Causes and Implications of Rising Gas Prices
http://thedianerehmshow.org/shows/2012-02-28/causes-and-implications-rising-gas-prices
The average price of a gallon of gas nationwide stands at $3.72, rising by 19 cents in the past two weeks, and up now for 21 days in a row. Gas prices have never been this high in February. One big reason: tension around Iran is driving up the price of oil. Forecasters say U.S. gas prices could reach four dollars a gallon by July. President Obama could tap the Strategic Petroleum Reserve to bring prices down a bit but his Republican opponents want more domestic drilling. Guest host Tom Gjelten and a panel of experts discuss the economic and political impact of rising gas prices and what it means for consumers.
Guests
Dean Baker
co-director of the Center for Economic and Policy Research and author of, "The End of Loser Liberalism: Making Markets Progressive." Blog is called "Beat the Press"
Coral Davenport
energy and environment correspondent, National Journal.
J. Robinson West
chairman of PFC Energy, an energy consulting firm
John Ydstie
economics correspondent, NPR
Comments
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These high prices are so avoidable. The fact that no one in Washington is addressing this fact is disturbing. One simple way to become oil independent is solar. We put a man on the moon with a sliderule. Calculators that came out soon after could do basic math, cost an arm and a leg. Digital watches......same. You can buy them for pennies today. If our government put the same support into solar energy that it did the Apollo program, cost for solar would come down dramatically. As demand increases so does technology to make it more affordable. Washington needs to offer incentives, ie: no interest loans, to those people who would like to put solar panels on their homes. This is a no brainer. Then again, I don't have a lobbyist lining my pockets!
The federal government and the federal reserve have reduced the spending power of the dollar to the point where all commodity prices are rising faster than any other cost. Oil is traded in dollars, the biggest thief in all this is the federal government.
The price of oil and by extension gas are set by a global marketplace, and then further manipulated by the federal government to artificially keep the prices low. Let the prices rise to the market price and quit throwing tax dollars at it. As for solar/wind I would love to see the day when we are a completely electric society with primarily solar, wind, oceanic wave, and geothermal power generation. Maybe the governement meddling in gas prices would be spent better on our future instead of our past.
Oil and gasoline price rises
from 1950-2000 gas prices were essentially flat, with a gentle rise from ~30 cents in 1950 to ~$1.16 in 2000.
in 2001 gasoline prices sharply spiked to $4.06, dropped due to the recession and are spiking MORE sharply.
This follows oil prices, oil went to ~135/barrel in 2008, dropped to ~$40/barrel in 2008 and is back to over $100/barrel, all from about 2004 to today
If you graph oil price per barrel and overlay millions of barrels produced per day, it FLATTENS at around 74-80 million barrels per day, NO MATTER WHAT THE DEMAND, NO MORE CAN BE DRILLED because it is not there.
(Nature Commentary: “Climate policy: Oil's tipping point has passed”, James Murray1 & David King
Nature, Volume 481, Pages: 433–435, 26 January 2012, doi:10.1038/481433a
If you look at reserves to be extracted, at the present rate of extraction, the PLANET, everyone, we will pull the last drop out in 50 years at increasing costs of extraction
If you graph gasoline prices from 2001 and draw a regression line, gasoline should hit $9-10 in the next 7-8 years if we continue to drive fossil fuel cars
(This is from public data from the US Energy Information Administration)
Things I read recently on the Internet:
1.Some major and minor oil companies have closed US refineries recently.
Some close permanently and others are being overhauled.
2. It is the season to reformulate gasoline for warmer weather, so that's part of it.
3. Microsoft's news site reported Keystone Xcel could cause a rise in gas prices. It is clear that crude from tar sands would have to go elsewhere for refining, considering our capacity is limited and oil companies do not plan to build more US refineries.
4. Right now our oil refiners are exporting a large portion of what they refine due to price structure.
5. It would be years before any new finds or pipelines could increase supply.
6. The Obama Administration will probably not use strategic reserves to moderate prices because supply is adequate.
7. Speculators are hoarding both crude and refined to maximize price.
Conclusion: Expect $5/gal. by May.
If we war with Iran expect much higher prices.
This is part of the Austerity being forced on formerly free peoples around the world by international financial Oligarchs. Austerity results in both increased profit and increased social control.
winfield 100- We are into difficult extraction now. At some point the energy calories required to obtain a barrel of crude exceed the potential net energy calories that can be obtained from it. The entire Earth is being Fracked.
