Gas prices are up! Where's the outrage?

Some subsidies in President Obama's 2012 Fiscal Year budget:

-$126 million for wind
-$340 million for bio fuels
-$457 million for solar
-$452 million clean coal
-$800 million for nuclear

Moen, are you against subsidies altogether or just against particular subsidies depending on the industry?

 

I don't mind government subsidizing innovative industries but corporate welfare for the most profitable industry in the world is nuts.

 

BO has had 2 years to do something about this but all he has come up with is tire inflation. He has not delivered any viable alternatives to fossil fuels nor has he done anything to increase our domestic supplies. If BO had tried to keep any of his campaign promises or anyone had tried to hold him accountible then we wouldn't be effected by the excuses given as to why oil prices are higher.
Wanna know what brought the prices down last time? "Drill, Baby Drill" that's what. As soon as the oil producers thought we were serious about ending our reliance on their product the price dropped. If BO cared he would have done something anything to make sure fuel costs didn't choke off our economy again.

 

Gas prices are about more than just oil


When Jay Ricker, owner of the BP gas station off Interstate 70 in Plainfield, Ind., set the price of unleaded gasoline at $3.44 per gallon on Monday of last week, it was 4 cents higher than the Friday before.
That alone might have been irritating to drivers paying the highest gas prices in more than two years. It was even more so because it happened on a day when the price of crude oil, which is used to make gasoline, fell almost $1 a barrel.
"It's up 20 cents one day, down 10 cents the next day," says Oscar Elmore, a courier who was filling up his Ford Taurus at a RaceTrac service station in Dallas recently. "It sounds kinda fishy to me."
Gas prices rise when oil prices rise, and fall when oil prices fall — except when they don't. What you pay at your gas station depends on an array of factors, from what happens on an exchange in New York to what the competition is charging.
This can rankle drivers, especially these days. Gas reached a national average of $3.51 a gallon on Monday. That's up 14 cents, or 4 percent, over the past week. The week before, the average rose 20 cents, the steepest increase since September 2008.
A year ago, the price was $2.75. The average is the highest it's ever been this time of year, and analysts expect it to climb higher in the coming weeks.
Unlike an iPhone or a pair of jeans or a Big Mac, oil and gas are commodities, and their prices can change every second at the New York Mercantile Exchange and other trading hubs. Those far-off changes affect the cost of the next day's commute.
Sellers of commodities, like gas station owners and refineries, price their product based not on what it costs to produce it, but on what it costs to replace it. Stations like the Plainfield BP, which gets shipments of gas several times a week, must constantly adjust their prices to keep up with the changing costs of their shipments.
Oil is the biggest factor in gas prices. It accounts for 50 to 70 percent of the cost. Recent upheaval in the Middle East and strong demand for oil around the world have pushed oil prices over $100 a barrel for only the second time in history. But the price of a gallon of gas at the pump rises — and, yes, falls — for a number of other reasons.
Oil prices can be moved by geopolitics, the value of the dollar, extreme weather or Chinese demand. Gas prices can be moved by oil prices, refinery problems or even weather that might keep drivers at home.
In the next few weeks, gas prices are expected to rise as refiners switch to a more expensive blend of gasoline designed to help protect against evaporation during the warmer summer months.
"We have to pay whatever the market says we do. It's an instantaneous world," says Joe Petrowski, CEO of Gulf Oil, a big gasoline wholesaler.
Whether the gas at the Plainfield BP was made from a barrel of oil pumped a month ago 1,000 miles away in Williston, N.D., or three months ago and 7,000 miles away in Kuwait, its price is set by buyers and sellers in New York hours before Ricker buys it.
There's no way to know exactly where the oil used to make the gasoline sold at the Plainfield BP came from, or even where the gas was refined. Oils from many sources are mixed together on their way to a refinery, and gasolines from many refineries are mixed together on their way to a fuel terminal, where gas is stored before trucks take it to gas stations.
But here's a plausible route: Oil is pumped by a company with wells in Texas or Louisiana and piped to a major oil hub in Cushing, Okla. From there, it is sold to an energy trader who may store it or trade it a few times.
Then BP buys it to feed its Whiting, Ind., refinery. After a two-week pipeline trip to Whiting, the oil is cooked into gasoline and piped to BP's fuel terminal in Indianapolis.
There, BP blends it with ethanol and a few special BP-branded additives and sets a final wholesale price, known as the rack price. It's this rack price that leads to the final pump price for most station owners.
A wholesaler like BP or Gulf each has its own formula for setting the rack price. In an attempt to smooth out the spikes and dips of the market, a wholesaler usually buys some of his fuel through long-term contracts. The rest is bought on the so-called spot market, priced at a given moment by a benchmark like the New York Harbor gasoline price.
Every day at 5 p.m., BP tells Ricker what the rack price will be starting at 6 p.m. That price is good for 24 hours.
Ricker hires a trucker to go to the terminal a short drive away in Indianapolis, fill 'er up with 10,000 gallons and bring it to his station. Then Ricker decides what price to charge customers based on his ultimate concerns: the Speedway and Circle K stations that share an intersection with him.
There are only two or three pennies per gallon in profit selling gas for most station owners. What Ricker really wants is to attract customers to sell the truly precious liquids: Not the gasoline and diesel outside, but the water and soft drinks inside.
Three times a day, his station manager, Debbie Sennett, records his competitors' prices. When the competition lowered prices on Tuesday, so did Ricker, to $3.24 per gallon.
"Gasoline is the only product in this country that if you're a penny different people will go out of their way to go somewhere else," Ricker says.
Wholesale gasoline prices have risen 38 cents per gallon, or 15 percent, since the first uprising in Libya on Feb. 15. When wholesale gas prices rise fast, filling station owners get squeezed or even lose money because competition prevents them from raising retail prices as fast as costs are rising.
So if it seems that station owners take their time lowering prices when oil and wholesale gas get cheaper, it's because that's exactly what they do.
"If gasoline prices drop a dime, a station will only pass along one or two pennies a day," says Patrick DeHaan, an analyst at GasBuddy.com, a website that collects and publishes retail gas prices. "They are slower to pass along the discount because they need to make up for money they lost when prices went up."
Through the first eight weeks of 2011, average gross profit for gas stations was 4.9 percent, according to the Oil Price Information Service. In 2010, it was 6 percent.
That doesn't draw much sympathy from those who have to pay more at the pump, though. "To me it seems like a money game," says Steve Armonett of Indianapolis, who pulled into Ricker's BP to fill up his Buick LeSabre recently. "They're just worried about how much money they can make."
___
AP Business Writers Sandy Shore in Denver, Tom Murphy in Plainfield, Ind., and David Koenig in Dallas contributed to this story.

