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How to get gas prices down to $2 a gallon

posted 2/25/2012 10:07:03 AM |
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  SweetNapaGuy

The Republican plan:

1) Start the world tumbling into a second Great Depression.

2) ...

3) Profit!

************

The real world: $2 a gallon for gas is never going to happen again, not without massive drops in demand. China and India are modernizing their economies, and they're likely to be as voracious in their demands for energy as the United States is. Expect the price of gas to rise, no matter WHO is president, unless we manage to find alternative fuel sources (and relegate petroleum to producing plastics).

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Comments:
SweetNapaGuy

Feb 25 @ 10:15AM  
And for those who say, "Drill, baby, drill!"...?

We currently import 60%-ish of our demand. Petroleum industry experts (i.e., people who WORK for the petroleum companies) have estimated that if we drill in the ANWR and along the coast, we could possibly reduce our dependence on foreign oil to 55%-ish... in about 20 years. (Ignoring, for the moment, all the offshore leases that are currently held but not being exploited. It's not that they aren't getting the rights to drill, it's that they AREN'T drilling when they already have the rights.)

From the awarding of the lease to peak outflow is about 20 years. So if you think that starting drilling now will somehow magically reduce the cost of gasoline, when not even one drop of oil will reach the market for 10 years, and full output won't happen for another 10 years past that...
bluewind37

Feb 25 @ 10:30AM  
I agree.
Gallows_Humor

Feb 25 @ 12:23PM  
unless we manage to find alternative fuel sources (and relegate petroleum to producing plastics).


this is the only logical ( abundant energy for all) solution to the fossil fuel problem... one that Obama is pushing.. and greenies embrace..

the other way is ben franklins way - a drop saved.. is a drop that is not needed... and let a free market dictate the price..
(where this has failed is in the speculation (profits) that runs ramant in imported oil how many times can a tankers oil cargo change hands ( with an increase in the price at the pump each time) ..while it is enroute from the well head to the refinery??

but the republicans want the current administration to control the drops.. deciding who gets what drops ( in the world markets) and at what price those drops are being sold for... my point is.. if this is the solution the republicans want.. have congress implement it by bypassing the oval office completely

the people who are figting this are the ones who are wanting to go back to the 50's when everything was simpler.. just because they are ... ....
jayrh

Feb 25 @ 1:09PM  
Somehow, I just knew that economic standards like price being a product of supply and demand would not be a reality for anyone in today's liberal party :-)

Obama tries to take credit for past drilling, while at the same time stifling new production in this country every chance that he gets! This is at a time where we are continually finding new reserves. It certainly does not take 10 years to start production, for any but the biggest and most complex projects... More like 3 to 5 years... Right about now, if Obama had persued a sensible energy policy. Instead, he has squandered the country's money with corrupt deals like Solyndra! I just read a report from a group called Western Energy Alliance that showed we could be nearly energy independent by the year 2020...

You have to wonder what Obama was thinking too when he axed the Keystone pipeline with one of our closest allies... And yes, today's fuel prices also reflect future expectations.

You overlook one of the main reasons that gas prices are going up though... Inflationary pressure. With the stimulus, quantitative easing, printing money... Debt/ GDP and spending at historically high levels... It puts pressure on the dollar which in turn puts upward pressure on the price of fuel. And, what have we gotten for this??? A booming economy???

World demand for oil is going up. To ensure economic prosperity for this country, you need an energy policy that maximizes energy potentials at home. Alternative energy sources are great but, in most cases, are not nearly as feasible as oil and natural gas.
SweetNapaGuy

Feb 25 @ 1:19PM  
@ Jay: You seem to have equally ignored logistics. You can say "supply and demand" all you want, but the SUPPLY increases on a decade-long scale, whereas the DEMAND increases on a month-long scale.

Even the petroleum industry's experts agreed that, if ANWR were opened in 2002-ish (when Bush was pushing for it), the first drop of oil wouldn't have reached the market until 2012, and full production wouldn't have been achieved until 2020.

If you think the price spikes of the Bush presidency could have been avoided by simply opening up the ANWR or giving the petroleum industry even MORE offshore leases that they weren't planning on exploiting yet... well, that'd make you a conservative (i.e., "faith-based," as opposed to "reality-based.")

And that's even leaving out the fact that the Saudis were in the process of investing a bunch into upgrading and expanding their facilities, which they would have cancelled if they thought America was going to be dumping large quantities of more oil onto the market. Paradoxically, opening up more places for drilling (to get oil to market in 15-20 years), would have resulted in HIGHER gas prices than were already gouging Americans during Bush's reign (because the Saudis wouldn't have filled the gap for the 15-20 years until our oil production had increased).
ManAlive47

Feb 25 @ 1:40PM  
World demand for oil is going up.

U.S. demand for oil and refined products – including gasoline – is down sharply from last year, so much that United States has actually become a net exporter of gasoline, unable to consume all that it makes.

Demand for oil low in U.S.

China is entering a slowdown.

China oil demand growth revised down

goodcatch57

Feb 25 @ 2:27PM  
I bought a bike. Uses zero gas and I can haul 2 bags of groceries.
jayrh

Feb 25 @ 3:55PM  
Even the petroleum industry's experts agreed that, if ANWR were opened in 2002-ish
ANWR is only one aspect of aspect of our potential energy supply... There are many other public lands and places where drilling is much more feasible... Obama, despite his rhetoric, though, has thwarted energy production and use at every turn. Whether it be through the EPA, moratoriums on off shore drilling (even going so far as to defy court orders to do this), nixing the Keystone pipeline, etc.

Paradoxically, opening up more places for drilling (to get oil to market in 15-20 years), would have resulted in HIGHER gas prices
A higher domestic supply would actually make prices higher??? Right...

