5 dollar gas...are we ready?

[Patman]

Re: 5 dollar gas...are we ready?

Eliminating red tape is a great idea...worked so well on Wall Street

I don't think I've seen "deregulation" ever blamed for the near term economic problems.... just "not appropriate regulation"... I've heard that the enviro regs on refineries are restrictive to the point that people don't want to build them... of course those with refineries may not want to either... but then again, who is to say that one of the companies many not want to make more money.

 

[Tundra]

Re: 5 dollar gas...are we ready?

How about we reduce the barriers to market entry? How about we give a reason for people to pursue refineries... how about we give people reason to try to do things better than their competitors by reducing their costs by eliminating red tape?

ok so we reduce red tape. does that equate to lower costs? more revenue for the state or federal government?

It's clear to me we need to increase oil royalty taxes (to 50% or higher)... we (public) need to get a fairer share of the oil profits. The oil belongs to us not the oil companies and somehow our lawmakers have sold us (the public) out in the name of "job creation". I still can't get over our Republican governor Parnell trying to give away $2billion/yr to the oil companies up here... it's just amazing how greed and corruption has become blatant and accepted.

So only thing that seems to be moving is the crude oil costs and refining margin (profits). 28cents to 60cents for refining profits. We probably could use a increase in federal gasoline tax hike from 18cents to California level of 35cents.

http://energyalmanac.ca.gov/gasoline/margins/index.html

Distribution Costs, Marketing Costs and Profits $0.13 $0.14 $0.15 $0.12 $0.11 $0.12 $0.13 $0.14
Crude Oil Cost $2.80 $2.70 $2.73 $2.77 $2.83 $2.87 $2.79 $2.91
Refinery Cost and Profits $0.28 $0.44 $0.41 $0.46 $0.44 $0.49 $0.60 $0.49
State Underground
Storage Tank Fee $0.02 $0.02 $0.02 $0.02 $0.02 $0.02 $0.02 $0.02
State and Local Sales Tax $0.11 $0.12 $0.12 $0.12 $0.12 $0.12 $0.12 $0.12
State Excise Tax $0.35 $0.35 $0.35 $0.35 $0.35 $0.35 $0.35 $0.35
Federal Excise Tax $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18
Retail prices $3.87 $3.95 $3.97 $4.03 $4.06 $4.16 $4.21 $4.22

 

[Patman]

Re: 5 dollar gas...are we ready?

ok so we reduce red tape. does that equate to lower costs? more revenue for the state or federal government?

generally that should mean lower costs... more competitors typically means that they will have to lower prices... remember, if there is profit in an industry then there is a motive to move into that industry until there is no profit... afterall, somebody is profiting... does it always work? No... not necessarily, barriers to entry are what they are... capital, manpower, ability and tech level, etc. That being said, inducing false barriers keep the big businesses in and others out because they have the means to survive such barriers. Isn't that a major complaint that the big companies have legislation for the explicit purpose of keeping away competition?

Why is it easier to restrict the actions of a society than it is a small aspect of it? I think I understand why... the balance and power of social movements... but at the same time I find it mindboggling that we'll go over the earth to fundamentally change things to an ideal as opposed to doing the vigilant work to keep things in check. Really, we'll just move from one corruptive situation to another because we'll get our foundational changes from time to time but then the system breaks down as all the people try to get their slice of the pie.

I had a guy in my kickball league, a IT guy or whatever, being proud of his ability to claim farm subsidy cash on a small farm... we're not talking acres... we're talking feet... like he should be proud that he figured this out. And I have a BIG feeling this is a sport for the educated persons in Montgomery County (amongst the other counties in the area). Yet, we feel that if we're going to move to this more pure object, which won't happen, that we'll be better for ourselves? No... the issues are to get at the rot... to go after the simpler items.

 

[aparch]

I'd say break up the monopolies the oil companies have right now would do far more than eliminating any red tape would do. Used to be 20 or so major oil companies, now their are 8, make it 20 again and maybe they won't be price fixing so easily

While that's a great idea, the last few two decades have seen so many mergers okayed by the government that a Standard Oil breakup isn't going to happen ever again.

Ma-Bell was shattered, and the pieces found their way back together. There is now only one satellite radio company (true monopoly). Cellular phone companies have just three national players, one of which will now control all U.S. GSM service once their "merger" is okayed.

It's a shame that people are stupid and let this * happen.

 

[Handyman]

Re: 5 dollar gas...are we ready?

