Gas Price Hysteria

burlboy

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Jan 18, 2004
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Exon's 3 month profit is 8.4 Billion dollars. The talking heads are all having a collective cow because exon made money and some are suggesting the corporation and the rest of big oil should be taxed extra because of this. Corporations are not charities they are suppossed to make money in fact they have a feduciary responsibity to their shareholders to do so. The oil companies only make 9 cents/gallon on gas. That is a sh!t margin for any kind of product.

Consider this if Exon made 8.4 Billion in profit with a 9 Cents/gallon profit then the Federal government made 18 Cents/gallon in taxes that means the US federal gov't made 16.8 Billion in taxes. The last thing they need is more. Some of the states make almost 35 cents/gallon in taxes. If the average State & Federal Taxes are 50 Cents/gallon then State and Federal governments have collected something like 46.7 billion dollars in that same 3 month period.

I don't see big oil as the villan here I see the gov't as the villan, Perhaps some tax cuts are in order or maybe a law that says the gov't cant collect anymore in taxes then a corporation does in profit for a product.
 

SilentLeviathan

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Oct 30, 2002
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Actually, in the US anyway, the gas tax hasn't been used for road repair in a while. It's used to pay down the deficit and for other things. I imagine it's the same in Canada. In any case, lowering taxes won't do much as it's a percentage, not a fixed amount.

Everyone wants to blame, oil companies, SUV drivers or Middle East concerns. Many people, including the media, seem to be ignoring the fact that India and China are driving the oil price spikes. The are demanding and consuming huge quantities and are willing to pay for it.

Lowering gas taxes, banning SUVs or drilling in ANWR (Alasks National Wildlife Reserve) will not lower oil prices for any significant amount for any period of time.
 

Primetime21

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Nov 27, 2001
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But there are more gallons of gas being sold each and every day, as people need more gas to fill their SUV's, and big gas guzzlers. If people were actually worried about the price of gas they would stop buying massive vehicles and go back to more fuel efficient vehicles. If the amount the oil companies make per gallon is a constant, the only way they can increase profit is to lower costs, which they obviously have done. The amount the state/provincial/federal governments get are based on a percentage of the price, so the higher the price the more governments get of the total. That is why governments are in no hurry to lower the percent of gas tax they charge. Do the math people, 7% of $3 is more than 7% of $2, so the higher the price the more governments rake in. And with the amount of money the oil industry spends on lobbying in Canada and the US do you actually think governments are going to mess with them. 2 words Fuck No.
 

burlboy

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That's what the futures market is for. If you are making a product that has a price structure that rely significantly on fuel cost, you buy futures, that way when you set the price of your product it is based on a fixed fuel price for the period of your contract with your customer. If the futures market didn't exist then many companies would be facing bankrupcy as the sudden upshift in fuel price would ruin them. In fact may companies still go bankrupt because they don't hedge there bets over a price contract period by participating in the futures market. Other people treat it like a casino game betting on future supply prices and trying to make money in the differences.
 

burlboy

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DonQuixote said:
The profit is not fixed on the volume of sales.
They get the oil from the ground and pay a royalty/fee
to the country of origin. Their cost per barrel as it is
extracted doesn't increase. Nor is the royalty/fee
increasing. Nor is the refinery cost increasing.

It is the options market that is driving the cost up
because of future uncertainties. Political
uncertainties about future production.
Profit is the difference between what it cost to find, recover,refine and deliver the gasoline and the price it sells for. Most companies will markup the price enough to ensure a profit for the company's investors. In some industries they will charge whatever the market will bear which means they reap huge profits per unit sold. Others like the oil industry are vilified for making any profit and therefore keep the profit margin low. Currently profit number I have seen is 9 cents per gallon if we convert that to a % based on the current price of gasoline that is a piss poor profit margin. the only reason the profit figures are large is they sell alot of gas. Imagine what the profit could be if they set there margins where other industries do or even if they matched the govt take per gallon.

As for the politically unstable elements driving up the gas Iran, Nigeria, etc. they are out of US control. if you want to get rid of these uncertainties and not scare the bejesus out of the market then you need more domestic supply but that is currently verboten since the stary eyed tree hugging dipshits and their political allies always move to block any attempt to do so.
 

burlboy

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DonQuixote said:
I understand how the future markets work and I agree with
your analysis of it's importance. I am not attacking the
futures markets.

