Gas Price Talk Radio

[Dragon]

Umm ... Ok. I mean, I get what you're saying, but how that relates to hundreds of gas stations within a 50 mile radius of every major city on the planet I'm not sure.

<{POST_SNAPBACK}>

I stated this fact in my original post.

Now as a lot of people may or may not know, the gas at the pumps for the gas stations in a certain radius of a big city is all pumped from the same fuel storage facility.

just because the storage facility has a company name on it doesn't mean they only cater to that one type of gas station. I know for a fact that all the gas stations in a 100 mile radius get there gas from the AMOCO fuel storage facility down in Des Moines. not just amoco. btw Amoco was purchased by British Petroleum (BP) around 3 - 4 years ago. The break from being an exclusive monopoly is because of the different names. (i.e. Shell, Exxon, Mobil, BP, etc...) but the big picture is that their gas comes from the same refineries, and the same fuel storage depots.

Most people think that because a oil platform has such and such name on it, its the only place the company name gets it's oil from, which isn't true, it all goes to the same refineries, which is of course, the one that will give the higher price per barrel of crude.

Well, unless you eat nuts and berries and live in a tent made of sticks and leaves you probably use money yourself, and I assume you'd like even more. So greed isn't "nasty" or evil all by itself.

I'm not saying I wouldn't like more money, but I don't see a need for one group of people to make over 28 billion dollars a day in profits.

[Brian_Holiday]

We have multiple problems here, and there is plenty of blame to go around.

1) Enviornmentalists have blocked building of new refineries. Since we continue to use more and more, we were going to bump into a problem sometime.

2) The oil producing countries have formed a cartel, illegal under US laws BTW, to 'fix' the price of oil. It costs them a few cents to produce it, the world get screwed.

3) Americans near some oil field areas have blocked exploration, and special interests have prevented us from opening up fields where no one would possibly want to live.

4) Special interests have pulled out all the stops to stop nuclear power under any circumstance. Cheaper electricity would help out those who are going to suffer this year with the price of home heating oil.

Now I have to admit, in the long run this will be better for us as a country. You are already seeing dealers refuse to take big SUV's for trade-ins. We use too much because it is cheap, and now people are thinking about conservation. In the end, high prices are going to make us do the right thing. Having said that, we need to step in and help those people who are seriously hurt by this. Sure it is irratiating to those of us that are spending our disposable income on energy, but we need to make sure we don't have another round of elderly freezing to death this winter.

BH

[JDoors]

...I know for  a fact that all the gas stations in a 100 mile radius get there gas from the AMOCO fuel storage facility down in Des Moines. ... I don't see a need for one group of people to make over 28 billion dollars a day in profits.

<{POST_SNAPBACK}>

And all retail stores get their trash bags from the same few companies, but that doesn't make all retail stores monopolies nor are the outlets that sell the same product at a higher markup automatically greedy, money-grubbing #@$@'s. Some retailers buy massive amounts, some buy small amounts, some have efficient operations with low costs while others are less efficient and may have high costs. The same is true for gasoline distribution.

It's a good thing no one has to get your approval before making a profit.

I used to work for a Sears that had its own gas station. I would fill up there 'cause it was quite a bit cheaper than the name brands, plus of course I was there every day anyway so I didn't waste gas buying gas. Most other employees would not buy that "cheap" gas, "it's bad," they'd say. One day I was leaving the station at the same time the gas truck left. I happened to be behind the truck as it drove to a Shell station and pulled in to fill them up. Ha. That was thirty years ago so I know oil companies have "shared" resources for at least that long (and I'm sure longer).

It's actually even more complicated than that as the exploration, recovery, refineries and retail portions are usually separate companies whether they have the same name over the door or not. So I may run a Shell refinery but I would accept oil from many brands, and sell to many brands, and I have nothing to do with retail sales or the exploration, recovery and distribution of crude oil. Some of the total profit goes to each of the companies throughout that chain. If it didn't, how would the gas stations pay for improvements? Or the refineries? Or the distributors? Or anyone else along that chain?

Oil companies have been among the most profitable companies for decades, along with banks and now tech companies. I guess it's all an evil plot to stick it to the common man. Damn dirty profits!

(But then I'm a willing accomplice as I accept a paycheck every week that comes out of the profits of the company I work for. I'm an apologist and collaborator!)

