Dont think gas stations are gouging?

There hasn't been a refinery built in the U.S. in the last 20 years because of all the environmental concerns. Also, I heard an interview this morning with the head of the section of the Tennessee government who deals with fuel, gas, oil, etc. He said that prices are dictated not by what the stations paid for the gas in the tank they are using, but the price of gas it will take to refill that tank. So you are paying in advance for gas that will fill up the underground tanks next week.
 
GotZoom said:
There hasn't been a refinery built in the U.S. in the last 20 years because of all the environmental concerns. Also, I heard an interview this morning with the head of the section of the Tennessee government who deals with fuel, gas, oil, etc. He said that prices are dictated not by what the stations paid for the gas in the tank they are using, but the price of gas it will take to refill that tank. So you are paying in advance for gas that will fill up the underground tanks next week.

you have 2 choices---high prices or no gas.
 
I lived overseas for 12 years - 80's to early 90's. Gas on the local economy back then was nearly $4.00 per gallon.

I have always maintained, even during the "gas wars" and rationing back in the 70's and 80's, that people will pay whatever they have to pay for gas.

We have become too dependent on vehicles to get us from point A to point B.

I am the first one to raise my hand and say that includes me. I might cut back on some of the driving on the weekend..maybe plan a better route to get my errands done. But driving is a necessity and a pleasure for me. Stress reliever - top down on the jeep..driving out in the country..etc...very mellow.
 
mom4 said:
I wouldn't mind seeing some pretty cornfields producing ethanol.

corn ethanol is actually less efficient in vehicles than gasoline-we would be filling up more often, thuse we wouldn't really be saving any money. i read this somewhere, and i will have to look for a link for it. i think it was in one of the local papers here...

sugar-cane ethanol, which is what is produced in Brazil, is doubly efficient, and cheaper to produce because corn takes much more nutrients from the land, so crop rotation is the only way to produce quality ears. Sugar cane requires less fertile soil.
 
dilloduck said:
you have 2 choices---high prices or no gas.

No you don't. If there wasnt a sudden spike in price or the mass hysteria caused by media, people wouldnt have sprinted to the gas stations to wait 4 hours for what they think is the last cheap gas ever. People are waiting in line to buy $5 gas for 4 to 5 hours? How exactly are we not going to run out despite the high prices if people are doing this?
 
insein said:
No you don't. If there wasnt a sudden spike in price or the mass hysteria caused by media, people wouldnt have sprinted to the gas stations to wait 4 hours for what they think is the last cheap gas ever. People are waiting in line to buy $5 gas for 4 to 5 hours? How exactly are we not going to run out despite the high prices if people are doing this?

If a station offered gas $1.00 cheaper than anyone else in town it would be pumped dry in hours. How long before the next shipment?
 
dilloduck said:
If a station offered gas $1.00 cheaper than anyone else in town it would be pumped dry in hours. How long before the next shipment?


Its being pumped dry in hours now. So whats the difference? The key was the hysteria caused by an irresponsible media in the first place. They said "Gas prices might sky rocket." Gas companies thought "Hey thats a good idea." We're where we are at now.
 
Anyone see that movie on FX a while back about the Oil in America? I forgot what it was called but it was one of those made up movies with fake headlines and actors and stuff.

In the movie they predicted everything that has happened in the past 2 weeks. First they said "What if?....There was a hurricane in the Gulf Coast that destroyed our Nations fuel supply." Then like a domino effect it all happened. People were fighting at gas stations for their spots in line, China was buying up huge Oil Companies, we were at War, Farmers went on strike and so on.

Basically what I'm trying to say is, this is getting bad. The movie almost predicted everything that has already happened. Except for the Farmers at strike I think everything else I stated there is true.

