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The Causes and Effects of High Gas Prices

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Note:  There is now a companion page about The Causes and Effects of High Oil Prices, which deals with the crude oil supply, the worldwide market, the controversy over offshore drilling, refinery capacity and many other issues.

Much has been said about high gas prices recently, starting in 2005 after Hurricane Katrina hit New Orleans and the retail price of gasoline spiked for a few weeks.  But the price of gas has a number of causes and effects that aren't discussed in any great detail on TV news shows.  (Other than sports and weather, nothing is discussed in much detail on television, but that's another story.)  This page represents an attempt to fill in the gaps.

Radical environmentalists and their friends in the news media would have you believe that high gas prices are primarily the result of corporate greed, poor planning, and insufficient government intervention.  In reality, this is a matter of supply and demand, and it is not the proper role of government to intervene.

The major causes of high gas prices include the increased demand for oil in places like China and India, high gasoline taxes, civil unrest in Venezuela, war in the Middle East, political instability in Nigeria, and too few refineries in the U.S.  Demand is kept high (in part) by people who prefer the comfort and safety of large trucks and SUV's regardless of their lower fuel economy.  If they can afford the gas, I support their freedom to choose any vehicle they want.  But a huge part of the supply problem is due to environmental regulations (and environmentalists' opposition to new refineries), and political opposition to oil exploration in the Gulf of Mexico and in parts of Alaska. 

Gasoline supplies are impeded by regulations that require specialized blends of gasoline for certain parts of the country.  Gasoline used to be essentially the same nationwide, but there are many different "flavors" of gas sold now, in some cases for specific counties.  Generally this seems to cause the price of gas to be higher in and around big cities.

One reason for the surge in gas prices during the early summer months is the number of people who drive to their vacation destinations.  More and more people are driving, I think, because of what they would have to go through at the airport, just to travel 400 miles.

Some people think the oil companies make astronomical profits.  But if you really believe that's true, you should keep quiet and buy stock in ExxonMobil!  I challenge you to buy a barrel of crude oil and see if you can make gasoline out of it for less than $10.00 a gallon.

If you find gas prices unaffordable, and if you don't mind squeezing into a crowded bus or train with a bunch of smelly and nasty strangers, you might consider mass transit as an alternative.

Gasoline is a bargain at $4.00 a gallon.  Get used to it.  Driving a car is a luxury for which we should be grateful.  And don't get your hopes up about Ethanol, because that's not the perfect solution either.

When you're finished here, check out the Oil and Gas section of the Environmental False Alarms page.

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First of all, the price of everything is going up.

Prices of OJ, Milk and Gas Skyrocket.  Mornings for Americans are about to get a lot more expensive:  The prices of orange juice, milk and gas are spiking and all are expected to go even higher.

Sticker shock at the grocery as soaring wheat prices mean more expensive food.  If you think the cost of gassing up your car is outrageous, wait until you need to restock your pantry.  The price of wheat has more than tripled in the U.S. during the past 10 months, making Americans' daily bread — and bagels and pizza and pasta — feel a little like luxury items.  Baked goods aren't the only ones getting more expensive:  Experts expect 80 percent of grocery prices will spike too, and could remain steep for years.

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Gasoline Prices:  Increases in retail gasoline prices from 2000 until fall 2006, and their sudden decline in September of that year, led to claims of price manipulation by oil companies, with Democrats accusing Republicans of being "in the pockets" of oil and gas companies.  In fact, gasoline prices at their peak only matched their inflation-adjusted prices of the 1980s, and oil industry profits, while large in dollar terms, are not higher than the profit rates reported by other industries.  Repeated investigations of oil industry practices have failed to find evidence of price-fixing or anti-competitive behavior.

The Real Reason Gasoline Costs More:  The popular myth about Big Oil is that it wields such great power that nation states cannot resist them.  The reality is that, faced with dictators like [Hugo] Chavez, often the only alternative is to leave or cut the best deal they can.  The other reality is that Venezuela's oil production has declined 25 percent since Chavez, a committed Communist, crushed the strike.  With the major oil companies departing, how much greater a decline lies ahead?  That is just one reason gasoline will cost more.

Find the lowest gas prices in your zip code.

State-by-state gasoline averages from AAA.

Federal Gasoline Excise Tax Rate, 1932-2007.

Gas prices state-by-state  (Map)

More Oil and Gas News.

Gas Buddy can help you find cheap gas prices in your city.  It is a network of more than 179+ gas price information web sites that helps you find low gasoline prices.

Is gasoline losing steam?  Gasoline markets have exhibited the first signs that an extended rally in pump prices is nearing an end after 52 straight days on the rise.  Gasoline futures started falling midweek after a government report showed a surplus.

A shock at the pump?  They're back.  Rising gasoline prices, that is.  Millions of Americans hitting the roads over Memorial Day weekend faced prices for regular gas averaging $2.35 per gallon, a full 30 cents higher than at the beginning of the month and nearly 60 cents more than at the start of the year.  But don't expect any help from Congress.  In fact, Washington is working on a bill that would raise costs further.

Gasoline prices continue slow climb.  Pump prices in California and around much of the nation continued their ever-so-slow crawl higher over the past week, the Energy Department said Monday. ... Crude oil futures for June delivery were up $1.27 to $54.47 a barrel Monday on the New York Mercantile Exchange, the market's best close since November, analysts said.

Are Wall Street speculators driving up gasoline prices?  Oil and gasoline prices are rising fast as Memorial Day weekend approaches, but not because supplies are tight or demand is high.  U.S. crude-oil inventories are at their highest levels in almost two decades, and demand has fallen to a 10-year low, but crude oil prices have climbed more than 70 percent since mid-January to a six-month high of $62.04 on Wednesday [5/20/2009].

Gas prices jump significantly.  You may have gotten a real shock at the pump if you noticed around a 30 cent jump almost overnight.  Prices were coming in at around $2.27 a gallon for regular unleaded.  That's up around 30 cents from where it has been.  AAA says there are several things at play here.

Why haven't gas prices gone down with the lower price of crude oil?  Crude oil prices are down, so why hasn't the price of gasoline dropped at your local station?

Crude oil is getting cheaper — so why isn't gas?  Crude oil prices have fallen to new lows for this year.  So you'd think gas prices would sink right along with them.  Not so.  On Thursday [2/12/2009], for example, crude oil closed just under $34 a barrel, its lowest point for 2009.  But the national average price of a gallon of gas rose to $1.95 on the same day, its peak for the year.  On Friday gas went a penny higher.

A Funny Sort of Depression.  The sudden crash in energy prices may be hurting Iran, the Gulf monarchies, Russia and Venezuela.  Yet Americans, who import 60 percent of their transportation fuel, along with natural gas, have been given about a half-trillion-dollar annual reprieve.  The reduced price of energy could translate into more than $1,500 in annual savings for the average driver, and hundreds of dollars off the heating and cooling bills for the homeowner.

California adopts first regulation to limit greenhouse gas emissions from fuel.  California took aim today at the oil industry and its effect on global warming, adopting the world's first regulation to limit greenhouse gas emissions from the fuel that runs cars and trucks.  The state Air Resources Board voted 9-1 in favor of the complex new rule, which is expected to slash the state's gasoline consumption by a quarter in the next decade.

Commission recommends federal gas tax increase.  As Washington struggles to find ways to fund highway improvements, a congressionally created commission on Thursday [2/26/2009] called for a 10-cent-a-gallon increase in the federal gas tax, while proposing that the country move to a system of charging motorists for how much they drive.  The idea of a tax increase would probably face strong resistance from lawmakers seeking reelection and consumers already reeling in a tough economy.

California Gas Stations Shut Under Expensive Mandate.  Nearly 100 California gas stations are being forced out of business by a statewide mandate requiring them to implement expensive new equipment to reduce vapor emissions at the pump.  The mandate, issued by the California Air Resources Board (CARB), is known as Phase II of the state's Enhanced Vapor Recovery program.  It requires gas station owners to purchase and install devices to prevent vapors from escaping when customers fill their cars.

Commission Urges 50 Percent Hike in Federal Gas Tax.  Motorists are driving less and buying less gasoline, which means fuel taxes aren't raising enough money to keep pace with the cost of road, bridge and transit programs.  A federal commission created by Congress to find a way to make up the growing revenue shortfall in the program that funds highway repairs and construction is talking about increasing federal gas and diesel taxes.  A roughly 50 percent increase in gasoline and diesel fuel taxes is being urged by the commission until the government devises another way for motorists to pay for using public roads.

Gag The Guzzlers.  Congress is considering legislation that would give drivers of gas guzzlers a financial incentive to get rid of their cars.  Where was this program when gasoline prices were at $4 a gallon?

Truckers protesting high fuel prices.  Independent truckers around the country pulled their rigs off the road and others slowed to a crawl on major highways in a loosely organized protest of high fuel prices.  Some truckers, on CB radios and trucking Web sites, had called for a strike Tuesday to protest the high cost of diesel fuel….

Bush and Congress Should Lift Environmental Restrictions on Energy Production.  With American consumers currently paying the highest gasoline prices in recent history, and after another winter of high heating costs, many Americans are properly concerned about America's energy future.  Predictably, many politicians and commentators blame the "greed" of U.S. energy companies for the soaring prices.  The truth, however, is that prices rise when demand increases relative to supply, and that the American supply of energy is being strangled by the policies of U.S. federal and state governments.

Astonishing!
Gas Shenanigans:  During this unprecedented increase in oil and gas prices, … we, the United States, are allowing the sale of gasoline refined domestically.  That's right … we're sending gasoline out of the country.  The very same gas, is refined here, then shipped to Mexico — where subsidies put in place by the Mexican government allow Mexican citizens to purchase gas at half the price Americans pay.

Gasoline, Oil and the Economy:  Despite the current gas price relief, growing numbers of Americans remain wary of domestic gasoline supply, gas prices, and fear for their economic future.  They are wary of the OPEC nations, who can throttle supply on political whim; and, they fear that, should they lose their job, how will they be able to buy food, gas, and pay for their home.  Their worry is understandable.  Perhaps, it is also wise — if their worry serves as a catalyst for demanding specific action by elected officials.

High gas prices lead to surge in mass transit.  It's standing-room-only on many commuter buses from Washington's suburbs.  Rail systems from Boston to Los Angeles are begging passengers to shift their travel to non-peak hours.  And some seats have been removed from San Francisco's subway cars to allow more people to cram in.  Around the country, high gas prices are helping to push more people to leave their cars at home and crowd onto trains, buses and subways.

More information about Mass Transit and Car Pooling .

What makes up the price of gas?  Once oil is pumped from the ground, it can be sold on the spot market, a last-minute trading arena where oil companies and distributors buy and sell to each other, or straight to refiners.  After it's brewed into gasoline, the product can again be sold on the spot market, or directly to wholesalers, who in turn can supply their own stations or sell it to other retailers.  Each step of the way, buyers and sellers negotiate a price until, finally, drivers pay the ultimate tab at the pump.

