| Author | Message | ||
     Cochise |
I guess this will be construed as hurtfull and a personal attack, buuut, what is this place? Is this a place of "Mary's? I will say this, and only once, so as not to beat a dead horse. Are we all first graders who can't say something unless we ask the teacher if it is ok?  Of course, on this next point, I will be hypocritical. Don't you think it would be more profitable for you to "call someone out" in an email rather than to publicly humiliate them in front of everyone, at least call M2me on the phone to cry about his attacks, you know, like when you called Scooter to cry about how everybody beed mean to you before the last elections? | ||
| Reepicheep |
Cochise, I think that was an honest question, so I will give an honest answer... We want to make the site enjoyable and welcoming to everyone. It's not so much about "asking the teacher if it is OK", it is more about respecting the owner of the house when he invites us to have a beer in his living room. | ||
| Cochise |
I am enjoying MYSELF, of course if somebody tells me I'm an idiot, so be it, I ain't gonna cry, and as far as I am concerned, people should be reprimanded in private, not out in front of everyone for humiliation sake. That being said, except for the childish higher-up stuff, I like this place and I think I'ma hang out for awhile, and not to stalk anybody. | ||
| Brucelee |
More on those gas prices! In Praise of 'Gouging' September 7, 2005; Page A16 One test of leadership in a crisis is whether politicians keep cool enough to resist populist furies, especially when it comes to the inevitable economic fallout. Sadly, that's not what we're seeing in the current demagoguery over alleged oil-profiteering. "Price gouging," says Missouri GOP Governor Matt Blunt, "is unconscionable and illegal ... and should be rooted out and punished." In Georgia, Republican Governor Sonny Perdue has signed an emergency executive order imposing sanctions on service stations that raise their prices too much. In Illinois, Democratic Governor Rod Blagojevich has pledged to prosecute gas companies that profit from the price spike, as has Ernie Fletcher, his Republican counterpart in Kentucky. Some 20 states, most of them in the south, already have anti-price-gouging laws on their books -- and many governors have declared emergencies to invoke them. These de facto price controls typically place ceilings of between 10% and 25% on how much companies can raise prices in the wake of a natural disaster. In almost all cases such laws are wrong-headed, because they exacerbate supply problems by short-circuiting the price system that matches supply with demand. As infuriating as higher gas prices will be over the next weeks and perhaps months, there is one economic certainty here: If governments will not allow the price system to ration the demand for gas, a new "price" system will emerge called gas lines, which have already appeared in many locales. Let's explain why prices have been rising. Katrina has knocked out about 90% of Gulf crude oil production and about 80% of natural gas output. That translates into about two million barrels a day that are not available to consumers, an 11% decrease in supply. This means that in the near term Americans are going to have to consume two million fewer barrels of gas every day, at least until the refineries are brought back on line and increased output and supplies from other nations arrive. The way the market achieves this reduction in consumption is through a higher price. The argument is also made that energy companies are reaping windfall profits from the Katrina catastrophe. That is in one sense true -- the oil they've already extracted and refined is more valuable now, and we would be pleased to see some of these extra profits donated to the relief effort. But artificially holding down the price of gas makes a bad situation worse. This is also why many of the nation's governors are misguided, even if well-intentioned, in their attempts to suspend state gas taxes. Given the high demand for gas and constricted supply, this gas tax cut will have one of two undesirable consequences. If the savings are somehow passed on to consumers at the pump, demand will be elevated, thus heightening the risk of gas lines and/or "sold out" signs at service stations. The alternative is that energy companies will keep the market-clearing pump price the same, and pocket the 10 to 20 cents a gallon reduction in the tax -- which would only increase their windfall. Either way, consumers won't benefit. So are the gas sellers guilty of "profiteering?" Price gouging laws say companies can't charge significantly more than