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Politics of gas prices

The LA Times mentions Arkansas in an editorial about politicians rushing to capitalize on the gas price issue:

Like most insta-legislation rushed to the floor in the wake of controversial news — think Terri Schiavo — the gas-price proposals should be ignored and scorned.

Take the calls to root out alleged misdeeds by oil companies. Sen. Charles E. Grassley (R-Iowa) wants to look at Big Oil's tax returns "to make sure [they] aren't taking a speed pass by the tax man." Sen. Charles E. Schumer (D-N.Y.) proposed breaking up the industry altogether. And state officials want their piece of the witch hunt too. On Tuesday, Gov. Arnold Schwarzenegger announced that he had sicced the California Energy Commission on the case. In Arkansas, a candidate for attorney general also pledged to investigate oil companies, even though that state's anti-gouging law only applies during emergencies.

Everyone likes to see a villain squirm. The problem is, the Federal Trade Commission already has been sniffing out price gouging in the aftermath of Hurricane Katrina and has yet to uncover one instance of illegal behavior. Election-year investigations into marketwide collusion and gouging are window dressing, nothing more.

The reference is to Dustin McDaniel.

Comments

Good for Dustin. One of the things I like about this political year is the fact that so many bright young people are trying to make a name for themselves. If you think about it, some of these candidates have more experience, more education, and more "potential" than Clinton had as a young law school professor running for attorney general. We have three candidates for attorney general who all bring unique experience to the table - we have lt. governor candidates who are clearly aiming up, we even have a candidate for treasurer who seems to have more discipline and drive than the Marine Corps. I am excited about what the future of Arkansas politics holds. Let ambition check ambition and let Arkansas benefit from the desires of aspiring greats.

I'm amazed that bio-diesel is already available here in Pocahontas. It generally takes years for anything new to make it all the way up here.

I've also heard that many people are getting instructions/equipment off the Internet to distill their own ethanol at home (not for drinking, in this case) since most cars run fine on gasohol (a blend of regular gas and the home "brew", which costs just 75 cents a gallon).

Thanks, Dustin.

One thing left out of the discussoin are the benefits of higher prices. Nothing will wean us off the tit faster.

Our government should have started making the transition a long time ago (except that the oil firms wouldn't allow it).

Now there will be all kinds of pain and suffering as unrestrained capitalism once again shafts the poor while increasing profit.

Dustin's message for the last couple of days has been that this is totally different than price gouging. He says it is wholesale consumer fraud that should be investigated at the highest levels. Price gouging is about individual stations usually. This is the tobacco litigation of the future. AG's can break the oil companies.

People like what they are hearing!

Max,

A critique from the peanut gallery.

Your column this week is not your best work and it was hard to follow. I still can't determine your overall point. What was it?

I don't understand Democrats concern about high gas prices. They have consistently proposed very high taxes on gasoline in order to reduce demand. Isn't that what we have with higher prices? They act as if they never made these proposals in the past as they express indignation today. Give me a break.

I don't understand Republicans concern about high gas prices. They have consistently proposed incentives to gasoline consumption to increase oil company profits. Isn't that what we have with higher prices? They act if they never were in bed with the oil companies in the past as they express indignation today. Give me a break.

Much ado about nothing...as in nothing good will happen for us. Like Sen. Pat Robert's continued stalling of his investigation into the Bush lies that took us to war. Nothing will come of this flurry to act all concerned about big oil and 3 buck a gallon fuel.

They are all owned by big oil, they speak all this babble to cover-up that they are whores for big oil. The American people are nothing more than pińatas to be battered by big business until we spill all our money out on the floor.

No one is looking out for us because they are too busy looking out for themselves. The game was lost silently as we slept many years ago. The cows are just now coming home to roost......or something like that.

Big oil and big everything else contributes to both parties. No one party has a monopoly on campaign contributions from big business. Hillary doesn't turn down money from big business---including big oil. I don't trust business any more than I trust politicans whatever their political stripe.

Here is an interesting (and I think correct) perspective on ethanol to replace gasoline:

http://healthandenergy.com/ethanol.htm

I am curious, is biodiesel a better deal than ethanol? Even if it is, is it morally right to use food sources for energy?

I am curious, is biodiesel a better deal than ethanol? Even if it is, is it morally right to use food sources for energy?

Our next topic should be population control. It's awful to have to feel guilty all the time that every acre, every free hour, isn't spent growing food for the hungry masses. What we need are fewer masses.

