Where the money went for rising gas prices

[Sabres Profile ICQ]

DAMN!! my idea blown to shit lol

[cavalierlwt Profile]

Originally posted by LordShard
CvLWT:Gasoline has 2600 times the energy hydrogen. You cannot compress hydrogen enough to get that much energy. Even in it's liquid form it would not as good as gasoline.

I know. That's why we use petrol based fuel. It's loaded with energy and easy as hell to make, compared to other fuels. I should say 'refine' not make.

Had to do a little edit here. By 'won't be as good as gas' I hope you mean 'miles per pound/gallon'. As for all around performance, hydrogen is fine, pollutionwise and driving performance-wise. Just not as convenient (or as cheap, currently) as gas.

[PraiseA||ah Profile]

Did anyone else watch Mythbusters last night? They built a 200 lb. rocket out of steel plumbing powered by Nitrous Oxide and parafin wax. Lot of energy there.. I wonder what the by products are and if that can be used as an alternative fuel. It was a great episode.. they melted the cameras (and other stuff) testing it. They kept the formula secret but it looked cheap and easy to make. They kept saying how amazed they were that they built the thing and it worked!

Back to the topic. Oil speculation, the price of gas and the profits the oil companies make. Hmm.. let's see. They (oil companies) control the market by saying they think such and such will make the price goes up and SURPISE! it goes up and joy! They made buttload of money! Hmm.. Anyone else think this is just a huge pile of bs or is it just me? Well, that's sort of answered by my first 2 posts in this thread. Apparently, other people think it's mighty damn suspicious too.

[PudriK Profile]

How is that different from, say, farmers in Florida saying, hurricanes ruined our crops, OJ prices will go up?

Is that proof of an OJ farmer cabal controlling prices and making excuses for it?

Or businessmen accurately predicting what will happen in their market as a result of a supply reduction?

"Orange juice prices rise 14 percent

Orange juice prices rose to the highest since December 1998 after Hurricane Wilma damaged citrus groves in Florida. Growers in Hendry and Collier counties reported losing 10 to 15 percent of their groves. Orange juice prices have risen 14 percent in the past two weeks and have climbed 46 percent in the past year. Orange juice for January delivery, the contract with the highest open interest, rose 3.8 cents, or 3.45 percent, to $1.1785 a pound Tuesday on the New York Board of Trade."

http://www.sptimes.com/2005/10/26/Business/Federated_to_close_pr.shtml

Now, OJ profits probably won't rise in turn, because there are numerous alternatives to drinking OJ.

Unfortunately, we don't have that option with cars, so the quantity of oil purchased doesn't change much. In addition, oil companies cannot, in the short-term, use those revenues to increase production to respond to the demand. Supply is inelastic as well. So even a small supply shock will make for a large increase in price. The extra money paid becomes additional profits for the oil companies, and it take a while before that extra revenue can be reinvested into increased production capacity (the maintenance of which would lower profits in the long term).

PS SpaceShipOne's hybrid rocket used N2O and HTPB (tire rubber), and if I recall correctly, the byproducts were CO, CO2, N2, and H2O. Paraffin wax is a hydrocarbon, too, so the byproducts would be the same.

[CodeRed68 Profile]

Looking at all this information the reality is (no surprise here) that it all comes down to money and profits and greed. Everybody is in it to make the most money as possible and unfortunetaly, take advantage of certain situations (disaster, war) to make the most profit. Whether it be oil or orange juice, it all comes down to the same reasoning. Human nature. Make a lot of money, solidify your future. Look good to the stockholders. Not sure if I can blame them? or would do anything different? Dont know. If any one of us owned our own company and had a chance to cash in would we?

[PraiseA||ah Profile]

I am not disputing their right to make a profit. I am however disputing their right to rape and pillage. I think there should be a cap on how much profit they can make because of the nature of this commodity. (I think the same should be done with banks and credit cards - who seem to be able to charge interest rates that make the mob jealous.) You can say blah blah blah about investing it back into the infrastructure. But it's not as if they weren't making enough money before to do that. As someone else said in this thread, you would expect them to have to pay more for the raw oil before refining - which is what we are told is the reason we're paying more at the pump. Instead, it turns out that the speculation and price increase was NOT paid out for more expensive crude but instead was profit to the oil companies. Investment in future production is nothing but an excuse to cover up the profiteering. They don't need government subsidies to invest in future oil fields, they're perfectly capable of financing that with the billions in profits they had BEFORE the recent raping. You are making it sound like they were a struggling startup and couldn't afford investment in the future before this and as if their growth was stagnant. Far from true.

Because they ARE subsidized by the government and because of the nature of this critical resource, one would expect the companies to be closely regulated by the government and not given carte blanche to do whatever they like.

By the way, personally, I think the only reason the Republicans are moving to do anything is because they are in danger of losing everything. Call me cynical.