My point is that several major oil exporting countries [Iraq,
Iran, Venezuela and Nigeria] are a problem because of
political issues. Nigeria and Iraq are dealing with major
security problems. Iran and Venezuela have political
issues with the US in particular. Those four countries
are major players in the oil industry. That's my issue.
I think we can agree on that. So the supply chain is a problem. We need to find ways to deal with it there are probably several ways to deal with that.

Option 1

Increase supply by Developing ANWAR and other sources of domestic supply. (Also refining capacity because we have a bottleneck there as well)

Option 2

Develop alternative fuel supplies and technologies. These will likely become more popular as the price increases.

Option 3

Adopt conservations Strategies. Remember we live in a free society so this will have mixed results. In other words "you can't tell me what to do". If the prices continue to rise this will become a more popular option. We have already seen a shift of new vehicle sales away from SUV's

Option 4

Do nothing. I put this option in because it's the default position for any government or bureaucracy. If only we could run cars on hot air.
 

WoodPeckr

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May 29, 2002
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Cheney/Dubya Just following the Game Plan of Big Oil

The Biggest Gas Station on Earth

By Mike Whitney

04/26/06 "ICH" -- -- Oil finished at $72.35 at the close of the market on Tuesday.

The current price per barrel is just one more damning bit of evidence that the Iraq war was waged on a mountain of lies. The oil industry is built on projections; they pride themselves on knowing where every drop of petroleum is located across the planet. They knew this day was coming. They knew that the world was facing shortages and that they’d have to hoodwink the American people into a war.

They also knew they could count on Bush to mobilize public opinion behind a smokescreen of fabrications about “mushroom clouds” and Niger uranium.

Here’s something to think about while President Buffoon goes through his “conservation” gyrations on national TV.

In 2001, Bush family consigliore, James Baker, presented a report to the powerful Council on Foreign Relations which found that “a new era of energy scarcity was upon the world…presenting fundamental obstacles to continued growth and prosperity.” (Lawrence Shoup “The CFR Debates Torture” Z Magazine March 2006)

Baker’s conclusions resulted in the formation of the White House Energy Policy Development Group headed by Dick Cheney. This was the secretive group of oil executives which divided up Iraq’s enormous oil reserves before the first bomb was dropped. The plan was clearly endorsed by American elites at the CFR who must have known the WMD-scare was a ruse from the very beginning.

The plan to steal Iraq’s oil puts Bush’s farcical “on-air” burlesque into perspective. US foreign policy is driven by the oil industry, just as the decision to invade was decided on the basis of peak oil, not WMD.

Now that gas is topping $3 per gallon, we should consider the heavy price the American people have paid to ensure that profits continue to soar for the oil giants.

In 2002, before the war, Saddam was producing 2.6 million barrels of oil per day even with the debilitating sanctions still in place. Currently, (given the success of Iraqi resistance attacks on pipelines) Iraqi oil production has dropped to a meager 1.1 million barrels per day. In other words, Bush’s war has taken 1.5 million barrels a day “off line”; the precise amount the global market requires to reduce prices to the $45 per barrel range.

Consider this: the United States has spent roughly $300 billion on the war so far. At 1.1 million barrels per day (396 million barrels per year) we are currently spending $274 per barrel which translates into $12 per gallon at the pump.

$12 per gallon!!!

This represents the greatest surcharge on petroleum the world has ever seen. Think of it as the Bush Gas Tax, a boondoggle that quadruples the price of gas while killing 2,400 American servicemen and 100,000 Iraqis in the process.

Bush’s ruminations on “price gouging” are ludicrous. It was Bush who spearheaded this monstrous rip-off, now he’s pretending to defend the common man by playing “consumer-advocate”.

What fakery.

His record on conservation is nearly as abysmal as his guru Dick Cheney who said, “Conservation may be a sign of personal virtue but it is not a sufficient basis for a sound comprehensive energy policy.” (April 30, 2001)

Cheney is wrong. He saw the Baker report; if he had America’s interests in mind, he would have initiated an massive restructuring of the economy focusing attention on conservation, rapid-transit, hybrid cars, and green technologies. Instead, 5 years later the American public is still lumbering around in their coal-powered SUVs choking the atmosphere, depleting the ozone, killing the ecosystem and scalding the planet. The administration’s inaction has put the country on the path to catastrophe.

