Skip to comments.$40/Bbl. & $2/Gal.: Will We Forever Be Over a (Saudi) Barrel at the Pump?
Posted on 08/11/2004 8:13:34 PM PDT by quidnunc
With crude prices at $40 a barrel and gasoline prices averaging $2 at the pump, the usual know-it-alls are mounting the ramparts.
They are (1) renewing calls for energy independence, (2) demanding release of oil from the salt-domed Strategic Petroleum Reserve (SPR) (with the co- rollary demand that the Bush administration stop putting more oil into it), and (3) reaching back to the tattered notion of raising the federal gasoline tax by 50 cents a gallon to make gas at the pump higher still.
First, let's talk facts:
U.S. domestic petroleum consumption is up (but as a percentage of Gross Domestic Product it is down).
Oil imports are up; domestic production is down. In 1970 the U.S. produced 20 percent of the world's crude; today the percentage stands below 10. Yet
Domestic reserves coastal, inland, and off-shore are dramatically up.
Since 1960, federal and state gasoline taxes have risen 300 percent. Today they account for 23 percent of a gallon of gasoline costing $1.80. That is more than everything in the $1.80 cost except the cost of the crude itself more than the refining cost and more than the cost of marketing and distribution.
(Excerpt) Read more at timesdispatch.com ...
"Will we ever be over a Saudi pump?"
Not as long as we are in Iraq! :-]
Will We Forever Be Over a (Saudi) Barrel at the Pump?"
Yes, until they run out of oil. No President can resist capitulation to the oil interests.
In 2004 dollars the price of a barrel of oil in 1980 is about $100. The basic problem is that during the '90s too many people grew accustomed to cheap oil. The basic problem now is not lack of oil but political instability--in the Middle East, in Russia, and in Latin America.
The Saudis have very, very, very little to do with the rise in oil prices: if anything, they're helping to keep prices lower than they otherwise might be.
Here's what's driving oil up, and it has pretty much nothing to do with the Middle East:
1) Venezuala: If Chavez is recalled this weekend, prices may fall- if the recall fails (or if it leads to further instability) they may go up.
2) Russia: Nobody is quite sure what's up with the Russian Government and the Russian oil industry.
3) China: In the last year, Chinese oil imports have increased from 2.02 Million Barrels Per day to 3.02 Million BPD- a 50% increase in a single year! This has sucked up pretty much all of the world's excess production.
In fast, I've seen at least one commentator raise the possibility that China may be deliberately buying oil and stockpiling it both to secure its own supplies in the case of a future war over Taiwan, but also to drive up the world price of oil in order to weaken the American economy and ensure the defeat of President Bush.
At today's prices, oil in 1974 would cost $57 a barrel.
During the 1920s, at today's prices, gas cost $10 a gallon.
Thank-you. And when oil goes back to under $30 (which it will) there will be hardly a peep from today's hand-wringers.
Bush needs to start drilling by executive order and make the Democrats squeal.
Even when I was paying $1.96 in July it was equal to $.34 a gallon in 1964 dollars, which was the 1964 price in many areas. Maybe we aren't being ripped off as badly as everyone thinks.
We have a grocery chain here called Giant Eagle.
The Giant for every 50 dollars I spend gives me a coupon for 10 cents off on a gallon for all the gallons I can pump into my car.
Right now the pump price is 1.79.
I fill up the car with gas about every three weeks.
I usually pay somewhere between 1.29 and 1.49.
Being retired, I find this helpfull.
But it is no solution.
ANWR has long made sense to me. Domestic oil production must be put on a war-time footing.
We should be drilling like crazy, and like right now.
Well, as an option, biodiesel looks pretty good now and will probably be looking better and better. If I had a diesel, I'd seriesly consider the conversion.
Sounds good, but what do we do about oil?
Maybe we can take our act on the road!
The "biodisel" you are / might be consuming in the future is probably based on the use of fossil fuel to grow the crop [real diesel for the tractor to cultivate the crop, natural gas as feedstock for the fertilizer, mote diesel to transport the crop to a processing plant, maybe coal or may more natural gas to run the plant that converts the plant matter into "biodiesel] that then gets labeled as a green / renewable product. Not that we can't harvest bio mass at a net energy gain, but these sorts of sorts of approaches require subsidies at current prices for fossile fuel ... and as currently being produced require a lot of energy input for a small net gain.
2. Start a crash building program for 20-30 refineries. Give the oil cos big breaks on all the PC environmental crap.
3. Slap the EPA up side the head to knock off all the "designer blends" of gasoline.
Look at it this way... if Xlinton could do damn near anything he wanted by EO, President Bush could do the same.
And this, unlike the peanut crop(!), IS a national security priority.
Sometimes ya just gotta do what's right for the country.
Scientists have discovered that certain types of algae could create complex hydrocarbon molecules that could be refined to either kerosene or diesel fuel in a form that is actually far cleaner burning than petroleum-derived fuel (mostly because you have no impurities that can generate sulfur dioxide or particulate emissions!). Imagine a 20 mile square pond about six feet deep growing this type of algae--they've estimated it is enough to make diesel fuel for every car, truck and diesel-electric locomotive in the USA and then some!
In short, science could make having to pump out petroleum from the ground obselete before you know it.
The gas tanks aren't gonna run dry in our lifetimes.
Reagan didn't stand for this crap. He drove the price of oil down to record lows, helping bankrupt the USSR.
I miss him.
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