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Gas prices
- Thread starter cinnabar
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Thank you for the illustrations, Perry! Very eye-opening.
I love your idea of selling items where markup is seemingly never in question, lol! Or you could just make a killing from the stocks.
When Kenneth Cole first became publicly traded my dad made a killing--we were on vacation and shopping for school clothes in a store where females my age then were swamping his whole display of shoes (clue #1, ha ha)!
Do you have a daughter who could give you some stock tips???
I love your idea of selling items where markup is seemingly never in question, lol! Or you could just make a killing from the stocks.
When Kenneth Cole first became publicly traded my dad made a killing--we were on vacation and shopping for school clothes in a store where females my age then were swamping his whole display of shoes (clue #1, ha ha)!
Do you have a daughter who could give you some stock tips???
movie zombie
Super_Ideal_Rock
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One thing I left out last night:
The oil companies do indeed make a profit on the crude oil, along with the refining, distribution, and marketing.
For example - lets say that they buy a barral of crude at $70.00; they have to mark that up as well before they sell the products from it. Much of the mark-up covers the cost of doing business related to buying that crude oil - however there is profit there in order for them to stay in business.
In a few cases the oil companies may own the crude - or at least have rights based on royalties - and then they must pay the royalties to the owners of the land the wells are on. This is a much smaller amount than many people think. Of course, for where the US companies own the crude they are making money from it by the riasing prices of crude oil in the world. However, that is tempered somewhat by the fact of long term contracts with certain customers (An oil company may in fact sign a 30 day, 60 day, or even 6 month or 1 year contract to supply certain types of petroleum products at a fixed price to large customers - such as the US Military).
"U.S. oil production topped out in 1970 at about 10 million barrels a day, double the 1945 level. Production has since fallen by almost half, in spite of the discovery of Alaska''s huge Prudhoe Bay field, and the United States is hostage to foreign oil. It imports about two-thirds of its consumption of 20 million barrels a day (world consumption is slightly more than 80 million barrels a day). " Refernce: www.energybulletin.net/5699.html
Monarch: Don''t you mean "socks." Imagine my having a "sock" botique... Wonderful chairs with refreshements to sit in while I gently wash and massage your feet and personally fit you with a new pair of socks... Of course, I could toss in such a free pair of socks with the purchase of a pair of shoes....
Perry
The oil companies do indeed make a profit on the crude oil, along with the refining, distribution, and marketing.
For example - lets say that they buy a barral of crude at $70.00; they have to mark that up as well before they sell the products from it. Much of the mark-up covers the cost of doing business related to buying that crude oil - however there is profit there in order for them to stay in business.
In a few cases the oil companies may own the crude - or at least have rights based on royalties - and then they must pay the royalties to the owners of the land the wells are on. This is a much smaller amount than many people think. Of course, for where the US companies own the crude they are making money from it by the riasing prices of crude oil in the world. However, that is tempered somewhat by the fact of long term contracts with certain customers (An oil company may in fact sign a 30 day, 60 day, or even 6 month or 1 year contract to supply certain types of petroleum products at a fixed price to large customers - such as the US Military).
"U.S. oil production topped out in 1970 at about 10 million barrels a day, double the 1945 level. Production has since fallen by almost half, in spite of the discovery of Alaska''s huge Prudhoe Bay field, and the United States is hostage to foreign oil. It imports about two-thirds of its consumption of 20 million barrels a day (world consumption is slightly more than 80 million barrels a day). " Refernce: www.energybulletin.net/5699.html
Monarch: Don''t you mean "socks." Imagine my having a "sock" botique... Wonderful chairs with refreshements to sit in while I gently wash and massage your feet and personally fit you with a new pair of socks... Of course, I could toss in such a free pair of socks with the purchase of a pair of shoes....
Perry
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Here is a great editorial in paper that I follow on the net (from my "home" area):
I have "Bolded" two paragraphs that indicate the essential truth about the situation:
FRI., APR 28, 2006 - 12:01 PM
Wisconsin State Journal editorial (Madison Wi)
Blame gas prices on shortsightedness
In the United States this week President Bush called for yet another investigation into allegations that gasoline prices are being manipulated.