Speaker Pushing Stealth Renewal of Congressional Energy Embargo.  Having failed to pass the required measures to fund the government for the next fiscal year, Congress must now pass what is known as a Continuing Resolution (CR) in order to avoid a government shutdown.  A draft of the resolution contains a provision taken from the recently passed House bill, H.R. 6899, to continue the ban on energy exploration and production on nearly all of the taxpayer owned Outer Continental Shelf in the lower 48 states for another year.

Gas prices blame game:  [Scroll down]  It's also worth noting that oil companies are probably the most investigated companies in America.  Every few years, outraged legislators demand that the Federal Trade Commission determine whether oil companies are colluding to inflate prices.  Repeatedly, federal regulators find that they aren't.

Average gas price drops below $3 a gallon.  The national average price of a gallon of gasoline has fallen below $3 for the first time since February.  The average price for a gallon of regular gas was $2.991 Saturday [10/18/2008], according to the AAA's daily survey of up to 100,000 self serve gas stations by the Oil Price Information Service and Wright Express.  That's down from $3.040 Friday.  A year ago, the national average price of a gallon of gas was $2.81, according to AAA.  A month ago, it was $3.835.

Republican talks fuel prices; Dems tout their agendas.  Sen. John McCain on Tuesday [4/15/2008] called for a summer-long suspension of the federal gasoline tax and several tax cuts.  To help people weather the economic downturn immediately, the Republican presidential nominee-in-waiting urged Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day.

Global Warming Holiday:  Most of the price of gasoline is determined by the global price of crude oil, which is spiking now due to a combination of the weak dollar and commodity speculation.  The source of the problem isn't the tax.  Domestic demand for gas always goes up with summer driving, but the McCain holiday doesn't affect production, and anyway, only applies over the short term.  More notably, it makes a hash out of the climate-change policies that the candidate purports to favor.

Shell Oil president:  To cut price, produce more gasoline in U.S..  John Hofmeister, president of Shell Oil Co., the U.S. division of Royal Dutch Shell, addressed rising gasoline prices during an interview Wednesday [4/30/2008] with John Roberts on CNN's "American Morning." … "I say we need more gas to be produced in this country.  I've been saying that for three years, ever since I took this position [as president of Shell].  If the U.S. set a goal to produce 2 to 3 million barrels more a day in this country, we would send a shock around the world that would immediately say to the speculators, hey, U.S. is serious."

Aging refineries drive price at the pump.  It is not ExxonMobil or Middle Eastern oil producers who are driving the price of gasoline you pay at the pump.  It is shortages of gas and other problems at aging refineries in your neighborhoods.

Group trying to stop BP refinery expansion.  The Natural Resources Defense Council filed a federal court appeal Wednesday [7/9/2008], alleging that BP Whiting's air permit will allow an expanded refinery to emit substantially more pollution than the Clean Air Act allows.  The environmental group hopes the lawsuit will send BP and the Indiana Department of Environmental Management back to the drawing board to draft a new, more stringent permit.

Environmental Group Sues to Block Oil Refinery Expansion.  An environmental group on Wednesday filed a lawsuit intended to stop the expansion of a BP oil refinery in Whiting, Indiana.  A shortage of oil refining capacity is often mentioned as one reason for soaring gasoline prices.

Gas could fall to $2 if Congress acts, analysts say.  The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday [6/23/2008].

Gulf Oil CEO says gas could hit $1 next year.  Gulf Oil CEO Joe Petrowski said on Wednesday [12/3/2008] that the price of oil could sink to $20 per barrel, and there is a chance gasoline prices could drop as low as $1 per gallon by early next year.  Speaking at a South Shore Chamber of Commerce breakfast at Lombardo's in Randolph, the Brockton native said that after speculators drove oil prices up, there is a chance that the market will overshoot on the way back down, resulting in much lower prices at the pump.

Who Is Really Responsible For The High Prices You Pay For Gasoline?  For the last 28 years, Democrats in Congress and a few Republicans have again and again opposed our drilling for oil in Alaska's ANWR area when we knew it contained at least 10 billion barrels of oil we could be using now.  For the past 31 years, Congress repeatedly prevented us from building any new oil refineries that we now badly need.  More recently, congressional Democrats defeated and discouraged any bill that would let us drill in the deep sea 100 miles out.  However, it's somehow OK for China to drill there.

Top 10 reasons to blame Democrats for soaring gasoline prices:  If Bill Clinton had signed into law the Republican Congress's 1995 bill to allow drilling of ANWR instead of vetoing it, ANWR could be producing a million barrels of (non-Opec) oil a day — 5% of the nation's consumption.  Although speaking in another context, even Democrat Senator Charles Schumer, no proponent of ANWR drilling, admits that "one million barrels per day," would cause the price of gasoline to fall "50 cents a gallon almost immediately," according to a recent George Will column.

Turn up the heat on Congress to bring gas prices down.  Senators and representatives know there is growing anger and frustration in the body politick over rising gas prices.  They know their excuses for inaction are not flying with the public, says the editor and founder of WND.  Joseph Farah is taking the unusual action of launching an ad hoc political movement in the waning days of the second session of the 110th Congress.

Blame Democrats for high gas prices.  Two years ago then Minority Leader Nancy Pelosi boldly proclaimed, "Democrats have a common-sense plan to help bring down skyrocketing gas prices."  Since she became speaker of the House, gas prices have skyrocketed from about $2.33 per gallon to $3.85 as I write this.

Energy a Democratic minus?  Gasoline prices are flattening consumer wallets and hobbling our economy, while the Democrats sit back and play politics with the issue.  Voter surveys show the economy and gas prices top the list of the most critical issues facing our country.  A Washington Post/ABC News poll reported last week that 85 percent of voters polled said gas prices will be either extremely or very important to their vote in this year's elections.

Drivers blame D.C. for high gas prices.  Fed up with record gas prices, drivers often scapegoat big oil companies for high prices at the pump, but in a recent survey, more Americans directed their scorn towards Washington lawmakers.  According to a Consumer Reports Auto Pulse Survey released Thursday [6/26/2008], 77% of consumers said the root of high gas prices lies with the government's failure to implement an effective energy policy.

Cussin' At The Pump Won't Fix The Problem.  These days, each gas station and each grocery store receipt shows American citizens how much they are paying for politicians who sold out to radical environmentalists and liberal social engineers.  That's the cost of bad political leadership.  How so?  Since the 1970s, liberal politicians in Congress have passed laws that have locked up most of our oil reserves, stopped the construction of refineries and virtually banned the building of nuclear power plants.  Every time we buy food, pump fuel or pay a natural gas or electric bill, we pay a price for these foolish policy decisions.

What's not to like?  Time magazine's recent piece "10 Things You Can Like About $4 Gas" exposes the twisted thinking of watermelons (green on the outside, Red on the inside).  While acknowledging Americans' only recourse today is to "adapt just by suffering," the article celebrates the benefits of record gasoline prices.

Democrats Float Bill to Curb Gasoline Demand.  Anxious to look like they're doing something about rising oil and gas prices — but unwilling to expand domestic oil drilling — Democrats have introduced a bill that's supposed to ease pain at the pump by offering alternatives to driving.  The bill does nothing to increase domestic energy supply.

Fossil Fool.  As pressure builds to develop America's domestic energy resources, Senate Majority Leader Harry Reid now says it's a health issue.  Coal and oil, he says, make us sick.  So why does he oppose nuclear power?

How much have the Democrats cost you at the pump?  Senator Chuck Schumer claims that coercing Saudi Arabia to increase oil production by 1 million barrels a day would drop the per barrel price by $25, saving Americans 62 cents per gallon at the gas pump.  Yet, somehow, that same amount of oil coming from Alaska's Arctic National Wildlife Refuge would only ease oil prices by a penny.

When You Fill Up the Tank Thank Congress for High Gas Prices.  Left-wingers want to have their cake and eat it too, of course:  they simultaneously insist that oil is running out, its use is ruining our environment and should stop as soon as possible, and that oil gas should still be cheap at the pump. … How stupid do they think we are?  How is it possible to simultaneously wean ourselves from oil and the carbon dioxide emissions that stems from it, keep oil cheap and abundant, drill for oil absolutely nowhere, and sue oil companies without hurting consumers?  Oh, and don't forget to slap a "windfall profits" tax on the oil companies just for good measure.

Ball Squarely In Congress' Court.  If this "lame duck" president succeeds in exposing this do-nothing Congress' self-serving pettiness in the midst of so much consumer pain at the pump, things might not turn out as badly for Republicans this November as the pundits predict.

The Marxist tactic of Crisis revolution:  The current revolutionary cry is to tax the "greedy," American-owned oil companies for their "wind-fall" profits.  In much the same way that [Bill] Clinton spoke of gun companies in the 1990s, today's Democrats demean oil companies with their "shame on you for what you're doing to the American people" approach, while simultaneously refusing to allow domestic drilling, to increase offshore drilling, or to drill in ANWR.  Like Clinton, the Congressional Democrats, who have created the current crisis, will allow a certain degree of suffering on the part of the people in order to insure their agenda is furthered.

Dems Skip Town:  Empty Promises Revealed.  Right now middle-class Americans are suffering from expensive-energy induced inflation.  We all know the adverse consequences pain at the pumps has wrought.  So what does "the most open" House majority of all time do when a fair and honest debate over drilling doesn't exactly help them?  They dodge the debate for weeks.  They disingenuously lead the American people to believe that oil and gas won't necessarily be a part of our energy needs in the future.

Fueling a Furor:  Beyond the finger-pointing, it's important for Americans to understand that America's "big oil" industry did not place us in our current predicament.  Congress and state legislatures — with the aid of special interests groups — are largely to blame.  The inescapable reality is that our nation needs and uses a lot of energy.  And without policies that encourage increased domestic production of energy, fuel will get even more expensive.

Too "Complex"?  The problem is not that supply and demand is such a complex explanation.  The problem is that supply and demand is not an emotionally satisfying explanation.  For that, you need melodrama, heroes and villains.  It is clear that many people prefer to blame President Bush.  Others prefer to blame the oil companies, who have long been the favorite villains of the left.  Politicians understand that.

Common glitch at pump adds to gas costs, also cheats station.  Angry about the price of gas?  Just imagine paying for gas you don't get.  Some alert consumers have noticed it over the years:  A pump that seems to hesitate a second when the lever is squeezed.  Anywhere from 2 to 6 cents tick off before the rush of gasoline starts.  That's what happens with a common, hard to diagnose and mostly ignored problem with the "check valve," which is supposed to make sure gas flows at the same time the price meter starts.  But even if your gas pump works, it can still be off as much as $5 for every fill up.  Tests by local regulators allow a pump to charge as much as 6 cents more than the gas delivered in a five-gallon test.

As gas nears $4, Minneapolis eyes limits on engine idling.  Minneapolis City Council members today [5/15/2008] will hear from city staff members about a proposed ordinance to restrict vehicle idling in most cases to 3 minutes.

Update:
Minneapolis limits vehicle idling to three minutes.  The Minneapolis City Council and Mayor R.T. Rybak approved changes Friday [6/6/2008], to the city's vehicle idling ordinance that aims to reduce air pollution.  The ordinance limits mostvehicle idling to three minutes, except in traffic.

