The Proper Role of the Federal Government in Controling Gasoline Prices - Page 2

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[ARCHIVED THREAD] - The Proper Role of the Federal Government in Controling Gasoline Prices (Page 2 of 3)

Posted: 8/23/2005 4:49:38 PM EDT

[#1]

Quoted:

I have since learned the error of my ways - thanks to Old_Painless and others. I was but an Arfcom n00b when I said something about the .gov stepping in to "help" with regards to oil prices. I was thoroughly and utterly upbraided and sent to my room.

Go easy on the first timers saying the government should step in. They might be OK guys.

Yep, but I fear that you are the exception.

You are a guy that actually wants to learn something.

A rare commodity on Arfcom.

Posted: 8/23/2005 4:50:55 PM EDT

[#2]

Quoted:
OK, I'll try this one more time.

A gallon of gas costs a distributor, let's say $1.50. There is a tax of, let's say, $.50 per gallon. So the price (what you pay at the pump) is $2.00. The gas station owner sells all the gas he can every day for that price.

Now remove the $.50 per gallon. Everyone rushes out to "take advantage" of the lower price. Now there is less gas for everyone.

Please, please, tell me what happens to the price of something when it is scarce? Does it stay fixed? Does it go down? Are Ferraris and Porsches more expensive than Camrys?

G

You are assuming people would drive 25% more. That wouldn't happen.

If the price of apples dropped 25% would you eat 25% more?

Posted: 8/23/2005 4:53:22 PM EDT

[#3]

Quoted:
Last August, ConocoPhillips traded at $35.64/share. Today it's $63.21 (52 week high was just over $66 a week or so ago) per share.

ExxonMobil: $44, now $59.07

Chevron: $46.21 now $60.34

I think the oil companies are doing pretty well on all of this.

You bet.

But here's the rub.....

Who "ownes" the oil companies?

Is it a group of big, fat guys in gold plated offices in downtown New York?

Nope.

They are owned by "Stockholders" who have invested their savings in these companies with hopes of getting a return on their investment.

You think they are getting a good return? Me too.

So, buy some stock and make some of that money for yourself.

(But be ready for the "lean times". They are coming as sure as the sun will rise in the morning.)

Posted: 8/23/2005 4:54:10 PM EDT

[#4]

Quoted:
Quoted:
OK, I'll try this one more time.

A gallon of gas costs a distributor, let's say $1.50. There is a tax of, let's say, $.50 per gallon. So the price (what you pay at the pump) is $2.00. The gas station owner sells all the gas he can every day for that price.

Now remove the $.50 per gallon. Everyone rushes out to "take advantage" of the lower price. Now there is less gas for everyone.

Please, please, tell me what happens to the price of something when it is scarce? Does it stay fixed? Does it go down? Are Ferraris and Porsches more expensive than Camrys?

G

You are assuming people would drive 25% more. That wouldn't happen.

If the price of apples dropped 25% would you eat 25% more?

Are you seriously contending that the demand for gasoline is equal to the supply?

G

Posted: 8/23/2005 4:54:43 PM EDT

[#5]

Quoted:
Quoted:

The federal government regularly orders power plants to produce full output, especially during an energy crisis like the rolling blackouts in California.

We are, as usual, in basic agreement.

But let's look at the government involvement in the "rolling blackouts" in Kali.

Has this really "helped" the problem?

Nope.

The problem is that the tree-hugging enviornmentalist wackos in Kali have stopped drilling of oil off their coast and severely restricted production of both petroleum and nuclear energy.

Solution: Let the market correct the problem. If the people of Kalifornia have enough blackouts, they will get fed up and vote out the idiots and replace them with people that will encourage energy production.

Supply and demand. Free market. Capitalism.

These things work wonders, if they are allowed to work freely.

Possibly, but the situation with gas is not the same. It's in the oil companies best interest to limit the supply of gas. As stated, we're down over 800,000 barrels of daily refining capacity from 1990-2000, and more plants have closed since then. That artificially imposed limitation has raised their profit margin. Who is going to come in to change that? What force in the free market is going to tell them to make less money?

Remember the Alamo, and God Bless Texas...

Posted: 8/23/2005 4:56:46 PM EDT

[#6]

Quoted:
What the government CAN do to effect gas prices:

1. ~~Reduce the insane tax on every gallon of gas~~ Temporarily decrease prices until gas companies start charging $2.70 and making all of the money for themselves.
2. Stop allowing the BS environmental claims of wackjobs who WANT to tank the US economy to block exploration of and exploitation of domestic oil resources.