Oil. An archaic source of energy. Time for a complete overhaul beginning with deleting subsidies and power from the producers which would force the application of new energy sources. We need to forge ahead not continue to be stuck in a time warp.
No amount of new production will lower the price of gas. Our reserves are too small to affect the world price. (The federal reserve doesn't even amount to a drop in the bucket ). Even if we produced more it would just be exported for higher prices. This past year we exported gas & oil, but the surplus did not lower our domestic prices. Oil prices are strictly a function of globalization of commodit prices. The third world suffer rises in food prices. The developed world suffers from rising oil & commodity prices.
look at graph of extraction vs price (nature refernce). we are MAXED out and cannot extract more NO MATTER WHAT. we are peaked at less than 80mil/bbl/day no matter what the demand.
you can draw a flat line on the top of extraction, which will soon start to decline and then prices will really spike.
want to make a differance?
turn OFF 5 100 watt light bulbs that run 24hrs/day. That energy will drive an EV 15,000 miles per year. 4,380 kWh.
look at Norway and other parts of Europe, they have been building high voltage L2 and L3 stations everywhere to fuel cars.
Ireland is completely electrifying their vehicles
Time to make Nationalize our oil. Our #1 export is gas. STOP!!!
Since the gas price spike escalated just after the denial, by President Obama, of the pipeline from Canada to Texas could the oil industry be using "reverse lobbying" to punish our President for his decision in an attempt to change the election in November to an oil friendly republican? (Note, they have also taken refineries off line right now as well)
thank you,
Don Dunklee
On Chris Hayes new and wonderful Sunday News program UP with Chris Hayes addressed the rising oil prices. A Mr. Dicker on Up and a Mr. Stockman on Fareed Zakaria's Sunday GPS program both explained that speculators were banking literally banking on and attack by Israel on Iran. That this strong possibility as well as US and Israel driven sanctions against Iran that go into action in early July would mean that the 3.5 million barrels a day that come out of Iran will be potentially be blocked and drive prices up once again.
Can your guest please give their opinions on whether the possibility of an attack on Iran by Israel is driving prices up?
Dr. Zbig Brzezinski was on Fareed Zakaria's and he said President Obama needed to make it very clear to Israel's Netanyahu that the US does not back an attack on Iran, will not follow Israel into such an unnecessary confrontation. Dr. Zbig went even further he said that President Obama should tell Netanyahu that the US will not allow Israel to fly through US air space over there.
(Nature Commentary: “Climate policy: Oil's tipping point has passed”, James Murray1 & David King
Nature, Volume 481, Pages: 433–435, 26 January 2012, doi:10.1038/481433a
Despite the GOP clamoring for O's head on a platter regarding this oil price debacle. Drilling has quadrupled since he took office. Not declined....quadrupled.
Drill, Baby Drill is not the answer. Finding alternatives that will get the oil monkey off our backs IS.
Fareed Zakaria GPS - YouTubewww.youtube.com/show/fareedzakariagpsCached - Similar
You +1'd this publicly. Undo
"We don't need to go to war" with Iran. Zbigniew Brzezinski on Iran and the chances of going to war there. Listen in. Aired: Feb 24, 2012 | Views: 279 | Partner ...
Can your guest talk about the speculators banking on another war and profitting from this possibility by buying up oil
Doesn't this uptick in price have to do with speculators. Speculators can buy as much oil as they want to not for their own use with little or no money up front as a hedge and way to make money.
When we get speculation under control we will get gas prices under control.
Saudia Arabia is pumping any gas that needs to be made up with any perceived shortage.
I would be willing to suffer another gas tax if it went to development of non combustion technologies. It would be nice to really push alternative vehicles that are practical (long range ,recharge fast) in a big way and have tens of millions on the road by the end of the decade
http://newyork.cbslocal.com/2012/02/27/expert-u-s-investment-bankers-dri...
I hear on the news that Wall Street speculators are contributing to the rise in oil prices. As I understand it, they are betting that those prices will rise, thus driving up what we pay at the pump. I can chose to buy a lottery ticket or not, if I want to place a bet. However, it feels to me like the speculators are placing their bets, and I am paying for their wager and their winnings. Why is this legal?