[CodeRed68 Profile]

Originally posted by PraiseA||ah
As someone else said in this thread, you would expect them to have to pay more for the raw oil before refining - which is what we are told is the reason we're paying more at the pump. Instead, it turns out that the speculation and price increase was NOT paid out for more expensive crude but instead was profit to the oil companies.

That is what I was complaining about earlier !!

Yes, agreed there needs to be / should be certain government restrictions and laws for certain needed commodities set up to protect the public. But.. at the same time.. to be very careful to keep government involvment to an absolute minimum. We know all too well how inneffective, fat and wasteful too many governement agencies can be.
(*trying not to get too political here *)

[LordShard]

Look at it this way. Other oil companies are going to build new refineries.
Exxon isn't.

THis will lead in the future to a marginalization of Exxon as now they will have to compete MORE with other oil companies.

[Gen. Ouch Profile Website]

it is absolutly true that the oil companies are profitiering they have jacked up prices like 20% more than it should be. i canadian government has realized this and is droping prices because we produce lots of oil. we use leters up here and about 1 month ago we were paying around $1.14 canadian a leter, there are about 4 leters in a gallon plus the exchange would be about 6 bucks a gallon. now we're paying around 96.3 or so. you can see that if a government doesn't have ties to the oil industry and the leader of that country isnt getting rich off it like Bush, the government can regulate the prices of gas as it comes into the country.

[King Profile]

speaking of canada i heard on the radio yesterday the king of canada was pissed at the US about something and they were going to sell oil to the commie chinese.

[PudriK Profile]

Tell me, how exactly does the Canadian government set gasoline prices?

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20051024/gas_prices_051024/20051024?hub=Canada

They're set in Canada on the open market, just like everywhere else.

The BBC has an outstanding breakdown of the whole problem (http://news.bbc.co.uk/2/hi/business/4296812.stm).

You are right that oil companies reduced refining capacity to increase profits. From the same memo: They did this because refining was not profitable in the 90s due to oversupply. Should the government subsize oil companies to keep refining capacity up? I thought oil subsidies were bad?

Or, it may be that refining was unprofitable because it was too expensive to produce domestically. So, retraction in capacity here, and investment in capacity overseas... Read the article. It looks like we can look forward to being even more witholden to OPEC nations in the future. Joy.

This tells me that refining itself is not an unprofitable business, but perhaps only in the US and Europe because of the added costs involved in regulations and approval.

As for the blah blah blah they will reinvest, I take it you think it is the government's job to provide inexpensive oil.

For the sake of argument, I will allow that government could tax "excess" profits.

What should be done with that money? Subsidize profits? Why not reduce taxes on gasoline instead? Provide tax credits for gas usage? Nw the IRS has more work to do, that adds cost, and people must comply or itemize to receive it. That adds complexity and unfairness.

How do you propose government could better spend those profits than the companies, in a way that would reduce gasoline prices in the future?

Look, do you want the US to become less dependant on oil, conserve more, etc.? This is how it happens, scarcity increases prices and increases the competitiveness of alternatives. All the left-of-the-isle types should be cheearing... now alternative energies will be more competitive in the market.

[Chacal Profile Website]

I agree. The only way to cut down on your yearly fuel costs is the use less fuel. Alternatives, yes, but don't forget to consider an obvious one: FEET!
Walking is good for you AND for your wallet AND for the environment.

[Gen. Ouch Profile Website]

first i'd just like to say...King of beers you redneck, there is no King of canada, its called a Prime Minister. i know its not your fault man its just abit of a sore part with us canadians that your school system doesn't teach anything about other countrys, especialy one of your biggest trading partners.

secondly, i don't beleave that the government should provide inexpencive oil. but i do think that it should regulate the price, of course this will never happen but i can always hope.

you are also right about the canadian government not actualy setting the prices, i was misinformed about that, so i looked some articles up and it turns out that about 30 cents of the total that we pay for fuel is taxes either set by my government or the oil companies. i guess i wouldn't be so risistant about the taxses if i could see some kind of return to people, inproving the counrty as a whole, improving the school systems and health care, which is already free but it needs alot of work. even paying off the national deficit would be good.

i think that it's because the majority population in both canada and the us are being misinformed, most people believe that the high prices are because of the conflict in the middle east but in reality it has nothing to do with it. or they believe that we're running out of reserves, which is true but its not affecting the flow of oil to the refineries in the southern states. i don't think that there will be any reduction in prices until the population has been properly informed, at least in Canada when the people start making a stink about things the government usualy rethinks its position. of course this is probably just wishful thinking, thats why im going to buy a hybrid.

[PudriK Profile]

I don't know about Canada, but gas taxes here are usually used to provide funding for maintaining and building roads and bridges, other transportation expenses, as well as the general government revenue.