Explanation for High Fuel Prices

[john3976]

ConocoPhillips Reports Record Oil Profits

 

[macdaddy]

ConocoPhillips Reports Record Oil Profits

Bully!!!!!!!!!!!!!!



Mac

 

[MCummings]

United States Government Reports Record Income





Merrick

 

[Mundgyver]

FACT: Since 1977 the us government has collected $1. 34 Trillion in gasoline tax revenues in inflation adjusted dollars. That's more than twice the amount of domestic profits earned by major U. S. oil companies during the same period.



Now I understand why we have a DO NOTHING CONGRESS for alternative transportation ideas

 

[nps]

(Disclaimer - It was hard deciding which 'Big Oil Rant' thread to post this on, but I thought the title of this thread made it the most appropriate one. )



Maybe this time is the wakeup call for the good ol USA to finally make some permanent lifestyle adjustments in response to energy prices. The hurricanes last year produced a short-lived period of panic until prices came back down.



Remember back in the 70's there was a shift to smaller cars (the US made ones were junk and this is what really got the Jap's foot in the door). But now we are back to big Excursions, Expeditions, Suburbans, F-150s, 1500's of type C and D, and heck even the Impala came back. Maybe they get a little better mileage that their predescessors of 15 years ago, but not much.



I posted in this forum earlier about my experiences following a less-than-affulent woman who, having just put gas into her guzzler, proceeded to race from stop light to stop light. That was at $2. 65/gal. Now we are at $2. 90, and drivers did seem to be a bit more conservative with the right foot during my drive to work this morning. But unless prices keep climbing through the roof (no I don't think they are there yet) I'm sure I'll be back to the races in a couple weeks.



To make a permanent effect on Americans I think it is time to take a cue from Europe - engine displacement tax. That's right, across Europe you pay through the nose each and every year when registering for your cubic inches and liters. The bigger the motor, the more the tax - BIG TAX - and it's rise is not linear with the increased motor displacement; it's more like exponential.



What is the result of this tax you ask? Well, in Germany most 3 series BMW's are 316's. 1. 6 liters. Few cars exceed 2 liters. Europeans still race from stoplight to stoplight. But in the process they don't burn nearly as much fuel as the average vehicle on American roads.



The bottom line - I don't think we will ever change driving habits. The only thing we can change is the rate of consumption considering those habits. It'll take time to recycle all the cars on the road today, but if history is an indication for the future, fuel price increases only have a short term affect.



Oh yeah, along with this proposal I also would include an exemption on all vehicles with a Cummins-built motor. :-laf

 

[JasonBrown]

It is not the job of the government to legislate behavior by taxation. They are trying that with cigarettes and booze already.

 

[Cattletrkr]

It is not the job of the government to legislate behavior by taxation. They are trying that with cigarettes and booze already.

While I agree with that statement wholeheartedly, I'm starting to think that the vast majority of people are either too stupid to figure it out for themselves or they just don't care.

 

[Rman]

It is not the job of the government to legislate behavior by taxation. They are trying that with cigarettes and booze already.

So is it the governments job to provide free health care for someone who smokes everyday, and drinks all the time? IF smokers and drinkers would never file an insurance claim for any of there hospital visits I say lift the tax, if they do then keep the tax in place and actually use it to offset the costs, instead of lining the pockets of the wrong people.



This is a hijack so I'll stick to the fuel. I think a displacement tax would be alright with me. Isn't the Cummins the lowest displaced diesel? Just another perk!

 

[nps]

It is not the job of the government to legislate behavior by taxation. They are trying that with cigarettes and booze already.

While I agree with that statement wholeheartedly, I'm starting to think that the vast majority of people are either too stupid to figure it out for themselves or they just don't care.

While I would normally agree with you Jason, in this case it seems there are 3 choices to ease demand and fuel prices (given the US consumes about 25% of worldwide crude, each driver does have a part to play in the current pricing) :

1. Voluntary conservation (not happening where I live).

2. Government regulation of the oil industry (creates more problems than it solves).

3. Tax policy to affect behavior. Works quite well when tax incentives are given to stimulate behavior (i. e. housing and mortgage industries), but meets with resistance when used to suppress behavior.



Any other suggestions?



I guess if some in here are too stupid to figure out any other solution then they can keep whining about the high cost of fuel until the price goes up so high that it modifies the consumption behavior.

 

[DSpencer]

It is not the job of the government to legislate behavior by taxation. They are trying that with cigarettes and booze already.

It may or may not be their role. If it were up to a vote I would vote for it..... twenty five years ago when the problem was the same but the prices were different.



Mass transit may have taken hold. People would have found ways to live closer to their work. More companies would allow professional workers to work at home.



