High gas prices trap more Americans

[Javaman]

http://www.usatoday.com/money/industries/energy/story/2011-10-21/high-gas-prices/50846298/1?loc=interstitialskip

Americans are increasingly hurt by high gas prices, because many lack options that would enable them to reduce the costs of driving, a report today says.

Although gas prices have recently dipped, drivers will have spent a record $490 billion on gas by year's end — $100 billion more than the prior year , according to the "Energy Trap" report by the New American Foundation, a non-partisan research group.

Consumers are no longer responding to price increases as they did in the late 1970s, when many drove less and bought more fuel-efficient cars, says author Skip Laitner, who analyzed U.S. government data. When prices hit $4 in 2008, he says, demand for gas fell only 3%.

Middle-class workers simply don't have alternatives, says Laitner, an economist at the American Council for an Energy-Efficient Economy. He says many moved to distant suburbs when gas prices were lower and can't afford now to move, buy a more efficient car or switch jobs. Also, he says many lack access to public transportation.

more at link...

[Sarah Ibarruri]

1. Please, someone, explain to me why gasoline is not a utility. Electricity is, water is, etc.

Basic services are all utilities. Gas is one, why isn't it a utility yet?

[badtoworse]

3. "Basic service" is not the criterion for something being a utility

Utilities are created for services where competition is not practical and a monopoly is the only reasonable way to provide the service. It wouldn't be practical to have numerous electric companies running wires through the street, so one company is given a franchise and regulated as a utility. (In the very early days of electrification there were multiple companies running wires in the cities and it was very problematic. I've seen pictures where there were so many wires you could barely see the sky from underneath them.). Today, electric transmission (the high voltage lines) and electric distribution (the lines that serve customers) are still regulated utilities, but generation is open to competition in many parts of the US. You have a choice of who you buy the electricity from, but pay the utility to deliver it.

For the same reason, water is a regulated utility where it isn't muncipally supplied. I'm exactly sure about TV, phone and internet. There are alternative ways of supplying these services, and there is competition, but I'm not sure about the level of regulation by the PSC. (We use Verizon, but could get the same services from Cablevision.)

Food is a basic service, but is not a utility. Why? There is no reason why you can't have numerous suppliers competing. The same is true for gasoline.

[Sarah Ibarruri]

7. So a utility becomes one when there's no competition then? Hmm.. I thought it was...

when a product was so important to the functioning of a place, that it had to be regulated.

[badtoworse]

9. It's when competition is not feasible or possible

Mail service is pretty imprortant, but it's feasible to have more than one company supply the service. That's why we have the USPS, Fedex, UPS and others competing for your business. On the other hand, it's not practical to have multiple water companies running pipes down the same street. That's why one is a regulated utility and the other isn't

[Sarah Ibarruri]

13. Got it. Thanks for the explanation. nt

[Spider Jerusalem]

19. "Utilities" are "natural monopolies".

The infrastructure investment and maintenance in electric generation and supply, in telecoms, in natural gas delivery, makes those things natural monopolies (because the provision and maintenance of a fixed supply network works best as a monopolistic entity under unified local/regional control). Motor fuel is not. And making it a utility would not make it any cheaper. The US imports over half the oil it uses and price is thus subject to the pressures of supply and demand on world markets (the US is conversely still self-sufficient in natural gas and coal for electric power generation).

[Sarah Ibarruri]

30. And yet isn't oil a cartel? Doesn't it function as a monopoly? nt

[Spider Jerusalem]

31. No it's not and no it doesn't

one company doesn't own all the oil production and refining and it's not a cartel, the price is set on the world market (and again, the US imports most of its oil).

[Sarah Ibarruri]

32. Here's an interesting article on the OPEC cartel...

http://www.huffingtonpost.com/raymond-j-learsy/if-the-opec-cartel-is-bei_b_462048.html

"OPEC and the manipulation of the commodity markets (please see "The CFTC and Department of Energy Snore Away While Oil Patch Makes Hay") have successfully doubled the price of oil since the outset of the Obama administration, when oil was quoted in the low 30's a barrel in February 2009. The administration has been helpless -- or unwilling, given the influence of the oil industry and Wall Street -- to confront the manipulation of a market that is literally overflowing with product, with producers, importers, and traders pushing up prices by literally keeping millions of barrels in supertankers at sea because there is insufficient storage on land. This results in higher prices at enormous cost to American and world consumers while being a major drain on our balance of payments and our economy at this precarious moment.

