Archives

Panic at the Pump ... and in Congress:

High Gas Prices Enrage Consumers, Terrify Politicians

By Joe Benton
ConsumerAffairs.Com

May 1, 2006

U.S. consumers are fed up with rising gasoline prices and looking for someone to blame. Words like price gouging are filling the air and politicians -- Democrats and Republicans alike -- are on the verge of panic out of fear that voters will blame them.

The harsh truth is that springtime gasoline this year costs 70 cents a gallon more than it did last April. Oil traders insist the increase has more to do with market speculation than a fundamental shift in supply and demand.

Whatever the cause, the big oil companies are doing nicely, thanks. Energy producers are just starting to report their earnings for the first quarter of 2006 and the numbers only go one way -- up.

Exxon Mobil's profits are up 14%, Chevron's jumped 49 percent and Valero Energy Corporation reported a gigantic increase of 60 percent. "We had the highest first quarter earnings in the company's history, and the outlook for the rest of the year is even better," gushed Bill Klesse, Valero's Chief Executive Officer.

While the earnings reports are certain to bring smiles to the faces of oil company shareholders, they're igniting renewed charges of price gouging and profiteering. The hue and cry for political retribution will increase throughout Capitol Hill. Washington will brace for more investigations and lectures.

Congress and the President are both promising probes and hearings. Some politicians are talking about rebate checks for families and others are calling for a lower federal gasoline tax. President Bush has suggest everything from changes in fuel economy standards for cars to a more generous tax break for hybrids.

Bush warned big oil that his administration would not tolerate "manipulation" of gasoline prices. He also ordered a temporary halt to filling the Strategic Petroleum Reserve to relieve pressure on crude oil prices and scheduled a White House meeting with auto executives next month..

As all of the rhetoric resonates through the marble hallways in Washington and as dueling talk-show denizens struggle to keep their arguments and their hairpieces straight, consumers are left with the reality that the federal government has limited ability to push prices down, at least in the short term.

Throwing Fuel on the Fire
Politicians are eager to feed the anger against oil companies in an effort to deflect the ire from themselves.

Said one Democratic leader in Washington, "This is the fault of leadership: the leadership of the oil companies and the fault of an administration that comes from the oil patch and is afraid to confront their old friends when it comes to these rising prices at the gas tank."

The Republicans face a difficult task trying to convince consumers that the gas price run-up is a result of anything that powerless Democrats have or have not done, particularly in the face of the surging oil profit reports. No one has yet figured out how to pin it on Bill Clinton.

Since 1990, oil and gas interests have contributed $140.9 million to GOP federal candidates and $46.7 million to Democrats, according to the Center for Responsive Politics in Washington. In the last election cycle, 84 percent of oil interest political contributions flowed to Republicans and 16 percent to Democrats, according to the public-interest group.

In return, Congress and the administration have paid little more than lip service to energy conservation steps. And as for closing many of the tax loopholes the energy industry enjoys? That hasn't even gotten lip service, it's been completely ignored.

Realistically, an "excess profit" tax, a term that's often bandied about, means almost nothing. What's excessive and how is it defined? Lobbyists would dilute any attempt to make such a law effective and the courts might well find it unconstitutional.

However, that doesn't mean Congress should get a free ride for rolling over and doing nothing to increase fuel economy standards. Government's job is to balance the competing demands of business and consumers.

When the system gets too far out of balance -- as it is now -- corporations can't really be blamed for maximizing their profits. That's their job, after all. Congress' job is to be sure that companies don't ride roughshod over taxpayers.

What To Do
So what is a consumer to do?

If politics and rhetoric could fill a gas tank the answer would be easy. But cars don't run on hot air, not yet anyway.

And in reality, just as the federal government can't do much in the short term, there are not many ways a consumer can slash the gas bill, other than to stop driving.

There are, though, lots of little steps that, when gas is $3 a gallon or more, can add up to real savings. Here are a few:

• Pay attention to your tires. For every pound that your tires are under-inflated, you lose up to 2 percent in gas mileage. Inside the driver's side door of your car is a sticker that lists the proper tire inflation for your car.

• Keep the engine running properly. A dirty air filter can cut mileage. Clean or replace the filter every 5,000 to 7,000 miles. Dirty spark plugs can decrease fuel economy by as much as 30 percent.

