Lois & Clark Forums Forums General Discussion Off Topic Gas in America

I remember the days when gas cost just under $1.00/gallon, which must have been about 10 years ago around the time I started driving. My dad remembers $0.29/gallon when he first came to Arizona 30 years ago. Now, gas costs just about $2.50 a gallon. )?

I know the war has loads to do with gas prices... you think they'll ever go down again?

Sara (procrastinaing, can you tell? )

I remember when gas for 0.99 was expensive! My parents wouldn't buy it if it was over 0.89. I used to take $10 and that would fill up my tank.

Now it costs over $20 to fill it up. Today, I got gas for my mom's car and it was 2.09, but when I went back out to get gas for my car, it was up to 2.29. I guess that's better than 2.50 . . . but it's still pretty riddiculous.

However . . . that hasn't cut down on my driving at all. Cleveland has riddiculously bad public transportation, and I find myself driving across town pretty often so I have to fill my tank about twice a week.

Well, here in Austria one gallon estimately costs 4.50 to 5 USD, that's a calculation without the current USD-Euro exchange rate in mind.

Thought you'd like to know for comparison

Sara,

You might regret starting this thread...

Over here, we are currently paying about $6.84 a gallon (according to my maths, which I don't think is that dodgy... See this site for more information than you ever would need about UK petrol prices: http://www.theaa.com/allaboutcars/fuel/ )

There's lots of reasons why ours is high, including it is heavily taxed, but the price always goes up over the summer months, because of increased demand from the US, amoungst other things....

It's all those SUVs you lot drive :p

I don't drive anymore. Partly because it's too expense to drive in London, but mostly because the public transport is good, so I don't need to.

Helga

Yeah, we UKers tend to get a little amused when you guys complain about high petrol prices. Our reaction usually goes more along the lines of, "Gosh, that's cheap!" <g>

As Helga says, a large percentage of our prices go straight to the government in tax. :p

LabRat (who thinks there should be a law that when producers raise their prices because of a specific problem or cause, they should be obliged to lower them again when said cause no longer applies. Only fair... )

Here in Italy gas costs $5.75/gallon.

Elena

I think gas is something like $2.20 a gallon here. My friends and I being the poor college students that we are <g> carpool a bit more often. Public transportation around here bites.

JD

It sucks here in my city too in Canada. Right now it's advertized at the pumps for 97.5/litre, but one can get it for 94.5 at the pumps with coupons or something. Gee it usually wavers in the 60s and 70s. Usually it jumps into the low 80s when a long weekend happens. This is nuts.

I think it was last year when the stations decided to put up a fourth spot for a digit in their signs. Luckily, it has not hit 100.0 for them to use that new spot.

ugh.

I remember when it was only in the 50s/litre. It hit that low either two or three winters ago and it wasn't that low since the late 80/early 90s. That was great.

My husband and I just moved within a 5 min walking distance from work so we only use the car once in a while now. So far this month we have used about 30 bucks worth in the car. Before we where spending about 150-190 on gas and 80 on a parking spot downtown.

We used to have a Hyundai Accent and it cost about 18 bucks to fill around 1999-2001. Now that we have a new car the tank is bigger and it would cost up about 30 bucks. Now if we go near the full point we are almost hitting 50 and beyond. ack.

How is everyone's gas taxed where you are?

If my math isn’t completely off, I paid $ 6, 59/gallon last time, and 64% of that price is government tax

I live at the beach in Maryland so they jack up our prices always because they say it cost more to bring it here. It is around $2.20 a gallon. I the early 1970's I had a car that had a 26 gallon tank and I could fill up for around $10 and I only did that once a month. Lived in the city on a direct bus line.

At the beach they would like you to take the bus but I drive because I'm almost a mile from the bus stop (have bad knee) also if you go to the store and buy any cold items they are hot or melted by the time you get home. Also you can have several buses pass you because they are full. However I don't jump in the car and run to the store for any little thing anymore. I try to make sure that I run all my errands at one time.

One of the reasons gas in the states varies so much is the local and state taxes. As I said I live at the beach in Maryland but am 2 blocks from the Delaware state line. I remember a phone in question to the local radio station about the differences in gas prices between Maryland and Delaware at least here on the "lower shore". They said that it had to do with each states taxes on gas so I would assume they vary state to state just as they do on cigerattes and liquor.

In the U.S. we don't pay the high prices charged in other countries for a lot of things because we don't have the same type of health and human services systems.

If anyone in the lower 48 was paying $2.00 a gallon before 2001 it would have been considered highway robbery. Now if anyone could find a station that charged $2.00 a gallon the station would be out of gas within two hours after opening. It'd be a NewsBreak on Channel 4!

