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Old 05-22-2008, 11:03 AM
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Default Why Fuel Prices are so High - A Breakdown of Fuel Prices

Fuel prices always seem to be a mystery to most people, myself included. I, like everyone here at FF and across the world have been spending a lot of time thinking about it. The politicians and the uneducated tend to blame the oil companies. The fact is that the oil companies are caught up in the mess with the rest of us. The best I can tell at this point is that the primary cause of the price increase is OPEC Organization of the Petroleum Exporting Countries, primarily made up of MUSLIM countries. Do you reckon our invasion of Iraq might have something to do with OPEC being pissed off and cutting back production?? What better way to harm the West than hitting us right in out bank accounts?

I've done some research on oil prices, and below is some of the best and easiest to understand information I have found. Along with OPEC and politicians, the next largest group contributing to the price increases are the so-called "environmentalists" who block the drilling for new sources of oil in the United States. These people are some of the loudest protesters about inflation, yet their actions and lobbying contribute directly to the high price of oil which contributes to the inflation of our everyday consumer commodities such as food and shelter.

Folks, I'm not feeling too optomistic about our political state right now. The Republicans act exactly like Democrats. As far as I am concerned, Bush is a Democrat. There are no conservative political parties left. The Democrats would appease the Islamic radicals, and Bush f#cked up big time invading Iraq and opening up the door to even more theocratic government in the middleast. It will take many years to unscrew the mess that Bush and the Democrat federal legislature have pushed us into. We will see $10.00 per gallon gasoline in the very near future. Grab your asses and hang on because it is going to be one hell of a rough economic ride for the West, especially those in the middle class. Neither McCain nor Obama can do a damn thing to fix this mess unless the federal legislature can collectively cure it's Economic Cranial Rectumitus.

Anyway, educate yourselves with the article and numerous links to excellent information below:




Browse the article How Gas Prices Work
How Gas Prices Work
by Ed Grabianowski and Kevin Bonsor


Introduction to How Gas Prices Work


Photo by Justin Sullivan/Getty Images

Gas prices approaching $4 per gallon are displayed at a gas station on May 14, 2008, in Martinez, Calif.

In May 2008, gas prices in the United States passed $3.70 a gallon, shattering records. But this was nothing new to American consumers. The price of gas had been rising, and breaking records, for months.

Gasoline is the bloodline that keeps America moving, and tracking gas prices can feel like a roller coaster ride. They're down a little one month, up the next, and then they shoot up more than 50 percent in a year. Plus, they're different depending on where you look. Other countries -- and even other states and cities -- can have very different gas prices from your local Gas-N-Go. To the average person, it probably seems as though there's little rhyme or reason to how gas prices are determined. In this article, we will look at the forces that impact the price of gas at the pump, and we'll find out where your gas money actually goes.

Americans have an insatiable thirst for gasoline. Just look at the amount of traffic on roads and highways, and you'll see that a severe gas shortage would practically cripple the United States. Americans drive nearly 3 trillion miles per year, according to the Motor and Equipment Manufacturer's Association (MEMA). That's about 820 trips from the sun to Pluto and back.

The United States consumes about 20 million barrels of oil products per day (bbl/d), according to the Department of Energy. Of that, almost half is used for motor gasoline. The rest is used for distillate fuel oil, jet fuel, residual fuel and other oils. Each barrel of oil contains 42 gallons (159 L), which yields 19 to 20 gallons (75 L) of gasoline. So, in the United States, something like 178 million gallons of gasoline is consumed every day. Typically, the demand for gas spikes during the summer, when lots of people go on vacation. Holidays like Memorial Day and the Fourth of July create logjams of tourist traffic during the summer. This high demand usually translates into higher gasoline prices. Cleaner-burning summer-grade fuels, which are more expensive to produce, can increase the price as well, but prices don't always go up in summer. For instance, while gas prices soared 31 cents in April and early May of 2001, reaching $1.71 per gallon (which seems inexpensive compared to today's prices), prices actually declined during the 2001 summer.

