Gasoline May Rise Above $5 a Gallon

[LTLFTcomposite]

So Newt was just making a big deal out of Bakken. I think he quoted a figure of 24 billion barrels of recoverable oil. WOW!!! 24 billion of anything must be a lot!!!

BUT:

24 billion bbls / 20 million bbls U.S. consumption per day = 1200 days = 3.28 years

Three years? How is that an energy policy? Moreover, how does sucking that reserve dry improve our security?

Or are my figures wrong?

 

[walterbays]

Should I believe this or not?

If we elect Newt Gingrich he will give us $2.50 gasoline. But if we elect Vermin Supreme he will give us all ponies! Frankly I find Mr. Supreme's promises slightly more credible.
[youtube]http://www.youtube.com/watch?v=4d_FvgQ1csE[/youtube]
Skip to 2:30 if you want to quickly get to his pony pledge.

 

[coolfilmaker]

Should I believe this or not?

If we elect Newt Gingrich he will give us $2.50 gasoline. But if we elect Vermin Supreme he will give us all ponies! Frankly I find Mr. Supreme's promises slightly more credible.
[youtube]http://www.youtube.com/watch?v=4d_FvgQ1csE[/youtube]
Skip to 2:30 if you want to quickly get to his pony pledge.

But if we're all riding ponies around gas will likely fall to below $2.50.

 

[AndyH]

In spite of a reported national average fuel price drop, we're in the middle of a move from $3.55 per gallon to 3.59 a gallon.




(Warning: Do not rely on this post for any purpose. While sterile and on-topic, it has not yet been approved for submission and is subject to deletion without notice.)

 

[N952JL]

Even the Wall Street Journal and the Cato Institute agree that president Obama can't do anything about crude oil prices (the main cause of increased gasoline prices):

http://thinkprogress.org/romm/2012/03/12/442536/wall-street-journal-and-koch-cato-agree-not-obama-fault-crude-oil-prices-have-increased/" onclick="window.open(this.href);return false;

Of course, that means that Newt is full of...

there are things that Obama can do. One is short term, the rest are long term. I'm not sure why he doesn't. Is it because he is too dumb, or does he have his own secret agenda.

short term: Open up some of the S. Reserves. This is why the reserves were create. to smoth out the ups and downs in the price of crude.

long term:
1. Come out with a compreshisive plan for America's energy independence.
2. Open up more drilling for Oil in the Gulf, and on public lands. But require all lease holders
to start pumping oil in x number of years from the start of the lease, or lose the lease and all wells they started to drill to the federal governement.
3. require a royalty be paid to the federal governement based on a persentage of the selling price. when the price goes up, the royalities go up.
4. charge an import tarif on any cude oil coming in by tanker. I.E. outside North America. I know this would raise the price of foreign oil but we want to keep the money in this country so this tarif would raise money for the governemnt. A persentage of this money would by law be used to fund clean renewable alternate energy. (like at least 33%)

just a few short thoughts. I could expand if needed.

 

[TonyWilliams]

Is it because he is too dumb, or does he have his own secret agenda.

short term: Open up some of the S. Reserves. This is why the reserves were create. to smoth out the ups and downs in the price of crude.

You must be smarter than "dumb" Obama, because you have remade history (as Faux News / Tea Party / political evangelicals tend to do).

Do you know what that "S" stands for?

 

[AndyH]

there are things that Obama can do. One is short term, the rest are long term. I'm not sure why he doesn't. Is it because he is too dumb, or does he have his own secret agenda.

short term: Open up some of the S. Reserves. This is why the reserves were create. to smoth out the ups and downs in the price of crude.

long term:
1. Come out with a compreshisive plan for America's energy independence.
2. Open up more drilling for Oil in the Gulf, and on public lands. But require all lease holders
to start pumping oil in x number of years from the start of the lease, or lose the lease and all wells they started to drill to the federal governement.
3. require a royalty be paid to the federal governement based on a persentage of the selling price. when the price goes up, the royalities go up.
4. charge an import tarif on any cude oil coming in by tanker. I.E. outside North America. I know this would raise the price of foreign oil but we want to keep the money in this country so this tarif would raise money for the governemnt. A persentage of this money would by law be used to fund clean renewable alternate energy. (like at least 33%)

just a few short thoughts. I could expand if needed.

