Fuel cost rant (ignore if not interested)

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alamocdc

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It's been said that the oil companies have targetted bringing fuel prices comparable to those around the world. This got me to thinking and such "illogic" doesn't even make good nonsense. Bear with me for a moment while I explain. Outside the US most folks get to work in one of three ways. They walk, rid a bicycle, or they use the city's public transit system. But then most cities outside the US are fairly compact. More often than not, they only drive if they are traveling between cities, on holiday, etc. Here we like our space and our cities are sprawled out, often over significant distances. And many of us choose to live in the "burbs" away from the hustle and bustle (and crime) of "downtown". And downtown is where about 50% of the job market is. Public transit would be a good option, but with few exceptions, it isn't really practical. Yes, NYC has the subway and Chicago has the "L" and if I lived in either of those places, that's how I'd go to work. Even the DC area has a fair train system for those who choose to live south in places like Woodbridge. But those are the exception rather than the rule. Public transit in places like Dayton and San Antonio are good only if you happen to live close to a bus stop. In both places I'd have to drive to a transit lot (10 minute commute) and leave my auto to take the bus. Both systems have stops just inside the fringes of the suburbs, but does most of us little good. If I'm going to drive my auto 10 minutes to get to a bus stop, I'd just as soon stay in it 5 or 10 more minutes and go to work.

And while I'm at it, let's examine diesel cost. Not so very long ago, the oil companies were wondering what they were going to do with a particular by-product of the refining process. This by-product was generated in very large quantities and they needed to try to market it. This by-product is the diesel/kerosene line and they discovered that it had a use in lamps, heating etc. and it didn't take long before an engine was created that would burn it. The oil companies were delighted. They had an avenue for dumping this stuff and offered it to the public for pennies so they could get rid of it. Then they discovered that it made an excellent fuel for jet engines and that helped even more. But in the early 1980's greed began to take over. With increasing gas prices due to the "lie" in the mid 1970's public outcry caused some of the US auto makers to put diesel engines in passenger vehicles. Mercedes and Volkswagen had already been doing it for years, but they didn't pose a very big threat to oil company revenue. But when GM stepped in with their diesel converted V-8 failures the oil companies got worried. "Oh my, what if everyone buys a diesel powered vehicle and only spends half as much for fuel? We have to do something!" And these conversions never posed a threat b/c they were crap. A few people bought them, but I don't know anyone who had one for more than a year or so and you won't see one on the road today. In fact, I know several people who had gas powered V-8s dropped in them. But enter "lie 2", "We're running out of diesel." nonetheless. Let's see, we're buying and using more gas than ever before (meaning more diesel production) and there has been a slight increase on diesel demand (meaning they can get rid of it), but we're afraid this may trigger a trend so we have to intervene. And with that diesel prices began to soar. Especially since the major three (GM, Mopar and Ford) decided to offer "real" diesel engines in their trucks. And diesel prices now significantly exceed gasoline as a result. Greed, pure and simple.

And the sad part is that many truckers can't make a living bringing us all the stuff we want when it costs them $1,000 to fill their tanks. A scale close by on I-71 reported mid-week that traffic across the scales was down 1,500 trucks per day! And this weeks gouge will only make things worse. The truckers are talking and we'd better pay attention. Many of them are talking about parking them and looking for work elswhere. The result, significantly higher prices for ALL of our consumables. Anyone out there getting a raise to offset ALL of these costs? I know I'm not.

So the "bringing the fuel costs in line with the rest of the world" argument is just more BS rhetoric to justify greed. I know, some of you may think this sounds like Chicken Little, but I've seen it all before (and so have you). With our already strained economy (yes, due largerly to folks over extending themselves, but still...) the resulting inflation will not be a good thing.