Should Madison ban the drive-through?  First it was a proposed ban on plastic bags.  Now, a member of the influential Madison Plan Commission wants to ban the restaurant drive-through — or at least restrict the ubiquitous symbol of America's auto-centric lifestyle.  "Given the concern about all the carbon going into the atmosphere, I'm not sure we should be building more places for people to sit idling in their cars," says Eric Sundquist, who was appointed to the citizen panel by Mayor Dave Cieslewicz this spring.

Chicanery alert!
There is a big difference between "carbon going into the atmosphere" and carbon dioxide going into the atmosphere.

Gas thefts are on the rise.
A New Way to Guzzle Gas:  In the past the most common form of fuel theft was to drive away from the station without paying.  Station owners have fought back in recent years by forcing drivers to pay before fueling.  These days 99 percent of the nation's million-plus pumps have that requirement, according to the NACS. … Because of the prepayment requirement, thieves have had to devise more creative schemes.

Thieves Find Easy, Lucrative Work In Siphoning Fuel From Cars, Stations.  With average prices of more than $4 a gallon for unleaded and $5 for diesel fuel, siphoning has become an easy and profitable crime of opportunity, officials said. … Pilfering gas requires little more than a hose and a container, although the low-tech method might involve a mouthful of fuel to get the flow going.

U-Haul:  Crooked renters refill gas tank with water.  Crooks have come up with a new scam to get out of paying for gas, and it's costing truck rental companies thousands of dollars.  Crooks reportedly rent U-Haul trucks then, when the time comes to return the truck, top off the tank with water instead of gas, wrecking the engine.  U-Haul dealers say the scam has become more prevalent as gas prices continue to rise.

Take it from UPS:  Left turns waste gas.  UPS routes are designed to avoid left turns.  Idling while waiting to turn left wastes time and gas.  This tip shaved 29 million miles off its U.S. drivers' routes last year, saving UPS more than 3 million gallons of gas.

At $9 per gallon, British driving habits change.  Pump nozzle in hand, Lisa Atkins keeps a close eye on the digital display rapidly adding up the pounds.  Gone are the days when she'd routinely fill the gas tank to the brim.  She now has to be more cautious.

House Republicans vow push on oil drilling.  With the November congressional and presidential elections looming, Republicans and Democrats in the U.S. House of Representatives are blaming each other for rising energy costs and gasoline prices that are topping $4 a gallon.  Republicans cited Democratic opposition to opening up the Arctic National Wildlife Refuge and more offshore areas to oil and gas exploration and drilling.

The Moral Imperative for Drilling:  The other day in a poor part of Central California, I talked with a number of folks at a rural gas station.  Most drove second- and third-hand pickups, large cast-off sedans or used SUVs.  They didn't have the cash to buy a new fuel-efficient Honda or Toyota.  And they were now spending a day or two of their wages just to fuel their cars.

Congress, Get Off Your Gas, and Drill.  With gas at $4 per gallon, roughly two cars in every household, and the average annual gas usage at 700 gallons, you do the math.  Americans are being forced to use their hard-earned money that once put food in their stomachs to put petroleum in their tanks and to drive the exact same distances they drove a decade ago for four to five times the price.

Senators Warn Bill Could Spike Gas $1.50 to $5 a Gallon.  Worried about gas prices hitting $4 a gallon and beyond?  Imagine if they were $6, $7 or even $8 a gallon.  Those levels are a certain possibility should Congress pass cap-and-trade legislation, which could face a vote in early June.  Oil is trading at record levels, in excess of $120 a barrel.  Leading Republican Sens. James Inhofe (Okla.) and Jeff Sessions (Ala.) both told the Business & Media Institute (BMI) energy prices would drastically increase if the Lieberman-Warner Climate Security Act (S. 2191) is signed into law.

Price of petrol to stay high for 8 years.  As oil prices reached an all-time high, experts forecast the cost of petrol could hit an average of £1.21 per litre within months.  Over the next two years it could even climb as high as £1.46, they said.  Petrol currently costs an average of £1.13 per litre following a month of almost daily price rises.

Gasoline May Soon Cost a Sawbuck.  Get ready for another economic shock of major proportions — a virtual doubling of prices at the gas pump to as much as $10 a gallon.  That's the message from a couple of analytical energy industry trackers, both of whom, based on the surging oil prices, see considerably more pain at the pump than most drivers realize.

$4 a gallon could seem cheap, analysts say.  If oil reaches $200 a barrel as some analysts have said it could, forget $4-per-gallon gasoline.  Think $6.64, according to a Rice University analysis of the link between prices of crude and gasoline.

Petrol-buying panic in Britain.  British motorists are in a petrol-buying panic after a North Sea pipeline that supplies 40 percent of the country's oil and gas was shut down because of a strike at a major refinery. ... The pipeline takes more than 700,000 barrels of crude oil ashore every day and supplies Britain and international markets.

Gas crisis?  Think back about 35 years.  Amid the $4-a-gallon mutterings — and, hey, I'm not thrilled about gas prices either — some perspective, please.  This is nothing compared to the gas crisis nearly 35 years ago.

Gas Prices — Dems are getting exactly what they fought for.  The world knows that with the power structure in Congress that's been in place since long before the Democrats took over the majority, the Dem will fight against and, in fact, will not allow 1) any more domestic oil production; 2) any more domestic refining capacity; and 3) the further development of any existing technology, such as nuclear, that could have an immediate and significant impact on our domestic energy production.  Couple that with domestic policy thrusts that are designed to increase the price of gasoline at the pump... you get the picture.

Bush faults Democrats for gas prices.  President Bush yesterday characterized Capitol Hill Democrats as hypocrites for demanding that Saudi Arabia pump more oil while blocking attempts to increase domestic drilling in such places as Alaska and the Gulf of Mexico.

As Gas Prices Rose, Democrats Ignored Opportunities to Help Production.  Gasoline today at the pump is $1.25 more, on average, than it was when the Democrats took over Congress.  Why is that a good place to measure?  Because during that period, we've had an opportunity to build more refineries, and the Democratic majority voted it down.  We've had an opportunity to open up additional parts of the Outer Continental Shelf and the Democratic majority voted it down.  It's clear that on the production side of the equation, this new majority is not interested in doing anything.

Like Your $5 Gas?  When it comes to crippling, racist, and economically debilitating energy policy liberals have truly paralyzed America.  And they seem proud of their efforts.  In the left's refusal to allow us to seek new energy sources they are stunting a nation's economy, they are hurting the average family, and they are starving hungry children. … They also express abject resentment towards anyone who dares to mention the obvious — that it is their policies that put us in this mess to begin with and disallows our escape from it.

Democrats Solve Oil Crisis!  Democrats have been in charge of the House of Representatives for more than two years now, and the price of gas is a whopping $1.61 higher than it was when they took control of the House and Senate — a 58 percent increase!  What was their plan in 2006?  It was to empower the Federal Trade Commission and Department of Justice to investigate and prosecute oil companies engaged in price gouging and market manipulation.  How would they prove this?  By doing what they do best:  Govern by subpoena.

Democrats Fumble Ball On Energy.  [Nancy Pelosi] and congressional Democrats have pursued energy "price-gougers," even though more than 17 studies have shown the practice is virtually nonexistent; they've punished "Big Oil" with higher taxes, while handing subsidies to alternative energy; and they've sought to punish "market manipulators."  None of these ideas work.



The Drill-Nothing Congress.  The average price for regular gas hit $4 a gallon over the weekend.  Gas prices have risen 75% since Nancy Pelosi took over.  Where's the energy independence Democrats promised two years ago?

Voters Say "Drill".  Public worry number one is now oil, jobs, and the economy, with the inflationary woes of the U.S. dollar right underneath.  The candidate who can connect with these issues will win in November.  But so far neither Obama nor McCain are dealing with the new political reality.  In fact, it's all about oil right now.  The price has doubled over the past year while the economy has slumped.

Why So High?  One major reason for this overall rise in prices is because the dollar does not buy as much as it used to.  And the reason the dollar does not buy as much as it used to is because the Federal Reserve System (along with the U.S. Treasury Department) is inundating our economy with newly created dollars.  Their intent is to finance the federal government's massive expenditures as well as to prevent a deepening recession.

Pump price vapors:  Regulation of gasoline prices doesn't work, and, by and large, our politicians know it doesn't work.  There's no escaping those remorseless facts.  Why worry at this point about regulation of energy?  The numbers on the gasoline pump tell us.  Anything above $3 a gallon is bad news, unless we adjust our expectations or start riding bicycles.  Then, memories of past government interventions — the price controls of the '70s and the lines that ensued at the gasoline pump, the "windfall profits" tax on oil profits — make chillier the sensations moving up and down the spine.  Regulation isn't equivalent to "solution" of anything.

Gas prices and $100 oil.  This week, a barrel of oil closed near $100, but why are gas prices still the same as when oil was $75 per barrel?  The refiners say gas prices are two-thirds controlled by the crude price.  If that held true from one gas price to another, gas should be at $4 right now.  Well it's not that expensive, but gas is headed higher in a time when it should be slumping.

Gasoline prices hit new high.  U.S. average retail gasoline prices have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn.  Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst on Sunday [3/9/2008].

$4-a-gallon gas forecast in some areas.  Gasoline prices in the coming months are likely to top $4 a gallon in some parts of the country, and perhaps nationally, the government said Tuesday.  According to the monthly report of the Energy Information Administration, the non-partisan statistical arm of the U.S. Energy Department, the monthly nationwide average gasoline price is likely to peak at $3.48 a gallon in May and June.

How Close Is $4-Per-Gallon Gasoline?  Would the price of crude oil have to rocket up $40 more per barrel for us to see $4-per-gallon gasoline?  If you use the back-of-the-envelope calculation that the government's chief energy forecaster employed Monday [11/12/2007] to gauge how much more pain at the pump is headed our way, it would indeed take nearly $140-per-barrel crude oil to add a dollar to the pump price.  But we may not have to wait that long.

Gasoline at $4 Coming to a Pump Near You.  Whether it's $50 to fill up your Prius or $130 for the Ford Expedition, $4-a-gallon gasoline is coming to a pump near you.  Fuel prices are rising at a pace not seen since Hurricanes Katrina and Rita knocked out a third of the U.S. oil refining industry in 2005.

Oil hits a high; some in U.S. see $4 gas by spring.  Gasoline prices, which for months lagged the big run-up in the price of oil, are suddenly rising quickly, with some experts fearing they could hit $4 a gallon by spring.  Diesel is hitting new records daily and oil closed at an all-time high on Tuesday of $100.88 a barrel.

Or maybe not...
Gasoline could drop 50 cents/gallon by spring.  U.S. drivers could enjoy a drop of up to 50 cents per gallon in gasoline prices by this spring as high fuel prices and the threat of a recession force them to conserve, experts said on Wednesday [2/6/2008].  U.S. gasoline supplies hit a near-14-year high of 227.5 million barrels last week, helped by falling demand for the fuel, the U.S. Energy Information Administration said on Wednesday.

Or maybe so...
Price at the pump likely to reach $4.  Gasoline prices could break the $4 barrier in some places this summer despite falling demand in the United States, the world's largest oil consumer, the government's energy forecasting agency said yesterday [4/8/2008].  Diesel prices already have soared past $4 a gallon, and prices for regular gas are verging on $4 in high-cost states like California.

