DawgTalkers.net Forums DawgTalk Tailgate Forum How can we complain to OPEC about oil shortages when we...

have allowed our Congress to put off limit signs on an expansion of Gulf of Mexico exploration...Big Sky Country oil extraction ...and expanded exploration in ANWR?

I hate Saudi Arabia for it's support and fostering of radical Islamic Terrorists but to blame them for our reluctance to provide for ourselves is simply stupid and part of our economic demise.

That Congress has the ballz to bitch and moan when they are significantly responsible for the supply problem is crazy...even more so to continue tax increases on oil production in hopes of forcing oil energy out of existence.

If the President were to overreach his powers and announce a temporary end to all roadblocks and impediments in the oil exploration areas the OPEC members would within a week drop their prices per barrel significantly. His order to begin new refinery building would signal an actual meaningful response to OPEC and Chavez in Venezuela.

This may be the only issue that GWB could count on to rally the majority of citizens to override Congress. Congress may choose to stop GWB but it may be at the peril.

Yes, it would take many months to actually derive a major amount of oil but it would be a most exciting action.

here's a crazy idea, lets start to ween ourselves off oil?

From Factcheck.org

Gas Price Fixes That Won't
May 2, 2008

McCain, Clinton call for gas tax relief that really isn't, while Bush dredges up old ideas with a variety of problems.

Summary

Hillary Clinton and John McCain are offering overburdened motorists a federal "gasoline tax holiday." But economists say that the proposal is unlikely to actually lower the price of gasoline. McCain's plan would essentially give federal funds to oil refineries, while the net effect of Clinton's plan probably wouldn't be much at all, although it would create a lot of new administrative work.

President Bush took another tack, dusting off a couple of golden oldies that he said would help halt the escalation in motorists' costs: allowing companies to drill for oil in Alaska's Arctic National Wildlife Refuge and encouraging construction of more refineries.

But opening up ANWR would lead to a negligible bump in world oil supply, and would provide barely 5 percent of what the U.S. consumes today. The spigot wouldn't even be fully opened until the mid 2020s -- if Congress acts now, which isn't at all likely. And Bush fails to acknowledge that investors aren't interested in building refineries for strong business reasons that go beyond the tangled permitting process.

Analysis

In a week that saw furious truckers steer their rigs to the nation's capital for a horn-blaring war dance over escalating fuel prices, President Bush and two candidates who want his job were offering proposals that are unlikely to provide any real comfort to motorists.

Happy Holidays?

Sens. John McCain, the presumptive Republican presidential nominee, and Hillary Clinton, who hopes to win the Democratic nomination, have both called for suspending the 18.4 cents per gallon federal tax on gas as well as the 24.4 cents per gallon tax on diesel. McCain proposed the idea on April 15, while Clinton introduced her twist on it on April 25. Both candidates claim that the “tax holiday,” which would extend from Memorial Day through Labor Day, would save Americans money by mitigating the rising price of fuel.

McCain (April 15): I propose that the federal government suspend all taxes on gasoline now paid by the American people -- from Memorial Day to Labor Day of this year. The effect will be an immediate economic stimulus -- taking a few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up.

Clinton (from campaign Web site): Suspending the gas tax will provide real, immediate assistance to American families and for our economy. Recent testimony before the House of Representatives by the American Trucking Association indicates that even small changes in price can have big impacts. Just a one-penny decrease in the price of diesel annualized over an entire year would save the trucking industry $391 million a year.

Clinton campaign spokesperson Geoff Garin said in a conference call this week that the proposal would save each driver $70. The Clinton campaign did not respond to our request to clarify how it arrived at that figure. But the nonpartisan American Association of State Highway and Transportation Officials estimates that the total savings for the average American motorist works out to about $28; for a two-car household, that would be $54.

That's IF prices actually dropped 18.4 cents per gallon. However, there's every indication that they wouldn't. Here's why: According to the basic principles of supply and demand, cutting the price of an item causes people to buy more of it. That’s why stores put items on sale. But when something is priced too low, consumers will buy it faster than it can be manufactured, which leads to shortages.

For gasoline, this means that cutting the price by 18.4 cents per gallon -- even though that's only about 5 percent of the current going rate -- will likely stimulate demand for more gas, economists say. Unfortunately, there's not all that much more gas that can be provided to U.S. consumers. The refineries that turn crude oil into gasoline are already working at close to full capacity. According to the Department of Energy, U.S. refineries have the capacity to process 17.4 million barrels of oil each day. Since only about 46 percent of a barrel of crude oil is converted to gasoline, U.S. refineries, operating at their peak, can produce only 8.06 million barrels per day of the stuff most cars run on. But the DOE also says that the U.S. consumes 9.25 million barrels of gasoline per day. In other words, American motorists are already using about 1 million more barrels of gasoline per day than American refineries can produce.

