Skip to comments.Six Dollar Gas?
Posted on 06/26/2008 5:14:27 AM PDT by thackney
By some estimates, oil prices could hit 200-dollars a barrel. If you do the math, that translates to $6.64 a gallon for gas! Meanwhile, Congress can't agree on a course of action. Democrats are looking at new regulations on speculators, while others -- like Woodlands Republican Kevin Brady -- want to increase drilling:
"...And while Congress is eager to place the blame elsewhere, whether it's OPEC or Big Oil or Big Autos, the fact of the matter is we ought to take a square look in the mirror. We need more American-made energy, and this Congress has resisted it."
Oil economist Karr Ingham disagrees with other analysts who see prices continuing to spiral out of control. He says rather than penalize the speculators, the free market should be left alone: "That's the economic system under which we operate. And ultimately, it's market forces that solve our problems for us."
Ingham says it's because of the current market that we're using more ethanol, and expanding research into other areas: "We would not be embarking on any of this if crude oil were still 20-dollars a barrel. So, it's rising prices for crude oil - relative to other sources of energy - that are going to spark the development of alternative energy."
Ingham says the current economic environment is actually more favorable to a drop in oil prices, which would bring prices down.
By Labor Day.
Democrats are privately hoping for $10 gas.
“Democrats are privately hoping for $10 gas.” -Always Right
Your moniker seems fitting. The more expensive gas gets, the more people will want to carpool, get rid of their SUVs, lower overall usage here. That’s been an important Dem agenda item for some time now.
I was thinking Thanksgiving or Christmas, maybe I’m too optimistic
Yes, that is right. They do not want to fix anyhting because the blame will go on the Republicans.
Just like when the Republicans had power, the rats obstructed everything the Republicans tried to do. Then the rats stood back and told the American people that the Republicans are inept. The people believed the rats and voted them into the House and Senate.
No different this time. As long as the rats can lay blame at the Republicans feet, they are not going to fix this. I am sick of the party politics. The rats should be removed and never let back into power again.
If some wildcatter were to find a huge heretofore unknown pool of oil/gas, the dems would do their best to stop the production.
Innovation is a by-product of our wants and needs.
Democrats, those RINO Republicans, and those legislating from the bench are soon to be seeing a mass uprising of the American people.
Obviously they haven't heard of the French Revolution, because the cake is getting to expensive to buy.
Democrats, those RINO Republicans, and those legislating from the bench are soon to be seeing a mass uprising of the American people.
How will they be getting to the uprising staging area? Not driving. Bicycles maybe.
I’m assuming the mass uprising will have a staging area and that the proper permits have been filed with the proper authorities. An adequate number of port-o-potties would also be nice.
The Rats blaming the Republicans is getting old with the American people and the American people know we will have to drill our way out of it. The American people also aren’t buying this 68 million acre crap because if that amount was true the oil companies would be working OT to get the oil out of the ground at $135 a barrel.
Our stupid greedy government has set up the US economy to tank.....watch. It's coming.
Still not one new gasoline refinery built since 1976...only 149 operable at this time with another 196 smaller ones siting idle that can handle other products other than gas and diesel.
No modernization of the smaller sites, no public disclosure as to really owns those sites, neither. Add to that no transparency in the futures markets......yup.....it's coming quickly.
Ree #12: TomGuy, you are dead on your assessments. It’s a sellout of the American people and the GOP simply laughs on the way to the bank.
Next time you're out-and-about, look around. Compare the number of people commuting to work in a car with those who are riding a bike to work. Public sentiment is increasing for drilling in ANWR, the OCS, and all federal lands. Recent polls suggest that 57% favor these policies, and it's rising every month. At $6/gallon, there's going to be a run on tar and feathers in every city across the US.
Alas, the GOP doesn't have the brains to pin this on those who triggered these problems in the first place. I can't even begin to relate how disappointed I am in the GOP's ability to get any message out to the public. The sit there with their collective thumbs up their a$$ and let opportunity after opportunity pass them by. McCain says he favors drilling the OCS, but then yanks back that correct step with a misstep by saying: "But I'll leave it up to the States to determine whether they will permit drilling offshore." The coastal states governors (except Alaska) have reacted saying: "It will take too long and won't make any difference." The translation: "I'll be out of office when the benefits accrue to my people, so why should I care when I can't get the credit?"