Given OPEC's success, given our tolerance of its activities, given its enormous cost to our society, why should we not, in our own self-interest and in an effort to level the playing field, follow its example?..."

[Spider Jerusalem]

35. Why not? OPEC controls the bulk of the world's oil producing regions and exports.

The US hasn't got anywhere near that kind of leverage (global crude oil production: c. 86 million barrels a day, US production, c. 5 million barrels a day. US consumption: c. 18 million barrels a day. Do the math. The US is over the proverbial barrel.)

[eridani]

34. Supply and demand isn't the only factor

Speculation is equally important, and it can and should be stopped. Not that motor fuel has to be made a utility in order to do that, though.

[Spider Jerusalem]

36. Stopped how?

Speculation probably accounts for a relatively small part of the cost of a barrel of oil. Have a look at the NYMEX/Brent crude differential sometime. Traded on different markets. One in NYC, one in London. Supply and demand (or rather, oversupply and insufficient infrastructure to move the WTI crude oil NYMEX trades in) has kept WTI trading at a $10-20 per barrel discount to Brent for several years now. If "speculation" were as important a factor as people seem to think then there's no reason for the price of "benchmark" US crude oil to be so far out of line with the rest of the market.

[eridani]

37. Make it illegal to buy oil unless you take posession of it

http://www.stopoilspeculationnow.com/Pages/problem.aspx
http://www.stopoilspeculationnow.com/home.aspx

Fuel prices remain high despite the weak economy. Gasoline costs nearly the same as the days following Hurricane Katrina – even though people and companies around the world are using less fuel because of the weak economy. There is absolutely no justification for today’s inflated prices.

The only logical explanation for this disconnect in supply and demand is the rise of rampant speculation on Wall Street. Speculators buy and sell as much oil as possible to make a quick and easy profit – even though they will never use the oil that they purchase. Speculators might trade a barrel of oil more than 20 times before it is ever used – the price going up with each speculative trade, and consumers picking up the final tab. This rampant speculation reportedly increases oil prices by as much as $10 to $30 a barrel – raising the cost of nearly everything you purchase



http://content.usatoday.com/communities/ondeadline/post/2011/04/disturbing-revelations-in-probe-of-possible-gas-price-manipulation/1

An investigation into possible manipulation of gasoline prices has uncovered "disturbing'' revelations, Attorney General Eric Holder said today.

"There are a couple things that … are disturbing,'' Holder said, declining to elaborate.

He indicated the information would be reviewed by a fraud task force formed last week

[Spider Jerusalem]

38. Fuel prices remain high because of demand for oil from China and India

and the rest of the world. Speculation has nothing to do with it. Look at a chart of global oil demand vs production sometime.

[eridani]

40. Several investigators disagree

And the economic downturn affects India and China too.

[Spider Jerusalem]

41. ...

Look closely; Q4 2011 demand is at over a million barrels per day in excess of global supply. Simple economics of supply and demand dictate that that means higher prices.

[demosincebirth]

2. I've said this before that our economy will not improve significantly

until the price of gasoline drops to a price of about 2.50 a gallon. I pay one hundred bucks a month more than in June of '08. And I only commute 30 miles a day. Multiply that by millions and millions of workers who commute to work, some even more than me. That's a lot of money that goes to the oil companies instead of the economy to create jobs.

I know that some will say to get a bike or move closer to work, or use public transportation -- all well and good for a small few, but the vast majority of us have no other option but to drive. I see no end in sight for rising oil prices and no solution to bringing them down other than regulation of this industry.

[Javaman]

5. Those days of 2.50 a gallon are long gone...

since the price of crude is traded in US dollars, if the dollar improves, the price of crude goes up.

And since we are at plateau in oil production, what you are seeing now, is pretty much how it's going to be from now on.

Remember when gas first rose above 3 bucks? people freaked out. Now, no one bats an eye lash.

the commodities traders and the oil producing nations laugh us each and every time they turn up the heat on the boiling pot of water. We just sit there thinking nothings wrong.