Michigan Congressman Wants 50-Cent Tax Hike on Every Gallon of Gas.  A Michigan congressman wants to put a 50-cent tax on every gallon of gasoline to try to cut back on Americans' consumption. … Rep. John Dingell, D-Mich., wants to help cut consumption with a gas tax but some don't agree with the idea, according to a new poll by the National Center for Public Policy Research.

The Editor says...
Apparently the congressman doesn't understand the concept of supply and demand. The high price of gasoline will reduce consumption without government intervention. He's just looking for an excuse to raise taxes, and a way to make the US economy look worse than it really is during an election year.

Oil investors welcome high prices at pump.  Regular gasoline prices vaulted to a once unthinkable record of $3.42 a gallon yesterday [4/17/2008], paining most Americans but pleasing a growing contingent of investors who are profiting from the fast-rising price of fuel.  Scott Lee, a small investor from Georgia who owns oil company stock, said it's the reason he is not bothered by rising pump prices.

The Wacky World of Oil:  Throughout the USA, the number of gasoline stations has been systematically cut in half since the 80's.  This cuts supply outlets and reduces retail outlet competition.  In California and elsewhere, states now require gasoline stations over a certain age to dig up and replace their worn out underground storage tanks and clean up these alleged "hazard pollution site" — whether they are leaking or not.  Independent, privately-owned gasoline stations can't afford the hundreds of thousands of dollars to comply, so they often close down.

Bicyclists, transit officials and environmentalists are happy about high gas prices.  The $3 gas prices posted at the station he passes on the way to work give Kevin Ishaug 20 miles to gloat over how much he saves commuting by bike.  Ishaug, owner of the Freewheel Bike shop in Minneapolis, is one of those people who welcome higher prices at the pump.  It brings more people into his shop for new bikes or repairs, as they switch to muscle-powered transportation to save money.

Refusal to drill impacts gas prices.  You no doubt have noticed all of the headlines concerning the recent escalation in the price of oil. … While these headlines caught your eye, there was another one that probably didn't:  "SF County Approves Drilling Moratorium."  With a unanimous vote the Santa Fe County Commission, with the governor's full support, laid down a moratorium of at least one year on the granting of any drilling permits in the Galisteo Basin.  The 100 people in attendance stood and cheered the Commission's decision.

RV sales up despite high gas prices.  Americans are defying high gas prices and jumping into gas guzzling recreational vehicles for their summer vacations. … Sales of RVs have shot up 22% in the past three calendar years.

The Editor says...
I suspect the popularity of RV's is partly because of the inconvenience, delays and invasive searches people routinely encounter at the airports.

Energy Bill Won't Bring Gas Price Breaks for '08.  Despite claims that the newly passed energy bill will reduce the amount that consumers pay at the pump, recent government projections show the cost of energy rising over the next year in the United States.  The president signed the energy bill in late December.  The week before the bill was signed into law, the Energy Information Administration at the Department of Energy estimated that the cost of gasoline would average well over $3 per gallon in 2008, with gasoline prices peaking at over $3.40 per gallon this spring.

Big Gas Price Hike Likely Come Springtime.  Experts are predicting pump prices, which jumped by almost a dollar a gallon in each of the last two springs in many parts of the United States, will spike again this year as refiners and gas stations switch from winter- to summer-blended fuels.

Gas whine is a sure sign.  Funny isn't it that charges of price fixing are never levelled at gas retailers when prices go down all at once?  A report released yesterday by the Canadian Centre for Policy Alternatives called, Gas price gouge:  The sequel, claims that Canadians have been ripped off at the pump ever since Hurricane Katrina wreaked havoc with refineries in the fall of 2005.

Canadian drivers should expect record gas prices.  Canadian drivers should brace themselves for record gasoline prices this spring if crude oil stays in the $90-a-barrel range, experts say.  "They could be getting into the $1.30, $1.40, maybe even the $1.50 range per litre," said Jason Toews, one of the founders of GasBuddy.com, a website designed to help motorists find the best deals at the pump.

CNN's Wastler Backs $1 Gas Tax Hike.  Gas prices are high, but CNN wants them higher.  Lots higher.  CNN's Allen Wastler told viewers April 28 that the government should increase the price with a huge new tax.  "Put in a tax to make it $4 a gallon right now," he urged.

Gas prices:  How high?  Could Americans actually see a $4 price tag on a gallon of gasoline?  There are analysts out there that would argue yes — in fact, they're saying it could happen as soon as this summer. … [Glen] Schuler says uncertainty is the culprit — uncertainty of the Gulf of Mexico hurricane season, in Iran, Nigeria and in oil-producing countries in general.  That is pushing the price of oil higher, which in turn makes gas more expensive at the pump.

Michigan's gas prices among highest in the country.  On the eve of a proposed nationwide protest, Michigan gas prices reached $3.27 a gallon, their highest levels ever, making the state's gas the third most expensive in the country.  Since Jan. 22, Michigan consumers have seen pump prices shoot up a total of $1.31.  In addition, Michiganders are now paying 20 cents more than the national average, as industry observers continue to blame refinery outages and capacity issues for the sharp increase in costs.

Iranians lose access to unlimited cheap fuel.  Iran's parliament this week set May 22 as the day when the country's 15 million motorists lose access to unlimited cheap fuel.  Pump prices, frozen for three years at 80 tomans (or 9 cents) a litre, have boosted consumption far beyond the capacity of Iran's oil refineries and meant that 40 percent of petrol has had to be imported.

Econ 101:  How to Reduce Gas Consumption.  In 1931 Harold Hotelling published a paper, "The Economics of Exhaustible Resources," that showed that the market process efficiently allocates the exploitation of a non-renewable resource over time.  His basic point is that as the supply of a resource shrinks, the price begins to rise.  That leads to an effect on the demand side.  As the price of oil rises, people will use less oil.

Fill 'er up, Cheyenne.  In a turnaround from last fall, gasoline prices in Cheyenne now rank among the lowest of all the state capitals in the nation.  Back then, the price of gas here stubbornly remained higher than in neighboring states that have a history of charging more for a gallon of regular unleaded.  On Monday [1/8/2007], when the twice-monthly Lundberg Survey of gasoline prices was released, Cheyenne topped the list of low prices at $2.09 a gallon.

Greens all talk, no action on global-warming cuts.  A survey by Deloitte & Touche in the summer found virtually no change in consumer energy use and driving habits despite grumbling about skyrocketing heating and electric bills and gasoline prices that twice reached more than $3 a gallon since 2005.  Americans also have been slow to spend more to buy more fuel-efficient cars and appliances and make their homes more energy efficient.

Soaring gas prices drive scooter sales skyward.  Record gasoline prices are fueling a boom in sales of fuel-efficient scooters across the United States, as commuters ditch their gas-guzzlers and don helmets and goggles to beat high prices at the pump.

If you own a yacht or a limo or an airplane I do not feel sorry for you.
High fuel prices keep boaters closer to harbor.  Bill Bouwens relaxed on his 36-foot express cruiser this week in Waukegan Harbor, where his boat will stay docked a lot more often this summer.  That's the sacrifice Bouwens says he'll make because filling up his 300-gallon tank costs a whopping $1,300 or more.

With RVs, the road's less traveled.  Bill and Barbara Wright sold their house in Georgia two years ago and drove off in their RV with plans to visit 50 states in five years.  But record fuel prices have forced them to cut their annual mileage in half, add at least a year to the schedule, and give up their dream of driving to Alaska.

Driving less?  It's costing the state.  High gas and parking prices are convincing people to drive less.  Statewide, traffic volumes are down by two percent. … The high price of gas is the real problem.  It's got most of us trying to figure out where we can cut back.  But every time you save a gallon, it costs the state 36 cents.

Funds for Highways Plummet As Drivers Cut Gasoline Use.  An unprecedented cutback in driving is slashing the funds available to rebuild the nation's aging highway system and expand mass-transit options, underscoring the economic impact of high gasoline prices.  The resulting financial strain is touching off a political battle over government priorities in a new era of expensive oil.

Oklahoma's painful car culture:  For many people in Oklahoma, life is built around the car.  With several refineries in the region, years of cheap fuel have made it possible for many people to live far from their jobs.  Now the situation is unraveling.

Gasoline at $6 vs warming?  It's hard to say which is scarier — apocalyptic global warming scenarios or the economic impact of some of the proposals designed to prevent them.  A recent European Environment Agency (EEA) study reported greenhouse-gas emissions from motor vehicles continue rising due to increased driving, despite heavy fuel taxes that boost prices there above $6 per gallon.  Even with gas prices more than twofold that in the U.S., Europe falls short of its global-warming goals.

You Can't Fuel All of the People All of the Time.  Environmentalists are constantly clamoring for higher gas taxes as the cure-all to their insane global warming theory.  Clinton proposed a 26-cent tax on gas.  John Kerry said it should be 50 cents.  Gore endorsed the Malthusian proposal of Paul and Anne Ehrlich in "The Population Explosion" that gas taxes be raised gradually to match prices in Europe and Japan.  The result is consumers now pay about 46 cents per gallon in gasoline taxes.

Prices at the pump: how low will they go?  Amid the recent avalanche of bleak economic news, one small bright spot has emerged:  Gasoline has gotten a lot cheaper.  After topping $4 nationwide this summer, pump prices are down more than a dollar a gallon in the past month alone and even have fallen below $2 in parts of the country, including some stations in Houston.

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The Return of the 55 MPH Speed Limit

Trucking industry proposes limiting speed to save fuel.  Struggling with record diesel prices, the trucking industry's main trade group yesterday [5/8/2008] introduced a plan to reduce fuel consumption and emissions over the next decade mainly by having its members slow down.  The American Trucking Associations [wants to] limit the speed new trucks can travel to no more than 68 mph and reduce the national speed limit to 65 mph for all vehicles.

The Editor says...
Get a clue.  That idea has already been tried, and it flopped.  Richard Nixon implemented a 55 mph national speed limit, which was nothing but an annoyance, although it provided a big boost to the electronics industry.  There was a surge in the sales of CB radios, radar detectors and more advanced radar guns.  The so-called Criminal Band was expanded from 23 to 40 channels, even though 90% of the activity was on Channel 19.

Is 55 in Our Future?  If there's one thing that's worse than paying $4 per gallon for gasoline, it's the resurgent talk of lowering speed limits to conserve fuel.  Because, of course, these lowered limits won't be enforced as a "conservation" measure.  Any curtailment of speed limits will be treated as a saaaaafety issue — just as happened during the Dark Decades of the 55 mph National Maximum Speed Limit.  "Speeding" tickets will be issued and "points" assigned.  At the stroke of a lawmaker's pen (and the cop's, too) driving "x" MPH will suddenly become "unsafe," rather than merely wasteful.  This is the most intolerable aspect of the whole scam.

Higher gas prices not slowing drivers.  Even in a time of $4-a-gallon gas, the slow lane is lonely these days.  For all the griping about gas prices, there's no clamor for the return of the 55 mph speed limit of the '70s and '80s — though most agree it reduces consumption and saves money.