• Keep your windows rolled up on the highway. Any car gets better mileage at highway speeds by having the windows up even with the air conditioner on. Open windows cut mileage as much as 10 percent.

• Buy gas when it's cool. Gas is sold by volume and, since gases expand when it's hot, the best time to buy gas is the coolest time of the day, which is usually early in the morning.

• Clean house. Haul only the stuff you really need in your car. Extra weight burns more gasoline. Get rid of the unnecessary junk.

• Drive moderately. Peeling away from one stoplight, then slamming on the brakes at the next one is hard on your car, and burns gas unnecessarily. Accelerate smoothly and coast up to red lights. This may annoy the guy behind you, but that's his problem.

And Another Thing ...
OK, so checking your tire pressure might not be enough to make a big difference. What are some steps we consumers can take to save money and, in the process, conserve energy and lessen damage to the environment?

Here's our short list:

• Ditch the Hummer. Congress didn't make you buy that Dodge Durango, did it? Using a 5,000-pound vehicle to transport a 110-pound woman and a loaf of Whole Foods sourdough doesn't make a lot of sense. And no, SUVs are not safer than sedans.

• Think 4 cylinders. The most economical car is a simple, stick-shift, 4-cylinder sedan, like the Toyota Corolla, Nissan Sentra or VW Golf. You probably don't need a Prius, which adds lots of cost for not all that much in the way of fuel savings.

• Move closer to work. Like deer trying to figure out where the woods went, Americans continue moving farther and farther out, seeking the frontier. Guess what? It's gone. Moving to the exurbs gets you a longer commute but doesn't guarantee the American Dream. Driving farther raises your gas bill, adds wear and tear to your car and stress to your life.

What Kind of Car?
During the first three months of the year, consumers bought vehicles with big and powerful engines. About 25 percent of all new vehicles sold in the United States were equipped with eight cylinders.

That may all be about to change.

With the sudden return of $3-a-gallon gas, consumers are facing $75 dollar fill ups as fuel prices soar to their highest point of the year with no signs of retreating.

Automakers and dealers are increasingly aware of consumer anxiety over fuel economy and the U.S. auto market is showing some signs of reacting to higher gas prices.

Sales of traditional truck-based SUVs like the Ford Explorer are down and cross-over vehicles that achieve better gasoline mileage are rising.

With it looking like 2006 may be a real life remake of the gas crises of the late 1970s, Detroit is worried, and rightly so. U.S. automakers saw record sales declines from 1978 to 1981 when gas prices nearly doubled. Sales dropped 40% and the Big Three suffered record losses.

GM, Ford and the former Chrysler Corp. had made most of their profits from large and midsize cars, powered by V6 and V8 engines. But as gasoline prices rose, many consumers switched to smaller, more fuel-efficient vehicles from Japan and Germany.

Fast forward to 2006 where GM and Ford derive an estimated 60% of their pretax earnings from SUV sales. As pump prices rise, GM is rolling out its new lineup of full-size SUVs this year, which the automaker describes as the most fuel-efficient models in their segment.

The sky is not yet falling over Detroit but it may be starting to crack.

While many consumers are concluding that the money they save in gasoline and on tax credits from driving a hybrid don't justify the roughly $3,000 premium they face at the dealership, the Toyota Prius and Honda Civic hybrids are top sellers nevertheless.

The Prius sells on average in 8 days and the Civic in 12 days, while SUVs languish on dealer lots. Both are real hybrids that deliver real fuel economy.

Having built a solid image as the leaders in fuel-efficient vehicles, Honda and Toyota continue to lead most automotive sales. Toyota is the world’s most profitable automaker and sale are up 12 percent this year.

Honda, Japan’s third ranked automaker, is predicting a seventh straight year of record profits.

April, May and June will be a test of U.S. consumer car buying trends. As gas prices continue to rise or perhaps just settle in at $3 per gallon, the trend is almost certain to turn away from big engines and SUVs and back to small Asian products.

If you're thinking of buying a more fuel-efficient car, be sure to do the math. A hybrid may be right for you, but it may not be. A small, four-cylinder car with a stick shift is almost as fuel efficient and a lot cheaper to buy.

