Gas Prices

[jakobeast]

Where ya been cpl? Or am I just not observant?

 

[IceHogsFan]

 

[LordKOTL]

^Not in my neck of the woods they weren't.

 

[jaxhawksfan]

National average folks, national average.

 

[jaxhawksfan]

Where ya been cpl? Or am I just not observant?

I was going to ask the same thing. Good to see Mac back.

 

[Pez68]

Actually Exxon-Mobil pays almost $10 Billion a year in taxes to the US government, but I've never heard them use taxes to justify the cost of fuel even though there is an argument to be made there. It's not just federal taxes, fuel gets taxed by everybody with a legal taxing authority, municipal, county, state and federal. That's a big part of the reason why fuel is so much more expensive in blue states like California, New York and Illinois. Commodity trading can and does impact the cost of fuel, but futures are not traded in a vacuum. Like every other commodity that is traded, many factors influence the market and traders buy and sell fuel at prices they base on market conditions (hurricanes, supply, demand, geo political stability, exploration and discovery to name a few). These factors are greatly affected by government policy. If federal land is closed to exploration then an enormous slice of the natural resource pie is off the table artificially limiting supply and driving up the market value. If a technology that exponentially increases our ability to recover natural resources from known reserves is targeted for shutdown by the government it chills exploration and keeps the market price high. If offshore drilling is frozen it artificially constrains the supply driving market prices up. If Canadian oil is not allowed to enter our country though an inexpensive pipeline the cost of transporting that oil to our refineries goes up exponentially driving up the market price. If we do not allow all of our known reserves to be explored and recovered we lose a valuable tool to drive down the market price. ALL of these things are government policy driven. What is not government driven but can be government influenced is the production OPEC arbitrarily decides to put in play. They can turn down the tap any time they want and drive prices up. Middle East unrest causes disruptions in the OPEC supply, we've had a bit of that lately. America is capable of energy independence even with fossil fuels which would eliminate OPEC from the picture regarding our fuel supply and prices. Another not often talked about factor is the emerging Asian market. China and India have exploding demand for fuel increasing the market value. I wrote a short piece on fossil fuels back in March.





There are only a dozen or so major refineries that provide almost all of America's fuel, and almost all of them are on the gulf coast. When a refinery blows, it's a major undertaking to get it put back together and train a new batch of workers, fortunately it's pretty rare. With hurricanes it's a different problem, the refineries don't always shut down for a hurricane but the oil wells do. It's called shutting in, and when a hurricane is forecast to roll through the neighborhood the offshore rigs and onshore gulfcoast wells that are thought to be in the area are shut down. When you shut down a well or rig it's called shutting in, but it's not like turning a light on or off. It turns off no problem, but getting a well pumping again after turning it off is time consuming because you have to prime the whole system including the pipeline that every well runs through. It might only take a few hours to get a well back online, but you have to multiply that by tens of thousands of wells. When Isaac rolled through here about a month ago, thousands of wells were shut in and it took almost two weeks for everything to be brought back online. Offshore rigs are worse, they have to fly the crews back to the rigs and that's assuming a crew will be available because a lot of them are dealing with a hurrican rolling through their neighborhood. They also have to have their rigs inspected for damage and get the okay to fire back up.



Significantly yes, entirely no.

That's cute. Propaganda right from the horse's mouth... Creative accounting, nothing more. And if the administration started enforcing policies to reduce gas prices, and as such, the profits from selling gas, the right wing would be up in arms about the government getting involved, preaching how they should stay out, free market economy, less regulation, on and on. It's hypocritical. It's not OK for the government to get involved with healthcare because it's a free market, but the government should get involved in gas prices? Makes a lot of sense.....?



Either monopolizing the market and gouging prices is bad, or it isn't. You can't have it both ways.

 

[jaxhawksfan]

Your first mistake is saying that the government actually has the right to policies which dictate anything about pricing or profits of selling an item.

The government is not there to mandate pricing, or police it. It is there to foster an environment that is not hostile towards more exploration and utilization of our own natural resources. Unfortunately, they fail miserably at that.



Nice try though. You are comparing two unlike situations. Nobody is saying the government should step in and mandate the price of gas (Unlike what they have done in the healthcare industry).

