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Posted on 06/01/2004 12:38:11 PM PDT by SwinneySwitch
Gasoline is a good thing. It gets us to work, to the doctor or hospital, to the charity we volunteer for or to the store to buy food. It makes it possible to visit kids and grandmas at Christmas, and to go on vacations in the summer.
And in spite of what you read in the paper--outrageous gasoline prices entered into Google gets you 15,000 links--its current inflation-adjusted price of $2 a gallon is about its median price over its 85-year existence, and with the exception of the 1980s spike, it has been steadily declining over the decades.
Better still, improving technology has increased the number of miles one can drive on a gallon of gasoline, to 22 in 2000 from about 13.5 in the early 1970s . So the cost of gasoline per mile driven has fallen nearly in half, from more than 13 cents to a bit more than seven cents. Meanwhile median income for a family of four (in inflation-adjusted dollars) has increased to more than $63,000 today from less than $46,000 in the 1970s.
Family income is up, and the cost per mile driven is down, so as a percentage of income, gasoline costs are substantially less and are an economical bargain for all of our families.
Burning gasoline is very much cleaner than it was 20 years ago too. According to the Environmental Protection Agency, lead emissions have nearly disappeared; carbon monoxide is down 62%, sulfur dioxide 52%, nitrogen dioxide 24% and ground-level ozone (smog) 18%.
Cleaner fuel, cheaper fuel and better mileage mean greater access to the things that matter in life. Gasoline-powered cars are a very good thing indeed
So one of our goals should be to continue to make available to all families the opportunities provided by low-cost gasoline burned in safe and energy-efficient (maybe hybrid) automobiles. Perhaps half a century from now we will be driving hydrogen- or solar-powered vehicles that are cheaper, cleaner and more fun. But for people who now have drivers licenses, gasoline-powered cars will be the reality for the rest of their lives. And with a growing population, that means we will need more gasoline. Good prices and increasingly efficient automobiles have exploded gasoline consumption. We drove our vehicles (including cars, trucks and buses) 1.5 trillion miles in 1980 and nearly three trillion in 2002, which expanded gasoline consumption from 8.7 million barrels a day from 6.4 million. The Department of Energy estimates gasoline demand will continue to increase by nearly 3% a year.
The bad news is that the number of refineries producing petroleum products has dramatically declined. In 1982 there were 301 refineries in the United States producing 6.4 million barrels of gasoline (and seven million barrels of other petroleum products) each day. Twenty years later there were half that number, just 153, but they are more efficient, producing 8.2 million barrels a day of gasoline. But current gasoline consumption is about nine million barrels, so consumption substantially exceeds our domestic refineries' output.
Worse, America built its last oil refinery in 1976, and there are no current plans to build more. Without new refineries the increased volume of gasoline we need each year will have to come from increased imports --by pipeline, truck or marine tanker from Venezuela, Canada, the Caribbean and Europe (no, there are no exporting oil refineries in Arab nations)-- not always an easy thing, particularly in a time of terrorism.
The reason no new refineries have been built is the burden of regulation, first on the permitted emissions of any new refinery, and second on gasoline formulation. Existing refineries are now working to comply with 14 new environmental regulations that come into effect this decade.
There are currently 18 different gasoline formulations needed to satisfy regulations across the U.S. Some parts of the country require oxygen to be added in the winter to reduce carbon monoxide emissions; others require reformulated gasoline to combat summer smog. Cleaner-burning gasoline is required in various states and cities. Such regional regulations--and seasonal consumption swings--make it much more difficult to produce the quantity and quality of gasoline that must be delivered to an area, and much less practical to build a refinery to produce it.
And then politics injects itself into our gas tanks. Congress and the farm lobby want to require ethanol--a product made from corn and already federally subsidized to the tune of $10 billion--in gasoline. That presents enormous supply problems, for ethanol cannot come by pipeline, only by barge and truck. New ethanol requirements--currently stalled in the Senate--would increase the cost of gasoline by about three cents a gallon.
The good news is that the world is not running out of oil. In spite of such predictions that it would--in the 1880s, after both world wars, by the wildly inaccurate but politically correct Club of Rome in 1972 and by today's pessimists--oil reserve estimates are increasing. Offshore drilling is producing oil that wasn't there a few decades ago. Alaska has untapped oil reserves; more oil is being found in Russia, the North Sea and the Gulf of Mexico. Technology is making products available from oil sands and liquids derived from natural gas.
In short, we have access to oil; what we need is the ability to refine it, and that is a major political problem. We need refinery construction incentives to keep our gasoline production process up with market demands. Price controls, more additive requirements, ethanol politics, increasing refinery construction regulations and the 50-cent-a-gallon gasoline tax increase John Kerry once endorsed would make things worse.
