[Vision2020] The Price of Gas
B.C. Strand
Bill at strand.bz
Wed Apr 13 23:18:57 PDT 2005
Mr. Arnold and Mr Harkin have been arguing about the price of oil and
gas in respect to overall cost of living. The easist way to make this
comparison is to go out tot to a web site such as the St Louis Federal
Reserve and download the historical data for the Consumer Price Index
(CPI) for energy as well as the CPI for all goods and services (minus
energy). The CPIs take into account inflation as well as relative use of
different goods and services.
A quick comparison shows that energy costs were indeed significantly
higher in the late 70s then they are at the present time.
As for the reason for the reason for higher gas prices - it is not crude
oil availability. Oil inventory levels in the US are at record high
levels (both in the stategic reserve as well as active inventories). It
is the potential shortage of REFINED products (gas, heating oil, jet
fuel, etc...) that have led to the high prices over the last year. Where
30 years ago US refineries were running 80% of the time, last year they
were running at 95% levels (and were still behind the demand curve). And
there is very little new refining capacity planned in the US. In
addition, the specialized summer blends of states such as California and
New York mean that gas cannot be imported (they have to import the blend
components).
Bill Strand
More information about the Vision2020
mailing list