The Price of Gas
#1
The Price of Gas
I had an attack of insomnia last night so I watched an entire congressional hearing about the price of fuel on Cspan. Congressional representatives from several states had spokesmen from all the major gas companies and their trade group on the stand and spent several hours grilling them.
In short, the conclusion was that there is no solution to the high prices in sight. The use of ethanol (E85 and other blends), greater use of diesel power, even increasing the CAFE standards will not drop the price significantly.
When all the oil rigs and refineries on the golf coast that were damaged in last summer's storms are repaired we may see a slight drop in price, but that will only be temporary, depending on the world demand for fuel.
So, it is what it is. We can wish for a better solution, but the handwriting is on the wall. These price increases are here to stay. My conclusion is that we will not see gas below $2.50 a gallon in California ever again.
In my projects I am going for fuel efficiency over high performance, and struggling to learn fuel injection. I hate it, but that is life.
You may chose high performance, but do so knowing that you are going to pay for it.
In short, the conclusion was that there is no solution to the high prices in sight. The use of ethanol (E85 and other blends), greater use of diesel power, even increasing the CAFE standards will not drop the price significantly.
When all the oil rigs and refineries on the golf coast that were damaged in last summer's storms are repaired we may see a slight drop in price, but that will only be temporary, depending on the world demand for fuel.
So, it is what it is. We can wish for a better solution, but the handwriting is on the wall. These price increases are here to stay. My conclusion is that we will not see gas below $2.50 a gallon in California ever again.
In my projects I am going for fuel efficiency over high performance, and struggling to learn fuel injection. I hate it, but that is life.
You may chose high performance, but do so knowing that you are going to pay for it.
#3
It's funny how Exxon-Mobile had record high profits the last 2 quarters with an average of $29 BILLION in profit, yet they say they aren't making any money off the price increases.
According to my calculations (I'm not an expert by any means), to justify $3 a gallon for gas, a barrell of crude oil should cost around $90. But if you look at the price of crude oil it's around $75 a barrell.
So lets give the oil companies a 15% profit margin (actually it's closer to 30% now) the price of gas today should be $2.86 a gallon.
What most folks don't realize is that a barrell of crude oil is only 35 US gallons. Out of that the refining process makes about 15 US gallons of gasoline. BUT the rest of the oil is sold off and used for quite a few other everyday items.
There is no justifyable reason in my opinion for gasoline to be so damn expenive.
Will it ever go down? Sure, but not by a lot as ***** said we won't ever see gas under $2.50 in California again. Why? Greed and politics.
Sooner or later we as a people will get fed up and actually do something about this. Until then it's our own damn fault we're getting gouged at the pumps.
/rant off
According to my calculations (I'm not an expert by any means), to justify $3 a gallon for gas, a barrell of crude oil should cost around $90. But if you look at the price of crude oil it's around $75 a barrell.
So lets give the oil companies a 15% profit margin (actually it's closer to 30% now) the price of gas today should be $2.86 a gallon.
What most folks don't realize is that a barrell of crude oil is only 35 US gallons. Out of that the refining process makes about 15 US gallons of gasoline. BUT the rest of the oil is sold off and used for quite a few other everyday items.
There is no justifyable reason in my opinion for gasoline to be so damn expenive.
Will it ever go down? Sure, but not by a lot as ***** said we won't ever see gas under $2.50 in California again. Why? Greed and politics.
Sooner or later we as a people will get fed up and actually do something about this. Until then it's our own damn fault we're getting gouged at the pumps.
/rant off
#4
My guess is that they are telling the truth - as far as their US refineries go. Oil companies are such a mass of partnerships, subsidiaries and marketing agreements on a world-wide scale that it is difficult to know just what part of a company is making money!
Yahoo says this about Exxon:
"Exxon Mobil Corporation engages in the exploration, production, transportation, and sale of crude oil and natural gas. It also engages in the manufacture, transportation, and sale of petroleum products and petrochemicals, as well as participates in electric power generation. The company manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. Exxon Mobil also has interests in electric power generation facilities. The company operates in the United States, Canada, Europe, Africa, Asia-Pacific, the Middle East, Russia/Caspian region, and South America."
If you have a lot of wells overseas and are making money pumping them at $35, when the world price jumps to $70 you are going to be making a lot more money.
Alaskan oil goes to Japan (world price) while we import oil on the east coast (again world price) - I expect that is a hold over from Nixon's price controls as he put controls on what they could charge for oil from US wells.
