Gas price worries?

[frosgrim]

A water cooler conversation got me thinking, are people more worried about:

1) the absolute cost of gas today?

2) about the uncertainty of future gas prices?

3) both

4) no concern

I didn't this as a poll as I would love to hear comments on the situation as well.

[AtLaS]

Option 3 easily. Gas is killing me.

[joannes3000]

Option 3.

I just got mugged the other day at the gas station, at the tune of $3.98 9/10 per gallon. Gas should hit the $4 mark in my area this holiday weekend, if it doesn't do so today.

Alternative fuel options, FTW.

[Admin]

What worries me is that the big 5 oil companies are bringing in record profits, $36 billion in profits combined in the first quarter of this year alone, and they don't seem to care about it. That combined with the big companies freaking out about vehicles that require less and less gasoline seems to be indicating that they may realize that their profit margins will soon be drying up so they are trying to squeeze us for all they can get. The biggest problem is the trickle down effect that it's having on everything since goods and services rely on transportation, which relies on fuel. So not only can people not afford to go on vacation and many are finding alternate means to get to work, but people are having a hard time feeding their families due to rising grocery costs.

What's truly frightening is that the local news ran a poll this past week asking Houstonians what they would do if a major hurricane (like Katrina) was going to hit Houston and more than 50% of the people said they couldn't leave because they couldn't afford gasoline to leave. That may sound crazy but during Katrina when we thought it was going to hit us people were fleeing Houston/Galveston in record numbers and you couldn't buy gas anywhere because it had run out and all of the roads were at a dead stop because of so many people trying to leave and so many cars running out of fuel waiting. I didn't leave during Katrina but one of my good friends did and it took her 24 hours to drive 30 miles because of the traffic.

Moreover (put that in for Diesel), it won't be long before we have a massive oil shortage now that China is taking up more and more of the world's supply.

I am moving at the end of June to a new condo that is about a mile from my work so that I can save on gas money and I have even considered biking to work.

[Guest]

4, no worries. In real terms, we are paying less than during the 1970s oil crisis. Also, we pay less than Europe currently does (yes I know, they are closer together in general and don't drive nearly as much as the normal American).

Rising fuel costs just means that some people will have to shift their driving patterns. Carpool, biking, new car, mass transit, etc. Whatever it is, people will eventually shift away from dependency on gas. So in the future, I don't see a problem. However, I do understand concern's about the near-future, i.e. the next 1-3 years because a shift to a hybrid car can be very expensive and isn't instantaneous. Only a disaster would put us in a serious situation though, currently it isn't like we have people homeless because of gas, they just have to learn to spend their money in a more efficient manner.

And on a side note, I heard someone talk about how it is cheaper to eat out now because of rising grocery costs. I don't believe that it is true, I think they intended to say something like "if this continues at this current rate, in 6 months..." but I do see the intent. We may very well be better of to start going out to eat than going to our local Kroger for food.

[AtLaS]

Wow, some of that is scary.

I've been saying it for a while, I think gas is one of the major causes for our current recession, if not THE major cause. As you were saying it's not just affecting people driving, it effects EVERYONE because all goods have to be transported somehow, thus almost all prices are rising in some way. The only thing these gas prices will do is cause inflation.

[joannes3000]

The trickle down effect is what's going to kill us. It's bad enough that I have to pay upwards of $1.50 for a loaf of bread, but at least I have the means. There's already a lot of impoverished countries that are getting hammered by the escalating cost of goods and as that cost gets worse, the isht will just continue hitting the fan in larger amounts.

Some folks are thinking that we're nearing the peak of gas prices, but to me that seems more like nervous optimism than anything else. I hate to think of a Katrina situation that will put the U.S. in a bind and further drive up demand. I'm just hoping that we can start earnestly investing in alternative fuels sooner than later. None of this ridiculous fuel-efficient SUV garbage, which is nothing more than a nice way for car manufacturers to get extra money to produce more gas-guzzlers.

[joannes3000]

Quote:

---

And on a side note, I heard someone talk about how it is cheaper to eat out now because of rising grocery costs. I don't believe that it is true, I think they intended to say something like "if this continues at this current rate, in 6 months..." but I do see the intent. We may very well be better of to start going out to eat than going to our local Kroger for food.

Maybe right now, but it's only a matter of time before rising costs hit the service industry as well. At my hotel, I see our in-house restaurant gearing more toward cheaper menu items. Not just to make things more affordable to the patrons, but also to make things more affordable for the restaurant. We used to have a couple of $30 items, but just this morning I noticed that we now have none.

