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Pump this

By jkaras ·
Sorry for the rant but the office is a-buzz with everyone complaining about the current gas price situation. It is getting out of control, we won right? Why then is it so much higher, other than blantant greed. I cant fathom the credible reason for the hike and blaming higher security costs for the oil just doesnt measure up since our military is protecting them under taxpayers dollar.

Here in Florida we have a non competitive law to keep gas prices in check to ensure that mom and pop gas stations dont get run over by conglomerates like Wall Mart in price wars that is currently being reviewed to abolish. If this law gets abolished then there is no stopping corporate America from lowering prices to stamp out competition only to raise it back to any price they want once the competition is gone.

What issues are the rest of you experiencing and prices in your repected states and countries? We are paying about $1.85 for regular, thats right the cheap stuff, not premium, or middle of the road quality. Some people have a belief that if we all boycott both Exxon and Mobile gas, the prices will come down since they are the biggest players and once their profit cushion is depleated they will lower prices forcing the others to follow suit. Is this hogwash or a decent idea?

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Why the price of gas is higher

by maxwell edison In reply to Pump this

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First of all, the people who made the claim, "Iraq is all about oil", should now retract that statement as being bogus because, now that we "could" control all of that country's oil, it's obviously not the case. In addition, the oil-for-food program, it is now known, was used and abused, not by the USA, but by the United Nations, France, Russia, and Iraq itself. (No wonder they were against the war.)

Another popular misconception leads people to "blame" the Saudis in particular, or the middle east in general. This is misdirected blame. Did you know that the USA imports more oil from Canada and Mexico than from EVERY middle east country COMBINED, and that only 17 percent of USA oil imports come from Saudi Arabia? Almost 50 percent of all USA oil imports come from three countries, Canada, Mexico, and Venezuela.

See link:

http://www.eia.doe.gov/neic/rankings/crudebycountry.htm )

In order to get a realistic answer to your question, one should avoid the normal clich?s, such as "it's all about greed", "those greedy oil companies", and so on. Don't fall into those traps. Those kinds of sentiments are planted only to entice hard feelings, for whatever reasons, among an unknowing and unsuspecting populace.

And there's no merit whatsoever to that Exxon and Mobile email thing that's circulating.

See this link:

http://www.snopes.com/inboxer/petition/gasout.htm

I think in order to find the accurate cause of any problem, and to pursue avenues to successfully solve the problem, a person should take all emotions out of the equation. Blaming the "greedy oil companies" is an emotional response, and it will only serve to cloud the issue and make the solution to a problem even more elusive.

Also, don't let "statistics" mislead you either. Consider these:

On one hand - The USA is the world's largest energy consumer.

On the other hand - The USA is the world's largest energy producer.

On one hand - The US is the world?s major oil consumer, with a per capita consumption of 28 barrels a year, as compared to only 2 barrels a year for each Chinese citizen.

On the other hand - China is now the world's second largest oil consumer, and is expected to consume over 5 million barrels a day in 2004.

On one hand - The United States is estimated to be consuming an average of about 19.9 MMBD (million barrels a day) of oil in 2003, up from 19.8 MMBD in 2002, an increase of less than one-half of one percent.

On the other hand - China has increased oil consumption by 20 percent since 2002. Moreover, China is expected to consume 12MMBD by 2025, an increase of well over 100 percent

(Keep in mind that the USA produces 8 MMBD of crude itself, so we import "only" 60 percent of what we use.)

Having said all that, the answer to your question is simply supply and demand. Why are they limiting the supply, you might ask? Well, they're not. Actually, the world's oil supply has risen over the past year. Demand, however, has risen at an even higher rate, and the increase in consumption by the USA is insignificant compared to other countries.

Some food for thought:

The refineries in the USA (converting from crude to gasoline) are operating at 100% capacity.

What determines the price of a gallon of gasoline?

43% - The price of crude oil.
32% - Federal, State, and local taxes.
13% - Distribution, marketing and retail dealer costs and profits.
12% - Refining costs and profits. (This component varies from region to region due to the different formulations required in different parts of the country.)

