Gas Prices

[Terry D.]

While reading the previous threads about gas prices I noticed only a couple of people mentioned being "ripped off". According to the Wall street Journal, the four biggest oil companies, two of which are very familiar to all of us but will remain nameless, only made 21 BILLION dollars in the first quarter of this year. Now I don't begrudge anyone from making a profit, but I think that is a little much. Then they have the gaul to claim the rise in crude oil for the increase at the pump. Does anyone know how long it takes a barrel of crude to reach the refined stage and get to your gas tank? More than a couple weeks I'd guess.
It would also be interesting to know how much money they, the oil companies, are spending to help the relief efforts down south? When I called my senator (Ohio)I was told by his office that it was none of my business and that they had no way of telling. Geez you would think they would want everybody to know where they were spending their billions.

Thanks for letting me get my 2 cents worth in.
Terry

[Michael H.]

Re: Gas Prices

Terry,

I agree, and have one more thing to add. Last week, some little country somewhere (can't remember who) donated 500 million barrels of oil to the USA for the hurricane relief fund. Supposedly, it's already been shipped. If there are 300 million people in this country, each of us should expect to see roughly 1.3 barrels delivered to our front door any day now. I'm going to forward mine to the hurricane relief fund.

If it was accidentally shipped to the oil companies here in the USA, instead, I'm sure they'll have free gas until the whole 500 million barrels have been distributed, right?

Michael

[Terry D.]

Re: Gas Prices

Michael

Sounds logical to me but,I don't think I'll hold my breath till my barrel gets here.
Terry

[Erik S.]

Re: Gas Prices

Well, here in Amsterdam a gallon of gas costs approx USD 6.70 and I am still driving around my L71 most of the weekends.

Greetz,
Erik

[Terry D.]

Re: Gas Prices

Erik

Do they give you a jar of vaseline with every fill up? Try not to forget you have several things available to you that are considered illegal here! So I guess it's a trade off.
Terry

[Duke W.]

Re: Gas Prices

Financial data without context is worthless, but the press (which serves us so poorly) loves to stir up controversy as that's what gets their ratings and sales.

What really counts is the earnings/sales ratio, and there are ranges of values for each industry. If their total sales were 210 billion then they made 10 cents on the dollar, which is very good. That's what GM made back in the fifties.

If you think this is such a great deal you should buy some energy stocks or energy mutual funds and get in on the action.

A big reason for high gasoline prices is lack of refining capacity, which is causing wholesale gasoline prices to be bid up. A new refinery has not been built on US soil for 25 years because of "environmentalist" opposition and all kinds of barriers they have put up via willing federal and state governments. (This is called "minority rule".) A lot of refined product now comes from the Carribean region, but with the port of New Orleans closed, it may be tough to get this product to the US. There is plenty of crude available, but crude prices are up because world demand is pressing capacity.

Add to this the several dozen "boutique blends" of gasoline, which are required in various parts of the country at various times of the year, which reduces supply flexibility as not all refineries are set up to manufactur all the various blends.

The entire industry is tied up in knots with federal and state regulations, and working near capacity, so is it any wonder than supplies are tight and prices are going up.

A good deal of oil company profits go back into exploration to improve supply - except little is done in the US, again because no one wants an oil derrick in their state or off their shore, and the "evironmentalists" and their willing press accomplaces have been engaged in a 35 year misinformation campaign on the "evils of oil drilling", refining - virtually anything to do with the oil industry and the industry itself.

Americans have been spoiled with "cheap gas" essentially forever, so we drive gas guzzling vehicles, but we won't allow addition exploration or refining, and then whine when prices go up. So what do you think the ultimate result is going to be? Do you think we can have our cake and eat it too, forever?

I think it was Mark Twain who said: "Suppose you were a member of Congress. Suppose you were an idiot, but I repeat myself."

And I say: "A people ultimately get the government they deserve."

Duke

[Terry D.]