 

[Pez68]

Except they have been doing exactly that for years. Communications, energy, IT, you name it. It's the whole basis behind antitrust and competition laws in this country. How far off from a monopoly is the current gas/oil situation in this country?



I still don't agree with the notion that the government can do ANYTHING to reduce the price of gas in this country. That is driven almost entirely by GREED, not policy. Is the policy really that much different towards gas/oil than it was four, eight, twelve years ago? If so, I must be living in a fucking bubble, because I don't see it.



I also don't see the government mandating the price of healthcare....



Monopoly: exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.



I don't know about your view on this, but I'd call it a monopoly.

 

[cplmac]

Where ya been cpl? Or am I just not observant?

Still in Louisiana hauling crude out of the oilfields. Been real busy lately.

That's cute. Propaganda right from the horse's mouth... Creative accounting, nothing more.

At least my information has a source, where is your source that they paid ZERO taxes? Are you and Harry Reid sharing sources? I'm not going to argue whether or not the numbers FROM Exxon are completely legit, I'm sure there is some level of manipulating, but I'm also sure they paid taxes, and I mean taxes in the billions. Maybe it was "only" $5 billion instead of 10, only the IRS and Exxon know for sure unless they have released their actual tax records (entirely possible I haven't looked for them though).

And if the administration started enforcing policies to reduce gas prices, and as such, the profits from selling gas, the right wing would be up in arms about the government getting involved, preaching how they should stay out, free market economy, less regulation, on and on. It's hypocritical. It's not OK for the government to get involved with healthcare because it's a free market, but the government should get involved in gas prices? Makes a lot of sense.....? Either monopolizing the market and gouging prices is bad, or it isn't. You can't have it both ways.

There is a fundamental flaw in your premise, by NOT enforcing policies they will effectively help the market. They do not need to take any action, the supply chain will take all the action necessary. Unfortunately this administration has chosen to take action and that action is to reduce domestic (I emphasize domestic becuase we are subsidizing Brazilian fossil fuel exploration with the understanding that we will buy their oil) fossil fuel recovery in any way it can. Less regulation in and of itself equates to increased domestic production, and dramatically lower production costs. It's not hypocritical at all, it is in fact the basis of constitutional conservatism. There is no monopoly on fossil fuels, there are half a dozen billion dollar companies alone fighting eachother for market share, not including the thousands of smaller producers. I've worked for Conoco Phillips and Shell over the past year in the oil fields, believe me when I tell you these companies are not colluding, they are knee deep in vicious competition.

Except they have been doing exactly that for years. Communications, energy, IT, you name it. It's the whole basis behind antitrust and competition laws in this country. How far off from a monopoly is the current gas/oil situation in this country?

AT&T was an entirely different animal, they were a legitimate monopoly to the extent they could unilaterally dictate the market. Energy is different, that is controlled because it's considered a matter of national security. You could make an argument that fossil fuels could fall in that same category and I wouldn't argue it much, but our current fossil fuel industry is nowhere near a monopoly.

I still don't agree with the notion that the government can do ANYTHING to reduce the price of gas in this country. That is driven almost entirely by GREED, not policy. Is the policy really that much different towards gas/oil than it was four, eight, twelve years ago? If so, I must be living in a fucking bubble, because I don't see it.

The price of everything is driven by market forces, greed is what makes producers ask the highest price the market will bear, and greed is what makes consumers pay the lowest price the market will bear. The government absolutely can affect the price of fuel, by a number of different things. They can open up federal land to be leased for exploration, something they have not done since Bush. They can stop frivolous ideological attacks on the production of fossil fuels (attempting to stop hydraulic fracking is a perfect example). They can lower the punitive taxes they levy on the purchase of fuel (these taxes are paid solely by the consumer). They can stop blocking the low cost importation of Canadian oil. They can release oil from the Strategic Petroleum Reserves which always significantly drives down the cost of oil. They can stop mandating Ethanol and other additives which actually damage the engines of the overwhelming majority of todays internal combustion engines and cost an arm and a leg for refineries to blend. There are plenty of things outside of the governments control when it comes to the price of fuel, hurricanes, geopolitical instability or even industrial accidents. However this president and his energy Secretary have both said they necessarily intended for fossil fuels to become cost prohibitive to force the public into alternative fuels rather than the more sane path of finding ways to make alternative fuels more affordable. The policy towards fossil fuels today is 180 degrees different from what it was 8 years ago. It takes between 5-8 years for new leases to start producing oil (mostly because of environmentalist lawsuits and EPA burdens), ALL of the growth in oil production we see today is from Bush. I'd be happy to explain any of this at all in more depth if you are interested. Hell Chicago shut down 2 coal fired power plants this year but we have not replaced them with any other means of producing electricity. I have no problem moving away from fossil fuels, but lets do it as the market dictates which is to say as they become financially practical for those of us with blue collars. The government CAN help make that happen and nobody would say they shouldn't.