In 2004, prices continued to rise past the end of the summer travel season for a variety of reasons, including several hurricanes and an increase in the price of crude oil. And in 2005, Hurricane Katrina (along with a sizable increase in crude oil prices) pushed prices to $3.07 per gallon on September 5. Prices settled down somewhat in November and December of 2005. But now the numbers are climbing again, with an average price for regular unleaded gas at $3.72 right now (May 16, 2008), an all-time high [source: EPA].

Price increases generally occur when the world crude-oil market tightens and lowers inventories. We will discuss who controls the crude-oil market later. Also, growing demand can sometimes outpace refinery capacity. In the spring, refineries perform maintenance, which can place a pinch on the gasoline market. By the end of May, refineries are usually back to full capacity.

In the next section, we'll look at where the money goes when you pay for gas.


Your Browser Does Not Support iFramesBreakdown of Gas Prices
When you pump $30 dollars into your tank, that money is broken up into little pieces that get distributed among several entities. Gas is just like any other consumer product: There's a supply chain and several groups who are responsible for setting the price of the product. The media can sometimes lead you to believe that the price of gas is based solely on the price of crude oil, but there are actually many factors that determine what you pay at the pump. No matter how expensive gas becomes, all of these entities have to get their slice of the pie. According to the U.S. Department of Energy, here's an approximation of where each dollar you spend on gas goes:
  • Taxes: 12 cents
  • Distribution and Marketing: 8 cents
  • Refining: 8 cents
  • Crude oil: 72 cents




Photo by Mario Tama/Getty Images
Traders work in the crude oil options pit at the New York Mercantile Exchange, April 22, 2008. Oil posted a then-record high of more than $118 following oil demand from China and supply concerns from Russia and Nigeria.





This is what the average breakdown looked like in March 2008. Let's look at those components in more detail.
  • Crude oil - The biggest portion of the cost of gas goes to the crude-oil suppliers. This is determined by the world's oil-exporting nations, particularly the Organization of the Petroleum Exporting Countries (OPEC), which you will learn more about in the next section. The amount of crude oil these countries produce determines the price of a barrel of oil. Crude-oil prices averaged around $35 per barrel (1 barrel = 42 gallons or 158.99 L) in 2004. And, after Hurricane Katrina, some prices were almost double that. In April 2008, crude-oil prices averaged around $104.74 per barrel. During that month, the price of oil reached a record price of almost $120 a barrel [Source: U.S. DOE]. By May 16, prices had topped $117 per barrel [source: MarketWatch]. This sharp increase in price may have been due in part to speculation in oil futures rather than a shortage of crude oil [source: Davidson]. Sometimes, gas prices go up even though there is plenty of crude oil on the market. It depends on what kind of oil it is. Oil can be classified as heavy or light, and as sweet or sour (no one actually tastes the oil, that's just what they call it). Light, sweet crude is easier and cheaper to refine, but supplies have been running low. There's plenty of heavy, sour crude available in the world, but refineries, particularly those in the U.S., have to undergo costly retooling to handle it.
  • Refining costs - The cost of refining diesel fuel can be considerably higher than the price of refining regular gasoline. To learn more about oil refining, read How Oil Refining Works.
  • Distribution and marketing - Crude oil is transported to refineries, and gasoline is shipped from the refineries to distribution points and then to gas stations. The price of transportation is passed along to the consumer. Marketing the brand of the oil company is also added into the cost of the gasoline you buy.
  • Taxes - Federal excise taxes are 18.4 cents per gallon, and state excise taxes average 18.2 cents per gallon. There may also be some additional taxes, such as applicable state sales taxes, gross receipts taxes, oil inspection fees, underground storage tank fees and other miscellaneous environmental fees. Add that to the state excise taxes, and it can average 27.4 cents. It could be worse. In Europe, gas prices are far higher than in America because taxes on gas are much higher.
  • Station markup - Of course some of the money you spend at the pump does go to the service station. While some consumers blame high prices on station markup, service stations typically add on a few cents per gallon. There's no set standard for how much gas stations add on to the price. Some may add just a couple of cents, while others may add as much as a dime or more. However, some states have markup laws prohibiting stations from charging less than a certain percentage over invoice from the wholesaler. These laws are designed to protect small, individually-owned gas stations from being driven out of business by large chains that can afford to slash prices at select locations.
Average U.S. Gasoline Prices
Year­Price Per Gallon

