For general reference, here are the breakdowns on the prices of crude oil and gasoline:

Crude Oil: (based on the recent $135/barrel price)
$75 Cost of crude oil strictly from supply/demand issues
$30 Price increase of crude oil from speculative pressure
$20 Price increase due to the weak dollar
$10 From risk premiums. a premium price paid by oil dependent industries to insure priority delivery.

Gasoline:
55% of the cost is from the cost of crude oil itself.
22% of the cost is from refining costs
19% of the cost is from taxes
04% of the cost is from distribution and marketing.

Also, it has been widely observed and reported that:
1. Gasoline prices rise more quickly in response to increases in crude prices than those prices will fall in response to a decrease in the price of crude oil.
2. Gasoline prices rise seasonally when demand is high, during the summer, and fall when demand abates in autumn.

There is no law that says oil companies have to be nice to you.

Also, even though demand is falling in the U.S., the total demand is rising globally, so don't expect prices at the pump to fall substantially, - they won't. High oil prices will continue to rise. Improving the strength of the dollar and making the middle-east more peaceful will have far more effect on the price of crude and therefore gasoline.

Also releasing the strategic reserve can not have much lasting affect on the price of oil globally since its total capacity is currently only about 700 million barrels, and only 200 million of that is "sweet" oil (easily refinable to gasoline). The most important value of the strategic reserve is as an investment: the average price per barrel paid for it was $28.42/barrel. Even Canada has oil reserves of over 264 billion barrels. The difference between the quantity of oil in native reserves globally and the U.S. strategic reserve is, frankly, immense. There is no comparison, and therefore the U.S. strategic reserve will have little if no effect whatsoever.

Moreover, gasoline prices are also influenced by the ability to supply it. Refining bottlenecks would remain the same no matter how much oil was flooded on the market. Since oil companies are loathe to pass on the savings from lower crude prices, yet eager to pass on cost increases, it is unlikely you will see substantial changes except for the usual seasonal fluctuations, at least for any time soon.

http://www.taxfoundation.org/publications/show/1139.html

I mean it's pretty obvious. Oil companies like exxon make like 8-10 cents per gallon sold, while US taxes are around 40 cents a gallon.

Agreed, its a tremendous source of power that we don't know how to harness-yet.

Now just to know where to park your car so it gets struck. If it can get a Flux-capacitor up and running...or do you have to be moving at the time for it to work?


Basically until he have better alternatives we need more refineries and offshore drilling for our own oil. NO kidding it won't lower prices next week / moth /year. But the future is not short term (or so i hope *gulp*). Just think if the US had bothered to look for alternatives after the 1970's when things looked bad with oil shortages, unrest in the middle east etc.

NOW the 3 big car manufacturers are begging the gov't for billions in loans so the can start making hybrids. So they sit and do nothing then want to be bailed out. I'm sure it was all in their business plan. I always feel like a conspiracy theorist when it comes to this subject.

I actually agree with 4 out of 5 of the Tax Foundations's core principles (I do not support growth for growth's sake--that's a way to describe cancer).

The article is sensible as far as it goes, but it is fundamentally misleading because it treats the tax revenues as pure profit. I would be very interested in a version of that article that included numbers for federal, state, and local spending on road infrastructure and policing--a sort of "net profit" analysis of that tax stream.



Cap'n, you're a Gerontocrat--how can you not remember that we *did* start doing that in the late '70s. Mr. Reagan simply put a full stop to it, just as he stopped our transition to the metric system. The price signs at the station would be less scary if we were paying by the litre, although that wouldn't help change the number after your tank's full...

Exactly my point in that we should have been doing something all along and politics and GREED put an end to it. Its the same now, with some party's votes tied to environmental groups things like drilling for oil won't be done.




We could just list the price per quart then. But still, i know I'd rather have my 355 ml beer bottle over 12 oz any day.

Amen to that - They have some things going on with super capacitors that, if they ever come online, change the whole milieu quite a bit. If we can combine efficiency, high capacity, and fast charging, then it becomes worthwhile to actually go straight to an electric economy and skip the intermediate steps - even if we're not not producing 'clean' electricity, the greater efficiency of large plants gives a substantial boost over running gasoline in cars both in resource use and lower pollution.

Jonnan

We don't need new technologies, we have an old one that'd work just fine - horses. Buy your horse now while you can! I'm off to start up my horse breeding farm! My horses will come w/cupholders!

Interested in where you got these figures because speculation is pretty commonly accepted as a scapegoat when it doesn't take physical reserves off the market.

The government doesn't make "profit". Theoretically everything the government does is for our benefit, so using your logic all taxes are zero sum. Point is, the oil companies and gasoline are a huge cash cow for our government and everyone says "oh it's the greedy oil barons!" as opposed to the greedy government taking more money than these corporations make in profit.


No we can use "lightning". Just stick a really long copper pole up in the sky during a storm and use the electrical potential difference.