This problem and the current fixes will only be short lived. The problem will continue until we either find a different energy source that is cheap or make logical choices that do include reducing consumption or at least not keep increasing it worldwide.



The answer in my opinion is that living on much less energy is easily achieveable. My bass boat is one of the most fuel efficient on the market. Performance wise it does things no cookie cutter boat will do with much less energy spent. When I bought my Dodge I only bought it because there were no better fuel efficient solutions available in the US. A clean burning diesel in a 4500 lb truck built to pull 5000 lbs would probably get me 1/3 better mileage but with govt regs there is no option.



The govt is now looking to reduce for the short term gas taxes and make more fuel available by not pumping oil into our reserves. They are trying to follow the publics demands but duhhh..... It will only keep the prices lower and does nothing about consumption.



They ought to do something like Europe and lower taxes on fuel efficient technologies like diesel. Raise it on the fuel inefficient cars. Promote fuel efficiency. You could do it with no impact on total taxes but would lower fuel used.

 

[JFaulkner]

Remember back in the 70's there was a shift to smaller cars (the US made ones were junk and this is what really got the Jap's foot in the door)

Junk, hey now your forgeting this mean mo'chine!



At least with this car you tried to keep it on "E" so it didn't explode when hit! :-laf

 

[nps]

Junk, hey now your forgeting this mean mo'chine!



At least with this car you tried to keep it on "E" so it didn't explode when hit! :-laf

Always said a real gamblin' man drove a Pinto with Firestone 500s. :-laf

 

[EMD-Run8]

Asia's fuel demand is billions of gallons higher than it was ten years ago but both the Russian's and the Venezuelan's are producing less than they are capable of producing. Not to mention various factors like the lack of capacity and slowness to get with it on alternative fuels (I think that part is coming quicker than we think though). 10 mpg or less Hummers and such don't help and every time I see somebody just romp on it for no apparent reason, I think that fuel prices must not be high enough yet for some of us. We consume 20 billion barrels of oil a DAY in the US. I'll bet that the US refiners are piling on less than an average of 50 cents on every gallon of the various fuels they're putting out. Add it up... ..... that's half a million bucks a DAY for every million gallons. Don't get me wrong... ... ... I DON'T LIKE IT!, but I don't think our companies are piling on as much everybody thinks they are. It does need to stop though. I understand all the damage they took from the storms but getting a 2 billion dollar tax break and reporting those kind of profits just rubs people all wrong.

 

[JasonBrown]

So is it the governments job to provide free health care for someone who smokes everyday, and drinks all the time? IF smokers and drinkers would never file an insurance claim for any of there hospital visits I say lift the tax, if they do then keep the tax in place and actually use it to offset the costs, instead of lining the pockets of the wrong people.



This is a hijack so I'll stick to the fuel. I think a displacement tax would be alright with me. Isn't the Cummins the lowest displaced diesel? Just another perk!

I don't think it's government's job to pay for health care either.

 

[JasonBrown]

I also think that the reason we don't have alternative fuels is that the government and the auto industry is in the pockets of the oil companies. They have made sure that no other sources are found and implimented. Bio-diesel and corn based solution for gas vehicles should've been the norm 20 years ago. Both burn cleaner, it's a no brainer. Just goes to prove, whoever has the most money wins.

 

[RustyJC]

I also think that the reason we don't have alternative fuels is that the government and the auto industry is in the pockets of the oil companies. They have made sure that no other sources are found and implimented. Bio-diesel and corn based solution for gas vehicles should've been the norm 20 years ago. Both burn cleaner, it's a no brainer. Just goes to prove, whoever has the most money wins.

It's really much more complex than you describe. The vehicle manufacturers aren't going to build alternate fuel vehicles until there's an infrastructure to support them - if you're driving from New York to Los Angeles, where exactly are you going to pull off the Interstate and fill up with hydrogen, ethanol, biodiesel, etc. ?



Conversely, entrepreneurs aren't going to sink a ton of money into alternate fuel infrastructure until there are enough vehicles out there that can utilize the fuel.



So, it's really a "the-chicken-or-the-egg" dilemma. We now see GM coming out with a number of E85 vehicles, but where do you fuel them up? Kroger is promising to install E85 pumps at a few of its Houston locations, but ?????



Rusty

 

[Mundgyver]

Try this one, my daughter sent it to me today



Subject: price of gas







A man eats two eggs each morning for breakfast. When he goes to the grocery store he pays . 60 cents a dozen. Since a dozen eggs won't last a week he normally buys two dozens at a time.



