Sticker Shock-$3 a gallon gas? Some links

various FR links | 03-17-04 | The Heavy Equipment Guy

[backhoe]

Appreciate the graphic.

[backhoe]

Buy more fuel efficient cars, people.

Good idea. Smaller motorcycles and scooters can be quite economical to operate, too... I seem to vaguely recall that even some of the old Vespas got over 150 MPG.

[JTG]

I know nothing about motorcyles, so I'll take your word on it.

All I know is that if you want fuel efficient cars today, you should look at Honda hybrids and the Prius. :~)

[jwalsh07]

You're welcome.

[tinamina]

Might have something to do with that refinery that's offline in Anacortes WA...6 weeks, with 500,000 gallons a day not coming into the market. Employee error, no consequences except to you. (us)

[Sabatier]

At the end of the day when I'm tired and just want to read something interesting I appreciate it a great deal when someone gathers and posts links on an interesting topic.
So thanks:)

[backhoe]

Your kind and thoughtful comments make it worth doing. Thank you.

[templar]

We rely on no overseas crude.

Crude is an international commodity. It goes where the money is, if you don't pay the going rate (International) it ends up going to where someone will. That's why your local crude goes down in price when there is an international glut of oil and up when there is an international short supply.

[Coleus]

My Vest Pocket solution?
1- drill for gas & oil like crazy- onshore, offshore, and in Alaska 2- go nuclear for power 3- convert stationary plants to clean coal technology 4- slash taxes and regulations like crazy>>>

I agree, especially with the Nuclear Power issue, it's the most efficient and cost effective.

If Bush wants to win the election, he must lower gas prices, cut spending and slash the budget, and make sure Al Qaeda does not bomb any rail lines, here and abroad, or anything else the months before November. They made sure the socialis was elected in Spain by using that terrorist act to hate the present president. Oh, and catching Osama will help too.

[TopQuark]

How did you arrive at that conclusion from a bunch of links?

1. The title is designed to shock and even uses that word explicitly.

2. Everything you said deals with a future contingency, not reality.

If you are one of those people who like dealing with future contingencies, you can engage today into plenty of action without dragging into this activity the "unsuspecting citizens" here on FR: trade oil futures.

In sum you pose a question of speculation as if it were a question of economics. There is no new information in your post but a great deal of emotion-provoking "facts."

[IYAS9YAS]

My response was to those saying the dollar was falling and that's what's causing the cost of oil to go up. The dollar doesn't go as far and oil supplies have remained fairly constant. Yes, the price per bbl has gone up. No doubt.

[IYAS9YAS]

No, all the fuel in Boise comes up from Salt Lake via pipeline (sometimes in from other areas by truck). The refinery being off line in WA has no impact on us here directly. The pipeline only flows north. They are trying to get to a point where it can flow either direction to allow gluts in one area to be spread to other areas.

I just think we're getting gouged in Idaho.

[TopQuark]

I guess we always will be as long as drilling and nukes etc. are banned.

Oh, long after that as well. All intertemporal decisions have been priced into the forward contrats traded on futures markets --- even in the present set of constraints such as drilling restrictions. None of the posters is even addressing the presence of futures: it's all about the past and present, and the sky-is-falling present is so much worse than the sunny-sky past.

Even if you remove drilling restrictions, people who today refuse to learn economics and institutions of capitalism will continue to do so.

[TopQuark]

I am certainly glad that you do not just lurk any longer: FR can benefit from people like you who know the value of the facts. Too many here fancy themselves conservative and aspire to purely socialist views when it comes to economics.

[TopQuark]

The first time gas went up around 1979, the bankers printed huge ammounts of money Bankers do not print money.

to compensate. For what? Why would bankers care about the oil prices?

This gave us 21% inflation during the Carter years. Those with debts benifited from this as wages went up also! And those without debts did not benefit from wage inflation?

And the point of this enumeration was... what exactly?

[TopQuark]

Someone on the radio was predicting $5/gallon by summertime. Oh yes, I distinctly remember those good time: spring of 2000, spring of 1995, spring of 1991, spring of...

[TopQuark]

Tonight when I fill up the tank, I'll let the guy at the Mobil station know... Whether he knows or not, you do not suffer as threads like this allege.

[TopQuark]

This is the price you pay for allowing the government to dominate and control your economic life.

That's propaganda. Domination must be defined even to be discussed --- something you do not bother to do and replace with nice-sounding, insendiary phrases.

Markets do not provide public goods, and we hire the government to provide them. By itself, it is not at all act of submission. Naturally, any contract grants privilages and imposes duties, so to partake of public goods you as individual do forgo certain freedoms.

Having common currency, including that which is "faith-based," in a public good.

Any libertarian statement such as yours is nonsense as long as it does not even bother to address provision of public goods.

[TopQuark]

What I don't get is, even though the cost of oil isn't rising, the fuel price in Idaho is through the roof

The prices are not based on cost: they are based on supply and demand. They rise if demand goes up or supply goes down.

[TopQuark]

I went to Manchester, NH and relative prices were cheaper by almost 25 cents/gallon just last weekend. It's more populated and definitely has a demand higher than Idaho. What the heck gives?

Delivering into a less densely populated area is more costly (per galon, per customer), and that is one of the things you pay via higher prices. The second is that the greater demand in a more populated area brings more competition that, once there, lowers the price. By comparison, there is less competition in a less populated area: in a tiny town you are stuck with Uncle Joe who opened a station next to the General Store some thirty years ago...

Price differentials are due to differences in market characteristics, which affect both the demand and supply side and, ultimately, cost --- but not the cost of producton of oil.