Don't Panic
For families on the edge, the higher gas prices may be a real crisis, presenting the unpleasant choice of whether to eat or fill the gas tank. For most of us, it's an inconvenience. Fortunately, for everyone, gas prices aren't likely to stay this high for long.

Gas prices always spike in the spring. Barring another disaster along the Gulf Coast or expanded conflict in the Middle East, prices should moderate over the next few months. The current unpleasantness won't be so bad if it causes all of us to think a little more critically about our transportation choices.

Oh, now I see why the Dems are so upset. Big oil cut back on their payments.

good read once again, many people keep thinking "ah it'll be fine and prices will stablelize".... think again.

I thought the article was great right up to this point:


Don't Panic
For families on the edge, the higher gas prices may be a real crisis, presenting the unpleasant choice of whether to eat or fill the gas tank. For most of us, it's an inconvenience. Fortunately, for everyone, gas prices aren't likely to stay this high for long.

Gas prices always spike in the spring. Barring another disaster along the Gulf Coast or expanded conflict in the Middle East, prices should moderate over the next few months. The current unpleasantness won't be so bad if it causes all of us to think a little more critically about our transportation choices.

I take issue with this statement, especially the text in bold. He effectively ends the article by saying "If you just hang on everything will get back to normal. Don't bother paying attention to anything that I said because soon it won't matter, anyway." People need to understand that this is not a short term problem! You can't just go out and buy your SUV or power truck in place of that station wagon, sedan, or other more fuel efficient car and then expect that your $75-$100 fill ups are just a short term "inconvenience." To be fair, the author does go on to clarify that conservation now might help us later. But to dilue that with false hopes was a poor choice, IMHO.

Yes, I'm nitpicking. Overall the article is very good. I'm just irritated that the author, or possibly his editor, decided to take the teeth out of it right at the conclusion.

Don't Panic
For families on the edge, the higher gas prices may be a real crisis, presenting the unpleasant choice of whether to eat or fill the gas tank. For most of us, it's an inconvenience. Fortunately, for everyone, gas prices aren't likely to stay this high for long.
GASOLINE IS THE CHEAPEST LIQUID YOU CAN BUY! It comes from the ground in the worst places in the world. It is needed by every person in the world. It needs to travle thousands of miles just to be processed. Then another thousand miles to get to your fuel tank. Why should gas prices go down? Every ounce of fuel is one ounce never to be seen again. And demand is increasing daily! If you're not willing to pay 3 dollars a gallon for gas, ride a bike, take a bus or train, walk, or skip on buying bottled water, soda, liquid soap, antifreeze, hand sanitizer, coffee, any form of alcohol, and milk or OJ. All of which are more expensive than and = volume of gasoline. And none are more important than gasoline.



Gas prices always spike in the spring. Barring another disaster along the Gulf Coast or expanded conflict in the Middle East, prices should moderate over the next few months. The current unpleasantness won't be so bad if it causes all of us to think a little more critically about our transportation choices. [/QUOTE]


Oil traders insist the increase has more to do with market speculation than a fundamental shift in supply and demand
If that were true, you could make a lot of money short selling oil. The truth is, a hurricane, a bomb, unrest in any number of oil producing countries could easily cause major problems to supply.

the big oil companies are doing nicely, thanks. Energy producers are just starting to report their earnings for the first quarter of 2006 and the numbers only go one way -- up
Cheap oil from investments in the past pans out to high yeilds when oil costs more. It's not price gouging. It's like selling your house that you bought 5 years ago. Cheap oil is coming to an end. and with that so too will the huge profits of the major oil companies.

While the earnings reports are certain to bring smiles to the faces of oil company shareholders, they're igniting renewed charges of price gouging and profiteering.
The goal of every company is to make money! Should microsoft have to hand out it's software for free? Just because you need to have something doesn't mean it should be cheap! In fact, the inverse is true. The more you need something, the more it is worth, the more it should cost.


Bush warned big oil that his administration would not tolerate "manipulation" of gasoline prices. He also ordered a temporary halt to filling the Strategic Petroleum Reserve to relieve pressure on crude oil prices and scheduled a White House meeting with auto executives next month.
He's a stupid man. Everything he touches fails. And now all of a sudden he's got this under his belt? Diverting oil from the SPR should be done under emergent conditions, not because you want cheaper gasoline. The amount of oil released from the SPR will have NO EFFECT ON GLOBAL DEMAND. It will only add to the profits of Exxon mobile and other companies accused of price gouging as they will get this as free oil or at a massive discount.



