Skip to comments.Three Reasons Gas Prices are High
Posted on 04/10/2012 6:09:52 AM PDT by Kaslin
The blatant hypocrisy and arrogance of president Obama, Nancy Pelosi, and Hillary Clinton in the video below is simple stunning.
Caroline Baum on "Obama the Omniscient"
Inquiring minds are reading Bloomberg columnist Caroline Baum's article
(Excerpt) Read more at finance.townhall.com ...
three reasons gas prices are high... government regulations, government taxes and government interference....
1. weak dollar
2. weak *resident
3. lack of domestic production
This country has a history of Robber Barons. Now the robber barons are in the government and taking over the high profit industries.
I have no great love for the Arab Oil Sheiks to whom Obama bowed when he bowed to the king of mecca.
They are the ones making out like bandits, but nary a peep of that comes out of the mouth of the one.
Hypocrisy ... thy name is 0bama.
One reason for the current price of gasoline is that the price at the pump is at the intersection of ‘Supply and Demand,’ plus 10 cents a gallon to Oil Companies, and 40 cents a gallon to Local, State and the damned Federal Government.
Since 95 % of the supply of Crude Oil in the world is directly controlled by governments foreign to the USA, it is fair to say that 95 % of the price of Gasoline is controlled by foreign Governments.
If all taxes paid at the pump by consumers were removed for the rest of the year, politicians would have lowered lowered gasoline prices by 10 %.
BTW, the politicians recently gave us a partial payroll tax holiday, so why not a Gasoline and Diesel Tax Holiday?
2) Termination of most oil drilling on Coast Waters (including devastated Louisiana)
3) Termination of the XL Pipeline with Canada.
All Policies of the Obama Administration to increase Energy Costs.
1. opec is a monopoly that sets the world supply of oil
2. opec funds ecology branch of dem party to limit US production
3. opec dabbles in world disorder to keep price high when they
mess up on supply calculations
1. Weak Dollar/Inflation
2. Wall Street Bailouts/Speculation
3. Lack of Production/Protection
Read history, this is why OPEC was formed in the 1960's- oil prices were flat yet the Western Countries were running high inflation. The Arab economies based primarily on natural resource exploitation (oil) had to increase prices to keep up with the inflation of the value added products they imported. The same is happening today. When the dollar doesn't go as far, you need more dollars.
You have it backwards. "Industry" LOVES a guaranteed bigger return without having to invest. That's why their owners on Wall Street gave Zero so much money.
What are they making per barrel of oil? I keep seeing how much they make per gallon of gasoline but that isn’t the only place oil is used. In searching I only find quotes of the per gallon of gasoline. I found one site that listed $80 a barrel of oil but it was a dubious source.
February 4, 2009 Just months after Obamas Energy Secretary said, Somehow we have to figure out how to boost the price of gasoline to the levels in Europe, the Regime begins scrapping leases for oil-shale development and cancels 77 leases for oil and gas production in Utah. Gas is $1.91 a gallon.
March 7, 2009 ABC News says the White House is closely monitoring the expedited Solyndra loan project even as it was delaying new American energy production that would help make us less dependent on foreign energy. Gas is $1.94 a gallon.
June 27, 2009 - Obama urges the Senate to adopt House Democrats cap and trade national energy tax the same plan O once admitted would cause electricity rates to necessarily skyrocket. Gas is $2.50 a gallon.
January 7, 2010 The Regime announces new bureaucratic hurdles to American energy production that Secretary Salazar admitted could add delays to the leasing and drilling process. Gas is $2.67 a gallon.
March 31, 2010 Instead of opening new areas to energy exploration and development, Obama blocks deep-ocean energy production on 60% of Americas Outer Continental Shelf. Gas is $2.80 a gallon.
December 1, 2010 Obama re-imposes and expands the moratorium on offshore energy production. Gas is $2.86 a gallon.
January 2, 2011 TIME reports that the Obama Regime issued the first in a series of regulations designed to unilaterally impose a national energy tax. Gas is $3.05 a gallon.
May 5, 2011 The Regime issues a formal statement opposing House-passed Restarting American Offshore Leasing Now Act (H.R. 1230), and Putting the Gulf of Mexico Back to Work Act (H.R. 1229) legislation designed to jumpstart American energy production, address rising gas prices, and help create new jobs. Gas is $3.96 a gallon.
June 21, 2011 - The Regime opposes the House-passed Jobs & Energy Permitting Act that would unlock an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Gas is $3.65 a gallon.
November 8, 2011 The Regime releases a plan for a five-year moratorium on offshore energy production, placing some of the most promising energy resources in the world off-limits, according to the House Natural Resources Committee. Gas is $3.42 a gallon.
January 18, 2012 Obama rejects the bipartisan Keystone XL pipeline and the more than 20,000 jobs that would come with it. Gas is $3.39 a gallon.
April 10, 2012 Average price of gas: $3.95
The ONLY place the democrats want to drill is the wallets of the American people.
If an oil company is not replacing their reserves, they are going out of business. For every barrel sold, a new barrel must be added either through acquisitions of someone else's reserves, or spending the dollars on exploration and building new production facilities. And as the dollar weakens, they spend more dollars on those replacement barrels.