With the supply of gasoline pretty much fixed (at least in the short term), the increased demand triggered by the price cut will lead consumers to bid up the price of gas. Len Burman of the nonpartisan Tax Policy Center says eliminating the federal tax won’t actually lower the price of gas because “supply constraints will push pump prices near their pre-holiday levels.” He goes on to warn that “if that didn't happen, there would be shortages.” The libertarian Cato Institute's Jerry Taylor agrees that a short-term gas tax holiday will have "little impact on pump prices."

For all the legislative prowess of McCain and Clinton, we’re doubtful that either candidate can rewrite the laws of supply and demand. That 18.4 cents per gallon won't go to consumers. Instead, the proposal will simply shift that money from government coffers to the oil companies. We're willing to grant that if the laws of economics themselves took a holiday and the price did drop that much, the amount saved might be meaningful to many motorists, particularly those who are low-income and those who drive a lot. And there would likely be all kinds of ancillary benefits involving price reductions for food and other products that have to be transported, as well as airline tickets and the like.

But we can't find any economists who think we'll actually see that drop in the price of gasoline. Others have tried and failed as well. And the Clinton campaign hasn't produced one, either.

Plucking from the Profits

There's another catch to the McCain and Clinton proposals. Currently, the gas tax is deposited directly into the Highway Trust Fund, which is used to pay for upgrades to roads and bridges. The American Society of Civil Engineers estimates that the three-month gas tax holiday could cost as much as $8.5 billion.

McCain has responded by pledging to fund the Highway Trust Fund out of general revenues. That, of course, means adding another $8.5 billion in federal debt, which in turn means adding as much as $383 million per year in interest payments.

Clinton’s plan is somewhat more complicated. She promises to impose “a windfall profits tax” on oil companies -- the mechanics of which she hasn't outlined -- and use that to fund the gas tax holiday.

Clinton (May 2): We have a choice. We can choose to have you continue to pay the federal gas tax this summer or we can choose to try to make the oil companies pay it out of their record profits...We ought to say: Wait a minute, we’d rather have the oil companies pay the gas tax than the drivers of North Carolina, especially the truck drivers, or the farmers, or other people who have to commute long distances.”

Problem: If, as we outlined above, the price of a gallon of gas stays roughly the same despite the "holiday," then what used to be 18.4 cents that would go to the federal government for every gallon sold instead goes into the coffers of the oil companies as profit. That would be the profit that Clinton is proposing to tax to recover the cost of the gas tax holiday. (Clinton planned to introduce a bill today with New Jersey Democratic Sen. Robert Menendez to implement her proposals; Sens. Charles Schumer and Sherrod Brown introduced legislation in March to tax "excess profits" of oil companies.)

Paul Krugman, a Princeton economist, calls Clinton's plan "pointless." We think it sounds a bit like a Rube Goldberg machine.

The ANWR Answer

Meanwhile, President Bush tried to reheat some energy proposals that he's championed for years, to little effect. There are reasons for that.

Back during the 2004 presidential election and even before, Bush called for Congress to allow drilling in the Arctic National Wildlife Refuge, arguing that it would help the U.S. achieve energy independence, a goal we dismissed as unrealistic at the time. In 2003, 2005 and 2006, ANWR provisions were attached to several bills, but never made it to final passage. Not one to give up, Bush trotted the idea out again at a press conference this week:

Bush (4/19): The Department of Energy estimates that ANWR could allow America to produce about a million additional barrels of oil every day, which translates to about 27 millions of gallons of gasoline and diesel every day. That would be about a 20 percent increase of oil -- crude oil production over U.S. levels, and it would likely mean lower gas prices.

ANWR could create nearly a million barrels of oil a day (though the mean estimated “peak” number is 876,000 and would not hold steady "every day" as Bush claims). Current U.S. crude oil production is 5.1 million barrels a day. With rather generous rounding, one could calculate that oil from ANWR would bring a 20 percent increase in current U.S. crude oil production.

But supply is only one part of the equation. Bush didn't mention that with U.S. consumption at 20.6 million barrels of oil a day, the ANWR bounty, if all went well, could only satisfy 5 percent of the U.S. thirst. That wouldn't have much impact on eventual gas prices.