In Brazil last week President Luiz Inacio Lula da Silva announced that his nation had become virtually independent of foreign oil.
If you answered Brazil, fill ''er up and move ahead. If you answered the United States, you''re in for more of the same tired demagoguery that has driven us in costly circles for more than 30 years.
In the United States, whenever the price of gasoline goes up, politicians pontificate. The standard procedure is to blame "Big Oil" for price manipulation and to demand an investigation.
The moral of Brazil''s success story should not be lost on U.S. policy makers. By all means, the nation should enforce laws against price gouging and other manipulations. But America needs leaders who focus on long-term energy solutions like alternative fuels and conservation. Demagogues need not apply.
I have the following comments to the editorial:
Jimmy Carter was the only president who had the will-power to attempt to craft a long term energy policy - it was largly trashed by his successors due to how unpopular it was with most americans.
So what if there was a major fuel efficiency tax applied to each vehicle all the time (say as part of annual plate renewal)?
If the vehicle normally runs better than 40 MPG it would be "excess use" tax free.
Business vehicles would be exempt depending on a review of applicability of if the vehicle size is needed for function (i.e. a truck or van for a company that has to haul things would be exempt: A truck, custom van, or other luxuray vehicle used for "image" would not).
And yes, under this scenerio.... I would not buy a full sized van for occasional usage: I would still be renting them when I needed them (although I did buy a very nice 1993 custom full sized van - and fixed it up with a new engine and Xmission rebuild, suspension, brakes, etc: a lot cheaper than buying a new nice van).
I have "Bolded" two paragraphs that indicate the essential truth about the situation:
FRI., APR 28, 2006 - 12:01 PM
Wisconsin State Journal editorial (Madison Wi)
Blame gas prices on shortsightedness
In the United States this week President Bush called for yet another investigation into allegations that gasoline prices are being manipulated.
In Brazil last week President Luiz Inacio Lula da Silva announced that his nation had become virtually independent of foreign oil.
Which country had the more effective response to rising gasoline prices?
If you answered Brazil, fill ''er up and move ahead. If you answered the United States, you''re in for more of the same tired demagoguery that has driven us in costly circles for more than 30 years.
In the United States, whenever the price of gasoline goes up, politicians pontificate. The standard procedure is to blame "Big Oil" for price manipulation and to demand an investigation.
The number of formal inquiries in the past five years runs into the dozens, including one ordered last year by Wisconsin Gov. Jim Doyle. The result is a lesson in wastefulness. None of the investigations has found any systematic illegal conduct.
Moreover, while the politicians have been engaged in demagoguery, they have not been engaged in developing an energy policy to reduce U.S. dependence on high-priced foreign oil.
It''s disappointing that President Bush fed this feckless grandstanding with his statement this week.
In contrast, Brazil is now reaping the benefits of its bold investment in energy independence. Brazil accepted a call to action in the 1970s, after soaring oil prices ravaged its economy.
Regrettably, the Brazilian public was cut out of early decision-making by the country''s military dictatorship. But the dictatorship''s policy of developing domestically produced ethanol as an alternative to gasoline has proved a big success. So was the development of domestic oil fields.
Today, Brazil''s democratic government is continuing the policies. More than a third of Brazil''s motor fuel is ethanol, made from sugar cane. And though Brazil still imports some light crude oil for refined products, its domestic production of heavy crude now exceeds internal demand.
As a result, Brazilian motorists are saving money by buying ethanol, which is less than two-thirds the cost of gasoline. And the nation will profit from oil exports, cushioning the economy against the rising cost of oil- related products.
The moral of Brazil''s success story should not be lost on U.S. policy makers. By all means, the nation should enforce laws against price gouging and other manipulations. But America needs leaders who focus on long-term energy solutions like alternative fuels and conservation. Demagogues need not apply.