1980 $1.22

1985 $1.96

1990 $1.22

1995 $1.21

2000 $1.56

2001 $1.53

2002 $1.44

2003 $1.64

2004 $1.92

2005 $2.34

2006 $2.63

2007 $2.85

2008 (to April) $3.24

Source: U.S. Bureau of Labor Statistics Consumer Price Index (CPI). Average Price Data, Gasoline All Types. ­

Gas prices also vary from state to state for several reasons. Taxes are probably the biggest factor in the different pr­ices around the country. Additionally, competition among local gas stations can drive prices down. Distance from the oil refineries can also affect prices -- stations closer to the Gulf of Mexico, where many oil refineries are located, have lower gas prices due to lower transportation costs. There are also some regional factors that can affect prices. World events, wars and weather can also raise prices. Anything that affects any part of the process, from the moment the oil is drilled, through refining and distribution to your car will result in a change in price. Military conflicts in parts of the world with lots of oil supplies can make it difficult for oil companies to drill and ship crude oil. Hurricanes have damaged offshore drilling platforms, coastal refineries and shipping ports that receive oil tankers. If a tanker itself is lost or damaged, or leaks its oil into the ocean, that will put a dent in the market as well.

The most recent surge in gas prices is due to several factors, including all of those listed above. However, a new reason emerged during the spring of 2007: legislation out of Washington to incorporate more ethanol into transportation fuels, enough to reduce daily oil imports by 1.5 million barrels by 2017. Between October 2007 and April 2008, ethanol-blended gas was between 4 and 12 percent more expensive than regular gas [source: McKay].

Next, we'll look at why it's more expensive to buy gas in Milwaukee, Wis., than in many other parts of the United States.


Gas Prices Across the Country
The new legislation to input ethanol comes from environmental standards that have been in place in some parts of the country for several years. In some areas, gasoline was required to meet higher environmental standards in order to reduce the amount of smog created by burning gasoline. Producing this cleaner-burning gasoline caused problems in refining, distribution and storage, which increases the cost of gas. "The result of this targeted approach to air quality has been to create gasoline market islands," John Cook, director of the petroleum division of the DOE's Energy Information Administration, said before the U.S. House of Representatives Committee on Energy and Commerce on May 15, 2001. Cook pointed at California and the Chicago and Milwaukee areas as primary examples of gasoline-market islands. The clean-burning requirements in each of these areas are unique to that individual area, and only a few refineries can produce the specialized products. High demand, a supply problem at a refinery or a problem with a pipeline can cause pricing in these areas to surge. Other states and municipalities also have their own requirements for cleaner fuel.

In California, the state government has set its own reformulated gasoline rules that are stricter than the federally mandated clean-gas laws. The state adopted requirements for cleaner-burning fuel in 1996 [source: ARB]. This is why Californians pay a higher price for cleaner fuels -- this, plus a local sales-and-use tax, the federal excise tax and a state excise tax. California's distance from the refineries located near the Gulf of Mexico can also add to the cost of gasoline if it chooses to obtain gas supplies from those refineries.

Photo courtesy Phillips Petroleum Company
Most of the American crude-oil supply is imported using tankers similar to this one.

Another area where prices have far exceeded the U.S. national average is the Midwest. In 1999, before the rest of the country started using ethanol-blended gas, the Midwest region became subject to rules that required the use of ethanol. Few refineries outside the region produced this type of reformulated gasoline, which meant that demand could outstrip supply. This was one of many factors contributing to higher gas prices in the Midwest in the early 2000s. The problem cropped up again across the United States after the national call for ethanol-blended gas in the spring of 2007.
Crude oil inventories have the single biggest effect on gas prices, and the United States depends heavily on foreign oil supplies. In April 2008, the United States imported about 13 million barrels of oil and petroleum products per day [Source: EIA]. We'll look at exactly where that crude oil comes from next.