[Dragon]

so wha tyou are saying, and please correct me if I am wrong, is that its oke for these oil companies/cartels to make over 28 billion dollars a day. I find it hard to believe that research, refining, etc.. costs that much a day to do.

there is so much money in this deal, there is no reason that they can't make a few more refineries. congress needs to get off their a$$es and tell the bleeding heart "tree huggers" that we are opening such and such area for a refinary, and we will be drilling at such and such an oil field. The least these companies could do is spend that money on making more refinaries so that people can afford to go to work, instead of lobbying Congress for a Tax cut.

If I recall correctly a few years ago they jacked the prices up because a refinary blew up in Illinois. now wouldn't it make sense to use part of that 28 billion a day money to help rebuild the refinary instead of jerking us around??

sure all the companies benefit from that money, but the real benificiaries of that money is the stock holders (I don't mean the few that hold maybe 30 shares out of a few million, I mean the real stockholders who decide what the company is going to do), and the upper management of these companies. What are they doing with the money??

As for the upper management personnel, what in their job description is so important that they qualify for a 7 figure paycheck, after taxes???

those are just a coule of questions that I have yet to find the answers on.

hypothetically, if you made $60,000 every two weeks for sitting in an office, and looking over the profits the company made, what would you do with that money besides pay your bills. and you figure their average bills are probably around $12,000 to $20,000 a month, that is something else that could be an interesting thing to look in to.

I don't begrudge people for making money, heh, I want more just like anyone else. but question still begs what are they doing with that money after their bills, taxes, etc... that keeps them from re-investing in making the cost of things go down?

I believe in the american dream, just like you do and everyone else in this country. but if its not greed then what makes a person feel like they are entitled to such a large paycheck for wearing a suit, sitting at a desk for 8 hours a day, and watching how much profits they make?

unfortunately, gas for our cars are a necessary evil. but the only way we can actually take control of how much we pay, is by taking a stand and showing these people that we can't stand for their pricing policies. And that is something that needs to be done as a nation, not just one state, or one community, but a nation.

I give kudos to Hawaii for putting a cap on the wholesale price of Gas, that should have been enough for the rest of the U.S. to say hey they can do it so can we. Yes I know the drawbacks of that legislation, in the process of doing that they also told the station managers that they can charge a higher retail cost to the customer. they should have made it where the retail stations couldn't gouge the consumer in that legislation, but Hawaii is relatively small, you can drive around the largest island in less then half a day, so I'm sure that the supply and demand for gas their isn't as high as it is here in the continental U.S. But at least they did something.

[bozodog]

I give kudos to Hawaii for putting a cap on the wholesale price of Gas, that should have been enough for the rest of the U.S. to say hey they can do it so can we.

I wonder how much fuel it takes to deliver fuel there? They are our socialist branch over there and will find that move biting them back.

I, for one, do not want the g'ment to have anything to do with attempting to control the costs of fuel. I believe the best thing to do is *everyone* get real and slash their own fuel use by 20% (yes, everydamnbody) that would truely put the hurts on the oil companies. But we all know that will never happen. Too many selfish, selfcentered folks out there saying "not me", "I can't", "won't matter".

[Brian_Holiday]

I give kudos to Hawaii for putting a cap on the wholesale price of Gas, that should have been enough for the rest of the U.S. to say hey they can do it so can we.

Woa there big fella. You aren't looking at the whole picture. If you cap prices, no one is FORCED to sell to you. Sellers will dump their stale surplus and no more. Get ready for shortages. Fuel delivery isn't a state run enterprise after all.

BH

[JDoors]

so wha tyou are saying, and please correct me if I am wrong, is that its oke for these oil companies/cartels to make over 28 billion dollars a day. I find it hard to believe that research, refining, etc.. costs that much a day to do. ... I give kudos to Hawaii for putting a cap on the wholesale price of Gas ...

<{POST_SNAPBACK}>

Last things first: You must not have been around for Carter's price controls on fuel, or Nixon's price controls, or for any federal price controls on anything, 'cause if you were you would never be so naive as to believe it's all upside and no down-side. Like others have said: You tell me I can't charge what I want to charge and I'll stop supplying it as soon as MY price goes up (Hawaii does not have crude oil and cannot control the price of it). Price controlled gas is worse than useless if no one will sell you any. I saw the closed stations, long lines and rationing that price controls bring. Screw that, it's crazy and stupid and never solves anything -- But it does a good job of making a bad situation much, much worse.

