Skyrocketing Gas Prices

[venture]

What you need to know is that prices wouldn’t go by as much if more drilling and energy infrastructure was allowed to be built and that our economy would be better off for it.
You / we need to know the real reason why prices go up and down over the long term.

So you are essentially saying we can open it all up, let them drilling to their hearts content, and even though we hear that it'll help lower energy costs in reality we are just going to keep the forced priced increase lower than what they originally would be?

If that's the case, what's the point? That's when we need to start pushing more (and improved) hybrid vehicles that would only use a couple gallons every few hundred miles. Of course I have a feeling if we do that, they are just going to turn around and charge $15/gal to make up for the drop in demand. IOW, we are in a no win situation.

[Martin]

You'd think with all the advances in technology since then we'd have a plethora of gas powered cars that got at LEAST 48 MPG.

it's not that the technology isn't there, it's just that current emissions and crash impact standards make that level of efficiency more difficult to obtain. -M

[windowphobe]

it's not that the technology isn't there, it's just that current emissions and crash impact standards make that level of efficiency more difficult to obtain.

As the young folks say, THIS.

That little Chevy Sprint weighed less than 2000 lb. Subcompacts today carry around 2500 lb or more, mostly to convince people that they can drive into bridge abutments and survive. Every mid-sized "family" sedan weighs at least 3100 lb; minivans are invariably over 4000 lb. Neither the Congress nor the EPA can override the laws of physics -- but they'll never stop trying.

[greatdane]

"They" are predicting prices to increase by as much as another 20 cents. Just since my post yesterday that same 7-11 I referred has gone up another 9 cents, topping the $4 mark. That is for non-ethanol fuel. I understand the summer fuel blend excuse it happens every year, as do increases around holidays. I am just miffed at the amount of increase. Seriously, going from 3.29 April 27 to 4.03 May 17 seems excessive to me. Gas in Dallas is 3.29, Little Rock is as low as 3.19, Albuquerque 3.33, Wichita 3.65. Why so high in OK?

[venture]

"They" are predicting prices to increase by as much as another 20 cents. Just since my post yesterday that same 7-11 I referred has gone up another 9 cents, topping the $4 mark. That is for non-ethanol fuel. I understand the summer fuel blend excuse it happens every year, as do increases around holidays. I am just miffed at the amount of increase. Seriously, going from 3.29 April 27 to 4.03 May 17 seems excessive to me. Gas in Dallas is 3.29, Little Rock is as low as 3.19, Albuquerque 3.33, Wichita 3.65. Why so high in OK?

News tonight is saying the refineries impacted are the main suppliers for us...so we get it the worst.

[ou48A]

So you are essentially saying we can open it all up, let them drilling to their hearts content, and even though we hear that it'll help lower energy costs in reality we are just going to keep the forced priced increase lower than what they originally would be?

If that's the case, what's the point? .

The point is to avoid another deep recession or something worse.


We now live in a world economy and should expect to pay reasonably close to the going world rates.
That’s why IMHO we should be pushing far harder for duel fueled vehicles (NG - gasoline).

Eventually NG will be exported in far greater amounts than we would ever likely use for transportation. This would cause NG to go up….The good news is that we have very large deposits of NG in the US off shore and in Canada. Drill baby drill will work very well for NG but we have to be able to build pipelines and associated facilities

[venture]

The point is to avoid another deep recession or something worse.


We now live in a world economy and should expect to pay reasonably close to the going world rates.
That’s why IMHO we should be pushing far harder for duel fueled vehicles (NG - gasoline).

Eventually NG will be exported in far greater amounts than we would ever likely use for transportation. This would cause NG to go up….The good news is that we have very large deposits of NG in the US off shore and in Canada. Drill baby drill will work very well for NG but we have to be able to build pipelines and associated facilities

Or we evolve completely away from it as much as we can. In the Fusion power thread I attempted to bring this up, but you seemed to dodge it.

There is technology available that can be advanced towards more electric car usage. In pavement recharging technology existing that can keep cars powered as they travel on interstates for example. As we move electrical generation away from oil/gas towards Fusion, additional fission plants (potentially), and wind fields that would reduce the demand we have for oil/gas for transportation.

So sure, we can sit there and go to dual fueled vehicles which is a good minor step. Much like hybrids were a good first step there. We can still do better, which probably will require the Fed coming down and doing forceful mandates - not these decades long plans. The sooner we break any reliance on oil/gas the better off we'll be.

[ou48A]

Or we evolve completely away from it as much as we can. In the Fusion power thread I attempted to bring this up, but you seemed to dodge it.