2 years from now the accepted norm will be 3.50. (if we are lucky)

[demosincebirth]

21. $2.50 is a debatable amount.. In my area 3.50 would be a real improvement.

[Javaman]

24. true. 2.50 in my mind is a complete pipe dream at this point. tn

[Tesha]

6. A lot of Americans made foolish decisions based on their belief in an unsustainable model.

Most of post-WWII suburbia was based on this lie.

Tesha

[demosincebirth]

8. I don't quite understand what you are getting at. Please elaborate

[Javaman]

14. I'm not the op but I will give you some insight...

after WWII the war industry needed to be retooled back to civilian based industries. However, due to the huge expansion many industries needed to make to meet the demand of war dept, cutting back would be a big hit to them.

So in steps the government to work out new price controls. Because during the war, the US Government via the congress had instituted price caps and limits to all items deemed unnecessary to the war effort.

So with price and production caps lifted for the most part, big business can continue making refrigerators and washing machines at the same pace they were making tanks and airplanes.

Only one problem, the Unions were pissed off. Why? because the corporations making these items didn't want to raise the pay of the workers to reflect their new found wealth. So there were all sorts of general strikes going on.

After a few years and a close call with another depression, the unions work out a deal and production goes into high gear.

But who is going to buy the refrigerators and washing machines? Well, returning vets.

So now in steps madison avenue. They start the marketing campaign to convince everyone that they will now live the life of ease if you by a Whirlpool washing machine or a Frigidaire refrigerator.

The war was fought for the idea of freedom, that all people in the world should be free. They could vote, speak their minds, have fair trials, etc. But before the ink was completely dry on the Japanese surrender documents, madison avenue was already trying to figure out a way to reinterpret the "American Dream" into, basically, what we have today.

No longer is the "American Dream" a right to live free, speak your mind, etc, it's now been bastardized to be: how much you can buy? How much stuff do you need? How often can you eat out? etc.

It went from intrinsic natural rights to materialistic fake wealth.

The theme of many ads from that era is based on jealousy of your neighbors new car, new boat, new whatever. "You too can live like a king!", etc.

During this period of time (post WWII to the present), we the people are no longer referred to as citizens but now as consumers. When you have entire population equating themselves as beings that buy up, use up and waste, then you have a society that no longer identifies with our original freedoms.

This was all deliberate.

Perhaps not in the beginning. I think in the beginning, people honestly thought they were helping the nation compete against a communist government (which was also propaganda). However, along the way, sometime around 1975, the income gap began to widen and then exploded in the mid '80's. (Greed is good, remember that?).

Now it become a self perpetuating machine of want. All in a quest for corporations to satisfy their investors, glorify the "elite" of corporate America and how they are saving us from ourselves, and to show just how much we could all convince ourselves of the lie that we were happy. Sadly, this all came on the back of deficit spending, a rising debt and a ballooning defense budget based on evil commies around every corner.

After the last hurrah of the Berlin Wall falling down, the nation as a whole, for all of 5 minutes, began to ask the million dollar question: With the soviets gone, why do we need such a big military? We should start looking at our own problems.

In steps the faux war of Saddam and Kuwait. All brought to a head because poppy, rumsfield and their ilk, didn't like the fact that Saddam didn't want to play with them anymore. But why did this need to happen?

To justify the overt MIC. If they don't have a bad guy of the week, they don't make money, if they don't make money, the many manufacturing plants that they placed in each and every state (so they can/could control that particular senator via blackmail in cutting job), then there would be lay offs. And any politicians worth their latest talking point would be damned to let that happen. So they play fiddle to the lobbyists.

So why did we attack Iraq again? because just flying no fly zone missions does not make the MIC enough money, does not make wall street enough money, doesn't not make the MIC congress people enough money.

so in steps george w. moron* to pick up the money ball and run with it. Mission billions, corporate mercenaries, various new weapon systems that work only half the time yet have to be continually replaced, new bullets, new missiles, new bombs, etc.

Why? because, as of late, our economy depends on a huge payouts from the MIC. Not just in jobs, but in all sorts of ancillary businesses. Not even including the many millionaires in our congress that still play fiddle to the lobbyists.