Speaking of food costs, I'm seriously looking at local farms for vegetables as well as starting a little garden of my own.

[Guest]

Quote:

---

I think gas is one of the major causes for our current recession, if not THE major cause.

I would have to say the major cause of the recession is the housing market and the adjustable rate mortgages that people continue to foreclose on. Also the credit crunch has been a huge reason for recession. Gas prices certainly isn't the major factor, it is a factor but I believe you are overestimating its impact because it is probably a major factor for you right now.

[joannes3000]

Quote:

---

Quote:

---

I think gas is one of the major causes for our current recession, if not THE major cause.

I would have to say the major cause of the recession is the housing market and the adjustable rate mortgages that people continue to foreclose on. Also the credit crunch has been a huge reason for recession. Gas prices certainly isn't the major factor, it is a factor but I believe you are overestimating its impact because it is probably a major factor for you right now.

Agreed on the housing market being a bigger factor. At the rate things are going, I'm just biding my time before I buy up half of downtown Portland for pennies on the dollar. I'm going to be like the Donald, only with better hair.

[AtLaS]

Quote:

---

Quote:

---

I think gas is one of the major causes for our current recession, if not THE major cause.

I would have to say the major cause of the recession is the housing market and the adjustable rate mortgages that people continue to foreclose on. Also the credit crunch has been a huge reason for recession. Gas prices certainly isn't the major factor, it is a factor but I believe you are overestimating its impact because it is probably a major factor for you right now.

Yeah that's definitely one of the top factors, foreclosed houses are out of control right now. It's a great thing for my brother because he's in real estate, and foreclosed houses are unbelievably cheap right now, so when the market picks back up the value of those homes will increase.

But for me being in college, I feel like driving to a friends house is a bill. I wanted to go the Braves game today because a few friends are going and have cheap tickets, but my ticket ($8 for ticket plus at least 20 for gas) just isn't worth it.

[frosgrim]

Other factors in the recession or move to recession:

Weak dollar- we have too much of trade imbalance and we have borrowed way too much money. That debt is also held mostly outside of the U.S. The weak dollar has also contributed to the run-away price of oil. The price of barrel of oil has doubled in the last year.

Grain scarcity- due to several factors grain is too expensive for its value. Factors include drought, biofuels, and transportation costs.

The occupation of Iraq- costing upto a trillion dollars in sum. This is money that could have been spent in other more productive sectors of the economy, such as transportation infrastructure, R and D (for alternative fuels perhaps), and education (long term payoffs are immense for the dollars invested). It also contributes to the deficit.

We should all pray (and I am not religious) that we don't have a bad hurricane season in the gulf where our refineries are. Another hit to the energy supply chain and we'll see prices double - this comes from economists, not just me, the liberal alarmist

[Admin]

The grain shortage is a major problem as well with not having the ability to meet the demand for E85 and for food. I'm not against alternative fuels but it's a little ironic that the same people who complained about big oil and gas guzzling vehicles are now complaining about the high cost of things when creating alternative fuels has affected quite a bit of the economy.

[Eddielives]

We can thank Al Gore's deciding vote for the current ethanol situation. Farmers are raking in the subsidies to make this innefficient crap. Thanks for the high food prices Al. Ethanol is really making a big difference in gas prices too.

[DJlaysitup]

Quote:

---

The grain shortage is a major problem as well with not having the ability to meet the demand for E85 and for food. I'm not against alternative fuels but it's a little ironic that the same people who complained about big oil and gas guzzling vehicles are now complaining about the high cost of things when creating alternative fuels has affected quite a bit of the economy.

I totally agree with your previous post dolfan - but not with this one. There is no grain shortage. The Midwest of the United States can feed the whole flocking world. I grew up there. Midwest farmers routinely plow under crops to keep the supply relative to the demand and get money to do it. If Saudi Arabia is the "King of Oil" - the U.S. Midwest is certainly the "King of Crops". If they plant more corn to make more money - good for them. The OIL industry is rolling in dough. They ought to get a few bucks out of the speculating boom too.

Many folks (including me) have hated that the "family farmer" has been eaten up by the corporate farms - but the (sad) truth is...they are very effective.

P.S. - all we have to do is keep a solid surplus (which should be easy) in case some of these poor assed countries controlled by thieves are starving so we can bail them out. For Chrissakes...the Peace Corps has been over in these countries teaching them proper farming techniques for 50 flockin years. How hard is it?

P.S.S. - I went through the Gasoline shortages of the Carter Administration. What did the USA consumer learn - nothing - as soon as Gas was cheap and available again we all tossed our Hondas for Ford Explorers. 30mpg to 14mpg. Americans are spoiled consumers and will only change when forced to.