The following link is the average price paid by US refineries to bring in a barrel of oil. That is the average price an oil company sells their oil for in the US. Included in that price is the cost of the transportation.
These two links shows the variation of oil prices based upon quality and location.
Domestic Crude Oil First Purchase Prices for Selected Crude Streams
Landed Costs of Imported Crude for Selected Crude Streams
How do you figure that? The Robber Barons were active in the late 1800s and early 1900s putting competing railroads and oil companies out of business. It was the only time the unions were useful getting reasonable working conditions and wages. The banking robber barons took over the banking industry and caused the depression to make a fortune. This was all before Obama the late comer.
You know as well as I do that there are plenty of reserves.
Complete loony tune ignorant Progressive Democrat Fascist BS manufactured to give ignorant voters in the Democrat party an excuse to keep them from every holding their party leadership accountable for the Democras stupid, incompetent "Green" energy policy. A policy that has been in place since 1978 when Jimmy Carter introduced it.
But not owned by the investor owned oil companies. They have to keep spending money to get them.
Do you understand how fast the production rate falls on a typical Bakken Oil well? These are exponential curves of lowering production.
According to Google:
One barrel of Oil has a volume of 42 gallons (US), or 158.9873 liters.
If an efficient Oil Company makes 10 cents per gallon that would be a profit of 42 gallons X 10 cents or $4.20 per barrel, assuming that all of the 42 gallons of crude oil could be converted to gasoline. The reality is that this never happens as crude is cracked into a myriad of compounds depending on the content of the crude oil.
The inefficient Governments take 4 X as much or $ 16.80, and spend in on salaries of DOE regulators that spend all their waking hours figuring out more ways to punish Oil Companies that supply America with the cheapest gasoline and diesel fuel in the World.
Good industry sources of information would be the API, or American Petroleum Institute, and Oil and Gas Journal.
Poor sources include the GSI, or Green Slime Institute located at 1600 Plantation Avenue, District of Corruption, USSA.
When they begin to care about that they'll turn it back on, in dribs and drabs.
Do you understand how fast the production rate falls on a typical Bakken Oil well? These are exponential curves of lowering production.
Too much fun to be had financing Israel's enemies (and ours). Russians too. You know as well as I do that the Soviets funded their war machine from the Caucasus. Reagan cut the money off with deregulated access. That's how it's gone since WWII.
Amazing no one ever thinks of asking the oil companies why prices have gone up. They are the one who really know.
Now they're using tax-exempt "charitable" foundations to fund "environmental" NGOs that sue complicit government agencies to control the supply side. Read the article.
Last Saturday I found out exactly why the costs of everything are so high at the local ACE hardware. I was inquiring as to the cost of 1”X 2” X 8ft lumber, and was told it was $7.49 a stick. I about croaked on the spot as I had just sort of recovered from the discovery of $4.99 a stick price at Home Depot needing thirty sticks to complete a project. (I started this project when the lumber in question was $1.67 each, and thought that way too high.)
Regardless the fellow working the floor at ACE that told me the price of their lumber said that it was really too high a cost, and I readily agreed with him mumbling about the devalued dollar, Obama, etc. only to be told by the ACE employee that it was trucking causing the problem. I looked at him as though I forgot to flush, and asked him if he really thought trucking was the cause of the prices he is paying at the pump? He threw up his hands in a STOP expression, don’t bother me anymore with your devaluation of the dollar, Obama crap, and told me he was “a bit of an expert on the matter”.
So, there you have it from an “expert”. Truckers are ripping off America, and causing the prices at the pump.
Wondering how many such “experts” there are walking about so confident in their knowledge?
Sigh. Here we go again. As has been repeated ad nauseum on FR, thanks to the rapid industrialization of China, India & an assortment of other countries that have modernized, there is now a much greater appetite for oil. Even if the supply would double it would barely keep pace with the increasing demands of those countries. And thanks to the weak dollar (thanks Dubya), they’d benefit from an increase in production, not us. No surprise the Townhall hacks left that part out. They’re good at missing the point.
1) Obama - ban on Gulf drilling
2) Obama - ban on pipeline from Canada
3) Obama - Arab ass kisser
I am not sold on that math being accurate. The oil company sells the oil to the refinery. Their profit has nothing to do with the end product. Their profit is tied to their expenses and the price of oil at the time of the sale.
Here is a blurb from a Conoco news release.
All told, ConocoPhillips earned $17.09 per barrel of oil in the second quarter, up from $9.38 in the year-ago period.
Both numbers are much higher than your 4.20 figure. I think it gets even more complex when the company pumps, buys and refines the oil. So I don’t think you can take a number from the price of refined oil and calculate what they make per barrel of oil. I know they can’t sell it internally to their own refinery for less than market rates. So right there is a built in profit.
They may only make 10c a gallon of the refined gasoline but I would be willing to bet every barrel of oil they produce themselves reaps large profit.
Are you confusing refinery margins with profits? Also, second quarter has not happened yet, are you talking about a previous year?
