gas prices

[Alex (Riptearkill)]

http://www.mises.org/story/2940
Thoughts? While it makes sense the only problem i see with that logic is that although it is less % wise it definitely isnt # wise which would mean they could possibly take less of a profit margin while still maintaining huge profits? It appears that way but i have no idea how much of it they reinvest towards research or expansion.

[Donnie (S3 / Jagor)]

At the risk of sounding like a broken record, taxes are the primary issue facing our country today. Blaming ANY private, non-monopolizing entity for unfair pricing is unconstitutional at worst, a complete waste of time (and tax dollars) at best.

Nice read Rip, thanks for posting it.

[Andrew (I2ed3ye)]

Although I mostly agree with the article as I did the math a couple months ago on the profits of gas (something like earning 10-20 cents a gallon, before all fees/taxes/shipping/etc).  The reason I did that was because Exxon was reported to have  brought in the largest profit for the year and first quarter of any company in the US.  http://money.cnn.com/2008/02/01/news/companies/exxon_earnings/ - There's a lot of articles about it on the net, ranging from 2005 all the way to 2007.  I guess this has been the backbone for the finger-pointing.  Or rather scape-goating.  I think there was another post about this or something.  Weird deja veux.

Anyways, the thing most people don't keep in mind about oil is that when a company buys a barrel of crude oil, just less than half of that refines in to gasoline.  I haven't done any research on it, but everyone knows part of it is refined in to jet aircraft fuels.  And considering we've been in a war for a couple years now, I'm willing to be that's been quite an impact on profits.  Factor in the other products and you've probably got a recipe for money.  When you think about it, gas is probably their worst money-maker.

[Roadill]

Whenever there's been a surplus of oil, which should in theory drive prices down, oil companies keep the price high by sending more to the oil reserve  http://fossil.energy.gov/programs/reserves/spr/spr-facts.html

With all the ties to the oil industry, our current government officials have no real interest in changing practices to reduce gas prices.

http://www.famoustexans.com/georgewbush.htm
http://www.rense.com/general14/bushsformer.htm
http://www.realchange.org/bushjr.htm
http://www.corpwatch.org/article.php?id=713
http://www.commondreams.org/views03/0403-10.htm
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/03/08/MN242495.DTL
http://www.newyorker.com/archive/2004/02/16/040216fa_fact

[MilambrMoo]

Im not following the gas price war much, I know atm its 1.22.2 per liter in Ontario, its in the area of 1.35.5 area in Newfoundland (for you Americans, its that island on the east coast of that big place that is directly north (thats up on a map) of you.

But, as I was wondering... Do they, or do they not have a storage for oil? If so, then why are the prices that is being forked out for gas not reflective on the oil that was bought back when the oil in the surplus was first had?  I mean, I KNOW (I guess its still assuming) that the gas isnt all gone, and we are using it up as the barrels of oil are bought.

Lyle

[Alex (Riptearkill)]

I'm under the opinion that the oil reserve should exist solely for government functions such as military use. It isn't the governments job to provide a stockpile for general population.

[Donnie (S3 / Jagor)]

You know... Something I have wondered about for quite some time is synthetic oil.  I admit I never did the proper research on the subject, but as someone who enjoys auto racing and has even dabbled in it at times it's amazing how useful synthetics can be.

Like I said, I never did the research I should have, but today I began wondering why we haven't created some sort of synthetic gasoline.  Then I kind of stumbled across an editorial by Glenn Beck.

http://www.cnn.com/2008/US/04/24/beck.oil.prices/index.html?iref=newssearch

I just thought it was interesting.

[Andrew (I2ed3ye)]

Thanks for the link, Donnie.  The wonders of life.   

[Alex (Riptearkill)]

http://www.popsci.com/popsci/flat/bown/2007/innovator_2.html
amazing what people have come up with
At your source for synthetic fuel. It sounds interesting but it just doesnt make economic sense that it wouldnt be in use now if it could cut costs by the proclaimed 50%. Why would such a technology be stifled when whoever harnessed it could surely dominate the fuel market? It's not as if it was made illegal by oil lobbyists it was just said to be economically unfeasible. Why doesn't somebody start up the program again because right now with gas at 3.50+ a gallon it certainly would work?

[Donnie (S3 / Jagor)]

http://www.popsci.com/popsci/flat/bown/2007/innovator_2.html
amazing what people have come up with
At your source for synthetic fuel. It sounds interesting but it just doesnt make economic sense that it wouldnt be in use now if it could cut costs by the proclaimed 50%. Why would such a technology be stifled when whoever harnessed it could surely dominate the fuel market? It's not as if it was made illegal by oil lobbyists it was just said to be economically unfeasible. Why doesn't somebody start up the program again because right now with gas at 3.50+ a gallon it certainly would work?

You may be surprised at how many research facilities are funded by government grants.  The truth is, since the government started printing money the free market has been broken.  If a company is not providing sound business (a la banks in recent news) the government props them up either directly or through tax breaks.

The simple truth is that we're still willing to pay the premiums.  I saw a new H2 on the street today, still had the sticker on the window.  I still drive a sports car, etc.  So the only companies with an interest are either A) already owned by the government via grants or; B) making a killing and has no monetary incentive to change.

Unfortunately, with our society as it is the free market drives very little progress.  The exception is the internet (and to some extent technology) but Congress is trying to get their nasty tax-loving hands on that too.

I've rambled...

[Alex (Riptearkill)]

are you talking about moral hazard? http://www.mises.org/story/2935
long read in case you wont read it; summary: Moral hazard is the incentive of a person A to use more resources than he otherwise would have used, because he knows, or believes he knows, that someone else B will provide some or all of these resources. The important point is that this occurs against B's will and that B is unable to sanction this expropriation immediately. The mere incentive to rely on resources provided by others is not per se problematic. For example, the announcement of a future inheritance might prompt the prospective heir to spend more in the present than he would otherwise have spent. In such cases we would not speak of moral hazard. A genuine moral-hazard problem appears however if A has the possibility to use B's resources against B's will and if he knows this. Laymen would call A's incentives a "temptation to steal" or a "temptation to act irresponsibly." Economists, ever weary of moralizing, have espoused the technocratic expression "moral hazard."