Those are things government CAN and SHOULD do about gas prices.

O_P is right: Government is not supposed to fix everything. But the stupidity of the ~~.gov~~ people who drive like idiots, drive gas hogging vehicles when a <gulp>civic</gulp> would suit the application, and lazy people has helped produce the situation we are in. By using some common sense and backing off of the usual ~~.gov~~ fuel inefficientsilliness, gas prices can come down a bit. Government should only fix the problems government created in this situation.

No more.

Fixed.

ETA: Look, you can blame whomever you want, but Shell Oil and Amoco and all those other bastards are going to charge whatever dollar amount makes them the most money, whether it be .99 or 9.99. Don't blame the Arabs. Don't blame shortages. Blame the sellers. Oil barrel prices have not doubled in the past year. Demand has not doubled. Supply has not halved. Price HAS doubled, because they know that no matter how much they increase the price, demand will not decrease. So they do, and it doesn't, and they are happy, you are sad, and here we are.

Posted: 8/23/2005 5:01:15 PM EDT

[#7]

Quoted:
Possibly, but the situation with gas is not the same. It's in the oil companies best interest to limit the supply of gas.

Why?

If gas is selling for $2.50 a gallon, why wouldn't they want to sell more?

As stated, we're down over 800,000 barrels of daily refining capacity from 1990-2000, and more plants have closed since then. That artificially imposed limitation has raised their profit margin.

You are correct.

But who was responsible for the plant closings?

Answer: Environmental wackos influencing Congress to make the refining of petroleum more and more costly and hazardous with regards to fines and restrictions. More and more environmental restrictions and costly "environmental" additions to new units.

Who is going to come in to change that? What force in the free market is going to tell them to make less money?

Once again, supply and demand, if the gooberment got out of the way.

There are plenty of folks that have money to invest in new refineries. But it is not economically feasible now because of environmental restrictions.

The "force in the free market" would be competition. But this is throttled by silly environmental restrictions.

Posted: 8/23/2005 5:03:10 PM EDT

[#8]

Quoted:
One poster made reference to Communism, where the government does indeed control prices. But I do not believe that those that propose that the Federal Government (FG) control oil prices are Communists.

I believe that they are poorly educated.

I believe I'm the poster that made the reference.

Poorly educated or not in what the functions of the Federal Government should be, the thought that the Government should intervene in the market to control prices is a communist/socialist idea. Its what can make communism/socialism so popular on the outside. Capitalism and free markets are a great thing... unless you're on the shit end of it. Then, its very easy to want the Government to do something about it, to make it all better.

Does Goverment have a place in business? You betcha. Agencies like the SEC and EPA have a place in regulating how a business works(in a perfect world). But in the US, the Government has zero place in the market itself. This includes tariffs and other such protectionist nonsense.

IMO.

Posted: 8/23/2005 5:04:52 PM EDT

[#9]

The best thing the .gov can do is get the hell out of the way.

Let the refineries brew up grades of fuel the market demands.

Let the oil companies drill for oil everywhere it exists.

Let the oil companies build new refineries in CONUS that can process heavy crude instead of just Texas Sweet Light Crude.

Let people with brains, balls and $$ develop the shale deposits in Colorado, Wyoming and Utah knowing that some eco-nuts will not got them shut down for encroaching on cockroach habitat.

Let the people vote with their wallets and buy more fuel efficient cars.

Let some power companies build some nukes so that we can phase out oil-burning peaker plants and the like.

Get your own ass educated and find out what you can do to reduce YOUR dependence on oil. If you won't, then STFU, FOAD and all that.

Nixon's and Carter's interference in the energy business in the 70's brought us gas lines, shortages and rationing. any new involvement by .gov will have the same effect.

Posted: 8/23/2005 5:08:15 PM EDT

[#10]

Quoted:
If we're lucky, the government will do nothing about high gas prices. If we're really lucky, it'll get rid of pollution standards and additive requirements.

Why would you WANT to get rid of pollution standards? I know why you THINK we should get rid of them, but why in the world would you want to increase pollution?

Posted: 8/23/2005 5:09:42 PM EDT

[#11]

Quoted:
Quoted:
Quoted:
OK, I'll try this one more time.

