americans ARE the problem. as YOU observed they learned a lesson in the late seventies and ten years later they abandoned all of their responsibility in the matter, so here we are again. do YOU think the answer is to get all pissed off every twenty years and make some minimal effort to duck the problem and then return to dooming behaviors? apparently that is exactly what 'your fellow americans' think.
regarding your link to the previous discussion and your intimation that i am a 'boy genius' for not searching it, perhaps you should check again....i posted on that thread a couple of weeks ago.

[Gillian]

No sympathy here. You guys should try UK prices at around $7.50/gallon (allowing for Imperial to US gallon conversion) ...

[specialk]

i made no assumptions about you k, i made observations about the 'efforts of your fellow americans'
do YOU think empty HOV lanes, empty public transportation systems, gas guzzling personal vehicles, 45-minute drives to work in traffic, mcmansions and delirious consumption of resources is the answer? do YOU think people are using reasonable logic when they complain about $3 gas but gleefully shed $4 for a friggin cup of crappy coffee? exxon is NOT the problem, GM is NOT the problem, your fellow americans ARE the problem. as YOU observed they learned a lesson in the late seventies and ten years later they abandoned all of their responsibility in the matter, so here we are again. do YOU think the answer is to get all pissed off every twenty years and make some minimal effort to duck the problem and then return to dooming behaviors? apparently that is exactly what 'your fellow americans' think.
regarding your link to the previous discussion and your intimation that i am a 'boy genius' for not searching it, perhaps you should check again....i posted on that thread a couple of weeks ago.

Pardon me for not caring about your post a few weeks ago, on a year and a half old thread. I'm assuming your part of the problem when you say "your Americans"....as you denote your location as the USA.....so you agree with me it's "Us Americans" (you included)who are to blame.

Going back to my earlier suggestion of not buying Exxon gas for a length od time is an experiment. Would it work?, yes, if enough people do it. We all know the Gov. or the oil folks won't help. Exxon would have a big problem, and Id like to see them figure out what to do about it. Look, I'm a supply and demand guy. If it goes to 10.00 a gallon it's a good thing in a way...it makes all the alternatives look pretty good. My hunch is this. Gas will have peaked shortly, like last summer and will go down later in the year. It's the new game in town....keep the needle in the arm, keep all of us hooked. They know what the "market will bear" in terms of us putting up with BS. It will be repeated year in and year out. If a major disruption in the supply happens, all bets are off and you and me and our fellow Americans will have to grab our asses with both hands.

[whatislove]

You keep saying public transportation, if your so gung ho about free market, shouldn't that be private transportation? Why should the government run the subway? (And I believe they should)


Dkg...why are you complaining about the profits of oil companies? Are you a capitalist or a Marxist? We (US) live in a capitalist society and, as atltrickster pointed out, it is a primary objective of a corporation to maximize profits. The major oil companies make profit MARGINS, the critical metric, of.......

[justatransgirl]

So, apparently Oil Companies are price gouging gas price

No shit sherlock...

Answer: NATIONALIZE all natural resources. The oil belongs to mankind, not to Cheveron.

Just my opinion,
TS Jamie

[chefmike]

This article was written by a man who knows as much about big oil as anyone- Raymond J. Learsy

Learsy's bio and blogs-
http://www.huffingtonpost.com/raymond-j-learsy/#blogger_bio

House Passes Gasoline Profiteering Bill and Misses the Target by a Mile

Part bluster, all theater, our oil-addled Congress took a swipe at the oil gougers and in Buster Keaton fashion fell flat on its face. Therapeutic play acting perhaps, but comedy shouldn't be the order of the day for the rest of us while the real gougers laugh all the way to the bank.

The bill focuses on the those gorilla's of the oil patch, the gasoline stations, and is meant to prevent gasoline stations from running up prices in the face of stressed conditions. Please understand that your local gas station is not well represented among Washington's "K" Street lobbyists, when compared to his suppliers, the oil companies. He/She have become a useful diversion, focusing our attention and that of Congress away from the real gougers, the oil companies themselves. But, hey, the gas stations are little guys and don't bounce around in their jets, plush corner offices and $500 million paydays.

