For all you oil alarmists and fern fondlers...

[V-1]

The gas companies are using a different version of that theory these days. They supply the gas and demand 3 bucks in return.
.

No oil company forced Americans to rush out and buy Ford Expeditions, Cadillac Escalades, and Hummers en masse so they could qualify for a tax break created by the present administration.

I suspect no oil company executive forced any soccer moms to drive Grand Cherokees and Yukons around grocery shopping.

I respectfully submit that most of those who don't like paying $3.00/gallon can choose to significantly reduce their consumption. Certainly 12 m.p.g. vehicles are not necessary for the majority of people driving them. Thirty minute commutes to and from work may need to be reevaluated as well.

Here's what I see during my daily thirty minute commute: 95% of the vehicles on the interstate I use are driving 10 - 30 miles above the speed limit. I did that myself before $3.00/gallon gas, and consistently averaged 21 m.p.g. Now I leave home five minutes earlier, drive the speed limit, and get 27 m.p.g. If I'm doing the math correctly, that's better than a 25% improvement in fuel efficiency...or to apply that further...a 75-cent per gallon reduction in price...effectively making $3.00/gallon fuel $2.25/gallon.

I think many people have forgotten about the national emergency speed limit of 55 m.p.h., and the original reason for it.

While changing vehicles or work/home locations may be undesirable for a number of reasons...just driving the speed limit can produce significant, immediate savings...just think what would happen to gasoline prices if everyone reduced their consumption by 15%-25%.

Because I believe this is unlikely, with the attitude we Americans have that we are entitled...by birthright or diving blessing...to purchase gasoline for $1.00/gallon, I have chosen, as anyone can, to invest in the petroleum industry. If you can't beat them (or more likely are unwilling to)...join them.

I guess with the average savings rate in this country at less than 1% of income...something else might be required for many to take advantage of the idea presented in the above paragraph...

But that's another post entirely.

 

[TonyC]

No oil company forced Americans to rush out and buy Ford Expeditions, Cadillac Escalades, and Hummers en masse so they could qualify for a tax break created by the present administration.

Gasoline did not sell for $3 when the business tax break for business vehicles encouraged some people to buy Hummers. I don't recall that Expeditions and Escalades tipped the scales at the required curb weight. If they did, you missed the Suburbans and Excursions, too.


I don't know of many people who have the luxury of changing vehicles or job locations from week to week. Were this true, we could certainly change our gasoline demands quickly to respond to the changing gas prices. Even so, I doubt we could keep up with prices changing 3 or more times A DAY. The gasoline supplier has the upper hand in this relationship any way you measure it.



Even your efforts to reduce your consumption through driving habits are the result of the gasoline companies' demands for higher dollars per gallon. They are driving the bus, you only decide which stops you use. Yes, I remember the national speed limit, and I recall it being based on politics, and not science. Vehicles that are designed to cruise at 65 mph do not save money by cruising at 55 mph. Why do people think that black numbers on a white sign on the roadside are going to change the physics of combustion in the engine?


Do you check your tire pressures every day? I'll bet not. Do you realize that underinflated tires can decrease your gas mileage significantly? How dare you drive without checking your tire pressures! How wasteful! You DESERVE to pay every penny the gas companies charge you for your shameful excesses.








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[Sig]

While the oil companies are making a bunch right now, they will have to spend vast sums on building and maintaining new refineries as well as repairing and maintaining what they have now.

Uhh, so when gas is 'selling' at an all time high, so go record profits?

Vast sums and other chimaeras are worthless doublespeak. Fact is:

Oil Majors' 1st-Quarter Earnings Shoot Up

Higher Crude Prices Leave Exxon Mobil, Others Awash in Cash

By Justin Blum
Washington Post Staff Writer
Friday, April 29, 2005; Page E01
As consumers struggle with high gasoline prices, Exxon Mobil Corp. announced yesterday that its revenue totaled more than $82 billion in the first three months of the year.
The world's largest publicly traded oil company boosted its profit by 44 percent, to $7.86 billion, from the corresponding quarter a year ago. That left Exxon with a cash hoard of $30 billion.


http://media.washingtonpost.com/wp-srv/photo/largerPhoto/images/enlarge_tab.gifhttp://www.washingtonpost.com/wp-dyn/content/photo/2005/04/28/PH2005042801907.jpgCrude oil prices around $50 a barrel pushed up retail gasoline prices in the first quarter. They also helped Exxon Mobil raise its profit 44 percent. (By Donna Mcwilliam -- Associated Press)

So I guess a 30B cash hoard against a 44 percent profit margin increase isn't enough to improve the devastation Katrina wrought? One GINORMOUS "vast sum" overlooked is the total time Exxon proposed production in the G. o' Mex would be "hampered":

... several days.

Ya know,

eh, nevermind.

 

[V-1]

At least there's one industry out there that knows how to earn a profit...sell a product for more than it costs to produce it.