Return of the 55-Miles-Per-Hour Speed Limit?  Republican Senator John Warner of Virgina has asked Energy Secretary Samuel Bodman to calculate what speed would provide optimum gasoline efficiency under current technology.  In a letter to Bodman, Warner cited studies that show the 55-mile per hour national speed limit saved 167-thousand barrels of oil a day — after it was imposed by Congress in 1974 because of the Arab oil embargo.  That speed limit was repealed in 1995.

The Editor says...
The "optimum" speed is different for cars and trucks.  Why not also impose a speed limit on locomotives and buses and cargo ships?

The Insanity of Drive-55 Laws.  It didn't seem possible that politicians could think up a sillier energy proposal than Barack Obama's windfall profits tax on oil companies, but Republican Sen. John Warner of Virginia has done just that.  Earlier this month, Mr. Warner suggested a return to the federal 55-mile-per-hour speed limit on America's highways, as a way to save on national gasoline consumption.

Campaign For 55 MPH Speed Limit Renewed.  Nearly 15 years after it was removed by Congress, the effort to limit driving speed in the United States to 55 mph is back.  The national 55-miles-per-hour speed limit was introduced in 1970s.  Proposed by President Nixon and enacted in January 1974, the nationwide speed limit was supposed to be a temporary emergency response to oil shortages and was to expire in mid-1975, but Congress quickly made it permanent.

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The Federal Price Gouging Protection Act

Who Is Gouging Whom?  The real gouger driving up gasoline prices is not the private sector, it is our government.  To "gouge" means to extort, to take by force — something that oil companies and gas stations have no power to do.

Gasoline Price Gouging Laws Will Not Benefit Consumers.  Sometimes the simplest solution is the best one, but not in the case of high gasoline prices.  Previous federal efforts to simply outlaw high prices through gasoline price controls have a bad track record, actually hurting consumers rather than helping them.

The Coffee Talk on Gas Prices That Isn't:  To highlight their empathy before a frustrated public, Democrats and Republicans alike in the U.S. House of Representatives passed the Federal Price Gouging Protection Act.  According to a study recently issued by American Council for Capital Formation (ACCF), the likely impact of this legislation and others like it is the imposition of price controls on gasoline similar to those in the 1970s which caused major supply disruptions, rationing and endless waiting lines for gasoline.  History is set to soon repeat itself if these bills become law.

Pumping Politics:  So if history shows that proposed anti-price-gouging legislation has fallen flat on its face, and if two federal agencies have said they haven't found any evidence of price gouging by oil and natural gas companies, and no one has been prosecuted under existing laws for price fixing, then why the new legislation?

Congress Should Not Criminalize "Price Gouging" of Gasoline.  Congressional demagoguery over prices at the pump has reached new heights in the "Federal Energy Price Protection Act of 2006" (H.R. 5253).  Though the conduct at issue, "price gouging," goes undefined in the legislation, it (whatever it is) could be punished with civil and criminal sanctions that include a $150,000,000 fine and imprisonment for up to two years.  In addition to being economically harmful, the criminal provisions of H.R. 5253 are potentially unconstitutional and certainly immoral.

What to Do About High Gasoline Prices:  In response to recent rises in gas prices, we are once again hearing calls for the government to "do something" to force prices lower.  But no matter what the price of gasoline is, such calls are wrong.  All market fluctuations in the price of gasoline, up or down, are a good thing — and none of the government's business.

Who Is "Gouging" Whom?  Last Wednesday, 79 members of the House of Representatives introduced a bill instituting criminal and civil penalties on any corporation or individual found guilty of gasoline "price gouging."  But the real gouger driving up gasoline prices is not the private sector, it is our government … which has engaged — with popular support — in the gouging of both the producers and consumers of gasoline.

'Price gouging':  One lawmaker has a plan.  Even though she admits the "problem" has not arisen in Nevada in recent memory, state Sen. Dina Titus, D-Las Vegas, now offers Senate Bill 82, which seeks to ban "price gouging" by classifying as an illegal "deceptive trade practice" the sale of a consumer good or service "for an unconscionable price before or during a state of emergency."

The Gouge Party:  America was saved Tuesday from a Democratic Congress determined to do more damage to our economy and raise oil prices still higher.  Energy taxes and eco-extremism make Democrats the real oil gougers.

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Requiem for a heavyweight?  The fate of the Hummer brand is up in the air.  GM, which bought the brand from military contractor AM General in 1998, has plowed a load of capital into Hummer, including $250 million for a plant expansion in Shreveport, La.  It has a pickup truck version of the mid-size H3, the H3T, in the pipeline for a summer release.  Meanwhile, product development is well along on a Jeep Wrangler-size 4x4 called the H4.

Hummer, How We Need Thee.  No set of wheels since the hapless Edsel has been as persistently reviled as the Hummer.  [But] America needs the Hummer to remind us of what has always made our automobiles stand out, from the tailfin 1950s to the muscle car 1960s and '70s: swagger.  Americans don't just drive their cars — they proclaim something about themselves by driving them.

Car rental companies caught short as demand for smaller vehicles soars.  David Sikorski went to a Hertz in Austin, Texas, last month to rent a car for a business trip to Dallas.  He'd booked a fuel-efficient mid-size sedan, hoping to keep expenses down on the 400-mile round trip.  What he got was a 16-mile-per-gallon Ford Explorer sport utility vehicle.  "I walked right back in and asked for something smaller," said the Austin computer data specialist, who eventually was given a Hyundai.  "They claimed it was an upgrade, but I sure don't want an upgrade if it means driving an SUV."

Soccer-mom stigma helping to slow down minivan sales.  Asked recently how the U.S. minivan market has been faring, Nissan Motor Co.'s Dominique Thormann had a concise answer.  "It collapsed," said Thormann, a senior vice president of Nissan North America.  While the rapid sales decline of pickup and sport utility vehicles has been grabbing the headlines, minivan sales have also taken a tumble, falling 20% during the first five months of this year.

"Supply and demand" at work:
Gas-hog owners can't sell them.  Tammy Fontanilla loves her red 2004 Dodge Ram pickup truck, but when gas prices began to soar last year, she felt she had no choice but to put it up for sale.  Problem is, there's little demand for a vehicle that gets 13 miles per gallon and costs nearly $100 to fill up.

Natural-gas stations fall behind.  Drivers of vehicles that run on natural gas have escaped prices above $4 per gallon for gasoline, but they're having to wait longer, or search harder, to fuel up along the Wasatch Front.  Many drivers of natural-gas vehicles say they have gone to filling stations in recent weeks only to find that increased demand has created insufficient pressure in the station's tank to pump the fuel.

Priceless politics, Part II:  What do prices do?  Prices impose the most effective kind of rationing — self-rationing.  Why is rationing necessary?  Because what everybody wants always adds up to more than there is.  It doesn't matter whether you are talking about a capitalist economy, a socialist economy, a feudal economy or whatever.  Resources are limited but desires are not.  That is the basic and defining problem of economics.

Wal-Mart sales may reflect gas costs.  While retailers that attract higher-income consumers continued to do well in November, others, especially Wal-Mart, may still be feeling the pinch of high fuel prices.  Wal-Mart's November sales were down 1%, and the company predicted December sales would be flat or up just 1%.

Big Oil's New Conspiracy:  We have heard much in recent months about the plot by oil companies to gouge consumers at the pump.  Now, I am writing to report another insidious plot on the part of Big Oil.  They are scheming to lower prices.  Shocking, I know.  But it is all true.

CNN talking head's conspiracy theory runs out of gas.  When gas prices shot up in spring, some in the media were quick to criticize "corporate greed," but as prices plummet, even that decline has to be a "conspiracy."

Enron and Today's Oil and Gas Prices.  If a Senate study concluded that legislation signed by George W. Bush and supported by Halliburton was partially responsible for today's high oil and gas prices, do you think you would have heard about it?  Well, such a report was released by the Senate.  However, the president that signed the law in question was William Jefferson Clinton, and the company that strongly lobbied for its passage was Enron.  Yet, mysteriously, this study was almost completely ignored.

Pain at the Pump:  Gas Prices Rise on Democrats' Watch.  Well, remember that?  The Democrats blaming the president for high gas prices, pledging to do something about it if they took control of Congress.  Well, since Election Day, the price of a gallon of gas has jumped nearly 40 percent.

Gas tax trial balloon.  A 2004 Congressional Budget Office paper concluded that if CAF standards were raised by 3.8 miles per gallon, it would take 15 years for gasoline consumption to fall by just 10 percent, and the economic cost would be high.  Raising the gas tax by 46 cents would also cut fuel consumption by 10 percent, but do so much more promptly.

More about Corporate Average Fuel Economy standards can be found here.

Paying at the Pump:  Gasoline Taxes in America.  Early gasoline taxes in the states were explicitly created in an attempt to charge road users for the privilege of using roads.  However, from the very inception of gasoline taxation, public officials have faced temptation to divert gasoline tax revenue to projects that are only tangentially related to transportation and that are often purely politically motivated.

Hawaiian gas prices dip under $3.  While still the highest in the nation, Hawaii's statewide average for gasoline has dipped below $3 a gallon for the first time in six months.  Yesterday's average for regular, self-serve unleaded was $2.98 a gallon, according to AAA's Fuel Gauge Report.  Next highest were Alaska at $2.76 and Washington state at $2.57.

7-Eleven Drops Citgo as Supplier.  7-Eleven Inc. dropped Venezuela-owned Citgo as its gasoline supplier after more than 20 years as part of a previously announced plan by the convenience store operator to launch its own brand of fuel.  7-Eleven officials said Wednesday [9/27/2006] that the decision was partly motivated by politics.

7-Eleven Dropping Venezuela-Backed Citgo.  Convenience store operator 7-Eleven Inc. is dropping Venezuela-backed Citgo as its gasoline supplier at more than 2,100 locations and switching to its own brand of fuel.

The Editor says...
Petro Express is owned by the same people as Citgo, according to various sources [1] [2] [3] [4].
I first heard of the connection from the RF Cafe.

The Russians are coming… with another Lukoil gas station.  The gas station down at the corner is taking on a bold new look.  The latest player on the block is Lukoil, a Russian oil company that holds the second largest oil reserves in the world behind only ExxonMobil.  In the past 16 months, Lukoil has been rapidly converting hundreds of Mobil service stations in the region to its own distinctive brand.

Terror Free Oil:  The gas station at 131 Street and Q used to show a Sinclair dinosaur.  Now, in big bold letters "Terror Free Oil."  The idea is to sell gasoline made from oil orginating in countries friendly to the United States.  On its website, the terror free oil organization says the U.S. is funding its own demise.

Conspiracy theories run out of gas when drivers fill their tanks.  When gasoline prices topped $3 a gallon in mid-summer, motorists were justifiably aggravated about the high price.  So now that gasoline has plunged below $2 a gallon you would think everybody would be happier.

State-by-State Motor Fuel Taxes.  Here are the latest state motor fuel tax rates effective 7/1/06. … This comprehensive summary looks at both gasoline and diesel tax rates.  Bar charts illustrating the state taxes are included. [PDF]

Decline in Gas Prices Isn't Buoying Detroit.  Just when $3-a-gallon gasoline looked as if it were here to stay, it left.  But it was around long enough to devastate Detroit's automakers by convincing many car shoppers that smaller is better.

