Gas prices=$4 ?

[Maxximus Redneckus]

Try and push for a viable alternative fuel source. .

There are alternate sources of energy, but the corporate conglomerate of oil companies which also are the leaders in alternate fuel research and development technology will never ever allow the use of other sources of energy until every single drop of oil in the planet has been consumed and they have profited from it, then they will profit on all the research and development of alternate fuel sources they have been keeping locked.

Raul hit the nail on the head it aint about keeping Americans warm and safe its all about PROFIT all the way from small  gas stations to pharmacies

[Raul]

Exactly, politicians do what the money they get for their campaigns tells them to do, the money says JUMP ! and the politicians ask HOW HIGH ? and nobody in this planet has more money than oil companies, they rule the world with their econopolitical power and as long as we need energy they hold us prisioners.

The only language they know and the only thing they care about is money, they have no patriotism, no allegiance, they owe to themsleves and to their shareholders.

[tyrius.]

Lots of interesting responses so far.

Oil prices are driven by a WIDE variety of things.  Production can be impacted by terrorists from the Middle East down to Nigeria, hurricanes can knock out production in the gulf, Venezuela taking over their oil production, etc.  Demand is steadily rising.  As China becomes more of a car nation and continues their rapid building spree they will continue to consume record amounts (for them) of oil per year.  This will continue to drive world wide demand up each year.  Currently, production is barely meeting demand and with all of the "easy" oil already tapped the oil companies are forced to go for the more expensive oil, this could be deep drilling in the gulf, oil sands in Canada, oil shale in the Rockies, even drilling in the arctic circle.

This would naturally lead to higher oil prices.  Now one must also take into consideration the impact of the oil commodity market.  This market is where the buyers meet the sellers to buy oil contracts for future delivery.  These contracts may be bought and sold many times during the contract's life.  Any type of bad news in any of the major production areas will cause the price of oil to rise.  If the threat turns out to be unfounded then the price will fall and those that bought the price up will lose money.  In today's market there is a section of those participating who have no intention of ever receiving any of the oil that they are buying and selling.  They are simply trying to make money on the rise and fall of the value of the contract.  

Now with the CDO (mortgage securities) being devalued and not traded as much there is another big amount of money that must be invested somewhere.  Those traders have been moving that money into the oil market, creating more demand for the oil contracts which will naturally raise the price of oil.

Adding in the impact of the falling dollar means that as the value of the dollar falls in comparison with the other world currencies that dollar buys less from the other country.  Therefore the falling dollar actually causes the price of oil (in US$) to rise when the actual price isn't rising.

All of this leads to the big time run up that we have seen in the cost of oil.  If the investment money continues to stay in oil then we will continue to see record setting oil prices.  

[tyrius.]

Almost every quarter the oil companies have record PROFITS, thanks to us.

Not this quarter.  Exxon's net income was down 10% in the 3Q of '07 compared to the 3Q of '06.  Year to date they are down 1%.  This is mainly due to the decrease in margins on gas.

What about state taxes too? That is now about 30-50 cents per gallon depending on what state you live in.

Don't forget federal and local taxes!!  

And doesnt the U.S. have reserves everywhere? THE GULF COAST? ALASKA? Curiosity question.. Does the U.S. have enough oil to sustain itself for a period of time? Try to pull an old school boycott to force prices down?

The oil in ANWR is a pittance compared to our yearly demand.  

[tyrius.]

There are alternate sources of energy, but the corporate conglomerate of oil companies which also are the leaders in alternate fuel research and development technology will never ever allow the use of other sources of energy until every single drop of oil in the planet has been consumed and they have profited from it, then they will profit on all the research and development of alternate fuel sources they have been keeping locked.

What alternatives would work in a country like the US where people drive on average over 30 miles roundtrip each day to work?  Where a trip of 100 miles is considered not very far?  How do setup up the infrastructure to deliver the fuel to the cars?  How do you transport that fuel?

The best options right now are the hybrids.  Chevy's Volt concept seems pretty intriguing where the car will travel about 40 miles on it's batteries alone and can run an engine to recharge the batteries to significantly increase the distance able to be travelled.

[=Matt 5.0=]

We (the United States) need to stop sending OUR oil to North Korea.....

[Glenn]

Let's be very careful here.  Some of the posts are starting to infringe upon the "No politics" zone.

Consider this a warning shot.