More importantly, any effect from drilling in ANWR wouldn't be realized for many years. Even if legislation to tap the oil reserves were passed today, it would take years to reap the crude. An Energy Information Administration analysis in 2004 concluded that "between 7 and 12 years were required from an approval to explore and develop the coastal region of ANWR until first production." The peak production of 876,000 barrels per day wouldn't come about for another five years or so. So even assuming Congress gave the go-ahead today, the first oil wouldn't begin flowing until sometime between 2015 and 2020, with peak output half a decade later.

Logic Alert

Bush was inconsistent in explaining ANWR's potential impact on gas prices compared with other alternatives. A reporter asked Bush if he would consider temporarily ceasing the government's purchase of oil to fill the Strategic Petroleum Reserve (SPR). He responded:

Bush: I don't think it would affect price, for this reason: We're buying, at the moment, about 67,000 to 68,000 barrels of oil per day, fulfilling statutory obligations to fill up the SPR. World demand is 85 million barrels a day. So the purchases for SPR account for one-tenth of one percent of global demand. And I don't think that's going to affect price.

The numbers are right. The SPR takes away about 68,000 barrels of oil per day, and according to EIA, world oil consumption is 83.6 million barrels a day. Furthermore, his conclusion that suspending the SPR purchases may not affect price is a fair one. Some experts have said it might; others dissent. As the Congressional Research Service summarized, gasoline prices "are sustained by a number of conditions" and they may remain unchanged "even if additional crude oil appeared on the market."

But the notion of tapping ANWR, the alternative Bush was pushing, can be dismissed using exactly the same logic. In fact, the EIA found in a 2004 study that:

EIA: ANWR coastal plain oil production in 2025 is projected to constitute between 0.5 to 1.3 percent of total world oil consumption.

So according to EIA estimates, the oil that could gush from ANWR would actually supply as little as four tenths of 1 percent more of world oil consumption than the oil that would result from halting purchases for the SPR. Not much of a distinction, particularly since ANWR oil wouldn't begin peak flow for more than a dozen years.

Ramp Up the Refineries!

The influx of crude oil alone cannot lower prices. Bush alluded to this, noting that "another reason for high gas prices is the lack of refining capacity." It's true that no matter how much crude oil you have, only so much can be processed into usable gasoline, depending on refinery capacity. And our current facilities are working at full tilt.

But Bush oversimplified the problem in saying, "we ought to expand our refining capacity by permitting new refineries and getting after it quickly." It's true that there is a myriad of federal, state and local regulations and permits to navigate for anyone wanting to build a refinery. But he ignores the fact that they are tough to build, expensive, and for many companies, simply not worth the trouble.

As a 2005 New York Times story about a company's attempt to build the first new refinery in the country since 1976 summarized:

NY Times: The business of turning crude oil into gasoline, jet fuel or heating oil has rarely been a lucrative proposition. It has dismal profit margins compared with its more glamorous cousin, exploration. It is highly cyclical and fairly unpredictable, because demand for gasoline swings sharply by season.

Ten years after the company first decided to try to build the refinery and seek permits, it still lacks enough investors and hasn't begun construction.

Someone did get something right. Bush is correct in noting that the average price for a gallon of gas has climbed $1.40 in the last 18 months, from $2.25 to $3.65. So while politicians' solutions may slip on faulty reasoning, the problem remains a stubborn fact.

-- by Justin Bank and Joe Miller

I thought it was hilarious when the talking heads were talking about Congress trying to override the fact that we (as a nation) defer so many imported barrels of oil to the strategic reserve, and the Prez's refusal to stop this practice. As I recall, we defer 70,000 barrels a day into the reserve out of the 21 million coming in.

Freeing up another 70,000 barrels into a market where 21 million are used would not drop prices by any worthwhile significance......methinks.

Gas in Cambridge Ohio is now $3.95 a gallon......curious as to what it is where others reside?

I got it today at $3.88, I believe, in Akron.

Here's a crazier idea..... All of the Above.

Let's come up with a National Standard on gasolines... no more of this 31 flavors for California, 3 blends for Colorado, 16 for Ohio, etc... standardize on 5 or 6 blends so that production can be streamlined.

Build one or two National Refineries that will sell fuel to buyers at 'cost' (allowing for a little extra for maintenance and repairs).

Let's explore and drill the hell out of every asset we have.

Let's ramp up, even further, the drive toward oil independancy and sustainable energy sources.




The one thing to bear in mind however, is that the current pain at the pump is what it takes to keep America on the road to independance from Oil... without that pain, memories will get real short real fast... so there actually is value for us in the fact that we are paying through the freaking nose at the pumps.

Actually, the absolute best way would be for us to simply stop buying gas. If there was a nationwide shutdown of people absolutely refusing to drive, our reliance on oil (at least to the point of what goes toward gas for fuel and not that which goes into products) would simply cease. Demand would go down, supply would go up, price would come down.