 

Gas prices are more than just about oil. Also has to do with "the market", greed, speculators and other corporate rapist activities.

 

I drive to Los Angeles pretty regularly.....just as you hit Palm Springs, there are windmill farms that power Palm springs and much of LA. I am all for it. Ask Clembo, we both were semi awestruck, this was 3-4 years ago.
The amount of windmills has grown 10X since then......
Cool stuff if it is viable....AND, can pay for itself without subsidies......We shall see

 

Why does BO allow it?

 

Obama is more of a carrot than a stick guy.

Solar power project in Mojave Desert gets $1.4 billion boost from stimulus funds
By Steven Mufson
Washington Post Staff Writer
Tuesday, February 23, 2010

The Energy Department on Monday announced a "conditional" $1.4 billion loan guarantee for a solar thermal power complex in the Mojave Desert that would ultimately produce as much as 392 megawatts of electricity.

The loan guarantee would be drawn from the resources given to the Energy Department under the economic stimulus bill adopted last year. While the terms of the solar loan guarantee -- like the terms of nuclear loan guarantees announced last week -- are still being negotiated, the Obama administration highlighted the jobs it said would be created.

BrightSource, the project developer, estimates that during the construction phase, the solar power complex will employ about 1,000 people. Operation of the plant will require 86 permanent jobs. BrightSource's construction contractor is negotiating labor agreements with various trade unions, the Energy Department said.

Construction could start as early as later this year if BrightSource gets the necessary permits. Earlier this month, the company scaled back the proposed size of the third and final phase of the project because environmental groups had objected to the project's impact on rare species such as the desert tortoise.

The solar plant is on federally owned land. So, while the Energy Department is seeking to promote the project, the Interior Department's Bureau of Land Management is supposed to be protecting the area.

BrightSource said it would reduce the footprint of the entire complex by 12 percent and cut the maximum power output to 392 megawatts (enough to power 140,000 California homes) from its initial proposal of 440 megawatts.

The plant would generate electricity using heat generated by the sun's rays. BrightSource plans to erect thousands of "heliostats" on three solar fields. Each heliostat will have two mirrors that track the sun, and reflect it onto a boiler filled with water atop a tower. The boiler will produce steam for a turbine. The company says the mirrors will capture a greater percentage of solar energy than other solar thermal technologies.

The first of three fields is expected to begin construction in the second half of this year and come on line in 2012. The company plans to start commercial operation of the second plant in mid-2013 and the third later that year. Electricity from the project will be sold under long-term power purchase agreements with Pacific Gas & Electric and Southern California Edison Co.

BrightSource has $160 million in backing from Silicon Valley venture capital firms, Morgan Stanley, BP, Chevron, Google and others.

 

That sure sounds like BO's math. That is $16.28 Million per job.

BTW, what was my carrot so I would agree with him paying all that money?

 

$5.39 per gallon in Orlando, FL:

Stretching Your Dollars at the Pump

 

This article is over a year old....how about a status report?

 

He's gonna release the reserves. Something you'd never see a right winger do.

 

Well....the way that will work is Mexico will start the drilling, then F it up, we take it over and forgive the debt so long as CORPORATE CEOxxx takes control and own all rights to it, then, when they F it up, it'll be back on the Mexicans, and the profiteers long gone and accountable to NOBODY. Capitalism baby!

 

Relying on fossil fuels, huh? Isn't that a criticism the libs level on the opposition? What about all of BO's promises to end our dependence on fossil fuels & come up with alternatives?? Letting him skate on that, huh?

