A Paste from Google News about Gasoline Prices

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By Paul Richter, Times Staff Writer May 1, 2006 WASHINGTON — Gasoline prices will remain high for years to come and will be largely unaffected by a new White House plan to bring them down, Bush administration officials said Sunday. Energy Secretary Samuel W. Bodman said the United States faced an oil price "crisis" because surging demand from such countries as China and India had outstripped supply, and he predicted that it would be "two to three years before suppliers are in a position to meet the demands." "The suppliers have lost control of the market," he told NBC's "Meet the Press." Gas prices approached record highs last week, further angering motorists and putting a scare into lawmakers seeking reelection in six months. The rise in fuel prices is the No. 1 concern of a plurality of Americans, recent polls show. In response, the administration sent top officials to the Sunday talk shows to promote the White House energy plan, which would, among other steps, reduce the flow of oil into the national strategic reserve, ease regulations on fuel ingredients, and encourage the production and purchase of hybrid vehicles. But White House Chief of Staff Joshua B. Bolten acknowledged that President Bush's program to deal with the price increases would have only a "relatively modest" effect on prices in the short term. "This is a very large problem," he said on "Fox News Sunday." "It's built up over many years — decades, in fact. It's not going to be solved in the short run by some silver bullet. There are a lot of policies that need to be put in place over the long run to wean ourselves from our dependence on foreign oil." The officials said the only lasting solution would be a long-term effort to reduce dependence on foreign oil, which represents about two-thirds of U.S. consumption. "We need to deal with the long-term problems of technologies that may get us out of this trap," Secretary of State Condoleezza Rice said on ABC's "This Week." She said that countries' efforts to ensure oil and gas supplies were "distorting international politics." "The quicker we get about the business of reducing our reliance on oil, the better we're going to be." Administration officials insisted that Bush was not hypocritical in halting deposits to the Strategic Petroleum Reserve, even though he attacked Democratic opponent Al Gore in the 2000 presidential election for urging a similar reduction to help cut prices. Asked if Bush's move was aimed at the midterm elections, Bodman said: "I wouldn't call it a political move. I would say it's an effort to … make a contribution to the reduction in price." He added that, in any case, the price of oil "is not something that is, I think, going to be meaningfully affected by whatever happens to the strategic reserve." Some elected officials have called for a "windfall" tax on oil company profits, pointing out that the major companies posted record profits last year and that former Exxon Mobil chief Lee Raymond was awarded a $400-million pay package when he retired. But Bodman said the administration was firmly opposed to such a tax. "There are certain things that we know don't work, and [a tax on] windfall profits is one of them," he said. "That was tried 30 years ago; it did not work. It resulted in reduced production." He said that though Bush had instructed the Justice Department to look into reports of price gouging, the administration doubted that profiteering had occurred. "We see no evidence of it," Bodman said. "But this is one of those situations where I guess I would call it 'Trust, but verify.' " Despite the administration's opposition, an influential Republican senator, Trent Lott of Mississippi, told CNN's "Late Edition" that he was not dismissing the idea of a windfall profits tax. "This may come as a shock to you, but I'm going keep my options open," he said. "If the oil companies don't stop escalating the gasoline prices, it is going to force the people to demand that the Congress do something more — and the Congress is going to have to do more." A top lobbyist for the American Petroleum Institute suggested that the oil industry, which has close ties to the administration, was urging the White House not to go to war with Iran over its nuclear ambitions. J. Bennett Johnston, who opened a lobbying firm in 1997 after retiring as a Democratic senator from Louisiana, said that "saber-rattling" on Iran was among the factors driving up prices. "We'd see gasoline prices above $5 or $6, crude oil above $100 [per barrel] if we bomb Iran," he said on "This Week." According to January figures from Oil & Gas Journal, Iran has the third-largest proven oil reserves in the world, after Saudi Arabia and Canada, and the second-largest proven natural gas reserves, after Russia. U.S. sanctions forbid American companies and their foreign subsidiaries to conduct business with Iran, and the United States does not import any Iranian oil or gas. But any U.S. military action against Iran's nuclear program would be expected to have an immediate effect on world energy prices.
 
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I was reading a book in the library that talked about $200/barrel oil. Can you imagine the profits that the oil companies would make from that. Wahoo, I need to buy more stocks.
 

Al

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Notice not a word about about conservation in the solutions. And always the words like : ""two to three years before suppliers are in a position to meet the demands." ...Heloooooo..its not gonna happen. The problem is going to get worse. [Frown] Just more banter for the masses.
 
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Yup, no one has a solution to cut the use in 1/2 only doubling the production. Makes no sense. I'm going to try cutting my use in 1/2 in the coming months. I put 25,000 on the truck in the last year. I'm hoping to only run 12-15,000 this year. That's an effect of dropping "my price" of fuel.
 
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Gentlemen ..we have a global economy based on consumption. Unless someone cracks the energy nut it's not going to change. It will only get worse. Those who conserve will enable those who do not. My part time employer has no desire to save resources ..only to buy them as cheaply as possible in the prevailing economy. Otherwise ..it's pedal to the metal. I think we're going to see some radical changes in the near future. Ones that make some of thos low budget "B" futurist movies a little more appreciated for their "vision".
 
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"Those who conserve will enable those who do not" ============================================================== This is why gas taxes should be raised in order to establish tax credits for those who conserve.
 

Al

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quote:
Originally posted by GROUCHO MARX: Al talked about the solution, use less.
That solution will come with people and government kicking and screaming all of the way. It won't be voluntary and it will not be planned. But it will happen and it will be ugly.
 