A gallon of gas costs a distributor, let's say $1.50. There is a tax of, let's say, $.50 per gallon. So the price (what you pay at the pump) is $2.00. The gas station owner sells all the gas he can every day for that price.

Now remove the $.50 per gallon. Everyone rushes out to "take advantage" of the lower price. Now there is less gas for everyone.

Please, please, tell me what happens to the price of something when it is scarce? Does it stay fixed? Does it go down? Are Ferraris and Porsches more expensive than Camrys?

G

You are assuming people would drive 25% more. That wouldn't happen.

If the price of apples dropped 25% would you eat 25% more?

Are you seriously contending that the demand for gasoline is equal to the supply?

G

No it is higher. Thus the increase in price.

The actual correct answer is it is equal as of any moment. That is why the price goes up and down. Because demand goes up and down. When the demand goes up and down and the price does not you have price controls. Like in CA.

Posted: 8/23/2005 5:21:06 PM EDT

[#12]

Quoted:
The best thing the .gov can do is get the hell out of the way.

Let the refineries brew up grades of fuel the market demands.

Let the oil companies drill for oil everywhere it exists.

Let the oil companies build new refineries in CONUS that can process heavy crude instead of just Texas Sweet Light Crude.

Let people with brains, balls and $$ develop the shale deposits in Colorado, Wyoming and Utah knowing that some eco-nuts will not got them shut down for encroaching on cockroach habitat.

Let the people vote with their wallets and buy more fuel efficient cars.

Let some power companies build some nukes so that we can phase out oil-burning peaker plants and the like.

Get your own ass educated and find out what you can do to reduce YOUR dependence on oil. If you won't, then STFU, FOAD and all that.

Nixon's and Carter's interference in the energy business in the 70's brought us gas lines, shortages and rationing. any new involvement by .gov will have the same effect.

I gonna have to give that one a big Plus 1.

Posted: 8/23/2005 5:24:34 PM EDT

[#13]

Quoted:
Quoted:
If we're lucky, the government will do nothing about high gas prices. If we're really lucky, it'll get rid of pollution standards and additive requirements.

Why would you WANT to get rid of pollution standards? I know why you THINK we should get rid of them, but why in the world would you want to increase pollution?

Let local .gov's decide if they want them. Not the fed .gov. I see nothing in the Constitution about pollution standards. I do however see the 10th Amendment.

Posted: 8/23/2005 5:25:06 PM EDT

[#14]

Quoted:
The best thing the .gov can do is get the hell out of the way.

Let the refineries brew up grades of fuel the market demands.

Let the oil companies drill for oil everywhere it exists.

Let the oil companies build new refineries in CONUS that can process heavy crude instead of just Texas Sweet Light Crude.

Let people with brains, balls and $$ develop the shale deposits in Colorado, Wyoming and Utah knowing that some eco-nuts will not got them shut down for encroaching on cockroach habitat.

Let the people vote with their wallets and buy more fuel efficient cars.

Let some power companies build some nukes so that we can phase out oil-burning peaker plants and the like.

Get your own ass educated and find out what you can do to reduce YOUR dependence on oil. If you won't, then STFU, FOAD and all that.

Nixon's and Carter's interference in the energy business in the 70's brought us gas lines, shortages and rationing. any new involvement by .gov will have the same effect.

Perfect.

Posted: 8/23/2005 5:25:56 PM EDT

[#15]

I'm not going to read the previous three pages; I'm just going to put in my 2 cents.

The government should have almost no role in controlling prices. Didn't Nixon try that?

Anyway, what government can do is get out of the way of industry. Oil is flowing at a rate not seen since the early 80s. China's demand had decreased over last year. So why the increase?

The increase is because our refineries are set up to refine light sweet crude. Most of the oil flowing out there isn't sweet, it's "sour." Our refineries are competing for the less plentiful sweet crude, ergo the price is increasing. If .gov would get out fo industries way and let them do things like build new refineries, drill in Alaska, and drill off the coast then maybe we wouldn't be in a position where sweet crude is in such short supply and high demand.

Posted: 8/23/2005 5:30:33 PM EDT

[#16]

Quoted:
Quoted:
Quoted:
If we're lucky, the government will do nothing about high gas prices. If we're really lucky, it'll get rid of pollution standards and additive requirements.