Historically, ever since 1985, March through May, we have always seen an increase in the price of gasoline. Many refineries shift from winter production, which includes the process of making gasoline cleaner burning for the winter months, to summer production. Additives are included in winter production to comply with cleaner burning regulations.

A simple way to answer the question, why are gasoline prices higher?

Because supply has increased, but demand has increased at an even higher rate, and expenses for the production have also increased.

What can we do about it? About all we can do (as consumers) is to consume less. This will, in theory, bring the price down and keep our individual total gasoline cost from rising, maybe breaking even, and maybe even bring it down.

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Strange message appearance

by maxwell edison In reply to Why the price of gas is h ...

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I have no idea why part of my message is bold.

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its ok

by jkaras In reply to Strange message appearanc ...

I rather liked it. Good points as always. I did know that ths is the season for higher prices but its getting out of hand. AS for Exxon/Mobile thing it was more aimed at humor than reality but its like one of those despiration things that make you say "why not"? Max who controls the rate of crude oil prices? Is it based on overall production, avilable reserve counts, or an elected body of major distributers?

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A question you asked

by maxwell edison In reply to its ok

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You asked, "Who controls the rate of crude oil prices?"

It depends on where it comes from, I suppose. But OPEC, the Organization of Petroleum Exporting Countries, certainly holds a lot of the aces in the hole (and oil in the ground). It was some very interesting research. Thanks for asking the question. Here's what I found:

Canada: Petro-Canada, created by the Canadian government as Canada's national oil company.

Saudi Arabia: The Saudi Royal Family.

Mexico: Mostly Pemex, the world's fifth-largest oil company, and, to a large degree, the government of Mexico. Nearly every peso of Pemex's profits goes to run the government of Mexico. The company, after paying taxes and royalties, actually lost $3.5 billion in 2001, and the company loses at least $1 billion a year to corruption.

Venezuela: Venezuela nationalized its oil industry in 1975-1976, creating Petroleos de Venezuela S.A. (PdVSA), the country's state-run oil and gas concern.

Nigeria: Nigeria is the most corrupt country on the face of the earth. (Or is it second behind Bangladesh?) So the answer is criminals.

Iraq: Iraq's top U.S. administrator right now is Paul Bremer. In June, when the transition hands the government over to Iraqis, who knows?

United Kingdom: I'm not sure how much, if any, government control is placed on oil production, but it's produced by independent oil companies including the major players, Pentex Oil and BP-Amoco.

Norway: Prior to 1999, the Norwegian government owned 100% of the country?s largest oil company, Statoil and a majority stake in the second largest oil company, Norsk Hydro. Statoil also managed the State Direct Financial Interest (SDFI), which represented the state's holdings in 150 offshore oil and natural gas fields, as well as about 40% of total. I suppose that would make it Norway's Minister for Petroleum and Energy, Einar Steensnaes.

Angola: Under Angolan law, oil revenues are to be deposited with the Angolan National Bank; KPMG determined that those revenues, were instead channeled directly through the State Oil Company, Sonangol or through the Presidency. By the way, in January 2004 Human Rights Watch Report alleged that between 1997 and 2002, nearly $4.22 billion of Angola's estimated $17.8 billion in oil revenues was "unaccounted" for by the Angolan government.

Colombia: The Colombian government owns the country's hydrocarbon reserves. Oil and natural gas development is regulated by state oil company Empresa Colombiana de Petroleos (Ecopetrol) and the Energy and Mines Ministry.

That's the top 10 oil importers to the USA. Combined, they provide 58% of the oil consumed by the USA.

We produce 42% of our own black gold, Texas tea, primarily concentrated in four states. Texas at 24%, Alaska at 22%, Louisiana at 20%, and California at 19%. The remaining 15% is spread out among several states including Pennsylvania, Kansas, Colorado, Wyoming, Montana, et al.

Who controls oil production within the USA? The whacko environmentalists, I suppose, or else we'd open up more oil fields in Alaska and off-shore.