China continues its push for stable energy supplies, from Canada and South America. This will indeed push up oil prices as supply shrinks. This leaves you with the choice of importing more oil from the Middle East, which is not entirely stable, or increasing domestic production, of which new found reserves are opening up daily... Alternative energy will more than likely make up a higher percentage in the future but in the short term, this isn't likely. Our government's insistence that it is by squandering even more money on companies that are going bankrupt sure doesn't help matters...
Panzer105

Feb 25 @ 6:03PM  
Quick bullet proof way to drop gas prices? It can never fail, each individual must bite the bullet, risk firing notify their employers of the scheme, then don’t buy a single gallon of gas for a month. If EVERYBODY does it employers would be hesitant to initiate reprisal firings…. Within a week all these Petro-Maggots would be drowning in their own swill… Can’t happen? Unfortunate, the power of the boycott ALWAYS works, it just takes unified effort.
SweetNapaGuy

Feb 25 @ 6:05PM  
A higher domestic supply would actually make prices higher??? Right..



A higher domestic supply IN TWENTY YEARS would have made prices higher TODAY.

Do I need to add even more emphasis? I don't think I have the ability to add color, or make the words a larger font size.

Saudi Arabia was considering doing quick-and-easy expansion and modernization. If they would see their prices drop in just a decade, they wouldn't have bothered. Ergo, there would have been even LESS supply to meet the expanding demand, in the short term. Even if we would have had a larger domestic supply, in the long term. And even if the Saudis had expanded/modernized, and we had gone into ANWR, we're STILL going to have even more dependence on foreign oil. It may not rise as fast, but it'll still continue to rise.
jayrh

Feb 25 @ 8:37PM  
A higher domestic supply IN TWENTY YEARS would have made prices higher TODAY.

Saudi Arabia was considering doing quick-and-easy expansion and modernization. If they would see their prices drop in just a decade, they wouldn't have bothered.
I get the concept that you're trying to convey Napa... And, I suppose it is possible... It is just as likely though, that Saudi Arabia would have taken this as a sign that they needed to expand production even more to make such ventures less profitable, thus keeping their market share when needed...

Overall though, prices will still follow supply and demand. As supply increases, prices drop. The difference is if the distance is closer, the overall price to the pump is lower. That is, if we can refine it... Because of regulation, I don't know the last time a new refinery was actually built.

And even if the Saudis had expanded/modernized, and we had gone into ANWR, we're STILL going to have even more dependence on foreign oil. It may not rise as fast, but it'll still continue to rise.

With the Keystone pipeline, we could have gone a long ways toward at least getting our oil from one of our closest allies... With new techniques, more oil reserves are being found here every day. Opening up new lands and offshore sites would almost certainly mean that we would not need oil from the Middle East. This goal is not only attainable but in sight, if our government would help instead of being openly hostile to domestic production...
SweetNapaGuy

Feb 25 @ 9:29PM  
So have you even checked out how much supposed supply would be added with all these drilling projects, and how it compares to global demand?

One study said that, if ANWR were opened for drilling, it would reduce the price of gas by... drumroll please... About $0.035 per gallon. By 20-25 years after the lease was signed. (Here is an article that refers to the Bush admin's study that came up with these numbers. If you don't trust Bush's admin to know about petroleum industry matters, well...)

Adding in every stretch of the Gulf of Mexico coastline that's currently blocked, and it'd reduce the price of gas by... drumroll please... Another $0.03-$0.04 per gallon. Again, after several years from signing of the lease. (In this case, there's a distinct shortage of drilling ships.) (AGAIN, it was a Bush admin report, also mentioned on the link, above.)

And that assumes that the petroleum industry, already sitting on millions of acres of untapped leases, actually DRILLED, rather than holding onto the leases until convenient to them.

So yeah. "Drill, baby, drill" makes a fine bumper sticker. But it doesn't make realistic policy.
SweetNapaGuy

Feb 25 @ 9:32PM  
With the Keystone pipeline, we could have gone a long ways toward at least getting our oil from one of our closest allies...

Strange. Canada is already one of our biggest suppliers. So we're already getting plenty from them.

And the Keystone pipeline is destined for China.
jayrh

Feb 25 @ 10:45PM  
And the Keystone pipeline is destined for China.

Exactly Napa! Obama said no to the pipeline... He has called for ending tax breaks for oil companies... Seemingly unaware (or purposefully misleading) that the big 5 oil companies don't get the percentage depletion deduction that independents do. The EPA is stifling drilling at every turn... I've seen several reports that say with new methods of extraction, our oil reserves may top Saudi Arabia. This may be a little too optimistic but it is not unrealistic to hope for energy independence. We just need the vision to take advantage of these reserves. It isn’t just ANWR or offshore drilling, it’s all energy production!

When Obama appointed Steven Chu as Energy Secretary, it should have been obvious that this administration would hinder energy production at ever turn. Maybe you missed his statement... “We need to figure out how to boost the price of gasoline to the levels in Europe.” At the time he made the statement, gas cost $7 – $8 a gallon in Europe!
ttomtarr

Feb 26 @ 12:03AM  
As a supply boat captain, I worked the Gulf oil fields in the 70s, 80s, and 90s.

Some periods it was "Drill, drill, drill", but it was usually immediately followed by "Cap, cap, cap".

Yes, that's right. The wells were capped to hold the supply down until prices rose.

So, some say let them drill, but if they just cap them off, it will do nothing but pollute the Gulf with drilling trash. It will do nothing to bring down the price of gas.

It is not environmental protection holding down production, but the greed of the oil producers.

OK neocons, now tell me what you read on the net, but don't expect me to forget what I SAW.
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How to get gas prices down to $2 a gallon