 

I guess your silence, dr moen, is indicative of the progress BO has made, huh?

 

Energy Experts Reject Claim That U.S. Drilling Policies Caused Recent Jump In Gas Prices

Chris Lafakis: "Absolutely No Merit To This Viewpoint Whatsoever." Chris Lafakis, economist at Moody's Analytics and expert in energy markets.

I received your question about whether or not federal drilling policies are responsible for the current rise in gas prices. There is absolutely no merit to this viewpoint whatsoever. Near-term fluctuations in gasoline prices are determined by two primary factors: crude oil prices and seasonality. Since the deepwater drilling delay applies only to exploration and production, it would take years, maybe a decade to get any amount of crude oil out of the ground and into our gas tanks. In the meantime, global crude oil supply is exactly the same as it would have been if the government were giving away permits like candy.

Currently, crude oil prices have jumped $15 since the civil war broke out in Libya. This rise in crude oil prices underpins all of the recent increase in gasoline prices.

Michael Canes: "Not Credible To Blame The Obama Administration's Drilling Policies For Today's High Prices." While noting that he disagrees with the Obama administration's policies on oil and gas drilling, Michael Canes, research fellow at the Logistics Management Institute and former chief economist of the American Petroleum Institute, told Media Matters via email that it is "not credible" to blame Obama's policies for the high gas prices:

It's not credible to blame the Obama Administration's drilling policies for today's high prices because of the relative scales involved. As I indicated the last time, world oil prices are determined in a market of around 85 million barrels per day of production and consumption, while the consequences of domestic drilling, particularly in the Gulf, likely would be more in the range of several hundred thousand to one million barrels per day, and most of that production would not occur for a number of years.

Lou Crandall: "Gasoline Prices At The Pump Would Be Higher" Even If U.S. Had Increased Drilling. Lou Crandall, chief economist of Wrightson ICAP LLC, an independent research firm that analyzes high-frequency economic data, told Media Matters via email:

Higher oil prices today are a global phenomenon, and the additional supply from increased drilling by the U.S. would not alter the global balance of supply and demand greatly. Gasoline prices at the pump would be higher either way. The only difference is that a somewhat larger share of the revenue would accrue to domestic interests (governmental and private) rather than to foreign suppliers.

Wally Tyner: High Gas Prices Are A Result Of World Demand, Unrest In Libya -- Not Obama's Drilling Policies. When asked if there is "any merit to the claim that Obama's drilling policies caused the high gas prices we're seeing," Wally Tyner, energy economist at Purdue University, said: "No. It would take years for increased drilling to have an impact. And most of the oil that remains off the US shores is in deep water and high cost." Tyner added:

The biggest factor is the rapid growth in world demand, especially India and China. Over the past decade, about a third of the global growth in world demand has come from China alone.
Currently with most of the exports from Libya down, that is causing prices to be higher. However, Saudi Arabia has indicated they will pick up the slack, but that will take a while to work through the system. Saudi oil is sour crude, and Libya produces sweet crude mostly destined for European refineries that cannot generally take sour crude.

Tom O'Donnell: "The Amount Of Extra Oil That The U.S. Would Produce" Would Have "Almost Insignificant" Effect On Prices. Tom O'Donnell, professor of Graduate International Affairs at The New School and expert on the globalized energy sector, said blaming the high gas prices on the administration's drilling policy mistakes correlation for causation. O'Donnell further stated:

Even if you gave permission to drill, it might take generally about seven years for oil to get to market. So that has absolutely no effect on the price of oil today. None whatsoever. The amount of extra oil that the U.S. would produce, as far as affecting the world price of oil, is almost insignificant.

People who say producing more oil will bring price down for Americans are missing the fact that it's a world market. For instance, oil produced in North Slope may very well go to Japan. There's not a separate market -- It's a world market.

 

Maybe that explains why gas in Venezuela is going for the outrageously high sum of 6 cents per gallon...

 

Wow, 6 cents a gallon. I would even take $2 a gallon! Paying $4 a gallon or close to it is crazy.

 

Wow! There are some things about Socialism that you DO like after all.

Hugo Chávez challenges Venezuelan 'birthright' to cheap gas
Caracas, Venezuela

In Venezuela, Humberto Patadilla pays just under $1 for 21 gallons of gasoline. If Hugo Chávez raises gas prices, he says, it could 'cause an explosion against him.' Consumers can pay about 5 cents a gallon, thanks to longstanding state subsidies that carry an increasing cost to the national economy. Venezuelans have endured blackouts, water rationing, and skyrocketing inflation. But ask them to pay more than $1 to fill up their gas tanks and you could be inciting revolution.
"Absurd!" says Humberto Patadilla, a 60-year-old mechanic, at the thought of paying more. To many in Venezuela, which has the largest petroleum reserves in the Western Hemisphere, cheap gasoline is a birthright.
"There's more than enough gasoline. [President Hugo Chávez] is giving it away to the rest of the world, why raise the price here?" Mr. Patadilla says as he pays just under $1 to top off an old, beat-up Mercedes with 21 gallons of gasoline.

 

Good try, Moen... but, I'll take high gas prices over socialism any day of the week.