(Excerpt) Read more at opinionjournal.com ...
oh wait..this was good news..
Not only are we dependent on foreign oil, but now we're dependant on foreign gasoline. Congress really needs to get its act together and provide incentives for new refineries, and not new obstacles for existing ones.
What a doofus.
Yes, if you enter those three words into Google, you get 15,000+ results.
Because google will search for ANY of the words, and return any page that contains ANY of the words, in ANY CONTEXT!
If you enter "outrageous gasoline prices" (including the quotes) into Google, you get a more reasonable 161 results.
...and they let these people drive...
That was and is their objective, right?
OK. But "outrageous gas prices" will net you over 600. And a simple "high gasoline prices" will yield over 42,000 results! Apropo of nothing, "kerry sucks" generously provides over 4,300 links.
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"1.5 trillion miles in 1980 and nearly three trillion in 2002, which expanded gasoline consumption from 8.7 million barrels a day from 6.4 million" .....driving doubled, while gas consumption rose only by 1/3. In other words, technology will drive the amount of gas consumed down, eventually - there is an upper limit to the amount of miles people want or are willing to drive.
Worse, America built its last oil refinery in 1976, and there are no current plans to build more .....the upper bound is not the amount of oil available, but the amount of refining capacity. Refineries are maxed out. We could, in theory, dump twice as much oil into the pipeline, and gas prices would not be affected a whit.
This isn't news to any Freepers, though. Unfortunately, the unwashed masses only believe what they're spoonfed on TV.
You're missing a key factor. Population growth.
Shell exec was ‘tired of lying’:CFO resigns over inflated statements on oil, gas reserves
But the liars at the WSJ show no sign of fatigue.
I favor expansion of offshore drilling, as well as development of the oil fields in ANWR. But I'm not gullible to swallow this pollyanna propaganda from the globalist shills on Wall Street. Increased global demand for oil in developing nations far outpaces the discovery of easily recoverable supplies. And our everincreasing dependence on imports directly jeopardizes our economic stability and national security.
This observation made me think. Energy is a very efficient world market. Energy is fungible, meaning that energy in one form can be used to replace energy in another from. The price of energy is a component in every single item we purchase, to a greater or lesser extent.
It occurred to me that the reason the price of a Big Mac stayed close to parity with the price of a gallon of gasoline might be this: when, in the '70's, OPEC raised the price of oil by a massive amount, they were not able to raise the relative value of oil to that of every other product in the world. That is, the amount people wanted oil and the amount people wanted Big Macs still went in the same ratio, just at a different absolute level.
OPEC countries have a lot of oil, but they have very little of anything else anyone wants. They can raise the price of oil as much as they like, but the world economy will respond by changing value of every other commodity to bring their relative values back to reality.
I believe the Saudi's know this.
By the way, does anyone know the price of a Big Mac today?
(steely)
"By the way, does anyone know the price of a Big Mac today?"
From McDonald's NAS, it's $2.30 + tax!
Again....I'm assuming that there's an upper bound to the amount of miles needed to be driven. That would seem the case, but it's likely as easily defined as the number of angels that can dance on the head of a pin.
There are a lot of variables there - population growth, number of cars, technology changes, cultural changes (the suburbanization of America will likely affect things the most). I guess the best explanation is that there is not a linear correlation between miles driven and gasoline used -as is assumed by most environmentalists today.
I also wonder what will happen when China (or India, or some other 3rd world country) figures out that they can refine gas more cheaply than the US or Europe, without all of the environmental restrictions. I'd say that 1st world countries will go out of the refinery business in a heartbeat, assuming that the imported gasoline meets quality needs.
ping
I certainly concur with that conclusion. However, I think the demand for gasoline is going to continue to grow for quite some time, and I don't think foreign suppliers are going to be able to fill the gap between domestic production and demand for too much longer. That is especially true since our beloved EPA has mandated so many recipes for gasoline for specific areas.
Assuming the global economy remains robust for the next few years, demand will exceed supply. Even if someone had approval to build a refinery here today, it would take years before it was operational.
Thanks, may cruise down PCH to see what the HB Mobil is asking for a gallon.
Thanks, SS. A coincidence, I'm sure.
;)
(steely)
Bullseye. As a relevant aside....My grandfather was VP in charge of gasoline procurement and allocation for Exxon for the Northeast in the late 70s and early 80s. Since that included NYC, I'd guess that at the time it was the largest market in the world (he'd never admit it, so I'll do the bragging for him....) At any rate, he said that there never really was a gasoline shortage at that time. The shortages were all local - difficulties getting the correct blend to the correct area caused prices to skyrocket. I figure that he probably knows what he's talking about.
We are dependent on foreign food as well but most here just want to let the farmers go our of business. At least that is what they tell me.
Nice to see you ping me again.
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