Yes, Gas Prices are Still High... Too High; Here's Why

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posted on May, 14 2013 @ 07:04 PM
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So this has been bothering me for a few weeks now. High gas prices; they just won't go down!!! It seems a majority of Americans have unfortunately become accustomed to these bloated gas prices. I can't blame them... Benghazi, Boston bombing, West Texas plant explosion, never-ending UFO disclosure threads, N. Korea, filing taxes... and that's just the past month. No one was paying any attention to gas prices in 2012 because half of ATS was waiting for the world to end!! So yes, we are easily distracted.

So who is to blame for these gas prices?
The middle east?
Oil companies?
Consumers?
Speculators?

National Average Unleaded Gas prices have been at or above $3.50/gal for the last 3 years.


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Ridiculous right? Considering the steps taken by the current administration to lower gas prices, one would assume they would go down at some point...

Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased.
In 2011, U.S. crude oil production reached its highest level in 8 years, increasing by an estimated 110,000 barrels per day over 2010 levels to 5.59 million barrels per day.
Overall, oil imports have been falling since 2005, and net imports as a share of total consumption declined from 57 percent in 2008 to 45 percent in 2011 – the lowest level since 1995.
The Administration has announced the 2012-2017 Offshore Oil and Gas Development Program, which will open more than 75 percent of our potential offshore oil and gas resources.

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... not to mention Phase 1 of the Keystone Pipeline has been in operation since 2010; and Phase 2 has been in operation since February 2011. These two operational phases of the pipeline are currently delivering up to 590,000 barrels of crude oil every day!
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Now check this out -- 2012 U.S. oil consumption was about 20% less than what the trend has been.


We are producing much more, we are consuming much less, we are under a new energy plan... what gives?!?! Well read the content below for your answers:


For the first time since 1995, the U.S. will likely produce more oil than it imports. That’s great for the country’s trade balance, but the benefits of all that cheap domestic crude still haven’t shown up at the one place it matters most: the gas station. Even as fuel consumption has fallen to 16 percent below its 2007 peak, gasoline remains about a dollar higher than the average price over the past decade. So far this year, gasoline prices have risen 11 percent nationwide, to $3.65 a gallon.



Most of the surge in oil production has happened in places such as North Dakota, Wyoming, Colorado, and Oklahoma, far from refining hubs and big population centers. With competition fierce for limited pipeline capacity, producers have begun moving crude on barges and trains, adding as much as $17 a barrel to the price of domestic oil. That extra cost eventually makes its way to the price at the pump. Ethanol requirements have backfired. The idea was to stretch a limited oil supply, cut reliance on imported crude, and make use of abundant corn harvests. But today the ethanol program is raising costs for refiners even as the price of oil has fallen 10 percent over the last year.



In late 2011 the U.S. quietly surpassed Russia as the largest exporter of such refined products as gasoline and diesel. Exports to Venezuela and India more than doubled. Without realizing it, U.S. drivers are competing for American-made gasoline with consumers in Latin America and Asia, where demand is rising. “Americans don’t think about their prices being impacted by a global market,” says Morse. “The American public just thinks about the rising price at the pump.”



Despite the added costs of transport, U.S. refiners retain a price advantage over their foreign competitors in Europe and Latin America, since U.S. crude is still cheaper than most foreign benchmark blends. This has led to healthy profits for some of the nation’s largest refiners. Shares of Marathon Petroleum (MPC) and Phillips 66 (PSX) hit records in January after earnings beat estimates. Now those lucrative margins have come under pressure as fuel makers run headlong into a biofuel mandate that has become tougher and more expensive to meet.


Let's continue to try to understand why gas prices won't go down...


This year, the law requires U.S. refiners to blend 13.8 billion gallons of ethanol into the fuel they sell to domestic customers. In their calculations when crafting the bill in 2007, lawmakers assumed gasoline demand would continue to rise and that refiners would need all that ethanol to make up 10 percent of the fuel sold to motorists. The problem is that U.S. drivers are consuming less, not more, gasoline because they’re driving fewer miles in increasingly fuel-efficient vehicles. As a result, refiners don’t need all the ethanol the government forces them to buy. To make up the roughly 400 million gallon difference between the ethanol the industry needs and the amount the government mandates, refiners must buy credits called Renewable Identification Numbers, or RINs.



The end result is that refiners have an even greater incentive to sell their fuel abroad, where it isn’t subject to U.S. ethanol requirements.



All of this means that while U.S. oil production is forecast to rise this year, much of it will be refined into gasoline or diesel for the new drivers of Brazil, India, and China. “You have demand growth in every market around the world,” says Schork. “We’d be paying considerably more than we are if we hadn’t had the runup in prices and the incentive to bring more oil to the market.”


So, we will produce more oil than we import, finally. But since Americans have gone against the predicted trend and have become less oil-dependent as everyone had wished, now all of the sudden we have prevented "the forces of supply and demand from working efficiently." WHAT!!!???

So, “The U.S. has the most sophisticated network and the most technologically advanced refining system in the world, and it has access to a tremendous amount of domestically produced crude oil in a country where demand is stagnant at best."... yet it doesn't matter because now we have to compete with far away countries for OUR OWN OIL!!!

The bottom line is this (which is of no surprise) -- the American people just CAN NOT win. If you guessed oil companies were to blame for high gas prices.... you were right. They continue to pass costs down to the consumer... costs that are THEIR responsibility to pay, the cost of doing business. And we all know big oil is untouchable... think Koch brothers, lobbyists, the almighty dollar, the devil.

You are allowed to ask for lube while they bend you over, but make no mistake about it, you're gonna have to pay top dollar for that too!!