Why would you WANT to get rid of pollution standards? I know why you THINK we should get rid of them, but why in the world would you want to increase pollution?

Let local .gov's decide if they want them. Not the fed .gov. I see nothing in the Constitution about pollution standards. I do however see the 10th Amendment.

Exactly.

Posted: 8/23/2005 5:31:48 PM EDT

[#17]

Quoted:

ETA: Look, you can blame whomever you want, but Shell Oil and Amoco and all those other bastards are going to charge whatever dollar amount makes them the most money, whether it be .99 or 9.99. Don't blame the Arabs. Don't blame shortages. Blame the sellers. Oil barrel prices have not doubled in the past year. Demand has not doubled. Supply has not halved. Price HAS doubled, because they know that no matter how much they increase the price, demand will not decrease. So they do, and it doesn't, and they are happy, you are sad, and here we are.

You need to do some studying up. China and India are sucking oil like there is no tomorrow. They do not have the stringent environmental controls the US and Europe do. They are inefficient, but they don't care. They want their economies to continue to grow 8% a year.

We can all stop driving tomorrow, and China and India will become that much more inefficient and voracious in their appetites for oil. It's Jevon's Paradox in action.

Global demand has increased. All of the oil wells that were discovered in the 30s, 40s and 50s are mature and are pumping out saltwater and oil, with the oil returns diminishing. There have been NO NEW DISCOVERIES of oil since the 1970's with Prudhoe Bay, ANWR and the North Sea. We are sucking the known fields dry, and the technology need to get to the remaining oil is insanely expensive. We burn two barrels of oil for each barrel we produce. Do the math. It ain't pretty.

These guys are making money because demand is outstripping supply, and PEOPLE ARE WILLING TO PAY $3 A GALLON.

The minute we decide $3 a gallon is too much and ride bikes to work or telecommute, prices will reduce somewhat.

But the era of cheap oil is now long gone.

Posted: 8/23/2005 5:40:43 PM EDT

[#18]

None!

Posted: 8/23/2005 5:57:11 PM EDT

[#19]

Good post Old_ Painless.

Everyone should have to take a macro economics class.

Posted: 8/23/2005 6:03:06 PM EDT

[#20]

Quoted:
Good post Old_ Painless.

Everyone should have to take a macro economics class.

Ain't it the truth!

So many citizens are so ignorant about economics.

(And by ignorant, I mean no insult. Ignorance simply means "not yet educated" about a subject.)

The average American citizen is ignorant about economics.

Thus do the Demoncrats continue to lie to the public and get away with it.

Posted: 8/23/2005 6:04:19 PM EDT

[#21]

Quoted:
This subject was raised in a thread that my friend SteyrAUG started, and I didn't want to hijack his thread, so here we are.

It is often stated by some on the board that, "The Federal government ought to DO something about the high price of gasoline."

My question is: Where did we get the idea that the Federal Government ought to have anything at all to do with the price of a commodity?

When the price is artificially inflated by a group working in concert to artificially limit the raw ingrediatnts the federal govt can and should use the military to "negotiate" with that organization. Particulary when we have acted as the defenders of that organizations members in so many recent conflicts.

Posted: 8/23/2005 6:06:31 PM EDT

[#22]

Quoted:
The demand for energy exceeds the supply.

Wrong. The supply of crude is artificially limited by OPEC.

Posted: 8/23/2005 6:15:36 PM EDT

[#23]

Quoted:
Quoted:
Buying gas isnt like buying apples.

Sure it is.

Don't like the price of apples? Quit buying them or buy less.

Don't like the price of gasoline?

Do the same.

There are only a handful of suppliers who fix their prices.

"Price fixing", i.e., working with competators to "set" the price of gasoline is illegal and aggressively prosecuted.

Yet price fixing of the raw ingrediants is allowed. The single biggest factor in the price of gas is the price of crude oil. OPEC artificially limits the supply to keep prices high.

Posted: 8/23/2005 6:19:31 PM EDT

[#24]

I do know one thing and that's if the price of gas stays at or rises even further, the Republicans can kiss their majority goodbye. And for comparison let's look at it this way; Clinton had the booming 90's and Bush has the busted '00's where a war raged and gas doubled. Who do you think the ~~country~~ middle class will vote for?

Posted: 8/23/2005 6:19:59 PM EDT

[#25]

The problem with gas prices is OPEQ. They set the prices. Therefore we are subjects to Saudi.