Okay, I'll get off my soapbox now. I just had to get that off my chest.;)
 
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Rifleman1776

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Accurate in large part. I don't understand the high price for diesel either. It requires less steps at the refinery to produce. One would think that would make it less expensive. At least it did for many years. But, the main factor driving up gasoline prices is the demand for crude oil. The countries of India and China are experiencing a huge boom in folks who can afford to buy cars and the demand for gasoline there is causing a bidding war for crude. Thus, the regular increases in the cost per barrel they talk about on TV news. And, guess why so many folks in those countries are able to afford cars? Because the U.S. is outsourcing jobs and manufacturing to them. We are killing ourselves. You are right when you say "we like our space". We chose our home several miles outside of town. With my truck, it costs about $6.00, or more, to run an errand and come back. I don't do that anymore unless absolutely necessary. Arkansas has the distinction of having the highest miles driven to and from work or shopping. Seems strange. One would naturally think of places like Texas or Wyoming or Nebraska for that but Arkansas leads. And it costs. And it hurts with a low median income. Yep, Billy, we care but I doubt our rants will help.
 
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Originally posted by alamocdc


And while I'm at it, let's examine diesel cost. Not so very long ago, the oil companies were wondering what they were going to do with a particular by-product of the refining process. This by-product was generated in very large quantities and they needed to try to market it. This by-product is the diesel/kerosene line and they discovered that it had a use in lamps, heating etc. and it didn't take long before an engine was created that would burn it.
;)

Actually, gasoline was originally the by-product of the production of Kerosene... because of it's lower combustion temperature, in the process of refining crude, the gasoline will come off first.

And in the earlier days, '30's & '40's.. the Model A ford could be run on kerosene.. but you had to remember to switch it back to gasoline before you shut it off or you couldn't start it again.. my grandfather had his little ford coupe set up that way... there was a switch valve under the dash that would change tanks so he could run "kero"... this was a late as the '50's..

Personally, I believe the prices are artificially inflated.. by withholding supply, they can claim "supply and demand" much like they did in the early '70's when we had the "gas shortage" until the prices reached $1+ per gallon, then miraculously there was plenty of gas... meanwhile, I heard that there were 10-20 tankers sitting off shore with no place to unload their crude.
 

Gary Max

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What if-----it ain't nothing but the rich folks making money off the poor guy---they play the market and make money---you and I get to pay the price.
 

Monty

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One of the excuses I've read of for the high cost of diesel is it costs more to remove the sulfur to make it cleaner burning.
 

Verne

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During the 70's gas fiasco I was a proud member of PATCO an affiliate of MEBA. Thier president at the time stated at a meeting that he knew of tankers from the US destined for overseas going to sea, laying out the hook for a period of time, changing the manifest and returning to the US with new found petro. Contrived? You bet! Me feels like the present oil thingy is tatamont to ENRON...all contrived speculation...no money changing hands...no oil changing hands...all on worthless paper to you and me. But, the fat cats are having a hayda, as usual you and I get to pay the freight!
Just my humble opinion.
Vern
 

alamocdc

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Originally posted by johnkofi

Please don't believe the garbage these presidential wanna-bes' are spewing about the big oil companies.

Check out this article written by Cal Thomas.

May 13, 2008
http://www.jewishworldreview.com/cols/thomas051308.php3

Yet he knows nothing of the oil that sits capped in wells throughout Texas and New Mexico. And I know it's there because I worked over 200 of them... all capped, but they would produce. So why do they remain capped today? There are several reasons, but the biggest is $$$. They initially said it was to ensure our reserves. Let OPEC exhaust its suply, then we'd have our own. But the problem with pumping that oil to day is one of money. Until and unless the law is changed, any oil pumped out of the ground has to sell at the going rate the date the well was drilled. And crude sold for $6/barrel back then.
 

Chasper

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Billy,
Thanks for the rant, I concur.

Ten years ago I boldly scoffed at those who suggested some sort of conspiracy between big auto, big oil and big government. I now find myself with a totally opposite view. I'm angry about being transformed from a trusting and optimistic patriot, into a skeptical cynic.

But being a fundamental pragmatist, I always need to find a solution to follow up on a rant. Expanded mass transit is one good option, although it will be slow to implement. On a personal level I'm restructuring my rolling stock investment; selling an expensive low mileage diesel pick-up and a luxury horse trailer; buying a small car, small truck, motor scooter, and back-to-basics trailer. When finished I will have cut my investment in half and fuel consumption by 30%. I'm also making plans to sell my MacMansion and some recreational land, then buying a smaller property. Collectively those changes will wipe out my debt and very significantly reduce ongoing cash flow.