their "cost." But what matters for wholesalers and gas stations isn't what they paid for the last tanker of fuel but what they expect to pay for the next one. Economists call this the "replacement cost," and any gas station owner would soon be out of business if he charged $2 a gallon for gas that he knew would cost him $2.50 a gallon to replace. As these replacement costs soar, it is entirely appropriate for gas stations to raise prices on a daily, or even hourly, basis. "If prices do not increase," explained the White House Council of Economic Advisers in a section on "unexpected shortages" its 2004 Report to the President, "consumers do not receive a signal to cut their consumption and suppliers might not have the proper incentives to increase supply adequately." Anti-gouging laws also punish companies for building excess capacity and reserves in advance of a crisis like the one we're now having. One lesson of Katrina is that we should reward companies for stockpiling oil and gas for the times when it is most urgently needed. Price gouging laws give them no incentive to endure the costs of carrying this excess inventory. We could fill these pages with all the ways government has undermined U.S. energy security and raised production costs. These include reformulated gas mandates, prohibitions on offshore and Alaska oil drilling, and environmental regulations and price controls that go a long way to explaining why not a single new oil refinery has been built in the U.S. since 1976. Not one -- in 29 years. These are the longer-term causes of the post-Katrina price increases. And they are energy policy dysfunctions that Congress would do well to fix before the memory of this catastrophe fades. In the meantime we can only hope politicians don't make this crisis worse by engaging in profiteering of their own, at everyone else's expense. | ||
| Brucelee |
Interesting! I am trying to dig deeper on these data. What is the real Price of Gas? Remember back in 1980 when the price of Gas first topped $1.00 per Gallon? Since then we have gotten used to Gas being over the magic number, that's why it doesn't hurt as much right? Wrong! In real (inflation adjusted dollars) gas is actually still cheaper than it was back in 1980! Even though a gallon of unleaded in the US has shot up 21 cents per gallon recently... And Gasoline is fast approaching the peak prices seen during both Gulf Wars... Though many in the press are claiming that gas prices are at an all time high... When adjusted for inflation, it is clear that gasoline prices are far below the 1981 inflation-adjusted peak of $2.94. http://inflationdata.com/Inflation/Inflation_Rate/Gasoline_Inflation.asp | ||
| Brucelee |
http://www.cato.org/testimony/ct-jt070600.html This is a superb analysis of gas prices, why they move and how they respond to government edicts. Dated 2000 but still relevant today. | ||
| Bandm |
Lots of energy info here: http://eia.doe.gov/indexnjava.html | ||
| Blake |
Thank you CJ.  Joe (Cochise), I understand well that you (and many others) would manage the site differently if that responsibility were to fall to you. I and the other custodians are in general agreement and happy with the way it is currently being managed. We merely ask that contributors please respect that. We're not asking anyone to like it, just respect it. Those who refuse to respect board policy, especially on a repeated basis, are simply not welcome here. I too frown on public admonishment. However, in this particular case I came to the conclusion that it was important for us all to understand that repeated violation of board policy will have consequences. Frankly, I wish folks would stick to bike related talk and avoid the divisive political rhetoric that so often devolves into personal attack. It brings down the tenor of the entire site. Not a good thing. Thanks for understanding and for hanging around. | ||
| CJXB |
Don't you think it would be more profitable for you to "call someone out" in an email rather than to publicly humiliate them in front of everyone, at least call M2me on the phone to cry about his attacks, I never intended to humiliate or call out m2me, I have met and know him personally, he ask the question What personal attacks? publicly and I answered publicly !! And as usual with our discussions I was right and he was wrong !!  Warning - the above statement is a joke, it's only a joke, no one needs to be offended at this time !! | ||
| Jeremyh |
its all fun and games till someone is having a bad day and wants to take everything serious. | ||
| Panic |