Have any sources for this list?

I agree that we need an energy plan - at this point ANY plan would be a step in the right direction because at least we'd have a 'dot on the page' to work from. Opening to more drilling won't do anything for 5-10 years - and it won't do a thing for our gas prices as 1. we've increased US production more in the past couple of years 2. we've opened more land for drilling in the same time frame and prices are not affected.

The point about the strategic reserves is incorrect. It doesn't exist to moderate fuel prices.

"The SPR exists to deal with large international supply disruptions," said White House chief economist Austin Goolsbee this week. "The SPR exists to deal with large international supply disruptions. That is why we created it." The Energy Policy and Conservation Act in 1975, which established the SPR, describes the criteria as "a severe energy supply interruption." That's currently not happening.

http://www.hybridcars.com/news/strategic-oil-reserve-intensifies-misunderstandings-87643.html
http://www.fossil.energy.gov/programs/reserves/spr/spr-facts.html#Sites page

I agree that there's an agenda. More from FoxNews:

[youtube]http://www.youtube.com/watch?v=UzEnKdBAb_o[/youtube]

 

[Nubo]

The strategic reserve isn't big enough to change worldwide oil prices over any meaningful period although it might be useful in some cases to quiet a speculative market veering out of control. But there's only so much that it can do given its finite size; it really is more for survival in extreme situations.

Seeing as how there are a record number of rigs in operation, the notion that this President is somehow "preventing" the USA from becoming energy independent is a bit of nonsense.

The move towards independence has many factors, which the current administration recognizes and is attempting to push. The answer isn't to drain all of our oil resources in record time. The major improvement in MPG standards will do more than any drilling bonanza to shift the balance, for one thing.

 

[DaveEV]

The strategic reserve isn't big enough to change worldwide oil prices over any meaningful period although it might be useful in some cases to quiet a speculative market veering out of control. But there's only so much that it can do given its finite size; it really is more for survival in extreme situations.

+1. At ~700M barrels of oil, assuming we import about 8M barrels / day, that gives us 3 months of supplies. Let's say we simply tap it at 1M barrels / day - that gives us nearly 2 years of slightly reduced oil prices - but then what do we have - no reserves and 2 years isn't enough time to make a huge dent in oil consumption. The reserve is there for short-term emergencies. Not long term strategies.

Seeing as how there are a record number of rigs in operation, the notion that this President is somehow "preventing" the USA from becoming energy independent is a bit of nonsense.

+1

The move towards independence has many factors, which the current administration recognizes and is attempting to push. The answer isn't to drain all of our oil resources in record time. The major improvement in MPG standards will do more than any drilling bonanza to shift the balance, for one thing.

+1. CAFE increases, incentives to drive electrification, incentives to use natural gas in vehicles (IMO I still think this is mostly better used in 60% efficient CCGT electricity plants), biofuels will all play a part in reducing oil consumption and improve sustainability. Those are all long-term goals and will take at least 5-10 years to have significant effect which means that tapping reserves is largely useless at this point in time.

On an individual level - do what you can to minimize oil consumption and encourage your friends/family to do the same. It hardly takes any real sacrifice to do so, yet so many people whine and moan that they can't afford to drive their 2-ton 15 mpg Explorer at 80mph on the freeway anymore. Geez - suck it up, stop-whining and downsize and slow down your life a little!