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posted on May, 14 2013 @ 07:56 PM
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reply to post by six67seven
 


It seems like another of example Economics 101 not surviving in the real world. All this push over the last few decades to increase our production and refining capability was BS. Now we got it but Big Oil does not want to take a cut in profits. So what was the point?



posted on May, 14 2013 @ 08:11 PM
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In many of the poorest countries of the world gas is more expensive than it is in Murica.

Stop being so spoiled and expecting us all to die for you and pay your subsidized gas bill.
edit on 14-5-2013 by nobeattles because: (no reason given)



posted on May, 14 2013 @ 08:13 PM
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I think this guy(r.i.p.) summed it up pretty good here around the 2:00 mark.... ( caution Strong language)




posted on May, 14 2013 @ 09:10 PM
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Originally posted by ABNARTY
reply to post by six67seven
 


It seems like another of example Economics 101 not surviving in the real world. All this push over the last few decades to increase our production and refining capability was BS. Now we got it but Big Oil does not want to take a cut in profits. So what was the point?


I think the point was for the government to continue pretending it can solve problems. Unfortunately for every nation on earth, government doesn't solve problems, government IS the problem. Yet it gets bigger & bigger, naturally becoming more and more tyrannical.

Government can't control big industry (whether big pharma, big oil, big banks) because the biggest corporations within their respective industry write their own bills for government to sign into law. Why does this happen? -- because very few in government actually know anything about economics/business.

Our representatives just go along to get along... throwing sh*t at the wall, hoping something sticks; hoping to distract the people with a new catastrophe before we all acknowledge they serve little purpose. It's a huge shell game.



posted on May, 14 2013 @ 10:59 PM
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I'm going to link to another thread here that has a very good but under reported cause of the recent high gas prices. Just in case anyone missed it the first time.

Big Oil, Free Trade and How We Get Pumped at the Pump, Every Day

All credit goes to Wrabbit for the hard work compiling the info in that thread. But I think this thread would be helped by reading the two together.



posted on May, 14 2013 @ 11:37 PM
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reply to post by Carreau
 


That would be me.... I missed it the first time. It goes without saying but that's a great thread.

Funny, the article I used as my main source was written 4 days after Wrabbit's thread.

Great minds!



posted on May, 15 2013 @ 01:04 AM
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Originally posted by nobeattles
In many of the poorest countries of the world gas is more expensive than it is in Murica.

Stop being so spoiled and expecting us all to die for you and pay your subsidized gas bill.
edit on 14-5-2013 by nobeattles because: (no reason given)


There is no country called "Murica", there is a country called America, in that country it's citizens are growing increasingly resentful against foreigners and traitors who try to enslave, force American's into poverty or continually emotionally assault America.

This will only lead to war. You might think your ignorant rhetoric harmless, but it is the same way the America civil war started. Relationships between the North and the South totally broke down. Southern men and women wrote books attacking northern men and women, and northern men and women wrote books attacking southern men and women(things like questioning southern/northern masculinity of men, femininity of women etc). After a decade of such rhetoric it was easy for both sides to see the other as less than human.

P.S

America's foreign adventures has not lower the price of oil Americans pay by one cent. Heck, one could argue that the cost of those unfortunate expeditions, increased the cost of fuel.

The simple fact is, if American's can't afford to buy oil, the surplus is shipped off to energy poor and wealth poor Europe. The only reason Europe hasn't collapsed is because of QE1,2,3. The FED needed to keep the dollar valued lower then the Euro and pound, or else he UK and the EU wouldn't be able to purchase American oil.

The surplus printed from QE1,2,3 was invested into Europe, giving Europe some real wealth and propping their currency up a bit. That wealth enabled them to purchase some energy and commodities from Russia and other nations they have negative trade imbalances with.


The day will come when America descends unto Europe, and pay's Europe back for their thievery.



posted on May, 15 2013 @ 03:02 AM
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why is it that the people of the country that seems to have the LOWEST GAS PRICES on the planet as well as wages that are typically far above those in most of the world, seem to be the same ones that whine the most about high gas prices?


complaining about $3.50/gal when in Canada the next closest county during the same time period (and money that has been extremely close in value sometimes more, sometimes less) has been closer to $5.00/gal. (and that is the area that seems to have the cheapest gas in Canada). heck so many Canadians have been crossing the border for CHEEP GAS that residents in Washington state have been whining about the lines at the pumps caused by the Canadians (they also complain about Canadians shopping at their stores).


in Manila a place where people get paid MUCH LESS (a decent wage being around US$120/MONTH) the currant average gas price is US$4.98/gal.


so again why is it that the country with the CHEAPEST gas seems to ALSO be the biggest complainers about the price being too high? :shk:

i'm not saying that the price is not artificially high (which it is all over the world), yet why so much complaining when you have it so much BETTER than everywhere else?



posted on May, 15 2013 @ 08:56 AM
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Originally posted by generik
why is it that the people of the country that seems to have the LOWEST GAS PRICES on the planet as well as wages that are typically far above those in most of the world, seem to be the same ones that whine the most about high gas prices?



so again why is it that the country with the CHEAPEST gas seems to ALSO be the biggest complainers about the price being too high? :shk:


Your words -- "the country with the CHEAPEST gas" -- to be clear, you are referring to the U.S., and to be clear you're wrong! A simple search proves that, but you'd rather complain about someone complaining.


Gas prices alone don't tell the whole story. We also must take into account income and what percentage a people spend on gas to calculate affordability.

Though my thread is about the U.S. (naturally, because that's where I reside), gas/oil prices are a global problem. I understand we still have it "better" than other countries but one has to look below the surface to get a bigger picture.

But I understand some just are thrilled to be contrarians.
As if the people throwing stones in this thread have never complained about their plight, when in fact they too have it "better" than the majority of earthlings. Clowns!






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