Econ 101: raise the price by a lot then lower it a trifle and let people's bad memories fool them into thinking they're getting a good deal. It didn't cost $20 to fill up my car with 92 octane in 2000; on Thursday it cost me $34 to fill it up with 89 octane (92 is no longer an issue).

Like Roo said here it is currently 97.5cents per litre (1 litre = 0.26 of a US gallon and 0.22UK). So it'd be a little under $5,00 a gallon here (if I'm counting that correctly).

I will pay high gas prices anyday to keep getting free health care. I love visiting the U.S but that is one of the main reason I could never live there.

Jackie

Up here in Oregon, it's about $2.31 at the cheapest station nearest me, averaging closer to $2.35/gallon statewide.

The main reason for the increase in gas prices, according to the financial media, is the red-hot growing economies of India and China, both running at roughly 10% annual growth. Both are growing so fast that oil demand over the last few years have skyrocketed from those two countries and have put pressure on oil prices while oil demand in the G8 countries has grown only slowly. Increases in US demand are actually running slower than normal, historically.

While many would think that the Iraq war is the main contributor, it actually isn't. Iraqi oil is pumping along as usual with relatively few interruptions lately from the terrorists, who have been concentrating on killing civilians instead. And since Iraq is exempt from OPEC quotas, they are free to pump as much as they want to.

But even China and India cannot account for the latest increases in oil prices. That is primarily due to investor speculation. These are people who are investing solely in the belief that prices are going up and who will never take delivery of a single barrel of oil. Every slight perceived disruption in supply, such as hurricane threats to Louisiana, refinery fires, Nigerian strikes, threats from Hugo Chavez of Venezuela (an OPEC member), or Russian takeovers of Yukos (the largest Russian oil company) contributes to huge influxes of speculators.

The speculation is such that it baffles even economists who have followed the oil market for years. The supply/demand factors only justify oil prices at perhaps $40-45/barrel, not the $60/barrel it is currently priced at in the futures markets. The rest is due to speculation. The Saudis are pumping oil like mad to try to reduce the prices, but are unable to do so as oil sits in storage with few buyers. Note that this production affects spot market prices only. The prices quoted in the press are usually for futures contracts for Texas light sweet crude or UK's North Sea Brent crude, several months down the road. The futures prices are running much higher than current spot prices.

Gasoline prices, while largely tied to oil, also are due to other factors, primarily environmental regulation. Regulations are so onerous in the US that no refinery had been built in the US for thirty years while at the same time, demand has skyrocketed. Refineries pump at full capacity and still cannot meet demand, so any additional requirements are farmed out overseas. Many economists attribute high prices to refinery bottlenecks, rather than actual oil supply. The problem can only get worse as no new refineries are in the pipeline.

US supply of oil has also dropped over the last thirty years. While old oil wells dry up, no additional ones are started. Even a battle over a miniscule 2,000 acre portion of Alaska containing the largest oil discovery in the United States is fought over tooth and nail to prevent us from reducing our dependency on foreign oil. And even conservative state governors have a "not-in-my-backyard" philosophy on oil drilling.

Further environmental regulations require thirteen "boutique" gasolines to be refined for various regions of the country. This has the result that no gasoline refined for a particular region can be legally transported to another region if a shortage develops. It also makes it difficult for refineries to convert to a different blend if a different distribution of gasoline is required, adding to shortages and higher prices. Reducing the boutique blends to one would likely dramatically reduce the price of gas, while making it far easier for refineries to produce gasoline.

Also during the summer months, the federal government requires additives to be put in gasoline to reduce emissions during the peak driving seasons. As it turns out, the additives don't work. While they do reduce emissions for a gallon of gas, the drawbacks are that they introduce water vapor into car engines and weaken the amount of energy produced. So to go the same distance, additional gas has to be burned negating the intended effects of reducing emissions. The result is higher gasoline consumption and higher prices with no net reduction in pollution.

Finally, driving demand has proven to be very inelastic. Higher prices have not significantly reduced demand for gas. Much of our driving is to/from work or to/from stores and such and cannot easily be reduced. Mass transit helps somewhat, but most people aren't willing to give up their cars. So as prices rise, sellers are given no incentives to reduce those prices as demand doesn't decrease.

So what's the answer? The fact is that oil is a finite resource, so whether or not you agree with the various environmental measures being taken, sooner or later, it's going to run out.

So do we carry on regardless, guzzling the available resource until it runs out, assuming while we do so that science will produce another source of energy just in the nick of time? Or do we try and make what we've got last as long as possible - which you could say is just postponing the inevitable in any case?