Re: Gas Prices

Duke

I understand what you are saying, but we also don't produce a lot of products that we used to, tires for one, yet there prices have not gone up 60% in the last year. Granted that with higher fuel prices the cost of everything will rise because of delivery costs going up also its a given that by products of the petrolum industry will rise I still think they make way too much profit at our expense. If small companies changed there pricing every time the oil companies do we would be out of business..Just my 2 cents.
Terry

[Duke W.]

Re: Gas Prices

Speaking of tires I heard that wholesale tire prices are going up led by a seven percent increase from Goodyear because of the increase in crude oil prices. Since crude oil is a raw material for so many other products (plastics and other synthetic materials) the price of these products will be going up as well as transportation costs, so there is a lot of inflationary pressure working its way into the economy.

Some pundits have even mentioned the word "stagflation".

Econ 101: If supply is tight and demand is high, prices are going to go up, and the demand for crude oil and all its products appears to be essentially inelastic.

The only way to break this cycle is to increase supply or reduce demand. As individuals we have some control over the latter. You should talk to you Senator again about the former.

Duke

[don 42616]

Terry, I prefer lower gas prices also BUT---------

Maybe $3-$4 gas prices will dictate people to buy economical car as daily drivers. Hummers, expeditions, & the list goes on was the daily diet for new buyers. The USA must reduce its dependency on foreign oil. We recieve much of our crude for the Mideast. Only a matter of time before that area implodes. I do agree with Duke (when I can understand him) . Regards, Don

[Rob M.]

What about hydrogen?

So when are we finally going to get cars which can run on hydrogen? Any idea what the oil price should be to make this alternative attractive enough?

greetings,
Rob.

[Duke W.]

Re: What about hydrogen?

So, where are you going to get elemental hydrogen?

Despite the fact that elemental hydrogen makes up 80 percent of the mass of the known universe it is very rare on earth. There is lots of hydrogen in water, but it is very comfortably bonded to two oxygen atoms, and it takes a HUGE amount of energy to disassociate.

Commercial hydrogen is produced from natural gas, which is primarily methane - CH4. The byproduct is C02, and when you analyze the complete thermodynamic and econmonic cycle, it's more economical to burn the methane directly in an IC engine than processing it to produce hydrogen for use in a fuel cell, and burning it directly will produce less CO2. Then there are the hydrogen storage issues, which have been somewhat vetted in public.

Water electrolosis requires huge amounts of electrical energy. Where is that going to come from? The reason electrolosis is rare is that it is much cheaper to produce hydrogen from methane because the chemical bonds are weaker than water, and there are no economies of scale for electrolosis. Look in any chemistry book to see how much energy it takes to disassociate a mole of water, then take into account the achievable efficiency using the best technology and it's a total loser economically.

Any undergraduate who has taken a first couse in chemistry and thermodynamics knows that fuel cells are not a viable candidate for mass application to vehicles as long as there is crude oil available to produce liquid fuels, however, ill-inforned and scientifically ignorant politicians continue to sell this to an unsophisticated, gullible public as if it is a real alternative. IT IS NOT!

Back in the late seventies there was a federally funded oil shale R&D project in the western slope of the Rockies, but crude prices would have had to reach about $60 a barrel back then for shale to be competitive, so the project was dropped.

That figure is now probably about $120 a barrel, but the "environmentalists" and their co-conspirators in the mass media will squeal like stuck pigs when the time comes - maybe in the not too distant future - that shale is competitive with crude oil.

There are no easy solutions, just ignorant, self-serving politicians and luddites.

Duke

[William C.]

Re: What about hydrogen?

Absolutely correct Duke, I know GM was working on compressed natural gas fueled vehicles in the 90's but they seem to have lost track when the management started listening to the "pie in the sky" croud about Hydrogen...

[Terry M.]

[Mike M.]

Re: What about hydrogen?

Duke: grapevine has it the tracy c has a flatus generator on the south forty capable of powering his 63 vette a hundreed miles per fart. mike

[Terry M.]

Re: What about hydrogen?

How large a herd does Tracy have? Bovines are large generators of gaseous emissions. Or did you mean something else, Mike?