Now, I know this will NOT happen, but in my opinion, that is the best way.

Exactley. The oil companies dont want that until the oil is gone and they have invested their money into the next fuel source. right now, they are making every penny off of us they can.

It also looks like the US is buying and using all the foreign they can so that they can be the last country to have it. Which is smart, but looking into an alternative fuel source would be better for the people so they dont have to spend $200-$300 a month to get to work. People become President to do whats best for the people, Right? Or do they become President as rich people to become even richer (halliburton) out of pure greed. The riches they have are not enough, so they go to war and the cost payers expense and then move the company to Saudi Arabia so they dont have to pay the taxes back.

Okay, so what do you plan to do to completely rebuild the economy after that happens? Meanwhile, everyone else in the world is saying, "Thanks for the cheaper gas guys"

I like what Ppl is saying ... you need to do an "all-of-the-above" approach.

I love the circular logic from factcheck... we dragged our feet for years, we did nothing for years, we bowed to the environmentalists for years.. now that we are in dire straights it won't help because it's too late to do anything.

Do any of these people consider that maybe, just maybe, 12 years from NOW, we still might need the oil?

And it's not going to help oil prices "much"? If we could meet our demand with 5% less imported, it would help. If it's a nickel, it helps... if it's up and running and some catastophe hits that slows or halts our oil from the middle east, at least we have increased our own capacity by 20%...

I don't think Iowa has a state tax on it's gas which is why it is so cheap. A lot also depends on production capabilities. We used to drive from Idaho to Ohio a lot. We would fill up right at the Wyoming/Nebraska border because there is a big refinery in Wyoming and gas thier is extremely cheap. We'd then drive through Nebraska (which had extremely high prices) and coast into the Nebraska/Iowa border gas station.

Gas here is $3.90 last I checked ... but I only fill up like once every 3 weeks or so. Could be up to $4 by now.

I use the 93 octane in my car.. .I filled up at $4.09/gallon yesterday

Exactly DC. 5% is a lot in the grand picture, it won't bring prices down to $1 a gallon, but it will help. Shep (and others) criticize Bush for putting oil into the reserve and effecting the price ... 70,000 gallons is one-third of one percent of our current usage. If that is going to make a difference in price ... 5% is going to make a much bigger difference.

I agree DC. I just throw it out there for discussion purposes and also to hopefully show that opening up the reserves in Alaska won't solve all of our problems.

Excl, I understand what you're saying, and you have a valid point that I hadn't really thought about. And, when the "boycott" is over, we start using just as much oil as before.

I do know that I will do a happy jig when we come up with an alternate fuel source that doesn't require dependence on any other country and we can say to places like Saudi Arabia "Thanks for all the years of problems. Now, go make love to yourself.", although maybe not in that kind of words.

I drive a Focus, so I largely shouldn't complain like the SUV folks.

But it still cost $41 to fill my tank the other day. i wanted to shoot myself.

Hell I just put $60.00 in my tank and its still not full. Damn SUVs. Im gonna trade it for a moped.

What a joke... the amount being put into the National Reserve isn't enough to even come close to having anything even resembling a meaningful impact on anything except our reserves... it isn't doing squat to the prices.

70,000 bbl/day is nothing.... America uses over 20 Million barrels every day... that is .35 of 1% of our daily consumption... it's NEGLIGIBLE to say the least.

Quote:

---

Shep (and others) criticize Bush for putting oil into the reserve and effecting the price ...

---

Whoa...I wasn't criticizing......I found it laughable that there are those that think letting the 70 grand barrels go into the market instead of the reserve will drop the prices.

I don't see how it could.....and understand the importance of the reserve.

I just read a report that said the national gas supply is falling and oil hit yet another price benchmark today. Funny but at 4 bucks a gallon I'd have thought there would have been some reduction in our gas consumption. I know I'm using less than I did. It must be all those rich Chinese burning up the 4 buck gas.
What are we doing about this again?

Sorry shep ... I was sort of "skimming" and read your post wrong.

I'm glad we took care of this 5 years ago. My wife and a "small" SUV and I had a sports car ... we both drove 30 miles to work. We traded both in and got two cars that get 38 and 36 MPG, and then bought a house that's 5 miles from my job and 2000 feet from hers.

To change gears here (sorry, bad pun) ... I look at a company like Dodge and shake my head. Four years ago, I could see that gas prices were starting to get pretty bad and had the foresight to get more fuel efficient cars. So what kind of cars does Dodge come out with this year? Magnum, Nitro, Charger, Durango, Dakota and Ram ... power cars and big trucks. Their best fuel efficient car (Caliber) doesn't even get 30 MPG ... and they wonder why American car companies are losing money.