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Maxwell I think you have stumbled on

by HAL 9000 Moderator In reply to Strange message appearanc ...

An undocumented Feature of the new TR. Now exactly what did you do different?

Also have you noticed that all of the current discussions that you where involved in have disappeared to be replaced by long dead ones? Or is it just me?

Col

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The undocumented feature and current discussions

by maxwell edison In reply to Maxwell I think you have ...

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Colin,

What did I do differently? Well, I didn't "intentionally" do anything differently. My guess is that something in the link that I posted triggered some HTML code to print the remaining text in bold.

And yes, I have noticed the shuffling of current discussions, the current ones no longer atop the list. However, something that is now working again will help us overcome that snafu. If I, for example, do a search for Maxwell Edison, I'll get a list of all my discussions sorted by date. (In your case, of course, you'll have to search for Col Luck.)

Change and tinkering - gotta' love it. (At least that annoying ad disappeared.)

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Has TechRepublic website been compromised ?

by jardinier In reply to Maxwell I think you have ...

Hi Colin. The same has happened to my discussion list. It seems rather implausible that this could happen without a deliberate act by the webmaster, so this makes me suspicious that someone has hacked into TR and made these changes. Any thoughts anyone?

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OK so it wasn't just me

by Oz_Media In reply to Maxwell I think you have ...

Just got back and noticed the same, I figured it was just a glitch as I have seen this before but then it goes to my regular discussion list if I close and restart TR. Well not this time, oh well.

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Strategic Planning

by TheChas In reply to Pump this

As Max stated, the cost of energy has risen mainly because demand is out-pacing supply.

Further, the ONLY way to reduce the per unit cost of energy is for EVERYONE to use LESS!!!

As to boycotts, unless you can boycott ALL stations served by a specific refinery, all the boycott will do is hurt the independent retailer who operates the station.

Now, there are other factors at play here.

Over the past few years, most new power plants that have been built run on natural gas.
This has contributed to price increases for natural gas and some shift from natural gas to other fuels.

The general trend toward consolidation and energy trading also causes the price to rise.
(Max, name me 1 merger that has resulted in lower prices and higher employment)

Then, the energy producers have not been able to get all of the policy changes they expected when George W. Bush was elected President.

Restricting supply and raising prices will "soften" the American people and Congress to support the changes they want:

Reduce environmental impact rules for new refineries.

Reduce or eliminate ethanol based fuels.

Reduce or eliminate "regional" blends of gasoline.

Open more federal and off-shore areas for exploration. (think Alaska)

The oil in Iraq has not come into significant play yet as the infrastructure was in much worse shape than anticipated.
The recently announced OPEC production limits are based on the assumption that oil will start flowing out of Iraq.

It does not matter where the crude oil comes from. The cost is based on the world market price.

The "best" thing that individuals can do is to drive "smart"!
On my drive to work, I figure I use at least 25% less fuel than my fellow commuters.
How?
I don't race to the next red light. I pace myself so that I get to the line of traffic just after the light changes to green and traffic starts moving.

I arrive at work at an "off-peek" time so traffic and delays are at a minimum.

Next, I use different routes at different times of the day based on how much time I spend waiting for traffic. While my drive time is longer on the slower route, my fuel use is less than on the faster route since I am not setting for 2 light cycles at each traffic light.

Finally, I am getting back in shape so that I can use my bicycle as much as practical.

Chas

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Driving "smart"

by Jennifer.Gardner In reply to Strategic Planning

Chas has some great suggestions. Here's what I'm doing:

I have a 40 mile highway drive to work every day. In the past, I would drive 72 - 74 mph. At this rate, I could travel about 335 miles on a full tank of gas. Since the prices have gone up, I've slowed down to 66 - 68 mph. I filled my tank on Sunday evening, and should about run out of gas as I'm pulling into my driveway tonight. I should have driven about 400 miles in the week.

I was surprised by what a difference it makes, and I'm really not getting to work any later in the morning. (plus, I'm not ever worried about speeding tickets!)

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