Gas is too cheap

Jamie79SC · 09-02-2005, 11:21 AM

I'll be as popular as a turd in a punch bowl with this observation:

Gas is under priced in the US. Yep, gas is too cheap. We’ve seen gas prices go through the roof in the last 18 mos. and consumption hasn’t been reduced a wit. By definition, gas is under priced.

Now, I’m not altogether sure that Exxon, BP, Shell, etc. really need that much more windfall. What do you say we impose more federal taxes on gas to get prices closer to a real market price, and BY G0D, REINVEST that money into new energy sources/infrastructure/basic research, and get past our dependence on oil.

What did I say? I’m as popular as a turd in a punch bowl.
- Increased taxes and government programs – conservatives won’t like that
- Taking some of the candy from big oil’s mouth – GW and his pals won’t like that
- Increasing energy costs for poor folks who can barely afford gas now – Liberals won’t like that.

Maybe it’s what we need though.

island911 · 09-02-2005, 11:30 AM

I understand your market forces argument, BUT, one thing needs to be clearly understood; Much of the civilized words success comes from having cheap sources of power.

Adding tax does not alleviate anything . . it only compounds the other energy inefficencies. Kinda like "sin tax". (it is obvious how lib's want to punish drivers for existing - nothing new there.)

Jamie79SC · 09-02-2005, 11:35 AM

Island - right you are - if we did with that tax what every government in history does with any significant tax revenue.

If we really did re-invest it as I proposed, we might solve some problems.

Since I know no government (right left or center) would have the balls to do the right thing with all that money, this is just a thought exercise.

M.D. Holloway · 09-02-2005, 11:36 AM

island911, well put and then take into consideration of who will actually oversee the increase of moneies that should be channelled for such a cause. Some, no make that many will look to feed pork projects that have small returns. Putting up windmills and hydro plants and nuc's is OK but it doen;t even come close to understand the transportation costs incurred by increased diesel. Remember, all the shipping, rail and over the road frieght hauling is done with diesel engines. Companies will not absorb these costs thay will hike up the prices of everything in order to keep the margins.

Guess you don't mind paying $8 for a gallon of milk or $4 for an apple?

svandamme · svandamme's Garage

move to europe dude... that'll sort you out on the subject of fuel prices

Jamie79SC · 09-02-2005, 11:40 AM

I've lived in Europe, I know. I also know that in Europe you drive much more sensable cars than we do here. Every time I return to the 'States, I'm struck by how huge the cars and a$$es are here.

Jamie79SC · 09-02-2005, 11:41 AM

...and by a$$es, I'm referring to the aft end of people...

livi · 09-02-2005, 11:41 AM

What a revelation, coming from an American !

I would advice you to look in to the Swedish system were our government pile taxes on taxes on the gas price which is ridiculously high compared to your current prices.

Funny thing though, it does not make people use their cars less. As an anti pollution strategy it seems useless. If at least we got some of that money back for better, safer roads - but I guess it all disappears into the well of millions we pour into EU...

Yeah, you do have too cheap gas.

Wrecked944 · 09-02-2005, 11:42 AM

JAMIE79SC - I don't think you are a turd. I think you're right. Astronomical oil prices are the only incentive that will push us out of the dino economy and into something better. Personally, I don't think taxes or govt programs or even good intentions will do it. But greed and fear are usually pretty effective motivators - not my preferred methods but definitely effective. And while pricey gas will hurt me personally, I think it is as good thing for the country in the long term. I say this confident in the belief that it will be an American who solves the energy problem. And that American will become obscenely wealthy. OTOH, if it isn't an American, then we may well be royally screwed. For example, if the Chinese figure out how to get off of dino oil before we do, then we are sunk.

Joeaksa · 09-02-2005, 11:42 AM

Quote:

Originally posted by Jamie79SC
I've lived in Europe, I know. I also know that in Europe you drive much more sensable cars than we do here. Every time I return to the 'States, I'm struck by how huge the cars and a$$es are here.

Have lived in Denmark, Germany and the UK. One big difference here is that Europe has a mass transit system that is set up AND WORKS that the public use.

Totally agree with you about the size of cars. How about the damm 4X4 pickup trucks and SUV's that have one person in them but are getting 10-12 mpg everywhere they drive? Its crap like that that make me mad.

If the fuel costs stay this high for long bet someone here in America may realize that we need the same thing and fast.

JoeA

island911 · 09-02-2005, 11:44 AM

Fortunately "Oil companies" are actually "Energy companies." They understand that other energy sources will be needed as the cost of pulling oil out of the ground passes a certain point. The writing is on the wall, obviously.

No doubt these Energy companies want to be positioned for future needs, and are indeed reinvesting in other baskets.

Jamie79SC · 09-02-2005, 11:51 AM

Those BP ads are pretty effective aren't they Island

M.D. Holloway · 09-02-2005, 11:53 AM

anybody have the chart that shows fuel increase over the past year?

M.D. Holloway · 09-02-2005, 12:16 PM

Check this out, ya, ExxMo and Chevron pay all sorts of attention on motor oils!

island911 · 09-02-2005, 12:20 PM

Jamie, I've been saying that since before those BP spots.

Quote:

Originally posted by Jamie79SC
Island - right you are - if we did with that tax what every government in history does with any significant tax revenue.
....

I know

- and just looking at how poorly FEMA responded to the New Orleans crisis really hits that point home. Most taxes are the absolutely the worst value, for our money.

Perhaps enough good/smart people will be outraged enough to think about going into puplic service. Then again, with wind-bags like Moore around ... we just get power-hungry opportunists like hillary; and more locally, Ron tax $ims . . that evil witch of a Govnr, WA has . . .giving us the highest gas tax in the nation

Dixie · Dixie's Garage

If you think gas is too cheap, and taxes on it should be raised, I suggest you simply send another 20% of your gross income to the IRS.

Make a statement my man!
Nothing like walkin' the walk!

ronin · 09-02-2005, 12:24 PM

Quote:

Originally posted by Jamie79SC
Those BP ads are pretty effective aren't they Island

c'mon Jamie, you can do better than that

kjb · kjb's Garage

So does a crude price of $70 per barrel translate to $3.50 at the pump, plus the cost of refining the oil, transporting it, et cetera?

Or does the price of barrel of crude refer to a bigger barrel?

/ J

edit: I'm referring to LubeMasters picture of a barrel of oil

tobster1911 · 09-02-2005, 12:27 PM

Gas for our personal vehicles may be too low (someone on a more limited income than yourself may disagree) but gas prices do not only affect someones ability to drive the ever hated SUV (in OT).

Wait until transportation costs hit every other thing you purchase....then tell me how we really should be paying more for gas (because everyone else is don't ya know). Will you be singing the same tune when every thing you buy at the grocery store (and everywhere else) doubles overnight because of the change in gas price?

M.D. Holloway · 09-02-2005, 12:31 PM

$70 / 42gl = $1.66/gl for crude. 46% of crude processed is gas. It really costs about $0.70 per drum to pump out of the ground and another $1.75 to $3.00 / drum to refine. Granted, it costs $$$ to boil up the crube at 400C to vaporize and distill but please! The oil co's are posting record earnings. If things were tight, share holders would be going nuts. Keep in mind, most all your mutual funds are energy and energy heavy. Why? You know why...