We've cut our household's gasoline consumption by 2/3rds by replacing old, inefficient vehicles. Imagine what would happen if even 25% of households did the same? We currently burn around 8M barrels of gasoline a day - about the same amount of oil equivalent that we import daily - so cutting That would cut oil imports by 15% over 1M barrels/day. Still not enough, but enough to save $144M/day in oil imports - just think of where that money could be spent locally!

 

[Yodrak]

No, not necessary. To quote Ron White, "The next time you have a thought ... Let it go."

just a few short thoughts. I could expand if needed.

 

[Stoaty]

there are things that Obama can do.

long term:
1. Come out with a compreshisive plan for America's energy independence.
2. Open up more drilling for Oil in the Gulf, and on public lands. But require all lease holders
to start pumping oil in x number of years from the start of the lease, or lose the lease and all wells they started to drill to the federal governement.
3. require a royalty be paid to the federal governement based on a persentage of the selling price. when the price goes up, the royalities go up.
4. charge an import tarif on any cude oil coming in by tanker. I.E. outside North America. I know this would raise the price of foreign oil but we want to keep the money in this country so this tarif would raise money for the governemnt. A persentage of this money would by law be used to fund clean renewable alternate energy. (like at least 33%)

None of this addresses the fact that there isn't anything Obama can do about the price of gasoline. We certainly need a plan for energy independence, but the plan needs to be one that addresses fossil fuel dependence since we will be running short of all fossil fuels in a few short decades.

 

[wsbca]

I saw an amusing (though strangely infuriating) homemade sign taped to the back of a (17mpg, overseas built) UAV as I was riding to work this morning, which said "Gas would be $1 a gallon if it weren't for the Democrats and their Environmentalist Puppetmasters." I lost count of possible counterarguments and retorts within a pretty short time. I'm sure folks in Europe would be irritated to find out that their exorbitant fuel prices can be attributed to politics and policy in the colonies.

Seriously, how does someone so catastrophically stupid...sorry, that's rude of me...I mean globally uninformed ever earn enough money to afford a sweet car like that in the first place? Never let it be said America isn't a land of opportunity for all!

 

[BRBarian]

Is it because he is too dumb, or does he have his own secret agenda.

short term: Open up some of the S. Reserves. This is why the reserves were create. to smoth out the ups and downs in the price of crude.

You must be smarter than "dumb" Obama, because you have remade history (as Faux News / Tea Party / political evangelicals tend to do).

Do you know what that "S" stands for?

The electorate has a very short memory. If Obama were to tap the reserve, he should do it in August and September when gasoline prices naturally fall back at the end of the summer season. Then he gets a double benefit going into the election. If he does it now, he spends his bullet and gets nothing for it. No one would even notice.

Just watch... late summer, at the precise moment to maximally damage the Fox News talking point. Strategic...

 

[LTLFTcomposite]

There's this notion floating around that the government is the only thing standing in the way of oil companies getting access to these infinite supplies. Not clear to me that is the case. Take the GOM, I have heard there are plenty of leases out there. But while there may be a lot of oil there, how many billions of dollars do you have to put at risk going to get it? For gasoline to be $1, crude would have to be going for what, $20 a barrel? Good luck making your money back on deep water exploration and production at those prices.

 

[LTLFTcomposite]

If Obama were to tap the reserve, he should do it in August and September when gasoline prices naturally fall back at the end of the summer season.

Markets are remarkably adept at seeing through the short term. Price is based on what the market thinks might happen, not what actually has happened. Last time I looked Iran hasn't actually disrupted anything in the Strait of Hormuz. Price is also based on what buyers are willing to pay, not just what it costs to make something. If it were solely the latter, the new iPad would be what, 12 bucks? Some of what we are seeing may just be upside price discovery in the price of gasoline.

 

[Nubo]

The electorate has a very short memory. If Obama were to tap the reserve, he should do it in August and September when gasoline prices naturally fall back at the end of the summer season. Then he gets a double benefit going into the election. If he does it now, he spends his bullet and gets nothing for it. No one would even notice.

