Gas price whiners

Re. "peak oil"

I've been surfing again, looking at how blogs and the major media are reacting to gas prices. In some areas we are still sitting at record highs.

Having been immersed in Peak Oil sites for a couple months it is easy to see gas prices as rising in the context of tightening supplies. It is easy to see today's prices as one step in a 5 or 10 year trend ... or it was ... the last month or so looks more like a bubble on top of the broader trend.

Probably the most interesting thing about the surfing is that most people don't seem to see it that way, as a trend. They (quite understandably) look at price history and see that gas is sometimes high, sometimes low, and that it's high right now. The normal expectation (if you don't think of the game changing) is that prices will "return" to a low level. The $10 phrase for that is "regression to the mean" and it is a good default assumption, without any change in fundamentals.

If we look at the recently passed Energy Bill, I think we see some tacit recognition of a change in fundamentals. I don't think we'd spend as many billions on ethanol and biodiesel if there was not recognition that oil will continue to get tight. If oil drilling in new places was enough to "solve" the gas price problem, I'm sure that is all we'd do.

So even with some self-doubt (that I don't have the Peak Oil thing all figured out), I'm going to say that there is a little bit of a disconnect in the public mind:

We launch long term plans for gasoline replacement, but we only look at gas prices month-to-month.

Really, if we have national plans to replace gasoline, it must be because we expect gasoline to get (much?) more expensive over time.

"Michael Johnson, PE" wrote in news:loGdnWXlw_8DvY snipped-for-privacy@giganews.com:

It's just starting to happen down here too.

IMO, the shit is already hitting the fan. People just don't want to see it yet, so they're pretending the air is clean. The wake up call is iminent.

Or take a nice, long bath.

Too true! I doubt if any politician or party has ever run on the "We're gonna rape you! (over and over)" platform.

well 'cept mebbe Clinton.... ;-)

Here in Finland there's 75% tax in gasoline =) And now regular gas costs 1.329E / litre

: > I agree, in California they always made some excuse, like this or that : > refinery was down. : >

: > It's all just price gouging I believe, and they get away with it because : > the : > government gets their hairy little palms greased in the deal. : : Best reason I've seen so far deals with the "peak oil" aspect - that point : at which we've used up exactly half of the world's reserves, without finding : sufficient new deposits to accomodate the need. In the belief that this : "peak oil" point is imminent, oil futures are being bidded up beyond : reality.

How the hell do they KNOW when we reach the halfway mark? Do they have a fuel gauge somewhere that's attached to the earth?

: : What I could never figure out is why oil "futures" have an immediate impact : on my gas pump price. : : My local Mobil station is up to $2.739 now for 87 octane. And, so far, no : one is telling them that they CAN'T raise the price.

Damn! That's a lotta money for regular. Of course when the holiday is over the price my drop slightly. There's a question, WHY do they ALWAYS raise the price over a long holiday?

: : Speaking of rising prices... : : I grabbed a couple of quarters and went out in search of an air pump. Every : stinkin' one of 'em was asking 75 cents for three minutes of air. It's like : all of the stations got together and raised the price simultaneously.

I remember the day when there were two long red hoses at each end of the island. One was air and the other water. All you needed for free, OR if you went into the full serve the guy would check and fill for you. *sigh* Nowadays .75 is just SO wrong! Maybe you should get one of those cheap little air compressors from harbor freight.

: : So I stopped at the Mobil Minimart and asked for change for a dollar, so I : could use their 75 cent air pump. The attendant told me it was free. Just : push the button and get air. The thing was broken, and didn't know whether I : put my quarters in or not. :

Thanks to the clerk, saved you 3/4 of a buck! Take that off the bottom line on your fuel purchase and you got a pretty fair price on fuel!

: AND ANOTHER THING! : : My rearview mirror fell off in TFrog. It's been 12 years, so I guess it was : due. Went to KMart and picked up my official rearview mirror adhesive kit. : But it seems that Ford has changed something up on the mirror, itself. Used : to be, the mirror assembly was held to the mounting bracket by a single : Allen screw. Now I find that I need an official Ford Rearview Mirror Removal : Tool. When the hell did this happen, and whose bright idea was that?!?

Seriously? LOL I'll be dipped!

: : To hell with it - I put the mirror back on whole. Just sitting here waiting : for the glue to dry.

How did you hold it up there? Duct tape? LOL

Poor Dwight.