[tyrius.]

2.95 average in RI > I just dont get it.. the fuel is already in the ground at the gas station, so why does gas the price go up day by day? its not like every station has a fuel truck there every day? It just stinks that its out of our control and we cant do anything about it. I think I'll just start going to work via dogsled once the snow starts falling.

The gas station owner has to make enough on the gas in the tank to purchase enough gas to fill the tanks again.  In times of rising prices the gas station owner must raise his prices on the gas that he currently has in order to be able to afford to fill the tanks again at the higher price.  

Gas is also a VERY low margin product (just a few cents a gallon) for the gas station owner.  They typically make the most money in times of falling gas prices.

[Raul]

What alternatives would work in a country like the US where people drive on average over 30 miles roundtrip each day to work? Where a trip of 100 miles is considered not very far? How do setup up the infrastructure to deliver the fuel to the cars? How do you transport that fuel?

The best options right now are the hybrids. Chevy's Volt concept seems pretty intriguing where the car will travel about 40 miles on it's batteries alone and can run an engine to recharge the batteries to significantly increase the distance able to be travelled.

In Brazil they have been driving cars with alcohol for a good couple of decades and there isn 't much difference between transporting alcohol and delivering alcohol to gas stations than it is to transport oil and gas. The system is not absolutely oil free, there is a certain percentage of gasoline in the alcohol they use.

Another source of fuel can be found in vegetable oil ( biodiesel ) and actually you can produce biodiesel almost out of anything.

[tyrius.]

In Brazil they have been driving cars with alcohol for a good couple of decades and there isn 't much difference between transporting alcohol and delivering alcohol to gas stations than it is to transport oil and gas. The system is not absolutely oil free, there is a certain percentage of gasoline in the alcohol they use.

Ethanol is a good source of energy for certain locations.  Brazil can do this very cheap because they have the climate to grow huge sugar cane fields which is then fermented into ethanol to use to fuel their cars.  

The US is exploring ethanol.  We can't grow sugar cane like Brazil can so we are currently working with corn.  This is not a long term solution as it is a physical impossibility for us to grow enough corn to make a significant difference in our oil consumption.  Corn just doesn't have the necessary sugars to make it feasible.  Also, transporting ethanol via pipelines does not work without significant improvements to the pipes, significant monitoring and cleaning.  Basically zero water can be allowed in.  Right now ethanol is only transported via semi truck, using more energy in the transport and making it unfeasible for areas of the US that do not grow significant amounts of corn.  

We have other options for ethanol production, switch grass, wood pulp, etc.  However the technology is not there to be able to make this a viable option and we're still stuck with the transport issues.

Another source of fuel can be found in vegetable oil ( biodiesel ) and actually you can produce biodiesel almost out of anything.

To get this we would have to grow more soybeans, which would decrease the amount of corn grown which would decrease the amount of ethanol available to be produced.

These options are definately feasible in the US for small scale applications.  However, they will not satisfy the entire US demand.

[Zel]

With the prices of oil going through the roof, looks like I may build me a greasecar soon.  With the price of bulk vegetable oil so cheap, or even free from restaurants, it might be something to consider.  

http://www.greasecar.com/

[Tin]

On the local news tonight they showed ANOTHER report on gas prices and it showed a few gas stations out in California selling for almost for and one gas station in Oakland was selling 89 octane for $4.05!!! Hope those prices dont make there way east.

[michbass]

just to lighten it up here. I have tons of free gas if anyone wants to come get some. Everyone that knows me doesnt want it. If it could only power a car.  

[Micro]

If you want to bring gas prices down, don't drive so much.  Current gas prices right now is driven by demand, not supply.  There is plenty of gas, there is just a lot of demand for it.  As long as the demand is high, prices will remain so.   It's simple "supply and demand" economics.  

[Guest muddy]

Lots of interesting responses so far.

Oil prices are driven by a WIDE variety of things. Production can be impacted by terrorists from the Middle East down to Nigeria, hurricanes can knock out production in the gulf, Venezuela taking over their oil production, etc. Demand is steadily rising. As China becomes more of a car nation and continues their rapid building spree they will continue to consume record amounts (for them) of oil per year. This will continue to drive world wide demand up each year. Currently, production is barely meeting demand and with all of the "easy" oil already tapped the oil companies are forced to go for the more expensive oil, this could be deep drilling in the gulf, oil sands in Canada, oil shale in the Rockies, even drilling in the arctic circle.