Just using lightning strikes though would be very inefficient because even though they are millions of volts, the amps (current) are very low.

If only such a vehicle existed in the USA. Unfortunately, Diesel vehicles in the USA are mostly large trucks and tractors. Cars with diesel engines are hard to find.



The electric motor is very unlikely to break down; it's a single moving part. What's more likely is that the gasoline engine will break down, which your mechanic can fix.



Agreed.



Agreed, but even so vehicles are getting smarter about this. Electronic transmissions can save plenty of gas despite the habits of a bad driver.



Enjoy while it lasts.



Agreed!! Now that's what an electric car should be.



Basically that boils down to solar, wind, and geothermal.



Actually, the amperage is extremely high: About 40 kiloamperes, according to the Wikipedia.

The problem is actually finding a way to store that energy. I know of no technology that can store that much energy in the fraction of a second that the lightning bolt exists for. It does indeed destroy pretty much whatever it strikes.

We're much more likely to have working large scale fusion power plants long before we can harness the energy of lightning.

Having experienced both the US and UK I would say both are impossible without a car! The rest of europe is a lot better. Germanys public transport is amazing!

In England Petrol is 124p/l at the moment (~$2.48) and half of that is tax which is wasted!

OK you're right, lightning has very high amperage. My point was that after traveling through an initial resistance of however many million ohms the air acts as is NOT the way we want our power.

Also, I was trying to say that we totally can harness lightning by sticking a conductor up into some thunderheads, we just don't want to, because it'd be crazy.

Living in the USA, I can agree. Our public transportation is a joke around here. No buses to my work, I'm afraid, and no passenger trains at all. In addition, I can't walk and I can't bike to work: My last place of work was 30 minutes away, mostly highway.

Thankfully, I'm currently driving a small high mileage car with a manual transmission. If I'm careful with my style of driving, I can get 40+ mpg with it.

Currently I'm going back to full time education, so I'm off of work for a while. I hope to soon have a place to live close enough to the school to access it by bicycle.

I was using shudder quotes in hopes of making clear that I didn't mean government profit in a literal sense. But you seem to be missing my point about the general tenor of so many anti-tax arguments: people want to have their cake and eat it too.

Gas taxes are an especially good example for this argument because the majority of them are directly connected to the creation and maintainence of the roadway infrastructure that makes cars a viable technology and still fuels most real estate development.

Re the possibility of harvesting lightning, I have one word: ceramics.

That will do a decent job of absorbing stray electricity and perhaps some of the branches of lightning, but the main stroke can be more than twice as hot as the surface of the Sun; even the best ceramic is going to be damaged by that.

. . . and my city is filled with more potholes than ever. Frankly, I'm not certain the government spends the money more wisely than a business would. At least a business can have competition and have incentives to do the job well, and people have the choice to pay more if they want higher quality. The government, on the other hand, has a very bad habit of just giving it to the lowest bidder for the contract, and of course they get what they pay for.

All large-scale formal organizations develop similar problems over time; GM is certainly no longer a model of efficiency, for example.

And productive reform is not limited to the private sector--the US Postal Service is a pretty remarkable system; even if a modern stamp gives us "geezers" a bit of sticker shock, it is an amazing bargain if you just think about sending an ounce of paper from a home in Florida to an office in California in two days and costs only about nine minutes work at miniumum wage.

The real point here is whether you consider something like the road system to be a public good. Your talk about both potholes and bad government contract assignments seems to indicate a conflict. Do you want a privatized road system or more honest competition between contractors and public employees who build and maintain roads?

Now that I think about it, I don't think I'd like a privatized road system - after all, that would mean lots of toll booths and they could even set up their own restrictions. But I certainly would not be opposed to a system where the government/contractors were a bit more accountable for the quality of work they do.

Health care is a bit more tricky - on one hand I do think that yes, if you can afford your health care out of your pocket, by all means that's where it should come from. No need to make everybody else pay for it if you can afford it yourself.

On the other hand, I do realize not everybody can afford their health care, and I do believe that in the case of an emergency that human life is paramount and it should not matter if the person has insurance or not. So there are cases where somebody else will have to foot the bill in order to save a life.

. . . and of course with technology advancing like it is, we have the ability to keep people alive longer with more serious conditions, such as AIDS or Cancer. Unfortunately, that technology has an incredible cost, especially for diseases that are chronic and the treatments expensive.

The only thing I can really think of that would actually be effective in reducing prices is increased competition. As it stands right now, having a government monopoly has the effect I expect to see with most monopolies: Increased prices.

"The US Postal Service is a pretty remarkable system; even if a modern stamp gives us 'geezers' a bit of sticker shock, it is an amazing bargain if you just think about sending an ounce of paper from a home in Florida to an office in California in two days and costs only about nine minutes work at miniumum wage."

