Interesting commentary on gas prices

[Haul Asp]

...let's look at some facts that most of the mainstream media and most politicians don't talk about. Let's start with those restrictions on oil refineries. As best as I can determine, not a single new refinery has been built in the U.S. in almost 30 years. That will guarantee a bottleneck in gas supply.

In addition, we have regulations that require specific gasoline blends for different cities. Sounds like a nice idea until you realize what is does to the supply. It injects unnecessary rigidities into the gasoline supply system. If Kansas City runs short, you can't just move supply from Dallas. In the end you get shortages and price spikes. Sound familiar?

What about fuel alternatives? There has been a lot of talk about ethanol. It turns out that last year's energy bill mandates increases in ethanol use. However, these mandates in the bill actually exceed current U.S. ethanol production. This is causing gasoline shortages and price spikes.

So why don't we import ethanol? After all, Brazil produces ethanol cheaply and we could import it to America. But we don't and we probably won't because we have an artificially high 54-cent ethanol tariff. Why is that? It's simple: the Iowa caucuses. Iowa grows corn and makes ethanol. Iowa also has the first caucus in the presidential primaries. Essentially, politics keeps us from importing cheap ethanol.

Is there any way we can increase supply? Yes, we can use pin-point exploration of oil-rich wastelands such as ANWR in Alaska. Congress could agree to allow oil exploration in one-tenth of one percent of the frozen tundra of the Arctic National Wildlife Refuge. But so far, certain members of Congress continue to block these efforts.

Or how about recovering oil from oil shale? A recent Rand study of oil shale within the Green River Formation in the west found that it contains 800 billion barrels of recoverable oil. That is more than three times the proven reserves in Saudi Arabia.

Of course we can also develop nuclear energy. This would provide electricity that can be used to power hybrid cars and electric cars. Even Patrick Moore, the co-founder of Greenpeace, admits that "nuclear energy may just be the energy source that can save our planet from another possible disaster: catastrophic climate change." But other environmentalists have blocked nuclear power for years.

But finally, let's get back to the price of gasoline for a moment. Here's something the mainstream media won't tell you. At $75 per barrel, oil is still $12 less than its inflation-adjusted price in 1981. Shouldn't the media at least try to put some of this in perspective?

Instead they talk about record profits and price gouging. But who makes the most off a gallon of gasoline? Not the oil companies. The greatest beneficiary is government. At current prices, the federal government gets more than 18 cents a gallon in taxes. By contrast, the oil companies get about 9 cents a gallon.

But federal taxes are only part of the take. Combined federal, state, and local taxes on a gallon of gas now average 50 cents (from a low of 26 cents in Alaska to a high of 60 cents in California). According to the Tax Foundation, in the last 3 decades, government has collected $1.34 trillion (inflation adjusted) in gasoline-tax revenues. That is "more than twice the amount of domestic profits earned by major U.S. oil companies during the same period."

Here's my point. In the last few minutes I have probably put a number of facts on the table that you are hearing for the very first time. Why haven't you heard this from the mainstream media? Is it because they don't have the resources? Hardly.

This information isn't that hard to find if you begin looking for it. I found it in a few columns and articles. The bottom line is simple: you aren't getting the whole story. And if you aren't getting the whole story about something that affects all of us (like gas prices) imagine how much other information is being held back.

[beachguy_inthongs]

So, how much is it in your neck of the woods?

Here, as of yesterday, it was $2.97, but I know a couple more, around here, that usually sell it a couple cents cheaper than the two that I saw.

[chrish]

My last fill up was at $3.47/gallon.

When everyone else was bitching about it being almost $3.00/gallon we'd been way over that for weeks. We're always about $0.20 to $0.40 ahead of everyone else.

Prices are a result of supply and demand. We've screwed ourselves. because we don't produce enough, won't drill for more on our own land, discourage investment in infrastructure to enable us to produce more.

On the bright side, the higher gas price has the relative effect of lowering the barriers to market of an alternate energy source like Hydrogen. We can only hope that H fuel deveopment gets going. That's the long term solution.

[beachguy_inthongs]

Originally Posted by chrish

chrish stated: "When everyone else was bitching about it being almost $3.00/gallon we'd been way over that for weeks. We're always about $0.20 to $0.40 ahead of everyone else."

Yeah, I've always been aware that gas is $2 more expensive in New York and on the New Jersey Turnpike.

[Haul Asp]

It's running about $3.06 here. Which sucks because this is the energy corridor. You'd think we would enjoy better prices.