Marx's Role in Gas Prices

Gasoline, as a source of power for transportation, may very well be a thing of the past within the next couple of decades.
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Yes, but that fact won't get me to the office tomorrow morning.

More drilling is not the answer. Alternative sources of energy are. Something renewable, sustainable and environmentally friendly.
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That fact won't get me to the office tomorrow morning either.

So, won't you concede the point that more production is the answer TOMORROW, while alternatives are the answer within the next couple of decades?
 
So, won't you concede the point that more production is the answer TOMORROW, while alternatives are the answer within the next couple of decades?
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Short term perhaps but in reality the oil companies would simply raise the prices to continue with the current line of profit, they have a monopoly and certain they will not give up easy, water shortages along with high prices will be the next giant problem.
 
Yes, but that fact won't get me to the office tomorrow morning.
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More domestic production, as pointed out by PBP, will only increase the surplus and prices by a a maximum of 5%, and that will take 10 years. That won't get you to the office tomorrow anymore efficiently or noticeably cheaper, than the current output.
 
Unfortunately it goes back to the individual corporate mentality on the part of the industry involved. I work for a large corporation which is right now seeing record profits..Great, but what is even greater is that they are using those profits to expand and reinvest in us. The businesses that have created those profits. I think it to be very narrow minded to blame one half of the politicos sitting in Washington, particularly since one half just recently gained majority. While the liberal left contains a lot of tree huggers, the reality is that they are elitist, just like the right in Washington who really don't give a rats' !@@ how much we have to pay at the pump. They just keep pounding the pork and say soothing words to their constituents to get re-elected.
elkman06
 
A person has to be pretty ignorant to not see that there is not incentive to build new refineries. Lets say I was a carpenter and I had the option of building 10 jewelry boxes and selling them for $1000 each or building 100 boxes and selling them for $100 each...knowing I was guaranteed to sell all of the boxes at the marked price which ever way I decided to go. Which is more beneficial and profitable for me?
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The last pending application to build a new refinery in the US was quashed last year by an Indian Tribe in AZ claiming it would pollute their holy grounds. The application was in process 4 years and faced contrary litigation from the start.

This anecdote is typical of litigation against refinery expansions, too, forget adding a new one. Read the history, your parable does not correlate to the facts of the matter.

Where have you been that you think a company can just build any facility it wants wherever and whenever? The permitting process for refineries/power plants, etc. involve government agencies out the wazoo. If you are unaware of this, you live in a cave.

The governor of KS just denied permits for 4 coal-fired power plants as, in her opinion, the emergency of MMGW required "bold steps". This kind of bold step is going to put people out of jobs and shrink economic opportunity.

How is this mindset helpful in our current situation?
 
Short term perhaps but in reality the oil companies would simply raise the prices to continue with the current line of profit, they have a monopoly and certain they will not give up easy, water shortages along with high prices will be the next giant problem.
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As to obscene profits, measure profitability by profit on sales. You find the oil companies making about what the S+P 500 (in average) does, while Microsoft makes double. Who is gouging whom?

Q1-08 results show declining profit on sales across the board, particularly in the sale of refined products as cost increases in crude are not passed on to consumers. IF the oil companies had their "monopoly", this would not be the case, they could pass on any price they chose.

Have you ever given a slight thought to why gas prices differ from station to station, place to place? It is absurd to talk about "monopoly" when you have competition holding prices back.

Dow Chemical, among others, is building plastics plants overseas because of the price and supply of natural gas in the US. They can't build where they want to be close to supplies and supplies are dubious because of restrictions on drilling. Those jobs, tax revenue and all the other benefits go elsewhere.

Hope you enjoy the view, unobstructed by nasty industry. Subsistence farming is not so bad a life. Look at Zimbabwe...
 
Just think about the fact that the Government makes more money per gallon of fuel than the Oil companies.
The Feds collect a Tax per gal.
The State collect a Tax per gal.
Both the State and Locals collect a Sales Tax and that keeps going up as the price increases.
 
HarrySchell

More oil refineries are not even really needed. I went to college at Marshall University which is right next to Kenova. The refineries there constantly ran at 25% output. The companies almost always have at least 25-50% of their production capabilities shut down because over-production causes price drop. They claim it is because of dis-repair and lack of manpower but that is an obvious crock.

I read an article in the Atlanta airport one time that dealt with oil refineries. It talked about the billions of dollars of tax payer money that oil companies have collected to maintain and expand refineries and how they have redirected almost all of it into other activities while continuing to allow large sections of current refineries to sit idle and decay.

There has not been a legitimate attempt to build refineries by the oil companies in decades. If they truly wished to build refineries there are tons of locations where it would be easy to do it, and with imminent domain laws they would have little problems. The union that covered the refineries in Kenova tried to force the plant to open more production and not lay off workers and were squashed by the oil companies.

People in Oregon are trying to fight a natural gas company and have been pretty much told "tough cookies" since energy is a state concern and cannot be denied.
 
WA's two step method to lower gas prices in one year.

1. start drilling...DRILL DRILL DRILL
2. Reduce demand

WA has cut his gas consumption 15% already. WA combines trips. SWMBO doesnt have WA pick her up, she takes the bus. WA even WALKED to the Convenience store...yes, he did!!!!

