May 15th: Pass on Gas

[trebuchet03]

Originally Posted by QDM

If you want to know why gas prices are so high, do some reading at this site.

http://www.oilwatchdog.org/articles/...0&topicId=8057

Q

Keep in mind that most crude suppliers have come to realize they aren't able to open the taps any further.... At least without causing "long term" damage to their supplies. OPEC says their supply reduction/day was "intentional" - but theirs no third party doing regular checkups.

Oil is about the only thing where we don't have supply meeting demand, and we do nothing about it. If we were paying $20 for a frozen pizza that only costs $8 to make, we'd quit eating pizza, but not so in the fuel world. Oh well, we're all doing our part, what more can we do?

Go Jehovah's witness and convert other people? I think I've gotten my dad on board too -- but I think that's partly due to how much time he's on the road between jobs. A penny more for gas means his gas overhead goes up $250 (yes, that means he does 25,000 miles a year). And various shipyards aren't getting any closer...

[Shining Arcanine]

Originally Posted by omgwtfbyobbq

Most heavy duty diesel equipment is not very clean. Surprisingly (not really) we've finally started to see all sorts of diesel emissions systems now that the EPA has significantly cut down on allowable heavy duty diesel emissions. In terms of environmentally friendlyness, well, that's just a matter of opinion. Generally speaking, we can almost always do better. However, once of the disadvantages of reduced emissions is improved efficiency, as was seen in the first gen Prius, which was designed to meet CARB fleet emissions regulations, and was later altered and marketed as a fuel efficient vehicle.

We've had to work through a glut in refining capacity and a relatively fuel efficient vehicle fleet for two decades to bump up against the roof in terms of gasoline/oil supply and send prices up. This has taken nearly twenty years, and now that prices and profits are through the roof, I don't think the major stock holders of companies like GM and Ford are going to approve a radical change in fleet efficiency, when they've spent so much time increasing demand for gasoline and oil, which they happen to hold way more stock in. Something as small as a consistent percent or two drop in consumption with supply staying steady would send prices through the floor for both oil and gasoline.

I mentioned that domestic SUVs and trucks were not very environmentally friendly. I really think that the same emissions should be required for them that are required for automobiles, with the exception of tractor trailer trucks, which should be required to be as clean as possible (i.e. the emissions should be composed entirely of carbon dioxide, dihydrogen monoxide and nitrogen), but no cleaner (i.e. do not legislate efficiency requirements through say, inefficiency taxes, as the automobile industry is already doing everything it can to make tractor trailer trucks more efficient because of the shipping industry and no amount of governmental intervention will catalyze efficiency improvements beyond that).

As for the oil companies' profits being at record highs, we are and have been for the past several years purchasing oil at record volumes, because the first derivative of our oil consumption is positive. So long as the first derivative of our oil consumption is positive, oil companies will sell greater volumes each year and make greater profits each year as a consequence. For example, if you sold a product with a profit of 20 cents per unit and sold 100 units of this product the first year, 110 units of this product the second year, 121 units of this product the third year, etcetera, you would make record profits each year, which is what we are seeing with the oil companies' total yearly profits.

[omgwtfbyobbq]

Originally Posted by Shining Arcanine

As for the oil companies' profits being at record highs, we are and have been for the past several years purchasing oil at record volumes

This huge increase in inflation adjusted (the magnitude of which depends on which method is used for adjustment) price is what some are irritated (or more?) about. Not ever increasing use. If vehicle efficiency had continued to increase, even at a slightly slower rate, than in previous years, we would not be where we are today in terms of price.
No one has any issue with increased volume resulting in proportionally higher profits. But some of us do have a problem with the boards of major automobile manufacturers freezing vehicle efficiency so that any and all available supply is eventually lapped up, and prices jump sky high. "Coincidentally", the majority shareholders who elect these board members also own far more in oil stock. To paraphrase Ron White, who was talking about an fit elderly man determined to wait out a hurricane tied to a tree.

it's not that the wind blows
it's.....what the wind blows
if you get hit with a volvo...it don't really matter how many sit-ups you did that mornin

It's not that profits are increasing, it's what profits are increasing by.

[omgwtfbyobbq]

Werd. The supply side is going to be profit driven because companies want to sell as much as they can while they can for as high a price as will be allowed. Now, they can't yank supply off the market and start charging crazy high prices because that would be profiteering. So, it has to be "demand" that results in a big increase in price. This is recognized, so when it comes down to supply or efficiency on the state level, efficiency is sometimes one of the paths used. But... For the individual consumer, this generally isn't the case.

In the early 1970s, California faced a one-two punch of doubled oil prices and soaring electricity demand, with new coal and nuclear power plants projected for every 8 miles of coast from San Diego to San Francisco.

The plants never got built because a motley band of physicists and state lawmakers cut energy demand down in ways as ambitious as reinventing the fluorescent light bulb and as simple as slapping energy-usage labels on refrigerators.

They also retooled the electricity market so power companies spent money helping people use less energy. Utilities were investing in selling less electricity, but they did not have to build 16 power plants and were guaranteed a return on what they did build or buy. The state's economy kept growing, even though Californians on average consume 40 percent less energy than Americans elsewhere.

[Matt Timion]

I'm going to write an article today or tomorrow to be published on a number of online newspapers.

It will basically talk about why the May 15th thing is stupid, and a few ways to actually "stick it" to the oil companies.

I'll post a link once it's done.

[Shining Arcanine]

Originally Posted by omgwtfbyobbq

This huge increase in inflation adjusted (the magnitude of which depends on which method is used for adjustment) price is what some are irritated (or more?) about. Not ever increasing use. If vehicle efficiency had continued to increase, even at a slightly slower rate, than in previous years, we would not be where we are today in terms of price.
No one has any issue with increased volume resulting in proportionally higher profits. But some of us do have a problem with the boards of major automobile manufacturers freezing vehicle efficiency so that any and all available supply is eventually lapped up, and prices jump sky high. "Coincidentally", the majority shareholders who elect these board members also own far more in oil stock. To paraphrase Ron White, who was talking about an fit elderly man determined to wait out a hurricane tied to a tree.

It's not that profits are increasing, it's what profits are increasing by.

In the end, it is the market that decides what is reasonable and what is not; if you do not think what it has decided is fair, then too bad. No one ever said life was fair; no one said that they knew what was fair either.

[omgwtfbyobbq]

Originally Posted by Shining Arcanine

In the end, it is the market that decides what is reasonable and what is not; if you do not think what it has decided is fair, then too bad. No one ever said life was fair; no one said that they knew what was fair either.

If my market you mean our world, then yes. But that applies to anything really... Why not tell me the things change for an encore?