IDIOTS! All you have to do is simply announce that you support all drilling everywhere and you'll completely alter speculator expectations and that would be enough to cause the current spot price of oil to drop. But, you refuse to act and yet you wonder why you have a 12% approval rating. Politicians no longer serve the public, they serve only their own self-absorbed interests.
A novel idea.
I am not going to lay all the blame at the Republicans feet. The majority the Republicans had was still not enough of a majority to get things done without the help of the demorats. The rats offered no help and do not deserve to be where they are today. It was not because of the merits of the demorats that they were voted into office.
And you can be assured the rats see no benefit to their party to help lower gas prices right now.
Hello folks... mandating the use of so many gallons of corn-based ethanol is neither free market nor innovative.
The math is not that simple because a lot of oil companies have long term contracts that still have years until they expire. They also have their own production. Thus, their weighted average cost per barrel is far below the often quoted spot price.
By November jobs may be disappearing at an alarming rate, the cost of goods and services may well have become astronomical, many food products may be in short supply, and inflation will be out of sight.
Melodramatic? I don't know, but we shall see.
I do know that we are about to see our Republic go the way of Europe.
Actually I’m thinking of people buying vehicles they can no longer afford, houses they can no longer afford, credit cards they can no longer afford.
Have fun blaming it all on the Dems., but some day you might need to get back in touch with reality if you hope to ever really address the prolem.
1. GHWB signed into effect restrictions or moratoriums on offshore drilling.
2. Hey, this is not year one of W’s administration. He continued those restrictions on offshore drilling. Heard any big initiatives to open up more offshore drilling from W until very, very recently?
3. All W has done is try to open ANWR for drilling. That’s something, but hardly a president who’s been trying to avoid this crisis since day one of his administration.
4. W and Jeb got together scarcely two years ago to insure that NO OFFSHORE DRILLING WOULD BE ALLOWED OFF FLORIDA!
5. Sorry, this crisis is the fault of both parties. The Dems. are more at fault, but the Republicans are far from blameless for this mess. I think Republicans, and some Freepers, felt very clever putting forth the “let’s use all THEIR oil up first, and then we’ll still have ours for the future.” Still look like a good strategy?
7. We can now blame the Dems. for refusing to help open new areas for exploration and drilling NOW. But as far as getting us into this mess, the Republicans are only slightly less to blame.
I can't imagine needing to take out a loan just to heat your house, but that time is fast coming.
Personally, I think that these prices are self-correcting and will eventually come down. Not sure if it'll be fast enough to help this winter, though.
Kinda like the Soviet Union trying to starve us by eating up all our wheat? Or waiting for the heavy yoke of capitalism to break the free enterprise spirit.
This is relevant:
Where are they going to put it? Most people I know are buying as little as possible and looking for ways to use less.
Think about it, its $135/bbl now. Say the critters open up the land and say the oil companies work double time to get oil down to say $50/bbl, which to me would be self-destructive. At $50/bbl it may not be worthwhile to do much of anything, except import.
A Vespa is a great idea. I had one in college and have been thinking the same thing recently. I just got back from Italy where I was paying roughly $8.50 per gallon for diesel for my rented van. Every one was either driving diesel vehicles or some type of motorcycle or scooter. Human powered bikes were also popular. I think I was looking at our future.
“Think about it, its $135/bbl now. Say the critters open up the land and say the oil companies work double time to get oil down to say $50/bbl, which to me would be self-destructive. At $50/bbl it may not be worthwhile to do much of anything, except import.”
And that’s the whole problem, and the reason the so called free market will never solve the problem of US dependency on foreign oil. What’s the incentive when the price will go down with significantly greater production, which we must have to become less dependent on imports?
If the American people and their government desire lower prices and greater independence from imported oil, then we must open up all areas for exploration and drilling, and our government must REQUIRE in the new leases that companies bring new finds on line for production until we reach some goal of producing ____ barrels per day, or a % of our requirements.
Sorry pretend free marketers, that’s the only thing that will both decrease prices in the long run and also decrease our dependence on imports.