I also don't see the government mandating the price of healthcare....

Look closer. They did more than just mandate the price of healthcare (indirectly by setting a coverage baseline that is above what many people want or need) they materially and directly increased the cost of NOT having healthcare by imposing taxes on every American who chooses not to purchase health insurance that meets that baseline. They also substantially increased the cost of healthcare to employers which is probably even worse. Many employers are simply going to pay the new healthcare tax and drop the health insurance coverage they currently provide their employees altogether because they can't afford the cost of the new insurance mandated by the federal government. So these employees are not only going to lose their insurance (if not their job, some companies will find it cheaper to simply downsize their workforce), but they will also now have to pay a tax to the government for no longer having insurance at all. Forget about the morality of whether or not the government has the right to force people to pay for insurance that covers procedures they find to be against their religion, or whether or not the 10th amendment actually allows the federal government to mandate health insurance at all, it's a financial nightmare in the middle of the great recession when people have much more immediate problems to face. I'm glad you brought this up though, it's a really accurate comparison to the way the government is causing the price of fuel to get high and stay high. We are now paying fuel prices over $3/gallon for 3 times longer than the previous record, almost 2 years exactly.

 

[Pez68]

Demand is down. Consumption is down. Supply is up. There is absolutely no reason for gas prices to be where they are at. The reasons you mentioned are nothing more than convenient excuses(bullshit) for the price gouging that is taking place. THIS COUNTRY has no more need for oil than it did eight years ago. Actually, less. Why should we open up all this land and all these oil fields so that the oil companies can sell oil to China and India? Because they're not using it here.... No, sorry, I don't agree with that at all.



Also, in case you didn't notice, the price of OIL, adjusted for inflation, is actually LOWER than it was when Obama took office. So, again, I call bullshit on your reasoning for the gas prices. The current gas prices have almost nothing to do with oil prices. Here's another interesting fact for you. The average price of oil for Bush's last year in office, was $91.48. The average price in 2009? $53.48. 2010? $71.21. 2011? $87.04. So, actually, the price of oil, even without adjusting for inflation, has been CHEAPER under Obama than it was under Bush's last year in office. Every single year. Your argument doesn't hold water.



I wouldn't rule out political motivation being behind the gas prices, either.



They shutdown a couple of coal burning plants...yet....I don't see an electricity shortage. Must not have needed them I guess?



Finally, the problem with "market forces driving the price of gas" is this. People NEED gasoline. Whatever gas costs, most people HAVE TO PAY FOR IT. If they don't, they don't work, they don't pay the bills, they don't eat, they don't live. They charge what they do for gas, because they know people have no choice in the matter. It's fucking bullshit.



And this comes from someone that works from home and likely consumes less gasoline than almost everyone here.

 

[jakobeast]

Still in Louisiana hauling crude out of the oilfields. Been real busy lately.

The money is good right? I have been poking around looking at jobs in the patches in the NODAK area and in Texas. Still a little gun shy. Also, i only have a class B, and i don't know if they even look at class B fellas.

 

[cplmac]

Stay out of the Bakken, the cost of living there is insane. I know people who have worked there and unless your company provides housing (many do now) you will not find a place to live and if you do you will pay Trump Tower prices. Same thing with food. Texas is a good place, Eagle Ford is booming and so is the Marcelles in PA. There isn't any class B work in the oil patch unless you are looking to work a wireline crew or a derrik. I'm usually over 80,000 loaded, I ran a triple axle my first year down here.



