Gas prices.... Gouging?

[scaeagles]

So we better not do anything like drill for our own oil or anything like that. Wouldn't want to risk te certain environmental disasters of doing that.

The only thing that makes oil prices go down is increased supply. OPEC pretty much controls the worldwide supply. Everyone who opposes offshore drilling and ANWR and exploration and drilling in Utah or Nevada or whatever shouldn't complain a bit.

[Name]

And I am not, thanks..

[scaeagles]

Then you have my complete respect, Name. What bugs me is people who whine about the prices but oppose doing anything about it - as in increasing supply.

[Name]

I ride a motorcycle, exclusively, thus doing my part to reduce demand(small and futile as it may be).

[PanTheMan]

The basic point is not about drilling, or OPEC or Supply and Demand, or some rare sea slug habitat off SB...

The point is GOUGING. If an Oil Company reports 26 BILLION in profit for a Quarter (3 MONTHS!) Dont you think they may POSSIBLY be overcharging?

[scaeagles]

Threads start discussion. Discussion moves in a variety of directions. This thread has logically moved into supply and demand issues related to pricing. I'm not sure why there's a problem.

[blueerica]

I love that I'm in an economics class when all this is happening. Too bad I wasn't available during the first parts of this discussion, most of what I would say was said by Morrigoon & sca...

Ultimately, the sacrifices aren't going to be made on a large scale, just not yet. Changes will be small; people are likely to drive less, or (at most) consider a trade-in for a more economical vehicle. I know I've curtailed my own driving habits, and my monthly gas expenditures have gone up (between price hikes and new work-school schedule) well, over $100 a month, which adds up for little part-time-working old me! So I find ways to take it easy. And there will be limits. If prices go beyond my personal threshold, I will drive less, etc etc etc...

[Morrigoon]

Originally Posted by Ghoulish Delight

The problem with just saying "demand will drop if price gets too high" is 1) gas is as close to inelastic a product there is and 2) even assuming its inelastic enough to hit a ceiling, so much of our economy depends on gas that by the time it hits that ceiling and begins to drop, the damage to the economy may be too wide spread. Prices of every single domestic good will be affected as every single domestic good relies on oil and gas. A prolonged spike in gas prices will have long lasting inflationary effects that the market may not be able to absorb.

Yes! and No.

RIGHT NOW, we're dependent on gasoline. If gas price problems are prolonged or continue to get worse, it will become potentially VERY profitable for companies to come up with alternative fuel options. The more expensive gas gets, the more we suffer, the more likely it is that someone will come up with a viable alternative and the more likely the public will embrace it. In that sense, you could view the fuel price problems as a boon for environmentalists - people are reducing their driving, and industry is encouraged to seek alternative fuel choices.

Now, in the short run. It sucks big hairy donkey balls. Believe me, every time my income goes up, gas prices have jumped to take it all away. I know VERY WELL the pinch of current gas prices. And yes, industry IS affected. Yes, gas prices CAN bring our economy to a grinding halt - in the short term. But seen on a medium- and long-term scale, this is, or at least CAN be, a very good thing.

Remember: right now we're at the mercy of OPEC. The middle east only has about a century worth of gas left anyway, so this was always GOING to happen, it's just happening sooner. If we find alternative fuels, and more importantly, there is widespread adoption of the technology, we can kiss OPEC goodbye. Hopefully we'll find someone that we in America have in abundance, so we're no longer at anyone's mercy.

Innovate or die.

[Ghoulish Delight]

Originally Posted by scaeagles

The only thing that makes oil prices go down is increased supply. OPEC pretty much controls the worldwide supply. Everyone who opposes offshore drilling and ANWR and exploration and drilling in Utah or Nevada or whatever shouldn't complain a bit.

Hmm, actually, what recent history seems to be showing is that increasing supply ain't gonna do much. Refineries are at or near capacity, so increased supply to the refineries will not equate to incerased supply on the market.

[scaeagles]

Necessity is the mother of invention.

The interesting thing is that there are already viable options available. The problem is not so much viable options as it is infrastructure, and no one wants to spend money on infrastructure to get it done.

The preeminent example of this is in Arizona. There was a huge push 5 years ago or so to convert cars to use CNG (compressed natural gas). Anyone who purchased a car that used it, if structured properly, could get a reimbursement from the government for the price of the vehicle. No joke. However, these cars could run on both CNG or gasoline at the flip of a switch, so there was no requirement that purchasers actually use CNG.

Anyway, one can convert any gasoline engine to use CNG for under $1000. No loss in horse power, no adverse affects whatsoever. The problem exists in that there are only 4 filling stations in the entire metro Phoenix area. That's a bit impractical. The nearest one to me is some 17 miles away. If there were CNG filling stations on every corner, I bet at least half of drivers in AZ would convert, especially if the state offered to pick up the cost of conversion.

I also watched a special on the History Channel on "future tech". They already have vehicles that run on Hydrogen fuel cells. The technology lacks mass production and therefore is incredibly expensive, but it could come down if someone were to invest in it and provide the infrastructure for refueling....or whatever one does with a hydrogen fuel cell.

And based on some research I did yesterday on the USGS site, we have some pretty nice oil reserves of our own in lots of different places. Why not get it?