The Bush-Cheney plan is predicated on the belief that we can steal enough oil to keep the economy chugging along while the other, weaker countries flounder. It must be shocking for him to see that the Iraqi resistance has other plans.

But, Cheney isn’t alone in his shortsightedness or his intransigence. The main contenders in the Democratic Party (Clinton, Kerry, Dodd, Biden, and Lieberman) still support the ongoing occupation; defending America’s free access to dwindling oil supplies to the bitter end.

Presidential elections will not resolve this issue, the system is broken. There are no political solutions. We should be looking at developments in Nepal to understand how this dilemma will eventually be decided.

In Iraq, we see a nation that has been utterly destroyed to service the energy needs of a foreign economy. Hundreds of thousands of innocent people have been killed, maimed, displaced or traumatized. The water and soil has been poisoned with depleted uranium, malnutrition has grown to epidemic levels, academics and intellectuals have been assassinated by death squads; museums, graveyards, war memorials and mosques have been looted or demolished in a wanton act of cultural genocide. The entire civilization is being decimated to fill the coffers of oil magnates, plutocrats, and corrupt politicians.

Presently, the finishing touches are being put on an $800 million American embassy in Baghdad, a “fortress-like compound the size of Vatican City”. It symbolizes America’s determination to subjugate the Iraqi people and pilfer their resources. It will be the biggest gas station on earth; a fitting testimonial to George Bush and the Washington war-mongers.



Taking Care of Business
....Dubya style !!!
 

Asterix

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Aug 6, 2002
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DonQuixote said:
The oil price would be $35/barrel right now but for the political
instability in Venezuela, Lybia, Iran and Iraq. Yes, India and
China are becoming major players. The operative term is
"becoming". They're not there just yet. The biggest problem
is the instability of prices due to political issues.
I'd like to be able to convince myself that's all it is. The bottom line is that we are very quickly running out of the easily extractable oil, and are very close worldwide to peak production. What most people don't realize, is that the claimed reserves, accurate or not, are far harder to pump to the surface the lower they get. The pressure drops, and the oil companies resort to pumping in water or steam to force the remainng oil out, compromising whatever oil is left. We are moving in opposite directions as regards oil. Demand will increase dramatically as production falls.
 
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alphauniform

Member
Aug 18, 2001
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I would urge all in this debate to google for the following :

" The Oil Industry, Gas Supply and Refinery Capacity : More Than Meets the Eye"
An Investigative report by Senator Ron Wyden, June 14, 2001.

........buried as usual!!!!
 

Meister

Well-known member
Apr 17, 2003
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More and more countries put research back into coal.

There is efforts to use coal instead of oil to produce plastics, paints, gasoline etc... because it is abundant and cheap.

A forerunner in this coal to liquids conversion is www.sasol.com . They use a process that was used by Hitler to keep his war machine going without depending on oil imports.

The process is supposed to come to North America soon.
 

I_AmCdn

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Jan 20, 2006
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Forget Alaska...dont fuck up the last remaining wilderness.

Why not do what we did back in the 1980 OPEC embargo / gas crisis? Anyone recall the heady days of filling up your car based on the date and whether or not your license plate was an odd or even number? No?

Speed limits were lowered to 55MPH in the USA. Canada did similar reductions. Short of banning driving it is bar none the simplest and most effective way to immediately reduce your gas consumption while still allowing you to get to your destination in a timely fashion.

Drive the 407 toll highway across Toronto and I guarantee that someone will pass you doing at least 140KPH. What the fuck is that all about? Who needs to do that? It is simple calculus to add on to that guy's monthly toll bill a speeding ticket that is triggered by say an average speed in excess of 110KPH....time of entry, time of exit and total kilometers driven = speeding ticket.
 

Meister

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Apr 17, 2003
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I_AmCdn said:
Drive the 407 toll highway across Toronto and I guarantee that someone will pass you doing at least 140KPH. What the fuck is that all about? Who needs to do that? It is simple calculus to add on to that guy's monthly toll bill a speeding ticket that is triggered by say an average speed in excess of 110KPH....time of entry, time of exit and total kilometers driven = speeding ticket.
So you want to punish them because they are wasting more gas or because it is not safe?
 
Ashley Madison
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