From comment # 18 above the hotlink shows the composite cost of feeder stock to be approximately 100 bucks per barrel delivered to the refinery, in 2011.
If the profit margins are higher on one end product, the refiner will crack to preferentially generate more of it than for the very low profit margin of gasoline, (commonly 3 to 4 cents per gallon).
Thus, the earnings per barrel cannot be directly applied to the earnings for gasoline. After the money is earned, then expenses must be deducted to arrive at the actual profit for each product generated from a barrel of feeder stock.
However, for the sake of this discussion let us assume that ALL of the earnings are the same as the profits, and that 1/3 of the feeder stock is converted to gasoline.
Then $17.09 X 1/3 = $ 5.6961 divided by 42 = $0.13562 earnings per gallon for the second quarter, and $9.38 X 1/3 = $ 3.1263 divided by 42 = $ 0.0744 per gallon for last year’s second quarter.
For a two year average of $0.013562 + $ 0.074437 = $ 0.210058 = $ 0 .105029, or 10 1/2 cents per gallon earnings.
On a $100 per barrel purchase of crude oil feeder stock the refiner and downstream entities generate earnings of 17.09 and 9.38 % respectively, for the two quarters, and 13.235 % per year average for the average of the same two quarters.
In return for purchasing the lowest cost refined products in the World, the consumer of these refined products is enabled to move goods, services and people to every corner of the World, plus use plastics, make surgical tubing, generate heat, electricity, fertilizer, and of course jet fuel so Green Peace can send their people to protest drilling of Oil wells off of the coast of any Nation with a coast line.
BTW, what return do you get from the Federal Income Taxes that you send in to Sheriff of Nottingham, Timmy Gee, each April 15 th? My guess is that it is less than 9.38 %. Last I checked, Social Security paid 1.2 % per year, well not counting your share of the National Debt, of course.
Yes, indeed! One can ALWAYS count on the US Federal Government to deliver the greatest loss at the maximum pain level for the longest period of time.
Error check: “ - - - $0.013562 - - - “ should read $ 0.13562.
The math calculations, according to my bare fingers and toes, is correct.
There’s only one reason. Monetary policy. That’s it.
In 1932, one ounce of gold would buy 16 BBL of oil. Take today’s spot price of gold and the spot price of a BBL and you’ll find its probably 16 or so BBL/ounce of gold.
In terms of gold, the price of oil hasn’t risen at all. Not one bit.
In dollars, if you print them like you are producing toilet paper for a food poisoning festival, gas is going to be expensive. Taxes make it worse (especially if they are percentage taxes and not fee-type taxes).
It’s expensive, not because costs went up, but because the purchasing power of the dollar went down.
Thanks for posting those graphs!
Oil is actually LOWER than it was in 1950, 1984, and 2006.
That’s actually funny! It made me laugh.
Oil is going to continue to drop, given the 22 year low in oil demand and spike in surplus. Gold may continue to rise faster than oil will.
Oil is a globally priced commodity and no where near a 22 year low.
The Middle East is not our main vendor. Canada is. With Mexico in third. Obama has screwed up the relationship with Canada so badly that they are now considering selling oil to us at the same price the Chinese purchase at.
Oil/gas is high because:
2. low domestic production
3. no new refineries/pipelines
4. seasonal changes (winter to summer/summer-winter gas)
5. Taxes: federal, state, local
6. rent of station facilites
(not all stations own the property)
I expressed myself badly - oil inventories are at 22 year highs. Demand is down.
Last year, I asked a refinery plant manager what it would take to build a new refinery in the US. She told me that nothing would. Her company alone was long by at least three refineries on the West Coast alone. She said she’d hate to be Tesoro right now - they are a refinery play.
No need. Our refinery capacity exceeds our demand. Even after shutting a few down in the Northeast.
Since it’s a world oil market, it doesn’t matter who our main vendors are in terms of that market price. The sheiks of just the arab league still put out about 30% of the world’s oil production. Canada is at about 4%
So did you inform his boss you were now voting with your feet?
So, is that why the oil companies are shelling out $10 million or more per well in the Three Forks and Bakken from lease to production?
Gotta sell something. More on less is better. Read the article. There's a reason the owners of BP, Exxon, Sunoco, and Citgo are the largest donors to environmental NGOs, by far, than any other interest group. Hell, they FOUNDED several of those environmental groups that sit on UN environmental treaty secretariats.
You touch on the fun part of inflation: For those making a decent living, inflation guarantees movement into higher tax brackets if the purchasing power of their salaries remains the same. For government, this means an automatic bigger slice of your individual pie, even though the purchasing power of your money remained constant or even declined slightly.
It is no surprise that the 'Rainbow coalition' style of blackmail has been carried out by ecowhacko groups against oil companies who could be tied up until leases expire with pissant litigation by environmental groups, so they make donations to get them off their back and in some cases, make commercials about how green they are.
The reality is that virtually any environmental disaster results in loss of product, materials, and profit, not to mention local hostility, and that is reason enough for the oil companies to keep their operations tidy. It's cheaper to not make a mess than to be fined and have to clean one up.