Why is GAS SO HIGH NOW?

a major pipeline burst last week, i think...big time shortages in Phoenix and throughout Arizona...my understanding is that's the cause.

 

we haven't taken enough oil from iraq....once we start stealing every last drop we will then get free oil and gas for everyone.

not really...but i just felt like mocking the people who said we went to war to get cheaper oil prices.

 

I'll be honest. I was hoping one of the byproducts from invading Iraq would be cheaper gas. It's not happening and I'm not happy about it.

 

I have heard that this is the reason also......I paid $1.61 yesterday..

 

Regardless of the reasons for gasoline prices being high at the moment, I'm loving the effects.

1. Houston-area energy firms are making money.

2. Poor drivers are forced out of their cars and onto their bicycles.

 

lmao, I agree. Those poor people are much easier to run down now.

 

screw poor people!

why not keep em poor by making it harder for them to drive to their crappy jobs where they make a min wage that is way too low! This means more profit for the big rich business man!

 

I thought it was because a holiday was coming up. ($)

 

Hey if you can't afford to tip, don't go out to eat.























Just kidding !

DD

 

Gas companies increased the prices because - they can!

I heard that the blackout caused it. In the past, they've used all kinds of stupid excuses. The truth is, they will raise the prices as much as they can get away with.

-- droxford

 

you realize that gas prices in the united states are significantly cheaper than anywhere else in the world, right? you realize that gas prices have not even kept up with inflation, right?

 

From the Phoenix New Times:

Dishonor Among Thieves
The recent gas crisis should inspire reform
BY ROBERT NELSON
robert.nelson@newtimes.com

I don't get the adrenal cascade of rage much anymore, and I can't even remember the last time I saw the thin veneer of civil society collapse before my eyes.

I'm guessing that's why it was so invigorating to sit in line for an hour last week in 105-degree heat waiting to pay $2.29 a gallon for gas at the Chevron station at Alma School and Riggs in Chandler.

Soon after I finally filled my tank -- a once autonomic task made orgasmic by an hour of heated coveting -- I got a call from Terry Goddard, the maintainer of civil society in Arizona. He was returning calls as he waited to go on a television show in Tucson, where he would be following Joe Arpaio, who had driven his gas-hog Crown Vic all that way to show off some precious puppy he had rescued.

Goddard was in a lather, too, and I was excited to hear the state's attorney general so fired up that he was referencing Mad Max movies.

"It's really wild, isn't it?" he said in a high-pitched lilt of excited disgust. "I just keep thinking of those scenes of Mel Gibson driving the tanker truck across the desert and armed bands of thugs zooming around on motorcycles. Anarchy in motion. I've gotta say, we've got to make sure this doesn't happen again."

"I feel like I'm watching a cockfight or something," I told him. "We don't get much Lord of the Flies action in the Valley."

"Nor should we," our top prosecutor responded.

What I heard in Goddard's voice was political will. You heard the same thing in Governor Janet Napolitano's voice. You heard the same thing out of the mouths of every sad b*stard sitting in line begging for the honor to buy overpriced gas.

Now the tough part: Hold that rage, folks. Don't forget your anger once the prices drop again. Then focus that rage on finding real solutions that aren't just another round of subsidies for the fossil-fuel industries.

The sad thing is, Arizonans have been getting gouged by energy-industry thieves for years. In both natural gas and gasoline, we rely on a single pipeline company with ancient, under-maintained lines and an ever-smaller cadre of giant shippers and refiners. And this small clique of massive companies has a well-documented, Enron-style pattern of just barely skirting federal antitrust laws with strategies meant to keep supplies unnaturally low to justify price spikes that net vulgar profit margins.

Earlier this year, the California-based Foundation for Taxpayer and Consumer Rights completed a comprehensive two-year investigation of the western U.S. gasoline market, which includes Arizona. The report's title should appeal to Arizonans right now:

"The Solutions Needed to Keep Pump Prices Under $2."

Reviewing industry data and depositions and internal memos of oil company executives produced in civil case discovery, researchers determined that the high pump prices in California and Arizona were the result of "intentional actions of the oil companies."

While oil industry executives have blamed price spikes on environmental regulation and the cleaner-burning fuels needed in areas such as Los Angeles and Phoenix, the researchers found the price increases were in fact attributable to inflated refiner profit margins.