I have the following comments to the editorial:
Jimmy Carter was the only president who had the will-power to attempt to craft a long term energy policy - it was largly trashed by his successors due to how unpopular it was with most americans.
George Bush (jr) has started to focus on Nuclear Power as a long term option - which in my opinion is an important piece of the long term puzzle. But it will not be the only piece (I suspect that in the end nuclear produced hydrogen may be able to replace about 1/2 of the current oil usage in the US - but it will take about 60 years to get there).
In my opinion: The single most effective long term statagy would be a mechanism that highly encouraged small very fuel efficient vehicles for most americans. In my case I own two vehicles: a small car that gets 30-40 MPG depending on driving conditions (city/highway) and weather- and I''ve had that car and cars like it for 20 years. I also own a full size van that gets 10 - 14 MPG depending on driving conditions and weather. The van is driven very rarely (typically only once a month just to keep it up) except for those situations where I really need the cargo or people capacity of the van (about every other month in the last year).
Now most people at work also have 2, or more vehicles. Few of them have a combination of a small commuting vehicle and a larger vehicle. Instead they have a modern full sized "beefed up" pickup truck and a mini or full sized van - or larger . Most drive those trucks to work.
People ask me all the time about my gas milage in my car when they are considering a vehicle; and then show up the next week with a new pickup truck that gets 12 MPG as their commute vehicle; or a new custome full sized van.
Probably 1/3 of the gasoline consumption in the US could be eliminated just by using small vehicles for commuting.
However, EGO - and "Keeping up with the Jones'' " is far more important.
So what if there was a major fuel efficiency tax applied to each vehicle all the time (say as part of annual plate renewal)?
If the vehicle normally runs better than 40 MPG it would be "excess use" tax free.
35 MPG - $50 per year
30 MPG - $250 per year
25 MPG $750 per year.
20 MPG $2,000 per year.
15 MPG $5,000 per year.
10 MPG $10,000 per year.
Apply that to all new vehicle model years - starting with the 2007 models and I''ll bet you see a major reduction in fuel usage in the next 5 years and a major shift in type and efficiency of vehicles as well. Incrementally over a period of years retrofit it back onto previous vehicles over time as well to drive the selection of used vehicles: say after 1 year one (in 200
5% of those rates would be applied to 2006 models, year 2 (2009) 5% to 2005 models - and 10% to 2006 models; year 3 (2010) 5% to 2004 model vehicles, 10% to 2005, and 15% to 2006
Business vehicles would be exempt depending on a review of applicability of if the vehicle size is needed for function (i.e. a truck or van for a company that has to haul things would be exempt: A truck, custom van, or other luxuray vehicle used for "image" would not).
And yes, under this scenerio.... I would not buy a full sized van for occasional usage: I would still be renting them when I needed them (although I did buy a very nice 1993 custom full sized van - and fixed it up with a new engine and Xmission rebuild, suspension, brakes, etc: a lot cheaper than buying a new nice van).
Perry
It''s interesting and very telling that you find this to be "total nonsense". Ummm....the price of gas at the pump goes up.....the record profits of the oil companines continue to go up. Which isn''t true?
And, what part of the cost of food rising has every bit to do with increased transporation (trickle down) costs do YOU not understand?
I certainly get taxed on windfall profits as an individual. Why shouldn''t the oil companies?
Mr Majestyk
Rough_Rock
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I disagree with what some of you say. It has nothing to do with respect or the lack of it. I neither respect nor disrespect people I do not know. I am dealing with only what you write; it''s not personal.
I understand the emotional response to gas prices. It gets us all and we look for someone to blame.
More disturbing that the price of oil per se is the fact that it raises the prices of som many other items. Freighters, trains, planes, and trucks all use fuel and virtually everything we buy gets to market using fuel. It''s going to squeeze the middle class, it already is doing so.