Interestingly enough, this is one of the few government programs that actively competes with other companies: You can, after all, deliver through UPS or FedEx instead of through USPS. The success of government, or the success of a competitive market?

Well, first class mail is a USPS monopoly.

-Dr. B

First class mail is also dependent on you actually sending things by mail. There are alternative methods, email, telephones, faxes, internet bill pay. Almost everything has a viable, cheaper alternative method of transfer. Which is why first class mail is almost entirely comprised of junk mail now.

I use it to mail weaponized bio-agents.

I enjoy the irony of my foes contracting smallpox from a get-well card.

-Dr. B

I find this thread intriguing as an insight into the mindset of Americans. Essentially the view that is getting banded around is that the high oil prices are a short term blip that is the fault of X.

X can be anything from china, oil companies, speculators, government etc.

The mindset seems to believe that it is their birthright to have cheap oil and that someone had better do something about it or your get really pissy!

Like it or not oil is finite, the market price accurately reflects the balance of supply and demand. Furthermore, China, India and others are starting to find a taste for travel. Kyro tells us that America is a special case because it has a much lower population density then Europe and less mass transit. Yeah, well that goes more than double for China and India. Indeed most of the developing world. Its Europe that is the special case compared to the rest of the world.

Oil prices are going to go a lot higher in the coming decades. America and its people have had an irresponsible attitude that there is always ‘more’ for too long. Culturally there is an obsession with the car that I have always found freakish on my visits to your country. The woefully inefficient vehicles, the reluctance to walk anywhere, even when it’s absolutely possible. The way cities and towns make use of space, peoples habits. I urge you to spend some time in European towns and cities, to see there are so many small changes that can be made to lifestyles and working habits that can make a more efficient environment.

America needs to realize that the world is bigger, that the world is developing and oil is very finite. America needs to change culturally, and I’m sure that most of you have no idea what I mean by that.

I am normally a great supporter of the US. I consider them the leaders of the free world, champions of progression, and liberty. If I were an American I could probably be characterised as a ‘South Park Republican’. But on this issue I don’t have any sympathy; America needs to change their outlook and many of their priorities. Otherwise frankly you’re just pissing into the wind.

Incidentally I might otherwise seriously consider immigrating to the states. Yet I worry that as a nation you guys are starting to be so insular and myopic that all your forbearers hard work is being lost. By that I mean the dizzying rise in bureaucracy. The get rich quick mentality of personal injury law. The extreme polarisation of politics meaning that both democrats and republicans are having to pander to the least realistic elements of their base. The liberal rot in criminal justice. The endemic ‘soft’ corruption of the myriad of elected and appointed posts. Your next president has a overt socialist agenda that surely is un-American, but total understandable give the aforementioned polarisation of society. And moreover on that the death of the American dream, or in many cases the society that even makes it realistic for many.

Many countries/empires have been truly great in History. Last it was us British before too many to name. Ottomans, Spanish, Italians, Persians to name a few, in all case at their peak hubris sets in and they become systemically unable to see the coming decline. I hope America has not reached that point.

Oh btw, The dollar is not weak. China did deliberately for years use vast sums of money from a current account surplus to buy American debt. This had several effects. It kept the dollar high and the Yen low. This allowed American consumers to buy imported good from China cheaply, also Oil from the middleeast. Meanwhile of course debt becomes extremely cheap. More credit going cheap means more money chasing assets. Like houses.

If you look at PPP. Price purchase parity:

“This is comparing a basket of goods bought around the world. There are many baskets to choose from , the simplest could be a single item. Indeed ‘The Economist’ newspaper use a big-mac, as it is sold globally to compare the purchase power of a given unit of currency.”

Anyway if you look at PPP the dollar is not weak. Indeed the east-Asian currencies are still quite undervalued.

Again, this speaks to the current American mindset. This is not a short term blip. The world has and is changing.

I find it intriguing that a European would be so ready to consolidate and oversimplify the US. We don't have the language varation the the EU includes, but we span a continent physically and socially we have a pretty remarkable variety despite the impressions given by the spew from Hollywood and Washington DC. Just compare cities such as San Francisco, Houston, and Miami.

As a sort of "South Park Democrat," (I'm afraid that Eric Cartman might be my inner child) I agree that most of my fellow citizens are deluded about oil in general and gas prices in particular. But most is not all. And the unavoidable fact that oil is finite is slowly dragging more people's heads out of the sand. Yes, we're generally oil-spoiled and whiny about the party winding down. But we also have a tradition of waking up the next morning and getting the house at least halfway back in order fairly quickly.

Re the USPS, First Class mail is a monopoly, but the USPS is the only system that delivers to *every* address in the lower 48 (I think some folks in Alaska still get mail dropped from planes). And junk mail might dominate, but lots of us still like to send real postcards, letters, greeting cards, formal invitations, and whatnot to each other. Plus there's Netflix, at least until they talk everyone into paying for broadband and buying yet another set-top box.