One sub rant I'd like to wander off on is driving style. When fuel prices started rising in a frenzy (or maybe it was when I reached the front edge of codgerdom) I decided to start driving slow to conserve. You wouldn't believe the number of people who blow their horns, shake their fists and give one finger salutes when you drive the speed limit, start off slow from a stop and don't hit the gas when you see a yellow light. The same people who are getting all red in the face around the water cooler as they talk about gas prices, are aggressively driving 15 MPH over the speed limit to and from work every day.

Excuse my long rambling response, but a good rant deserves a good re-rant.
 

Rojo22

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60% of the cost of a barrel of oil these days is sheer speculation and nothing else. So if we take $127 per barrel, that equals $76 of speculation, or in other words, the barrel of oil would be worth the same as it was 3 years ago without all of the speculation.

Bottom line is they tell us in the 70's and 80's that it is supply and demand. Conveniently now it is called a "commodity" and is subject to the market fluctuations.

We are at a 14 year HIGH in oil reserves, demand for the gas has gone down in the same time of the year that the demand is usually up. If you are half way decent with math, and understand the basics of economics, it does not take long to figure out who is getting the shaft and why. The federal government gets about 28 cents per gallon in tax, and in our state it is about another 19 cents in tax. It isnt the government that is getting rich.

The traffic in Atlanta is being impacted by this. I have seen the rush hour both in the morning and afternoon decreased by half hour either way because people are riding the buses, or carpooling. To see that kind of a change in the Atlanta traffic is unbelievable.
 

DocStram

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We live in a capitalist country. The free market is all about unrestricted competition without government regulation. As long as there aren't any monopolies then corporations can charge as much as they like . . . as long as we are willing to pay. When we stop buying gas or drastically cut back on our usage . . . the price will drop.

If one does not want government intervention (i.e. restrictions on gas prices), then one must find a way to stop using as much gasoline.

As you can probably guess, I'm not much of a capitalist. If I ran a business I'd probably go broke giving away the store. Just soft hearted I guess.
 

Nolan

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Billy I cant get a truck to dead head 100 miles to get my lumber now they sit and wait to pick a load where they unload. Hense I now have to pay him and extra 160.00 to go get my lumber and bring it down. Oh yah plus the fuel surcharge they have been charging all along. I know their pain as it takes 1400 to fill up my crane truck for the week, not last week though cause had to go to Vegas for one of my accounts[B)] (almost 800.00 just in fuel).
 

Russianwolf

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Every day I jump in my 40 year old Jeep Truck and drive 4 miles to the train station. I ride a commuter train 70 miles into DC and then metro(subway) 4 stops to my office. I can make 10 gallons of gas last 3+ weeks.

At some point I will get a more efficient vehicle for my 4 miles/weekend errands, and the Jeep will be restored to a semblance of it's original glory.

I've been wondering why Diesel has gone up too, but I will point out that it's not that much more that Regular is right now in my area ($4.15ish compared to $3.95ish) and if you have a deisel that gets 25% better economy than the gas version, it still makes sense to go that route.

About the truckers. I feel for the small operations, as yes they are feeling the pinch, but the big operations don't buy their own fuel and contract it out months in advance. I saw where one of the larger companies reset the governors on their trucks to 62 (from 65) and that this was going to save them something like 15 million in fuel costs while making less than a 10 minute impact on the time needed for deliveries. What does that tell you that everyone should be doing? 3-5mph might start having a big impact.

I hate to say it, but I'm happy with where the prices are going. I hate that is it has to hurt everyone, myself included, but it's the only way that the changes that need to happen will happen. Europe has been living this way for decades.
 

BrentK

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Well what makes me mad about all this is the oil business is my life line. I work in the oil industry in the gulf of Mexico for the most part. This time last year they had around thirty more rigs in the gulf than they do now. So here I am with oil prices as high as they are and I am barely working. I have been home for eight days and counting when before I would stay home maybe two. So I just dont understand why we are not drilling more than we are with the prices being as high as they are. I dont mind paying the higher prices if it would roll over to more work for me. But that is not the case as of right now. Hurican season right around the corner will make things even worse. It is my exsperience is that most companies are slow right now. Due to alot of rig companies are taking contracts overseas for a better day rate on there rigs. They only get about five hundred thousand a day for big rigs here in the gulf and some are at least doubling that overseas. I am having a hard time getting overseas for some reason so here we sit tring to figure out how to make the house note. Thats just my two sense on the matter.
 

jcollazo

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It's interesting to me that every time there is a burp, hiccup, or cough in any oil producing country the price of a barrel spikes. It's as if there is a collective thought of "If oil stops flowing here, I'm going to make as much as I can NOW!"