There were people in fist fights at my local gas station earlier today because they said the other guy stole their spot or something. Like I said...this is getting bad.
 
insein said:
How the hell is this justified?

capt.gagb10409010035.katrina_oil_gagb104.jpg


http://www.ajc.com/metro/content/metro/0805/31fuel.html



There is no freaking excuse for gas station owners to raise their prices 200% in 1 day. They are not endanger of losing any business or any money. People will buy gas regardless of the price and their isnt any shortage on the horizon. These scum bags get away with murder.

You don't get it? I don't get you people! It's called the American Dream. The beautiful system all good republicans love so much: capitalism: the free market: laws of supply and demand.

The average American consumes 27 barrels of oil a year, compared to a Japanese 18, and a European 8. Maybe if Americans got rid of their silly SUVs and other ridiculous oversized vehicles, or turned off the air conditioning and invested in some energy efficiency, you wouldn't have this ever worsening problem. So, when whining about paying over 3 dollars a gallon for gas, bear in mind that in the UK we pay over 6.5 dollars (per US gallon). It tends to make us exactly what you should be: more fuel efficient.

PS: I hear that over 20 tankers have been booked to take refined gas (not crude- cos thats not the problem) from Europe to the States, so don't worry, you'll soon be able to get back into your bad habits.
 
8236 said:
You don't get it? I don't get you people! It's called the American Dream. The beautiful system all good republicans love so much: capitalism: the free market: laws of supply and demand.

The average American consumes 27 barrels of oil a year, compared to a Japanese 18, and a European 8. Maybe if Americans got rid of their silly SUVs and other ridiculous oversized vehicles, or turned off the air conditioning and invested in some energy efficiency, you wouldn't have this ever worsening problem. So, when whining about paying over 3 dollars a gallon for gas, bear in mind that in the UK we pay over 6.5 dollars (per US gallon). It tends to make us exactly what you should be: more fuel efficient.

PS: I hear that over 20 tankers have been booked to take refined gas (not crude- cos thats not the problem) from Europe to the States, so don't worry, you'll soon be able to get back into your bad habits.


The comparison is bad. The average American must travel further to be able to get where they are going. The US is HUGE compared to almost any European country.

I agree this is supply and demand at work, however this isn't "capitalism" as it is brought on by panic buying based on false information. This is people taking advantage of other people, not true capitalism. The truism applies, Buyer Beware, but in this case it is simply opportunism not capitalism.
 
no1tovote4 said:
The average American must travel further to be able to get where they are going. The US is HUGE compared to almost any European country.
The fact still remains that the per capita energy consumption of America is (and has been since WW2) the highest in the world. This rate of consumption can not go on indefinitely. America has 5% of the world's population and uses 25% of the worlds energy. If everyone in the world had an American (or even 'western') standard of living I don't think we would be waiting too long for the environmental consequences - and those 1.2 billion Chinese are itching to jump on the consumption bandwaggon. Something has to be done - preferably before the planet does it for us.

PS I'm not entirely convinced Americans do travel that much further than Europeans: we too have plenty of idiots that spend 4 hours a day commuting to and from work (in cars, and with no passengers);)
 
8236 said:
The fact still remains that the per capita energy consumption of America is (and has been since WW2) the highest in the world. This rate of consumption can not go on indefinitely. America has 5% of the world's population and uses 25% of the worlds energy. If everyone in the world had an American (or even 'western') standard of living I don't think we would be waiting too long for the environmental consequences - and those 1.2 billion Chinese are itching to jump on the consumption bandwaggon. Something has to be done - preferably before the planet does it for us.

PS I'm not entirely convinced Americans do travel that much further than Europeans: we too have plenty of idiots that spend 4 hours a day commuting to and from work (in cars, and with no passengers);)

The city of Denver has only a bus line and tram, and they are terrible if you actually have to get anywhere, there is no Tunnel, there really can't be. The sprawl has benefits, but also a downfall. Have you ever been here on this side of the pond? The first thing that I hear from the Europeans visiting is that they are amazed at how "just huge" the US really is. I don't think it is easy to understand without first seeing.

