The problem with gas prices: Congress restricts supply

[Little-Acorn]

This has been going on since the 1960s. If the vaunted Democrat-majority congress wants to "make real changes" as they kept claiming during their campaigns, here's a good place to start. But are they trying?

So far, I've seen nothing from them in this area, except for attempts to make us drive less, and/or drive smaller, lighter, more dangerous cars.

Even that cloud has a silver lining, though. If they keep this up, gas prices will rise so high that it will become economically practical to start developing alternate technology that has bee priced out of the market so far.

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CONGRESSIONAL CRITICISM MISSES MARK ON GAS PRICES

As gas prices pass $3.00 a gallon, several members of Congress have taken aim once again at oil companies, promoting everything from a windfall profits tax to breaking the companies up. Yet rather than attacking "big oil," Congress should look in the mirror, says H. Sterling Burnett, senior fellow with the National Center for Policy Analysis (NCPA).

The real problem is that while energy prices are subject to the basic economic laws of supply and demand, Congress continually restricts supply, says Burnett. For instance:

* Congress chose not to lift the moratorium on new oil and gas
production on the U.S. Outer Continental Shelf, putting more
than 85 billion barrels of oil (quadruple current U.S.
reserves) off limits.

* Congress has repeatedly refused to allow oil development in
the coastal plains of Arctic National Wildlife Refuge (ANWR),
putting 16 billion barrels of oil off limits.

* Congress dictates the types of gasoline that Americans burn,
mandating 57 different gas blends that must be refined with
seasonal changeovers.

"The rhetoric coming from Congress shows a naïveté about energy markets and a blatant disregard for their own role in causing high prices," says Burnett. Further, by limiting domestic supply opportunities, Congress has required that oil companies, and therefore pump prices, are reliant on oil from foreign countries sold on the world market, rather than their own domestic reserves.

Source: "Congressional Criticism Misses Mark on Gas Prices," Earthtimes.org, May 11, 2007.

For text:

http://www.earthtimes.org/articles/show/news_press_release,104813.shtml

[-Cp]

And the problem with this assertion? I still have yet to see ANY Gas stations with supply problems... there are no huge lines at any Gas station anywhere..

[Hagbard Celine]

This has been going on since the 1960s. If the vaunted Democrat-majority congress wants to "make real changes" as they kept claiming during their campaigns, here's a good place to start. But are they trying?

So far, I've seen nothing from them in this area, except for attempts to make us drive less, and/or drive smaller, lighter, more dangerous cars.

Even that cloud has a silver lining, though. If they keep this up, gas prices will rise so high that it will become economically practical to start developing alternate technology that has bee priced out of the market so far.

-------------------------------------

CONGRESSIONAL CRITICISM MISSES MARK ON GAS PRICES

As gas prices pass $3.00 a gallon, several members of Congress have taken aim once again at oil companies, promoting everything from a windfall profits tax to breaking the companies up. Yet rather than attacking "big oil," Congress should look in the mirror, says H. Sterling Burnett, senior fellow with the National Center for Policy Analysis (NCPA).

The real problem is that while energy prices are subject to the basic economic laws of supply and demand, Congress continually restricts supply, says Burnett. For instance:

* Congress chose not to lift the moratorium on new oil and gas
production on the U.S. Outer Continental Shelf, putting more
than 85 billion barrels of oil (quadruple current U.S.
reserves) off limits.

* Congress has repeatedly refused to allow oil development in
the coastal plains of Arctic National Wildlife Refuge (ANWR),
putting 16 billion barrels of oil off limits.

* Congress dictates the types of gasoline that Americans burn,
mandating 57 different gas blends that must be refined with
seasonal changeovers.

"The rhetoric coming from Congress shows a naïveté about energy markets and a blatant disregard for their own role in causing high prices," says Burnett. Further, by limiting domestic supply opportunities, Congress has required that oil companies, and therefore pump prices, are reliant on oil from foreign countries sold on the world market, rather than their own domestic reserves.

Source: "Congressional Criticism Misses Mark on Gas Prices," Earthtimes.org, May 11, 2007.