Pez, demand is up, way up. Oil is a global commodity and no matter how much domestic demand falls oil is traded on the international markets where China and India more than make up for our decline. Also in 2009 our fuel prices were higher than they are now for several months. If I remember right a barrel actually hit $125 at one point in 2009. The prices went through the floor at the end of W's term though, so your comparison makes perfect sense against today's prices. When gas sells for less than $2/gallon oil is trading under $60/barrel. Something to chew on, a barrel of oil depending on what kind of oil it is makes around about 35 gallons of gas, if a barrel of oil cost $95 then you are looking at gas at $2.71/gallon at crude oil prices. That's not taking into consideration how much money it costs to refine a barrel of oil (separating out the gasoline hydrocarbons from all the other hydrocarbons), to transport it from the oil field to the refinery, to add %10-%15 Ethanol to the gas (Ethanol costs more than gas), to add the detergants and stabilizers and octane blend to the gas, and to transport it to the distributors (the gas stations). There is very little profit margin in refining oil, the profits come from producing massive quantities which is why we export fuel (refined from oil we imported because we have the worlds most advanced and large refining capacity). Also, it costs a fortune to refine diesel because the government requires that diesel fuel have virtually no sulphur in it. That is expensive becuase crude oil has a tremendous amount of two things, water and sulphur. That's why light sweet crude is expensive (very low sulphur content) and heavy sour crude is cheap (high sulphur content). Most people don't realize how much fuel is actually diesel and not gasoline. Airplanes run on a form of diesel, trucks, ships, locomotives, diesel is a huge chunk of the fuel market.



I agree that people NEED gas, no doubt it's a national security issue the same as electricity. How do we deal with that? Again I did write a little article about how we can make progress there. As far as you not noticing any shortage of electricity, nuclear plants can be ramped up to produce more power on demand, the problem is even though nuclear is the medium term future of electricity the Democrats have blocked a national nuclear waste repository for decades even though every single electric bill we pay a federal tax for the disposal of nuclear power waste. That aside does Chicago have so many jobs it afford to lay off two coal fired powerplants worth of workers? It's a blue city so I'm sure they think they can, Springfield will just pay the difference out of the pockets of the red counties as usual and the fed will pick up any leftovers. Meanwhile those workers can now look forward to being taxed for no longer being able to afford health insurance. Lather rinse repeat.

 

[Tater]

There is a fundamental flaw in your premise, by NOT enforcing policies they will effectively help the market. They do not need to take any action, the supply chain will take all the action necessary. Unfortunately this administration has chosen to take action and that action is to reduce domestic (I emphasize domestic becuase we are subsidizing Brazilian fossil fuel exploration with the understanding that we will buy their oil) fossil fuel recovery in any way it can. Less regulation in and of itself equates to increased domestic production, and dramatically lower production costs. It's not hypocritical at all, it is in fact the basis of constitutional conservatism. There is no monopoly on fossil fuels, there are half a dozen billion dollar companies alone fighting eachother for market share, not including the thousands of smaller producers. I've worked for Conoco Phillips and Shell over the past year in the oil fields, believe me when I tell you these companies are not colluding, they are knee deep in vicious competition.

Also known as outsourcing.



Great post CPLMAC and welcome back.

 

[cplmac]

Thanks, good to be back. Jako the money is pretty good, especially compared to what's out there for middle class workers right now. I work 4 days on 2 days off on 12 hour shifts. Oilfield schedules are really bizarre, mine is way closer to a normal job schedule than a lot of oilfield workers. The offshore guys work 2 weeks on 2 weeks off, the pumpers work 1 week on 1 week off, in North Dakota guys work 2 weeks on 1 week off, it's just all over the map. My first job down here was 5 days on 2 days off 5 days on 3 days off. It's actually nice having your weekends in the middle of the week sometimes, you can get stuff done and you always feel like your playing hookey even though you worked 60 hours...

 

[LordKOTL]

Your first mistake is saying that the government actually has the right to policies which dictate anything about pricing or profits of selling an item.

The government is not there to mandate pricing, or police it. It is there to foster an environment that is not hostile towards more exploration and utilization of our own natural resources. Unfortunately, they fail miserably at that.



Nice try though. You are comparing two unlike situations. Nobody is saying the government should step in and mandate the price of gas (Unlike what they have done in the healthcare industry).

I don't think they should, but in the future they may have to. If no one can get to work then no money is in the economy and it could precipitate huge crash especially since alternative fuel/energy are not being investigated with any zeal.



Moreover, I think a lot of the populace would not be against a price fix no matter how socialist it is in concept. A price fix would mean that gas would be afordable and any profit loss by the oil companies (which report multi-billion dollar profits) could not pass that cost onto the consumer.