The US will probably lead the charge with alternate energy for exactly the reasons you expound above. There are already cars designed with Hydrogen Fuel cells in testing stages, the hybrids are selling like hot cakes, and the plug-in hybrids are just hitting the sales floor with their 500 Miles Per Gallon capability. (Those are hybrids with a larger battery capacity that you have to plug in as well as fuel at the station, you can get an amazing amount of miles.)

The assumption you have is that all will remain the same and that nothing at all is happening to work toward a solution to dependence on carbon-based fuel consumption, and that assumption is clearly wrong. I understand you want a solution now, that is Western thinking, but long-term I see a good future in buying alternate energy stocks here in the US.
 
no1tovote4 said:
The city of Denver has only a bus line and tram, and they are terrible if you actually have to get anywhere, there is no Tunnel, there really can't be. The sprawl has benefits, but also a downfall. Have you ever been here on this side of the pond? The first thing that I hear from the Europeans visiting is that they are amazed at how "just huge" the US really is. I don't think it is easy to understand without first seeing.

The US will probably lead the charge with alternate energy for exactly the reasons you expound above. There are already cars designed with Hydrogen Fuel cells in testing stages, the hybrids are selling like hot cakes, and the plug-in hybrids are just hitting the sales floor with their 500 Miles Per Gallon capability. (Those are hybrids with a larger battery capacity that you have to plug in as well as fuel at the station, you can get an amazing amount of miles.)

The assumption you have is that all will remain the same and that nothing at all is happening to work toward a solution to dependence on carbon-based fuel consumption, and that assumption is clearly wrong. I understand you want a solution now, that is Western thinking, but long-term I see a good future in buying alternate energy stocks here in the US.

I agree. If the price stays close to where it is, relatively speaking, there is the impetus for development of alternatives. If the government 'controls' the prices, the impetus is removed. It doesn't mean I have to like the prices, even if they fall further than the dime they did today:

http://www.techcentralstation.com/0902055.html

Three Cheers for "Price Gougers"
By Rand Simberg Published 09/02/2005


With every disaster or crisis, it seems that the public, press and politicians require a remedial course in Economics 101. In fact, apparently we need an ongoing educational campaign even when there is no catastrophe, as demonstrated by the recent foolish legislation in the state of Hawaii to cap wholesale fuel prices. Note the subhead in the linked story: "Some analysts warn move may spur supply problems."

Really? Only "some"? Maybe they need to be more careful about which "analysts" they listen to. Whatever would we do without those other "analysts"?



Imagine the headlines, "Legislature Mandates Pi To Equal 3.00000 -- Some Analysts Warn Move May Spur Engineering Problems," or "King Canute Commands Tide To Recede -- Some Analysts Warn Move May Spur Wet Footwear Problems." What would we think of the analysts who thought that the proposed mandates were no problem, perfectly in consonance with the laws of physics and human nature? Even most people with typical journalism educations would recognize such heads and subheads as the jokes they are, but somehow when it comes to basic economics, the laws of supply and demand, and the function of prices in a market economy bizarrely remain subjects for public debate.



I write this little essay sadly, knowing that it's been written many times before, and that it will have to be written many times again, if history is any judge. It's hard enough to watch all of the suffering of these apocalyptic events on the Gulf Coast without having to contemplate as well the compounding of the problems that will be achieved in future days by editorial writers and public officials with their calls for defiance of economic reality. I grind my teeth in frustration at all of the economic damage that will continue to be wrought by well-meaning but economically ignorant people as they attempt to circumvent the most efficient means of delivering products and services to those areas in which they are needed most -- the market, with its pricing mechanisms.



Let's recap, briefly, for those who never took the class, or have forgotten it. It's really simple. In any locality, when the supply of a particular item is reduced with no change in demand, or the demand for it increased with no change in supply, or supply is decreased with a demand increase, prices will go up.