This logic only makes sense if you're an environmentalist.
Could Lower Gas Prices Be Bad?.  From the way some people are carrying on, you would think it was the sky that was falling, not gas prices.  Heading up the field is Daniel Akst, whose op-ed piece in The New York Times today lays out the case for the negative effects of lowering gas prices.  "Anything that reinforces the role of fossil fuels — particularly oil — as the world's primary energy source, is bad, not good," Akst writes. … "Lower oil prices would promote more driving," Akst notes.

Has Citgo become a political tool for Hugo Chávez?  One of the USA's largest refiners, Citgo is a subsidiary of Venezuela's state-owned oil company, Petroleos de Venezuela S.A. (PDVSA).  As such, it ultimately belongs to Venezuelan President Hugo Chávez, an avowedly anti-American leader who counts Fidel Castro among his closest friends and mocks President Bush as a "genocidal murderer."

Katrina and the punch at the pump:  Lost amid the anniversary articles about Hurricane Katrina is how we've dealt with the energy fallout.  We've had a year to get used to $3-per-gallon gasoline and to come to grips with the vulnerability of our energy supplies.  What have we learned?  We've learned that the impact didn't have to be so bad and that Washington can take measures to ensure that the next big storm won't hurt drivers and homeowners as badly.

High Gas Prices Courtesy of Environmental Rhetoric.  As a matter of national security and as a significant boost to the American economy, it makes no sense to not assure and achieve a higher level of energy independence.  So why, in mid-May, did the House of Representatives reject an end to the quarter-century ban on oil and natural gas drilling in 85 percent of America's coastal waters?

An Energy Lesson from Cuba and China.  An unlikely political figure is willing to fight for lower gas prices.  His name:  Fidel Castro.  He's working with foreign investors, including China, to find oil off the Cuban coast, close to American waters.  In contrast, American companies aren't looking for oil off the Florida coast, because it's part of the 85 percent of the nation's offshore areas where drilling's not allowed.

House Roll Call Vote on Offshore Drilling.  The 232-187 roll call Thursday [6/29/2006] by which the House voted to end the offshore drilling ban.

Cuba oil probe spurs calls for U.S. drilling.  Congressional proponents of oil and gas drilling are pointing to Cuba's exploration off the coast of Florida — with help from China — as a prime reason to open up U.S. drilling in the eastern Gulf of Mexico.

FTC chief sees a gas-price-gouging law passing.  The head of the U.S. Federal Trade Commission said on Thursday [11/16/2006] that Congress will probably pass a law designed to stop gasoline price-gouging after it convenes in January, despite objections from the agency.

Who is "gouging" whom at the pumps?  [Rising oil and gas prices] is an issue that affects many Americans and Democrats hope to convince those Americans that greedy Bush oil buddies are to blame.  But as usual, the real facts are quite different from the bogus campaign rhetoric … Who is getting rich at the gas pumps?  For starters, many average Americans who hold stock in the oil companies, either directly or indirectly through their 410k or mutual fund.  But the fact is, the gross profit margin for a gallon of gas in America today, is what it has always been, on average, .08 cents per gallon.

The Big Three Pump Up While Drivers Pay Out.  Detroit is pushing hot wheels this summer, figuring Americans want to play NASCAR driver in new versions of vintage muscle cars.  But a let's-burn-rubber message seems likely to stall in an era of $3-a-gallon-gas and more fuel-efficient foreign brands.

Some relief appearing at the pump.  Are gasoline prices, after hovering just below $2.90 a gallon for weeks, actually on their way down?

Big Media are Repeatedly Wrong Claiming 'Record-High' Gas Prices.  Since Hurricane Katrina swept ashore on the Gulf Coast, we've heard seemingly countless reports of "record high" gas or oil prices.  From the beginning of September last year, the big three networks — ABC, CBS and NBC — have told us about record high gas or oil prices close to 100 times.  They've been wrong each and every time.

Claim of Record High Gas Prices Tanks Under Scrutiny.  Don't believe the media hype:  Prices at the pump aren't as bad as you've been lead to believe.  Compared to what they were nearly 25 years ago, today's gas prices are a bargain.  And they're a bargain compared to other necessities, too.  According to Bureau of Labor Statistics, the average cost of a gallon of regular unleaded gasoline in U.S. cities was $1.41 in April 1981.  Excluding federal and state gas taxes, this meant the price was around $1.26.  In today's dollars, that would be about $2.83 per gallon.  But in May, the before-tax cost of a gallon of unleaded gasoline was just $2.29 — about 19 percent lower than that.

Governmental Viscosity Breakdown:  Members of Congress, such as Pennsylvania's Arlen Specter, who … manages to exude split-atom energy when it comes to cheerleading for bad ideas, are calling for a windfall profits tax on the oil companies.  Of course, the tax would be passed on to consumers, but Congress will deal with that later — it'll be good fodder for calling for the federalization of the oil industry.  In a Beltway culture that confuses motion with action, windfall profits taxes are but flailing victims in the quicksand of lunacy.

Higher Gas Prices Require Higher Minimum Wage, Dems Say.  Before leaving Washington, D.C., for the Memorial Day recess, Democrats in the U.S. Congress Thursday [5/25/2006] criticized Republicans for failing to "lower skyrocketing gas prices" and called for the GOP to show "real leadership" by raising the minimum wage.

Did someone mention the Minimum Wage?

Consumer mood rises on lower gas prices.  U.S. consumers were more optimistic in June as once-soaring gasoline prices eased, and the government reported that a key measure of the nation's trade deficit narrowed more than expected in the first quarter.  The University of Michigan's preliminary June index of consumer sentiment read 82.4, up from May's final reading of 79.1 and above Wall Street expectations for a reading of 79.0.

'Green' Politicians Add to Gas Price Woes.  Certainly increased demand for oil from the growing Chinese and Indian economies and instability in the Middle East are major pressures on oil prices, but both Republicans and Democrats have added to these pressures by allowing the environmental movement to tie our energy policy in knots.

Reporting on the economy is worse than the economy.  The same people who blame Bush for higher gas prices resist allowing the president to do the things he can.  This includes a suspension or reduction of taxes, permission to drill in Arctic National Wildlife Refuge and the outer continental shelf, and allowance for the construction of nuclear power plants.

No Way to Handle a Fuel Crisis.  There is no big oil "collusion;" the crude oil price is universal.  It was 54.8 percent of the cost of a gallon of gasoline in March and rising in response to supply concerns amid geopolitical tensions in oil-producing countries.  Federal and state taxes account for about 24 percent of the price.

We are all Marxists now.  National Public Radio's Juan Williams, appearing on Fox News Sunday, insisted repeatedly that "supply is at an eight year high" as proof that the oil companies are cheating us.  He kept repeating the phrase, as if that would make it a more sensible statement.  It didn't. … Frustrated by his inability to convince others of his nonsense, Williams then insisted that there is no connection between supply and demand.

Pumping Gas:  The facts are not pretty.  Gas prices at the pump are not going to drop significantly in the foreseeable future, no matter what Congress or federal and state governments do.  Sure, they can lower their take on a gallon of gas, which … is an average of 45 to 46 cents.  At best that would be a temporary solution.  After all, what government would be willing to long forego a great source of tax revenue?

Incendiary Ignorance:  I'd planned on ignoring the inferno of idiocy raging in the nation's capital over gas prices, but it's looking like an eternal flame.  First came the Democrats.  For more than a decade their leading lights have extolled higher gas taxes, and hence higher gas prices, to pay for everything from school roofs to the development of alternative energy sources that would usher in the economic Shangri-La of "energy independence" — whatever that is.

Say It With Me:  Supply and Demand.  Precisely 10 years ago (April 29, 1996) as gas prices reached a shocking $1.27 a gallon, President Clinton ordered his Energy and Justice Departments to launch investigations to find out why.  In my column that week, I offered a wild guess as to why:  "Supply is down and demand is up."

Energy Policy for Idiots:  In the short run, the supply of gasoline is fairly inelastic.  Current inventories of crude oil and refined products are fairly difficult to adjust, so that the supply of gasoline is what it is.  That is why it is pretty certain that drivers face a "tough summer," in the words of the President.  If the supply of gasoline is what it is, then the price of gasoline will be whatever it takes to limit demand to meet the supply.  If that means $3.00 a gallon, then consumers are going to end up paying $3.00 per gallon, no matter what the tax is on gasoline.

High gas prices cause more hot air.  The Congressional Research Service estimated in 1990 that [Jimmy] Carter's windfall profits tax (really an excise tax) decreased domestic oil production by 3 percent to 6 percent, while pumping up dependence on foreign oil by 8 percent to 16 percent.  Thank you, Congress.

Brazilian drivers opt for ethanol-gas mix.  [In Brazil], ethanol is a sort of like a miracle drug, having helped Brazil to kick its own dependence on foreign sources of oil by the end of last year.  In the United States, Brazil's success story is either a free-market solution the United States should try to match, or a pipe dream that is impossible — and dangerous — to try to copy.

Which costs more, ethanol or gasoline?  With oil topping $135 a barrel, ethanol must be cheaper than gasoline, right?  Not if you adjust for the fact that ethanol has about 30% less energy content than gasoline by volume.

Mixing gasoline and moonshine:  The House approved by a vote of 389 to 34 a plan to impose criminal penalties and fines of up to $150 million for refiners and wholesalers for "gouging," with a fine of $2 million for retailers.  It is pitiable that 389 members of the House were so eager to make a public spectacle of their economic illiteracy.  It is revealing that they totally exempted congressional moonshine — otherwise known as ethanol.

More derogatory information about ethanol can be found here.

Congressional squawking won't bring fuel prices down.  When a crisis strikes, Americans can count on Congress to swing into action.  So as gasoline prices soared toward $3 per gallon, lawmakers did what they do best:  They complained.

Gas prices and hot air:  Political hot air will not bring down gas prices.  Last week Sen. Charles Schumer (D-NY) claimed that gas prices are rising because too many oil companies have been allowed to merge in the last decade.  If one could identify 100 factors responsible for causing high gas prices, mergers would be number 101.

Think $2.90 for Gasoline Is High?  Try $5.17.  Public hysteria over high gasoline prices is unwarranted, according to [Jerry] Taylor.  "I actually saw an MSNBC story the other day which interviewed a pawn shop owner who said people were selling earrings and diamonds and what not to pay for gasoline.  Those kinds of stories just make me very annoyed because they are utterly unhinged and they lack a tie to reality," he said.

Government Gasoline Help?  Someone messed up all right but it was not the terrified oil executives.  Congress did it with an assist from a nervous Executive afraid to veto the bill that caused the crisis.  The one thing Congress does not promise that would actually work is for it to stop "solving" the problem.

Serious About Gas Prices.  It is disappointing that President George W. Bush has decided to make cheap political points about high gas prices instead of promoting policies that will lead to more domestic oil production and lower prices.

Gas gouge?  ExxonMobil paid $23 billion in taxes last year, which gives us some idea of the scale of an activity whose gross income exceeds the combined income of IBM, General Motors and AT&T.