"Recently released memos of oil company executives outline cooperative litigation and lobbying efforts intended to close down West Coast refining capacity, short the West Coast market of adequate inventories and insert language into environmental regulations that, unbeknownst to the policy makers, would ensure smaller competitors went out of business. The goal of the effort seems clearly identified in the memos as a means to legislate higher consumer pump prices for the benefit of the refiners."

Also: "The constant increasing or decreasing of production by the oil companies at their local refineries had the greatest impact on prices at the pump. The level of gasoline inventories in storage tanks is kept as low as possible to maximize price, but just high enough to avoid the return of gas lines if an unexpected disruption of flow into storage draws the inventory down. Just in time inventories' is the industry terminology for today's practice of maintaining low levels of inventory."

In Arizona, the game is more precarious for oil executives because we have no quick alternative source if the one major pipeline breaks. The short supplies dwindle quickly and cause the gas lines, and price spikes, you suffered last week.

The exact same games are played in the natural gas industry. And Arizona is just as vulnerable to thieves in the natural gas market as they are in the gasoline market.

Two years ago, I wrote about one such anti-competition industry plan, a plan hatched by natural gas executives in a secret meeting at the Embassy Suites Hotel near Sky Harbor Airport in 1996.

The meeting brought together senior management of SoCalGas, San Diego Gas & Electric and the gas provider for the Valley, El Paso Natural Gas.

At the meeting, SoCalGas executives agreed to stop competing with El Paso Natural Gas on a power plant project in northern Mexico if El Paso Natural Gas would cancel its plans to build pipelines into Southern California that would have broken SoCalGas' monopoly in Southern California.

The canceled pipelines would have doubled the amount of gas reaching Southern California.

Prices soared in California, which pushed up prices in Arizona.

Without that extra pipeline, California will continue to need more natural gas from the pipelines that also serve Arizona. Compounding the danger to Arizona was another little-publicized decision this summer by the Federal Energy Regulatory Commission to cease Arizona's status as a "full-requirement customer" of El Paso's. In effect, as of September 1, El Paso will no longer be required to provide all the natural gas asked for by Arizona customers. The measure was pushed by California officials to better secure their state's supply.

"We will no longer have the safety and luxury of knowing that if we have greater demand in Arizona, that El Paso must provide it to us," says Randy Dietrich, manager of fuels for SRP. "All of a sudden, we're in a new game with new rules. And we're not completely sure how it will affect us."

Arizona has no major natural gas storage facilities that could be used to stockpile gas to mitigate a shortage. A major pipeline project designed to bring natural gas from the north has been scrapped. Another pipeline project is years off if it ever gets built.

"Arizona is still in a pretty bad position," says Lance Astrella, the lead attorney in several natural-gas-related lawsuits across the West. "That's why some sort of north-south line is so important. It's all about competition."

Thanks to El Paso executives and California officials, we could soon see a much more precarious and expensive market for natural gas and electricity.

I imagine a day when I'll be unable to open the electric garage door to let out the car I can no longer afford to drive.

In our conversation, Terry Goddard suggested Arizona and other western states should all agree to use the same type of cleaner-burning gasoline. Currently, each state has its own requirements, which makes each state dependent on just a few producers that make their blend.

Goddard's staff is already working on anti-price-gouging legislation to present to Arizona legislators. Sixteen states have similar legislation, but similar proposals in Arizona have always fizzled in committee.

"I think the political will is there this year," he says.

We'll see. In the past, Arizonans and their political leaders have quickly forgotten once an energy crisis has passed.

And they certainly haven't been very creative, or forceful, in addressing these critical infrastructure problems.

For a heavy dose of both brains and balls, Arizona leaders should consult with the authors of the FTCR report.

The California report suggests much stronger antitrust legislation at the state and federal levels.

And the report authors suggest the most novel solution to California and Arizona's problems, a solution that has yet to be considered by Arizona policymakers.

Their idea: Sell only one grade of gasoline.

"When studying the low inventory levels maintained by the (oil companies), FTCR determined that the three octane grade gasoline offering of regular, midgrade and premium results in under-utilization of the existing tanks, many of which sit partially filled with slower selling high octane gasolines."

The researchers found that approximately 50 percent of the storage dedicated to higher octane gas is never used effectively.