In a sense, I agree that it is partially the fault of big oil''s reluctance to embrace and develop alternative fuel vehicles. I remember going to the World''s Fair in 1964 in NY and Chrysler had its new turbine cars on display. They would run on basically any combustible liquid, diesel, kerosene, etc. There was a lot of potential there for a "flexible fuel" vehicle. That was over 40 years ago and what have we seen since then? A smattering of E85 vehicles, and precious little else. Now there will be a backlash and some people will react and switch to smaller more fuel efficient cars. My wife drives a Chevy Aveo which isn''t very exciting but gets 35 mpg.
We need a coherent energy policy and plan, development of alternative sources of energy such as fuel cell technology, and a fundamental change in peoples'' attitudes that bigger is better.
Regarding the "windfall profit" tax issue and the oil companies: (Source > ***Media Research Center CyberAlert***8:45am EDT, Friday April 28, 2006 (Vol. Eleven; No. 72)
> 2) All three network morning shows played the envy card Thursday
> morning, as they hyped the "record high profits" and "corporate greed" of
> American oil companies. High on their agenda: ExxonMobil''s announcement of
> $8.4 billion in profits, which the networks implied was scandalous given
> the high price of oil.
>
> But unstated in the network coverage was the fact that the U.S.
> government took in more than $7 billion from ExxonMobil during the first
> quarter of 2006, a jump of more than $2 billion from the same time period
> in 2005. And that doesn''t count the more than $7.6 billion in excise taxes
> -- the gas tax -- that ExxonMobil collected for the government during the
> same quarter. Plus another $11 billion in "other taxes" and ExxonMobil
> sent the government more than $25 billion in the first quarter of 2006 --
> three times more than the amount network reporters seem to feel is
> obscene.
>
> Big Government is making more off of high gas prices than Big Oil.
I understand the emotional response to gas prices. It gets us all and we look for someone to blame.
More disturbing that the price of oil per se is the fact that it raises the prices of som many other items. Freighters, trains, planes, and trucks all use fuel and virtually everything we buy gets to market using fuel. It''s going to squeeze the middle class, it already is doing so.
In a sense, I agree that it is partially the fault of big oil''s reluctance to embrace and develop alternative fuel vehicles. I remember going to the World''s Fair in 1964 in NY and Chrysler had its new turbine cars on display. They would run on basically any combustible liquid, diesel, kerosene, etc. There was a lot of potential there for a "flexible fuel" vehicle. That was over 40 years ago and what have we seen since then? A smattering of E85 vehicles, and precious little else. Now there will be a backlash and some people will react and switch to smaller more fuel efficient cars. My wife drives a Chevy Aveo which isn''t very exciting but gets 35 mpg.
We need a coherent energy policy and plan, development of alternative sources of energy such as fuel cell technology, and a fundamental change in peoples'' attitudes that bigger is better.
Regarding the "windfall profit" tax issue and the oil companies: (Source > ***Media Research Center CyberAlert***8:45am EDT, Friday April 28, 2006 (Vol. Eleven; No. 72)
> 2) All three network morning shows played the envy card Thursday
> morning, as they hyped the "record high profits" and "corporate greed" of
> American oil companies. High on their agenda: ExxonMobil''s announcement of
> $8.4 billion in profits, which the networks implied was scandalous given
> the high price of oil.
>
> But unstated in the network coverage was the fact that the U.S.
> government took in more than $7 billion from ExxonMobil during the first
> quarter of 2006, a jump of more than $2 billion from the same time period
> in 2005. And that doesn''t count the more than $7.6 billion in excise taxes
> -- the gas tax -- that ExxonMobil collected for the government during the
> same quarter. Plus another $11 billion in "other taxes" and ExxonMobil
> sent the government more than $25 billion in the first quarter of 2006 --
> three times more than the amount network reporters seem to feel is
> obscene.
>
> Big Government is making more off of high gas prices than Big Oil.
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Mr Majestyk
I remember going to the World''s Fair in 1964 in NY and Chrysler had its new turbine cars on display. They would run on basically any combustible liquid, diesel, kerosene, etc. There was a lot of potential there for a "flexible fuel" vehicle. That was over 40 years ago and what have we seen since then?