We were told weeks ago that gas prices would go up, and be very high by Memorial Day. This is a self-fulfilling prophecy. The NYME is using fear to drive up prices and they are not regulated. All the other talk is a waste of time in my opinion.
Explain why US gas exports have increase 3-fold in a year.
I think that we need to differentiate between long term and short term factors that affect crude oil prices. In my opinion, average annual oil prices give us the best indication of fundamental long term supply and demand factors. And of course, Brent is a far better indicator of global prices than WTI.
We have seen two annual Brent crude oil price doublings since 2002, from $25 in 2002 to $55 in 2005, and then from $55 in 2005 to $111 in 2011.
In response to the first price doubling, we did of course see a substantial increase across the board in total liquids production (inclusive of biofuels), in total petroleum liquids, in crude + condensate (C+C), and in Global Net Exports (GNE) and in Available Net Exports (ANE). GNE and ANE numbers are calculated in terms of total petroleum liquids. ANE are defined as GNE less China and India’s combined net oil imports.
In response to the second Brent crude oil price doubling (2005 to 2011), we have so far seen a very slow rate of increase in total liquids production (up 0.5%/year from 2005 to 2010), virtually flat total petroleum liquids and virtually flat C+C production (through 2010), and a 1.3%/year and 2.8%/year respective decline rate in GNE & ANE (through 2010).
I estimate that there are about 157 net oil importing countries in the world. If we extrapolate the Chindia region’s rate of increase in their combined net oil imports, as a percentage of GNE in 19 years just two of these oil importing countries--China & India--would consume 100% of GNE.
The dominant trend we are seeing is that the US, and most other developed oil importing OECD countries, are being gradually priced out of the global market for exported oil, as annual global (Brent) crude oil prices doubled from 2005 to 2011.
@Seller61 got it exactly right.
The only way to reduce the price of gas is to reduce the use of it further and further until we git rid of it. We can do it within 10 years, if it becomes a national project. It will cost us the price of 1-2 years of gas, but we will save dozens of years in future gas consumption. Think about it - we can get back twice or three times of the current national debt. Not to mention that we may save the planet and get a better air to breath. It's amazing why other people do not get it.
The US is a net exporter of refined petroleum products because of weak demand in the US, as we are being outbid for access to global net exports of oil (GNE) by the developing countries. The US remains dependent on crude oil imports for about 60% of the crude oil processed in US refineries.
One reason for high gas prices is we want them in order to punish Iran for having nuclear power, so far legitimately.
We have closed their access to the international banking system and they have reduced output. If we, as a country chose to believe them, that they are getting nuclear power for their own use, then the price of oil will fall dramatically.
This appears to be the new scare tactic for a new war.
Now with Iran. Let's back off and use what we preach.
You are innocent until proven guilty. And thus far Iran is following the non-proliferation treaty that they also signed.
I have heard (ON NPR) that 4-5 refineries were closed. Why not build a new one??? Also if Fracking is making NG prices collapse I hope it is going to be worth it to America especially if all our water is contaminated
Why is gas almost 4 dollars now when oil is $108.00 and change per barrel when in 2008 oil was about $140.00 a barrel and only maxing out at around $3.40 ?? Has there been that much inflation?
I am puzzled at how gas prices here in Traverse City, Northern Michigan, can go from $3.33 to 3.89 in a matter of hours. We are in the mid-west. Where are those lower mid-west gas prices you are talking about? I do think there is manipulation, as I have watched this happen over and over.
Jeffery Brown "In response to the second Brent crude oil price doubling (2005 to 2011), we have so far seen a very slow rate of increase in total liquids production (up 0.5%/year from 2005 to 2010), virtually flat total petroleum liquids and virtually flat C+C production (through 2010), and a 1.3%/year and 2.8%/year respective decline rate in GNE & ANE (through 2010).
I estimate that there are about 157 net oil importing countries in the world. If we extrapolate the Chindia region’s rate of increase in their combined net oil imports, as a percentage of GNE in 19 years just two of these oil importing countries--China & India--would consume 100% of GNE. "
that is a better way to make my point. we are runnimg out, at max we have 50 years to the last drop, production has peaked
@oren
you got it exactly right like a manhatten project or a challenge to go to the moon in a decade...TOO BAD George Walker (texas ranger) Bush chose to start 2 wars on a credit card and made such a financial mess that Obama is stuck. If we could make quantum leaps in Battery technology and power them by solar wind and wave...well we could be what the neocons want.... exceptional