2007-2008 Crude Oil Cost

[N Judah]

While I'm finding my source on how much tax Exxon Mobil pays could you tell me what a lifestyle subsidy is?

Government subsidizes suburban lifestyle via trillions in freeway subsidies. Gas/automobile-centered lifestyle is cheaper than other lifestyles, so everyone gets trapped in gas/automobile-centered lifestyle.

So Exxon Mobil pays more in taxes than they make in profits? Hard to believe they remain solvent. It almost seems like all of these oil companies should be bankrupt, instead of enjoying record profits, share prices, etc.

The fact is that they can pass on whatever they want to consumers at the pump, irrespective of regulations or whatever. They control the debate so they can make money any way they want.

[N Judah]

Would you rather have the government doing all this? Do you really think they could do a better job?

For some reason lots of countries seem to think they'd rather have the fed government doing all this. from the consumer viewpoint, gas is much cheaper in Venezuela than it is here, so I'm interested in how you think corporations are the way to go.

[jgriff]

I already commented on your link. Pump taxes are not taxes on Exxon. Cigarette taxes are not taxes on Phillip Morris. They are taxes on consumption of the products, therefore they are taxes on me, the consumer.

Pump taxes are a tax on the oil industry. It makes their products more expensive therfore they sell less of it and make less money. It also puts them at a disadvantage against other forms of energy. The thing that will kill big oil is high gas prices. When it gets cheaper to drive an electric car than a gasoline car big oil will be finished. Taxes on gasoline bring that day closer.

So lets list all the big favors the government does for big oil.

1. Direct subsidies for competitors, ie ethanol.

2. Regulations and reformulations that cause them to have to build new plants. ie ULSD, MTBE, etc...

3. Large taxes on their products that cause lower sales and put them at a competitive disadvantage.

4. High income tax rates.

5. Constant congressional hearings on why they are making money.

Government subsidizes suburban lifestyle via trillions in freeway subsidies. Gas/automobile-centered lifestyle is cheaper than other lifestyles, so everyone gets trapped in gas/automobile-centered lifestyle.

So Exxon Mobil pays more in taxes than they make in profits? Hard to believe they remain solvent. It almost seems like all of these oil companies should be bankrupt, instead of enjoying record profits, share prices, etc.

I didn't say they weren't making a profit. I said the amount of taxes they pay exceeds the profit.

So what is your alternative to the freeway lifestyle? Is it cheaper or more expensive?

For some reason lots of countries seem to think they'd rather have the fed government doing all this. from the consumer viewpoint, gas is much cheaper in Venezuela than it is here, so I'm interested in how you think corporations are the way to go.

Well, if you want a communist government I say more power to you. If you think they are better off than us maybe you can move there.

Maybe the cheap fuel will help you handle the massive shortages and huge inflation rate.

[RedScare]

Pump taxes are a tax on the oil industry. It makes their products more expensive therfore they sell less of it and make less money. It also puts them at a disadvantage against other forms of energy. The thing that will kill big oil is high gas prices. When it gets cheaper to drive an electric car than a gasoline car big oil will be finished. Taxes on gasoline bring that day closer.

Starting happy hour a little early today, are we? I'm sorry, when I hear doomsday scenarios for the most profitable corporation in the world, I can't stop laughing.

[jgriff]

They are not the most profitable on a percentage basis. They make a lot of money becuase it is a huge corporation. When are you guys going to understand the difference?

Ok, I'm signing off. Time to go home.

I spent 12 hours today building the plants that make the fuel for the cars and trucks that deliver all your food and get you to work everyday. Your welcome...

[N Judah]

The thing that will kill big oil is high gas prices.

Higher taxes/prices bring more production (not less). you said it yourself!

Well, if you want a communist government I say more power to you. If you think they are better off than us maybe you can move there.

You asked how it would be better off if governments were in charge of the oil patch, and I answered you. Our government subsidizes just as much (if not more) than other governments. We're just less open about our industrial policy.

Maybe the cheap fuel will help you handle the massive shortages and huge inflation rate.

That stuff can happen no matter the government style.

I spent 12 hours today building the plants that make the fuel for the cars and trucks that deliver all your food and get you to work everyday. Your welcome...