The thing is, taking steps to use less oil is generally not just better for the available supplies and the environment, it's also better for our health. If we all walked more and cooked from scratch more than bought pre-packaged foods, we'd get more exercise, we'd eat more healthily, and we'd use less oil. For example, alongside all those single-occupancy cars travelling to and from the shops, think of all those plastic containers, plastic bags, and plastic bottles we throw out every day.

However, it's a complex issue. Our entire social structure, our transport systems, our lifestyle - even the way our towns and cities are designed - would have to change to make a significant dent in consumption. I don't think that's going to happen in my lifetime.

Yvonne

Taxes on gas should be slightly over 40 per cent in Austria - but compared to some other European countries, it's actually bearable.

Oh, one more or less political cause for the high prices are the crude oil sources within western territory. The thing for the USA is, that since 1995 the imports are higher than their own production and this gap gets continuously bigger. In addition to that the rate of newly discovered oil recources compared to the total usage changes too. That means in clear words that the oil recources in the 'western world' will run low or empty centuries before the ones in arabian countries.

Also issues with more and more extrem weather situations are taking influence in gas prices. I've recently read a report on hurrican Emily and that's probably not the only local issue.

There are three schools of thought on this issue. On one side are the environmentalists who advocate only clean energy sources such as geothermal, hydroelectric, wind, hydrogen cells, and government-mandated fuel economy standards, believing that only conservation will solve our energy problems. On the other side are the advocates of unlimited oil exploration (drilling off-shore, ANWR, shale oil, etc), clean-burning coal, and nuclear power who poo-poo cleaner solutions as too expensive until we've exhausted all efforts to obtain new sources of oil. A third way combines both approaches. We continue to locate additional sources of fuels while at the same time fostering new, cleaner sources of energy while at the same time modernizing electrical grids to prevent the sort of blackouts California experienced just a short while ago, converting oil-consuming power plants to natural gas, and others.

Unfortunately in Washington, D.C. politics on both sides have prevented any sort of energy policy at all for decades, so advocates of both the first and second approaches are preventing compromise on the third approach, so nothing at all gets done. I can't speak for other countries since I haven't lived there. Over the last 30 years, the US went from a 30% dependency on foreign oil to the current near-60% dependency. This short-sightedness is only now starting to make itself apparent with ever-increasing costs of energy, likely to the detriment of long-term economic growth. There is no magical solution that can give us $1/gallon gasoline overnight, nor is there an answer that can solve all of our problems. Anything proposed and enacted today will still take years before benefits are seen, so high gas prices are probably here to stay.

Each side insisting on their own solution simply leads to gridlock and inaction. The left cannot get over their fears of global warming, still unproven as half the world's environmental scientists believe it exists while the other half don't, though universally believed to be absolutely true in the press. (As an aside, a single volcanic eruption like Mt. Pinatubo a few years back put more pollutants into the atmosphere than every car ever made in history and altered the weather patterns of the entire west coast of the US) The right believes proposals like Kyoto are designed merely to destroy America's economic power, while excluding the real polluters like China and India.

I don't know where the right balance exists. Admittedly, I lean heavily towards the right and believe that we should definitely try to satisfy current growing energy demands, while at the same time advocating policies that eventually lead toward alternative fuel. I, for one, would love to get one of those new hybrid SUV's. I suspect that any proposals I make will be supported heavily by conservatives and decried by liberals, so I'm not sure if I should bother.

But hey, what the heck.

For problems in our own back yard, I would advocate a number of proposals to satisfy current demand for oil. I'd open up ANWR (Arctic National Wildlife Reserve for those non-Americans) immediately. I find it ludicrous that a handful of porcupine caribou are what stands between us and 18-50 billion barrels of oil, especially when nearby Prudhoe Bay has proven that the caribou thrive near pipelines and love the warmth they provide. And the development kills off the insect parasites that end up reducing the herd population. Contrary to the pictures shown on the evening news of a pristine white wilderness (within ANWR, which is bigger than many states, but nowhere near the proposed drilling site), the actual 2,000 acres in dispute are in a swamp, full of those caribou-killing insects.

I would immediately remove the regulations that I deem unnecessary and ineffective that prevent refineries from being built or supplies from being distributed to where they are needed. I would reduced taxes or give tax incentives for the development of hard-to-get oil sources such as shale. I would permit off-shore drilling far enough away as to be invisible from shore. I would give incentives for switching electrical plants from oil to natural gas. I would accelerate the building of refineries and modern, safe nuclear power plants. This country would go a long way once the last oil-burning plant is converted into using something else.