More importantly, for the integrated oil companies, whether it be their own or independent distributors what happens at the gas pump is completely secondary. You see what counts is how much they make on the crude oil they produce, and anything that can take our attention away from that very fundamental issue is a boon to them. To put it all in perspective Exxon/Mobil produces as much crude oil per day as Iran (over 4 million barrels of crude daily and over 6 million barrels in crude oil equivalents). So what possible incentive would they have to force down the price of crude oil. Crude oil makes up some 60 percent of the price of gasoline, and the higher they can keep the price of crude the higher their profits. And while the gas station has a reasonable margin in dimes and quarters, our integrated oil companies profits are egregious, exceeding tens of dollars per barrel at current price levels.

On Tuesday of next week the House Energy and Commerce Subcommittee has tentatively scheduled hearings about "Breaking up the Oil Companies". Rep. Bart Stupak (D.Mich), its chairman, defined price gouging as a price that is "unconscionably excessive" or that indicates that "the seller is taking unfair advantage of unusual market conditions". If that's the definition consider the following:

Oil companies do not usually break out their divisional earnings, i.e. production, refining, chemical operations and on. Yet the oil industry had an 'Oops' moment a few years ago when a then bubbling management of Marathon Oil, one year out from its separation from U.S. Steel and clearly not yet fully in thrall of the oil industry's vow of omerta, laid out exactly such a breakdown (By the way this is the same company currently under investigation by the CFTC for alleged crude oil price manipulation). In Marathon's 2002 annual report, barely able to contain themselves they claimed upstream profits (primarily sales of crude) of over $1 billion dollars. They further boasted that they had replaced their annual production that year by 262 percent with finding and development costs of $4.61 per barrel, while increasing their proved reserves by 23 percent. In 2002 the average price of crude was in the $20's per barrel, so that with a price of say $25/bbl Marathon earned a gross profit of over $20 per barrel produced and sold. If we assume the the price of finding and producing a barrel of oil has doubled since then, which is a generous assumption, then at today's prices of circa $65/bbl their per barrel, gross profit would be over $55 per barrel! Marathon has been brought into line and no longer breaks out earnings by division. But we can readily assume that today at over $65 a barrel the uptstream profits are staggering, and that the same would apply for all integrated oil companies.

But that's not all. Marathon's 2002 report showed that the Upstream Division (production)
had some 3000 employees and earnings were over $1 billion, while the rest of the companies additional 26,000 employees brought in earnings of $300 million.The report showed that upstream operations comprised 71% of the company's earnings while downstream (primarily refining) and other energy related business comprised 29%. With today's crude oil prices of over $60/barrel the numbers become daunting even with beneficent refinery margins. Certainly House chairman Bart Stupak's criteria "unconsciously excessive" would readily apply.

House hearings on "Breaking up the Oil Companies" is certainly a timely exercise. Here the focus should also be on how we got these vertiginously high oil prices. What incentive do integrated oil companies have to militate for lower oil prices? As seen from the above, none and even less then none in that their refining operations are being used to maximize the price of crude with resulting high gas prices and with the added benefit of giving them a vehicle to divert our attention from the real source of gouging.

The House hearings might also touch upon such related issues as : an in depth look into role of OPEC; what has been the role of the oil lobby,;who really are and who funds the peak oil theorists; what is the degree of oil and Middle East funding and influence on the Beltway think tanks; how disinterested are the scare mongers who forever frighten us into higher crude prices going so far as citing such spurious events as fog on the Houston Ship Channel; how diligent has our press been in dealing with these issues (more to come in an upcoming post- see post "The Price of Oil. The Maddening Silence of The Press" 8.04.06); why hasn't our government been more forceful in using the bully pulpit to confront OPEC manipulation; and how unfettered is trading of oil and gas futures on world exchanges (along with Marathon, BP is also in the sights of the CFTC- also see post "Manipulating Stock Prices and Oil Prices: It's in the Air" 3.22.07).

All the above is to highlight the tax on the citizenry to the benefit of the oil companies and their business allies. What the price of gasoline should be, given its environmental contingencies, is another matter altogether and should be dealt with as such. It should not be permitted to be used by the oil industry as another justification to rationalize high prices to their own benefit.