I wish I could blame the oil companies, but, in truth, they are doing what any for profit company would do. This is just Economics 101 - Our choice is to pay their price, or do without. When more people do without, the price will come down.
What we need to do is find a way to get other people to do without so we can enjoy cheap gas again!
Yahoo says this about Exxon:
"Exxon Mobil Corporation engages in the exploration, production, transportation, and sale of crude oil and natural gas. It also engages in the manufacture, transportation, and sale of petroleum products and petrochemicals, as well as participates in electric power generation. The company manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. Exxon Mobil also has interests in electric power generation facilities. The company operates in the United States, Canada, Europe, Africa, Asia-Pacific, the Middle East, Russia/Caspian region, and South America."
If you have a lot of wells overseas and are making money pumping them at $35, when the world price jumps to $70 you are going to be making a lot more money.
Alaskan oil goes to Japan (world price) while we import oil on the east coast (again world price) - I expect that is a hold over from Nixon's price controls as he put controls on what they could charge for oil from US wells.
I wish I could blame the oil companies, but, in truth, they are doing what any for profit company would do. This is just Economics 101 - Our choice is to pay their price, or do without. When more people do without, the price will come down.
What we need to do is find a way to get other people to do without so we can enjoy cheap gas again!
#5
WillyB
What are doing?I have just started cooling off from the calif Smog shafting,And you start this.The price of gas is just bellow what I thank of the smog laws.Glad you started it though.
Last week on 60 minites they aired a speciall on Ethanol.It sounded good.I like what the said about mixing it.
I could run Ethanol Blend around town or on tripes,And when I needed the power for pulling a 5th wheel just mix it stronger.
All this with minour engin modification.Sounds good to me.I will be using about half what I do now.
How would this affict the engins with carbartors and what modifications are the talking about?
On one Ethanol web site it said it would take all the farm land to raise the corn an that would be enough.So who do you believe.
Don
What are doing?I have just started cooling off from the calif Smog shafting,And you start this.The price of gas is just bellow what I thank of the smog laws.Glad you started it though.
Last week on 60 minites they aired a speciall on Ethanol.It sounded good.I like what the said about mixing it.
I could run Ethanol Blend around town or on tripes,And when I needed the power for pulling a 5th wheel just mix it stronger.
All this with minour engin modification.Sounds good to me.I will be using about half what I do now.
How would this affict the engins with carbartors and what modifications are the talking about?
On one Ethanol web site it said it would take all the farm land to raise the corn an that would be enough.So who do you believe.
Don
#6
Ethanol is not as powerful as gas - you have to squirt more into the cylinder to do the same work. The timing is also different - so, at the minimum, you will need different jets in your carb and to reset your timing. EFI cars with their computer controls can do this automatically - carbs must be physically changed.
It also has to be transported by tank truck, for now. It can not be shipped by common carrier pipeline - the cheapest way to move a liquid. To be economically viable the ethanol plant must be located near the consumer.
Ethanol is part of the answer, and every little bit helps. But it will not solve the problem on its own, nor even have a large impact on the price.
It also has to be transported by tank truck, for now. It can not be shipped by common carrier pipeline - the cheapest way to move a liquid. To be economically viable the ethanol plant must be located near the consumer.
Ethanol is part of the answer, and every little bit helps. But it will not solve the problem on its own, nor even have a large impact on the price.
#7
Ok I may be out of line here but if we were all to work at saving gas it would make a big impact. People buy these big gas guzzlers SUV's that never get used for what they are intended for and they buy these big four wheel drive trucks that never see the dirt and than they raise them so high that when they are behind you their headlights blind you, they through on these big a$$ tires and the fuel milage gets even worse.
I know that everyone has the right to buy what they want but people should start thinking future.
By a practicle vehicle with good gas milage drive it when you need to drive it and I believe that you would see gas prices come down.
Another thing that I have a hard time with is these people with gas guzzlers driveing 80 MPH down the highway. If people were to just slow down a bit it would also save tons of gas.
I think that if we all just used a little less gas it would make such an impact on the gas companies that they would be forced to lower prices. Then the problem woould be us, once gas went lower we would start to use more again once we relaxed. So we would have to make it a life style change that we would need to stick to.
I got rid of my gas guzzler about 7 years ago and went with an economical comuter and have used about 1/3 as much gas since. I have worked on my 65 and taken it from 9 MPG to about 16 MPG and limit my driving to as little as possible just enough to keep everything in operating condition.