There is technology available that can be advanced towards more electric car usage. In pavement recharging technology existing that can keep cars powered as they travel on interstates for example. As we move electrical generation away from oil/gas towards Fusion, additional fission plants (potentially), and wind fields that would reduce the demand we have for oil/gas for transportation.

So sure, we can sit there and go to dual fueled vehicles which is a good minor step. Much like hybrids were a good first step there. We can still do better, which probably will require the Fed coming down and doing forceful mandates - not these decades long plans. The sooner we break any reliance on oil/gas the better off we'll be.

We should evolve away from crude oil usage it as much as we can….. but as long as there is oil production due to the cracking process there will always be gasoline. I’m pretty sure the physics of the cracking process can’t be changed very much or by enough to not still have large amounts of gasoline. We have still got to do something with it.

Baring a major break though with electric cars they are far more expensive and are not really very practical for most people. There are also limits to what the electric power grid will support.

Right now the most cost effect fuel we have that can displace gasoline is NG. Right now nothing else even comes close. That’s why dual fueled vehicles are the most cost effective and practical alternative. Even if only 25% of commuters used NG for their commutes it would displace significant amounts of oil.

Strong national leadership on this issue would help. Nobody else in the world has as much natural gas potential as the USA. If we displace a decent percentage of our crude oil usage with NG we can become a net exporter of crude oil and its products in a world market that will need our expensive crude/ products.

This would significantly strengthen our national economy and our ability to influence world events.

This is not to say we shouldn’t be working on cheaper energy alternates…. But basic laws of economics mean that high energy prices cause serious economic turmoil on the consuming end. It’s better to be a producer of energy.

[venture]

What is to keep Chesapeake and other major NG producers from just rocketing up the price of NG to keep it comparable to Oil to where there is no advantage? If we have so much supply than the price shouldn't really jump all that drastically. Would it be something that the Fed would need to step in and regulate pricing until the market is well adjusted to the switch in our primary fuel for cars?

[ou48A]

What is to keep Chesapeake and other major NG producers from just rocketing up the price of NG to keep it comparable to Oil to where there is no advantage? If we have so much supply than the price shouldn't really jump all that drastically. Would it be something that the Fed would need to step in and regulate pricing until the market is well adjusted to the switch in our primary fuel for cars?

The trading markets basically set the price for Chesapeake and other major NG producers.
We have far more NG than oil + crude oil is much easier and much cheaper to ship across the oceans.
Even if NG is roughly the same price as crude per BTU it’s a national advantage to use more NG gas as a transportation fuel. As I said we could export the excess crude. This is an area where we have a huge potential economic advantage over China and most other low cost producers.
We have tried regulating NG nationally and it was a dismal failure.

[OKCisOK4me]

My mom is in Flagstaff visiting the sister and her kids and it's $3.59 there.

I guess the answer is, take your vacation outside of Oklahoma this summer!

[ou48A]

My mom is in Flagstaff visiting the sister and her kids and it's $3.59 there.

I guess the answer is, take your vacation outside of Oklahoma this summer!

Maybe so……refining is still somewhat a regional industry and when the outage occurs in your region it’s going to impact you more than if it was nearly a half a continent away.

[SOONER8693]

"They" are predicting prices to increase by as much as another 20 cents. Just since my post yesterday that same 7-11 I referred has gone up another 9 cents, topping the $4 mark. That is for non-ethanol fuel. I understand the summer fuel blend excuse it happens every year, as do increases around holidays. I am just miffed at the amount of increase. Seriously, going from 3.29 April 27 to 4.03 May 17 seems excessive to me. Gas in Dallas is 3.29, Little Rock is as low as 3.19, Albuquerque 3.33, Wichita 3.65. Why so high in OK?

Almost a dollar more in Oklahoma than surrounding states, I'm calling BS on any explanation. The "forces" that be have chosen for whatever reason to hose the gas buying public of this state. Should be criminal and treated as such.

[SoonerDave]

I know that when price spikes (large or small) happen, it renews the call for alternative fuels, but the problem with the alternatives is that once you cull away the hype from the reality you find out that there really aren't extensive, practical mass fuel alternatives. When GM solicited battery proposals for their Volt, they received a boatload of great proposals from lots of great green startup-type companies, but guess what - they were all just variations on essentially the same technology.

The explanations behind all of this don't make it down through regular media, because it starts to get into discussions about physics and technology limits that aren't overcome just because a senator or Hollywood type or *insert favorite pundit here* says they should. You have to figure out a way to get X amount of energy from mechanism Y, and right now the closest thing we can get in practical terms are the semi-electric hybrids and CNG vehicles.