For about 8-10k you can do a home conversion of your SUV to electric.


As for 5% of oil from Alaska, that doesn't mean gas prices will drop by 5%, it doesn't mean they will drop at all. It just means we will be buying 5% less from Saudi Arabia or whoever.

We NEED oil for alot of things, can fuel for cars is onyl 1 part of it. Oil is in all kinds of things (ink, crayons, bubble gum, dish washing liquids, deodorant, eyeglasses, records, tires, ammonia)

What are "records"?

True....What is even more Frustrating is that we have the ability to develop an alternative fuel source and we continually refuse to break with oil because we say that it would hurt our economy as well as the world economy....Enough is Enough !....The Time Has Come For Us To Bite The Bullet , Deal With Any Short Term Consequences and put our National Interest First , JMHO....

Vinyl albums are making a comeback.

I understand your point and the economic times of the day do present such obstacles. I would say it's much like other variables in our life. We must weigh the pro's and cons and do what is best.

IMO- If you are saving 40 to 50 a week on fuel, let's use 50 as a round figure with which to work with, in a year you would save roughly 2600 hundred. That's a pretty big chunk.

Plus you must consider that if you sale your home in a poor market, you will also be buying a home in a poor market. So the money you lose when you sale your home, you will get back buying a house in the current "buyers market".

So in the long run, depending on the housing market where you live, verses where you plan to buy, the whole thing may be pretty even.

However, I do understnd that this isn't a "fool proof plan" that will work for everyone. The school systems, tax base, crime rate and many other variables enter the equasion that would not make all of the measures Ex has taken quite as practical for everyone.

JMHO

j/c

I had an environmental engineering class this spring and my professor was telling us that the big wigs have decided to go the route of biodiesels and other corn-derived fuels. He made the point that corn is in used to make a large amount of our foods. So not only does the cost of gas rise the price of food, but also the higher demand for corn will and is going to add to the cost of our food prices. He also pointed out that natural gas would've been a better way to go, because it's cheaper and there is a lot of it available. I read an article a month or two ago that said CNG was like 61 cents a gallon in Utah and like $2/gal in California. Sure prices would rise if we went that way, but if we expanded CNG to say half of all vehicles oil prices would stabilize and maybe drop as well. It's just ridiculous that we Americans have to deal with this because of greedy politicians and corporations. Enough of the hemming and hawwing Washington! Oh and also it would be nice to have a public transportation system in this country worth a darn. Look at the highspeed rail systems in Europe and Japan. Yet, here in America all we have is one small crappy highspeed line in the Northeast. Here in Florida, they had a proposal of a highspeed rail line going from Daytona to Tampa, but Jeb Bush took care of that. Total BS!

But add into that equation that most people that commute, commute INTO cities for work, and generally the closer you get to the city limits the more expensive the house. Which is one of the reasons people began moving farther out into suburbs in the first place, cheaper realty.

And for me to save $50 a week on fuel, I would have to walk to work. at 4.05/gal (I use premium) and generally putting 11-12 gals to fill my car (15.4 gal tank, and I don't believe in waiting until your on fumes to fuel, it just increases the chance of sediment clogging the fuel filter)

I feel for people who pay 50+ dollars to fill their tanks once a week, and have car payments. I was thinking the other day, paying off my car back in January was the best thing. I now have a car 2 years old, and put 200-250 in gas a month into it tops. That's still less than most peoples car payment alone, so I guess that's why it hasn't really bothered me all that much.

Changed my driving habits just a little, and now I'm getting 19-20 mpg city, not bad for a V8 sports car.

I do keep an eye on technology for the future, whether I buy a new car, and additional car, or maybe even when my engine is shot, rebuild it with new technology.

The United States economy runs on one thing...OIL!

France gets nearly 80% of its energy from nuclear sources...but not it's auto fuel.

I'm all for building nuclear reactors...for using coal liquification techniques...expanding windpower and solar power systems.....
BUT ONLY IN CONJUNCTION WITH OIL EXPLORATION!!!!!!!!

The next President needs to demand that all available sources of oil be developed and all restrictions on exploration not proven to be potentially fatal to mankind be lifted.

We will never be free of oil as an energy source ... I hope one day someone develops a fuel that is made from human waste as this person will soon become the richest person in the world. Until that time we had better open the taps on US OIL ...even if it means some unhappy polar bears, scared seals and sexually frustrated caribou.

I can make an engine that runs on human waste ...

... but the milage is crap.