F... gas prices

Vive le Revolution!

Just recently read an article on the "oil bubble" comparing it to the "housing bubble". While there is speculation driving the price, there is an underlying increased demand from developing countries (particurlarly, as Schneed has repeatedly pointed out, India and China). Thus, while there may be some easing in the future as the market cools down, it is unlikely to "burst".

IMO, it appears to be a confluence of events and market forces that is making a resource, that had been vastly underpriced, reach its market price. It will probably overshoot and then ease back (my guess it ends up around 4.50). Prior to this latest spike, how many people (other than those who drove for a living) actually budgeted their weekly gas expenses? Doesn't that suggest to you that it may have been a bit underpriced?

The price now is beginning effect people and changing their habits - to me, that is an indication that it is reaching a price close to its free market level.

[BTW - Just to indicate how the gas prices are affecting us - now, b/c of our driving needs for commutes and such, we have actually added "gas" as a separate line item in our budget where previously it was part of discretionary spending.]

I think it was definitely underpriced in the 90s when it was under a dollar. When you figure in Fed and State taxes, it was practically free. (I think oil was around $13 a barrel.) So, that was never going to last, but I don't think demand has increased proprtionately with the increase in price. I think there are other factors at work.

Wether or not to extract oil from ANWR has reminded me of a joke that the late Senator Howell Heflin of Alabama told on Ted Kennedy some while ago. Senator Kennedy was photographed on his boat with some young women and Heflin remarked, "I guess Senator Kennedy has changed his position on offshore drilling." Hilarious. Get well soon Ted. We want you live to be at least 100.

I think it was definitely underpriced in the 90s when it was under a dollar. When you figure in Fed and State taxes, it was practically free. (I think oil was around $13 a barrel.) So, that was never going to last, but I don't think demand has increased proprtionately with the increase in price. I think there are other factors at work.

Did you just make the case for oil being overpriced or that it's practically free and possibly profitless (http://www.comedycentral.com/colbertreport/videos.jhtml?videoId=167611&rsspartner=rssFeedfetcherGoogle)?

The estimates are that there are between 5-16 billion barrels in ANWR

Arctic National Wildlife Refuge, 1002 Area, Petroleum Assessment, 1998, Including Economic Analysis (http://pubs.usgs.gov/fs/fs-0028-01/fs-0028-01.htm) (it's an old survey, 1996 so with newer methods more recoverable oil may exist).

By using this resource in a measured way, the US could reduce its dependence on foreign oil by 5-10% for the next 12-15 years.

It would also IMMEDIATELY begin to lower prices because speaculators price the oil on the market by looking into the future. By opening up ANWR and/or any of our other oil deposits, it would help clear up some of the uncertainty about our future oil. Then, when we actually begun using it, a more substantial price drop.

But yet again, Congress (mostly Democrats) said no.

I really hope this limits the amount of huge SUVs and trucks on the road. I've noticed that a) most people can't drive those vehicles. and b) I hate trying to see when someone has a car the size of a small yacht when they simply don't need that space.

On the other hand, I get 20 minutes of enjoyment every day watching the woman with the Suburban try to park it every evening. One day she'll even get it straight.

schneed, i didnt mean to attack you personally. but we definitely look at this differently. you think its fine for gas to be $5.00- $6.00, or whatever, a gallon so the companies can maintain record profits. we disagree on that. we disagree on how they go about it. we definitely disagree on the governments place in this problem. you see this as capitalism at is finest. i see this as raping the American public. the government can control anything it wants to. why not oil? because of the Saudis influence with the American government. and yes, i understand who O.P.E.C is. and i also understand the military's involvement in the middle east. the little bit of stability they have comes from an American influence/ presence. we Americans are always more then willing to aid any country that asks. how about someone scratching our backs every once in a while?


These "record profits" are only because usage is at an all-time high. Most big companies, like Coca Cola, operate at a 20% profit. Oil companies operate at a 2-7% profit rate. The various levels of Government make 10 times the profit as oil companies in the form of taxes, which they have done zero work to earn. Also, environmental restrictions and regulations force prices and production costs WAY up. The oil companies are NOT the enemy OR the reason for prices being high and moving even higher. The government and Congress has the majority of the guilt and yet, we still listen to them when they want to investigate and tax oil companies into oblivion to please the uninformed sector of the population. Oil companies are ALREADY operating on substandard profit rates and if they're squeezed any more, they will have to begin offering lower quality fuels, forcing us to use more.

Yes, total profits may be records, but you have to look at their profit % which is nothing compared to the Governments'. Also, inflation must be figured into it.

I'm pretty "pro-environment," but I have to wonder what harm would it do to drill in Alaska. Supposing we drilled in some remote forest and there was a spill, would it be that hard to clean up? I would think that a oil spill on land would be pretty contained.

schneed, i didnt mean to attack you personally. but we definitely look at this differently. you think its fine for gas to be $5.00- $6.00, or whatever, a gallon so the companies can maintain record profits. we disagree on that. we disagree on how they go about it. we definitely disagree on the governments place in this problem. you see this as capitalism at is finest. i see this as raping the American public. the government can control anything it wants to. why not oil? because of the Saudis influence with the American government. and yes, i understand who O.P.E.C is. and i also understand the military's involvement in the middle east. the little bit of stability they have comes from an American influence/ presence. we Americans are always more then willing to aid any country that asks. how about someone scratching our backs every once in a while?
So are you saying that the Saudis have influence over the entire American goverment? The just one party in general and which party? How about their influence over the Clinton, Obama, or McCain?

I'm pretty "pro-environment," but I have to wonder what harm would it do to drill in Alaska. Supposing we drilled in some remote forest and there was a spill, would it be that hard to clean up? I would think that a oil spill on land would be pretty contained.

After you sucked Alaska dry what's the game plan? If people referred to drilling ANWR as a short term solution I'd have less of a problem but people act like it's a viable solution which solves the fundamental problem. What happens 10-15 years from now? Drilling ANWR is a hack just like the gas tax relief being flaunted.

So are you saying that the Saudis have influence over the entire American goverment? The just one party in general and which party? How about their influence over the Clinton, Obama, or McCain?

The Saudis have America by the balls, period. Democrats, republicans, it doesn't matter. That's why the president was begging them to increase their production and reduce prices last week.