: : dwight : :

"Michael Johnson, PE" wrote : : The home prices are getting ready to take a dive in most areas of the : country. A few areas may remain stagnant because demand will remain : high. Being in the land development industry, I can see the drop in : home prices coming. Existing home sales are slowing here, which is the : first indicator. Also, new home sales are being driven by investors : that are opting for interest only loans. They are banking on increasing : home prices to justify refinancing in a few years.

Every time I see one of those ads all I can think is "How stupid is THAT??"

If that doesn't : materialize then the shit will really hit the fan. IMO, anyone buying a : house right now had better plan on living in it for the next 7-10 years.

Damn! What percentage of the population owns a car there?

Actually it isn't stupid if you buy at the right time. There are some investors here that bought 3-4 years ago and have made out like bandits. The smart ones have stopped buying investment homes. Now the ones that are buying think they have missed out and want to feed at the slop trough too. They are using 100% financing with interest only loans to help them qualify for the purchase and the banks are letting them do it knowing full well the risk of foreclosure. IMO, recent buyers will be lucky to break even if they sell within the next 3-5 years is the price correction happens this year.

Then again I may be wrong but I do know that home values have risen about 20% per year for the last 3 years here. That can't continue without a correction in the near future. Otherwise, there will be no buyers left that can afford a home.

Ah, so _that's_ what that tiny print says! Time for new glasses...

"Michael Johnson, PE" wrote in news: snipped-for-privacy@giganews.com:

Like 80% =) Finland is country with long distances (and bad public transportation network) and car is "must" here. Only in southern parts there's good train/bus network. Few years ago in summer there was a lot of V8 USA made cars on the roads. Now days only few people have money to use regularly big engine cars. I have driven my '66 Mustang only few thousand kilometers in this summer because of high gas prices.

The next question is why does the public let the government soak them on gasoline taxes? What are the income tax rates there?

That's leads to the one thing I find really depressing.

In all the talk of using oil reserves and increasing mileage and whatnot, I have yet to hear ANYONE (other than me) suggest cutting back on the gas taxes a bit.

It's the traders on the oil markets reacting to world event. For example, the hurricane today has caused several refineries to be shut down. That drove the price sike past $70 per barrler. And you don't just start those refineries up in one day when the sun comes out again.

Everyone is always looking for a conspiracy, but the truth is pretty much right out in the open. Futures markets and global demand (China, as Rich said, being a big factor).

Sorry, folks, but there really are no secret global cabals (or at least none worth spending any brain cells on). Civilization is sort of boring that way.

I'm not so sure about that. Here's in California they list the gas taxes at the stations. It appearsa to be a fixed rate per gallon, so price increases do not feed the state any more than normal, and there's no sales tax on gas...

Yes there is. It's called the Gas Tax. ;)

No, but their demand for imported oil has. This has been pretty widely reported.

China was an oil exporter until 1993. Their thirst for oil HAS doubled in just the past 5 years, and their domestic supplies are beginning to become depleted.

They have untapped stuff in the Tarim Basin (AKA, the middle of f*cking nowhere and then some) that was not economic to bring out at $50 a barrel. Maybe $70 a barrel will give them reason to look at it again.

Al lot of the things driving current prices are relatively fleeting with the exception of the China variable. You can also add India as a big source of increasing demand.

Other things driving current prices.

- Recent and currrent hurricanes.

- More active trading in the oil futures indicitive of speculation. That will probably burn itself out, so to speak, once a few of the big players take a couple in the shorts.

- Political turmoil in Venezuela.

- The extreme *ahem* variablility of Iraq's supplies.

- Some claim the "peak oil" effect, but I'm a little skeptical on that at the moment. It might be there as a meme affecting the trading, but it's effects is lost amongst all the others.

No magic. No governemnt agendas. No secret cabals. Just natures and people being wasteful and/or stupid.

Personally, I think it's a bubble. It may spiral as high as $90 or $100, but I think it'll eventually fall back to the $20 to $30 range again as things easr in Iraq & Venezuela and the weather calms down and the investors begin to bail like they did from the tech stocks.

But China and India ain't goin' anywhere...

Consider having heard it from me. ;)

That's good question, car owners have been punished for ages by goverment here. There's high gas tax, high insurence cost,high new car tax / used car import tax and "temporary" car tax once in a year. And also I need to mention high diesel tax once a year. If all tax would go to make road network better that would be fine but about 10% of all collected taxes go to that. Car owners here are too nice to attack goverment and go barricades, it's always been like that :( I think income tax average is here like 45-50%

Good example as our high new car tax is 05 Mustang. If u could buy new 05 here it would cost over 50000 euros (nearly 60000$) so it's no wonder why nobody wants to import those here.