This is a signal to the market. To those demanding the product, it is a signal that the supply is relatively short, and that they should perhaps rethink the level of their demand, if possible. To the suppliers, it is a signal that more of the resources must be brought to market. In both cases, it will result in a change in behavior on both parties that will restore the balance between supply and demand. Moreover, it does so in a useful, quantitative way. It tells the supplier how much expense, risk and effort she should expend to increase the supply. This calculation may even bring new suppliers into the market. It also indicates the degree to which it is sensible for the consumer to change their demand. When by fiat we pretend that the price has not gone up, it's like covering up the signposts, and we shouldn't be surprised when those supplying no longer attempt to increase the supply, and those demanding can't be bothered to reduce their usage of that particular commodity.



What does this mean in the current situation?



Let us ignore for the moment the horrific situation in the worst-hit areas, in which first-worlders have been thrust into the third world literally overnight, many with no place to even sleep, let alone have access to food, water and other necessities or money with which to purchase them. In some of the other areas, homes are damaged, but intact and dry, and people have cash. Commodities like gasoline, perishable food and ice are in short supply. In fact, gasoline prices are rising across the nation, in response to the sudden reduction in refinery capacity on the Gulf Coast.



Consider -- if a gas station owner has gas, someone has to decide who gets it. If the price remains at pre-hurricane levels, many will fill their tanks, because they can afford to do so, against the chance (and even likelihood) that gas will later become completely unavailable (a self-fulfilling prophecy if the price is not allowed to rise). Many will do so even if they have no immediate need for it. But after the first few people do this, the gas will be gone, and none will be available for those who come after, because it's now tied up in the gas tanks of those who didn't really need it. Those who didn't get any may include emergency workers, or truck drivers who need it to go out and find other goods to bring in. It is likely worth more to them, but they didn't get it, because the price was artificially fixed. Moreover, had the price been allowed to rise, they would have been able to afford it, because they would have been able to demand more resources with which to pay for it -- the emergency worker might have had aid from local agencies to pay for it, or the truck driver might have been willing to make the investment in order to recover it by bringing in necessary goods (assuming, of course, that prices on those weren't capped).



Similarly, if ice prices rise to the market, the man who needs to keep his insulin cold for his diabetes treatment will place a higher value on it than the man who wants to keep his beer cold, and will have a better chance of getting it. The man who might rent two hotel rooms for his family for additional comfort might, in the face of appropriately higher prices, inconvenience himself and only get one, releasing one for another whole family.



This works for the supply side as well. Making and transporting ice costs money. When the local ice plant is out of commission, it has to be brought in from other locations, in refrigerated trucks, at higher gasoline costs. Who would bother to take the trouble, expense and risk to deliver it at a loss when they can only get the same price for it as before the hurricane?



Of course, some argue that prices shouldn't go up for stock on hand because the cost didn't go up. After all, the gas station owner is selling gas that he already paid for at pre-hurricane wholesale prices. Why should he make "obscene profits," taking advantage of a situation by jacking up the price when his price hasn't changed? But in reality his prices have already changed. He will have to replace the gas that he sells, and he knows, either indirectly because he understands the supply situation, or directly because he's gotten a call from his supplier, that the cost of his next tank load will be dramatically higher. In order to pay for it, he has to get as much as possible for the stock he has on hand, which means as much as the market will bear against his competition, if he has any. If he doesn't have any, then he just has to guess.



But won't some people make "unfair" profits from such "greed"?



Sure. Sometimes life isn't fair. We can't eliminate unfairness from life -- at best we can minimize it. But what's more unfair -- someone who supplies a community with needed goods while making a profit (at some financial, and even personal risk, given the breakdown of civil law in many areas, in which shipments can be hijacked), or someone who overpurchases and hoards a commodity because the price doesn't reflect the demand and supply? Ice at three dollars a bag doesn't do one much good if there are no bags available at that price.



