High Gas Prices

[Lynn7]

I saw this interesting article about why the gas prices are so high.

Article (http://articles.moneycentral.msn.com/Investing/SuperModels/TheTruthBehindThoseGasPrices.aspx)

[shoe1985]

Excellent article you found there, Lynn.

I think the guy is pretty much correct. Everything we do it seems anymore requires some type of oil to be used. We are too dependent on it and it is only going to get worse.

Refineries don't want to build new ones or expand because what is the point? If they find a new energy they will be out of jobs more than likely. Would you want to risk that? I know I wouldn't and would try to gain as much income as possible.

Consider also that we have how many new drivers on the road each year? Refineries need to expand all the time, and sooner or later they will run out of places to go. We could say overpopulation is too blame also.

So many reasons for this, but it does start with you and me. We need to cutback on many things. Do you really need 5-10 kids? Can't 1 or 2 be enough? Do you need to go to the store for that box of tissues instead of going after work tomorrow?

[Thrizzle]

Yet another reason to invest heavily in research for alt energy.

One thing i dont get about this issue is why the oil companies are making record profits. If they are taking on the higher bid prices and simply passing it on to consumers, why are they making more money than any companies have in the history of business?

Building more refineries would only hurt their bottom line by increasing fixed costs, which they guard tighter than fort knox. They wont even adequatly maintain their supply lines and run approriate safety checks and repairs.

http://www.usatoday.com/money/industries/energy/2006-08-08-pipeline-usat_x.htm

[jeo4]

I agree with every point Thrizzle just made. Especially in finding alternative fuel sources. And for the record, I don't buy gas from BP, though it has more to do with ownership and less to do with maintaining its pipelines and taking care of the envirnment. That, however, is another reason never to buy from them.

I also agree with Lynn's article, with the single exception that the author thinks that this is not gouging prices. Still, it's a good article.

Shoe, you also made a good point. One that Lynn has also made before. This is most definitely a country of wretched excess. Now would be a good time to curb it and set a better example for future generations.

[shoe1985]

Originally posted by Thrizzle
Yet another reason to invest heavily in research for alt energy.

One thing i dont get about this issue is why the oil companies are making record profits. If they are taking on the higher bid prices and simply passing it on to consumers, why are they making more money than any companies have in the history of business?

Building more refineries would only hurt their bottom line by increasing fixed costs, which they guard tighter than fort knox. They wont even adequatly maintain their supply lines and run approriate safety checks and repairs.

http://www.usatoday.com/money/industries/energy/2006-08-08-pipeline-usat_x.htm

Demand is so high right now, and since refineries can only put out 17 million barrels and not the 22 million needed, prices will rise to try and push demand down.

A little something I noticed today in my town gas prices dropped to $3.07 after being at $3.09 for the last week or two.

[Thrizzle]

That's true but it's an inelastic good, price wont affect demand the same way it does other products.

[shoe1985]

Originally posted by Thrizzle
That's true but it's an inelastic good, price wont affect demand the same way it does other products.

It could be considered either inelastic or elastic. Times are changing and people seem to be paying more attention to it then they used too. It isn't like salt where the price doesn't seem to matter because people don't use it all the time, gas they use every day. I know I have made massive changes in my driving habits. I go to work and only to a few things here and there. I have purchased things I could do more at home: books, video games, movies, ect...

Oil is such a hard thing to judge. If you ask any oil executive, they will say that Americans will pay $5, $6, or more for a gallon of gas. It is true because that is how we are. Instead of being close to say our jobs, we live far away because of the benefit of maybe a better school for our kids, or the community, all good reasons. I live in a great town with all those things, but we lack jobs, and we must travel to make anything more than minimum wage.

We should invest more in subways, buses, and other transportations. They might require oil, but we would consume less over time.

It was on my local news the other day about UPS, the shipping service, and the majority of their drivers don't turn left, unless need too, because they have to stop and let their trucks idle. They said they saved over 3 million gallons in gas last year alone because of this.

This is not the easiest thing to fix. I don't think you can really fix it because no matter what happens we will have problems. All we can do is make better decisions with how we use what we have.