One day while buying eggs he notices that the price has risen to 72 cents. The next time he buys groceries, eggs are . 76 cents a dozen. When asked to explain the price of eggs the store owner says, "the price has gone up and I have to raise my price accordingly".



This store buys 100 dozen eggs a day. I checked around for a better priceand all the distributors have raised their prices. The distributors have begun to buy from the huge egg farms. The small egg farms have been driven out of business.



The huge egg farms sells 100,000 dozen eggs a day to distributors. With no competition, they can set the price as they see fit. The distributors then have to raise their prices to the gr ocery stores. And on and on and on. As the man kept buying eggs the price kept going up. He saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there.



He checked out the huge egg farms and found they were selling 100,000 dozen eggs to the distributors daily. Nothing had changed but the price of eggs.



Then week before Thanksgiving the price of eggs shot up to $1. 00 a dozen. Again he asked the grocery owner why and was told, "cakes and baking for the holiday". The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs goes up. Expect the same thing at Christmas and other times when family cooking, baking, etc. happen.



This pattern continues until the price of eggs is 2. 00 a dozen. The man says,"there must be something we can do about the price of eggs".



He starts talking to all the people in his town and they decide to stop buying eggs. This didn't work because everyone neede d eggs. Finally, the man suggested only buying what you need.



He ate 2 eggs a day. On the way home from work he would stop at the grocery and buy two eggs. Everyone in town started buying 2 or 3 eggs a day.



The grocery store owner began complaining that he had too many eggs in his cooler. He told the distributor that he didn't need any eggs. Maybe wouldn't need any all week.



The distributor had eggs piling up at his warehouse. He told the huge egg farms that he didn't have any room for eggs would not need any for at least two weeks.



At the egg farm, the chickens just kept on laying eggs.



To relieve the pressure, the huge egg farm told the distributor that they could buy the eggs at a lower price. The distributor said, " I don't have the room for the eggs even if they were free".



The distributor told the grocery store owner that he would lower the price of the eggs if the store would start buying again. The grocery store owner s aid, " I don't have room for more eggs. The customers are only buy 2 or 3 eggs at a time. Now if you were to drop the price of eggs back down to the original price, the customers would start buying by the dozen again".



The distributors sent that proposal to the huge egg farmers. They liked the price they were getting for their eggs but, them chickens just kept on laying.



Finally, the egg farmers lowered the price of their eggs. But only a few cents. The customers still bought 2 or 3 eggs at a time. They said, "when the price of eggs gets down to where it was before, we will start buying by the dozen. "



Slowly the price of eggs started dropping. The distributors had to slash their prices to make room for the eggs coming from the egg farmers. The egg farmers cut their prices because the distributors wouldn't buy at a higher price than they were selling eggs for.



Anyway, they had full warehouses and wouldn't need eggs for quite a while.



And them chicken s kept on laying.



Eventually, the egg farmers cut their prices because they were throwing away eggs they couldn't sell. The distributors started buying again because the eggs were priced to where the stores could afford to sell them at the lower price.



And the customers starting buying by the dozen again.



*

**Now, transpose this analogy to the gasoline industry.



What if everyone only bought $10. 00 worth of gas each time they

pulled to the pump? The dealers tanks would stay semi full all the

time. The dealers

wouldn't have room for the gas coming from the huge tank farms. The

tank farms wouldn't have room for the gas coming from the refining

plants. And the refining plants wouldn't have room for the oil being

off loaded from the huge tankers coming from the Middle East.

**

**Just $10. 00 each time you buy gas. Don't fill it up. You may have

to stop for gas twice a week but, the price should come down.



Think about it.



As an added note... When I buy $10. 00 worth of gas,that leaves my

tank a little under half full. The way prices are jumping around,

you can buy gas for $2. 65 a gallon and then the next morning it can

be $2. 15. If you have your tank full o f $2. 65 gas you don't have

room for the $2. 15 gas. You might not understand the economics of

only buying two eggs at a time but,

you can't buy cheaper gas if your tank is full of the high priced stuff.



Also, don't buy anything else at the gas station, don't give them

any more of your hard earned money than what you spend on gas, until

the prices come down. . **







**

****_Everyone should read this and send it on! _**** *

 

[cojhl2]

But doesn't the man still consume 2 eggs per day no matter how many he buys. The count of eggs dont bunch up somplace.



Likewuse with fuel, I use so much per time period regardless of how I buy it.

 

[Mundgyver]

Yep, them pesky eggs got to be consumed at a regular rate



I did find an interesting way to commute though and if I lived with in 10 miles of work I would buy one.



A Segway? http://www.segway.com/

 

[Rman]

That's the most ridiculous analogy I've ever heard.