If we plant every acre in corn such that everybody is fed and no one is hungry, it no doubt leads to more population growth and in the end, instead of 10 million hungry you have 100 million starving.

I think hunger is one of nature's population control methods. Certainly, when small game population increases, the bear population increases as a result. When food supplies in nature decrease, population decreases as a result. It's unnatural and an affront to the balance of the planet to bypass this by using our technology to eliminate hunger.

We should be using our technology to keep population in balance with the food supply in such a way that nobody has to starve, and we can produce fuel from corn with a clear conscience.

Patrick,

You are kind of scary. Next you are going to say we need to lobby the Arkansas Game and Fish Commission for a "human" season. Serial killers everywhere are lining up to contribute to your PAC.

Furthermore, you are troll. Why not discuss rationally what may be the best technological solutions for energy. Population control is a nutcase proposal that does nothing but confuse the issue at hand.

My bad, you aren't interest in working together to solve problems that we face, you are just interested in initiating flamewars that divide people and create hard feelings and hatred.

Why don't you start population control with yourself. Perhaps we can render all that lard you carry around into heating oil for some poor and elderly person to heat their home with this winter.

I can deffinately understand Governor Terminator wanting to start looking for wrong doing now. If you remember Gray Davis got run out of town because of the power brownouts that we later found were attampts (successful) to gouge the energy market by Enron.

Better to have begun snooping illegal activity now than to find out later it occured and the people want blood.

Dustin McDaniel is about as sharp as a room full of bowling balls, though he can jump on a bandwagon pretty fast.

Here is a fact to consider: Big Oil makes about 9 cents profit per gallon and government rakes in about 50 cents per gallon.

Interesting stats on the energy loss resulting from the creation of ethanol and the energy ethanol results in. I believe the hydrogen process is suffering from the same thing in that it takes more energy to create hydrogen than the energy the resulting hydrogen will have available.

So here's another plug for riding your bicycle. When you consider how much food you need to eat to ride a bicycle just 32 miles each day, itâ?Ts not anything more than you already eat. It's a matter of eating the right food.
One apple and a cup of cooked oats - costs about $1.12 will be enough fuel. But that's not really an extra cost to you because you already buy food to eat.

So how much do you save riding a bicycle when practical? If you travel just 30 miles per week on your bicycle vs. a car that gets say 30 mpg you will save at today's gas prices nearly $3.00 for every 30 miles. If you have a less fuel efficient car the cash savings increase.

Then there is the long term car maintenance cost. I rode just 3000 miles last year saving me at least one oil change and 3000 less miles on my tires holding off their replacement even longer.

The long term health savings costs. Fewer medical visits means less co-payments, less pharmacy costs and so on.

Conservation is the key and bicycle riding is a means to conserve that has benefits for you right now. Do it as often as you can and you will be making a difference.

In the words of the great Tommy Robinson, "never let the duties of the office get in the way of a soundbite". Looks like McDaniel has graduated from honors from the TR school of campaigning. Have all the critics of Herzfeld gone silent? Where's the outrage about spitting out a trumped up press release? McDaniel supporters remember that next your criticize Herzfeld for taking a position on an issue. By the way, what can the AG do to spur investment in bio fuels? I think a more realistic plan for McDaniel would be to ask all his cop buddies (you know all those in his ad) to patrol the pumps, or better yet, patrol the board rooms of the Big Oil companies. Or one more idea, Dustin please let us all borrow your Sam's Club card so that we can get the 3 cent gas discount, some of us can't afford the card. OK AG candidates it is time to get back to the basics; utility regulation, environmental protection, inmate appeals........

what is Bush's first response?

Drill in ANWAR, roll back pollution controls, and cut taxes which pay for roads.

That makes as much sense as take a second mortgage out on my house to pay off credit card debt and then use the extra to take a vacation. Not good long term planning.

Where are we going and why are we in this handbasket?

Now that I have somewhat bashed on ethanol, and "alotwhat" bashed on Patrick. Here is the other side of the coin.

Fuel produced from annual crops have a one year carbon cycle. That means that the next year after a crop produces the fuel that is burned, another crop removes that carbon from the atmosphere. Burning fossil fuels on the other hand puts millions of years of atmospheric carbon extraction back into the air in a very short period of time.

That is why I was thinking bio-diesel seems promising for a portable fuel source.