This would naturally lead to higher oil prices. Now one must also take into consideration the impact of the oil commodity market. This market is where the buyers meet the sellers to buy oil contracts for future delivery. These contracts may be bought and sold many times during the contract's life. Any type of bad news in any of the major production areas will cause the price of oil to rise. If the threat turns out to be unfounded then the price will fall and those that bought the price up will lose money. In today's market there is a section of those participating who have no intention of ever receiving any of the oil that they are buying and selling. They are simply trying to make money on the rise and fall of the value of the contract.

Now with the CDO (mortgage securities) being devalued and not traded as much there is another big amount of money that must be invested somewhere. Those traders have been moving that money into the oil market, creating more demand for the oil contracts which will naturally raise the price of oil.

Adding in the impact of the falling dollar means that as the value of the dollar falls in comparison with the other world currencies that dollar buys less from the other country. Therefore the falling dollar actually causes the price of oil (in US$) to rise when the actual price isn't rising.

All of this leads to the big time run up that we have seen in the cost of oil. If the investment money continues to stay in oil then we will continue to see record setting oil prices.

WELL PUT>>>>>>>>. I JUST DID A PAER TRACING THE EVOLUTION OF THE BOOM AND BUST ECONOMY OF AMERICA IN THE LATE 1800'S TO THE CURRENT PROSPERITY/RECESSION ECONOMICS OF TODAY , ACED IT!!! I FOUND MANY OF YOUR POINTS IN MY RESEARCH. IT IS INCREDIBLE HOW ,(MINUS THE POLITICAL ELEMENT) THE ECONOMY CYCLES. MY OLD MAN USED TO SAY WHEN MILK AND GAS ARE UP, WE ARE HEADED FOR TROUBLE, MAN HE WAS RIGHT!!!!!!!!!!

[tyrius.]

THE ECONOMY CYCLES. MY OLD MAN USED TO SAY WHEN MILK AND GAS ARE UP, WE ARE HEADED FOR TROUBLE, MAN HE WAS RIGHT!!!!!!!!!!

That is correct.  The economy will grow and then will go into a recession, then it will grow again.  It's really not a question of if.  It's a question of when.  The federal reserve has made preventing a recession their number one concern (this is from Greenspan to Bernacke).  They are not too concerned with protecting the value of the dollar.  As such, they are lowering interest rates to promote consumer and industrial spending and to attempt to prop up the housing market.  These rate reductions are having the anticipated impact on the value of the dollar which makes foreign goods more expensive which causes energy prices to rise precipitously.

It is my opinion that the longer the recession is pushed off the harsher it is going to be.  I'd almost like to see the fed raise interest rates and start protecting the dollar and just bear our way through the recession to come.

[bassdocktor]

I'm just gonna put this out there especially since tyrius has been talking about alot of economic principles and Muddy brought up the business cycle. The oil companies are a cartel. Right now OPEC is actually an example of an efficiently working one. They decide to set the supply under the market equilibrium level and then raise the price over what economic graphs would show it should be. That is something that should be taken into account. As far as it being a cartel, we can't do much legally since usually cartels are controlled by companies and not countries. Also the places that are part of OPEC don't have laws against cartels.

[tyrius.]

The oil companies are a cartel. Right now OPEC is actually an example of an efficiently working one.

Just a point of clarification.  OPEC is a cartel of oil producing countries, not companies.  Those countries are  Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.  Exxon-Mobile, BP, etc are not part of this cartel and do not operate under it's direction.

We can't do much about it legally because those countries are not governed by our monopoly laws.  If Exxon-Mobile were to ask for admission into OPEC I have a strong suspicion that the US gov't would have a rather large problem with that.

[grimlin]

This is interesting to read.I didn't know about some of this stuff.

[Raul]

OPEC is an organization of oil exporting countries but the ones running the show are the 7 "sisters" which form the true cartel : Mobil, Exxon, Texaco, BP, Royal Dutch-Shell, Chevron and Gulf-Aquitaine. There are a few other smaller companies owned by a country with subsidiaries like Citgo, but they have a minor role in the transport, processing and distribution of oil and it 's products. Most of the oil in the world falls and moves through those companies.

