Analysts: Gas May Soon Cost $4 Per Gallon
Speaking of the high cost of gas these days, the Associated Press’ John Wilen said today that gasoline prices extended their record run at the pump. He wrote:
At the pump, the national average price of a gallon of gas rose 0.2 cents overnight to $3.289 a gallon, according to AAA and the Oil Price Information Service. That’s the latest in a string of records set as gas prices have followed surging oil futures higher…
Wednesday’s surge in gas futures, accompanied by a big gain in oil prices, is expected to send prices even higher at the pump in the near future; retail prices follow the futures market, although with some time lag.
How bad could gas prices get? The AP business writer said:
The report also showed that refiners are holding back on producing gasoline due to low refining profit margins. The combination of low production and higher demand during peak summer driving season — and high crude prices — could boost gas prices even further into record territory…
The Energy Department expects gas prices to peak near $3.50 a gallon later in the spring. Many analysts think prices could rise as high as $3.75 or $4.
It’s no surprise then that with prices rising at the pump, politicians are not only (predictably) attacking Big Oil, but are clamoring for the White House to bust out that “Magic ‘Tussin,” otherwise known as the Strategic Petroleum Reserve. R.A. Dillon of the Fairbanks Daily News-Miner wrote today:
Obama energy adviser Jason Grumey recently told Reuters news service that the candidate would stick it to Big Oil.
Grumey said Obama would take an active role in U.S. oil markets as president, challenging the dominance of large oil companies and perhaps using the Strategic Petroleum Reserve to ease supply concerns and lower prices.
Give me a break. Not that I like high energy prices, but does the Obama campaign really think Americans are stupid enough to believe there’s a simple fix to our energy problems? Apparently so, as they’re portraying the Illinois Senator as the solution to the gas pump blues. Right now, the Obama campaign is running a TV ad in Pennsylvania attacking Big Oil. Dillon wrote:
The 30-second-spot opens with a shot of a long line of cars waiting at an Exxon retail station during the energy crisis of the 1970s.
“Nothing’s changed,” Obama says in the ad. “Except now, Exxon’s making $40 billion a year, and we’re paying $3.50 for gas.”
The Illinois Democrat goes on to say he won’t let Big Oil “block change anymore” and that he’ll push for a tax on “windfall profits” to pay for developing alternative sources of energy and energy assistance for low-income families.
Alternative sources of energy? Like corn ethanol? Time’s Michael Grunwald wrote on March 27:
But on Nov. 6, at a biodiesel plant in Newton, Iowa, Hillary Rodham Clinton unveiled an eye-popping plan that would require all stations to offer ethanol by 2017 while mandating 60 billion gal. (227 billion L) by 2030. “This is the fuel for a much brighter future!” she declared. Barack Obama immediately criticized her–not for proposing such an expansive plan but for failing to support ethanol before she started trolling for votes in Iowa’s caucuses.
So, what’s the problem with biofuels and corn ethanol? Grunwald also noted in his piece:
But several new studies show the biofuel boom is doing exactly the opposite of what its proponents intended: it’s dramatically accelerating global warming, imperiling the planet in the name of saving it. Corn ethanol, always environmentally suspect, turns out to be environmentally disastrous.
Like I said, resolving the energy issue isn’t that simple. Think about it- if it were, Americans would have figured it out during the last energy crisis. I could not find anything about Mr. Grumey’s energy credentials. However, legendary energy investor T. Boone Pickens had this to say last month regarding the U.S. presidential candidates and their understanding of energy. Pickens said, “They don’t know anything about it.”
Sources:
“Gas prices rise to new national record”
John Wilen
Associated Press, April 3, 2008
“Oil companies targeted in Obama’s Pennsylvania ad campaign”
R.A. Dillon
Fairbanks Daily-News Miner, April 3, 2008
“The Clean Energy Scam”
Michael Grunwald
Time, March 27, 2008
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April 3rd, 2008 at 6:25 pm
Whats worse is that its not just the oil companies who are making a killing on this but the credit card companies are making a fortune now too. I saw over at the Daily Local that several of their Wawa’s are even offering a discount to customers who pay with cash for gas instead of cards because the credit card fees they have to pay are so nutz. Thats crazy if you ask me, I’ve worked with the MPC and to have raising gas prices and ridiculous credit card fees hitting us and small business like gas stations at the same time it is more that we should be expected to put up with.