One final thing, note how as soon as we are rolling up things in Iraq, the bullshit on Iran has picked up?

We now live in perpetual war. The American Dream is gone. It was hauled around the back of the barn and shot with the squirrel gun about 10 years ago.

Anyone thinking that there is still an American Dream are confusing it with rampant consumerism.

(not much of a nut shell and far from complete but it gives you an idea of what has happened)

[demosincebirth]

17. Thanks for the insight., not like some narcissistic jughead.

[Javaman]

23. Cheers! nt

[Obamanaut]

25. Great response. Even though I was not the one who asked, I appreciate

an answer like this one. Thank you.

[Tesha]

15. Sure you do! (NT)

[MH1]

28. shorter version

living far from work and commuting a long distance by private automobile is unsustainable by fossil fuel technology.

Sure it is sustainable for awhile but unless you think the supply of fossil fuel is infinite, obviously it is unsustainable over the long term.

Perhaps a shift can be made to a sustainable model that still supports suburbia, using renewable fuel sources. But current technology will not do it, and especially not considering unchecked population growth, which is also obviously unsustainable over the long term.

IMO we are experiencing initial paroxysms of a very ugly future where the bill comes due for all the false assumptions our society is built on.

[Javaman]

12. Nail on head.

also rebranded as the "American Dream".

[Andy823]

4. The common factor here

Republicans won control of the house and took control this year! Big oil knows that the house will make sure NOTHING happens that would take away their "welfare" checks, or stop them making huge billion dollar profits. Wall street also knows republicans will block any attempt to put and end to speculation in the oil markets, so as long as republicans are in control of either house, or the WH, things will not change!

It's all about GREED, period! Oil companies make billions and pay congress millions to do their bidding!

[Abin Sur]

10. I recently purchased a hybrid in anticipation of higher gas prices.

With a 70 mile daily commute, getting 45 mpg makes a big difference.

[FarCenter]

11. The price of gas will be going up -- Global production of crude oil is flat, non-OECD consumption up

Global production of crude oil is flat at around 85+ million barrels per day. Oil fields are depleting at about the same rate as new ones are developed. New fields tend to be in very deep water or they are very heavy, sulfurous oil. In either case, difficult to extract and difficult to refine.

Meanwhile, consumption domestically in oil producing countries is going up, leaving less oil to be traded on the world market. Also, developing countries such as China, India, Brazil, etc., are consuming more, and some countries, such as Indonesia have gone from being exporters to importers.

The age of cheap oil is over, and there has been comparatively little investment to change transportation to natural gas and electricity.

[Tsiyu]

16. Speaking on OWS and gas

this also locks low-income people out of participating in large city protests. I think the Welfare Queen Oil COmpanies understand this angle all to well. They LUVS them some welfare....

Remember to carpool if you can when attending protests. Give a ride to someone who wants to attend but hasn't got the gas money....

K&R

[lonestarnot]

18. I want santa to bring me an all electric car that motherfucker!

[JVS]

20. Gas goes up and so does public transportation. The best you can do is limit trips.

[bhikkhu]

22. Or walk, or bicycle, or move closer to work, or work closer to home

Not intended to be preachy or sarcastic - but gas prices have been high since 2008. Putting aside all theories about the causes and reasons, there aren't any realistic projections for gas prices to go down, short of global economic collapse.

If you are trapped by high gas prices, figure a way out - even if it's a long-term plan or something that will take three or four years to arrange. The problem is not going away, and your future self will thank you.

[spin]

26. However not everyone lives in a city ...

or close enough to work to walk or bicycle. It also may be difficult to walk or bicycle to work in a blizzard or when the temperature is below freezing.

Moving is a good idea but many people are underwater on their mortgage. The value of their home may take a decade to recover, if ever.

One green solution is to allow those who can to work from home. Companies could save a fortune by allowing this practice as they would no longer need enormous buildings filled with a mouse maze of cubicles. The reduction in traffic would result in lower gasoline prices and save money maintaining and constructing roads.

[bhikkhu]

27. That's one point - but given sufficient time any problem can be solved

the first step is realizing that there is a problem (which most people are aware of now), and the second is realizing it isn't going away - cheap gas isn't coming back, so good sense leads to planning for a future where the impact of high fuel costs is less.