And yes, I am saying: THERE IS NOTHING WRONG WITH PROFIT. It doesn't matter how much they "need," how much others think should be "enough," or what they choose to spend it on (or if they choose to hoard it all in a vault somewhere). They earned it, it's theirs to do with as they please.

If oil company's profits are "too big" for you what does that make the profits of numbers 1, 2, 3, 4, 5, 9 and 10 of the largest companies in the world? World's largest companies (from Forbes.com):

1) Citigroup

2) General Electric

3) American Intl Group

4) Bank of America

5) HSBC Group

6) ExxonMobil

7) Royal Dutch/Shell Group

8) BP

9) ING Group

10) Toyota Motor

What do banks and insurance companies and conglomerates and car companies do with their huge, undeserved profits anyway? I dunno, maybe they find something useful to do with it; Like invest it, or build things, or pay salaries, or buy things. You know, the stuff that keeps our economy running? They sure have a lot of nerve!

I guess we could convert our economy to socialism, that's working out so well in other countries like ... Oh, wait ...

[Dragon]

I do believe this might have gotten missed in my previous statement.

unfortunately, gas for our cars are a necessary evil. but the only way we can actually take control of how much we pay, is by taking a stand and showing these people that we can't stand for their pricing policies. And that is something that needs to be done as a nation, not just one state, or one community, but a nation.

yes bd your right we are a selfish, selfcentered nation. which is why i said what I said above.oh and the Gov does control some aspect of the prices we pay on fuel, hence the taxation, and the congressional bans on where we can drill for oil as well as where we can build refinaries. uber-enviromentalists unite, you have successfully crippled our nations ability to properly survive. because of their, the enviromentalist groupd, lobbying of congress and making large contributions to certain congressmembers they are succeeding. when it comes to the government involvement of gas/oil prices, look at the EPA, its a government agency, or how about the FTC? there is more government agencies involved in the pricing of gas/oil then you think.

Jdoors, yes I know what you are getting at, but in all seriousness if they, the oil companies, were so interested in keeping this economy going wouldn't it make sense to use some of that money to build more refinaries and storage locations?? jsut think of the jobs that they could offer communities.

BH, actually I am looking at the big picture. If all the states put caps on wholesale prices, the oil companies would have no choice but to lower their prices to be able to sell anything at all. what are they going to do with all that gas they made if they don't?? I doubt that large of a enterprise would close up shop just because teh people of the united states asked their loacal governments to step in and do something. besides, with a cap put in place, its not like they are saying you can't sell that here, they are saying your not going to rob our constituants blind just becasue you can.

adn no I'm not saying lets go socialist, I'm just pointing out facts that could help in the long run. yes I was around for the fuel shortages of the 70s I remember the lines, and people calling other people unamerican because they wouldn't drive gas guzzling Cadillacs or the likes, Instead these "unamerican" people were driving economy fuel saving cars. so they could afford to go to work.

[Brian_Holiday]

BH, actually I am looking at the big picture. If all the states put caps on wholesale prices, the oil companies would have no choice but to lower their prices to be able to sell anything at all. what are they going to do with all that gas they made if they don't?? I doubt that large of a enterprise would close up shop just because teh people of the united states asked their loacal governments to step in and do something. besides, with a cap put in place, its not like they are saying you can't sell that here, they are saying your not going to rob our constituants blind just becasue you can.

<{POST_SNAPBACK}>

If the price of raw materials goes up, and they can't raise prices profit suffers. When profit suffers, the lay people off and only run the most profitable plants. Since EVERY state is never going to pass price caps, because basically it is anti-capitalist, your reality is never going to be everyones reality. In addition, what is to stop oil companies from shipping to South America? Oil goes where the money is. So they no longer make a profit in the US, they have the option of going somewhere else. In addition, if you set price caps why wouldn't an oil company just charge that cap? Hey, it would make $4.50 a gallon the same everywhere, but you wouldn't have this temporary spike right?

As for goughing, it is illegal and will be investigated. People are going to jail for this stuff after Enron. Govs in several states are starting to look into this.

Frankly, you can argue this until you are blue in the face and nothing is going to change. The mainstream sees Saudi raising prices, and gas prices going up. When the Saudis lower prices on oil, we can do nothing about it because we have low capacity for refining, and a number of refineries we have are down due to the storms. Listening to the special interests has led us here, and now we are going to have to deal with it just like California.