April 4th, 2008 at 5:29 am
Thanks for the comment Steve.
“I saw over at the Daily Local that several of their Wawa’s are even offering a discount to customers who pay with cash for gas…”
That used to be the case in the Chicagoland area at some stations, but I haven’t seen that around for years. As a matter of fact, it jarred my memory once you mentioned it. It may be good for the consumer, but like you mentioned, you then have to wonder how much the credit card companies are charging that would bring back this kind of scenario.
April 4th, 2008 at 8:58 am
“Like I said, resolving the energy issue isn’t that simple. Think about it- if it were, Americans would have figured it out during the last energy crisis”
————————————————-
Please remember that President Carter was moving this country toward increased energy independence, with his support of alternative energy research like solar power.
When Reagan came into office he had the solar panels (that were installed on the roof of the White House) removed in a symbolic snub toward alternative energy. He was a big supporter of nuclear as well as Big Oil.
So in response to your comment, some Americans did indeed figure it out during the ’70’s energy crisis, but were pushed aside. Aren’t we paying dearly for this now!
(Disclaimer: In no way am I saying that this nation’s transportation fleet will run on solar power.)
All I am saying is that we SHOULD be much farther along the path of energy independence by now.
-Mammoth
April 7th, 2008 at 5:45 am
Thanks for the comment Mammoth. Never heard of that Reagan story— interesting.
“All I am saying is that we SHOULD be much farther along the path of energy independence by now.”
Wholeheartedly agree with you there…
April 13th, 2008 at 4:48 pm
Almost all wars and terrorism in the world can be stopped. Almost all dictators and tyrants can be rendered powerless. All we have to do is to stop paying them. An alarming amount of the money Western nations pay for oil is going into the coffers of people who are terrorists and dictators. All we have to do defund the world’s most violent criminals is to become energy independent.
In the first phase of energy independence we get as much energy as possible from resources which we own or which are in the hands of friendly, stable nations. First we build new nuclear power plants in every state. If the French can make nuclear work what excuse do we have? If France’s success isn’t incentive enough, consider the success of Denmark, Brazil, and Australia in diversifying their energy supplies. In addition, we drill for oil off all our coastal waters and we build new refineries and pipelines in every state. We must burn more coal and use more natural Gas. Existing energy companies are making plenty of money in the current climate of false scarcity. We will have to find away around them. Usually the way around greedy energy companies would require political will. However, almost all existing politicians are in the pocket of the energy companies. This includes democrats and republicans. So every politician currently in office needs to be thrown out. Anyone who works for or who owns an existing conventional energy company is in my view disqualified for public office. We already know from the Bush/Cheney experience that such politicians will work in a way contrary to the national security of the United States and will start pointless wars for oil. Every time a new oil war start conservatives get paid. That is why no conservative supports plans to gain immediate energy independence.
Merely having new politicians willing to clear the legal minefields laid down by oil bought senators and congressmen might not be enough. We might have to get a little bolder. Therefore I suggest that we build terawatts of new nuclear power plans and miles of new oil refineries in Mexico and that we send the power back to the states via pipelines, power lines, hydrogen, or whatever works. This will provide work for Mexicans and energy for us. The Mexican government will have a large incentive to make the plants secure and this increased security might even spill over to the borders and make our borders more secure.
While phase one is going on we need to start on phase 2. In this phase we bring online as many green and renewable technologies as are currently viable and put as much money as is needed into producing more. I would suggest that the model cities be built in the west and south—anywhere that it does not get cold enough to snow. The idea is to build small towns or cities that will go cold turkey. There will be no fossil fuels of any kind allowed in these cities. All vehicles and houses will be powered by wind, solar and bio-mass. The best locations would be those that have year around wind, sun and enough farming in the area to produce the bio mass. These experimental towns would be off the power grid. The only way to get power to them would be to make the green and renewable technologies work. Volunteers who truly believe that the future is green would be invited to apply for residency. We would probably take engineers and farmers over other types because we would need people who were skilled in keeping the power conversion machinery going and others who don’t mind the get their hands dirty hard work of farming. Another part of the second phase will involve green government. In a free society you can not tell free citizens they must go green. But you can tell government at all levels that it is prohibited from using non domestic sources of energy and non domestic products.
April 13th, 2008 at 6:59 pm
Thanks for sharing your thoughts with us poetryman69.