Ah, yes, the mythical "self-regulating law of supply and demand". If anyone remembers: this same statement was offered in opposition to any form of controls when rising gas prices were causing small business bankruptcies, school districts running out of money etc. The statement was "there is a natural maximum price to which gas may rise if demand continues to climb, but since demand is reduced by the higher price, this figure will never actually be reached. Therefore, no control or government intervention is, or will be, necessary." Sound similar? Date: 1979. The price that gas will never reach: $.60. What factor really controls here? The proximity of oil companies to the White House. Get used to it. Very shortly, gas at $4.00 will be only a happy memory. (Message edited by panic on September 07, 2005) | ||
| Bustybuell |
It seems strange to me that as we are all getting gouged by the oil companies, simply due to GREED,that there is a number of people that try to justify the greed by adjusting for inflation or any number of other excuses. It is not the fault of the people driving SUV's. It is the fault of a bunch of greedy arabs that will one day take over this country while we are all bickering at each other. It is Greed, pure and simple, and the disire to control us. what to do, what to do, nothing because you can't get more than 3 people to agree on anything. Also we have NO politicians with any balls, democrat, republican, libertarian or Hillary. No balls, none, so we will continue get what we deserve. just my 2 cents, who cares, let's go ride. | ||
| Brucelee |
"It is Greed, pure and simple, and the disire to control us. " Ah, a fastball, right down the middle!" Well, lets see: If you invest in a stock, do you give back any gain you made in the stock when it reaches a "fair or reasonable" return, or do you hold on until you think it has peaked? Hmmm, that would be GREED! When the price of gas dropped in the 1980s, did you refuse to take the lower price and did you offer to give the extra price drop back to the gas companies so that they can earn a "reasonable return." When you quit you last job for a higher paying job, did you feel "greedy" or were you just doing your best for your family? When the price of plasma TVs dropped sharply over the past two years and you purchased one, did you feel bad that this was only half the cost you would have paid two years ago? NO? Well, you would be GREEDY! If you could, would you charge more or less for whatever you selling! GREEDY! And to return to my earlier posts, with all of the Attorney Generals, Congressmen, Presidents, FTC, FBI etc investigating energy companies over the past 40 yrs. how come they never convict anyone? Are they all in on this conspiracy too and if, why? Is every Economist who writes on this subject either just not as smart as you, or are they on the take also? Are they ALL on the take? C'mon, you can do better than this! | ||
| Brucelee |
"What factor really controls here? The proximity of oil companies to the White House. Get used to it. Very shortly, gas at $4.00 will be only a happy memory." You are right! We have NEVER had price spikes in gasoline before. GWB did it for sure. BTW-If you can predict the price of gasoline, you should trade futures. But then that would make you GREEDY! | ||
| Brucelee |
Quiz, Since there has not been one new gasoline refinery built in the USA in 30 yrs. how would this help deal with an increase in the demand for gasoline? Bueller, bueller??? | ||
| Road_thing |
Jeez, I'd love to jump in here, but you guys are having too much fun, and I'm too busy counting my money. rt (tpb) | ||
| Brucelee |
Money, money, money, Must be sunny, in the Rich Man's World! I love ABBA! Who by the way, made a TON of money in their time. | ||
| Bandm |
Quiz, Since there has not been one new gasoline refinery built in the USA in 30 yrs. how would this help deal with an increase in the demand for gasoline? Since refining is a continuous process, refinery utilization of 100% is optimum. Anything less than 100% is just slowing down the process, costing the same to operate, but getting less product in return. Refineries have been running about 90% in the winter, and 95% in the summer in recent years. Building more refineries would cause utilization to drop, increasing the cost per gallon to refine. Running current refineries at higher utilization would reduce the cost per gallon to refine. Not building refineries has kept costs lower, prices lower, increasing demand? Building new refineries would increase costs, raise prices, and lower demand? Current Refinery Utilization | ||
| M2me |
CJ is publicly humiliating me!  CJ is waging yet another personal attack in lieu of congenial discussion! I'm gonna tell on you!  | ||
| Bustybuell |