Congress and the administration have paid little more than lip service to energy conservation steps. And as for closing many of the tax loopholes the energy industry enjoys
OK, take away the tax encentives to produce gasoline in america. Why? First you complain about the price of gasoline, and now you want to remove the tax incentives. Gasoline without any taxsubd's would run 8 to 14 dollars per gallon. You take out the tax incentives, who do you think will shoulder the rest of the price?


Government's job is to balance the competing demands of business and consumers
No it's not! The government's job in a capitalist, democratic society is to let the market do it's job. Prehaps you've heard of "government keep hands off". Do a google on "free market". I will assure you it has nothing to do with government manipulation.

Congress' job is to be sure that companies don't ride roughshod over taxpayers.
Really, I'd like to see that in text. Congress makes laws.

Hi Invest In Oil:

___Terry just posted an articles contents, he did not write it.

___Now for my own POV.

If you're not willing to pay 3 dollars a gallon for gas, ride a bike, take a bus or train, walk, or skip on buying bottled water, soda, liquid soap, antifreeze, hand sanitizer, coffee, any form of alcohol, and milk or OJ. All of which are more expensive than and = volume of gasoline. And none are more important than gasoline.
___I don’t think anyone here is not willing as we still fill up our tanks week after week but do we really do have a choice? If I were using 15 gallons a week of any of the products you listed above at the going cost of purchase, I would/could easily substitute or refrain. The gasoline portion is a bit tougher to deal with as you know :(

If that were true, you could make a lot of money short selling oil. The truth is, a hurricane, a bomb, unrest in any number of oil producing countries could easily cause major problems to supply.
___So far, we have seen little to no actual oil/gasoline shortages sans 10 gallon max fills on odd number days depending on the last number of your license plate or long lines at the gas station etc. Because we do not actually have a shortfall, supply and demand may have become closer to one another but they have not yet crossed other wise you would see the above. Could there not be a bomb, hurricane, unrest in any other commodity producing area causing spikes in the prices of any given commodity? I don’t see milk or perfume spiking 250% in 3 year’s? The difference is we have alternatives to just about everything above but not gasoline/diesel. I am sure you have read much on the world’s production capabilities of both Bio and ETOH and our ability to grow and refine them is hampered for a number of reasons. I do not know what the answer will be but as gasoline/diesel continues to climb, the possibilities become more intriguing for those wishing to make a buck in the alternative fuel fields.

Cheap oil is coming to an end. And with that so too will the huge profits of the major oil companies.
___I think as you read more replies here at CleanMPG, you will find most if not all of the membership here know this. Do you think we travel between the max/min speed limits when everybody else is 15 over for our health ;) What we all can do in the here and now is help stretch the world’s ever decreasing resources as well as save those willing to invest a little time and energy a few $’s a tank in the process until we do stumble upon the next transportation fuel or method that will not involve purchasing crude from an unstable country or region, not emit vast amount’s of GHG’s or SMOG related ones during creation and refining, and give the energy market’s reason to stabilize again.

He's a stupid man. Everything he touches fails. And now all of a sudden he's got this under his belt? Diverting oil from the SPR should be done under emergent conditions, not because you want cheaper gasoline. The amount of oil released from the SPR will have NO EFFECT ON GLOBAL DEMAND. It will only add to the profits of Exxon mobile and other companies accused of price gouging as they will get this as free oil or at a massive discount.

___The SPR has been tapped in the past for similar stupid reasons but as for calling him a stupid man, he is not only surrounded by many of the sharpest minds, he too is not that stupid. How else could you get an entire country to go to war with an oil bearing country over terrorism when not one iota of evidence can be found proving this to be the case? The ability to dupe a country the size and caliber of the US doesn’t sound as if a stupid man was involved to me? Does it you?