My wife is ending her second week of commuting on her new Honda scooter. In this time I've also ridden it a number of times to go to the pharmacy, Michael's, machine tool surplus store, Post Office.... She still has half of the original tank left..... and it's a 1.2 gallon tank! At this rate, her $2500 cash investment will be paid off very soon.
 

alamocdc

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I hear you, Joe. I'm seriously looking at a commuter bike. I was talking to a guy Saturday who has a 650CC Suzuki (kind of a cross between and touring bike and sport bike) and he gets 60 MPG. My Harley gets half that, so it may get pushed to pleasure rides for us.;)
 

Jarheaded

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I know a lot of people around here are refusing to pay $4.60 a gallon for diesel, and have found a way around it. They are filling their home heating oil tanks and siphoning it out to run in their trucks. It is basically the same fuel, only there is no dye in the heating oil. It is illegal to do it, but the heating oil is selling for $1.50 less a gallon and over time, that is a big savings. I have a diesel truck, but it is sitting and rusting instead of being used for short drives with no loads, it goes out to get a load or to plow and then it sits. My little Jeep is getting around 20 mpg and I will continue to drive that until it dies, I am even thinking about throwing a plow on it for next winter. I was considering buying a new truck this summer, but until the fuel prices are a little more stable, I'm going to hold off. I don't want to buy a smaller truck that will be under powered and will need a new motor every 2 years, I've been there already and won't do it again. If my back wasn't such a mess, I would pull my old chopper out and just ride that around for the summer. I just can't picture me riding home with a chainsaw and a burl strapped to my handle bars.
 

jeffj13

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Grumble all you want about greed and short supply (neither of which appear to be true). Gas is where it is becuase of the weakened dollar. Before you grumble about that, consider that a strong dollar would likely lead to a significant number of american jobs going overseas.

jeff
 

titan2

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Originally posted by Russianwolf

I hate to say it, but I'm happy with where the prices are going. I hate that is it has to hurt everyone, myself included, but it's the only way that the changes that need to happen will happen. Europe has been living this way for decades.

The needed changes will not happen with higher prices......you think the enviromental folks will be appeased with higher fuel prices? I think not......it's their activities that prevent us from drilling where we should.........think ANWAR, Atlantic & Gulf! When was the last refinery built in the US? No, higher prices won't solve the problem.......more drilling will. How many oil spills were there after Katrina? Didn't see any.......

Also, the fuel prices in Europe is not due to the cost of crude! The greatest part of their cost is from the government taxes that are added to the cost. You gotta figure......the cost of crude is the same (basically) for everyone that deals in it (as long as it's bought at the same time). Crude going to Germany today should be the same cost of crude going to England or the US. The difference at the pump is the direct result of all the additional fees and taxes that their respective governments (national, regioal & local) add to the end product.

OK......I'll jump off my box now.........
 

Russianwolf

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Originally posted by titan2

Originally posted by Russianwolf

I hate to say it, but I'm happy with where the prices are going. I hate that is it has to hurt everyone, myself included, but it's the only way that the changes that need to happen will happen. Europe has been living this way for decades.

The needed changes will not happen with higher prices......you think the enviromental folks will be appeased with higher fuel prices? I think not......it's their activities that prevent us from drilling where we should.........think ANWAR, Atlantic & Gulf! When was the last refinery built in the US? No, higher prices won't solve the problem.......more drilling will. How many oil spills were there after Katrina? Didn't see any.......

Also, the fuel prices in Europe is not due to the cost of crude! The greatest part of their cost is from the government taxes that are added to the cost. You gotta figure......the cost of crude is the same (basically) for everyone that deals in it (as long as it's bought at the same time). Crude going to Germany today should be the same cost of crude going to England or the US. The difference at the pump is the direct result of all the additional fees and taxes that their respective governments (national, regioal & local) add to the end product.

