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Marshall, Missouri ~ Sunday, July 6, 2008
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High Gas Prices
Posted Monday, April 28, 2008, at 11:25 PM<< Previous | Read comments | Respond | Email link | Next >>
Last week a friend of mine tried to fill the gas tank on his van. It didn't happen! It seems that the pumps at the local convenience store are set to shut off automatically when they reach $100.00. A $100.00 and is still wasn't full!
As a motorist who has bought gas for $.24 a gallon I can't help but think we are getting hosed. It's not hard to do my kind of math here. Twenty-four gallons of gas refined from a $15.00, 40 gallon barrel of crude oil. Crude oil prices have risen 700 percent over the price of the $.24 a gallon gas price. If I multiply the price of the $.24 a gallon gas by 700 percent I get $1.68 a gallon plus $.68 for State and Federal taxes. Now I'm up to $2.36 a gallon. Wait a minute, the retail price is $3.34 plus on a gallon of 70 octane gas. Besides gasoline one barrel of crude oil will also render diesel, kerosene and several other products. On April 1st of this year the top executives of the country's "Big 5 oil companies" sat before the Select Committee on Energy Independence and Global Warming and defending themselves during a less than friendly hearing. The movers and shakers of the oil industry were pressed to explain why they should continue to get billions of dollars in tax breaks when they made $123 billion last year and motorists are paying record gasoline prices at the pump. "Don't blame us, oil industry exec's told a skeptical Congress. They "acknowledged" that they knew record fuel prices are hurting the people, but they argued it's not their fault and their huge profits are in line with other industries. Democratic Rep. Edward Markey of Massachusetts stated, "these companies are defending billion of dollars in federal subsidies while reaping "a windfall of revenue"while poor people have to choose between heating and eating because of high energy prices. On April Fool's Day, the biggest joke of all is being played on American families by Big Oil." J.S. Simon of Exxon Mobil Corporation remarked "our earnings, although high in absolute terms, need to be viewed in the context of the scale and cyclical, long term nature of our industry as well as the huge investments requirements." (I should note here that Exxon Mobil Corp. only made a record $40 billion last year). "We depend on high earnings during the up cycle to sustain investment over the long term, including down cycles," he continued. "I heard what you are hearing, Americans are very worried about the rising price of energy," said John Hofmeister, president of Shell Oil Company. His remarks sounded like a replay agreeing with the remarks by the other four executives including representatives of BP America Inc,. Chevron Corp., and Conoco-Phillips. Rep. James Sensenbrenner of Wisconsin, the committee's ranking Republican asked them "what would bring lower prices?" Chairman Robert Malone of BP America added that "85 percent of the country's coastal waters are off limits to drilling. We need access to all kinds of energy supply." "We face a new reality, volatility, high prices, greater competition for resources, said Peter Robertson, vice president of Chevron Corp., adding that he understands that " Americans feel the pain of $100.00 a barrel oil." Simon, of Exxon Mobil added, "Imposing punitive taxes on American energy companies, which already pay record taxes, will discourage the sustained investment needed to continue safeguarding U.S. energy security." He remarked that "over the past five years Exxon Mobil's U.S. tax bill exceeding its U.S. earnings by 19 billion. Rep. Emmanuel Clever of Kansas City, remarked that the oil companies and now rated lower than members of Congress, "and that's pretty low." In 1997 the "Big 5 Oil Companies" decided to establish profit centers for all of their operations. Historically the oil companies refined gasoline, diesel, kerosene and several other products from a barrel of crude oil and then added their profit and marketed their products. With the profit center concept the big oil companies segmented their costs to market their products. 1. Exploration and drilling plus profit. 2. Transportation of crude oil plus profit. 3. Refining of crude oil into gasoline, diesel, kerosene, and several products plus profit. 4. Storage and transportation to the market plus profit. This concept effectively added another 48% to their profits. I might add that all of the other oil companies soon followed suit. This plus the fact that there are now over twice the number of cars on the highway than there were 30 years age and they still haven't build another refinery to increase their production capabilities. Now that I have ALL the facts and opinions from the "BIG 5 oil companies" I did some reflections on my previous statement and decided to change it. "WE ARE GETTING HOSED!" I'm John Q. What Do You Think? Comments Showing most recent comments first [Show in chronological order instead] |
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i have a gas guzzling car... 11mpg it costs me $50 dollars to fill my 12.5 gallon tank. This is extremely ridiculous!!!! Any more you have to have a doctorate to be able to by gas! My parents talk about how gas was $.55 the year I was born...25 years ago! I remember getting my license and paying $.80 I think if even that much! What is happening in this world?
I should not that Chairman Robert Malone of BP America added/stated or complained that "85 percent of the country's coastal waters are off limits to drilling. We need access to all kinds of energy supply."
My second question would be, how much of the coastal waters would be acceptable to the oil companies and are they willing to post a bond that would cover any damage to the coastal waters from any oil spill and clean up costs and environmental damage?
Kathy - I do understand, but I also understand that a warm engine in -50 degree weather will start and not blow up. There are alternatives like heater blankets, but those require outdoor electrical hookups. I'm not saying that it's good or right but I do understand it to a degree. It is a hold-over from when gas was 19 cents a gallon - and yes I do remember those days.
The substitution of the giant SUV as a symbol of 'manliness' is a whole other issue... besides, any guy who thinks that his car is more important than his character is a loser to begin with IMHO.
And yes, we can do a lot to conserve, both personally and within our communities. But most people in the US do not yet feel the urgency yet - discomfort, concern, annoyance, perhaps, but we are still so rich, so well-off that we are discussing WHETHER to cut back on trips OR eat out less OR drive instead of fly on vacation. When enough people get to the point that they simply don't have a choice, we will change.