So I believe that we are one of the problems..
jd
I know that everyone has the right to buy what they want but people should start thinking future.
By a practicle vehicle with good gas milage drive it when you need to drive it and I believe that you would see gas prices come down.
Another thing that I have a hard time with is these people with gas guzzlers driveing 80 MPH down the highway. If people were to just slow down a bit it would also save tons of gas.
I think that if we all just used a little less gas it would make such an impact on the gas companies that they would be forced to lower prices. Then the problem woould be us, once gas went lower we would start to use more again once we relaxed. So we would have to make it a life style change that we would need to stick to.
I got rid of my gas guzzler about 7 years ago and went with an economical comuter and have used about 1/3 as much gas since. I have worked on my 65 and taken it from 9 MPG to about 16 MPG and limit my driving to as little as possible just enough to keep everything in operating condition.
So I believe that we are one of the problems..
jd
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#9
Just to throw another wrench in the gears here....auto's aren't the only cause for high gas prices. The energy production for this state (I believe around 80%) is still based almost solely on oil. So another way for gas prices to come down is to save energy around the house too. Solar/Wind Power and what not......So that old fridge in the garage that you were thinking of turning into a Kegerator.....unplug....or get rid of it....
#10
I practice conservation by nature as I have always been frugal (cheap). But as a solution to an energy shortage it is a loser of an idea. Yes, if we all cut our energy use by 15% the shortage would end - until we returned to normal use.
Even if we continued to conserve we would still face a shortage in the future as the population grows. Except that having cut the fat out of our energy budget this time, we could not do it again.
It is like PG&E offered a real price discount if you cut your electric use last summer. I could not qualify for that program because I had already cut my use to the bone, and there was no wasted energy for me to save.
What we need is a ample supply of energy. Those that chose to use it wisely can save money, those who do not will waste more of their disposable income. That is fair, and lets each of us decide what is more important to us.
Even if we continued to conserve we would still face a shortage in the future as the population grows. Except that having cut the fat out of our energy budget this time, we could not do it again.
It is like PG&E offered a real price discount if you cut your electric use last summer. I could not qualify for that program because I had already cut my use to the bone, and there was no wasted energy for me to save.
What we need is a ample supply of energy. Those that chose to use it wisely can save money, those who do not will waste more of their disposable income. That is fair, and lets each of us decide what is more important to us.
#11
#12
I found a product that saves gas and reduces emmissions - Ethos Fuel Reformulator.
Anybody tried it? It saves an average of 7% - 19% on most vehicles, but can save as much as 30% - 40% in older "classic" models. I haven't tested that yet since mine's still in the process of restoration. Check out http://www.roushperf.com/ and let me know if anyone has tried it on their classic.
Anybody tried it? It saves an average of 7% - 19% on most vehicles, but can save as much as 30% - 40% in older "classic" models. I haven't tested that yet since mine's still in the process of restoration. Check out http://www.roushperf.com/ and let me know if anyone has tried it on their classic.
Last edited by F2504x4; 05-17-2006 at 11:36 PM. Reason: link change
#13
Sounds like a pyramid scheme?
Everyone needs to simply cut their consumption of fuel, vehicular, home heating, home electricity etc by 15%. It's a different world these days period. Though the previous post sounds nice, I feel a little suspicious. I hope I am proven wrong. I would like to see something surface like that with no adverse affects to my trucks.
Edit: Oh, I see that the link has been modified. Disregard my last.
Everyone needs to simply cut their consumption of fuel, vehicular, home heating, home electricity etc by 15%. It's a different world these days period. Though the previous post sounds nice, I feel a little suspicious. I hope I am proven wrong. I would like to see something surface like that with no adverse affects to my trucks.
Edit: Oh, I see that the link has been modified. Disregard my last.
Last edited by olfordsnstone; 05-17-2006 at 11:43 PM.
#15
OOPS, better point out that "chapter moderator" is not the same person as "chapter leader", although I did ask the moderator to check out the post by trklvr as he is a new user, and not a member of this chapter.
I did not edit the post by 78 workhorse. I did think it was off topic and apt to lead to a discussion that would fit better in another forum, but as it was not selling something and no one seemed upset, so I left it alone.
Clint
I did not edit the post by 78 workhorse. I did think it was off topic and apt to lead to a discussion that would fit better in another forum, but as it was not selling something and no one seemed upset, so I left it alone.
Clint