Posted: 8/23/2005 6:21:40 PM EDT

[#26]

Quoted:
Quoted:
I've asked this before, and never really got a response.

What if the US were to team up with several other industrialized nations, and form the "Organization of Petroleum Purchasing Countries"? We'd bid out for oil to OPEC, as well as non-OPEC outfits like the Russians, and name our own prices backed with huge purchasing power.

Okay, let's look at that.

We and several other countries get together and tell OPEC, "From now on, we will only give you $10 a barrel for your oil."

They say, "Nope, we won't sell it for that".

What do we do then?

Start filling every US flagged tanker with free Iraqi crude. If that doesnt work explain to kuwait at the end of the brl of many very large guns that they owe us big time for Desert Storm and they will sell us their oil at a fair price. if they refuse we take back that nation which we rightfully won from Iraq. If that doesnt work we explain to Saudi Arabi how they owe us for Desert Shield and will sell use oil at a fair price. If they refuse we invade and take it.

Posted: 8/23/2005 6:40:18 PM EDT

[#27]

Quoted:
The problem with gas prices is OPEQ. They set the prices. Therefore we are subjects to Saudi.

O-P-E-C

Do you even know what OPEC stands for?

Posted: 8/23/2005 7:05:09 PM EDT

[#28]

Gas 101

Short answer: environmental laws are limiting refinery capacity, and the 50 different blends of pump gas various locations use around the country aren't helping any, either.

No, it's not a conspiracy, it's an object lesson of government over-regulation.
So, thank your Congress-critter for the $3 a gallon prces, because they passed the legislation that created the current market conditions.

Posted: 8/23/2005 7:16:55 PM EDT

[#29]

Its the federal regs that are causing all this bullshit...
Thanks to the E.P.A. asshats...

Like Ronald Reagan more or less once said.

"With all the Regulations and Billions spent. The E.P.A. has not produced one gallon of gas.."

I miss Ronald Reagan.

Posted: 8/23/2005 7:29:03 PM EDT

[#30]

What the Gov't should do is look at the refineries in this country and go 'Guess what, your upgrading them.' And if landowners start to bitch, use eminent domain to move them away.

A lot of the idiots forget that the price of oil is set by the people who buy it on the stock market. Output for the most part is still the same, hell, it actually was increased. The problems lay in the US ability to refine said gasoline in quantities to sate the market.

They are pumping 27,500,000 barrels/day. These figures do not include Iraq at all.

Posted: 8/23/2005 7:29:14 PM EDT

[#31]

Quoted:
Gas 101

Short answer: environmental laws are limiting refinery capacity, and the 50 different blends of pump gas various locations use around the country aren't helping any, either.

No, it's not a conspiracy, it's an object lesson of government over-regulation.
So, thank your Congress-critter for the $3 a gallon prces, because they passed the legislation that created the current market conditions.

Hammer, head, hit.

Posted: 8/23/2005 7:36:09 PM EDT

[#32]

Quoted:
What the Gov't should do is look at the refineries in this country and go 'Guess what, your upgrading them.' And if landowners start to bitch, use eminent domain to move them away.

A lot of the idiots forget that the price of oil is set by the people who buy it on the stock market. Output for the most part is still the same, hell, it actually was increased. The problems lay in the US ability to refine said gasoline in quantities to sate the market.

They are pumping 27,500,000 barrels/day. These figures do not include Iraq at all.

+1

Please move them all to Detroit.. I heard that the mayor is complaining about 12000 homes that have been abandon and need new homeowners.

He said that those homeowners left because of racism. But its actually the high crime rate against white people.

Posted: 8/23/2005 7:56:29 PM EDT

[#33]

Quoted:
Don't blame the Arabs. Don't blame shortages. Blame the sellers. Oil barrel prices have not doubled in the past year. Demand has not doubled. Supply has not halved. Price HAS doubled, because they know that no matter how much they increase the price, demand will not decrease. So they do, and it doesn't, and they are happy, you are sad, and here we are.

Wow. You make these claims that are easily
debunked within 30 seconds of searching.

Regular unleaded gasoline (usg)
08/22/2004: $1.85
08/22/2005: $2.58
Increase: 39%

Light Sweet Crude (bbl)
08/2004: $42
08/2005: $66
Increase: 57%

How's them apples taste, lefty?