[robroy]

I want to know how a company cany justify selling gas at varying prices in towns 15 - 20 miles apart. Here it is $2.60, at the next town south same company $3.00 and at the next town east $3.10. My son in law said that the next one north was also $3.00 but that is across the state line. From how busy these stations arethey ought to be a little closer in price.

[Brian_Holiday]

I want to know how a company cany justify selling gas at varying prices in towns 15 - 20 miles apart. Here it is $2.60, at the next town south same company $3.00 and at the next town east $3.10. My son in law said that the next one north was also $3.00 but that is across the state line. From how busy these stations arethey ought to be a little closer in price.

<{POST_SNAPBACK}>

They have a formula, in rural areas gas is cheaper. They sock it to people in wealthy areas. It also has to do with custom blending to meet local regs.

It's not just gas, all chaines are doing this now. Lowes, Walmart, Home depot...all regionalize prices.

Charge what the market will bare.

BH

[JDoors]

... Jdoors, yes I know what you are getting at, but in all seriousness if they, the oil companies, were so interested in keeping this economy going wouldn't it make sense to use some of that money to build more refinaries and storage locations?? jsut think of the jobs that they could offer communities. ...

<{POST_SNAPBACK}>

We both know the answer: They CAN'T build more refineries and they CAN'T drill where the oil is.

Part of that is knee-jerk environmentalism: Oil? Bad. Wilderness? Good. No drilling for oil in ANY wilderness, ever. Not a problem for the rabid environmentalists as they drive weiner cars anyway.

Another part is NIMBY (Not In My Backyard): "Hey, I'm rich and I love the views out of my oceanfront condo, you're not putting an oil rig out there!" Not a problem for THEM cause they can afford the gas for their limos and private jets.

The NIMBY part I can empathize with is for refineries. Do YOU want one in your neighborhood? I know people who live near Gary IN. and frankly, their neighborhood stinks. Nice homes, but it smells awful. Plus they have to deal with explosions and fires like the rest of us deal with severe weather (warning sirens blare & you know you have to get indoors and stay there until the "all clear" siren blasts). You can't put refineries in remote areas without massively increasing your costs, so ... I dunno what the solution is to that.

[Brian_Holiday]

The NIMBY part I can empathize with is for refineries. Do YOU want one in your neighborhood? I know people who live near Gary IN. and frankly, their neighborhood stinks. Nice homes, but it smells awful. Plus they have to deal with explosions and fires like the rest of us deal with severe weather (warning sirens blare & you know you have to get indoors and stay there until the "all clear" siren blasts). You can't put refineries in remote areas without massively increasing your costs, so ... I dunno what the solution is to that.     

<{POST_SNAPBACK}>

The question about Gary is, was the refinery there first? If a homeowner chooses to buy next to an Airport to get lower cost land, they have given up ther right to complain in my opinion. Same for any industry.

Correct me if I am wrong, but isnt gas pumped through pipllines to it destination? If so, what is preventing them from putting refineries anywhere along the pipeline route? One exapmle might be rural areas that need jobs, and have lots of space. Put them near pig farms, then the smell will be unnoticeable...

Bush offered abandoned military bases, what ever happened to that?

BH

[JDoors]

It's not a "chicken or egg" question since the people I know aren't complaining about it. In fact, they enjoy amenities that are only possible because the oil companies pay enormous local taxes (which they constantly fight against having to pay, but that's another story).

You put refineries where the people are 'cause you need a lot of employees, they have to be near where the finished product is going 'cause trucking the finished product long distances costs a ton o' money, and they also need to be near where the raw oil is available because you can't built pipelines anywhere you please for the same reason you can't drill or refine oil anywhere you please (environmentalists & NIMBY). With all the complexities involved it's a wonder we have any infrastructure at all!

[Brian_Holiday]

It's not a "chicken or egg" question since the people I know aren't complaining about it. In fact, they enjoy amenities that are only possible because the oil companies pay enormous local taxes (which they constantly fight against having to pay, but that's another story).

You put refineries where the people are 'cause you need a lot of employees, they have to be near where the finished product is going 'cause trucking the finished product long distances costs a ton o' money, and they also need to be near where the raw oil is available because you can't built pipelines anywhere you please for the same reason you can't drill or refine oil anywhere you please (environmentalists & NIMBY). With all the complexities involved it's a wonder we have any infrastructure at all!