OPEC and Gas Prices Around the World

Global Gas Prices

Want the world's cheapest tank of gas? Take a trip to Venezuela, where gas is 12 cents a gallon. At the other end of the spectrum is Sierra Leone, where gas is $18.62 per gallon [source: Hargreaves].

The single largest entity impacting the world's oil supplies is the Organization of the Petroleum Exporting Countries (OPEC), a consortium of 13 countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Together, these 13 nations are responsible for 40 percent of the world's oil production and hold the majority of the world's oil reserves, according to the Energy Information Administration (EIA). When OPEC wants to raise the price of crude oil, it simply reduces production. This causes gasoline prices to jump because of the short supply, but also because of the possibility of future reductions. When oil production dips, gas companies get nervous. The mere threat of oil reductions can raise gas prices.

In April 2001, OPEC decided to reduce its collective production by one million barrels per day. This was at the same time that American consumers saw gas prices rise, hitting an average high of $1.71 per gallon on May 14, 2001.

OPEC increased its production in June 2005, when it raised to 28 million barrels per day with an increase of 500,000 barrels per day pending changes in oil prices. In September 2005, it made all of its member countries' "spare output" available, an estimated 2 million barrels per day. However, in November 2006, OPEC again reduced its rate of production by 1.7 million barrels per day to keep the price from falling below $50 per barrel [Source: Joint Economic Committee ]. OPEC's estimated production for the first quarter of 2008 was an average of 32.3 million barrels per day [source: EIA].

Beyond OPEC, there are several other countries that contribute to the world's crude-oil supplies, including the United States, Mexico, Canada, Equatorial Guinea, Russia and China. In February 2008, the United States imported from Canada approximately 1.9 million barrels of crude oil per day [Energy Information Administration]. OPEC tracks the oil production of these nations and then adjusts its own production to maintain its desired barrel price.

Cause and Effect

Numerous forces can influence the price of gas at the pump, but fuel costs are only one part in the vast web of global economics. Gas prices have an impact on other parts of the economy as well. You're already aware of the immediate effects of rising prices - that feeling of stunned disbelief as the numbers climb and climb while you fill your tank. There are secondary effects as well. You might decide against a long road trip because the gas would cost too much. When it comes time to buy a car, you might decide against a gas-guzzling SUV and find something with better mileage instead.

Let's look at the big picture. Does a hike in gas prices lead to inflation in the overall economy? It could, as long as the increase is a steady, long-term rise in prices. Expensive gas means it's expensive to ship products by truck, expensive to drive long distances and expensive to fly in airplanes. All those costs mean the cost of virtually any product you can think of will go up if gas prices stay high.

However, economists don't look at gas prices as a leading indicator of inflation. The price of oil, along with food costs, are far too volatile -- that is, they are easily influenced by things like weather, labor strikes and wars. The costs swing up and down, depending on world events. To watch for inflation, economists keep their eyes on the core Consumer Price Index, which is a measure of the cost of certain goods, like DVD players, hotel rooms or college textbooks, which stay more stable in the short term.


Domestic Supplies

After seeing how much oil the United States imports, it may be surprising to know that the United States is the world's third largest producer of crude oil. The biggest production region is around the Gulf of Mexico, and the largest producing state is Texas. The Gulf Coast region is home to two important producing areas: the Permian Basin, located in west-central Texas and eastern New Mexico, and the federal offshore portion of the Gulf. Other big oil-producing states include Alaska, Louisiana, California, Oklahoma and Arizona. Even with the United States producing so much oil, it is still heavily dependent on foreign sources. It's that dependence that crippled the country during the oil embargo of 1973 and 1974. To make sure that this situation never happens again, the federal government formed the Strategic Petroleum Reserve (SPR). While most domestic oil is sent directly to refineries and then to the consumer market, some of it is held back and sent to the SPR.

As of April 30, 2008, the SPR stores about 701 million barrels of oil in underground salt caverns along the Gulf of Mexico [Source: Department of Energy]. Given that the United States imports about half of its oil, the Strategic Petroleum Reserve holds about a 60-day supply of oil if all imports were suddenly and totally cut off. See What is the Strategic Petroleum Reserve? for more information about how the storage sites work.