Posted: 8/23/2005 7:59:53 PM EDT

[#34]

Quoted:
Quoted:
Don't blame the Arabs. Don't blame shortages. Blame the sellers. Oil barrel prices have not doubled in the past year. Demand has not doubled. Supply has not halved. Price HAS doubled, because they know that no matter how much they increase the price, demand will not decrease. So they do, and it doesn't, and they are happy, you are sad, and here we are.

Wow. You make these claims that are easily
debunked within 30 seconds of searching.

Regular unleaded gasoline (usg)
08/22/2004: $1.85
08/22/2005: $2.58
Increase: 39%

Light Sweet Crude (bbl)
08/2004: $42
08/2005: $66
Increase: 57%

How's them apples taste, lefty?

But demand has doubled or it wouldn't be sold.

Posted: 8/23/2005 8:00:34 PM EDT

[#35]

The government should take over the entire Middle East and make it the 51 state called Oil Land. Any resistence coming from Oil-Land should be met with thermo-nuclear retaliation.

Any domestic asshole who does not like this policy should be denied any of the spoils that come from our newly claimed land.

Posted: 8/23/2005 8:11:03 PM EDT

[#36]

Quoted:
But demand has doubled or it wouldn't be sold.

No, it has not. The fixed cost part of the equation
for the oil companies (e.g. the cost of oil) has
increased at a higher rate than the retail price.
If anything, the oil companies should be losing
money on this deal.

Of course, the economies of scale, contractual
deals, and sales of non-gasoline products could
easily make up for this perceved "loss" of gasoline
profits.

Of course, I might be missing your point (or,
potentially, the sarcasm).

Posted: 8/23/2005 8:40:28 PM EDT

[#37]

Quoted:
Quoted:
Quoted:

Personally, I think that somewhere somebody is getting rich off of all of this.

But I don't think it is Dick Cheney.

You are certainly correct.

The folks "getting rich" are the Arabs.

Why?

Because they own most of the land that has the oil under it.

Now, what we do about that problem is the subject for another thread.

Last August, ConocoPhillips traded at $35.64/share. Today it's $63.21 (52 week high was just over $66 a week or so ago) per share.

ExxonMobil: $44, now $59.07

Chevron: $46.21 now $60.34

I think the oil companies are doing pretty well on all of this.

Remember the Alamo, and God Bless Texas...

The price of the stock (what people are willing to pay for a share) has nothing to do with the price of pil at the pump. Two years ago IBM was at approximately $55/share, In January it was at almost $100/share. The price of their product didn't skyrocket, nor did the demand go through the roof.

Posted: 8/23/2005 8:49:45 PM EDT

[#38]

Great post OP!

I only disagree a bit about the education thing. The mentality that the govmit should "do something" cuts across socioeconomic and age boundrys. I have heard rich (presumably better educated) people as well as old (presumably educated in the "old school" system, thus better educated) people complain much the same.

All the while, they bust down the interstate at 80+ mph.

My dear old Dad even said something about it at the supper table Sunday. I asked him when cheap gas was added to the Bill of Rights. He got kind of pissed. I mention this because I believe there is some irrational water cooler herd mentality that causes this. Dad knows better. He has two Masters Degrees, one of which is an MBA. Yet he thinks cheap gas is a God given right.

Go figure.

I think the gubmint should do somthing about buying me practice ammo. :)

Buck

Posted: 8/23/2005 9:45:06 PM EDT

[#39]

If our economy was indeed a true free market, we'd be trading illegal alien virgins for barrels of oil, thereby reducing a) the illegal alien population, b) the price of gas, and c) the suicide bombings.

(Man, I am soooo going to hell now.)

Posted: 8/24/2005 4:18:56 AM EDT

[#40]

Quoted:
What the Gov't should do is look at the refineries in this country and go 'Guess what, your upgrading them.'

Once again, while I agree that refining capacity needs to improve, where would we get the idea that the Federal Gooberment ought to have the right to "tell" the oil companies that they must "upgrade".

The federal government has no such right or just power.

What they ought to do instead is get their stinkin' noses out the free enterprise business and let the market, unfettered by over-regulation, fix itself.

The FG needs to quit placing such silly EPA restrictions on refineries so that the refineries will then find it profitable to invest in upgrades. If it is profitable to invest in such upgrades, they will do it.

No new "laws" needed.

