Bush Seemingly Resigned to High Gas Prices

[YellowLinesandArmadillos]

Despite the actual sarcastic thoughts about the title....why won't the President try some intervention techniques to address oil company profiteering. I know that some of this is demand side driven, but a lot is not based on supply of oil but domestic refinery manipulation, ala, Enron energy market manipulation.

 

He hasn't even threatened opening up the strategic oil reserve to shock these guys to some sanity in their pricing. Long term it won't change the dynamics and maybe this current price shock will actually cause some good old American innovation to another source of energy.

 

But darn, this sure can't help the President, reinforces the perception of lame duck weakness, i.e., his inability to take strong action to address a domestic crisis.

 

]Link

[Crap Throwing Monkey]

Despite the actual sarcastic thoughts about the title....why won't the President try some intervention techniques to address oil company profiteering.  I know that some of this is demand side driven, but a lot is not based on supply of oil but domestic refinery manipulation, ala, Enron energy market manipulation. 

 

There's a hell of a lot of assumption in that paragraph alone. "Oil company profiteering". "Enron energy market manipulation". "Refinery manipulation". I haven't seen any evidence of the first two - beyond the obvious "oil companies are making money" - and scant proof of the third.

 

The Enron comparison, in particular, is egregious: Enron manipulated energy markets because 1) they were the market, they practically invented their market niche, and 2) they blew smoke up everybody's asses with their "We can't tell you how we do business because it's a trade secret" bull sh--. Enron operated in a market they designed by rules they made that they wouldn't disclose with anyone. I don't see the oil companies doing that; quite the contrary, they've been pretty open about their market, their operations, and disclosing their problems (namely: the different state regulations requiring formulations not using MBTE have forced a wholesale switch to an ethanol blend...and ethanol can't be manufactured or shipped fast enough to refineries. In fact, the industry has stated in the past few days that gas prices would drop rapidly if they were allowed to go back to the MBTE blend.)

 

Of course, it's a lot easier for the public to B word about people getting rich of the public's own stupidity and laziness than it is for the public to understand the issue...so I'm sure public pressure for government interference to drive the price down of a commodity that's had it's price driven up by public pressure for government interference is just the answer.

 

He hasn't even threatened opening up the strategic oil reserve to shock these guys to some sanity in their pricing.

 

What's insane about the pricing? Hell, can anyone here quote the breakdown of where every cent paid for a gallon of gas actually goes to? How much of the $3.09 I just paid to put a gallon of gas in my car actually shows up as profit for Exxon?

 

There's also another assumption at work here: that oil companies profit off gas prices. Oil companies do a hell of a lot more than distribute gas at street corners. They operate fields, ship and trade oil, refine, ship and trade refined products. They're some of the largest shipping and commodities trading companies on the planet, and the financial mechanics of swapping a tanker-full of Borneo crude for a tanker-full of Saudi crude in itself is a huge cash machine itself. Try to imagine the profit from filling a tanker with Indonesian oil, shipping it to the Persian Gulf, emptying it and filling it with Persian Gulf oil, and shipping that to Indonesia. That's two million barrels each way...and a VLCC will charge somewhere between $2-$4/bbl shipping...conservatively, that's eight million dollars a round trip, minus operating costs of $30k/day. So on one trip a year, a supertanker pays for itself, and the rest is profit. And that's just profit off shipping, never mind the rest of the business.

 

Oil companies don't need to gouge the American consumer. With oil at $70/bbl, they can get rich the same way bond traders do with American debt: they pick at the crumbs world commerce leaves behind. Take an eighth a percent off every transaction, and that adds up to real money real quickly.

 

...but I digress. My original question was: why is $3/gal gas insane pricing? Because it's more than in the 1950's? Because it's economically unsound, and negatively impacts growth? Because it "hurts"? Last I checked, it's not the '50's, the economy's growing at a healthy - even strong - clip, and $3/gallon gas apparently doesn't hurt. In fact, by most any measure I've yet seen, gas prices don't start to "hurt" in the "1970's gas line" sense until significantly past $4/gallon. So where, precisely, is the insanity?

 

Long term it won't change the dynamics and maybe this current price shock will actually cause some good old American innovation to another source of energy.

 

That, at least, we agree on. Though again, I think the real spur to innovation hits at $4/gallon and above. Or, more likely, things like the utilities deregulation that's going to double electricity prices in MD in the next three years. The impact of $3/gallon gas on the economy is nothing compared to what escalating utility prices would do.

 

But darn, this sure can't help the President, reinforces the perception of lame duck weakness, i.e., his inability to take strong action to address a domestic crisis.

667345[/snapback]

 

I don't think I have to point out that I'm just not seeing the "domestic crisis" angle of "My gas is too expensive, oil companies are bad, bad people." I will point out, however, that President Howdy Doody being unable to take strong action to address a domestic crisis is simply dead-nuts par-for-the-course normal.

[blzrul]

Phooey, it's quite simple. Bush's oil buddies are watching the wheels come off his Administration and just can't resist raping us one last time because they know he's either going to eventually take a stand (to save the Repigs in the midterm election or 2008)...or because it could be a long time before they have someone so friendly to their cause in the Oval office again.

[/dev/null]

Phooey, it's quite simple.  Bush's oil buddies are watching the wheels come off his Administration and just can't resist raping us one last time because they know he's either going to eventually take a stand (to save the Repigs in the midterm election or 2008)...or because it could be a long time before they have someone so friendly to their cause in the Oval office again.

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for a second you started to sound coherant, but then you had to throw in the "Repigs" line to remind everyone what an unbiased level headed opinion you have

[Nanker]

Perhaps THIS might have something to do with the price of gas going higher.

 

"U.S. Energy Secretary Samuel Bodman said the switch to ethanol in gasoline may cause supply disruptions for several months.

 

Bodman said the country's supply of ethanol is adequate overall. The logistics of shipping the additive by barge, rail and truck may cause regional disruptions, he said. Rules that lower the acceptable level of sulfur in diesel fuel and refinery maintenance delayed by last year's hurricanes are also boosting supply concerns, he said.

 

The filling stations that ran out were around Philadelphia and Wilmington, Delaware, AAA spokesman Geoff Sundstrom said. Service stations and fuel terminals can't move to ethanol-based fuel until they empty and clean their tanks, a process that can take as long as two days, he said.

 

``This is related to the conversion from MTBE to ethanol,'' said Jeff Lenard, spokesman for the National Association of Convenience Stores, a trade organization representing more than 2,200 retail outlets. ``It is not necessarily the same thing as supply outages.''

 

Replacing MTBE

 

As many as 60 Dallas-area service stations ran out of gasoline in early April because tanker trucks that would normally be available to re-supply them were used to haul ethanol, according to Valero Energy Corp. spokeswoman Mary Rose Brown.

 

The average U.S. pump price for regular gasoline has risen 14 percent this month to $2.855 a gallon as of yesterday, up from $2.218 a year ago, according to AAA's Web site.

 

Most refineries will have phased out the gasoline additive MTBE, or methyl tertiary butyl ether, by May and replaced it with ethanol in reformulated gasoline. Refiners are wary of liabilities for MTBE that leaks from underground storage tanks and contaminates drinking water.

 

Unlike MTBE, which can be mixed with gasoline at the refinery, ethanol must be shipped separately by rail, truck or barge and blended with gasoline at local terminals. (Ethanol absorbs water - that is why it can't be added at the main refinery.)

[cromagnum]

In 2ooo , gas was 1.10, here in new england, was driving south, and georgia was .92.............2006 gas in newengland right now is 3.oo....Hopefully, after the war in iraq is finished, and their oil production increases, the price will drop...

[GG]

There are 5,968 members on this board.  That number is probably inflated due to various factors, but there are still a lot.  This means that odds are high that at least some of them have to deal with the issues of autism or retardation on a regular basis. 

 

I know you take a lot of undeserved grief in a lot of posts, but anything you take over your comments here is richly deserved.  I think you are realtively young and maybe that is a valid excuse but I'm not buying it.

 

I hope you have no clue about the amount of strain put on people by these afflictions.  If you do, and you still wrote that, I feel sorry for you.  I hope no one dealing with them happened upon your post while seeking a brief diversion from reality. 

 

Blzrul's answer may have been glib and lacking in thought (not unexpected), but yours seems to go out of its way to be far worse.  Maybe you just weren't thinking.  Next time, please think.

 

If you delete your post, I'll delete this.

667468[/snapback]

 

Perhaps this is Ed's attempt at field study in his endeavor to become a social worker.

 

But back to the orginal point. Tom's answer is the correct one. But because his post was longer than two sentences and contained polysyllabic words and supply chain concepts, most people will look at blzrul's answer as the right one.

[TheMadCap]

In  2ooo ,  gas was 1.10, here in new england, was driving south, and georgia was .92.............2006 gas in newengland  right now is 3.oo....Hopefully, after the war in iraq is finished, and their oil production increases, the price will drop...

667406[/snapback]

 

Not likely. Remember, it's not only US demand for oil inflating prices, it's the entire world. I am not even sure that if we massively cut out consumption that it would make a difference. Either way, it is irrelevent, personal sacrifice was never, will never, be a strong point of our spoiled society...

[Crap Throwing Monkey]

Ya know, Tom, comes up with an outstanding, well-thought out answer.

Blzrul ends up sounding like an autistic, retarded 8 year old.

 

Tom, doesn't it get frustrating after awhile?

 

What gets frustrating is that I'm the one diagnosed as mentally ill.

 

That doesn't always make a whole lot of sense to me...

[Crap Throwing Monkey]

I just saw a blurb on CNN that very nicely puts the "gas crisis" in perspective: they were talking to some yahoo who was "doing his part" by buying a motorized bicycle off Ebay for $500. He was "saving gas" with a vehicle that got 87 miles for every gallon of gas...

 

...and no one in the story once pointed out that a normal $500 bicycle can go 87 miles on no gas. Is it any surprise we have an "energy crisis" when stupid sh-- like that passes for "conservation"? We don't have a gas crisis, we have a stupidity crisis...

[Ghost of BiB]

I just saw a blurb on CNN that very nicely puts the "gas crisis" in perspective: they were talking to some yahoo who was "doing his part" by buying a motorized bicycle off Ebay for $500.  He was "saving gas" with a vehicle that got 87 miles for every gallon of gas...

 

...and no one in the story once pointed out that a normal $500 bicycle can go 87 miles on no gas.    Is it any surprise we have an "energy crisis" when stupid sh-- like that passes for "conservation"?  We don't have a gas crisis, we have a stupidity crisis... 

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Where I grew up, someone with a motorized bicycle would have been beaten up. More so because of the helmet, relectors, elbow and knee pads he was wearing.

[Taro T]

Where I grew up, someone with a motorized bicycle would have been beaten up. More so because of the helmet, relectors, elbow and knee pads he was wearing.

667531[/snapback]

Well, Alden always was a pretty barbaric place.

[Ghost of BiB]

Well, Alden always was a pretty barbaric place. 

667534[/snapback]

 

Be surprised at what's under the concrete picnic table slabs in the town park.

[Taro T]

Be surprised at what's under the concrete picnic table slabs in the town park.

667537[/snapback]

Wouldn't know.

 

Since they closes Neeland's (sp?) Dairy there isn't much reason to stop there except for LaPaloma's.

[Adam]

Despite the actual sarcastic thoughts about the title....why won't the President try some intervention techniques to address oil company profiteering.  I know that some of this is demand side driven, but a lot is not based on supply of oil but domestic refinery manipulation, ala, Enron energy market manipulation. 

 

He hasn't even threatened opening up the strategic oil reserve to shock these guys to some sanity in their pricing.  Long term it won't change the dynamics and maybe this current price shock will actually cause some good old American innovation to another source of energy.

 

But darn, this sure can't help the President, reinforces the perception of lame duck weakness, i.e., his inability to take strong action to address a domestic crisis.

 

]Link

667345[/snapback]

Why go for the temporary solution- the reserves need to be for emergencies. Thinking long term is the right way to go.

[RayFinkle]

Folks can spin this BS whatever way they want. Blame China, blame Katrina, blame ANWAR, etc, etc. The truth of the matter is the price of oil has been driven through the roof because of instability in the middle east. Plain and simple. Thanks George, the world loves you.

[meazza]

Despite the actual sarcastic thoughts about the title....why won't the President try some intervention techniques to address oil company profiteering.  I know that some of this is demand side driven, but a lot is not based on supply of oil but domestic refinery manipulation, ala, Enron energy market manipulation. 

 

He hasn't even threatened opening up the strategic oil reserve to shock these guys to some sanity in their pricing.  Long term it won't change the dynamics and maybe this current price shock will actually cause some good old American innovation to another source of energy.

 

But darn, this sure can't help the President, reinforces the perception of lame duck weakness, i.e., his inability to take strong action to address a domestic crisis.

 

]Link

667345[/snapback]

 

maybe since in general, conservatives/republicans are monetarists and that will never change. more power to the rich.

[meazza]

Perhaps this is Ed's attempt at field study in his endeavor to become a social worker.

 

But back to the orginal point.  Tom's answer is the correct one.  But because his post was longer than two sentences and contained polysyllabic words and supply chain concepts, most people will look at blzrul's answer as the right one.

667476[/snapback]

 

THe price of oil has risen at a rate far higher than 2-3% per year. THe central government and central bank says that they have managed to keep inflation in check (which is their goal), but yet don't take into account energy prices as an indicator of inflation.

 

So yes it is a crisis. Price stability is the main goal of any central bank, and yet, prices haven't been stable.

[Crap Throwing Monkey]

THe price of oil has risen at a rate far higher than 2-3% per year.  THe central government and central bank says that they have managed to keep inflation in check (which is their goal), but yet don't take into account energy prices as an indicator of inflation.

 

So yes it is a crisis.  Price stability is the main goal of any central bank, and yet, prices haven't been stable.

667640[/snapback]

 

The stupidity of that set of statements is astounding, even for you.

[meazza]

The stupidity of that set of statements is astounding, even for you.

667644[/snapback]

 

why exactly? Is it not the policy of the gov't to keep prices stable. Is it not flawed that they do not use energy prices as an indicator of inflation. The fact that the gov't doesn't include the price of energy keeps them from having to intervene when things such as oil prices get too high.

 

but ya.. you are mentally ill.