Not that I don't think that a lush tropical planet world wide (like in prehistoric times) wouldn't be awful nice, but I doubt it would be wise to get there quite as quickly as many say we are.

Besides, think of the benefits of an ethanol pickup truck. When rednecks like me break down on the way to the honky tonk. No problem, just get the siphon hose out and get drunk right there.

Probably going to get slammed for this, but...while I feel some pain at the pump, we really need some viable alternatives, at least higher fuel standards. The tech is there for 40 mpg on some rather large cars. We definitely don't need to punish the environment with some loosening of regs and drilling in Alaska...and the silly idea of $100 vouchers reminds me of the silly little checks we got when Bush got elected (a little bribery). Anyway, Congress won't do anything anyway...yesterday's approval rating of 22% says it all...c'mon...

Saying that you want to cut dependency on foreign oil and in the same breath nixing the idea of ANWR makes about as much sense as a fish riding a bicycle. You can't have you cake and eat it too. Conservation will only buy you so much.

"Conservation will only buy you so much." -
Anonymous

But conservation doesn't cost you a thing. An investment in a technology of conservation costs way, way less than an investment in new oil exploration. Implementing individual conservation habits costs nothing. If it does, then you're not really conserving are you?

Further, the return from a method of conservation - like cycling - is immediate. Right now. Today. Probably in the corner of most household garages as we speak.

Energy dependance or drilling in ANWAR are not the only options.

We will have to eventually find alternate sources of energy. Everyone knows that one day oil will run out. Maybe 50 years maybe 100 years or more but it will occur.

I believe it is immoral for our generation to leave a ruined land so that we could get a little cheaper short term source of energy.

We can all pretty well agree that the slash and burn clearing for farm land and then grow one type crop till the soil is depleted is immoral since future people pay the price for our wasteful use of resources. How is ruining ANWAR for a temporary energy fix any less selfish?

We need to conserve AND develope options.

The issue isn't cheaper gas. The issue is in the here and now. The issue is what are you going to do in the immediate future if some wacko (Iran or Venezuela) cuts off oil or China/India cut better deals than we do and you have no oil to purchase?

We're concerned about limited drilling in ANWR. When was the last time you noticed the blight brought on by Developers in Little Rock? Overdevelopment is real and alive and well right under your very noses. I don't remember any ground swell of righteous indignation about that.

The process of recycling uses more energy than the manufacturing of new products.

Again, god forbid Americans in mass numbers buy smaller freaking cars and drive less.

"Here is a fact to consider: Big Oil makes about 9 cents profit per gallon and government rakes in about 50 cents per gallon.

Posted by: Anonymous | April 28, 2006 10:05 AM"

Here is a fact that is true. They make about $0.60-75/ gallon from their refining operation alone. There are additional mark-ups on the distribution, credit card handling, co-marketing, and a host of other things. Don't feel too sorry for the oil companies. Any company that can arrange the retirement package for a CEO like Exxon-Mobil did, is not hurting for money. The federal government takes in 18.4 cents (it's on the pump) and the state takes in a little. The one that gets screwed is the station operator who gets 7-12 cents a gallon, taking a loss when the prices are heading upward and recouping some when the prices are falling. If the company has their own wells, their cost is not the WW cost. Also, the accounting system allows them to cost the oil out based on the first received so they are still selling oil that was $40-50/barrel while the WW price is $70/barrel. At some time that $70 oil will become the oldest inventory and then we will still be paying the higher costs, even if the world costs have fallen.

About the $100 checks. That would be taxable income so right off the bat, we are talking about a net in the $70-75 range or lower. Window dressing.

The Republicans show up for their show-and-tell yesterday with a Pries while they hid their 8 mile/gallon SUV around back of the station. Take a look at what we are paying for as a perk (remember Mike Ross and the three large cars) and you can see why this is all window dressing.

Sorry about the missing name, I hit the post key too soon.

Yea, they should have been as upfront as the Democrats who drove their gas guzzlers.

Oil already comes to this country via multiple sources. If Iran stops delivery, then you bet gas prices will rise. ANWR, when in a few years begins to deliver oil, will not make up for even the smallest fraction of oil imports from Iran or any place else for that matter. What if two of our current importers stop delivery? What's after ANWR?