[KB21]

The gas prices are ridiculous right now, but like a lot of other things, this is cyclic in nature and will return back into the normal range at some point. Right now, the supply of oil is low because of all the use of it in China, but there are some giant oil fields in Brazil. Brazil is about to become the next major supplier in oil for the world. The estimates at this point say that the price of a barrel of oil will be cut in half once this new supply is opened up, and this will be reflected at the pumps. This deep water exploration area that an oil company named Petrobas just discovered could contain as many as 33 billion barrels of oil, and this will be the world's third largest known oil reserve.

Of course, the United States could do a lot in supplying their own oil, but all the tree huggers don't want the drilling to be done in Alaska.

[KB21]

It takes 450 lbs of corn to make enough ethanol to fill a 17 gallon tank, and it takes just as much grain to produce grain based ethanol. The need for alternative fuels is nothing but a liberal driven hoax, primarily driven by the global warming myth. As a result, so much corn and grain has been used that it has created an increased demand for the things we actually need corn and grain for.....FOOD! The price of grain and corn goes up because farmers that produce it for the use of alternative fuels are losing money on it. The supply of grain and corn is down while the demand has remained the same. It has driven the price of livestock, poultry, and dairy products up. So, we see the results at the grocery store. All because of a mythical need for alternative fuels and a mythical problem of global warming.

[frosgrim]

KB you are right to a point. All economies go through cycles, however, those cycles are heavily influenced by actions of governments, companies, and consumers. Not to mention geo-political issues. Thus, we can create policies that either get us out of economic down-turns quickly or slowly (this is a debate that we should probably open another thread on).

In regards to the ANWAR. The total amount of energy drilled would provide 1-5 years of oil to the country (at current consumption levels). It would take 10 years for the ANWAR production to come fully on line. In essence the ANWAR is a red herring from both the drilling side and the conservation side. IMO, why are we going to use up a natural preserve for a negligible amount of oil that produces profits for a very few individuals? That is poor resource management.

There are numerous other sources of oil in the US. The best source is actually coal. The problem with using coal is that its expensive to turn into gas. However, as crude prices rise, the cost of synthetic gas will come into alignment. There is about 300 years of coal in the US to supply predicted demand. The cost per gallon I have seen estimated at about $4.20-4.50 in 2005 dollars. That could go down with refinement innovations.

China's consumption is another misnomer. They have have only increased world-wide demand by 5% this year. That does not account for the doubling of oil prices. The weak dollar, which is the result of disastrous U.S. economic policy is also to blame. Profit taking, however, is what I suspect is the real culprit.

In terms of looking for alternative energies- why is that bad? That makes no sense. Yes the bio-fuel experiment is a disaster. But that is due to agribusiness insisting on using grain instead of stalks for the production of agrifuel. In other words, a good idea that got hijacked by greedy business interests. Brasil's ethanol production is the model we should follow.

In terms of the developing world and grain production. Its a mess. Many of the Peace Corps' projects get de-funded by nations once the PC moves on. Further, and more damaging, is that the presidents/dictators of many of these countries are so corrupt they take the grain produced and sell it on the international market for their own benefit. I can tell you in Ecuador, which is an oil nation, that the government ministries routinely sack the nations bank by extracting the savings and then fleeing the country. Imagine if a US treasure secretary just froze your bank account, transfered all the money to some offshore account, and then fled the country. That is exactly what happens routinely in Ecuador and throughout South America.

[KB21]

It's not just the ANWAR though. There is an oil field in North Dakota that has an estimated 3.5 billion barrels of oil, and we cannot drill it because of all the regulations the environmentalists have put on drilling. There are oil fields off the Pacific Coast that cannot be accessed due to the regulations.

The search for alternative fuels has by and large been a completely inefficient exploration. Plus, the biofuels are terrible for your engine. The fuel will completely clog the lines up in your automobile.

I do agree some with what you are saying about other countries causing the shortage in grain. I was reading last night, and the under secretary of the USDA Mark Keenum (A fellow Mississippi State Alumnus I might add) has stated that the shortage has more to do with the high tariffs countries like Argentina, India, and Vietnam have put on grain, rice, and soy. I still believe that the research for biofuels is a waste of time, money, and energy and is largely created by the Global Warming myth.

[mattlanta]

I actually wrote about this back in around October/November in one of my World History class's tests. I wrote something about not being surprised when it comes to summer that our gas prices would be around $5 each.

During that time, gas barrels were about $92-94/each. Now, they're increasing at a much faster pace, and I believe they're well over $100 now.