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Why gas is going to $10 per gallon
Trainorders.com ^ | March 4, 2012 | Ed Ellis

Posted on 03/04/2012 1:22:41 PM PST by CedarDave

There has been a good discussion on the All Aboard group about gas prices, and this is my point of view. It's long....

The single biggest factor is China, and the free market. Very little is related to politics (either red or blue), the oil companies or Iran. Here’s a simple fact: The Chinese are buying about 20 million new cars a year. Those cars replace bicycles, or carts, not other cars. They represent new consumption of oil. If you look at the International Energy Agency Oil Market Report for February ( www.omrpublic.iea.org/currentissues/full.pdf ) you will see that demand for the developed (OECD) world will be down 2.6% this year while demand for the rest of world will be up 2.8%. China, up 3.9% this year, will drive the non-OECD growth. So this means that every gallon of gas you don’t buy is replaced by a gallon of gas bought somewhere else in the world. Demand is going up even if US vehicle-miles-traveled peaked in 2007 and will continue to go down this year.

But supply isn’t going up. Production is around 90.2 million barrels a day, and either production has to grow by 800,000 barrels a day this year, or demand won’t be met. Unless the price goes up. Of course, US crude oil production is growing again, after years of decline, thanks to the frenetic drilling in the Bakken and Permian. US crude production should increase by 250,000 barrels a day this year. But it’s expensive oil. It can take up to $1 million in frac sand to frac a single well in the Permian. And it’s getting more expensive to produce oil in fields around the world. And even with that it’s hard to move the needle on production.

(Excerpt) Read more at trainorders.com ...


TOPICS: Business/Economy; Government
KEYWORDS: china; gasoline; oil
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Ed Ellis is founder and president of Iowa Pacific Holdings, which is operator of numerous short-line railroads, both freight and passenger. In addition, IPH's operations include freight car storage, car repairs, car leasing, and property development.

The opinion appeared in the subscription Trainorders.com forum, however his remarks and some following comments are free to browse.

1 posted on 03/04/2012 1:22:46 PM PST by CedarDave
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To: CedarDave
I've been putting this sticker on gas pumps:

"Somehow we have to figure
out how to boost the price of
gasoline to the [$8-$10/gal]
levels in Europe." - Barack Obama's
Energy Secretary Steve Chu. Had enough yet???

I've sized mine to fit twelve to a sheet of bumper sticker stock...
2 posted on 03/04/2012 1:25:28 PM PST by null and void (Day 1138 of America's ObamaVacation from reality [Heroes aren't made, Frank, they're cornered...])
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To: CedarDave

120 dollars to fill up the car. It will cost 240 a month. Won’t completely destroy my budget but it won’t be fun. We do have two cars but I work 4 miles from home and my wife is stay at home. We are lucky. I know others who are not.


3 posted on 03/04/2012 1:26:28 PM PST by napscoordinator (A moral principled Christian with character is the frontrunner! Congrats Santorum!)
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To: CedarDave
To cut down the article somewhat for excerpting, I left out this important prediction by Ellis:

We will see $6 this year or next, and $10 by 2015. The era of highways may not be ending, but it is certainly in twilight.

4 posted on 03/04/2012 1:27:05 PM PST by CedarDave (Donna Brazile: "... we we believe that the weakest candidate ... [is] Mitt Romney.")
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To: CedarDave

And who’s fault is it gonna be?????

Any one? Any one?


5 posted on 03/04/2012 1:28:07 PM PST by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: napscoordinator

Looks like it would be time to buy a locking gas cap.
What is it about stupid democrats and locking gas caps? Last time they were big was when Jimmy Carter was screwing up the country. Now we have this walking cesspool and his minions.


6 posted on 03/04/2012 1:31:02 PM PST by Yorlik803 (better to die on your feet than live on your knees.)
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To: Jack Hydrazine

7 posted on 03/04/2012 1:33:07 PM PST by CommieCutter
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To: Jack Hydrazine

If we have $10 gas it will be because of politics and regulation, not a lack of supply.

That aside, I would welcome $10 gas for August, September, and October because it would be the end of Obamalini’s regime no matter how much the MSM shills for him, how many illegal contributions he gets, or how many votes he steals in Detroit, Chicago, or LA.