Photo courtesy U.S. Department of Energy
An aerial view of the Bryan Mound storage site of the Strategic Petroleum Reserve

On September 22, 2000, President Clinton directed the U.S. Department of Energy to tap into the SPR to bolster oil supplies. When oil supplies shrink, the SPR can be used to help make sure that people have enough affordable oil to heat their homes. President Clinton authorized the Department of Energy to release up to 30 million barrels of oil in a swap with oil companies. The companies took the oil in fall 2000 and were required to return it by fall 2001.
The SPR is the largest emergency petroleum supply in the world. It was first used during the Persian Gulf War in 1991 to keep oil plentiful and prices stable. It currently has the capacity to hold 727 million barrels of oil. In 2005, the Energy Policy Act included a directive to expand the SPR and fill it to a capacity of 1 billion barrels. President George H. W. Bush also recommended expanding the reserves in his 2007 State of the Union Address. The Department of Energy announced in February of 2007 that it will expand two existing sites: Big Hill, Texas, and Bayou Choctaw, La., to comply with the Act. When complete, the expanded reserves will have a capacity of 1 billion barrels.
In May 2008, in light of record-breaking crude oil prices, Congress passed a bill that mandated a halt in the filling of the reserves.

Now, we'll take a look at one of the more controversial sources of U.S. oil: the Arctic National Wildlife Refuge.



Arctic National Wildlife Refuge
In March 2006, the U.S. Senate passed its 2007 Budget Resolution, which included a provision for lease sales of the right to drill for oil in the Arctic National Wildlife Refuge (ANWR) in Alaska. The Congressional Budget Office estimates that income from lease sales could top $4.2 billion in the next five years [Source: ANWR]. The Arctic National Wildlife Range was established in 1960 to protect the "unique wildlife, wilderness and recreational values" of the area. In 1980, Congress passed the Alaska Lands Act, which renamed the area and more than doubled its size. Today, the ANWR encompasses nearly 20 million acres, which is about the size of South Carolina. The same act authorized the study of the oil and gas potential of the northern part of the Refuge, called the 1002 Area. This region is still being looked at as a possible oil-development site, but environmental groups say that any oil production would upset the natural ecosystem within the ANWR.
It's still uncertain just how much oil exists under the ground of the ANWR. A 1998 analysis conducted by the United States Geological Survey (USGS) estimates that there are about 7 billion barrels of profitable oil in the 1002 Area alone, but the price of crude-oil determines how profitable that oil is. If the price of crude oil dips below $16, the cost of producing the oil would offset any profit -- but prices inched toward $120 per barrel in April 2008 [source: EIA].
The issue of gasoline prices is often a volatile one. As long as cars and other vehicles run on gasoline, the price of gas will continue to affect every part of the U.S. economy. While other fuel sources exist, none of them could be quickly integrated into the economy, which leaves Americans dependent upon gasoline for the time being.
This gas dependency makes everyone from the daily commuter to the shipping company executive very aware of price fluctuations. These fluctuations may vary from week to week or month to month, but over time are relatively stable. Still, limited resources, as well as environmental concerns related to oil use and production, encourage scientists to look at new technologies, such as fuel cells, to reduce our dependence on oil and gas.

For more information on gas prices and related topics, check out the links on the next page.

Out of Gas

If gas prices are influenced by the world supply of oil, what will happen when we run out of oil? The surprising answer is, we probably won't. That doesn't mean that the rampant use of fossil fuels isn't a concern -- they are very harmful to the environment, and dwindling supplies will still cause massive changes in our economy -- but oil will get too expensive to use long before we run out. The world oil supply acts like an asymptotic value, which is just a mathematical term for a value that gets closer and closer to another value, but never actually gets there. In this case, the "other value" is zero, or no oil left anywhere. Why would we never get there? Oil companies start out with the easiest (and cheapest) oil to find and bring to the surface. Once that runs out, they have to find more oil, which might be harder to harvest. As time goes on and the oil supply dwindles, it will get harder and harder (and more and more expensive) to find what's left. Eventually, it will get so expensive to find and harvest the remaining oil that no one will be able to afford it. The rising costs will force us to develop other energy sources.