How can they (the people) stop it? It is all sanctioned...the government won't prevent it and neither will the SCOTUS. Corporations are more important than the citizens, everyone says so now.

And Patman, if more companies join the Oil Industry it will not change price at all. Oil is not like most products that follow a standard supply and demand curve because it is always needed, no matter the price. If you started an oil company tomorrow, you would not jump in and undercut the competition by a significant amount because you don't have to. Why make less profit than everyone else when it doesn't benefit you all that much? (especially with the oil taxes and so on) You will lower your price 10 cents for a bit and that will shift things minutely, until the price per barrel rises a bit then you will even out like everyone else. That one month dime saved is nothing at the rates oil has been rising of late.

 

[Almington]

Re: 5 dollar gas...are we ready?

How can they (the people) stop it? It is all sanctioned...the government won't prevent it and neither will the SCOTUS. Corporations are more important than the citizens, everyone says so now.

Monopolies and larger internation mega-corporations are the end effect of unregulated free-markets.

Which is why I don't understand how a typical person could be infavor of extreme deregulation and true free markets, at the end of the day it is the general populace who will suffer while a small elite will flourish. That is how things have always trended in the absence of regulation.

 

[amherstblackbear]

Re: 5 dollar gas...are we ready?

Cellular phone companies have just three national players, one of which will now control all U.S. GSM service once their "merger" is okayed.

And once the merger is okayed, expect a sudden about-shift from Verizon about not wanting to consolidate CDMA/LTE*

*assumes Sprint is still worth owning

The regional carriers (US Cellular, Cox Cable, etc) are the only competition left.

 

[unh_hockey]

Re: 5 dollar gas...are we ready?

And once the merger is okayed, expect a sudden about-shift from Verizon about not wanting to consolidate CDMA/LTE*

*assumes Sprint is still worth owning

The regional carriers (US Cellular, Cox Cable, etc) are the only competition left.

Ha ha this thread is playing out like a conversation between Bertram skudder and dange taggart in the book ‘Atlas shrugged’.

On one hand, you have those who believe in social responsibility. Than you have those driven by profit. Honestly, I don’t think it’s as black and white as that, but my limited experience in the business world…especially at that level cannot offer a satisfactory opinion on the matter. That said … My opinion is this: companies should not be meddled with for the sake of equalization, but they shouldn’t be allowed to run free at the expense of the commonwealth. Ultimately it is the commonwealth that gives these companies their riches, so in essence, both have an obligation to one another. Why should oil companies give up what they worked for? Why should they be allowed free reign in a society that has permitted them to be where they are?

I really don’t have an answer to this question. Regulation is a good AND bad thing. Objectivism ( I think that’s what it is called) can be a good and bad thing too. To be honest, I still have 10 more years of my life observing before I make up my mind.

BTW countdown until driving is almost over… 4 weeks!

 

[unofan]

Re: 5 dollar gas...are we ready?

Which is why I don't understand how a typical person could be infavor of extreme deregulation and true free markets, at the end of the day it is the general populace who will suffer while a small elite will flourish. That is how things have always trended in the absence of regulation.

Because everyone reads what they want into economic theory and ignores the rest. TheArthur Laffer and his famous Curve aren't inherently wrong; it's just most people who reference it forget the first part of the curve where increased taxes = increased revenue.

Likewise, people deify Adam Smith and the free markets as being inherently right, while ignoring things which Adam Smith himself would've told you operate in areas that present market failures. The market is not some divinely inspired system which must be maintained at all costs, it is simply a means to distribute goods. Where there is perfect competition (which primarily means commodities), the markets are great. But that's why companies go out of their way to create imperfect competition, though monopolies, brand separation, and the like - because then they get to work in markets that are no longer perfectly competitive, which allow them to take in more profits.

These things generally go in waves. We're about 100 years removed from Teddy Roosevelt and the trust-busters. We're about 30 years removed from Ma-Bell. I'm thinking in 20 years or so we'll get another round from monopoly breakups.

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

Because everyone reads what they want into economic theory and ignores the rest. TheArthur Laffer and his famous Curve aren't inherently wrong; it's just most people who reference it forget the first part of the curve where increased taxes = increased revenue.

Likewise, people deify Adam Smith and the free markets as being inherently right, while ignoring things which Adam Smith himself would've told you operate in areas that present market failures. The market is not some divinely inspired system which must be maintained at all costs, it is simply a means to distribute goods. Where there is perfect competition (which primarily means commodities), the markets are great. But that's why companies go out of their way to create imperfect competition, though monopolies, brand separation, and the like - because then they get to work in markets that are no longer perfectly competitive, which allow them to take in more profits.