Fuel cell technology is extremely promising conceptually, but those implementations are primarily hydrogen based, and no one has quite yet posited a way to roll out a slew of micro H-bombs on the roads bouncing around at 70mph and sometimes hitting each other. Fusion is very intriguing, but practical implementations are still years away (there's an example of a skunkworks project here. Fuel cell technology is very intriguing, but its so expensive that its unlikely to get past what are termed "niche" applications. Though I'm loathe to use Wikipedia for a reference for nearly anything, I'll grant myself an exception for what seems to be a pretty decent general article on the subject here. The point is not to dismiss them, and not that we shouldn't pursue them, but just temper expectations. Reality is often an ugly obstacle.

I remember a lecture back in Engineering school at OU that talked about the maximum available energy from various sources, and how back then the prof was talking about (and this isn't a quote, its a paraphrase) "these are the physics limits we face right now." He was talking about how great it was to consider solar, wind, and all the other forms that are popular to discuss, but the physical limits of those technologies were pretty sobering. Mind you, this transcended politics. This was about how we turn the discussions about alternative energies into something useful, and its a darned sight more difficult than it seems. The battery notion with the Volt is just a contemporary manifestation of that very same notion - at some point, no matter how badly we want an alternative to work, the physics is sometimes the biggest roadblock.

Sorry for the diversion.

[Just the facts]

You are right Venture. We will just export whatever amount is necessary to keep prices up.

[LandRunOkie]

The US has been a net importer of petroleum since WWII. The recent ramp up in domestic oil production due to fracking, offshore, and waste water wells has only decreased imports. US producers do not have the ability to set oil prices globally.

[mkjeeves]

U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years.

A combination of booming demand from emerging markets and faltering domestic activity means the U.S. is exporting more fuel than it imports, upending the historical norm.

According to data released by the U.S. Energy Information Administration on Tuesday, the U.S. sent abroad 753.4 million barrels of everything from gasoline to jet fuel in the first nine months of this year, while it imported 689.4 million barrels.

That the U.S. is shipping out more fuel than it brings in is significant because the nation has for decades been a voracious energy consumer. It took in huge quantities of not only crude oil from the Middle East but also refined fuels from Europe, Latin America and elsewhere to help run its factories and cars.

As recently as 2005, the U.S. imported nearly 900 million barrels more of petroleum products than it exported. Since then the deficit has been steadily shrinking until finally disappearing last fall, and analysts say the country will not lose its "net exporter" tag anytime soon.

"It looks like a trend that could stay in place for the rest of the decade," said Dave Ernsberger, global director of oil at Platts, which tracks energy markets. "The conventional wisdom is that U.S. is this giant black hole sucking in energy from around the world. This changes that dynamic."

So long as the U.S. remains the world's biggest net importer of crude oil, currently taking in nine million barrels per day, it isn't likely to become energy independent anytime soon. Yet its growing presence as an overall exporter of fuels made from crude gives it greater influence in the global energy market.

U.S. Nears Milestone: Net Fuel Exporter - WSJ.com

[ou48A]

I know that when price spikes (large or small) happen, it renews the call for alternative fuels, but the problem with the alternatives is that once you cull away the hype from the reality you find out that there really aren't extensive, practical mass fuel alternatives. When GM solicited battery proposals for their Volt, they received a boatload of great proposals from lots of great green startup-type companies, but guess what - they were all just variations on essentially the same technology.

The explanations behind all of this don't make it down through regular media, because it starts to get into discussions about physics and technology limits that aren't overcome just because a senator or Hollywood type or *insert favorite pundit here* says they should. You have to figure out a way to get X amount of energy from mechanism Y, and right now the closest thing we can get in practical terms are the semi-electric hybrids and CNG vehicles.

Fuel cell technology is extremely promising conceptually, but those implementations are primarily hydrogen based, and no one has quite yet posited a way to roll out a slew of micro H-bombs on the roads bouncing around at 70mph and sometimes hitting each other. Fusion is very intriguing, but practical implementations are still years away (there's an example of a skunkworks project here. Fuel cell technology is very intriguing, but its so expensive that its unlikely to get past what are termed "niche" applications. Though I'm loathe to use Wikipedia for a reference for nearly anything, I'll grant myself an exception for what seems to be a pretty decent general article on the subject here. The point is not to dismiss them, and not that we shouldn't pursue them, but just temper expectations. Reality is often an ugly obstacle.