You can think of $10 gas before the election as just an extremely effective kind of campaign contribution.


8 posted on 03/04/2012 1:34:47 PM PST by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: CedarDave
Because the government wants more money, oil companies want more money, and the consumer thinks that it's inevitable and has resigned to this reality.

Just promise the masses a “free lunch” and they will surrender their freedom of their own free will. Ignorant, apathetic, selfish, shortsighted, unprincipled, secular, far away from the ideas expressed in the US Constitution, Declaration of Independence and by our founding fathers.

9 posted on 03/04/2012 1:35:30 PM PST by Red6
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To: Red6

bookmark


10 posted on 03/04/2012 1:39:44 PM PST by corlorde (Drone strikes: the preferred method of killing by Nobel peace prize winners since 2009)
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To: CedarDave
That's a difficult headline to not click. China's stability is questionable imo.

Start with the elected US representatives. I read nothing in that article about the politics involved. $10 a gallon under a pelosi/obama/romney/pelosi... machine is entirely predictable. I think that even the hardcore lib/left/dems are getting frustrated that their fairytale hasn't worked out like they planned. That darn market reality, human motivation, which has befuddled every single communist since it's inception keeps the price target down around $7. ;)
11 posted on 03/04/2012 1:43:31 PM PST by allmost
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To: CedarDave
The fascist democrat party will loudly proclaim that we have to have Federal gas rationing once it hits five dollars. That's part and parcel of making it expensive, being able to limit the fuel available to those not in favor and grant additional fuel to those who please the fascist nobility.

JMHO

12 posted on 03/04/2012 1:44:03 PM PST by Rashputin (Only Newt can defeat both the Fascist democrats and the Vichy GOP)
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To: Yorlik803
Looks like it would be time to buy a locking gas cap.

Didn't help in rural areas. In the '70s crunch, mt wife's dad had people sneak in his yard, jam a sharpened object into the tank, and drain out the gas. Nothing short of a 12 gauge will deter these people.

13 posted on 03/04/2012 1:48:11 PM PST by Oatka (This is America. Assimilate or evaporate.)
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To: Oatka
Nothing short of a 12 gauge will deter these people.

You say that like it's a bad thing.... ;-)
14 posted on 03/04/2012 1:53:19 PM PST by frankenMonkey (Attention Presidential Candidates: This Space For Rent. Inquire Within.)
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To: CedarDave

Why is gas going to $10 a gallon? One word.

Obama.


15 posted on 03/04/2012 1:53:54 PM PST by Freddd (NoPA ngineers.)
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To: CedarDave
Cuba Havana $3.03
Taiwan Taipei $2.84
Lebanon Beirut $2.63
South Africa Johannesburg $2.62
Nicaragua Managua $2.61
Panama Panama City $2.19
Russia Moscow $2.10
Puerto Rico San Juan $1.74
Saudi Arabia Riyadh $0.91
Kuwait Kuwait City $0.78
Egypt Cairo $0.65
Nigeria Lagos $0.38
Venezuela Caracas $0.12

I think the point that Bill O' Blowhard has been trying to make is that gasoline is not necessarily dependent upon global markets, but can be kept and sold locally. See the last few entries in the above table.
16 posted on 03/04/2012 2:00:20 PM PST by frankenMonkey (Attention Presidential Candidates: This Space For Rent. Inquire Within.)
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To: CedarDave

Leftists’ new fighting chant...

10 bucks, 10 bucks
10 bucks per (gal.) can,
If Obama can’t do it,
Nobody can!

Rah! Rah!


17 posted on 03/04/2012 2:03:32 PM PST by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: CedarDave
This morning on Meet the Press, David Gregory editorialized a comment to Rep. Cantor regarding gas prices:


MSM will do all they can to provide cover for Obama. That is most of the reason for all the flapping over contraceptives and Fluke -- to distract attention away from joblessness, the economy, and other 'real' issues.
18 posted on 03/04/2012 2:05:13 PM PST by TomGuy
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To: CedarDave

19 posted on 03/04/2012 2:13:18 PM PST by kabar
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To: achilles2000
That aside, I would welcome $10 gas for August, September, and October because it would be the end of Obamalini’s regime

I wouldn't; that will literally kill a lot of people as those months are when home heating oil purchases are in full swing. People will buy far less and the price will steadily rise the coming weeks and people will literally be too broke to buy fuel to heat their home in the dead of winter.