I think we take the short-term view too often - we tolerate things until they are intolerably bad, then we demand change immediately. Of course, that's usually not possible. Taking a good look at things and planning years in advance is possible in this case, I think, as the whole thing has become fairly predictable.

In my case I started bicycling to work, which sounds easy enough, but it took about a year to arrange things health-wise and with the family for it to work out...but we saved enough in vehicle and fuel costs to live much more comfortably with one less vehicle.

[bhikkhu]

29. Well, to argue with myself - plenty of problems can't be solved given adequate time

...they can be adapted to or worked around. The "easy oil" was, essentially, millions of years of distilled and concentrated solar energy, which fundamentally transformed human life. Unfortunately, its limits are being reached, and there's nothing else of the kind on the horizon.

Life is still well worth living, and "adapting" is something our species is very good at.

[The Straight Story]

39. Well, a few problems with that

I get the general idea (define problem, hunt for solution).

Moving closer to work: Cost of moving can be crazy and secondly companies tend to lay off and fire people a lot. Move closer, lose job, wasted money.

Working closer to home, better idea, but jobs just aren't there (3.35 million jobs and 14 million unemployed)

Instead of everyone finding their own solution, if we focus on lowering prices and fixing the economy we narrow it all down :)

[bhikkhu]

42. I was thinking about that too -

I guess I am prone to an "individual" approach - figure out what you can do to solve a problem in your own life (which is usually also a problem in other people's lives as well), then test the solution in practice. Then if it works you have a better life yourself and you set a useful example to others.

Which is all well and good...

But I do understand that individual solutions will never solve large problems - something about the law of averages tells us that wherever there is a problem there will be a wide range of responses - some will solve it or adapt to it, some will ignore it, some will deny it, some will endure, etc. Basically, on average, without a "top-down" solution, the problem doesn't go away.

Fixing the economy, to the extent of improving the distribution of wealth and income, would help a great deal. I think the best way to do that is to vote for democrats, and then hold their feet to the fire on the economic inequality issue to be sure they get the message.

Lowering prices is a tougher thing to do - anyone who's followed the oil industry for long is likely to say "ain't gonna happen". The old easy fields are drying up, and the new fields are devilishly difficult and expensive to develop. Its not a matter of will, but of reality; the planet's geological history is not subject to revision, you might say. Perhaps the transition to electric will eventually lower costs, but that looks like a roll of the dice now too; the technology and complexity involved are costly in themselves.

...which leaves my solution to lowering costs that works right now (though it did take a year of arranging things) - I ride my bicycle. So my advice (not that anyone asks) would be two-pronged - elect democrats, and plan on walking, cycling, taking the bus, relocating, or otherwise becoming less dependent on your cars in the future. And, again, your future self will thank you for it.

[RebelOne]

33. Right now, I am fortunate.

After being laid off my job in 2010, I decided to retire, as I was already collecting Social Security. I am saving at least $50 a week in gas traveling round-trip to work. At this time, the only travel I do is to the grocery store. So, a fill-up will last me a month to a month and a half. And at the present, gas prices in my area are averaging $3.13 a gallon.

[darth marth]

43. the high cost of gas and food is because of Goldman Sachs/Koch speculating driving the cost up

even goldman said that gas is at least twice the price it should be.

We did not use to have speculating on our necessities until the GSCI (goldman sachs commodity Index) and the special Koch derivative for oil.


Why the hell this is not the number one demand of OWS! I cannot understand.

These assholes are robbing us blind every day.

You food is twice the cost it should be.

Your gas is twice what it should be.

That heating oil you can't afford to pay for because your insurance is coming due and you have to buy your meds....should not actually be $800!

How much easier would it be for everyone right now if your major expenses were cut in half?

Because that is what would happen if we ended this speculation on the stock market.

you can move your money, drop out of the system...but there is no way you can avoid being jacked by Goldman Sachs on your food, gas, heating.


These greedy bastards did this just to make themselves more money, and they are killing people. People are starving all over the world because these assholes are screwing with our commodities on the stock market. It makes me so angry :grr: