What we can do about fuel prices " not "

[Buzz-sawyer]

all of my adult life, I have pondered, what use is it to worry about things like fuel prices when I cannot do anything about it.
what is the truth of the situation?
what difference can one individual make?
What difference can any group in make?,
 is it'll all a conspiracy, if so does it matter?

 it seems to me, that the price of fuel most certainly raises all prices in our country which in turn, will never never go down.

 Think about it, once the price of blue jeans or chainsaws or milk  begin to rise, have you ever seen them go down? Therefore once the prices go up we have inflation.  

 my conclusion;
nothing will change, prices will continue to rise on gasoline as high as the market will allow.  In other words, as high as we will allow.  
 as I told of gas station attendant yesterday, " it will continue until we decide to do something about it !  "  
I am a capitalist, I believe in free market.  Competition makes prices go down.  in a free-market by producing our own gasoline in this country, a and, we could drive the price down.
 What's your take on a it ?how can we do anything about it. . . .  It's really frustrating isn't it?  

[Tom]

My Granddad had the answer.

He said, "If the price of gasoline is cheaper across the street, buy it from that dealer, support him. That's how our system works".

Some people are too lazy to cross the street for a penny less.  They lose sight of why it is a penny less.  It is competition.  Support the lower price and, eventually, you lower the higher price.

There are many arguments people use to support their marketing:  I burn more to get to the lower price.  I don't have the time,  I like their other products, etc.  The fact is that they are justifying the higher price to the store owner and the inverse competition will take place.  The lower priced station will raise their price.  Now what's been accomplished.

One of the biggest problems we suffer from our suppliers is that they are mostly from other countries and don't follow the same rules we do.  They can price fix and regulate and have Government subsidies that allow them to attack a capitalistic based economy.

"Pop" Hamilton doesn't own the gas station down the street any more. It's probably a company store and owned by a faceless corporation. To get to them, you have to talk to their computer. All their computer sees is sales numbers. If you buy where it's cheaper they will eventually see that.

If you buy because of quality and can support the quality manufacture with your purchases then, generally, Quality will go up in the market place.

There's a lot of gripe about companies going off-shore. I don't like it either. But, labor is a commodity just like gasoline. If the price of labor goes up, the system leans toward cheaper labor.  Who do you suppose drives the cost of labor up so high as to chase off the companies?

[Ron Wenrich]

Inflation is right around the 8% level.  Interest rate hikes are not far behind.   Mortgage rates have already increased by 1% in the past few months.  

As an individual, you don't have much control over gas prices or any other prices until you actually change your lifestyle.  For most people, that ain't gonna happen.  People are still buying gas hogs.  Party like its 1994.   8)

As a nation, we have to get off the carbon as a fuel.  We are really starting to lag behind the rest of the developed countries.  Wind farms are becoming common in Europe and solar energy is being developed by the Japanese.  What do we have?  

And it isn't just us that is using oil.  The rest of the world, especially China, is starting to buy cars.  They need fuel for their expanding industry base.  It is a global market.  If Chevron or Mobil can make more money by sending it to Thailand or Timbuktu, that's where they're going to send it.

We've pretty well burnt out the cheap oil in the world.  The longer you work an oil field, the more expensive it is to bring that oil on line.  So, prices will have to rise.

Yes, they can ship the jobs overseas.  What happens is you have a hollowing out of the middle class.  They get poorer and the rich get richer.  The middle class is a rather new class.  They weren't around until the 20th century.  Before that it was rich and poor.  Without the middle class, who will pay the taxes?

[Tom]

Taxes..... now there is a big bone of contention with me.  Why are there so many?  Because we as a society think that the government owes us a living and because our Government is so top heavy that the legs that hold it up are bowed, we have gotten away from  taxes supporting Government.

Want to see a really big  unemployment registration?  Have a downsizing in the Governments comparable to what has happened in the private marketplace.

Did you know that you don't count in the Governments jobless or unemployed figures unless you register for unemployment compensation?  Most of the middle "class" would starve before they accepted such a sign of self-defeat.  The unemployment figures have always been much larger than acknowledged.

[oldsaw]

"And it isn't just us that is using oil"

In the 90's, the US economy was booming due to a "slight" misunderstanding of how the internet was going to modernize the economy.  The rest of the world sat on the sidelines.  There was a plentiful oil supply in the pipeline because we were the only ones eager to buy.  Now the economy is improving worldwide, so everyone's oil usage is increasing, and then you have China, who's use is growing exponentially.

The worlds oil infrastructure isn't up to the current demands, let alone this usage rate for extended periods of time.  Iraq is not fully on line, and won't be for years.  The Saudis are pumping what they can, the Russians need to modernize, and the US isn't getting at what they should.  However, when oil prices are up over $40/bbl for extended periods of time, then things start to happen.  Oil fields that were deemed "unproductive" are suddenly profitable again.  Oil shale processing becomes viable in the low $40s, and people and companies shift how they consume energy due to cost.  Eventually a market equilibrium is reached.

What really adds to volatility is that we lack the refining and storage capacity that we need to smooth out some of these price spikes.  We need more production in the US to lessen demands on the world market and stabilize prices.

As you said, we have already hit all of the easy spots to find oil, the rest are harder, and will be more expensive to get on line.  This is something that we should have been working on for the past decade, not thinking about now.

[Gary_C]

I saw an interview with the Chairman of Exxon Mobil last week and he had some interestings things to say. First, the last time crude was $40 per barrel was in the late 70's and a comparable price today would be $100 per barrel. The reason for the high gas prices now is not because of supply and demand. He said if one of Exxon's refinerys needed more crude today, it is readily available. The bigest reason for the high prices today is because some large speculators have jumped into the oil futures market and they are betting on political instability in the large oil producing countries, specifically in Saudi Arabia. The other big reason is that the world is operating at peak refinery capacity because no one wants a new refinery in their neighborhood.

On the subject of alternative energy sources, Exxon made 21 BILLION dollars last year on sales of over 400 BILLION dollars. If they saw a good opportunity in another energy source, they have plenty of cash to invest. Just for comparison, if you covered all of Los Angles with solar cells, it would replace the energy supplied by just 4 Exxon stations and they have over 3000 stations in the US and only sell 10% of the gas.  Exxon sells 1 billion gallons of gas every three days.

As far as the future, he declined to predict future gas prices for obvious reasons, but did say that the present prices are not sustainable long term. Russia has the reserves to be the largest supplier in the world, even larger than the Saudis, and Exxon is working on a deal with a large Russian oil producer now, but the head of that Russian company was temporarily thrown in jail by the government for some reason that was not explained.

As far as what we can do about the high gas prices, I don't have a clue. In every problem, there is an opportunity lurking and perhaps this would be a good summer to cut and dry firewood. However it seems like people now have enough money to just pay the high fuel prices and they don't have the time or desire to burn wood.

I have plenty of wood available, but cutting firewood is so far down on "the palm pilot" that it will be at least next year before I start.

On a related subject, I just heard our govt is going to tighten up rules on off road engine emissions and this will require no sulfur diesel fuel at some time in the future. When this becomes reality, our politicians will just blame the higher prices on "other countries" or "the oil companies."  Perhaps then they will have to open up more of the Artic Wildlife Refuge for drilling?

[iain]

he's in jail for vast amounts of tax "problems" ;)
im thinking it would be nice to run out of oil before we run out oxygen we as a spieces have cropped all over this planet for years now we have to stand in it
    and mother nature?
 she dont realy care what we do she'll just carry on
and when we're gone she might give a bit of a burrp at our passing but untill we realise that we need this plant more than it needs us we're up the creek and its us individuals that need to change a bit here and a bit there and with the internet now one is in the dark about the effectits also easier to hold those that are in power to question

petrol here in the uk $6.88 per uk gal thats about $1.05 with out tax

swede what do you know about aspen fuel its supposed to be the best there is with all the crud taken out made in sweden i think

[Ron Wenrich]

The point isn't how much oil is in the ground, but how much cheap oil is in the ground.  Here's an article that was in Scientific American in 1998 about oil reserves:  http://planetforlife.com/End%20of%20Cheap%20Oil.htm

Royal Dutch/Shell has announced twice this year that their oil reserves have been reduced.  They have downgraded by 20%.  Related article:  http://www.janes.com/business/news/fr/fr040421_1_n.shtml  If Shell has overstated their known reserves, do you really believe they are the only ones?

As for futures markets, it is primarily driven by large investors, like Shell and Exxon Mobil.  When you have a futures contract written, there has to be a buyer and a seller.  Follow what the large boys are doing and you'll make money.  They are on top of things and know a lot more than the average guy.  If they think oil prices are going up, there is a reason.  Oil before Iraq stood at $25/barrel.  I speculated on oil at that price and made some quick money.

Firewood is a good source for those with access.  That includes most people on this forum.  A lot of people are starting to go to pellets, for convenience.  You can buy coal cheaper though.

[EZ]

I believe all the high fuel cost is just greed.
Back 30 yrs ago I was a driller for an oil rig and was one of the highest paying man on the rig, at $4.65 an hr. I know for a fact that we cap this holes off and to this day they havent pump any crude out of them.
EZ

[Fla._Deadheader]

Had neighbor friends in Ar that were ex-drillers. They had the same story. Cap the wells and use the welder to put code as to what was down the hole. : :

[Norm]

The economy is sure getting better and the costs of things have been held down by deflation, now they're catching up. Anytime the feds try to micro manage the economy they screw it up and send us in big oscillations, way down and then way up.

Our business has increased significantly this year over last, yes my costs have gone up also, but the increase in sales has more than made up for it. For the Jan-April period consumer prices have gone up 4.4%, the core is up 3.0% for the same period. Personal income continues to increase, the middle classs is no exception.

Like it or not we must have a reasonable amount of inflation or we wind up in the downward spiral like Japan.

Me, I'm running a pipline from the hog confinement next door. ;D

[shopteacher]

I'm thinking of going back ta when I was a kid and gas was 25 cents. Rubber hose, jerry can and darkness of night.  Oh them High School days!   ;D

[Stan]

 Wind farms are becoming common in Europe and solar energy is being developed by the Japanese.  What do we have?  

For wind farms you'll have to take a drive down I-40 past Barstow-Dagget Airport, or take a trip from Los Angeles to Palm Springs. The really big players in solar energy are the Saudis.  :
Teach, when gas got up above a quarter, I started buyin' economy cars, what am I gonna do now?  :'(

[Furby]

I know this won't really help as it hasn't in the past, but some of you may have heard that May 19, is "stick it to um" day.
Even though everyone will buy gas the day before or after :, nobody buy gas on the 19th.
Yeah I know it won't help, but I can go a day or three without buying gas. It takes $$$ to buy gas, and if we don't have $$$, we don't buy gas!  :

[Tom]

Prices will probably go up to make up for the lost revenue. :D

[Furby]

 :D :D :D
Yep!

[whitepe]

Yes, I agree that there are things that we as consumers
can do about high fuel prices. It now appears that
we as Americans are beginning to face what Europeans
faced years ago.  My counterparts at CAT in England
drive 1000 cc diesel powered cars to work that get
60 mpg.  Yes, they have the acceleration equivalent to
flushing a toilet but the cars get them to work and
back everyday.  Our American highways are clogged
with gas guzzling SUV's and pickups  (I'm guilty on
this one too) that we drive to / from work every day
where an econobox would work just fine.

Everyone has made great points in this thread and I
want to add my $0.02 worth as well.  We are rapidly
seeing the effects of two new major world economic
powers coming to life as industrial Super powers. Of course
I am referring to India and China. These two countries
have an all time high demand for not only oil but steel
as well.   CAT's orders for equipment are at an all
time high and our factories cannot get enough steel. Why?
Ships with iron ore and steel are being intercepted while in
transit on the high seas and the captains of those ships
are being offered more money to take their cargos
to China.   One reason that China and India are
growing so rapidly as economic giants is due to the fact
that their people are willing to work hard to improve
their lot in life. We have dozens of engineers and computer
scientists from India legally working at CAT. They are making
the same wages as other CAT employees except for
one major difference.  These Indian employees are
putting in 10-12 hours per day 6 (and sometimes 7) days a week. CAT management loves these employees because they are gettting 60-80 hours per week out of them compared to the rest of the employees who are putting in five 8-10 hour work days. It doesn't take a math wizard to figure out what's going on here.  Americans need to wake up and get off our sofas and realize that we are fast becoming the new "third world"
Okay... I'll get off of my soapbox now.