Posted: 8/24/2005 4:19:28 AM EDT

[#41]

Quoted:
Quoted:
Gas 101

Short answer: environmental laws are limiting refinery capacity, and the 50 different blends of pump gas various locations use around the country aren't helping any, either.

No, it's not a conspiracy, it's an object lesson of government over-regulation.
So, thank your Congress-critter for the $3 a gallon prces, because they passed the legislation that created the current market conditions.

Hammer, head, hit.

BAM!!!

Posted: 8/24/2005 4:24:51 AM EDT

[#42]

Quoted:
Great post OP!

I only disagree a bit about the education thing. The mentality that the govmit should "do something" cuts across socioeconomic and age boundrys. I have heard rich (presumably better educated) people as well as old (presumably educated in the "old school" system, thus better educated) people complain much the same.

All the while, they bust down the interstate at 80+ mph.

My dear old Dad even said something about it at the supper table Sunday. I asked him when cheap gas was added to the Bill of Rights. He got kind of pissed. I mention this because I believe there is some irrational water cooler herd mentality that causes this. Dad knows better. He has two Masters Degrees, one of which is an MBA. Yet he thinks cheap gas is a God given right.

Go figure.

I think the gubmint should do somthing about buying me practice ammo. :)

Buck

You are certainly correct.

Many that say such things, if confronted by someone that asks the proper questions, will realize the error of their position.

I guess I simply long for a general public that is educated enough to always assume that economic problems ought to be "fixed" by the free enterprise system and not Big Brother.

I don't know how far back into history we would have to go to get to this understanding, but I am sure that if we asked the Founding Fathers, "Is it the role of the Federal Government to regulate the price of a commodiy?", they would have looked at you like you were crazy to even ask such a question.

But the "entitlement" generation has lost that clarity of focus.

Posted: 8/24/2005 4:52:18 AM EDT

[#43]

Economics 101 teaches us, and history certainly proves it (with a vengence), that when governments dictate price, freezing it in place below market value, shortages immediately follow. Government can not alter the law of supply and demand any more than it can alter the laws of motion, gravity, or the value of pi.

Posted: 8/24/2005 4:55:16 AM EDT

[#44]

I am not reading going to read all of the pages...but if this has not been said...I want to lay it out there.

If this is some kind of Mid Eastern/ Bin Laden conspiracy to attempt to break us...then the feds ought to step in....otherwise it is outright price gouging and if you don't want to pay it...don't drive...the decrease in demand will lower the prices...

I am not a tin foil hat guy...but you never know.

Posted: 8/24/2005 5:35:13 AM EDT

[#45]

My wife works for an oil company - it will remain nameless.

When the price of crude goes up, she inputs a price change ASAP. Late nights, no sleep, the whole department is on overtime.

When the price of oil goes down - nothing happens.

You COULD be paying lower prices at the pump, but the oil companies are trying to make as much money as possible.

Obviously, there are other factors there, but a few cents here and there can make one heck of a difference long term.

Last year we recived a nice Christmas bonus, and they hand out overtime like candy. The company she works for is sitting on a lot of extra cash right now.

Av.

Posted: 8/24/2005 6:03:34 AM EDT

[#46]

Quoted:
BAM!!!

Precisely.

As I said in my first post, all the .gov should do is undo the part that they have played in causing gas prices to skyrocket.

6 or 7 years ago I remember paying 99 cents a gallon for 89 octane. I sound like an old timer saying "Remember when gas was 99 cents a gallon?"

Posted: 8/24/2005 6:21:16 AM EDT

[#47]

Quoted:
My wife works for an oil company - it will remain nameless.

When the price of crude goes up, she inputs a price change ASAP. Late nights, no sleep, the whole department is on overtime.

When the price of oil goes down - nothing happens.

You COULD be paying lower prices at the pump, but the oil companies are trying to make as much money as possible.

Obviously, there are other factors there, but a few cents here and there can make one heck of a difference long term.

Last year we recived a nice Christmas bonus, and they hand out overtime like candy. The company she works for is sitting on a lot of extra cash right now.

Av.

And that companies will eventually have problems. Someone will either undercut them or enter the market to undercut them and they will lose market share.

Posted: 8/24/2005 6:32:53 AM EDT

[#48]

Quoted:
The real reason gas is high:
US oil companies have shut down over 51 refineries in the last 15 years, severely limiting refining capacity.