Brucelee, Your comments require no response at all. You are the problem, no part of any solution. As a once famous man said "and that's all I got to say about that" Wow! | ||
| Road_thing |
Bandm: Your analysis is correct only if there is no additional crude to run through the new refineries. I don't think that's the case. I suspect that the 90-95% utilization we've been seeing is actually close to optimum in the real world, where things get shut down occasionally for maintenance, repairs, and stuff like that. rt | ||
| Brucelee |
Brucelee, "Your comments require no response at all. You are the problem, no part of any solution. As a once famous man said "and that's all I got to say about that" Wow!" Then why are you responding? | ||
| Brucelee |
Road_thing is dead right. In reality, you can't have 100% average capacity in a process plant. You need some down time for maint, breakdowns etc. | ||
| Ceejay |
hey the profile pics are back, thanks for making my day better bustybuell. If the gas prices continue to stay above 3 bucks, they have already dropped here, would it help contribute to the decline in urban sprawl, which I believe is a worse problem, almost as bad an idea as building a city on the coast that is below sea level. | ||
| Bustybuell |
Then why are you responding? ******************************** I didn't but then I knew you wouldn't understand that either. Whatever I can do to make your day better CeeJay, Thanks. Maybe they should teach Scuba diving at the grade schools in No'rlens } | ||
| Brucelee |
"Maybe they should teach Scuba diving at the grade schools in No'rlens" The folks in NO that are burying their family members this week will not likely find this comment amusing! | ||
| Brucelee |
"As a once famous man said "and that's all I got to say about that" I knew you were lying when you made this statement. | ||
| Brucelee |
How gas prices influence demand! No need for government here. AutoVIBES: Nearly 60% of Shoppers Influenced By Gas Prices IRVINE, Calif. (Sept. 8, 2005) -- The number of in-market vehicle shoppers who say that gas prices have either changed their minds or strongly influenced their purchase decisions has climbed 13 percentage points to 59 percent since July, according to the August 2005 AutoVIBES, a study from Harris Interactive and Kelley Blue Book Marketing Research. Additionally, the study found that 42 percent of vehicle shoppers indicated that they would seriously consider a more fuel-efficient vehicle if gas prices were to increase another quarter above the current national average ($2.61 per gallon, as of Aug. 26). This is a 12-percentage-point jump since July, and an all-time high since tracking began in April 2004, said study executives. "With prices for gas now skyrocketing above the psychological threshold of $3 per gallon in many areas, consumers are more interested in fuel-efficient cars than at any time in the last two decades," said Jack Nerad, editorial director and executive market analyst for Kelley Blue Book. "Pump prices are not only pinching the pockets of today's SUV owners, but future owners as well, as we are seeing three and five year residual values on new SUVs begin to fall." | ||
| Bandm |
The utilization numbers are based on operable capacity and do not include facilities that are offline not capable of production. I agree that 100% utilization is probably not achievable, but maintenance, repair, changeover, etc, do not effect utilization. There are shiploads of additional crude available to refineries, but why refine it, to glut the market, drive the price of refined goods down, and the price of crude up? With supply and demand steady wouldn't the near doubling of crude costs have more effect on gasoline prices than the fixed costs of refining it? Mark | ||
| Brucelee |
"With supply and demand steady wouldn't the near doubling of crude costs have more effect on gasoline prices than the fixed costs of refining it" This is correct, crude prices have shot up more than refinery costs, which have been increasing but at a slower rate. However, as we have just seen in the wake of Katrina, no extra capacity in the refinery system has its "costs." What is more instructive here is the strong bias against oil and gas development every time someone want to drill somewhere in the US or off shore. The prevailing wisdom must be that we can't do that but we want cheap gas anyway! How well is that working for us? Lastly, to the folks who think that GWB has engineered this latest price "gouge" how exactly is he doing this? Does the White House control WORLD WIDE crude prices, and if so, how is the WH doing that exactly? If you can answer this, you probably know who REALLY shot JFK!! |
