There is really only one major reason why gas prices have gone up so much in the last few years, have not gone back down, and will continue to rise over time.

The Chinese and Indian economies are modernizing, building, and enlarging.

Go look at a chart that breaks down how much oil each country consumed per year over the last 20 years. Then go look at the average price for a barrel of crude oil per year. You will see that while yes our consumption went up year by year the big increases in price started when China and India began comsuming much more oil. It is for this reason that gas will never permanently go back down below $2 a gallon and will continue to increase each year.

The best thing that can be done short term to help with doemestic unleaded gasoline prices in this country would be for the federal government to pass legislation that requires each octane level to be the same mixture nation wide. One thing most people don't realize is that every state has different requirements for additives that must be in the fuel mixture for the gas to be legally sold in that state. The refineries have to make tons of different batches of fuel mixtures with all these different additives and ratios. If each octane level was exactly the same then it would streamline the process. Of course the federal government (being the beaucratic cluster f**k that it is) would probably mandate the most expensive mixture be made. This would help lower the crack spread (the difference in price between a gallon of crude oil and a gallon of unleaded gas) and gas at the pump would be cheaper.

Of course more refineries would help (preferably not in coastal huricane danger areas), so that if there is a major disruption in one area of the country the other side can pick up the slack. I think that it would be great if the freakin' Senate would allow drilling in ANWR. ANWR is a ridiculously huge piece of land. If ANWR were the size of a football field then the area they want to open up for drilling would be about the size of a postage stamp. Also, all those voice over videos you see on the news are from the southern, habitable areas. The northern coast is nothing but rocks and ice. The caribou can only survive there about 2-4 weeks a year. If we drill we won't be bothering anything living. Also remember that the caribou like the pipes. They have to be heated to keep the oil flowing and in the winter the caribou crowd around them to keep warm.

papap is right about oil company profits. The anti business/capitalism types and treehuggers always cherry pick these numbers and the dumb, gullible or agenda driven (pick one) media looking for an easy, interesting story runs these numbers. The correct way to assess profits is profit margin. This is the percentage of revenues that is actually profits. It can be kind of complicated if you don't understand financial/accounting principles like inventory profits but basically, the percentage of revenues that is profit is more important than the year to year dollar amounts. When they say the Big Oil Company #1 has made a record profit of 8 billion dollars this year it sounds huge and unfare. But, because the cost of crude went up big time this year it also cost him alot more to make it than the year before. So while prices are high he's still making the same percentage profit as the year before, its possible it could be even less.

Here's an example. If Big Company A made $1 billion dollars of profit last year and Small Company B made only $1 million dollars of profit then yes Big Company A made more money in terms of raw dollars. But if Big Company A's revenues were $100 billion dollars then its profit margin is only 1%. That's not very good. If Small Company B's revenues were $5 million dollars then it's profit margin is 20%, which is really good. So even though Big Company B made more money (in raw dollars) that year Small Company B is the more profitable of the two!

Last year the oil industry profit margin was about 8%. The average profit margin for all businesses in america is about 9%. The oil companies are slightly below average in profitability! The most profitable industry in the US was financial/banking with about 19% profit margin. If you should be mad at some company for screwing you be mad at the bank that holds the mortgage on you house. (Oh wait, you probably already are) Politicians were grandstanding this issue a few months ago because it was front page news, they wanted media time, it makes them look like they are doing something important, and some of them are really sociallists/communists who would like to see the government control all major industries. Remember if the government passes some kind of windfall profits tax that targets oil companies (or any industry) to "protect the consumer" you can be assured of two things. One, you the consumer will never see any of that taxed money. It will disappear down that black hole called the federal budget and go to pay for $250 million dollar bridges to no where in Alaska. Two, the infrastructure of the oil industry will be hurt and possibly crumble over time. How can the oil companies build new refineries, increase production capacity, drill new oil wells, and invest in R&D for new energy sources or process improvements if they can't reinvest their profits? Companies grow and improve by reinvesting profits, take those away and it will only make matters worse. There was a windfall profits tax on oil companies back in the 70's during the Carter administration and they nearly strangled the oil industry to death until Reagan removed them in the eighties.

And while I am pontificating about oil let me tell y'all about this. Don't let anyone tell you we will run out in the next few hundred years. Go google "oil shale" you will find some really interesting stuff. Crude oil can be extracted from it. The known deposits of oil shale (and the oil that could be extracted) are about equal to the known liquid oil reserves under ground. The estimates range from about 1.6 trillion to oever 2.6 trillion barrels. The really great thing about oil shale is that 1.1 to 1.2 trillion of those barrels of shale oil are found here in the good ol' US of A. Most of it in Colorado, Utah, and wyoming. Ok, now here was the bomb shell for me, we have more oil in the form of oil shale here in the US than all the oil under Saudi Arabia!!! We get 30% of our oil from Venezuela and about 16% from Saudi Arabia. One country is run by a communist dictator that hates the USA and the other is run by a small royal family and some of them like to fund terrorism. I think it would be a good idea to pursue this oil shale extraction technology with fervor, but currenly it is against environmental laws to do so. (those damn treehuggers again!)

Now, currently it costs more to get the crude oil from the oil shale than it does to have it shipped from other places around the world, but with the uncertain politcal circumstances in today's world that could change in a few years. Right now about 20% of Canada's oil production comes from oil shale deposits in western Canada, so it can be done on a large scale.

I hope you found some of my pontificating on oil interesting and I hope you learned something too.

 

very well said

 

Tolerance is a two way street, the tree lovers cannot continue to bitch about high gas prices when they are at the same time bitching about new refineries being built inside the united states. Make up your mind, be a *** and buy a hybrid car........or stop being a hypocrite........lol

 

Anyone see the latest South Park episode? The one called "Smug Alert" where everyone starts driving hybrids adn then become so self congratulatory and arrogant that they all start loving the smell of their own farts? Good stuff. Some hybrid owners I've met are so self righteous that I wouldn't doubt they would go around handing out fake traffic citations from driving "gas guzzlers" if they were so worried about cutting down trees to make the paper.

 

An excellent point. I'm certainly not a "tree hugger", but I'm not a "toxic waste dumper" either. I believe in good stewardship. God put natural resources on this earth for man to develop, master, use, and enjoy. We need to be thankful for them and use them and extract them responsibly.