Hope you get paid for it.

[TheNiche]

Higher taxes/prices bring more production (not less). you said it yourself!

Price Elasticity of Demand. Look it up.

[N Judah]

Price Elasticity of Demand. Look it up.

Gas consumption is inelastic. But why? It wasn't always like that. Better for gas company profits, I've found. They're doing a lot better than the late 90s when gas was $.88 a gallon. Well, only if you think record profits are any sort of indication.

[musicman]

Energy conservation is great, but I would do it to be environmentally friendly, saving money is just a secondary benefit.

I can afford my current usage and am pretty efficient already.

LOL guess things arent THAT expensive after all.

[TheNiche]

Gas consumption is inelastic. But why? It wasn't always like that. Better for gas company profits, I've found. They're doing a lot better than the late 90s when gas was $.88 a gallon. Well, only if you think record profits are any sort of indication.

[sigh]

Long run, short run considerations. Also bear in mind that price elasticity is not the theoretical straight line as simplified in introductory textbooks and on Wikipedia.

[N Judah]

[sigh]

Long run, short run considerations.

No...the framework itself is being gamed. Such is the nature of politics, and economics just fills in the gaps.

Also bear in mind that price elasticity is not the theoretical straight line as simplified in introductory textbooks and on Wikipedia.

That is exactly what I bore in mind. Oil companies can charge whatever they think people are willing to bear with almost no fear of competition. They don't make record profits by being stupid, and it's not like they don't have lobbyists to frame the debate to suit their needs.

[TheNiche]

Oil companies can charge whatever they think people are willing to bear with almost no fear of competition.

Ummm. NO.

This is why I'm so very much in favor of funding better high school programs. People actually believe this stuff, then turn around and vote.

[RedScare]

Ummm. NO.

This is why I'm so very much in favor of funding better high school programs. People actually believe this stuff, then turn around and vote.

Frankly, I am far more concerned with how many politicians a corporation can buy than how ignorant people vote. Time and time again, it has been shown that money trumps voters. You needn't fear for the oil companies. They'll do fine thank you.

[TheNiche]

Time and time again, it has been shown that money trumps voters.

Uh, yeah. That's exactly what I was getting at. The status quo sucks, therefore change it by implementing better educational programs.

[N Judah]

Ummm. NO.

Increase in gas prices -> record profits

is the pattern so far.

[Mark F. Barnes]

Pump taxes are a tax on the oil industry. It makes their products more expensive therfore they sell less of it and make less money. It also puts them at a disadvantage against other forms of energy. The thing that will kill big oil is high gas prices. When it gets cheaper to drive an electric car than a gasoline car big oil will be finished. Taxes on gasoline bring that day closer.

So lets list all the big favors the government does for big oil.

1. Direct subsidies for competitors, ie ethanol.

2. Regulations and reformulations that cause them to have to build new plants. ie ULSD, MTBE, etc...

3. Large taxes on their products that cause lower sales and put them at a competitive disadvantage.

4. High income tax rates.

5. Constant congressional hearings on why they are making money.

I didn't say they weren't making a profit. I said the amount of taxes they pay exceeds the profit.

So what is your alternative to the freeway lifestyle? Is it cheaper or more expensive?

Well, if you want a communist government I say more power to you. If you think they are better off than us maybe you can move there.

Maybe the cheap fuel will help you handle the massive shortages and huge inflation rate.

Clueless...................

40 years in this business and this has to be as far off the reservation as I have heard in a long time.

News flash for all those speculators out there. Just managed to get two test wells into the lower Huron Shale in Boone County, West Virginia. Have them on test currently at a maximum rate of 2.16 mmcfd/day from three zones in the 400 foot thick formation. This is a 1200 btu clean gas that carries not only C3, but also high quality C1 and C2. You don't even have to run this stuff through a scrubber, very very clean. Looks like a great new play for a while. Reservoir guys are saying 400-500 tcf of production possible. I know the local economy could use the boost of a boom, this is a depressing area. Some of the poverty in this area is self induced, but even the folks that do work are below scale. Some of these areas around Logan and Jeffery, look like a 2AM feed the children commercial. Pretty tough on some folks in this area.