Probably won't matter either way in the North East anyway. PA alone is slated to take six coal fired electric plants offline in the coming months (what "were" towns around those plants are now effectively dead).

There is no reason for all of this other than liberals and marxists purposely killing the United States of America.

20 posted on 03/04/2012 2:15:00 PM PST by Michael Barnes (Obamaa+ Downgrade)
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To: achilles2000
Thats the way I feel as well.

I hate the thought of $10 gal., but whatever the hell it takes to get that Mulotto jackass out of our HOUSE and take all his minority minions with him. It can't come soon enough, and I hate wishing my life away.

This will hurt many of you, and I really hate that, makes me sick as I have children who still have to drive a long way to work (and back).

I'm sorry this has come to this, but is showdown time, if it will free this Country from ALL LIBERAL SOCIALIST FOREVER, I am ready to do whatever is necessary to see that happen.

Our founding fathers who fought the REV war and led us to victory, did the same. They risked the LIFE & FORTUNE to the cause. They held back nothing, some burning their own properties so the Brits could not use it. Inject SOCIALIST for Brits and you see the bigger picture & what it may take today.

It is us (U.S.) or them, let's make it THEM at all costs.

21 posted on 03/04/2012 2:20:16 PM PST by annieokie
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To: CedarDave

Because Ken Lay is not dead and is a futures speculator?


22 posted on 03/04/2012 2:28:55 PM PST by hadaclueonce (you are paying 12% more for fuel because of Ethanol. Smile big Corn Lobby,)
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To: CedarDave

China can’t afford $10 gas anymore than we can. Won’t happen anytime soon.


23 posted on 03/04/2012 2:51:41 PM PST by Sequoyah101 (Half the people are below average.)
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To: Michael Barnes
People will buy far less and the price will steadily rise the coming weeks and people will literally be too broke to buy fuel to heat their home in the dead of winter.

Hardest hit? New England, upper Eastern Seaboard, Northern West Coast states, Minnesota. All liberal hotbeds. We had an expression when I lived in TX: Let 'em freeze in the dark.

Of course, I think that's a little cruel to the good folks of those states, but they are the places that give us the lefty moonbats.

24 posted on 03/04/2012 2:51:48 PM PST by Cyber Liberty ("If the past sits in judgment on the present, the future will be lost." --Winston Churchill)
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To: Oatka

Great...now we will be like the “Road Warrior”. Puling up to car wrecks with a spring loaded center punch to salvage gas.
Hope everyone got their “Police Specials”.


25 posted on 03/04/2012 2:52:00 PM PST by Yorlik803 (better to die on your feet than live on your knees.)
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To: Michael Barnes

Obamalini’s adminsitration is killing lots of people today through promoting abortion, injecting a culture of death into the general medical system, etc.

While I think that the people you worry about would not die, they would be miserable. In any event, many of them voted for that dope and “change”, and they deserve to get it (the “change”) good and hard.


26 posted on 03/04/2012 3:00:10 PM PST by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: Sequoyah101

“China can’t afford $10 gas anymore than we can. Won’t happen anytime soon.”

Actually, this can happen, if the dollar is severely devalued...


27 posted on 03/04/2012 3:00:57 PM PST by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: null and void

Nice!


28 posted on 03/04/2012 3:04:50 PM PST by 9YearLurker
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To: Yorlik803

I have a locking gas cap on my work truck, I deliver auto parts. Mine is the only one that has it. I just got a 1999 Blazer and my check engine light comes on, I ran a scan and it seems to be the gas cap, I might buy one for my truck too.


29 posted on 03/04/2012 3:17:08 PM PST by Nowhere Man (Send Obama back to the ghetto, November 6th.)
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To: CedarDave

What, me worry?
I have not had or needed a car since I left the USSA
8 years ago.