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I work at home and my wife works about 40 miles from home, with no public transport options. We can't cut back, except to change my wifes job or relocate closer to my wifes place of work. Buying a more economical vehicle will cost more than running what we have. If the DC gang do something stupid and cause shortages, I will not be amused. The price needs to go higher if that's necessary to allow supply to meet demand. Economics 101. Decades of supply neglect has led us to where we are. Those 10Billion barrels out of ANWR sound pretty good about now, and the much larger fields we haven't tapped are still out there doing nothing, much like our politicians who think they can add taxes to create more supply [Duh!]
 

JHZR2

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I have yet to see the actual numbers that show China and India's demand increase with any sort of proportionality to the price increases of the last year or two... Just all these claims that China and India are demanding so much more now... Where is the data? To me its just a claim that isa good excuse to drive prices up higher. Until I see the curves and numbers, its just trading up at our expense, because they have a quick and easy excuse that nobody seems willing to verify. While I realize that these countries are 'moving up', how much and at what rate per year is an interesting issue. All the data that I see indicates that as GDP increases, on a GDP basis, energy requirements have been decreasing... indicating increasing efficiency, allowing leeway for those moving up in the world in CHina and elsewhere. It would be dense to assume that they use severely outdated and inefficieent processes for everything they do... theyre interested in turning a profit as much as possible, same as everyone else around the world, and commdotities price increases hurt everyone everywhere as much as they do here, making efficient implementation as much a necessity in China as elsewhere. JMH
 
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GROUCHO is right... at my college most kids have their GMC Sierras and brand new SUVs that they bought. Anyone who has a Honda Civic or similar sized car is looked at as "poor" and pathetic. Ever since gas prices went up - you see these guys trading in their $45,000 trucks for a Saturns. LOL. Still, there are a lot of guys/gals driving these trucks doing 8 second 0-60s from the stoplights. Their gas credit cards must love them [Razz]
 

NJC

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JMH; As per Jan 2002, China's oil comsumption was 4.85 million barrels/day. http://www.scaruffi.com/politics/oil.html But 2004 figures put China's consumption at 6.31mbpd or 30% increase over 2yrs. That's substantial. http://www.cia.gov/cia/publications/factbook/rankorder/2174rank.html I'm not overly-happy about Exxon's 2005 ~38 billion profit but less happy with govt's even bigger piece of the pie. As others have mentioned, this $100 rebate is another vote-buying scheme and Big Eeeeevil Oil makes a great scapegoat and deflects criticism. Cut the oil industry's huge tax credits and level the field. And remove the $.54/gallon Brazilian ethanol tariff.
 
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Cut the subsidies on fuels of any description, and make them a level playing field. Make petroleum reflect the true cost, including the costs of defense forces overseas etc, climate change(?), and let us all pay for the product what it REALLY costs to produce, and give us all back our taxes so that WE are deciding how we spend it. Then every emerging technology can compete on its merits, and compete against the true cost of our favourite fuel. And pretty soon, we won't be using anywhere near as much oil.
 

Al

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quote:
Originally posted by Shannow: Make petroleum reflect the true cost, including the costs of defense forces overseas etc, climate change(?),
You said a mouthful here. If you factor in the true costs...Oil would be 100+ bucks a barrel. A good portion of our multi trillion$$$$ armed forces is aimed at insuring our oil supply. And look at the Government's cost to run the U.S. strategic reserve. I'll bet the dollars are in the 10's of Billions per year, at least. Sadly, the joe sixpacks of the world will still demand (but won't get) $1.30/gasoline.
 

JHZR2

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quote:
Originally posted by njc: And remove the $.54/gallon Brazilian ethanol tariff.
Interesting... Brazil is in no way part of OPEC, right? Brazil isnt an 'enemy' of ours, or a country that is considered to be a danger to us, right? I'm all for US farming, and I support local farmers all that I can. However, with ethanol in short supply, Brazil having large production capactity, and their country being one that is not as much a threat to our security, as say the middle east countries or even, say, venezuela, why not open the floodgates of trade with them, if for no other reason that to ber a tiny bit less dependent upon the unstable places. Sure, China and india may buy up that real crude/fuel for their growth (thanks for the figures, by the way) but then hey, if instability is induced in the mideast one way or aqnother, and they cant get their fuel... then they may be enticed to help protect their oil fields, instead of just buying up US debt to pay for us to do it. JMH
 
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Would the ethanol from Brazil burn right in U.S. cars equipped to run on corn-based E85? The reason I ask is because the ethanol in Brazil is made from sugar cane, not corn.
 
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quote:
Originally posted by Shannow: Then every emerging technology can compete on its merits, and compete against the true cost of our favourite fuel. And pretty soon, we won't be using anywhere near as much oil.
Oil is almost free. Sure, there are exploration and extraction and refining and transport costs, but the raw product is free. It's hard to compete with free. We will be using all the oil we can get for as long as we can get it. Consider this. Somehow we convert a good proportion of our cars over to hydrogen power and significantly reduce demand for oil. The price of oil will plummet, making the hydrogen (insert any alternative fuel here) too expensive to compete. There are no magic bullet solutions. Besides, it's not in OPEC's best interests to overprice its product and have their customers turn to alternatives. So this upturn will reverse but the oil producers can't open the spigot overnight. What we are seeing is that the oil producers did not anticipate and keep up with demand. Doom and gloomer "peak oilers" will tell you that there is no more to have. Bunk. We've heard that since about the year 1900. The wild card is what's happening in South America (government confiscation of oil production, causing inept management and underinvestment) and if Iran goes nuclear and carries out it's threat to destroy the US and Israel first, every other infidel next. Then all bets are off and the price of gas won't seem so important.
 
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