Itâ?Ts like building roads. If you keep building more roads people will keep driving more cars. If you keep supplying all the oil people need and then some they will gorge themselves happily on it like a bad drug addict eventually wanting more, throwing fits and having with-drawls when it becomes more difficult to get it to them.

In neither case does the majority of society learn to use a reasonable amount of what they have responsibly. Even when the warning signs of disorganized - actually less efficient - sprawl or a gradual increase of the normalized base gas prices over years and years loom, people will continue on a destructive path which in the end harms everyone in one way or another.

Those countries that have pursued alternatives to oil will be better prepared to offer the products of those alternatives to its citizens for a lot longer than the oil will last. Likewise, good individual conservation habits adopted years earlier will allow you to compensate.

The oil embargo of the 70's eventually saw us go to smaller cars for a time being. There was talk of alternative fuels then too. Wiser subsets of the population took to supplementing their transportation needs with bicycles and still do today. By the mid 80's 4x4's, predecessor to today's mighty gas guzzling SUVs, started to gain in popularity.

Now, we are back where we started 30 years ago. All that has changed are the politicians and that SUVs do a little better in gas mileage than did the mega sized family sedans of the 70's.

I have yet to hear in the past week one politician give any sound advice as to a solution that will work immediately. They tell us an immediate solution is not there. Thatâ?Ts not entirely correct. True, in the short term no one can bring the price of gas down. But, each one of us can implement habits of conservation and that is what will work immediately. Eventually, smart sustained conservation will bring down demand for oil and suddenly ANWR doesnâ?Tt seem so necessary..

The oil embargo of the 70's lasted nearly a year. The gas price increase during Katrina was 2 months, we are into - what? - our third week of prices averaging nearly $3 a gallon. We are told that we have not even reached the height of gas prices during the embargo (adjusted for inflation)

Encouraging is the fact that it has our attention this soon.

"The president believes that [high-energy consumption] is an American way of life, and it should be the goal of policy makers to protect the American way of life. The American way of life is a blessed one."
Ari Fleischer, the President's spokesman, saying that the country should address the energy crisis through supply, not demand, as quoted in Newsweek Magazine, May 21, 2001.

"The process of recycling uses more energy than the manufacturing of new products" -Anonymous

I don't agree with that. Proof please.

Too many private businesses make a living out of recycling. If it was a wasteful process they would not be in business. Do they get government money to subsidize then?

Remember the secret meeting that shotgun dick had with all the energy leaders in early 2001. It would be nearly impossible for the administration not to have learned from the oil companies that it was already unprofitable to invest in new refineries due to the looming chance that there would be an oil shortage in the near future.

It would more impossible to believe that after 911 the spoiled rich kid in the white house who is use to pushing people around didn't believe that invading Iraq would turn on more oil from there.

The first thing this cartel did was to guard the oil fields. The second thing they did was give Halliburton a no-bid contract to build a pipe line in northern Iraq. But in their divine wisdom they believed it was not necessary to have engineers do the soil drilling and testing required for this type of project. After all this money has been spent on the pipe line through a fault line it is impossible to maintain and operate. They are now pumping even less oil.

The fault line. Thanks to Bush, Chaney, Rove, Rumsfield and all those whose who voted on these Repugs for not taking a more realist approach to government and the results of high gas prices.

rrizzardi: Proof please:

http://www.iiiee.lu.se/Publication.nsf/c05cf70b5a5648c8c1256b4a004a5a9f/d375f6813a2c460cc1256ef9002d15c0/$FILE/mont.pdf

I don't believe we receive any crude oil from Iran.

I don't believe we receive any crude oil from Iran.

We don't

Interesting comparisons:

Oil company profits: A perspective
Earnings, Revenues, Profits (Billions) for selected companies, recent quarter, 2005
Source: Bloomberg News, reported in AAPG Explorer Dec. 2005
Company Net Profit Revenue Profit Margin
Citigroup (banking) $7.1 $21.5 33%
Microsoft $3.1 $9.7 32%
Coca-Cola $1.3 $6.0 21%
Procter & Gamble $2.0 $14.8 14%
General Electric $4.7 $41.6 11%
ExxonMobil $9.9 $92.6 11%
ConocoPhillips $3.8 $48.7 8%
IBM $1.5 $21.5 7%
Chevron $3.6 $51.1 7%
Wal-Mart $2.8 $76.8 4%
Oil industry average profit margin is about 8.2%; (3rd Q. '05)
for all US industry, the average is about 6.8%.
Profits in the oil industry were easily outpaced by those of the
Pharmaceuticals, Banks, Household Products, Software, Telecommunications,
Semiconductors, Consumer Services, and Food, Beverage and Tobacco sectors.