[florida]

There are almost twice as many cars on the roads today as there were in 1977 and yet not a single new refinery has been built since then. Essentially we have one half the refining capacity today that we had then. There is almost no new oil drilling being done today in America. There are no oil wells off the Florida coast in spite of  proven reserves there, there will be no drilling in ANWR in the foreseeable future in spite of the fact that the reserves there are thought to contain 30 years worth of imports from Saudi Arabi. Thank the environmentalist. Family owned gas stations are almost a thing of the past because they can't afford the insurance or clean up costs from a gas leak. Thank the environmentalist again.  There are hundreds of boutique blends of gas demanded by states and municipalities due to pressure from environmentalist that costs us all money. The Chinese demand for oil is shooting through the roof. They have imported 33% more oil so far this year than they did last year.  States and cities see gasoline sales as a great opportunity to "punish" drivers by adding on more and more taxes.  So, of course the price of gas has gone up, how could it not?
However, adjusted for inflation gas is still considerably cheaper than it was in the early eighties when we were paying $2.84 a gallon in 2004 dollars.  
In 1964 gas was 25 cents a gallon and a first class postage stamp costs 4 cents. Today a first class stamp costs 37 cents and a gallon of gas is about 2 bucks. The stamp costs over 9 times as much, gas costs 8 times as much.

Here's a link to a chart that will show you the real price we're paying for our gas compared to what we used to pay.
http://www.eia.doe.gov/emeu/steo/pub/fsheets/RealMogasPrices.html

[Larry]

Yes, I agree that there are things that we as consumers
can do about high fuel prices. It now appears that
we as Americans are beginning to face what Europeans
faced years ago.  My counterparts at CAT in England
drive 1000 cc diesel powered cars to work that get
60 mpg.  Yes, they have the acceleration equivalent to
flushing a toilet but the cars get them to work and
back everyday.  Our American highways are clogged
with gas guzzling SUV's and pickups  (I'm guilty on
this one too) that we drive to / from work every day
where an econobox would work just fine.

Well put whitepe.  And those diesel econbox's seem to last about twice as long as our gas guzzler's which might make an impact on our steel prices.

[Buzz-sawyer]

It seems to me,
that we are priveledged to drive what ever the heck we want ,
( to work) for a couple of reasons.
The market and price of fuel supports larger vehicles (Im still a capitolist...believe in free market economy)
People enjoy them, and thier quality of life improves when driving gas guzzlers ....
So I dont necissarily view getting a gas mizer as a solution to a economic problem...
And I do not see being compared to the European economy because they run thier economy in an altogether different way, they run a socialist state government ...really a a mild tyranny with out a free market at all.
Question, As well stated earlier, since market price is now over $40 dollars a barrel...shale production in the US is profitable, like wise pumping difficult less productive wells .
Why not pump oour own oil and open refinerys in the US and make oil and gas for us and export....there has not been one refinery opening here in over 20 years (Due to exteme over regulation by EPA and heavy handed government), they are old, out of date,
 I believe building about 20 state of the art refinerys and making our own fuel would cure us for 150 years...what ya think?

[iain]

hey swede hows your tryannical country getting on with the rest of us despots

[Stan]

I think you've got it right Buzz, the price of gas today is directly attribitable to the eco facists actions and the press's support of them.  :-/

[Buzz-sawyer]

Stan
political correctness dictates that a person is less than thoughtful, or wise if we even consider building new refinerys or drilling for oil and using it....however, there IS NO viable and economically feasible alternative regardless of the hype, eco terrorist pressure or whatever....
We will start to drill for oil here (us) and build refinerys at the time we see the value in it and force our elected officials to enforce more balanced views on using the natural resources we have available....
another good example is the BILLIONS of dollars in timber on public ground goin up in smoke do to un balanced approach to the use of resources...recon?

[Buzz-sawyer]

Iain...I didnt think ya'll had those over there anymore ;) :D

[iain]

if the price of fuel reflected the amount that is left to burn how much would it be?
 NOT ALLOWING for political pressure or the sledge hammer clout of a true multi national
when the normal philos of a company is to make what yuo can as soon as you can and the aim at the top is to be in front of you neighbours and peers with little real regard for what happens the day after tomorrow
 this country is to run out of our own gas soon
whats the solution?
close down coal mining frown on wind and the alternatives (they mostly being to become a lot more efficent in our application and use of power so we dont need to produce as much)etc
and switch to gas fired stations and import our gas from russia easy init
except every other country between here and there wants the same gas and were on the end of the pipe rather like being on the end of the colorado trying to water your tomatoes

europe is more than twenty countries now
none speak the same language or even realy agree if we should be one big happey family :