We are precisely where we were in the late ‘70s and early ‘80s, except it’s worse this time. We should have set a goal to bring ____ capacity for domestic production then, but Reagan (sorry, again) decided the magic of the free market would solve it all.
It didn’t. And it won’t now, either.
We have to treat this as a matter of national security, and explore and drill and put new well in production until we can produce some target amount of our needs.
It can’t all be left up to the oil companies and the fantasy free market that isn’t all that free for energy production.
The American economy, driven by the confidence and buying habits of the public, is now and will continue to reflect the will of an alarmed and wary consumer. Americans are patient to a fault, but when crude oil prices took another jump from $30 to $32 per barrel, they saw retail gasoline dealers immediately post prices of $1.599 or more for regular unleaded. As March began, John Q. Public rebelled.from
Blame can readily be pinned on a failed foreign and domestic policy in which the Clinton administration and Congress have looked at election-year politics, while ignoring the effect of rapid-rising crude oil prices for the past 12 months.Read the whole article at the link. It will cause a chuckle in light of the current state of affairs.
For example, in southwest Florida, surrounded by water, ports and hoping to keep oil rigs at bay in the Gulf, a gallon of unleaded regular was $ .899 in February 1999. Now, at $1.599, the price increase is $ .70 per gallon or an astronomical 78 percent in the past 12 months.
I believe you are mistaken if you believe the old plants taken out of service in the 1980's mostly exist, let alone be operable. Most were scavenged of useful equipment, many chopped up and sold either overseas, for other processes or for scrap.
No modernization of the smaller sites
Not economic. It is far better return on the dollar invested to upgrade and expand the bigger refineries with modern processes.
Keep in mind billions of dollars are being spent expanding and upgrading those existing plants. Some of the expansions are bigger than the average refinery. Also, expansions and upgrades have been going on for decades, just not at the current pace. The result is in the 1990's and past 8 years, the total cumulative output capacity in the creation of fuels has risen approximately equal to one new refinery per year including the refineries that were shut down.
Last-minute feeble acts by the overburdened energy secretary to increase crude production, will take too long, perhaps a year.
I liked the above statement. Now, you hear the demorats say it will take ten or more years before drilling will take effect. I don't concur with that. I am also one who believes in refineries. We need more refineries along with more barrels of oil on the market.
Both parties have a responsibility to help fix this party.
I meant to say fix this problem. My bad.
But I don't think you realize how much is actually paid. The average isn't the spot market price, but take a look at what is actually paid.
Refiner Acquisition Cost of Crude Oil
In April, the average price for a domestic barrel of Crude Oil bought by refineries was $107.50. The average spot market price for West Texas Intermediate (the futures price quoted when people talk about the price of "oil") was $112.58 for the same month.
Petroleum Spot Prices
Of course, oil comes in all kinds of quality grades and the actual price reflects that. It has different values and either produces lower grades of products or takes additional refining to produce the same amount of products as something like WTI.
Domestic Crude Oil First Purchase Prices by API Gravity
Landed Costs of Imported Crude by API Gravity
I agree with this. While we don’t like it, hey! C’mon you spoiled Americans! Make a little sacrifice here! You have your sons fighting in Iraq, maybe you could make some sacrifices yourselves!
Take one less trip this summer! Carpool! Cut out purchasing a few things, like cheap Chinese-made consumer goods!
Yes, oil priceed at $140/barrel does suck. Well? Too D*** Bad. If you are conservative and really believe in market forces, that is EXACTLY what has to happen in order to make other development of sources of energy economically feasible. The cost of capital for plant to start production has to be paid, and NO, IT’S NOT GOING TO BE PAID BY SOMEONE ELSE OR THE GOVERNMENT!!!! WE are going to have to pay for it. Plain and simple.
So, sure, we all want nuclear power for electric generation, and we want oil from oil shale and/or coal liquification. Sounds good to me. But we’ve got to pay for it.
The price of gas at $4.00/gallon and oil at $100/barrel makes this possible. So I’m not mad at price of oil. It’s what we do with this OPPORTUNITY that matters. We need to use this as a means to develop our own resources and get off the addiction to foreign oil. And say to hell with the global warming hoax and let the tree huggers go live in the woods w/o modern conveniences.