For text:

http://www.earthtimes.org/articles/show/news_press_release,104813.shtml

Uh, the Republicans had a majority in Congress for the last seven years. Why didn't they do anything about this? Why are you blaming the Dems for this? Could it be because you are wildly, blindly, out of control biased? Nah, it couldn't be that. :rolleyes:

[Little-Acorn]

And the problem with this assertion? I still have yet to see ANY Gas stations with supply problems... there are no huge lines at any Gas station anywhere..

That's because the gas station owner paid the (increased) wholesale price for the gas instead of cutting down his order. And he did that, because he knew you would pay the retail price (also increased) he would have to charge.

Glad to hear you don't think these rising prices are a problem, Cp. I'll send you the bill for my next fillup. When can I expect your payment in return?

:laugh2:

[Hobbit]

And the problem with this assertion? I still have yet to see ANY Gas stations with supply problems... there are no huge lines at any Gas station anywhere..

Once again, higher prices lead to lower consumption and you will only see lines at the gas station and stations running out of gas when the price is artificially forced lower than its natural market value, like it was in the 1970s.

[glockmail]

Maybe its good that Congress has put 100 billion barrels out of commission for now. This will cause us to use up the Arab's oil first, and when that's all used up we can tell them to pound sand. :coffee:

[Yurt]

Maybe its good that Congress has put 100 billion barrels out of commission for now. This will cause us to use up the Arab's oil first, and when that's all used up we can tell them to pound sand. :coffee:

I was going to say basically the same thing. The rest of the world is using up their supplies, while we are not. With my tin foil hat on, I say this is a conspiracy by the US government to horde our untapped oil supplies. But think about it for a minute..........

[shattered]

Once again, higher prices lead to lower consumption and you will only see lines at the gas station and stations running out of gas when the price is artificially forced lower than its natural market value, like it was in the 1970s.

Lower comsumption, my foot.. $1.99 a gallon, or $3.49 a gallon (currently), I still drive the same 40 miles to work every day...

[Dilloduck]

I was going to say basically the same thing. The rest of the world is using up their supplies, while we are not. With my tin foil hat on, I say this is a conspiracy by the US government to horde our untapped oil supplies. But think about it for a minute..........

If oil were food (and in many ways it is),this would be the path that I would recommend we take. Buy theirs first.

[glockmail]

I was going to say basically the same thing. The rest of the world is using up their supplies, while we are not. With my tin foil hat on, I say this is a conspiracy by the US government to horde our untapped oil supplies. But think about it for a minute.......... I have. This is not my idea but from someone else on this board I think. It all makes sense, really.

[glockmail]

If oil were food (and in many ways it is),this would be the path that I would recommend we take. Buy theirs first. I think it might have been you that said this first?

[glockmail]

Lower comsumption, my foot.. $1.99 a gallon, or $3.49 a gallon (currently), I still drive the same 40 miles to work every day...
Then get off my ass, tailgater. :fu:

[gabosaurus]

Why is it that the people who support government subsidized and approved mega-corporation and their right to make profits are also complaining about high gas prices?

[Hobbit]

Lower comsumption, my foot.. $1.99 a gallon, or $3.49 a gallon (currently), I still drive the same 40 miles to work every day...

Sure, but do you use a car with the same milage from back when gas was cheap? Do you run your AC all the time? Do you take as many road trips? Do you caravan or do you carpool? How about all the people you know? Anybody driving a smaller car than they used to? There's more ways to save gas than to not drive to work.

[shattered]

Sure, but do you use a car with the same milage from back when gas was cheap? Do you run your AC all the time? Do you take as many road trips? Do you caravan or do you carpool? How about all the people you know? Anybody driving a smaller car than they used to? There's more ways to save gas than to not drive to work.

Yep.
Yep. (When it hits 80)
Yep.
Nope.
Nope.

People have things to do..They're going to pay whatever gas costs to get those things done...

[Dilloduck]

I think it might have been you that said this first?

Sounds like something that mighta popped outta my head. :laugh2:

[Hobbit]

Yep.
Yep. (When it hits 80)
Yep.
Nope.
Nope.

People have things to do..They're going to pay whatever gas costs to get those things done...