[PuroAztlan]

Clueless................... 40 years in this business and this has to be as far off the reservation as I have heard in a long time. News flash for all those speculators out there. Just managed to get two test wells into the lower Huron Shale in Boone County, West Virginia. Have them on test currently at a maximum rate of 2.16 mmcfd/day from three zones in the 400 foot thick formation. This is a 1200 btu clean gas that carries not only C3, but also high quality C1 and C2. You don't even have to run this stuff through a scrubber, very very clean. Looks like a great new play for a while. Reservoir guys are saying 400-500 tcf of production possible. I know the local economy could use the boost of a boom, this is a depressing area. Some of the poverty in this area is self induced, but even the folks that do work are below scale. Some of these areas around Logan and Jeffery, look like a 2AM feed the children commercial. Pretty tough on some folks in this area.

wat

[cottonmather0]

Ummm. NO.

This is why I'm so very much in favor of funding better high school programs. People actually believe this stuff, then turn around and vote.

I agree, Niche. It's scary how the ignorant can vote to take advantage of the prudent, or even more generally, vote their ignorance into policy. There is a huge political machine that panders to this on both sides of the aisle, hence the occurrence of those oil company hearings in the very first place. And not only is it scary that truly ignorant people are able to go out and vote, it's also scary that truly ignorant people can manage to get themselves elected, too. Hi Sheila!

Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives. - James Madison

[Pumapayam]

$113, nah, lets try $115.

I say $120 by the end of the month.

[N Judah]

And when it's $10 a gallon we'll still be paying it. Technological progress only goes so fast (Silicon Valley VC money be damned) and without any other transit options (to say nothing of the Niches of the world wishing to dissolve METRO) we'll happily cough up since we're not going to bike it downtown from Sugarland...

Some of the poverty in this area is self induced, but even the folks that do work are below scale. Some of these areas around Logan and Jeffery, look like a 2AM feed the children commercial. Pretty tough on some folks in this area.

LoL. Is this the proposal to drill *in* Chief Logan State Park, even though the law forbids it? At least you're not preying on the desperate. See how they feel about you guys in a few years. Or, for that matter, how they feel about you now...

I agree, Niche. It's scary how the ignorant can vote to take advantage of the prudent, or even more generally, vote their ignorance into policy.

Oh, he's just being a jerk. He wants us to ask him about his degrees so he can brag about them.

[Pumapayam]

And when it's $10 a gallon we'll still be paying it. Technological progress only goes so fast (Silicon Valley VC money be damned) and without any other transit options (to say nothing of the Niches of the world wishing to dissolve METRO) we'll happily cough up since we're not going to bike it downtown from Sugarland...

Honestly, I think $10 gas will be the least of the problems, I can't imagine what food, airplane flights, restaurants, or any consumer goods for that matter will cost. $10 gas is really asking for a HUGE % increase in most everything we enjoy now. . . minus non tangible items likes mobile phone plans, cable, and internet.

[N Judah]

Honestly, I think $10 gas will be the least of the problems, I can't imagine what food, airplane flights, restaurants, or any consumer goods for that matter will cost. $10 gas is really asking for a HUGE % increase in most everything we enjoy now. . . minus non tangible items likes mobile phone plans, cable, and internet.

So true. To hear some people tell it, expensive gas simply means we are supposed to car pool.

[houstonmacbro]

So true. To hear some people tell it, expensive gas simply means we are supposed to car pool.

I'm also hearing natural gas will be much more expensive this summer meaning we'll be getting hit on the roads and at home. Not sure how many of us want to swelter through Houston summers with the air conditioning set at 80, but that might be a reality for me.

[cottonmather0]

And when it's $10 a gallon we'll still be paying it. Technological progress only goes so fast (Silicon Valley VC money be damned) and without any other transit options (to say nothing of the Niches of the world wishing to dissolve METRO) we'll happily cough up since we're not going to bike it downtown from Sugarland...

Looks like Niche's explanation of price elasticity is starting to sink in. And no, you're not expect to bike from Sugar Land into downtown, but the ultimate economic expectation would be for you to reevaluate your whole choice of living so far from work and either move houses or change jobs to wear you wouldn't have to drive so much. At $1 a gallon, the true cost of a house Sugar Land (or Katy) is probably still less than the price of a house inside the loop. At $3 or $5 that cost is probably closer and it's a tighter decision to make.