OK, take away the tax incentives to produce gasoline in America. Why? First you complain about the price of gasoline, and now you want to remove the tax incentives. Gasoline without any tax subd's would run 8 to 14 dollars per gallon. You take out the tax incentives, who do you think will shoulder the rest of the price?
___Let us look at this from a different perspective. With gasoline running $11.00 per, do think the Ethanol and Bio producers will sit idly by all the while hundred’s of Billion’s of $’s in potential profit only go to the oil companies? Let us let the free market reign and see where this does end up? I can tell you I would be making my own fuel at $11.00 per and would not be having a problem coming up with any number of alternatives of my own accord once we start seeing $11.00 or more per. There will be disruptions of all types receiving the goods and services consumed on a daily basis of course but I also know the average consumer will find alternatives as crude slowly fades away. Hopefully in time? Many of these alternatives will not be pretty of course but at $11 per, ETOH from Switchgrass using crude mechanical means would be highly profitable let alone the enzyme approaches to cellulosic ETOH creation.

No it's not! The government's job in a capitalist, democratic society is to let the market do it's job. Prehaps you've heard of "government keep hands off". Do a google on "free market". I will assure you it has nothing to do with government manipulation.
___Government has a large hand to play considering what would have happened in American Revolutionary war, Civil War, WWI, II, Korea, Viet Nam, Gulf War I and II let alone Standard Oil in the distant past and the likes of Enron in the here and now? Give the world a truly free market and it will be run by crooks, thieves, and thugs. In many cases, this is the case today ;)

___Finally, most here believe we have a liquid fuel sustainability problem and whether the Government can do something about it or not, we still have to look in the mirror every morning and say to that person staring back, you are the real problem given your use of fossil fuels at an unsustainable rate. I am in some cases more guilty then many members’ here in fact :( If you find the time, I would be honored if you were to read an article of my own dealing with Peak Oil and Ethanol as I see it. I did not provide much in the way of solutions but at least seeing the problem is a start.

What does Peak Oil look like? (http://www.cleanmpg.com/forums/showthread.php?t=74)

___Good Luck

___Wayne

Very well written post (both of them) :)

However there were a few problems. Switch grass and ethanol would require the US to farm all of our land to produce enough bio material to make enough ethanol for the country. The other problem is that ethanol is less efficient than gasoline, so it requires more volume as well.

I agree with peak oil theory. However the real premis behind peak oil is that eventually global demand will be greater than the rate at which we can get the oil out of the ground. As the oil fields mature, the recovery rate is decreased because of increase in water flood (less oil per unit extracted from the ground) and decreasing pressure. There is an expanding golbal ecconomy that requires more fuel every day.

The Tars Sands help, well, everything helps. But the Tar Sands peek problem is the refining process. And even though they have a massive amount of oil in the sands maybe even more than saudi arabia, the peak production will not be 15 mbpd like the saudis loftly goals.

I agree that we do not suffer from a shortage of gasoline... yet. However to state that supply and demand work together, you cannot suggest we should have government involvment with price fixing just because we "need" gasoline. To do so would create a shortage. Our only protection against a shortage is higher prices.

Now imagine the effects on the ecconomy if a shortage did occur (although that would help correct high fuel prices).

You said that you do not see the price of purfum milk etc raising 250% over the next few years.

Are you sure? 5 years ago, did you invest into realestate because you "saw" the housing boom coming? Did you invest into oil refineries 2 years ago because you "saw" the gasoline boom coming? How much gold have you invested in over the past 4 years while gold has doubled in price and closing in on 700 dollars an ounce. Do you own oil shares? How has your track record been for predicting the commodity market? As energy costs raise so do the cost of EVERYTHING around you. Inflation. Like you said at the end of your post, do you honestly think we could keep 3 dollar milk and 11 dollar gasoline?

You seem like a smart person. I don't understand why you would say that we do not have alternatives to oil. ***Alternatives DO exist to gasoline/oil. The only thing that is going to get them mainstream is HIGER GAS AND OIL PRICES***. Some examples are moving closer to a city, windmills, solar cells, tidal generators, nuclear, walking, bike riding, and energy reduction things such as high mpg cars, and efficient liighting... But you cannot expect people to spend money to not save money just because it sounds good. If you want change, you need higher energy costs. And this will take years if not decades to perfect. Should we close our eyes to the real cost of energy by subsidizing the price only to continue down this path towards a shortage?