Wildcarryingthe45ofcourseAlaska ™
 
WA has cut his gas consumption 15% already.
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That's all? Just 15%??? I cut my gas consumption by at least 50% every summer. Mostly because I ride my motorcycle everywhere and it gets four times the gas mileage of my truck and twice that of my car. :)

Also, I disagree with you on the drilling issue. Like I said, I have seen no evidence what-so-ever that increased drilling would affect price at all. In fact, most case studies I have read say exactly the opposite. They say all it would do it in the short run would be to divert huge amounts of money into the hands of the oil companies while removing it from the tax payers pocket.
 
I read an article in the Atlanta airport one time that dealt with oil refineries. It talked about the billions of dollars of tax payer money that oil companies have collected to maintain and expand refineries and how they have redirected almost all of it into other activities while continuing to allow large sections of current refineries to sit idle and decay.
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Since you read one article, you are now expert? Gee, I thought it took more work.

I can't speak to Kenova or the issues surrounding that expansion. Can you speak to the Arizona refinery? Was your time near Kenova when oil was $12/barrel and oilcompanies were losing money? Or under current conditions?

Eminent domain is unlikely to be used to build refineries. Primary regulation for that is going to come out of local, state and Fed EPA's, which don't have ED authority. Eminent domain is useful to local governments within city limits to hand over properties to developers of retail or residential projects. Ever hear of it being used to pave the way for any kind of industrial project such as a refinery? I have not but it doesn't mean it hasn't happened.

And what was the mechanism that "gave" taxpayer money to oil companies? IF you are talking about "subsidies" such as depletion allowances or depreciation, those are tax provisions just like the R+D credit which benefits Microsoft. Is therefore Microsoft being "subsidized" by taxpayers?

I agree partly that additional refinery capacity is not so useful without additional supplies, and that is where the drilling can reduce the price of crude going to refineries. Depending on where the well is, flowing wells can be on-line in less than a year. The 10 year mantra was what was touted 10 years ago to justify doing nothing. Here it comes again. It is not accurate.

Drilling offshore usually meets, in my empirical sample, the example of the Santa Barabara Channel blowout of 1969. A big mess, to be sure. All traces long gone, more sea life than before. And the experience of Katrina, with multiple platforms destroyed and no spills, the improvement in technology to prevent blowouts, of course none of that appears to have happened, or the experts would know about it (they don't, or won't).

"Settled science" says we can't do anything. That is a crock as science continues to move ahead, and even Algore is hiding with all the new data about MMGW being a hoax.

When you stop learning you start dieing.
 
Ah but you have a cycle PP, I don't.


hey say all it would do it in the short run would be to divert huge amounts of money into the hands of the oil companies while removing it from the tax payers pocket.
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My sources tell me there is enough oil and gas up here to make us look like Saudi Arabia. The infrastructure to get it to market is already in place and if the US would unite around the issue, it could be on line in less than two years...they built the Alaska Highway in less time during WW2 :)

All they gots to do is.....DRILL DRILL DRILL......

WildandmaketheeskimosrichAlaska ™
 
I think increasing the margin requirements on commodities would have the desired effect -- immediately. If you buy stock on margin you need to pony up 50% (i.e., $100 buys $200 of stock). With commodities, you need 10% to buy (i.e., $100 buys $1000 of oil futures). With the stock market in the tank for the last year and a half most of the really big money has been pouring into commodities. In case you haven't noticed oil is not the only thing going up. Oil is up about 120% in the last year with no significant changes in either supply or demand. One difference is big players like Goldman Sachs investing billions and touting that the price per barrel will reach $200 by year end.
 
harrys ghost

You are right about that.

And in a situation like that drilling does not help prices at all since the price increase is not based on availability or demand.

When we were overseas last year it was odd to watch foreign news and see how differently they tell the story. You don't get the lobbyist version of the story, you get the reality that OPEC is producing oil at a rate that is still creating the same amount of daily surplus that they were two years ago.
 
Marx would spin in his grave!

If he learned that the majority of "welfare" households in the US have their own cars. Last I heard the rule was no more than 2 cars per person to avoid being cut off from the dole. Average poor person in the US has an income greater than the middle class of 70% of the countries in the world and lives in a household where one household member does about 17 hours per week of productive work. Bottom line is that it doesn't matter if the Wildalaskas of the world cut down their gas consumption until they stop buying gas for the lazy and indifferent. My 2 cents.
 
Your source doesn't happen to be a big fat blowhard with an oxycontin addiction does he???
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Naw a skinny one :)

Seriously, I believe him as he is one of the exploration guys....the Oil Companies got the info locked up tighter than Baracks relationship with the media :)

We just had another lease sale you know :)

WildicantwaitformypfdAlaska ™
 
Seriously, I believe him as he is one of the exploration guys....the Oil Companies got the info locked up tighter than Baracks relationship with the medi
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Never believe the car salesman on the condition of the car. :)

Like I said before, every geology analysis I have seen says different.

Philip Morris has doctors on staff that regularly put out studies that suggest nicotine is not addictive and that smoking does not cause cancer.
 
if you, or the public has seen it, it's agenda driven
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Not always true...the old rule of "consider the source" works both ways. :)

And i would go with "european consortium of top geologists find" over "employee of the oil companies says" any day of the week. :)
 
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