Perhaps prior to taking the easy way out by filing bankruptcy, these airline C.E.O.'s should be required to do an internship at Exxon, Chevron, etc.

 

[Sig]

At least there's one industry out there that knows how to earn a profit...sell a product for more than it costs to produce it.

Perhaps prior to taking the easy way out by filing bankruptcy, these airline C.E.O.'s should be required to do an internship at Exxon, Chevron, etc.

Mmmokay,

but two things really should kinda, you know, make you... think.

1. This is gouging. Keynes et. al would agree.
2. Ahh, if your airline (or aviation employer) had a history of huge gains yet passed the buck onto the consumer and claimed cost of doing bidness has riz, where would the isostatic balance rejoin this thing we call reality? Bankruptcy is irrelevant. Competition doesn't exist (dontcha dare try to argue this) in the energy sector right now.

ya know,

eh, nevermind (again).

 

[JimNtexas]

An economist discusses why energy prices are falling. Certainly the United States will significantly cut demand for gas as most people's next car is one size smaller than the one they drive now.

This trend may kill GM, but the death of badly run companies is a fundemental reason for the superiority of capitalism over socialism.

 

[V-1]

Competition doesn't exist (dontcha dare try to argue this) in the energy sector right now.

No disrespect intended, but I suspect there is more competition in the oil industry than there is in the airline industry...what with Northwest selling tickets on Delta flights, Delta selling tickets on Air France flights, no cabotage, etc. I believe short-run supply has not kept pace with increasing global demand...leading to only two possible short-run outcomes...higher prices, or shortages (Different regions have seen both of these effects recently). Given the choice, which would most people prefer?

I don't disagree that relatively high energy prices are not a good thing for our economy, or the average American, in the short term. Personally, I'd like to see higher prices act as a catalyst for us to make a serious investment in new technology, and perhaps some lifestyle changes in order to be more responsible with the way we consume finite resources. Unfortunately, any change in status quo is painful in the short-term...though history shows we usually come out ahead after adjustments are made.

The oil industry understands if they are producing at full, or near-full capacity, they should be earning a profit. Why doesn't the airline industry, which has been operating at roughly 85% load factors over the last several months, seem to grasp this concept?

Just some thoughts.

 

[414Flyer]

Yes, competition exists with petroleum companies. I still want someone to explain how American oil companies, with US oil production in a long decline, somehow are able to push up worldwide crude oil prices for everyone in the world.

As explained, oil companies did not make us waste gas, and buy inefficient vehicles. Are US oil companies making India and China, and soon Pakistan, buy cars like crazy to push up demand as part of some big conspiracy? Is Bush supposed to go to the UN to demand that they cant have cars, so that we can have cheap fuel?

Its the left most complaining about gas prices, but also making it the most difficult to go after new production. I cant even remember any oil production the left approved of. The left blames Bush for somehow causing high prices, and both trying to open up new areas (increasing supply). What is one thing the left and the anti oil people have proposed that would do anything?

I remember last year, when people were complaining when the price was around 1.50 or so, someone here claimed stations could actually sell for 99 cents a gallon, but there was a vast conspiracy going on. Even when it was shown that the basic wholesale price per gallon was well over a dollar, the person still insisted stations could sell for under a dollar and make a profit.

People forecast oil price could go even 80-100 per barrel. Is that because of oil company conspiracies? NO, its because of climbing worldwide demand.

Demand has been steadily climbing, but production has not, and its even going down in places. There is no slack capacity anymore between production and demand like there used to be.

Its silly to think that every gas station in the US, whether chain or indepedent, whether owned by US company or foreign, is in on it. If it can be shown there is a large gap between wholesale price of fuel and what stations are sellling it for, then one will have a point. But it hasnt been shown, only limited gouging in the SE by individual stations after Katrina, and that passed quickly. But oil has probably doubled per barrel in world since that time.

There are PLENTY of politicians that would love to have lots of TV and photo ops by showing gouging going on, but they havent been able to. Oh they love to toss around the accusation for good political theatre, but when it comes to specifics, they really have not been able to prove it.

 

[JimNtexas]

Oil is a product that is totally fungible. Its impossible to create a monopoly in this kind of product. There is far more competition in the oil bidness than there is in aviation.

 

[jarhead]

Why all this hand wringing over oil? Everyone with half a brain knows that there is an endless supply of oil, and we will never run out of it no matter how much we consume. Technology will soon allow us to go to the moon and to Mars and drill for oil there. When it is discovered, there will be a rush to technology being developed that will allow for cheap transportation of 125 million barrels a day from outer space to earth for refining here.

We will no doubt find the technology as well, to build refineries on Mars to transport the refined gasoline as well, so we don't need no stinkin' refineries on our planet.

I urge all of you to go out and buy an H2 Hummer (or two or three of them) as when we consume a lot more gas than we do now, the price will rise enough for oil and gas to make the oil companies have the incentive to develop extra terrestrial oil fields. That way, we won't need the middle east or OPEC for their stinkin' oil.