BTW Bush is not a smart man. His success in getting us rallied around a war as you point out was not due to brains. It was simple manipulation. Just as slight of hand does not make a magician brilliant, nor does Terror Management Theory (TMT) make a president smart.

As for the $11 pg of gasoline you need to look at your theory. It is highly flawed. You are contradicting your own statement. You state in the free market if allowed to get $11 pg of gasoline, no one would buy it. That sounds like price fixing, not free market. Supply and demand curve would suggest that if no one is buing gas for 11 bucks, it's not worth 11 bucks and will not reach 11 bucks.

At 3 bucks a gallon people are starting to adjust driving habbits, run the AC less in the house, and keep the home a few degrees cooler in the winter. These energy saving things are how higher price will cause a decrase in demand. However, regardless of our attempt to decrease demand, it still increases daily due to global ecconomic expansion.

Thanks for the well written posts :)

Hi Invest in Oil:

However there were a few problems. Switch grass and ethanol would require the US to farm all of our land to produce enough bio material to make enough ethanol for the country. The other problem is that ethanol is less efficient than gasoline, so it requires more volume as well.
___Never did I say it would. We are at the point were simple Corn and Soybean to ETOH and Bio will just touch our daily fuel needs. Never was it mentioned anywhere from this individual or anyone else I know that we would ever be able to grow our entire daily needs nor was it mentioned that ETOH has about 70% of the calories of gasoline. These are simple facts not up for debate. If we go 100% Biomass, then we have a shot but by that point in time, I see PHEV/EV’s taking over a larger % of our daily transportation needs then those running on liquid fuels no matter the source.

I agree with peak oil theory. However the real premise behind peak oil is that eventually global demand will be greater than the rate at which we can get the oil out of the ground. As the oil fields mature, the recovery rate is decreased because of increase in water flood (less oil per unit extracted from the ground) and decreasing pressure. There is an expanding global economy that requires more fuel every day.
___It does not matter if the peak arrives from our daily consumption rate due to our or our ability/inability to pull it out of the ground or if we actually hit peak and can only pull it out of the ground at ever decreasing rates. If we take all the Tar Sands, all the Oil Shale, all the stated oil reserves, and all the non-liquid fuels to supply our liquid fuel needs, we have enough oil to last for hundreds of years. We will reach Peak Oil long before that either due to our insatiable demand overtaking supply or simply a declining supply as we have seen in the US’ lower 48 and Alaska. The end results will be the same.

The Tars Sands help, well, everything helps. But the Tar Sands peek problem is the refining process. And even though they have a massive amount of oil in the sands maybe even more than Saudi Arabia, the peak production will not be 15 mbpd like the Saudi’s lofty goals.
___Known fact. Right now they don’t have the NG for heating to extract the oil from all the Tar Sand available. Will they build a Nuke to supply the electricity to heat as necessary? More NG pipelines out of Alaska? Unknown and it doesn’t matter. Peak Oil is still on its way no matter what the Tar Sands can supply. At $15 - $17 per BBl, Suncor and the rest involved are making a ton while the end product is still 70.00 + and we are just barely holding our heads above water.

I agree that we do not suffer from a shortage of gasoline... yet. However to state that supply and demand work together, you cannot suggest we should have government involvement with price fixing just because we "need" gasoline. To do so would create a shortage. Our only protection against a shortage is higher prices.
___I never saw anyone mention price fixing? When a corporation makes over $36 Billion in profits – Exxon/Mobil - FY 2005 yet receives a government subsidy to find, produce, refine, and ship a product, do you not see a problem here? I could see a subsidy if the oil companies were losing money or at least breaking even given the security a stable fuel marketplace creates but not when they made more $’s then any company has at any time in history. It is the subsidies that are a problem, not their profit.

