[Vision2020] Gas prices [was: Can we not find...]

Fri Aug 19 12:31:19 PDT 2011

Without putting any professor hat on the authors of the posts or the
sources, these two articles do a pretty good job at summarizing the
"why".

http://highgaspricing.blogspot.com/2011/05/gas-prices-go-up-twice-as-fas
t-as-they.html

http://jalopnik.com/5795871/why-gas-prices-go-up-much-faster-than-they-g
o-down

Jay

From: Andy Boyd [mailto:moscowrecycling at turbonet.com] 
Sent: Friday, August 19, 2011 11:43 AM
To: Jay Borden; Ralph Nielsen; vision 2020
Subject: Re: [Vision2020] Gas prices [was: Can we not find...]

I am curious if anyone can answer this about gas prices:

Why when the price of oil per barrel goes up we see an immediate
increase in price at the pump but when the price of the barrel goes down
the price of gas drops ever so slowly and may never get back down to
where it was before the increase?

Thanks,

Andy Boyd
----- Original Message ----- 

	From: Jay Borden <mailto:jborden at datawedge.com>  

	To: Ralph Nielsen <mailto:nielsen at uidaho.edu>  ; vision 2020
<mailto:Vision2020 at moscow.com>  

	Sent: Friday, August 19, 2011 11:26 AM

	Subject: Re: [Vision2020] Gas prices [was: Can we not find...]

	Aside from taxes, it doesn't matter what party is in office,
they have very little (if any) control over the cost of gasoline.
(Foreign wars and unrest in the middle east not withstanding).  The BIG
OIL companies that many on here love to bash so heavily also have very
little to do with the cost of fuel at the pump.  If you take a peek at
their model, it's a pretty straight-forward "cost-of-goods to produce +
markup" business.  Yes, a VERY BIG BUSINESS, but one that makes the
profit on VOLUME, not on price gouging.

	The two largest driving forces in the cost of oil?  OPEC and
taxes.

	The government makes more in taxes on a single gallon of
gasoline than the BIG OIL company that refined it and delivered it to
your local gas station.  (If I remember reading it correctly, this has
been true for the past 25 years, with only 1 or 2 years being an
exception).

	The other driving force, OPEC, is just unified enough to keep
the supply/demand metric at a price point JUST above the break-even
point for alternative forms of energy to become economically viable...
and they damned well know it.  (They produce something like 45% of the
world's crude oil supply... so they are the 800 pound gorilla in the
market).   If indicators show that suddenly a new form of wind
technology or solar energy design can be made for cheaper, by some
MIRACLE the cost per barrel of oil goes down just a tad.    OPEC is
business collusion in its WORST form.

	Think about it this way:  a 42-gallon "barrel" of oil sold on
the market today is right around $84 (rounding to make the math easy).

	That means that the COST of the oil is $2 a gallon before it
goes to any refining process... tack on a refining cost, tack on
transportation/distribution costs and then tack on taxes... and now
you're starting to approach the current cost of a gallon of gasoline.

	This is why I roll my eyes when morons like Bachman declare
"when I'm president, I'll return to $2.00 a gallon gasoline" [to
paraphrase]... (yah, good luck with that).

	Jay

	From: vision2020-bounces at moscow.com
[mailto:vision2020-bounces at moscow.com] On Behalf Of Ralph Nielsen
	Sent: Friday, August 19, 2011 10:32 AM
	To: vision 2020
	Subject: [Vision2020] Gas prices [was: Can we not find...]

	Have a look at the cheapest gas in Canada -- in Edmonton AB, at
$3.94/gal. And below, the cheapest gas in Fort McMurray AB, where the
tar sands are, costs $4.66/gal.

	For metrically challenged Americans, divide liters and
price-per-liter by 0.264 for per-gallon equivalents. For liter-gallon
equivalents multiply by 0.264.

	In 2005, when I was in England, petrol was a pound per liter =
$2/liter = $7.58/gal. I'm sure it's higher now. Don't count on the
Conservatives to lower it.

	http://www.albertagasprices.com/

	Ralph

	On Thursday, August 18, 2011 10:53:56 AM Steven Basoa wrote:

	> Yeah, but the gallons will be smaller...

	Sure, and the new gallons at $2 each will have a new name --
liters.

	A $2 bill is what one will pay for a demonstration flask of fuel
from the old-

	fashioned pre-electric vehicle days.

	A $20 bill is what one will pay for just enough fuel for Junior
to get the old 

	hot rod from home to the prom and back home again -- and nowhere
else.

	A $200 bill will be necessary to fill up the old hot rod -- and
even then only 

	for deductible business uses -- assuming fuel expenses are still
deductible.

	Yes, indeed, the coming days of fuel at $20 per decaliter
(before inflation) 

	will allow an electric vehicle purchase decision to be really
easy to approve.

	I wonder whose face will be chosen for the two-hundred-dollar
bill. Ideas?

	Ken [Marcy]

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