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Old 05-22-2008, 11:41 AM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

Good post CB.

We're already in Iraq. Should we just take the oil? OPEC is raping us, so turn about is fair play.
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Old 05-22-2008, 11:45 AM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

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Good post CB.

We're already in Iraq. Should we just take the oil? OPEC is raping us, so turn about is fair play.
Probably wouldn't work. If we did that, OPEC would probably slash their production volume, and the price would go up anyway. I think they have enough cash on hand to survive that situation.
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Old 05-22-2008, 11:55 AM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

So my Boss the Vice Boss and me have been discussing this mess while we have been in Philly all week. One thing we have all agreed upon is that the damn media reporting the record oil prices everyday is helping to drive the futures prices and the overall oil prices higher. If the media would track the CONSUMPTION daily. We might actually SEE the truth. And MAYBE, just MAYBE we would quit eating the shit like candy. But the media would not want to do THAT.... then they would not have anything to talk about...
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Old 05-22-2008, 11:56 AM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

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Probably wouldn't work. If we did that, OPEC would probably slash their production volume, and the price would go up anyway. I think they have enough cash on hand to survive that situation.
Invading a Muslim nation and killing its secular dictator that we put in power and unleashing yet another theocracy in the region pretty much put the screws to us. We would have to neutron bomb the entire middleeast and then bring in the bulldozers to bury all the stinking bodies after the radiation clears to "take" the oil. That's not going to happen.

We are going to have to find a better way to protect ourselves from Islamic terrorism while reestablishing diplomatic relations. They have the oil we need to fuel our war machine. Now we are paying big bucks for that oil. Reckon there's a correlation there?
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

Why not:
- relax emmissions standards in favor of higher mileage,
- build nuclear power plants - we shouldn't have anything but nuclear power plants (close all coal and oil run power plants),
- drill in Alaska and other US territories
- build more efficient refineries.
- tax incentives for not owning a vehicle.
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Old 05-22-2008, 12:04 PM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

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We would have to neutron bomb the entire middleeast
And even that wouldn't solve the issue of increased demand from Asia for the finite quantity of oil available. They are already outbidding us for oil and this trend will just get worse.
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Old 05-22-2008, 12:05 PM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

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Why not:
- relax emmissions standards in favor of higher mileage,
- build nuclear power plants - we shouldn't have anything but nuclear power plants (close all coal and oil run power plants),
- drill in Alaska and other US territories
- build more efficient refineries.
- tax incentives for not owning a vehicle.
I'd take one (tax incentive) on a really nice bike. I would LOVE to have a nice road bike to ride back and forth to work on (16 miles one way). Only good two seasons, but that's OK with me....
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Old 05-22-2008, 12:15 PM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

So, looking back did we (we = USA) cause this new demand by our corporations outsourcing and moving manufacturing jobs to other countries? Now those countries need lots more oil than before, plus they are making more money so they have cash to buy a cars and travel about. IOW, is this the effect of our own greed?
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Old 05-22-2008, 12:23 PM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

Here is a good read relative to the subject.

http://westernrifleshooters.blogspot...te-things.html

Read the link to the presentation given to the British House of Commons; this fellow had a crystal ball.

Won't make you feel much better.
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Old 05-22-2008, 12:25 PM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

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Why not:
- tax incentives for not owning a vehicle.
A mechanism exists for this, in the form of using gas taxes to fund transit systems and Amtrak.

An example I'm familiar with is an effort to add commuter capacity on the SF - Oakland Bay Bridge and the Golden Gate Bridge by applying regional gas tax surcharges and tollbooth revenue to buying commuter busses. Then subsidizing low commuter bus fares, to lure commuters out of their one-occupant commuter SUV's.

These measures are far cheaper than it would be to build parallel bridges to double the SUV-commuter capacity. A side benefit is less demand for fuel.