Much of the northeast of the US heat homes using heating oil. I would support programs whether through subsidy or direct payments to convert those homes to natural gas heating or electrical heating. Refineries usually have to scale back production of gasoline in preparation for the winter months and increase production of heating oil. If no one used heating oil anymore, refineries could continue to produce large quantities of gasoline, therefore reducing the price at the pump.

On the conservation side, I would give incentives for people to buy more fuel-efficient means of transportation. I don't believe in mandating fuel economy as the tradeoff is lighter vehicles and higher percentages of traffic fatalities. I would exempt from energy taxes any consumers that switch their accounts to cleaner fuel sources. My local electricity provider, Portland Gas and Electric, has a program that allows you to opt into electricity produced solely from clean sources such as wind, solar, and hydroelectric at the cost of a higher electric bill since that energy is far more expensive to produce.

On the alternative fuels, I would encourage research into those fields. I don't normally approve of government subsidies into these areas since it usually involves government micromanagement, but if the latter could be avoided, I'd be all for research and development grants into alternative sources like hydrogen fuel cells, clean-burning coal, or even the panacea of cold fusion.

As you can see, there are a lot of things that can be done. Practically none of those are being done because of petty partisan bickering. Only now is an energy bill on the verge of passage and enactment. Many of the items I mentioned above are included in that bill. It merely took taking ANWR off the table to enable passage after five years of filibusters in the Senate. We'll see whether those proposals will have significant effects in the future. Unfortunately, very little in the bill will do anything for current prices. There's not much that can be done short of eliminating state or federal taxes on gasoline (federal tax in US is 18.4 cents/gallon while state taxes vary). Releasing oil from the National Strategic Petroleum Reserve would do nothing as the amount available is dwarfed by total worldwide fuel consumption. As seen, increased production has little effect on futures prices, as the Saudis have learned. Price regulation is probably the worst of all solutions. It was tried in the late 70's, leading to gas lines, fueling on alternate days depending on whether your license plate was even or odd, and the advice to put on a sweater as national "malaise" set in.

We just got back from a long car journey, and it cost us over $40 each time we had to fill up the tank of the minivan.

Even so, I can't ever complain about the cost of gas for two reasons:

1 - Americans still pay the lowest amount per gallon than everyone else.

2 - Americans continue to insist on driving gigantic gas-guzzling SUVs that get 10 miles to the gallon. While I can get behind the idea of SUVs for people who need them to haul stuff (in the country, in the mountains where 4 wheel drive is needed, in the frozen tundra), I have a hard time accepting those who commute to downtown Chicago one passenger per SUV, not as part of a multiple-passenger carpool mind you, where they take up twice the amount of parking space while using up all that lovely gas.

Lynn

Just a couple of quick addendums here...

First, Roger's very interesting and thorough summary of the reasons for the increase in the price of petrol/gas and crude oil didn't include one very significant cause: the recent lower value of the US dollar. Oil is priced internationally in dollars. When the dollar is worth less on the world currency market, the oil-producing countries get a lot less money in real terms for the oil they produce... so they increase the price.

And, no, prices will not go down to their former level at the pump when this ends... they never do. :p

Second, although Lynn's quite right that the US pays by far the lowest price per gallon, the international comparisons posted should be treated with a little bit of caution unless you know exactly which gallon measurement people are using. An Imperial gallon contains exactly a quarter as much again as an American gallon. (A North American pint contains 16 fluid ounces, while an Imperial pint - the measurement used in just about every other non-metric country - contains 20 fluid ounces. There are still 8 pints to the gallon, but when the pint is smaller the gallon will also be smaller ).


Wendy (who has now got used to paying less than half what she used to pay to fill up her tank! )

Is it just me or is it starting to get political in here? I mean can we have a discussion about the high price of gas without getting into a fight about the merits/detriments of the Dick Cheney Energy Plan? I can get that from the Washington Post.

I don't think it's been getting overly political. People have discussed their opinions about what could be done to change things, and politics *does* tend to hamper progress to some degree.

I pay about $2.35 a gallon for gas here in my part of Maryland, which I think is close to the current average for the U.S.? At least, it was average last time I heard anything. However, while I can't afford a hybrid (wish they'd come up with a way to make them cheaper), I do have a fuel-efficient car. I get about 40 miles to the gallon, which is pretty decent for a car over here.

There was a commercial on TV a while ago for some SUV (don't remember which). In the commercial, the SUV was driving through this forest that was trying to attack him (think "ents," like in Lord of the Rings), and the SUV just barely escapes. I believe it was trying to show the SUV as something that keeps you safe from all the dangers outside, but my husband and I thought it was creation rebelling against its biggest despoilers. *grin* I agree that there's a place for SUVs... in the country, the mountains, places where 4-wheel drive is essential, etc. But there should not be the demand for them that there is.