<{POST_SNAPBACK}>

Employees, no problem. People fight for sewing factory jobs in Kentucky. I understand why refineries need to be near ports, or a crude pipeline. As for the gas pipeline, I am still a little confused. I thought refining took place at centralized refineries, because a large variety of products are produced out of oil. Then the 'raw' gas was sent through a pipeline and customed blended at the end of the pipe. The final distribution takes place by truck.

After thinking about it, the biggest problem is probably the environmentalist lobby interfereing with an individual state's right to self determination. This is what happened with ANWAR, Alaska wants it open. Personally I think the Fed should get out of a states business, unless it effects national security (i.e. Yucca Mtn.)

Like you, I am surprised we have anything at all. Luckily, this power that the environmental lobby has is a recent development. Hoefully their excesses will lead to a more practical approach to the environment, and inject some common sense.

BH

[JDoors]

The right kind of employees is a problem. If the job requires some on-the-job training, no problem (maybe), but if it's in a highly specialized field, it's a problem. Then you have to go where the skills are.

"Gas pipelines" are for natural gas. Gasoline is not piped.

As long as people don't understand the word "compromise" or the phrase "trade-offs," we're not gonna see any significant new infrastructure or drilling on land. It's part of our culture now to hate big business regardless of the negative consequences.

There was a time when people were willing to take risks, willing and anxious to see development, proud of the accomplishments and acheivements of others and what that contributed to the country. Now that most people are essentially happy with what they have, many want to put the brakes on everything. Stop everything where we are, or even go back to some mythical point in time when things were allegedly better.

If you're poor and unemployed you might be philosophically opposed to a new refinery, but you almost certainly wouldn't fight against one that would create jobs nearby. You'd 'compromise,' realize there are 'trade-offs' involved. Outsiders who already have what they want will selfishly fight tooth-and-nail against it.

Follow the money: Who has the money to get what they want? Billion dollar environmental groups and their rich patrons? Or the poor and unemployed who would benefit from such investments?

I realize this turns the "evil corporations" idea on its head but honestly, who's already won the drilling & refinery argument? The oil companies? Or the environmentalists and selfish NIMBY activists?

Bit of rambling there ...

<edit> Another coincidence: Got a column about "spoiled brat politics" a few minutes ago. Similar point: "What I want is more important than what YOU want."

Thomas Sowell - Spoiled Brat Politics II

In case you wanna see Part I

Edited October 13, 2005 by JDoors

[Brian_Holiday]

  Bit of rambling there ...

<edit> Another coincidence: Got a column about "spoiled brat politics" a few minutes ago. Similar point: "What I want is more important than what YOU want."

Thomas Sowell - Spoiled Brat Politics II

In case you wanna see Part I

<{POST_SNAPBACK}>

And they say the liberal elite wants to help the poor...what a crock. If I were anywhere near you, I would buy you a beer. You have your argument down...

BH

[JDoors]

And they say the ... elite wants to help the poor...

<{POST_SNAPBACK}>

They don't want to help the poor, they want taxpayers to support the poor (i.e., "give" them stuff). Their inbred hatred of business makes the idea of "jobs' for the poor completely alien to them (with the exception of government jobs, the government should, of course, "give" them jobs) so they blindly rant against the very businesses (with the exception of suppliers of luxury goods -- how come you never hear complaints about the price of a Louis Vuitton bag? Oh, but those evil drug & oil companies sure are screwing us, huh?) that could bring many out of poverty.

... ramble, ramble, ramble ...

[Brian_Holiday]

Down to 2.59 this morning...Southern Maryland

BH

[robroy]

$2.49 here today

[bozodog]

Jeesh! we're still at $2.64

[Brian_Holiday]

Not going to be much of a problem for me, in six weeks we loose the contract I work on. Time to polish the resume.

BH

[Brian_Holiday]

2.49 here, had a significant drop today....weird...

[JDoors]

... Time to polish the resume.

<{POST_SNAPBACK}>

Six weeks ... Just before X-mas.

Good luck on the hunt.

[bozodog]

Yeah, good luck. Maybe there's another contract coming soon. Or at least you won't have that long distance commute.....

Filled up today At $2.59, $65 dang dollars for a 5 day holiday to the lake. And don't ya know I'll have to fill up again Monday...

Anyway, 4 nites and 5 days on beautiful Lake Michigan is worth it. At least we don't have to pay for acommidations....