30 posted on 03/04/2012 3:19:50 PM PST by AlexW
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To: napscoordinator

I work 80 miles from home (that’s a 160 mile round trip). No work anywhere else. I actually bought a Prius and it is helping some, but if it goes to $10.00 a barrel, even that isn’t going to help much.


31 posted on 03/04/2012 3:28:09 PM PST by freepertoo
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To: achilles2000

I truly believe obama will have a good chance of winning even if gas is $10 a gallon. People actually worship him and will vote for him no matter what.


32 posted on 03/04/2012 3:28:27 PM PST by Terry Mross ("It happened. And we let it happen." - Peter Griffin)
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To: Rashputin

Dangit! You’re right.


33 posted on 03/04/2012 3:28:59 PM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: CedarDave
The author brings up some very good points -- the following, however, is a big clunker.

compressed natural gas as an alternative, so I did some research. It would cost almost $4 trillion to convert the US to compressed natural gas for transportation. If natural gas is the equivalent of $2 per gallon, that means a total cost, net present value, of about $10-12 per gallon when you factor in the conversion.

We don't need to convert the entire fleet; that's a red herring. If we converted just, say, 10%, of our vehicles, the marginal drop in oil consumption would be significant.

And he is slightly skeptical about the technological improvements that can increase the oil supply even more than we think possible now.

34 posted on 03/04/2012 4:22:00 PM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: Jack Hydrazine
Leftists’ new fighting chant... 10 bucks, 10 bucks 10 bucks per (gal.) can, If Obama can’t do it, Nobody can! Rah! Rah!Soon 999 will have a whole different meaning!

Seriously, we have so much oil and natural gas available for drilling and refining but much is being held back by current US government policies. As has been stated by many, offshore oil and gas, oil and gas locked up on federal lands in the west and north slope Alaska, and oil from Canada.

35 posted on 03/04/2012 4:30:24 PM PST by CedarDave (Donna Brazile: "... we we believe that the weakest candidate ... [is] Mitt Romney.")
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To: BfloGuy

If the current nat gas / diesel price relationship continues or gets even more favorable, you’ll see truck fleets that operate out of a “home base” start switching to nat gas next year.

The economics are too favorable to miss out on.


36 posted on 03/04/2012 4:31:03 PM PST by nascarnation (DEFEAT BARAQ 2012 DEPORT BARAQ 2013)
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To: achilles2000
That aside, I would welcome $10 gas for August, September, and October because it would be the end of Obamalini’s regime no matter how much the MSM shills for him...

Amen, brother!

37 posted on 03/04/2012 4:54:00 PM PST by E. Pluribus Unum (Government is the religion of the sociopaths.)
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To: Nowhere Man

I remember gas lines and even /odd days. The old timers at the gas station I worked at in the 1980s told me that they had a PA state trooper there to enforce the rules. And that fights broke out.
Gotta love democrats. They always make bad things worse.


38 posted on 03/04/2012 5:05:31 PM PST by Yorlik803 (better to die on your feet than live on your knees.)
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To: Yorlik803
I remember gas lines and even /odd days. The old timers at the gas station I worked at in the 1980s told me that they had a PA state trooper there to enforce the rules. And that fights broke out.
Gotta love democrats. They always make bad things worse.


I remember those too, what part of PA did/do you live in? I live near Pittsburgh. I remember one time I spent a night or two over at my grandmothers and to save gas, Mom let me stay a few more days over there.
39 posted on 03/04/2012 6:19:20 PM PST by Nowhere Man (Send Obama back to the ghetto, November 6th.)
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To: CedarDave

Drill ANWR.


40 posted on 03/04/2012 6:27:16 PM PST by editor-surveyor (No Federal Sales Tax - No Way!)
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To: Yorlik803
Looks like it would be time to buy a locking gas cap.

Haven't you heard? Obama constituents are drilling holes in gas tanks and draining the gas that way.
41 posted on 03/04/2012 6:40:55 PM PST by crosshairs
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To: Michael Barnes
I wouldn't; that will literally kill a lot of people as those months are when home heating oil purchases are in full swing.