These things generally go in waves. We're about 100 years removed from Teddy Roosevelt and the trust-busters. We're about 30 years removed from Ma-Bell. I'm thinking in 20 years or so we'll get another round from monopoly breakups.

Unless, of course, it's the government creating the monopolies...

 

[Kepler]

Re: 5 dollar gas...are we ready?

Unless, of course, it's the government creating the monopolies...

That goes in cycles, too. There is always a populist wave of "gol-durn-gub-mint" followed by deregulation followed by a free-for-all of predators thriving in the absence of oversight, followed by a period of increased regulation, followed by bureaucratic sclerosis that provokes calls to rein in the "gol-durn-gub-mint." Each wave always seeks to curb the excesses of the prior one. That's how we roll.

Everything is cyclical.

 

[aparch]

Re: 5 dollar gas...are we ready?

Forgot to look at prices on the way in to work until I was stopped at a light in Elgin, IL by a Shell station. $4.65. The Citgo right in front of work still showed $4.39 when I got into work. Wonder what it will be tonight.

If prices do jump to $4.65 out by me, I'm pretty sure that it's broken $5 downtown.

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

Didn't the midwest see $5 gas once, I think it was when there was some gulf area disaster (not Katrina)? I remember that was the first time I ever saw New York State with some green on the national heat map on gasbuddy.com...

 

[Tundra]

Re: 5 dollar gas...are we ready?

Well I can see $5 if oil keeps going higher to old time high of $147 or if the oil companies feel like it. These big integrated oil guys have total control over the price since they can win any price war with independent refiners, so cutting red tape and starting 1000 refiners will mean nothing if they can't (won't) compete against the big integrated oil companies.

I've to laugh about the "big fight" repealing oil tax subsidy of $2billion/yr.
Um how about we just increase oil royalty tax by $1 or 1% x 9m/bpd x 365 = $3.28billion. and how about "fair share" of public resources instead of "windfall" "tax hike".

So currently we're producing 9million barrel per day? (I thought it was closer to 6 or 7 million not too long ago and when did Russia over take Saudis) x $100 x 365days = $328billion gross revenue that oil companies are getting from public (and private) lands.

http://www.reuters.com/article/2011/05/10/usa-bigoil-taxbreaks-idUSN1012325320110510?type=bondsNews

introduced the bill as U.S. gasoline prices hovered just under $4 a gallon, about 14 cents off a record hit in 2008.

The bill will likely draw opposition among Republicans, who have said such measures will send gasoline prices even higher.

But the bill's sponsors said it would save taxpayers about $2 billion a year, noting that oil companies have made $1 trillion in profits over the last decade.

http://en.wikipedia.org/wiki/List_of_countries_by_oil_production

� World 84,240,000 100% 2009
1 Russia 10,120,000 12.01% 2010
2 Saudi Arabia 9,764,000 11.59% 2009
3 United States 9,056,000 10.75% 2009

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

One thing I have noticed: There isn't very much disparity between the unleaded and diesel prices, whereas back in 2008, almost everywhere in the country, diesel was up to $5 a gallon.

 

[bigblue_dl]

Re: 5 dollar gas...are we ready?

One thing I have noticed: There isn't very much disparity between the unleaded and diesel prices, whereas back in 2008, almost everywhere in the country, diesel was up to $5 a gallon.

I couldn't care less what gas is at. But if diesel goes down, that would be excellent.

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

I couldn't care less what gas is at. But if diesel goes down, that would be excellent.

I see diesel running a little closer to the true commodity price, at least in terms of the rate of price change. I'm still trying to figure out if the rate difference in unleaded is a result of taxes, inability to refine, demand, I'm not sure.

 

[bigblue_dl]

Re: 5 dollar gas...are we ready?

I'm still trying to figure out if the rate difference in unleaded is a result of taxes, inability to refine, demand, I'm not sure.

The easy answer is "a little of each".

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

The easy answer is "a little of each".

This is true. Plus, if the Senate is successful in ending tax breaks on petroleum commodities, guess where that cost is going to shift...

http://online.wsj.com/article/BT-CO-20110511-707673.html

 

[LynahFan]

Re: 5 dollar gas...are we ready?

These people don't care about $5 gas:

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