Bush orders suspension of gas rules.  President Bush yesterday [4/25/2006] ordered a temporary suspension of environmental rules for gasoline, which are creating bottlenecks in U.S. gasoline markets, and announced a federal investigation into potential manipulation of gas prices that have topped $3 per gallon.

Bush on Gas Prices:  Who's He Kidding?  With gasoline prices close to $3 a gallon, President Bush this morning [4/25/2006] gave a disingenuous speech to an alternative fuels association about what he was going to do to stem the rising tide.  There were a few flashes of candor and insight, but, on the whole, it was a sad example of political capitulation by a former Texas oilman who certainly knows better.  What Bush clearly understands is that prices rise when demand increases faster than supply, and that supply is being limited in the United States by government.

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$100 Rebate Checks

Here is another bad idea that went over like a lead balloon.

Senators to push for $100 gas rebate checks.  Most American taxpayers would get $100 rebate checks to offset the pain of higher pump prices for gasoline, under an amendment Senate Republicans hope to bring to a vote Thursday [4/27/2006].

The Editor says...
Let me make a prediction:  Many of these checks will end up in the hands of people who ride the bus to work and don't buy gas.  (Need I remind you of last year's FEMA debit card fiasco?)  And where do you suppose the $100 is going to come from?  Your paycheck, of course.

Senate GOP backs off from oil tax increase.  Senate Majority Leader Bill Frist, under pressure from business leaders, retreated Monday [5/1/2006] from a plan that would have used a tax increase on oil companies and other businesses to fund a $100 gasoline rebate for millions of motorists.

The $100 rebate plan is a loser.  Last week Republicans announced a plan to mail a $100 rebate check to voters to offset the rising price of gas.  The plan has not gone over well with anyone.

Gas Fumes Obscure GOP Base.  In short, the Republican base wants to know:  Where's all this partisan extremism we were promised? … The actual GOP response?  Hundred-dollar rebates.  Cash money, friend, just for drivin'.  We feel your pain:  Here, have some money we borrowed from someone else.

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Stupid Petrol Tricks:  Dems Feign Pity for Consumers.  The Democrats are sounding terribly concerned about the high prices we're paying for gasoline these days.  Upon closer inspection, however, we can see that they have no problem with gas prices being higher than three dollars a gallon.  In fact, they prefer it that way.  Their only real objection is about where the bulk of that money is going.

A Self-Inflicted Energy Mess:  It's always tempting to blame soaring energy costs on some nefarious foreign plot and be done with it. … But, as we've written before, those aren't the only things to blame.  The federal government, with its balkanized gasoline requirements, its taxes and its myriad regulations, deserves a large measure of responsibility for the soaring cost of gasoline.

It's Hard Out Here for a Pump.  I would be more interested in what the Democrats had to say about high gas prices if these were not the same people who refused to let us drill for oil in Alaska, imposed massive restrictions on building new refineries, and who shut down the development of nuclear power in this country decades ago.

Price-gouging in the public interest.  Today, the U.S. must import 10 percent of its gasoline as well as 57 percent of its oil.  Thus, even the temporary closure of several refineries by Hurricane Katrina and Hurricane Rita sharply inflated pump prices.  Environmental regulations, backed by activists who mix demonstrations and lawsuits, create delays and inflate costs.  One Arizona project begun a decade ago is still at least five years away from completion.

Oil industry helped Texas craft storm strategy.  By the time [Hurricane] Rita's 175 mph winds followed Katrina into the Gulf of Mexico and made a beeline for Texas, motorists had tapped just about every drop of gas available in Houston and the surrounding area.  Complicating the exodus was that until Rita, no Texans had ever been told they must evacuate from a storm area. ... Damaged production platforms and evacuated refineries left the oil industry vulnerable to the crush in demand for gasoline.

Skip The Gas Profit Tinkering.  Though many Americans seem to feel low gasoline and oil prices are their birthright, price controls are disingenuous and counterproductive, leading to reduced investment in oil and gas exploration and possibly gasoline shortages — the exact opposite of what consumers and the country need.

Of Price and Men.  There has been much talk about "price gouging" by the oil companies, as we witnessed the average gasoline price rise to about $3.10 before falling to pre-Katrina levels most recently.  But as I listened to well-paid pundits pillory the oil industry for being slick, I was left wondering:  what is gouging?

The consumer rip-off.  Since allegations of oil company price-gouging have become topical, let's look at real price manipulation.

How congress pumps up prices.  At the same time oil companies were blistered in Senate hearings because their companies earned hundreds of millions of dollars in the recent quarter of 2005, the Tax Foundation's Scott Hodge reported that in the last 25 years, oil companies paid more than $2.2 trillion (that's right trillion) in taxes to federal and state governments.  That's more than threefold the oil companies' profits in the same period.

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How Big is a Hawaiian Gallon?

Oil industry resists adjusting gas pumps for hot climates.  The Hawaiian gallon contains nearly 234 cubic inches of fuel — about 3 cubic inches more than is dispensed in the rest of the United States.  The extra volume, required by state law, helps offset the higher temperature in this tropical climate, which causes the gasoline to expand.  If the gallon weren't temperature-adjusted, Hawaiians would receive less energy per gallon than called for under the government standard.  That's because for nearly a century, gasoline and diesel have been measured across America as if they were being dispensed at a temperature of 60 degrees, a more condensed gallon of 231 cubic inches.

The Editor says...
I see nothing about a Hawaiian gallon in 15 USC Chapter 6, or in NIST Handbook 130, and I'm waiting for a reply from the weights and measures people at NIST.  Of course, it's a lot hotter in Texas than in Hawaii, but keep in mind that most gasoline storage tanks are underground, where the temperature is closer to 60 degrees.  Smart gasoline pumps could measure the temperature of the fuel as it is delivered and adjust the price accordingly, but I doubt if that will ever happen.

But again, gasoline expands as it heats, which is good news for the consumer.  The expansion means that as gasoline comes out of the cold underground storage tank at the gas station, it occupies less space than it will when it warms up in your gas tank.  On a hot day, you may end up with two percent more gas (by volume) than you paid for.

Updated 8/30/2006:
Upon further reflection, I'm starting to have my doubts about this Hawaiian Gallon story.  First of all, gasoline has a coefficient of expansion of 0.00060/°F.*  So, if my calculations are right, gasoline expands by one percent for every sixteen degrees of temperature increase.  That's not much expansion.  And in any event, if Hawaii really is so hot -- consistently hot year round -- the way to accommodate the difference is to adjust the price, not the definition of a gallon.

Updated 6/19/2007:
When it's hot, you lose at gas pump.  Almost a century ago, the industry and regulators agreed to define a gallon of gasoline as 231 cubic inches at 60 degrees. … During the energy crisis in the 1970s, tropical Hawaii decided to set a base fuel temperature of 80 degrees, meaning that consumers there get more bang for their buck because retailers now dispense 234 cubic inches of gas per gallon rather than 231.

[That's only 1.3 percent.]

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Basic economics:  In the wake of the spike in fuel prices, many Americans demand that politicians do something.  You can bet the rent money that whatever politicians do will end up harming consumers.

The Left Caused Higher Gas Prices.  Because of environmania, the left has prevented domestic exploration of energy sources such as those to be found in the Arctic National Wildlife Refuge.  But the fear by a myopic but noisy few with poor science on their side that caribou would be upset or displaced by exploration, is inhibiting the growth of our national economy and requiring us to beg for mercy from [OPEC] dictators who have no reason to offer any.

"Fueling our enemies' engines".  In order to "feed their habit," addicts must pay out mountains of cold hard cash to very unsavory characters who are often as deadly as the addiction itself.  That's always been the case with heroin or crack and today it's increasingly true of petroleum.

On the other hand...
We're Not Addicts!  It's a confused and confusing debate but it can be boiled down to this:  On one side are those who believe the answer is for us to slash our demand for energy.  On the other side are those who believe the answer is to greatly increase our supply.

Gas price vapors:  Now that the gasoline price has plummeted across the country, shouldn't the Senate committee that berated oil company executives when prices were up now praise them?  If the price of gas can be so easily manipulated by the oil companies, shouldn't the senators give those corporate execs medals instead of tongue-lashings?  Fair is fair.

EPA Rules Raise Gas Prices.  While it is possible to expand domestic refinery capacity without constructing new refineries, current and planned EPA rules act as disincentives to refinery expansion.  In 1997, the EPA made air quality standards across the country more stringent. … These standards were not based on sound science and, consequently, aren't likely to produce benefits commensurate with their $100 billion annual cost.

Katrina Reveals Gas Price Folly.  A new oil refinery has not been built in the United States since 1976.  During that time, our gasoline use has increased over 25 percent.  The nation's 149 existing refineries have been running at maximum capacity trying to meet record demand and, as a result, not only do we import oil, we actually have to import 10 percent of our daily gasoline from refineries overseas.

The Petro sky is not falling.  This "crisis" will push us — finally — to tap America's significant reserves in ANWAR and offshore California and Florida.  Fanatical tree huggers' silly politics for years have blocked development of huge fields which will finally come online during the next 10 years. … The petroleum sky is not falling.  We have and will continue to have enough energy resources.  Current upward price swings have little to do with current and projected supply.

No Easy Answers For Post-Katrina Gas Prices.  The hurricane's impact on already-high gasoline prices is hard to ignore.  Politicians are coming up with the usual list of easy answers to ease pain at the pump, but unfortunately, they are the wrong answers.  Setting price caps, pumping lots of oil out of the Strategic Petroleum Reserve, and going after industry "price-gouging" and collusion will not have much of an impact, and each comes with problems of its own.

Ignoring economics:  Part II.  What all this boils down to is that prices higher than what observers are used to are called "gouging."  In other words, prices under normal conditions are supposed to prevail under abnormal conditions.  This completely misunderstands the role of prices.

Running out of gas.  Everyone knows what the problem really is.  It's Economics 101:  increasing demand and precariously tight supply.  Yet for three decades we have done criminally little about it.  Conservatives argued for more production, liberals argued for more conservation, and each side blocked the other's remedies — when even a child can see that we need both.

Oil Company Executives Defend Profits.  The chiefs of five major oil companies defended the industry's huge profits Wednesday [11/9/2005] at a Senate hearing where lawmakers said they should explain prices and assure people they're not being gouged.

Windfall for the dimwitted.  Sen. Byron Dorgan, the North Dakota Democrat, … recently got 34 colleagues, none of them Republicans, to vote for his measure to punish oil companies for earning profits that, relative to revenue, were unimpressive.

High Taxes Cause High Gas Prices.  Americans everywhere have felt the impact of higher gasoline prices during the past year.  In response, our government officials have offered up the usual "solution":  greater regulation of the oil industry.  Administration officials have ordered an FTC antitrust probe, while vote-seeking politicians have condemned the oil industry and called for an investigation into collusion and price gouging.  The truth is that costly federal taxes and regulations largely are to blame for high fuel prices, not convenient scapegoats like OPEC and the oil companies.

High gas prices aren't as bad as some think.  Our immediate spike in gas prices was brought on by the destruction Hurricane Katrina caused in the oil-rich Gulf of Mexico.  But even if this had not happened, and even if there were not a war in Iraq, the price of gas was bound to rise.  China and other highly populated countries are developing rapidly and will demand gas as they join the "I love my car" club.