I remember a lecture back in Engineering school at OU that talked about the maximum available energy from various sources, and how back then the prof was talking about (and this isn't a quote, its a paraphrase) "these are the physics limits we face right now." He was talking about how great it was to consider solar, wind, and all the other forms that are popular to discuss, but the physical limits of those technologies were pretty sobering. Mind you, this transcended politics. This was about how we turn the discussions about alternative energies into something useful, and its a darned sight more difficult than it seems. The battery notion with the Volt is just a contemporary manifestation of that very same notion - at some point, no matter how badly we want an alternative to work, the physics is sometimes the biggest roadblock.
Sorry for the diversion.

Very good post…. particularly the bolded part.
As you indicate it’s the physics that are the biggest roadblock no matter hard we wish or hope

[LandRunOkie]

The reporter in the video you linked to gave a legitimate reason for the conflicting numbers. Environmentally conscious fuel consumers like those in Europe are electing to import the refined products rather than doing their own refining. Probably because of the environmentally hazardous byproducts of refining operations. The US will not become a net crude exporter in the foreseeable future.

[ou48A]

We will just export whatever amount is necessary to keep prices up.

If we are paying global prices in a global economy why shouldn’t they be allowed to export their products?

[ou48A]

What do I pay for in a gallon of regular gasoline? - FAQ - U.S. Energy Information Administration (EIA)

The national average retail price of a gallon of regular gasoline in March 2013 was $3.71. The four main components of the retail price and approximate shares of the total price were:

1.Crude Oil: 63%. The cost of crude oil as a share of the retail price varies over time and among regions of the country. Refiners paid an average of about $98.00 per barrel of crude oil, or about $2.34 per gallon, in March 2013.
2.Refining Costs and Profits: 16%
3.Distribution, Marketing, and Retail Costs and Profits: 10%
4.Taxes: 11%. Federal excise taxes were 18.4 cents per gallon and state excise taxes averaged 23.47 cents per gallon

[mkjeeves]

The reporter in the video you linked to gave a legitimate reason for the conflicting numbers. Environmentally conscious fuel consumers like those in Europe are electing to import the refined products rather than doing their own refining. Probably because of the environmentally hazardous byproducts of refining operations. The US will not become a net crude exporter in the foreseeable future.

There are no conflicting numbers. Crude oil imports and exports are a sub set of petroleum products imports and exports. We net export petroleum products. Any way you want to look at it, we don't import or produce one barrel of oil, crack it and export two barrels of products from that one barrel of oil. Assume we import 5 barrels or crude and produce 5 barrels of crude. We crack that and export 6 barrels of gasoline, diesel and other products. We net imported crude since we didn't export any of it but we net exported products because we shipped out more barrels than we shipped in.

The US will not become a net crude exporter in the foreseeable future.

Which may or may not be irrelevant depending on what the argument is, pollution, oil consumption or other, since crude imports and export totals don't take into account how much crude we cracked and shipped out.

OU48 spoke once about exporting crude and products, at other times about crude but I believe his point was we export oil and oil products and will continue to do so more and more if we switched to NG. Personally, I think as a matter of natural interest, security and pollution control, we should move to other alternatives for our own use and limit oil products exports. Keep the resources here to secure our economy, energy and oil product needs in the future. Don't take on the pollution for other countries.

Not only that, we heavily subsidise oil, thus when we ship it out, we heavily subsidise oil in the countries we ship it to. That's beyond stupid.

[LandRunOkie]

There are no conflicting numbers. Crude oil imports and exports are a sub set of petroleum products imports and exports.

Nope. The process of refining is what makes petroleum products petroleum products. Crude oil is not a petroleum product. I agree that we shouldn't be refining Europe's oil. Just another example of oil companies not being forced to account for environmental costs.

[mkjeeves]

Okay. I'll let OU48 make his own argument but it seems to be essentially the same...the more we switch to NG, the more oil products we have to export and the more power we have in the both the crude market and oil products market.

My opinion is the same though, NG can be a transition and some help to ease dependence on oil but our primary focus needs to be on moving as much of our needs as we can to electric, natural gas and wind generated now and whatever we can do to move beyond that as fast as possible in the future. And as I said, we need to stop the oil companies from taking profits by letting the world crap their pollution on us and we need to keep as much of the resources at home as possible to drive down domestic prices and secure our future needs.

[RadicalModerate]

that sounds good in theory, but since fuel prices affect the whole supply chain and therefore affect the price of pretty much anything you buy, you're affected whether you personally use or not. -M

Would you please refrain from making statements like that that make too much sense to be believed or tolerated?
(j/k . . . =)

It's almost like slapping up a bumper sticker with something along the lines of
"Everything You Ever Owned Came By Truck
Including Your Bicycle"

Did I say "bumpersticker"? Sorry . . . it implies bias.

(jsyk: Even the thought of $4.00 a gallon gas totally sucks in an unjustifiable manner.)