The response to this, in turn, is that the solution is rationing. But is it more fair to have a bureaucrat, perhaps unfamiliar with the needs of the local community, making decisions about who should get scarce goods? Does the local commissar understand the market better than the market? We can recognize that when prices are high, some people of modest means may not get essential goods. A better solution for this is not to subsidize prices, which misallocate the resources due to the false market signals, but to subsidize the individuals who need help, by giving them cash or vouchers (somewhat akin to the food stamp program).



Price "gouging" is purely in the mind of the beholder, and there's no way to distinguish between it and the necessary signals that the market must have to ensure the most efficient use of resources. The price "gougers" are (often, if not always) the people who will have incentives to satisfy market needs as quickly as possible, and ensure that the economic recovery will occur. That some people may "unfairly" take advantage of this is a price we have to pay, and it's a small one compared to the alternative.



There has been much discussion recently (much of it foolish) of how this disaster was a result of "fooling mother nature," whether in the absurdity of asking whether or not it's a result of not acquiescing to the unjustifiable damage to our economy that would have resulted from the Kyoto Treaty, to the more sensible questions of how much effort we should expend to continue to divert the natural course of the greatest river on our continent. To whatever degree that's true, let us not compound the damage, and slow the recovery from it, by attempting to fool mother economics.



Rand Simberg is a consultant and entrepreneur in commercial space, space tourism, and internet security. He publishes a weblog, Transterrestrial Musings.
 
http://ww2.scripps.com/cgi-bin/archives/denver.pl?DBLIST=rm05&DOCNUM=20000

ROCKY MOUNTAIN NEWS

SHELL'S INGENIOUS APPROACH TO OIL SHALE IS PRETTY SLICK

Date: Saturday, September 3, 2005

Section: Commentary/Editorial

Page: 25B

Source: By Linda Seebach, Rocky Mountain News

Memo: Linda Seebach is an editorial writer for the News. She can be reached by telephone at (303) 892-2519 or by e-mail at [email protected].
COLUMN

Edition: Final

When oil prices last touched record highs - actually, after adjusting for inflation we're not there yet, but given the effects of Hurricane Katrina, we probably will be soon - politicians' response was more hype than hope. Oil shale in Colorado! Tar sands in Alberta! OPEC be damned!

Remember the Carter-era Synfuels Corp. debacle? It was a response to the '70s energy shortages, closed down in 1985 after accomplishing essentially nothing at great expense, which is pretty much a description of what usually happens when the government tries to take over something that the private sector can do better. Private actors are, after all, spending their own money.

Since 1981, Shell researchers at the company's division of "unconventional resources" have been spending their own money trying to figure out how to get usable energy out of oil shale. Judging by the presentation the Rocky Mountain News heard this week, they think they've got it.

Shell's method, which it calls "in situ conversion," is simplicity itself in concept but exquisitely ingenious in execution. Terry O'Connor, a vice president for external and regulatory affairs at Shell Exploration and Production, explained how it's done (and they have done it, in several test projects):

Drill shafts into the oil-bearing rock. Drop heaters down the shaft. Cook the rock until the hydrocarbons boil off, the lightest and most desirable first. Collect them.

Please note, you don't have to go looking for oil fields when you're brewing your own.

On one small test plot about 20 feet by 35 feet, on land Shell owns, they started heating the rock in early 2004. "Product" - about one-third natural gas, two-thirds light crude - began to appear in September 2004. They turned the heaters off about a month ago, after harvesting about 1,500 barrels of oil.

While we were trying to do the math, O'Connor told us the answers. Upwards of a million barrels an acre, a billion barrels a square mile. And the oil shale formation in the Green River Basin, most of which is in Colorado, covers more than a thousand square miles - the largest fossil fuel deposits in the world.

Wow.

They don't need subsidies; the process should be commercially feasible with world oil prices at $30 a barrel. The energy balance is favorable; under a conservative life-cycle analysis, it should yield 3.5 units of energy for every 1 unit used in production. The process recovers about 10 times as much oil as mining the rock and crushing and cooking it at the surface, and it's a more desirable grade. Reclamation is easier because the only thing that comes to the surface is the oil you want.