IMHO the best thing that could be done at this point is investigate a multi-vehicle strategy for consumer living. Something electric can be used for daily commutes (I've actually thought about getting an electric motorcycle for this purpose) and even grocery-getting while something fossil-fuel based can be used for long-haul trucking, Road trips, or just a leisurely weekend drive in a car that can lay a patch of flaming rubber.

 

[BlackHawkPaul]

Also known as outsourcing.



Great post CPLMAC and welcome back.

+1.

 

[IceHogsFan]

I agree, good to see cplmac back on here.



Welcome

 

[TSD]

Demand is down. Consumption is down. Supply is up. There is absolutely no reason for gas prices to be where they are at. The reasons you mentioned are nothing more than convenient excuses(bullshit) for the price gouging that is taking place. THIS COUNTRY has no more need for oil than it did eight years ago. Actually, less. Why should we open up all this land and all these oil fields so that the oil companies can sell oil to China and India? Because they're not using it here.... No, sorry, I don't agree with that at all.



Also, in case you didn't notice, the price of OIL, adjusted for inflation, is actually LOWER than it was when Obama took office. So, again, I call bullshit on your reasoning for the gas prices. The current gas prices have almost nothing to do with oil prices. Here's another interesting fact for you. The average price of oil for Bush's last year in office, was $91.48. The average price in 2009? $53.48. 2010? $71.21. 2011? $87.04. So, actually, the price of oil, even without adjusting for inflation, has been CHEAPER under Obama than it was under Bush's last year in office. Every single year. Your argument doesn't hold water.



I wouldn't rule out political motivation being behind the gas prices, either.



They shutdown a couple of coal burning plants...yet....I don't see an electricity shortage. Must not have needed them I guess?



Finally, the problem with "market forces driving the price of gas" is this. People NEED gasoline. Whatever gas costs, most people HAVE TO PAY FOR IT. If they don't, they don't work, they don't pay the bills, they don't eat, they don't live. They charge what they do for gas, because they know people have no choice in the matter. It's fucking bullshit.



And this comes from someone that works from home and likely consumes less gasoline than almost everyone here.

<---- works from home at least 3 days a week.

 

[jakobeast]

I don't think they should, but in the future they may have to. If no one can get to work then no money is in the economy and it could precipitate huge crash especially since alternative fuel/energy are not being investigated with any zeal.



Moreover, I think a lot of the populace would not be against a price fix no matter how socialist it is in concept. A price fix would mean that gas would be afordable and any profit loss by the oil companies (which report multi-billion dollar profits) could not pass that cost onto the consumer.



IMHO the best thing that could be done at this point is investigate a multi-vehicle strategy for consumer living. Something electric can be used for daily commutes (I've actually thought about getting an electric motorcycle for this purpose) and even grocery-getting while something fossil-fuel based can be used for long-haul trucking, Road trips, or just a leisurely weekend drive in a car that can lay a patch of flaming rubber.

2 problems.



1: they tried price fixing in the mid 70's. Anyone remember what happened? That shit can't happen again.



2: While I agree having many different energy sources, the populace can't have it. Americans, and really, all humans, need a clear cut number 1. From fuel, to watches, to anything really, we need a best thing that everyone wants. Everyone is looking for the number 1 thing in any category.

 

[jakobeast]

Thanks, good to be back. Jako the money is pretty good, especially compared to what's out there for middle class workers right now. I work 4 days on 2 days off on 12 hour shifts. Oilfield schedules are really bizarre, mine is way closer to a normal job schedule than a lot of oilfield workers. The offshore guys work 2 weeks on 2 weeks off, the pumpers work 1 week on 1 week off, in North Dakota guys work 2 weeks on 1 week off, it's just all over the map. My first job down here was 5 days on 2 days off 5 days on 3 days off. It's actually nice having your weekends in the middle of the week sometimes, you can get stuff done and you always feel like your playing hookey even though you worked 60 hours...

I don't mind the goofy hours. I know the NoDak area is crazy up and down, no housing, crazy shit happening.



I spose if I got my Class A with hazmat, tanker, and doubles I could probably pull 6 figures. I am just kinda stuck with what i want to do. Derrik work? sounds dangerous. Whats wireline? I need to learn some shit.