But I doubt the public support exists to increase this 'social engineering'. The one-occupant commute is too much a part of Americans' enjoyment of life.
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Old 05-22-2008, 12:32 PM
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So, looking back did we (we = USA) cause this new demand by our corporations outsourcing and moving manufacturing jobs to other countries? Now those countries need lots more oil than before, plus they are making more money so they have cash to buy a cars and travel about. IOW, is this the effect of our own greed?
I think it's broader than that. Asia in particular has moved away from a colonial model where the western nations keep whatever profits are earned there. Their governments are working to improve internal re-investment. (Maybe this is the same thing as the capitalism and democracy that Bush wants to export to the whole world).

We are seeing the whole world converge toward a similar standard of living in all countries. For us, this is a decline.
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Old 05-22-2008, 12:55 PM
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.........increased demand from Asia for the finite quantity of oil available. They are already outbidding us for oil and this trend will just get worse.
This is a part of the issue, but I do not think that it is as big as the media purports it to be. I also am not convinced as to the "limited" amount of oil in the world that many speak of. Supply and demand is indeed a part of the problem, but the supply is artifically manipulated by OPEC and ourselves with our own laws. We are our own worst enemy where fuel prices are concerned.
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Old 05-22-2008, 01:25 PM
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Wait and see.

China is financing huge oil exploration programs, in their region and in Africa. When these get in production they may sell oil to themselves below OPEC prices, but they have no incentive to undercut OPEC rates for their oil they sell to us.

Matter of fact even the American owned oil companies have no incentive to sell oil to Americans below OPEC cartel prices. Why should they. They already know how much Americans are willing to pay, why sell it for less?
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Old 05-22-2008, 01:39 PM
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Default Re: Why Fuel Prices are so High - A Breakdown of Fuel Prices

Asian demand is huge. They are running out of coal so they are burning oil instead to generate electricity. The reason steel and concrete prices are going up is largely due to increased demand in asia.

This is all an obvious consequence of the booming industrialization process we are seeing in Asia.

We sold our sole to the devil when we sought out "cheap" foreign labor and goods. The only result would be increased wealth and industrialization in other parts of the world.

The ultimate consequence will be a "levelling" effect on the global economy. The wealth will be re-distributed.
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Old 05-22-2008, 01:49 PM
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Asian demand is huge. They are running out of coal so they are burning oil instead to generate electricity. The reason steel and concrete prices are going up is largely due to increased demand in asia.

This is all an obvious consequence of the booming industrialization process we are seeing in Asia.

We sold our sole to the devil when we sought out "cheap" foreign labor and goods. The only result would be increased wealth and industrialization in other parts of the world.

The ultimate consequence will be a "levelling" effect on the global economy. The wealth will be re-distributed.
Huge compared to what? Yes, this is part of it, but not as huge as is being suggested, I believe. I didn't realize we sold our feet (sole) to the devil (Canucktards ) But I think we sold our soul to OPEC.

If we had done the right things as far as our own legislation (there's that word again), this "levelling effect" would serve to bring everyone up closer to our level without bringing anyone down.

Everyone wants to blame somebody else for our problems, but guess what folks.....this oil mess is OUR FAULT because we, as citizens keep electing the same morons over and over and over again while expecting a different result.
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Old 05-22-2008, 01:55 PM
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I didn't realize we sold our feet (sole) to the devil (Canucktards ) But I think we sold our soul to OPEC.
Of course, you'd have to have a soul to sell and we all know what a god-less SOB you are (in addition to being a know-it-all SOB). So in your case I sold you feet.
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Old 05-22-2008, 02:05 PM
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Of course, you'd have to have a soul to sell and we all know what a god-less SOB you are (in addition to being a know-it-all SOB). So in your case I sold you feet.


Know it all SOB? What's up with the twinkified response?

Just because I disagree with your economic opinions makes me a know it all? Geeze, dude...I thought you of all people could support your own opinion better than that.

Lighten up. I'm just having fun pokin' ya. I thought you could handle it.
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Old 05-22-2008, 02:09 PM
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Just because I disagree with your economic opinions makes me a know it all?
No I simply called you a "know-it-all" because you decided to make fun of my spelling mistake.

I didn't see anything else in your reply that really warranted response.

You basically, blamed the legislators for making bad laws and then asked why we all have to blame someone else for our problems?
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