The dramatic increase in gas prices over the past two weeks and more importantly over the past 2-3 years is as simple an equation to figure out as 2+2=?

Of course the oil companies are going to raise prices because:
1. The price of crude oil is well over $70 per barrel
(As Thomas Sowell said in his column today: "Is it rocket science that, when oil prices hit new highs, gasoline prices also hit new highs? Do you think the price of wheat could double without the price of bread going up? Would we have politicians running around spouting off about "gouging" by Big Wheat?)
2. China and India are quickly approaching the US in terms of gas and diesel usage (China recently overtook Japan for #2)
3. Middle East fears of implosion in their region (Bush sabre rattling about Iran) has caused the $70 per barrel prices by oil companies based in the area (not US companies)
4. We have dramatically increased fuel economy standards since the mid-late 90's (How else do you think they are going to make up the difference in lost revenue?)
5. The Gulf Cost hurricanes of 2005 have crippled our refining capacity

3. Middle East fears of implosion in their region (Bush sabre rattling about Iran) has caused the $70 per barrel prices by oil companies based in the area (not US companies)


I believe the sabre rattling is coming from Iran against Israel, US and the civilized world.

I've spent years in the environmental field, working for some of the best brains, and to make a statement that recycling always uses more energy than manufacturing new products is so simplistic as to be laughable.

If you use systems thinking, there are some surprises. Ceramic coffee cups, for example, are worse for the environment than styrofoam. Everyone has dozens, and each one consists of clay dug out of the ground, trucked somewhere using energy, fired using more energy, then shipped using even more energy. The styrofoam version, on the other hand, costs little energy to produce and shiip.

But across the board? hah. Despite what 300 page doctoral dissertations say. If the wanna-be doctor takes that simplistic of a view, he doesn't deserve that Phd;.

This article (see link) was written back when oil had ratcheted all the way up to $55/bbl. And bear in mind that it was printed in The Rolling Stone--so it probably can't be considered news. I'm not saying I agree with it, but I did find it interesting. It's a pretty long article.

(Adapted from The Long Emergency, 2005, by James Howard Kunstler, and reprinted with permission of the publisher, Grove/Atlantic, Inc.)

JAMES HOWARD KUNSTLER

Posted Mar 24, 2005 12:00 AM


(hugh mann)

OK I read it.

The dissertation deals more with durable product recycling than it does things like paper, cans and plastics.
Nonetheless, it got into water recycling briefly on the 54th page and from what I read it stated

"...higher factor improvements, up to factor 10-16, could be reached due to efficiences of scale and through reusing/recycling of water..."

The 58th page talks about Xerox designing copiers for easier remanufacturing. $200 mil is saved annually through the reuse of parts and materials

Lund(2000) said remanufacturing is more economically beneficial

An MIT study found 85% of energy cost were saved in the remanufacturer of car components. Like wise a 35% energy savings was realized in furniture remanufacturing

Then it did say risks may be present for companies that take on recycling processes, But really, risks abound all over the place. Companies that take risk and succeed prosper. Still it did not say the risks were anymore riskier than anything else

Still, I could find no mention of paper, can or plastics which is what the average person thinks of in recycling.

So what's your point again anon?

"I don't believe we receive any crude oil from Iran.

We don't" - anon

Is not Iran a supplier of foreign oil? Yes, indirectly.
Why else would Wallstreet be concerned about the supply of oil and prices if military action results there?

Oil is fungible, meaning any distruption of world suppply would quickly be felt in the global market. This is how you have to view oil from Iran.

Its not something as simple as a US oil barge traveling specifically to Iran, picking up a load of oil and coming back. Oil is traded.

Iran along with other Mid East countries provide 1/4 of the world market oil as of 2001.

Please see Wes Brown's story at Stephens Media. He talks about hollow political promises to deal with gas price spike. McDaniel are you listening?

THe same public officials who claim to have a solution for high gas prices are the same group that has promised to fix schools since 1971.

And tout an Rx program that hasn't signed up one person.

....Thanks Dustin...

i am happy mostly - though terribly sick at times - the medicine is not a perfect fix - i think some weed would help but caant find any - Kant find any...

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