Turbine driven vehicles - and several other engine technologies (wankle) have been tried in production vehicles. Sadly, the "promise" of them did not pan out. In both cases there were two problems: Firstly reliability - which admitedly in the turbines was overcome; but more important they turned out to be horrible fuel hogs.
Alas, what works so well in laboratory engines - where tolerences can be tighter and materials don''t have to handle rugged service could not be duplicated in actaul service engines.
Both Greyhound Busses for several years, and 1/2 of the intitial several year production of M1 battle tanks were fitted with turbine engines and run for many years of actual use. Diesels get about twice the gas milage - in production engines. The Army invested mega multi-millions of dollars trying to improve the M1 tank turbine engine over almost a decade.
The Military could afford the losses; and the fuel inefficiency of the new Greyhound busses were one of the factors that lead to that companies financial troubles.
The Wankle has found a nitch market for small light powerfull engines where long term reliability is not that important (certain industrial applications and sports cars). The long term wear problem with the chamber seals has not yet been solved (a typical wankle engine last 18 - 24 months in an "average milage" car before needing overhaul).
There are other engine technologies that have been tried on smaller scales - and more variations on the way. No one has made any of them work as well - or as efficient as the internal combustion piston engine.
Fuel cells are still in their infancy, and are considered a long way off for real life rugged duty for cars. You also need to have a clean fuel source for them as well.
Perry
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A few more bits of information I picked up today:
The profits the oil company are reporting are earned on world wide operations - with only part of those profits coming from US operations. Due to the record prices for oil - there are indeed higher than normal profits from some operations; but most of that is not from the US.
The US oil companies have been investigated more that 30 times in the last several decades by the US & state government''s - and there has never been a single finding of wrongdoing. With all of that attention and awarness- do you really think that the US Oil companies have crossed some line somewhere.
The average profit of one of the really large oil companies was 7.7%; while non petroliuem based energy companies tend towards 10% profit.
Perry
The profits the oil company are reporting are earned on world wide operations - with only part of those profits coming from US operations. Due to the record prices for oil - there are indeed higher than normal profits from some operations; but most of that is not from the US.
The US oil companies have been investigated more that 30 times in the last several decades by the US & state government''s - and there has never been a single finding of wrongdoing. With all of that attention and awarness- do you really think that the US Oil companies have crossed some line somewhere.
The average profit of one of the really large oil companies was 7.7%; while non petroliuem based energy companies tend towards 10% profit.
Perry
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I know that this tread kinda died... But here is some information I ran across today that sums up - what I think is a good part of the problem.
For personal transporation (Light-duty vehicles) the following statistics have been recently released by the EPA. This represents an average of all vehicles sold in this catagory. This catagory includes personal use vehicles and small business vehicles. The number of vehicles used for small business purposes (cars, vans, light trucks) tends to be fairly constant over the years and is a small segment of this vehicle catagory (perhaps 5%).
Gas milage increased substaintially from the early 1970''s to the mid 1980''s - and has dropped since then.
People are driving bigger vehicles (that are heavier), and ones with larger engines for faster acceleration.
I have heard many people claim that they "need" their large vehicle. My question is why didn''t their parents and other people in the past need a large vehicle to do the same thing?
For personal transporation (Light-duty vehicles) the following statistics have been recently released by the EPA. This represents an average of all vehicles sold in this catagory. This catagory includes personal use vehicles and small business vehicles. The number of vehicles used for small business purposes (cars, vans, light trucks) tends to be fairly constant over the years and is a small segment of this vehicle catagory (perhaps 5%).
Gas milage increased substaintially from the early 1970''s to the mid 1980''s - and has dropped since then.
People are driving bigger vehicles (that are heavier), and ones with larger engines for faster acceleration.
I have heard many people claim that they "need" their large vehicle. My question is why didn''t their parents and other people in the past need a large vehicle to do the same thing?
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moon river
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