[llPa1nll]

I think what allot of people are missing is that alternative fuels do exist. Im speaking mainly of Hydrogen power. The technology is real as well as the cars that are using it. It is being used in Iceland, read about it here. Yet our country is all hung up on Hybrid technology while being more efficient than gas only cars, they are still using gasoline. The other upside of the hydrogen fuel cells is that only emissions to come out the tail pipe is water, which would cut down on harmful emissions.

[tyrius.]

I think what allot of people are missing is that alternative fuels do exist. Im speaking mainly of Hydrogen power. The technology is real as well as the cars that are using it. It is being used in Iceland, read about it

Just because one country is able to make it work does not mean that it is feasible for other countries.  As Raul mentioned Brazil uses nearly 100% ethanol to power their cars.  They can do this because of their natural resources and small size.  

Hydrogen power is good if one has an easy way to come up with the hydrogen needed for the fuel.  The current method is to use electricity to split water molecules into Hydrogen and Oxygen.  This takes a lot of electricity.  Iceland gets this electricity from hydro-electric plants and geothermal.  Both methods are renewable.  Here in the states we get a big percentage of our electricity from coal or natural gas.  Not renewable.  So moving to hydrogen power for our cars is really just moving our problem from one fossil fuel to another.

That is just the production problem.  GM has had the fuel cell car as their dream for many years (about a decade).  They have spent over a billion dollars on this and still have many problems.  How do you safely store it in the car?  The current Sequel is still just a concept car that last year cost about a million bucks to produce.

Setting up the infrastructure to deliver the hydrogen (convert gas stations) throughout the US would run in the tens of billions of dollars.  How do you transport and store the lightest, smallest gas molecules on the planet?

There is little doubt that this technology should continue to be explored, but it is far from being ready to be deployed.  Iceland isn't planning on being oil free until 2050!  GM is still actively working on the hydrogen car and are banking on it to bring the company back to the forefront.  They missed the hybrid boat.  But right now, the individual consumer should be buying hybrids, driving less, and altering their driving styles to get better mileage.

[Raul]

I think what allot of people are missing is that alternative fuels do exist. Im speaking mainly of Hydrogen power. The technology is real as well as the cars that are using it. It is being used in Iceland, read about it here. Yet our country is all hung up on Hybrid technology while being more efficient than gas only cars, they are still using gasoline. The other upside of the hydrogen fuel cells is that only emissions to come out the tail pipe is water, which would cut down on harmful emissions.

There 's only one itsy bitsy problem with hydrogen, true, it is the most abundant element in the universe problem is ...... that in practical terms is just doesn 't exist as hydrogen alone, it 's always bound into something else and the process to free it consumes a lot more energy than hydrogen provides on it 's own.

The easiest way to obtain free hydrogen is to separate it from water and in order to do that you need electricity and to produce electricity you have to generate it from somwhere that means, since with energy there are no free rides you have to invest in free energy: solar, eolic, geothermic or hydro and those cost a lot of money and still, you the ammount you need for the process is more than what you obtain from it.

Until somebody finds away to obtain free hydrogen the fuel cell technology for the masses is going to be just a dream. Iceland can do a lot of things because for staters their country is one of the most volcano active countries in the planet ( free and abundant supply of geothermal energy ), the country is covered with snow most of the year ( free and abundant water to boil with geotermal energy to produce steam that runs generators ) and with a popultaion of less than half a million inhabitants their energy requirements are insignificant. Man there are three times more people in the city I live in than in Iceland. How many buses can you need to transport less than half a million inhabitans ? not many, fuel cell buses ? oh yeah we can afford that.

[Zel]

Wonder why all of a sudden several countries have become so interested in the moon lately? Why do you think Bush wants a permanent base there? If you think it's for the sake of science think again Helium-3 baby! The surface of the moon is covered in it. It just has to be heated out of the rock.

Japan is already investing around $40 million a year into the technology of developing a reactor system compatible with Helium-3 (and there very little of it here on earth hmmmmm). One space shuttle load would supply the entire United States energy needs for a year.

Can you say inventments!

http://www.upenn.edu/gazette/0397/0397gaz2.html

[Siebert Outdoors]

Let's be very careful here. Some of the posts are starting to infringe upon the "No politics" zone.

Consider this a warning shot.

Heee hee,  thats why I'm staying out of it.  I could say something that would go very political and raise some eyebrows, but I'm being a good boy and making some bass jigs. :-X

Back to work.