You're painting everybody in such a broad brushstroke. If truly nobody you know has decreased their gas consumption in any way, then you live in what would be called an economic anomaly. It is a basic law of economics that the higher the price goes on ANY product, no matter how essential, consumption will drop. People around the country are investing in fuel-saving machines, such as smaller cars and high quality air filters, and they're driving less. You can deny it all you want, but you might as well be claiming that the sky is green directly over your house and that that means it's that way all over the country. I can look out my window and clearly see that people around here are using less gas, just like I can look out my window and see that the sky is blue.

[glockmail]

Sounds like something that mighta popped outta my head. :laugh2: I think it did. I was saying how the cost should be 10 bucks or so as long as we didn't import any from the rag heads. But what you said made more sense. Lets us their's up first then watch them shrivel up and die when there's no more.

[glockmail]

You're painting everybody in such a broad brushstroke. If truly nobody you know has decreased their gas consumption in any way, then you live in what would be called an economic anomaly. It is a basic law of economics that the higher the price goes on ANY product, no matter how essential, consumption will drop. People around the country are investing in fuel-saving machines, such as smaller cars and high quality air filters, and they're driving less. You can deny it all you want, but you might as well be claiming that the sky is green directly over your house and that that means it's that way all over the country. I can look out my window and clearly see that people around here are using less gas, just like I can look out my window and see that the sky is blue.
I heard today that if everyone drove 3200 feet less per week, then the supply would catch up with demand and the proces would drop to the low 2's.

[Yurt]

Yep.
Yep. (When it hits 80)
Yep.
Nope.
Nope.

People have things to do..They're going to pay whatever gas costs to get those things done...

Should gas be a "natural" monopoly? What is your suggestion?

[shattered]

You're painting everybody in such a broad brushstroke. If truly nobody you know has decreased their gas consumption in any way, then you live in what would be called an economic anomaly. It is a basic law of economics that the higher the price goes on ANY product, no matter how essential, consumption will drop. People around the country are investing in fuel-saving machines, such as smaller cars and high quality air filters, and they're driving less. You can deny it all you want, but you might as well be claiming that the sky is green directly over your house and that that means it's that way all over the country. I can look out my window and clearly see that people around here are using less gas, just like I can look out my window and see that the sky is blue.

You live somewhere other than Wisconsin.. :) We have just as many gas guzzling SUVs on the road as ever - if not moreso now, since they've gotten cooler looking.. Gas and coffee lines are still 6 cars deep at 7am, etc... IF anything has changed here, it's VERY minimal...

[Yurt]

I heard today that if everyone drove 3200 feet less per week, then the supply would catch up with demand and the proces would drop to the low 2's.

I'm not walking up that hill.......

[glockmail]

You live somewhere other than Wisconsin.. :) We have just as many gas guzzling SUVs on the road as ever - if not moreso now, since they've gotten cooler looking.. Gas and coffee lines are still 6 cars deep at 7am, etc... IF anything has changed here, it's VERY minimal... Proving once again that at 3 bucks its still cheap.

[shattered]

Proving once again that at 3 bucks its still cheap.

Cheaper than trying to live on unemployment, anyway... Guess that's how you tell if you're job's really worth it..

[glockmail]

Cheaper than trying to live on unemployment, anyway... Guess that's how you tell if you're job's really worth it.. Take the bus, walk, ride a bike, car pool. :pee:

[Hobbit]

You live somewhere other than Wisconsin.. :) We have just as many gas guzzling SUVs on the road as ever - if not moreso now, since they've gotten cooler looking.. Gas and coffee lines are still 6 cars deep at 7am, etc... IF anything has changed here, it's VERY minimal...

It doesn't take much. The market price of such a massively purchased commodity as gasoline is very fragile. If only 1 in 1000 Americans change their driving habits by enough to save 1 gallon of gasoline per week, that's still about 15,600,000 gallons of gasoline per year that don't get purchased, or, averaging the year's gas price (remembering that it goes down when it gets cold) at about $2.50/gallon (a little on the high side, probably), a market difference of $39 million. It may not seem like much compared to Exxon's profits, but it still shows how much money we're talking about with only the tiniest of changes.

[shattered]

Take the bus, walk, ride a bike, car pool. :pee:

Not that there are any busses where I live anyway, but.. have you ever ridden a bus? YUCK!

[glockmail]

Not that there are any busses where I live anyway, but.. have you ever ridden a bus? YUCK! I don't need to. I commute to downstairs.