That’s what I’m more focused on.
I received the below (in it's entirety) in an email:
ANWR = Arctic National Wildlife Refuge.
Now A comparison:
And some perspective:
NOTE WHERE THE PROPOSED DEVELOPMENT AREA IS (its in the ANWR Coastal Plain):
THIS IS WHAT THE DEMOCRATS, LIBERALS AND GREENS SHOW YOU WHEN THEY TALK ABOUT ANWR
and they are right these ARE photographs of ANWR
ISNT ANWR BEAUTIFUL? WHY SHOULD WE DRILL HERE (AND DESTROY) THIS BEAUTIFUL PLACE?
WELL THATS NOT EXACTLY THE TRUTH
Do you remember the map?
The map showed that the proposed drilling area is in the ANWR Coastal Plain
Do those photographs look like a coastal plain to you?
WHATS GOING ON HERE?
THE ANSWER IS SIMPLE
THAT IS NOT WHERE THEY ARE WANTING TO DRILL!
THIS IS WHAT THE PROPOSED EXPLORATION AREA ACTUALLY LOOKS LIKE IN THE WINTER:
AND THIS IS WHAT IT ACTUALLY LOOKS LIKE IN THE SUMMER:
HERE ARE A COUPLE SCREEN SHOTS FROM GOOGLE EARTH:
AS YOU CAN SEE, THE AREA WHERE THEY ARE TALKING ABOUT DRILLING IS A BARREN WASTELAND.
OH AND THEY SAY THAT THEY ARE CONCERNED ABOUT THE EFFECT ON THE LOCAL WILDLIFE
HERE IS A PHOTO (SHOT DURING THE SUMMER) OF THE DEPLETED WILDLIFE SITUATION CREATED BY DRILLING AROUND PRUDHOE BAY*
DONT YOU THINK THAT THE CARIBOU REALLY HATE THAT DRILLING?
HERES THAT SAME SPOT DURING THE WINTER.
HEY, THIS BEAR SEEMS TO REALLY HATE THE PIPELINE NEAR PRUDHOE BAY*
*The Prudhoe bay area accounts for 17% of U.S. domestic oil production
NOW, WHY DO YOU THINK THAT THE DEMOCRATS ARE LYING ABOUT ANWR?
REMEMBER WHEN AL GORE SAID THAT THE GOVERNMENT SHOULD WORK TO ARTIFICIALLY RAISE GAS PRICES TO $5.00 A GALLON?
AL GORE AND HIS FELLOW DEMOCRATS HAVE ALMOST REACHED THEIR GOAL!
NOW THAT YOU KNOW THAT THE DEMOCRATS HAVE BEEN LYING, WHAT ARE YOU GOING TO DO ABOUT IT?
I take it any refinery now cracks the oil to get all the possible product mixes (highest margins and product demand) it can out of each barrel depending upon the quality of the crude??
We already have huge KNOWN pools that we're not allowed to produce. I don't know why anyone would even bother looking for more, it's not like they'd be allowed to do anything with it.
Absolutely! It's nice to hear from someone who actually sees it as I do and can put a positive spin on it to boot. Its a bit progressive for many here but I believe we need to roll up our sleeves and mow thru this time so we don't have to do it again in 10-15 years. People who think oil is cheap don't realize how much of this countries resources have been expended securing our addiction.
We really need to find ways to do much, much more while using much less.
They might do that or try to. It would depend if it is on Federal turf or not.
It is a good idea to look for different methods to produce energy. But until we have put these methods into production, it is a good idea to make available those methods that are known. We need short, mid, and long term goals to solve this problem. We need true leaders who really care about our nation (not self serving interest) to carry the flag up the hill.
We don’t need obstructionist. We need producers in our Congress and in the White House. We the people can put producers in and we can remove obstructionist. I say it is time to git r done during the next election cycle. This has to be the worst Congress in my lifetime. It is time to do something about that.
Brilliant image. That needs to be printed out and spread far and wide!
I clearly see your point, but as the last 30 years have proven, you can't have it both ways. Private investment always follows the trend, if the trend is more oil thats where the money goes. If the trend is less oil the money will seek other opportunities.