I have to wonder, with extreme sadness in my heart, how many of those that are going to die support this socialist agenda.

42 posted on 03/04/2012 7:02:19 PM PST by houeto (Mitt Romney - A Whiter Shade of FAIL)
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To: crosshairs

At my church someone cut the gas lines and drained both busses.


43 posted on 03/04/2012 7:38:19 PM PST by charlie72
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To: The Antiyuppie

Of course but only for a time unless wages go up in tune. Otherwise demand would plummet.


44 posted on 03/04/2012 9:49:21 PM PST by Sequoyah101 (Half the people are below average.)
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To: CedarDave
This would cause Rebellion on the Gulf Coast were we to get hit by a Hurricane, and no one be able to run a generator for any length of time. And, I do not care if I get reported...I will lead the charge. Both my parents are elderly, heart patients, and I would bust hell wide open if I let anyone cause their deaths from the heat of an Alabama Summer. No, there will be a line drawn. So help me God.
45 posted on 03/04/2012 11:09:17 PM PST by Shadowstrike (Be polite, Be professional, but have a plan to kill everyone you meet.)
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To: TomGuy

After all the Dems did to beat up Bush on gasoline prices before the 2008 election, and that little twerp has the audacity to suggest that? Sheesh.

It’s long past time for the Republicans on these shows to really jam their bias down their throats. Gingrich is the only one who seems to be any good at it.


46 posted on 03/04/2012 11:17:44 PM PST by FreedomPoster (Islam delenda est)
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To: CedarDave
These are just some of the reasons/excuses gas prices are quite suddenly burning up your income.

_______________________________________________

Iran is going to take over the world.

The refineries need maintenance

The speculators are doing it

We're running out of oil

We have plenty

Americans are driving less, so we need to raise prices

The Chinese have millions of mopeds to fuel

There is a leak in a pipe in Moose Jaw Alaska

A rodent chewed through a line at the main pump station in Texas.

Demand is down but we are producing more however, our refineries have been and are being shut down

Prices will go to 6.75, but 3 days before the election, Obama will lower prices to 1.40 to ensure reelection

A school of endangered blowfish have been sucked into a pipe, and it takes time to get them out.

Iran has nukes

Unstable markets worldwide.

A big refinery fire

A small refinery fire

A refinery fire could possibly happen

New gas additives are being developed to make Americans even more stupid

They forgot to build a pipe

They don’t like pipes

Rich liberals want the price even higher.

Obama hates the oil industry

The oil industry hates Obama and are hoping this kills his reelection

Liberals want everyone ridding donkeys and bicycles to work as a sacrifice for the planet

We moved more armaments to the gulf because Iran is taking over the world

Wild money printing and massive deficits

Americans love high gas prices

Refinery margins are tight…They hardly make any money at all.

The masses have no idea how free market works.

It is being exported because we are making more than we use.

Demand has fallen

We need refinery upgrades and expansion

We are making more than we use so we have to sell it to the Chinese, (They have 1 billion mopeds to fuel , and need to go to work so they can send us more Communist products .

We have plenty of oil, so much so, we need to sell it abroad to keep prices low.

We have plenty of oil, so much so, we need to sell it abroad to keep prices high.

Barry intentionally pissed off the oil companies and seriously limited their profit and boy are they PO’d.

47 posted on 03/04/2012 11:19:31 PM PST by dragnet2 (Diversion and evasion are tools of deceit)
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To: dragnet2
You forgot one.

Because Bush and Cheney are still alive. Nah, they would still be blamed if they were six feet under. Never mind.

48 posted on 03/04/2012 11:23:24 PM PST by Kickass Conservative (New Tagline under construction, please watch your step.)
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To: TomGuy

Beat Obama over the head with it as hard as possible & ignore Gregory the idiot shill. Ask the Gulf Coast how much Obama is doing to bankrupt them. Maybe Gregory should ask Obama what he has done to fix the problem! Why he is holding US oil hostage! It would create millions of jobs if he would get the hell out of the way!


49 posted on 03/05/2012 12:02:01 AM PST by kcvl
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To: CedarDave

You nailed it!


50 posted on 03/05/2012 12:05:49 AM PST by kcvl
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