OK......I'll jump off my box now.........
And how are you going to get the oil from ANWAR to the refineries? The pipeline that's in place can't handle much more capacity than it already is. The cost to build another would be in the billions and would take years if not a decade or more. ANWAR is a pipe dream for the forseeable future even if they start drilling tomorrow.

the changes I'm talking about are expanding the woefully inadequate mass transit systems. Look at how many cities Amtrac services and look at how many cities are serviced by passanger rail in Europe. If the price of gas stays up my commute gets more crowded, and it should, maybe MARC will add more cars to the trains. For every person that takes my train, that's one less 140 round trip by car each day. We have over 100 regular commuters from my station alone.

Automakers bringing large amounts of vehicles to market that get better economy, and the prices staying up so that people actually buy them.

And the more gas costs, the more effort will be put into finding an alternate fuel source.

I never said the price in Europe was due to crude prices. They have paid more at the pump for decades and as a result have demanded better mass transit and better economy.
 

alamocdc

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Originally posted by bettyt44720

it doesn't add up to me that all the jobs are going to china because of cheap labor. how on earth could somebody that is earning $2.00 a day afford to buy $4.00 a gallon fuel? bob

Easy. They don't. And have no need to. Probably don't even have a car.
 

Russianwolf

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I don't think the people in Beijing and Shanghai make $2 a day, and there are a lot of cars there.

The farmers out in the countryside, likely don't have or need a car though, but stereotyping the entire population as such isn't rational.

Then you have India, another place that companies are outsourcing to. And yes, while they are less expensive workers than here, you aren't talking dollars per day there either. The salaries are likely 30-50% less than wage earners here, but the company also saves as they don't provide many of the perks that US workers demand. Health care, good working conditions, etc.

Forgot to mention that Cost of living is another factor. When most necessities are 50% of their cost here, it's easy to live on 50% of the salary here.
 

titan2

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Originally posted by titan2

Originally posted by Russianwolf

I hate to say it, but I'm happy with where the prices are going. I hate that is it has to hurt everyone, myself included, but it's the only way that the changes that need to happen will happen. Europe has been living this way for decades.

And how are you going to get the oil from ANWAR to the refineries? The pipeline that's in place can't handle much more capacity than it already is. The cost to build another would be in the billions and would take years if not a decade or more. ANWAR is a pipe dream for the forseeable future even if they start drilling tomorrow.

You get it to the refineries the same way all the crude makes it to the refineries! Raising gas to $10 a gallon will not make a more fuel efficient car next year......it will not make alternative fuel source appear next year either......who's to get this excess money that you want us to pay for gas???? The oil companies? The government? Yeah, right! The length of time to start drilling ie ANWAR and the time it would take for the first oil to come out of the pipeline would take a few years (don't recall how many they said), but you want to know something???? It would of taken the same amount of time 10-20 years ago when they first wanted to start.....where would we be today if they had started then????

There is no quick fix......we need to find our own sources right here in the good old USA. As China and other Asian countries grow they will be wanting more crude to supply their industries and the cars that they are now just begining to want for themselves.

We need a workable energy policy that will allow us to drill an access our own oil, which in the long run will get us out of the grasps of those who'd wish us ill.

That's all folks.....
 
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Originally posted by Russianwolf


About the truckers. I feel for the small operations, as yes they are feeling the pinch, but the big operations don't buy their own fuel and contract it out months in advance. I saw where one of the larger companies reset the governors on their trucks to 62 (from 65) and that this was going to save them something like 15 million in fuel costs while making less than a 10 minute impact on the time needed for deliveries. What does that tell you that everyone should be doing? 3-5mph might start having a big impact.
While this may be true and good for the company, the decrease in speed does increase the time required to make deliveries and when the drivers are paid by miles driven, reduces their pay and increases the time they must work for that reduced pay.
 

Russianwolf

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No, their time would increase , their pay wouldn't decrease. a 1000 mile haul is after all still 1000 miles, they just have to drive and extra 45 minutes to do it if you they were even able to drive the entire 1000 miles at full speed (which isn't likely).

Titan, I'm not saying drilling for more is wrong, but we have to put more effort in reducing dependance on oil entirely too. And Corn based ethanol isn't the way to do it.

Was reading earlier, Oil demand is being pushed by China, The Arab countries, Russia, India and BRAZIL. Appearently they have so many cars that run on ethanol now, that gas has become the cheaper fuel down there.
 
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