So true. To hear some people tell it, expensive gas simply means we are supposed to car pool.

Well, yeah. If you can't afford the price of a commodity or good, you have to find ways to use less of it. Carpooling uses less gas per person per distance traveled.

I'm also hearing natural gas will be much more expensive this summer meaning we'll be getting hit on the roads and at home. Not sure how many of us want to swelter through Houston summers with the air conditioning set at 80, but that might be a reality for me.

Again, conservation. You can turn your thermostat up or you can buy a smaller house but either way the price will induce you to use less of it. That's how supply and demand works.

It's all simple economics. And you can blame speculators all you want, but the fact that people complain about higher oil and natural gas and gasoline prices yet still continue to consume the same amount as before just means that the price isn't high enough yet and that those speculators are speculating well and have found an inefficiency in the market. That's what they're supposed to do. At some point - $5/gallon? $10/gallon - we'll all start riding the bus and carpooling and the price will no longer keep going up and the speculators will have nowhere else to go.

Cheap fuel prices are not a right, yet for years this country has been developed in the mindset that supplies will always be pletntiful and prices low. Ergo, the transformation to a new market paradigm has been, is, and is going to continue to be, hard.

[CDeb]

At $1 a gallon, the true cost of a house Sugar Land (or Katy) is probably still less than the price of a house inside the loop. At $3 or $5 that cost is probably closer and it's a tighter decision to make.

If you want a much smaller house, sure.

[CDeb]

A simple analysis:

I currently commute 48 miles round trip (lets call it 50).

I drive a Toyota Camry V6 and generally get about 26 mpg (yes, I'm a dork and I check at each fill-up). Let's call it 25 mpg.

We'll assume 250 work days a year (52*5 minus 10 holidays/other days off).

Now let's assume I buy a place ITL where my round trip commute is now 10 miles. My annual commuting miles have now dropped from 12,500 to just 2,500. That's 10,000 fewer miles, and more importantly, 400 fewer gallons of gasoline.

So my gasoline savings has only netted me an extra $2,000 a year even at $5.00 per gallon. Even assuming the 50.5-cent per mile IRS reimbursement as a true total cost, I've only saved $5,050 a year.

Now, $5,050 a year isn't chump change, but it doesn't nearly begin to cover the increase in housing cost when moving from the Burbs to ITL.

[cottonmather0]

A simple analysis:

I currently commute 48 miles round trip (lets call it 50).

I drive a Toyota Camry V6 and generally get about 26 mpg (yes, I'm a dork and I check at each fill-up). Let's call it 25 mpg.

We'll assume 250 work days a year (52*5 minus 10 holidays/other days off).

Now let's assume I buy a place ITL where my round trip commute is now 10 miles. My annual commuting miles have now dropped from 12,500 to just 2,500. That's 10,000 fewer miles, and more importantly, 400 fewer gallons of gasoline.

So my gasoline savings has only netted me an extra $2,000 a year even at $5.00 per gallon. Even assuming the 50.5-cent per mile IRS reimbursement as a true total cost, I've only saved $5,050 a year.

Now, $5,050 a year isn't chump change, but it doesn't nearly begin to cover the increase in housing cost when moving from the Burbs to ITL.

Exactly. So the price really isn't "too high" yet, is it?

[CDeb]

Exactly. So the price really isn't "too high" yet, is it?

Exactly. Which is why you haven't seen me complaining

[Mark F. Barnes]

And now it all makes sense to them all I hope. Everything is high, quit zoning on fuel. Is the price of oil to blame on the cost of housing? Don't like the cost of gas, buy a motorcycle. You'll just love those rainy months......

[Pumapayam]

Exactly. Which is why you haven't seen me complaining

I live 3 blocks from the loop and only 10 miles from work.

But I am still complaining because of the way it increase, too much and too fast.

I expect anything and everything to go up, but within reason and within a rate that matches inflation.

Now, oil seems to be the one driving inflation, and inflation is trying to catch up.