“As observed over the last few years and as projected well into the future, the most critical
factor facing the refining industry on the West Coast is the surplus refining capacity, and the
surplus gasoline production capacity. The same situation exists for the entire U.S. refining
industry. Supply significantly exceeds demand year-round. This results in very poor refinery
margins, and very poor refinery financial results. Significant events need to occur to assist
in reducing supplies and/or increasing the demand for gasoline.”

Internal Texaco document, March 7, 1996

“A senior energy analyst at the recent API (American Petroleum Institute) convention
warned that if the U.S. petroleum industry doesn’t reduce its refining capacity, it will never
see any substantial increase in refining margins…However, refining utilization has been
rising, sustaining high levels of operations, thereby keeping prices low.”

Internal Chevron document, November 30, 1995

wyden.senate.gov/leg_issues/reports/wyden_oil_report.pdf

I don't necessarily like Wyden, but if what he says is true, then at least part of the responsibility for the high cost of gasoline rests on the shoulders of the oil companies. And say what you want about keeping the government out of commodities pricing (I agree), it cannot be ignored that the high cost of fuel is detrimental to the overall economy, which is a bad thing.

Question: What is it when Enron shut down power plants to drive up the price of energy?
Answer: Market manipulation, and the government doesn't like it.

Question: What is it when the energy companies in the US start shutting down refineries to raise the price of gas?
Answer: Market manipulation.

Remember the Alamo, and God Bless Texas...

YOU could educate yourself, put together a business plan, borrow money, and build a refinery to operate on lower margins than big oil. When they go to undercut your price, there are antitrust laws to help protect you. Prices will not come down until this happens, and I sure hope our government doesn't try to declare the entire industry a utility and regulate prices as such.

Posted: 8/24/2005 6:45:24 AM EDT

[#49]

Quoted:
Quoted:
What the government CAN do to effect gas prices:

1. ~~Reduce the insane tax on every gallon of gas~~ Temporarily decrease prices until gas companies start charging $2.70 and making all of the money for themselves.
2. Stop allowing the BS environmental claims of wackjobs who WANT to tank the US economy to block exploration of and exploitation of domestic oil resources.

Those are things government CAN and SHOULD do about gas prices.

O_P is right: Government is not supposed to fix everything. But the stupidity of the ~~.gov~~ people who drive like idiots, drive gas hogging vehicles when a <gulp>civic</gulp> would suit the application, and lazy people has helped produce the situation we are in. By using some common sense and backing off of the usual ~~.gov~~ fuel inefficientsilliness, gas prices can come down a bit. Government should only fix the problems government created in this situation.

No more.

Fixed.

ETA: Look, you can blame whomever you want, but Shell Oil and Amoco and all those other bastards are going to charge whatever dollar amount makes them the most money, whether it be .99 or 9.99. Don't blame the Arabs. Don't blame shortages. Blame the sellers. Oil barrel prices have not doubled in the past year. Demand has not doubled. Supply has not halved. Price HAS doubled, because they know that no matter how much they increase the price, demand will not decrease. So they do, and it doesn't, and they are happy, you are sad, and here we are.

PRICE HAS NOT DOUBLED! DOE Link

It has gone up approx 40%.

Posted: 8/24/2005 9:51:16 AM EDT

[#50]

Quoted:
Quoted:
Don't blame the Arabs. Don't blame shortages. Blame the sellers. Oil barrel prices have not doubled in the past year. Demand has not doubled. Supply has not halved. Price HAS doubled, because they know that no matter how much they increase the price, demand will not decrease. So they do, and it doesn't, and they are happy, you are sad, and here we are.

Wow. You make these claims that are easily
debunked within 30 seconds of searching.

Regular unleaded gasoline (usg)
08/22/2004: $1.85
08/22/2005: $2.58
Increase: 39%

Light Sweet Crude (bbl)
08/2004: $42
08/2005: $66
Increase: 57%

How's them apples taste, lefty?

Lefty don't like them apples.

But it is easier to hate "big oil" in the US that you feel the Big Brother Government could make do something, than to face the reality that it is the owners of the oil, i.e. OPEC, that are the ones that control the price.

And the only reason that OPEC can set the price is because of Supply and Demand. We presently Demand all the oil they can pump.

The only solution, short of an invasion of the mid-east, is to lower demand.

[ARCHIVED THREAD] - The Proper Role of the Federal Government in Controling Gasoline Prices (Page 2 of 3)

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