Feds' Gas Tax Has Lived Too Long.  The federal gas tax was levied back in 1956 with the promise of finishing the interstate highway system.  Well, that system was completed by 1982.  To no one's surprise, the tax didn't stop then.

Overtaxed at the Pump:  What's Behind the High Gas Prices.  Federal and state taxes make up the largest component of the retail price of gasoline beyond the cost of a barrel of crude oil.  Taxes can add between 26 cents and 53 cents to the retail cost of a gallon of gas.  The total annual gasoline tax bill for motorists is $53 billion per year.

The Burden of Hidden Taxes:  When you buy a gallon of gasoline, the government receives the largest chunk of your money.  According to one report, for a dollar's worth of gasoline, 34 cents are accounted for by exploration and production, refining takes up 6 cents, wholesalers get a nickel, and the service station owner gets 12 cents.  Taxes take up the rest.

 Here's a Hint:   100 - 34 - 6 - 12 = 48

High-gas-price blues?  Blame the greens.  Americans have every right to be angry, as they watch the rising price of gasoline take a bigger bite out of their paychecks.  But their anger should be directed toward the real cause of the unnecessary price increases:  irresponsible reverence for the environment.

Global Warming and the Price of a Gallon of Gas:  You may want to give credit where credit is due to Al Gore and his global warming campaign the next time you fill your car with gasoline, because there is a direct connection between Global Warming and four dollar a gallon gas.  It is shocking, but true, to learn that the entire Global Warming frenzy is based on the environmentalist's attack on fossil fuels, particularly gasoline.

What's the Answer for High Gasoline Prices?  Nothing.  At the end of the day, the best remedy for high gasoline prices is… high gasoline prices, which provide all the incentives necessary for motorists to conserve, for oil companies to put more product into the marketplace, and for investors to look into alternatives fuel technologies.  Government has never demonstrated an ability to do better.

Local, State and Federal Gas Taxes Consume 45.9 Cents Per Gallon on Average.  Record gasoline prices are constantly in the headlines, which leaves many asking why prices are so high.  While supply and demand are the primary determinants of gasoline prices, a significant portion of the price consumers pay at the pump can be attributed to gasoline taxes.  In fact, the federal gas tax alone equals 18.4 cents for every gallon purchased.

Oh, Those 'Enormous and Unreasonable' Oil Profits.  Convenience store operators make their profits from merchandise sales and gaming machines, not gasoline sales.  The gas pumps are there just to get you into the store.  [On the other hand,] the federal tax on gasoline is 18.4 cents per gallon.  The State of Nevada levies an additional 33.7 cents.  That's 52.1 cents a gallon going to the government.  Residents of the Silver State pay the third highest gasoline tax in the nation, behind only New York and Hawaii.

Chafee Votes to Keep Gas Prices High.  Environmentalists opposed [Chairman Jim Inhofe's Gas PRICE Act (S 1772)] for its provisions to expand refinery capacity, streamline refinery permitting and simplify so-called boutique fuel requirements.  It also would have provided federal assistance for the construction of refineries on closed military bases, which could have been producing gas in about two years, Inhofe said.

Statement of Jonathan Adler before the U.S. Senate Committee on Environment & Public Works:  Gasoline markets' ability to respond to supply disruptions and price changes have been severely hampered by federal fuel content mandates under the Clean Air Act.  Imposing various boutique fuel mandates on different regions of the country has balkanized domestic gasoline markets and increased prices for consumers for minimal environmental benefit.  By segmenting national gasoline markets, these requirements have made some regions more vulnerable to supply disruptions and volatile gasoline prices.  Some boutique fuel requirements have further strained gasoline supplies by reducing the volume of saleable product that can be produced.  Yet since passage of the 1990 Clean Air Act, such mandates have been expanded, not reduced.

Congressional Mandates Contribute to Higher Gas Prices.  Four major components drive the retail price of gasoline:  the cost of crude oil, refinery processing costs (including environmental regulations), distribution and marketing costs, and taxes. … Distribution and marketing costs [account] for 11 percent of the retail price of gasoline.  The wide variety of specialized regional gasoline formulas required by federal and state regulators make storage and distribution more difficult and increase the potential for supply disruptions and short-term price spikes.  Moreover, specialized blends required for one area of the nation may not be suitable for another area.  Furthermore, not every refinery can produce every grade of gasoline and pipelines have limited flexibility to move different grades of gasoline to different places.

The Gas PRICE Act:  A Modest Step Forward in the Post-Katrina Energy Debate.  Sen. James Inhofe's (R-OK) new energy bill … contains several sections that could help reduce motor fuel prices over the long term.  One would allow states to streamline refinery permitting, transforming a process that now drags on for years into one that must be completed in months.  This should encourage expansions of existing refineries.  By reducing some of the costs and uncertainties involved in undertaking such projects, these provisions would facilitate bringing badly-needed additional capacity online.

The case for more uniform fuel standards:  An even bigger concern may be the effect that this market segmentation has in combination with two other developments.  The first is the fact that over the last quarter century, half the refineries in America have shut down and no new ones have been built.  The second is the number of mergers and acquisitions that we have seen in the petroleum industry over the same period.

Map of US Gasoline Requirements.  This map shows the nature of the proliferation of fuel standards.  It indicates that you could drive through seven contiguous counties in Arizona, California, and Nevada, and be required by law to put a different formulation of regular gasoline in your vehicle in each one.

A Nice Overview of the Problem with Boutique Fuels.  Boutique and reformulated gasolines have balkanized our nation's gasoline markets, creating virtual islands of gasoline blends that are subject to more severe price spikes than the rest of the nation.

NACS Voices Fuel Price Volatility Concerns to Congress.  The overlapping federal, state and local regulations that dictate specific fuel formulations for distinct markets must be replaced with a more uniform system.  A reduction in the number of boutique fuels is essential to stabilizing both supplies and prices.  This need not result in a reduction in environmental protections.

Chart shows Boutique Fuel Requirements Across the U.S..  There are more than 300 local and state fuel regulations in the U.S.  These regulations result in a patchwork of gasoline zones across the country where only certain fuels can be sold, creating price disparities across the country.



The Factors Influencing the Price of Gasoline.

Chart:  U.S. Gasoline Distribution System.

Where Does Your Gas Dollar Go?  Most consumers don't know that 90 percent of the price of gas is determined before it even reaches their local convenience store.

Gasoline prices:  Some Americans are demanding that the government do something about gasoline prices.  Let's think back to 1979 when the government did do something.  The Carter administration instituted price controls.  What did we see?  We saw long gasoline lines, and that's if the gas station hadn't run out of gas.  It's estimated that Americans used about 150,000 barrels of oil per day idling their cars while waiting in line.

Why High Gas Prices?  When three socialist amigos like Senators Charles Schumer of New York, Barbara Boxer of California and Harry Reid of Nevada all urged the Bush administration recently to help ease gasoline prices by releasing oil from the Strategic Petroleum Reserve (SPR), you know what's up. … You'd think that Martha Stewart owned Exxon the way [Senator Reid is] acting.  Reid forgets that Bill Clinton tried that trick in 2000 and the effect at the pump was negligible.

See which U.S. cities have been hit the hardest and the least hard by rising gas prices.  Ironically, New Orleans is #2 on the list of cities that have been hurt the least by rising gas prices.

Hillary's hurricane rule.  Sen. Hillary Clinton sometimes talks as if she wants oil and gas to be cheap and abundant, but she never stops working to make them expensive and scarce.

Are We Out of Gas?  Let's get a little historical perspective.  In 1914, the U.S. Bureau of Mines predicted American oil reserves would last merely a decade.  In both 1939 and 1951, the Interior Department estimated oil supply at only 13 years.  "We could use up all of the proven reserves of oil in the entire world by the end of the next decade," declared President Jimmy Carter gloomily in 1977.  In fact, the earliest claim that we were running out of oil dates back to 1855 — four years before the first well was drilled!

Outdated Car-Mileage Tests Steer Buyers Off Course.  The U.S. Environmental Protection Agency's test for mileage hasn't changed since 1974.  Consequently, the tests likely overstate the actual mileage, note observers.  The EPA's "current" mileage tests assume that no one drives more than 60 miles per hour when many states have set the limit at 65 or higher since 1995.  And they assume that no one uses air conditioning, which can cut mileage by as much as 21 percent.

High Pump-Price Fairy Tales:  Gasoline markets today are increasingly global rather than regional in nature.  For example, European governments tax diesel fuels less than gasoline and European motorists have responded by using diesel.  Accordingly, European refineries make more gasoline than they can use and it's cheaper for us to import that gasoline than to produce it here at home.

National Security and Energy:  While most of us suffer from the escalating cost of filling our gas tanks, some "public interest" activists likely don't share our concern.  After all, increasing the price of natural resources, mostly by curtailing domestic energy production, has been a longstanding goal of environmental elitists.  They think this is the best way to reduce supposedly rampant automobile pollution and force development of "alternative" fuels.

$1 billion wasted on study of efficient cars.  American taxpayers have forked out more than $1 billion over the last nine years helping the Big Three automakers develop cars efficient enough to travel 80 miles on a single gallon of gas.

 Editor's Note:   Ask yourself this question — What would an 80 mpg car look like?  It would probably make a Yugo look like a limousine by comparison.  Even the smallest motorcycle on the road today doesn't get that kind of mileage.  There is a finite amount of energy available from the combustion of one gallon of gasoline, even with pure oxygen fed into the air intake of an automobile engine.  Eighty mpg is an unreachable goal.

Government Policies Make the Gas Situation Worse.  Since the OPEC oil embargo of 1973, personal income has gone up twice as fast as the price of gasoline.  The role of taxes in keeping prices high cannot be neglected.  Start with the federal tax of 18.4 cents per gallon.  Add to that state taxes of various sorts.

Don't be fooled by that 9/10th in price at gas pumps.  As millions of Americans make the filling station the first stop on their Memorial Day vacation this weekend, the traditional start of the busy summer driving season, some may wonder:  "Why does the price for gasoline always have that 9/10 number at the end of it?"

Natural Gas Needs No Dinosaurs to Form.  Credible scientists have now demonstrated that methane, the main ingredient of natural gas, can form inorganically, as a result of natural processes that involve no biological material whatsoever — no dead dinosaurs, no rotting ancient forests, not even any little plankton trapped in the soil.

Drillers target huge natural gas field under Appalachia.  Geologists and energy companies have known for decades about the gas in the Marcellus Shale, but only recently have figured out a possible — though expensive — way to extract it from the thick black rock about 6,000 feet underground.  Like prospectors mining for gold, energy executives must decide whether the prize is worth the huge investment.

Gasoline Expected to Remain Cheap This Summer.  Gasoline prices are expected to be relatively low this summer, so motorists might want to take to the road despite the dismal economy if the federal government projections hold.

Editor's note:
In an attempt to combat high gas prices, you may be tempted to purchase a hybrid vehicle.  But before you do, you should look at the information on this page.

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Document location http://www.akdart.com/gas.html Updated June 25, 2009. Page design by Andrew K. Dart  ©2009