You said that you do not see the price of perfume milk etc raising 250% over the next few years.
___No, I do not see Milk spiking up 300% in the next 3 years just as I did not see it spike by that % the last 3 years. Gold did not spike by 300% in the last 3 years either. In fact, Gold is still below its peak set back in 79/80. Gasoline is ~ 300% higher then that period. As for Real Estate, I believe my portfolio includes enough Real Estate to choke a horse and anyone that has visited knows this but I only saw an increase of ~ 200% in the last 10 years. Not 250% in the last 3. There are parts in Michigan that have seen extreme declines just as there are parts on the West and East coast that have seen better but not nearly the increase of gasoline over the past 3 years. Track record? Decent enough in fact, how about you? Would you bet the farm on Gold, Real Estate, and Oil now? I am sure Gold Futures have your name all over them. An easy 1,000% in 3 months depending on how much leverage you want to hold? And an even easier bankruptcy if the price heads south. Just do it and you’re a multi-millionaire. Or broke while wishing you hadn’t while looking up out of the gutter ;)

Like you said at the end of your post, do you honestly think we could keep 3 dollar milk and 11 dollar gasoline?
___Never said that?

You seem like a smart person. I don't understand why you would say that we do not have alternatives to oil. ***Alternatives DO exist to gasoline/oil. The only thing that is going to get them mainstream is HIGER GAS AND OIL PRICES***. Some examples are moving closer to a city, windmills, solar cells, tidal generators, nuclear, walking, bike riding, and energy reduction things such as high mpg cars, and efficient lighting... But you cannot expect people to spend money to not save money just because it sounds good. If you want change, you need higher energy costs. And this will take years if not decades to perfect. Should we close our eyes to the real cost of energy by subsidizing the price only to continue down this path towards a shortage?
___The higher it goes, the more people will look for real alternatives just like those we provide here at CleanMPG. By increasing your FE in whatever you drive today, you should save on the consumption side by a minimum of 30 + %. On the $ side, probably much more as time move on … When I see the roads filled with bikes, I know our society as a whole will have changed for the better. And our economy for the worst because of the same :( As for the rest of it, I invite you to spend some more time here at CleanMPG. Almost every energy generator listed has been discussed in some form let alone many members who are employed in those exact industries. Start with News as there are a few tidbits here and there regarding these same energy generators.

BTW Bush is not a smart man. His success in getting us rallied around a war as you point out was not due to brains. It was simple manipulation. Just as slight of hand does not make a magician brilliant, nor does Terror Management Theory (TMT) make a president smart.
___He must be smarter then the two of us because he was not only the Governor of Texas, he is the President of the United States. You do not get there by being stupid as you proposed. I did however take this opportunity to take care of a few spelling errors in the quotes above and below if that helps?

As for the $11 pg of gasoline you need to look at your theory. It is highly flawed. You are contradicting your own statement. You state in the free market if allowed to get $11 pg of gasoline, no one would buy it. That sounds like price fixing, not free market. Supply and demand curve would suggest that if no one is buying gas for 11 bucks, it's not worth 11 bucks and will not reach 11 bucks.
___Not only were you the one who mentioned $11.00 per gallon (($8 + $14)/2 and do the math), I do not see how $11.00 gasoline relates to price fixing? It is what it is. I won’t be consuming nearly the amount I am today and I highly doubt anyone else will either if we do in fact see $11.00 per. This is not price fixing; it is simply supply, demand, and need.

___Please hold onto the “Highly Flawed” and “Wrong” rhetoric until the point you really have a handle on how both Peak Oil and GHG emissions can and will effect humanity in the not to distant future. You are only pointing out the obvious which most here already know.

___Good Luck

___Wayne

With gasoline running $11.00 per, do think the Ethanol and Bio producers will sit idly by all the while hundred’s of Billion’s of $’s in potential profit only go to the oil companies?

It is 11/g (8 to 14), But not to the consumer. I think that is where the confusion is? And where are all the bio producers now that big oil is making such a proffit? I would think this would be a good time to jump in, no?

I never saw anyone mention price fixing? When a corporation makes over $36 Billion in profits – Exxon/Mobil - FY 2005 yet receives a government subsidy to find, produce, refine, and ship a product, do you not see a problem here?... given the security a stable fuel marketplace creates but not when they made more $’s then any company has at any time in history. It is the subsidies that are a problem, not their profit.

OK, take away the tax encentives to produce gasoline in america. Why? First you [not you, the writer of the article that prompted this portion of the discussion] complain about the high price of gasoline, and now you want to remove the tax incentives? Gasoline without any taxsubd's would run 8 to 14 dollars per gallon. You take out the tax incentives, who do you think will shoulder the rest of the price?