The report suggests that state legislation mandating the sale of a single grade of gasoline in a state "would greatly reduce the ability of oil companies to create price spikes at the pump by increasing the use of existing storage tanks as means to combat the low inventory practices responsible for the spikes."

Basically, we use the existing tanks below every gas station in the Valley as our strategic reserve against price manipulation.

The report's authors argue that, contrary to oil industry marketing, only 5 percent of vehicles on the road in 2003 still need higher octane gas. Owners of those vehicles, mostly high-performance luxury cars or vintage cars, could easily boost their octane by occasionally pouring a small bottle of octane-boost additives into their tank. Such additives, the report's authors argue, are considerably cheaper to buy in bottle form than at the pump and are identical to the additives used to turn normal gas into premium.

The FTCR report offers numerous other solutions and supporting documentation for all its claims and suggestions. This must-read for Arizona policymakers can be accessed at www.consumerwatchdog.org.

But like so many other brilliant policy papers, the FTCR report will only sit collecting dust if the political will doesn't exist to fight for needed changes.

Instead of smart, inexpensive policy changes like the ones proposed by FTCR, expect a bevy of industry-supported plans that use taxpayer dollars to purchase refineries or additional storage. State policy leaders are already beginning to propose projects that are little more than government handouts to the same people who have made massive profits off the people of Arizona while paying few taxes to state coffers.

Oil and gas executives are looters. We now know why they loot, how they loot and what it feels like to have them robbing our store.

The trick now is to hold this nasty thought until the next legislative session.

Then it's payback time, a time for Arizonans to do a little looting of their own.

phoenixnewtimes.com | originally published: August 28, 2003

 

I read an article that also said there was a late summer jump in demand that was not expected.

There were a lot more summer vacation/driving trips taken than expected and a lot later in the summer than usual.

So that added with all the other things would help raise the price as well....as demand goes up.

 

Actually, that's only true if you don't count the entire rest of the world. A gallon of gasoline in Caracas was 28 cents per gallon in January. And several Middle Eastern cities have lower gasoline prices than in the U.S. Even Moscow had average prices of $1.21 per gallon, which was cheaper than any U.S. city at the time.

And in many of those countries where gasoline prices are considerably higher that is only because other countries so severely tax gasoline.

Take out the taxes, and gasoline prices are more in line with what the U.S. charges. The roughly $1.19 that a gallon of gasoline would've cost in January in Paris if not for the gasoline taxes is not completely out of line with what Americans in major cities were paying for gasoline if you take out the American taxes (gasoline taxes average about 42 cents per gallon in the United States). The national average for the U.S. in January of 2003 without taxes was roughly $1.00 per gallon. But that's the national average. I don't know what the prices were in a city of comparable size to Paris.

So while what people actually pay for gasoline (including taxes) is relevant, the fact that prices are higher elsewhere is often a simple matter of different taxing philosophies.

 

From the "gas crisis" in the 70's, the oil industry learned two things:

1) If they increase the gas prices too much, too quickly, it will work against them.

2) If the press decides to bash pertolium companies for raising gas prices, it will work against them.

So.... oil companies raise prices gradually, they raise the prices at times when other items get more press attention, and they do as much media control as possible to avoid alarming headlines that read "gas prices skyrocket". Following this policy, they get stronger price control.

-- droxford

 

This is the worst analysis of the gasoline market I have ever seen in my life. You really, really have no clue what is going on here. Oil companies do not simply increase and decrease prices on a whim. The price of gasoline is set largely by the price of crude oil (of which a large % is controlled by OPEC). The price of oil depends on many factors, especially countries' production output. Refinery shutdowns and pipeline breaks can also impact it. When the price of oil rises, the price of gasoline rises, as gasoline is produced from crude oil in refineries. Petroleum (notice the spelling) companies simply pass on their increased feedstock costs to consumers in the form of higher gasoline prices. Open up new drilling areas, remove the high taxes on gasoline, and cut back on all the environmental regulations and the result will be dirt cheap gas.

 

deleted

 

IMO, there are 3 major reasons for the recent increase.

1. The pipeline that burst in the southwest knocked out our ability to get gas to large portions of the country.

2. The blackout knocked out 2 or 3 refineries for several days.

3. They always raise prices at Labor Day to cash in on all the travel.