[qeuqheeg222]

today i went to fill up at the local hood gas where its about 10cents cheaper than other stations and i happened to notice something fishy.normally the price of diesel is slightly higher than that of premium.i think big oil does this to discourage people from gettin german dieselcars which get 50 to 60 mpg highway...but today the dsl price was actually 10 cents cheaper than the rotgut regular!!!what the fuck is up with that...actually i think big oil doesnt want wal-mnart and all the other businesses that rely heavily upon truck freight transportation to get into the price gouging fracas so they are keepin this shit cheap..not many americans drive diesels anyway...

[tsafficianado]

no shit, Learsy's great, and quite the comedian. trouble is, you can never tell when he's trying to be serious or just running his shtick. i have all of his cds, my fave....Politics is Like Doodoo, I like to Play With It
caught his act at the Comedy store a couple of months ago, favorite line of the night "Chefmike, when I want his opinion I give it to him"

[chefmike]

no shit, Learsy's great, and quite the comedian. trouble is, you can never tell when he's trying to be serious or just running his shtick. i have all of his cds, my fave....Politics is Like Doodoo, I like to Play With It
caught his act at the Comedy store a couple of months ago, favorite line of the night "Chefmike, when I want his opinion I give it to him"

It's so good to see you again, TFan aka TFool! I really missed you when you were at jesus camp, and I hope that your keepers don't find out that you are posting on this sinful forum again...just don't forget what happened to Haggard, Foley, et al...and BTW, do you still squat when you pee, TFool? Or did the good lord and his self-righteous xian soldiers cure you of that?

I'm gonna go out on a limb here...but I'm guessing that they made it harder for you to sit down, pilgrim...nothing like that old-time religion, eh?

[fivekatz]

This is hardly a shock that oil supply is being manipulated.

This is a cartel of mega industrialists that had so much power they were able to sell the least cognitively qualified candidate in the history of the modern US presidential electoral process to an electorate that did not stand to win from his positions to the a “majority” of those voters.

And when his wins were in doubt they manipulated the electoral process and nobody called them on it from Florida 2000 to Ohio 2004.

The Bush family pedigree (yes they are dogs) is solid. When policy favors oil and defense money it is unquestioned by most observers. They are to busy worrying about who is doing what with who in bed, whether a GG that does not wish to have a baby will terminate a pregnancy and whether Adam and Steve are living together, And that hate is not by accident, the political machine has fed that and made it a cultural factor.

If a person is not dazzled by the hate they sell to the homophobic, religious elitists and the terminally scared elements of American society, you see that these people are pointing at the fear in the corner, while they are reaching into your pockets for your money and your civil liberties.

The entire Neocon movement has been about making their patrons, big oil, big military contractors and big medicine (pharma manufacturers and insurance co.) happy. They sell a steady diet of fear against the members of this MB, of any alternate religion and/or ideological thought as threats to the safety of America. Hell, the Prez is so desperate he is used those very metaphors against press members willing to challenge his failed Iraq policies this last week. Hate and fear is all these assholes know.

People who would stoop to installing a regime as unqualified and lacking any moral or spiritually grounding as this administration would find it not only acceptable but rather a primary course of business to manipulate oils supplies to insure that energy prices remain artificially high.


And for our Euro friends, while our prices are lower here in the US, we do appear to all be on the track of rip-off.

These people are very bad and the only shining light is they picked a group of political operatives with equal parts of arrogance and marginal intelligence.

Otherwise the choice to target those with alternate views and life choices would be eternally frightening to every member of this MB IMHO.

Luckily it appears these guys were so stupid and power drunk that they have halted an era of hate that has few parallel moments in modern history.

Just my take.

[chefmike]

Well said, fivekatz... and welcome to the cuckoo's nest.

[specialk]

no shit, Learsy's great, and quite the comedian. trouble is, you can never tell when he's trying to be serious or just running his shtick. i have all of his cds, my fave....Politics is Like Doodoo, I like to Play With It
caught his act at the Comedy store a couple of months ago, favorite line of the night "Chefmike, when I want his opinion I give it to him"

It's so good to see you again, TFan aka TFool! I really missed you when you were at jesus camp, and I hope that your keepers don't find out that you are posting on this sinful forum again...just don't forget what happened to Haggard, Foley, et al...and BTW, do you still squat when you pee, TFool? Or did the good lord and his self-righteous xian soldiers cure you of that?

I'm gonna go out on a limb here...but I'm guessing that they made it harder for you to sit down, pilgrim...nothing like that old-time religion, eh?


He's baccccckkkkk>>>>>>