I do not have a problem with any corporation making money. If you removed the tax incentives, Big Oil would still need to meet earnings expectations, and they will raise the price of the product on to the consumer. The only alternative is price fixing. They will make the proffit as you said the security of the energy market. Now how would you like to see them make their money:

A. With govt subsidies and moderate prices in the USA.
B. Without govt subsidies and very high prices in the USA.
C. Socialize oil and gasoline and price fix and let the government run the companies ensuring efficiency and quality products.
D. Leave the USA and relocate in another country that will fully understand the importance of energy on society (china, india), and go where more money can be made.
E. Maybe just leave things alone and let the market do it's thing. And be greatful that you have 3 dollar milk.

Let us let the free market reign and see where this does end up? I can tell you I would be making my own fuel at $11.00 per and would not be having a problem coming up with any number of alternatives of my own accord once we start seeing $11.00 or more per. There will be disruptions of all types receiving the goods and services consumed on a daily basis

Right, and if you remove the tax incentives today, that is what the actual cost of 1 gallon of gasoline would be tomorrow.

ME: Like you said at the end of your post, do you honestly think we could keep 3 dollar milk and 11 dollar gasoline?
You:___Never said that?

Well what would happen once "There will be disruptions of all types receiving the goods and services consumed on a daily basis"

If you remove the tax incentives on oil products like suggested, the price of EVERYTHING will race upwards. Inflation, and supplies of necessary things would decrease as you stated. So I ask you again, do you honestly think you can keep 3 dollar milk and 11 dollar gasoline? Because if you are serious about lets say calling your senator to remove the tax incentives on oil companies (and the'll do anything for a vote to keep their job), and if they listen, do you still think that you would "not see Milk spiking up 300% in the next 3 years"?

Gold did not spike by 300% in the last 3 years either. In fact, Gold is still below its peak set back in 79/80. Gasoline is ~ 300% higher then that period.

http://www.zealllc.com/commentary/goldinoil.htm

A quick historic view of oil vs gold and they trend pretty much with eachother. The last time gold peaked was when oil paked. And currently oil is trading at 2x what the price of gold would suggest based on 79/80.

Track record? Decent enough in fact, how about you? Would you bet the farm on Gold, Real Estate, and Oil now? I am sure Gold Futures have your name all over them.

Currently I own GLD, NAT, PFT, and PXE. They are the strongest part of my portfolio up 25% year to date. I also own USO, but only for 2 weeks and not included in my 25% statement. I also own AHM, and my house value has grown 15% in the 6 months since I purchased it.

Yes, realestate, oil, and gold.

Peak Oil is still on its way no matter what the Tar Sands can supply. At $15 - $17 per BBl

Please supply your refrence for that number. I have never heard anything less than 30$ for the cost to produce 1 barrel of oil from the canadian tar sands. And that number was some 4 years ago.

have you read what I have written. I DO UNDERSTAND PEAK OIL! That is why I say Invest in oil!

ME: "...Cheap oil is coming to an end. and with that so too will the huge profits of the major oil companies."

ME: ... Should we close our eyes to the real cost of energy by subsidizing the price only to continue down this path towards a shortage? [to clear up future confusion I am for keeping the tax structure how it is, this statement is in regards to additional government involvement to further depress the current consumer cost of fuel].

Please hold onto the “Highly Flawed” and “Wrong” rhetoric until the point you really have a handle on how both Peak Oil and GHG emissions can and will effect humanity in the not to distant future.

Am I wrong about the flawed part? Current car Ford Escape Hybrid.

PTF not PFT.

PTF not PFT.

Invest in oil;

If you do-not mind saying? What is your Name and what State do you live in?

Scott

I live on Long Island (New York).

How is long island for a commute? I can imagine its very difficult.

It depends. Once you get to queens it's rough. I work nights and go against the traffic every day so it's not that bad. The real problem is the traffic lights. 15 miles 50 lights!

Scott

I live on Long Island (New York).

Thank-You :D

It depends. Once you get to queens it's rough. I work nights and go against the traffic every day so it's not that bad. The real problem is the traffic lights. 15 miles 50 lights!

That's a light every 1/3 of a mile. Ouch. :rolleyes:

Sounds like a light every block. Thats rough. I'm happy that my commute is not through downtown. I don't think I could pull of 40mpg going through any citys downtown.