And we've hardly gotten to the really ingenious part yet. While the rock is cooking, at about 650 or 750 degrees Fahrenheit, how do you keep the hydrocarbons from contaminating ground water? Why, you build an ice wall around the whole thing. As O'Connor said, it's counterintuitive.

But ice is impermeable to water. So around the perimeter of the productive site, you drill lots more shafts, only 8 to 12 feet apart, put in piping, and pump refrigerants through it. The water in the ground around the shafts freezes, and eventually forms a 20- to 30-foot ice barrier around the site.

Next you take the water out of the ground inside the ice wall, turn up the heat, and then sit back and harvest the oil until it stops coming in useful quantities. When production drops, it falls off rather quickly.

That's an advantage over ordinary wells, which very gradually get less productive as they age.

Then you pump the water back in. (Well, not necessarily the same water, which has moved on to other uses.) It's hot down there so the water flashes into steam, picking up loose chemicals in the process. Collect the steam, strip the gunk out of it, repeat until the water comes out clean. Then you can turn off the heaters and the chillers and move on to the next plot (even saving one or two of the sides of the ice wall, if you want to be thrifty about it).

Most of the best territory for this astonishing process is on land under the control of the Bureau of Land Management. Shell has applied for a research and development lease on 160 acres of BLM land, which could be approved by February. That project would be on a large enough scale so design of a commercial facility could begin.

The 2005 energy bill altered some provisions of the 1920 Minerals Leasing Act that were a deterrent to large-scale development, and also laid out a 30-month timetable for establishing federal regulations governing commercial leasing.

Shell has been deliberately low-key about their R&D, wanting to avoid the hype, and the disappointment, that surrounded the last oil-shale boom. But O'Connor said the results have been sufficiently encouraging they are gradually getting more open. Starting next week, they will be holding public hearings in northwest Colorado.

I'll say it again. Wow.
 
Kathianne said:

Holy crap that's awesome! If we could get a steady supply from oil from this oilshale at $30 a barrell than we will cut our gas prices in half atleast! Not only that but those getting it from other sources will probably try to drop their prices to less than 30 a barrell to try to make the oilshale method to expensive which means competition will be working again and shell will have to come up with an even cheaper means of getting oil that way:) Dont you just love competition? I can't wait till this has an impact.
 
I just drove my truck 320 miles yesterday. I decided to leave 15 minutes earlier and maintain a speed of 65. ALL of the traffic passed me like I wasn't moving. I figured out my mileage and was pleased to see that I gained 5 miles per gallon over my normal haul ass driving habits. I have a 16 gallon tank, that's 80 more miles per tank! I sat back and enjoyed the drive without worrying about the Texas State Police and I didn't really lose any time because i left earlier.My biggest fear was getting rear ended by the asswipes driving way over their skill level while whining about gas prices . Not only are they a wreck waiting to happen with their high center of gravity, poor handling truck station wagons(SUVs), they are driving at incredibly inefficient speeds.
We as a country need to get our shit together, stop the greed and selfish behavior, get more organized, make less stop and go trips, be kinder to each other . . yea right . . . that's going to happen. The people that set these prices know what dumbasses most are. They count on everyone continueing to go out of town for labor day, run your boat to catch the most exxpensive fish possible, rush out for Thanksgiving, Christmas. How much of an affect would it have if everyone would stay home on any of these weekends? How much more power would we all have by staying home one Holiday each year? Our society is so spoiled it's a joke. Even the poorest among us are spoiled. . . look at New Orleans, 3 or 4 days without Television or cell phones and they riot. Most of the women I saw could live years off of the stored fat hanging off their bodies.
We all know how bad airline food is and yet we bitch if the airlines try to save a little by not including them, we can't go 3 hours without stuffing our faces? Arrrrrrggg !!!!!!!!!! :salute:
 

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