Just watch... late summer, at the precise moment to maximally damage the Fox News talking point. Strategic...

I think rather that this is a trap set by the GOP. There's no way for Obama to win this one-sided argument.

- If he does not tap the reserve the GOP blames oil prices on him.
- If he does tap the reserve and prices don't move significantly, the GOP says he waited too long.
- If he does tape the reserve and prices go down, the GOP brags about how they got him to cave in.

Of course, both sides play these games

I'm a politician. Which means I'm a cheat and a liar and when I'm not kissin' babies I'm stealin' their lollipops.

- The Hunt for Red October

 

[KJD]

IMHO taping the Strategic Reserves is a bad idea. If by chance Iran does mine the straight of Hormuz then the SR should be used. Short of that it should stay right where it is.

Short term we could put a J1772 outlet in EVERY federal owned parking lot in USA. It would be free to anyone WITHOUT any reservation. Employees could use them and general public could use them 24x7.

Long Term put a CHAdeMO charger at every 10 Miles and really close to the freeway exit. Do I-80 first coast to coast and after that fill in all the rest. There would be a SMALL fee for using these stations. We can debate on how much cost would be at a later date.

short term: Open up some of the S. Reserves. This is why the reserves were create. to smoth out the ups and downs in the price of crude.

long term:
1. Come out with a compreshisive plan for America's energy independence.
2. Open up more drilling for Oil in the Gulf, and on public lands. But require all lease holders
to start pumping oil in x number of years from the start of the lease, or lose the lease and all wells they started to drill to the federal governement.
3. require a royalty be paid to the federal governement based on a persentage of the selling price. when the price goes up, the royalities go up.
4. charge an import tarif on any cude oil coming in by tanker. I.E. outside North America. I know this would raise the price of foreign oil but we want to keep the money in this country so this tarif would raise money for the governemnt. A persentage of this money would by law be used to fund clean renewable alternate energy. (like at least 33%)
.

 

[BRBarian]

- If he does tape the reserve and prices go down, the GOP brags about how they got him to cave in.

The price will certainly go down. Obama just needs to make sure he gets credit for that. All he needs is a good excuse to tap the reserve at the right time. Either Iran or Israel (or both) will provide that excuse.

 

[redLEAF]

Back to main topic ... regular was at $4.29, premium at $4.53 TODAY just around the corner from where I work NW 'burbs outside of Chicago at both a Mobil and Shell gas station already ... in the city, the BP at 1647 N LaSalle Blvd & Clark St shows regular at $4.68 ! so the question is simply not 'may' it's 'when'! -- with our extreme warm weather and rains that washed the salt off the roads was able to switch out our 16/17 mpg Routan for our high 20's mpg Miata for one of our daily commuters so it should impact us less now. The LEAF is simply loving the warmer temps with better range; went 92 miles w/o really trying very hard on a single charge over the weekend. Getting a few more people noticing the 'zero emission' badge on the car and asking if it needs to use gas -- I would think $5/gal is the tipping point again for people to take a harder look but if prices fluctuate a lot from week to week maybe not so much.

 

[KJD]

The web site Energy Bulletin has many articles on oil and gas prices. Tom Whipple writes at least once or twice a week and he writes some good articles. They are worth the time to read.

http://www.energybulletin.net/stories/2012-03-15/peak-oil-crisis-surging-gasoline" onclick="window.open(this.href);return false;

With the EU's debt crisis and the Iranian confrontation relatively quiescent, attention has turned to the incessant increase in U.S. gasoline prices. The Capitol Hill gas station, where at least some members of Congress fill up, is currently selling regular for $4.49 a gallon. If you prefer to do business at the Watergate Exxon it will set you back $5.39 for regular. For a real taste of the future, then be sure to come in a full-sized SUV with a big V-8 and a 33 gallon gas tank - a fill-up will only be $188 for premium.