NanaDot - Surely other big wasters of gas are people who live in colder climates. I used to travel a lot on business. During a one-week trip to Canada, the owner of the business I visited parked his very large pickup truck in the driveway and left it running the entire day - never shut it off. Many others working at the business did the same. The clouds of exhaust in the downtown area from cars running continuously while their owners were sitting inside restaurants eating a meal, or transacting other business elsewhere made driving dangerous. I observed the identical behavior in Montana and North Dakota during the winter months, and have often observed it right here in Marshall. The military may be using a lot of energy, but the rest of us are right in there pitching.
JQ - Do remember that I said "...if they don't need to." There are good reasons for driving a pickup or another bigger car - squeezing a couple of kids in a car with required car seats is one reason that comes to mind. I once worked with a very dapper and well-educated young man, an up-and-comer in the large corporation I worked for. He drove the biggest, baddest SUV I've ever seen, complete with every conceivable off-road option known to man. I'm sure its fuel efficiency was measured in gallons per mile. When I asked him if he did a lot of off-road driving, he looked at me as if I'd lost my mind - he'd never even considered doing such a thing with that expensive gas-guzzler. He just thought it was "cool." An instrument small enough to measure my concern for his "problems" with current gas prices does not exist.
GWB must be reading this blog. Today he finally came out and spoke on the energy crisis. Unfortunately he blamed it on the congress. I guess it's true. It's not whether you win or lose it's where you place the blame.
Smokin' Cheetah, I also drive an older model car. It runs good, it's paid for and I can anticipate the cost of operation and repairs and it's still much less that another payment, plus sales tax, property taxes, and the interest charged to finance a newer vehicle. Also, I couldn't afford to buy one right now.
Unfortunately, I drive a guzzler. It was once by choice, but now is sort of a last resort. You see, it's paid for.
I haven't fully calculated the cost of my options: continuing to feed the monster, or financing a newer more efficient animal that I'll likely be paying monthly on for the next 60 months. So....do I spend 300 bucks a month PLUS sales tax and gas, or continue to spend 200 to 300 for what I'm currently driving?
NanaDot, in the situation that the truck drivers face it is necessary to bring up these facts. The bills being paid to the independents are sometimes two or three months late, sometimes partial or not at all. Before deregulation federal law required all freight bills be paid within seven days. Now days the independent truck is at the mercy of both big and small businesses. Anything that you buy comes on a truck. The sign on the back of one truck lines says it best. "Without trucks America stops."
It is estimated that there as three days supplies of food in our major metropolitan cities. Do we wish to continue to endanger the American people with these higher than necessary fuel prices just to line the pockets of "Big Oil?"
Independent and professional drivers and operators are dying out there, since diesel is higher than gasoline, and it's costing them $1200 to fill their tanks. Over 70% of this country's freight gets there by truck. Most of us work in or near town, we can carpool, etc. Our food, our gasoline, our medical supplies, and all the 'stuff' we just can't live without' gets to us by truck. They need help NOW. It probably wouldn't hurt the rest of us to walk more.
Kathy, My friend drives a van a delivery vehicle because is necessary for his livelihood. As he explained to me, the cost of doing business is rising faster than his income ultimately threating his future. On most shipments or deliveries major companies pay a fuel surcharge. Many other smaller companies say that the costs of transportation is rising so fast that they can't pay a surcharge because they directly effect their ability to stay in business.
There is not one single answer to any of it, and it IS all connected. Plastics, insecticides, herbicides, and fertilizer are petro-chemicals. Look in any store and understand that it exists because of oil. Look at agriculture since the 50's and understand it only exists in its current form because of oil. The 'dead zone' in the Gulf is largely due to run-off from Minnesota down of fertilizer, herbicides and insecticides, not to mention the run-off from feeder operations and refineries. The biggest consumer of gas is NOT the American public - it is the military.
We can choose to limit or find alternatives to plastics; we can choose to change our gas-guzzlers for gas-stretchers or mass or non-gas transport; we can compost instead of fertilize. But the BIGGIES have to be changed by policy and how our legislators allocate our tax billions.
Now, these BIGGIES have billions of dollars to pay 'educational' lobbies. My budget for trying to present the OTHER side is about $0.41 per letter, but I guarantee that it doesn't amount to the billions BIG BUSINESS spews -uh- spends. And I guarantee that my 41 cents gets about 41 Cents worth of attention.
If the tank on your friend's van is that large, maybe a smaller, more fuel-efficient vehicle would be a better choice. At the price right now, $3.38 per gallon, he pumped close to 30 gallons. I'm no happier than anyone else with the current price of gas - I, too, remember when it was 24 cents a gallon - but I don't have much sympathy for people who are driving gas-guzzling cars and trucks if they don't need to.
If you listened to the 'presidential news conference' this morning, the answer is painfully obvious - especially given that all of his 'energy policy' has been written by (duh) oil guys... AND I quote: If WE can't drill in Anwar, it means YOU don't care about gas prices...
Americas leadership at the beginning of the Iraq war leaves me to wonder, why did American's troops surround the oil ministry building in Baghdad while hundreds of tons or military munitions were being unloaded by militants that have been used against American soldiers? Why has these glaring mis-steps not been brought to bear on those responsible for arming the resistance? Could it be that GW and the boys were more interested in protecting the records and special interests in Iraq than our stated purpose?
WE are getting HOSED, and GW and Cronies are getting record setting profits on the deal. Why do you think we built our bases in Iraq and Afghanistan along the PIPELINE - it wasn't to liberate any PERSON...
And they COULD take OIL off the commodity market, then the speculators would not be able to artificially drive the price up, as they have with grains, etc.
God knows the farmers aren't getting it, and the Iraqi people sure as hell aren't getting any of it either... How did OUR oil get under THEIR sand, Daddy?