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THE Gasoline Price Thread Pt. 5

General discussions of the systemic, societal and civilisational effects of depletion.

THE Gasoline Price Thread Pt. 5

Unread postby ennui2 » Fri 04 Dec 2015, 11:43:22

AndyA wrote:Which is very true, all consumption taxes are very regressive.


Or you could say it helps address tragedy of the commons, because the cost to the environment is never factored into what people pay.
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Re: US$2 gasoline makes a comeback in the US

Unread postby KaiserJeep » Fri 04 Dec 2015, 12:38:17

I know it's an "apples to oranges" sort of comparison, but the average price of E85 "corn fuel" as it is called in the MidWest is already $1.86 on average and it can be found as low as $1.14 per US gallon.

That is enough of a price range to make a flex fuel engine option worth it - provided you can ignore the other impacts of corn subsidies:

1) The price of corn is approximately 40% higher than it would be without distilling ethanol from a food crop, causing hunger throughout the world.
2) The GHG emissions for producing E85 are higher than for 100% gasoline or 10% ethanol fuels.
3) Taxpayer funded crop subsidies for big agribusiness are a major budgetary expense.
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Re: US$2 gasoline makes a comeback in the US

Unread postby Outcast_Searcher » Fri 04 Dec 2015, 15:28:08

Subjectivist wrote:In 1993 President Clinton should have adopted the penny tax plan. Federal fuel taxes would increase one penny the first Monday of every month until the rates matched those in The EU. The gradual nature of the increase would give more than enough time for the population to gradually shift to more fuel efficient transportation over time. As fuel guzzling trucks and SUV's wore out they would be replaced with more efficient types. Now 21 years later our fuel tax would be around $2.50, still far below EU levels, but we wouldn't even notice a $1.00 change in fuel price much because the proportional change would be much less going from $5.50 to $4.50 than the change from $3.50 to $2.50

+1

Sounds perfect to me. However, I wanted to start in 1980 during the THIRD big oil price spike within a single decade. (Seemed like pretty good evidence to me that oil was going to be a long term issue for the planetary population -- so time to get serious about conservation).

One tweak I'd add -- when the price gets to the level of the EU (average), I'd have the country reassess. Perhaps the right price is the price needed to pay ALL the known social costs, including ALL military protection of oil, oil shipping, etc. Or maybe the right price is the level required to get people to SERIOUSLY conserve energy. (i.e. perhaps the right price is higher (maybe much higher) than the typical EU price.

Sadly, given the typical American attitude (buy everything one can afford AND borrow, and to hell with the consequences because "That's my right" -- good luck getting the short sighted populace or the clowns they elect to go for anything so rational or requiring long term thinking.

One nice side effect is the tax revenue is quickly there to likely take care of the modernizing of ALL the basic transportation, water, electric, energy maintenance (like aging gas lines) etc. in coming years, solving pretty much the entire infrastructure problem. Heck, there might be a lot more revenue than that -- so some debt could be paid down, etc.

And for those who scream about regressive taxes, the poor, etc. -- there could even be limited tax credits for "the poor" (which already generally receive net federal income taxes, by the way).

But no, better to continue American BAU and blame someone, anyone -- else for all the oil we burn to have more stuff and a "better" lifestyle.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: US$2 gasoline makes a comeback in the US

Unread postby ennui2 » Sat 05 Dec 2015, 09:24:39

KaiserJeep wrote:That is enough of a price range to make a flex fuel engine option worth it


Did you phone this in from 2008 or something? Pretty much everyone realizes now that biofuels are a dead-end for reasons that have been discussed here ad nauseum. The only useful biofuel is WVO (with diesel) and there's not enough of it to go around.
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Re: US$2 gasoline makes a comeback in the US

Unread postby KaiserJeep » Sat 05 Dec 2015, 16:21:52

Nope, and keep in mind that as an AGW/CC skeptic, I make different choices than do AGW fanboys.

IMHO, an engine that accepts E85 fuel can be fed longer than a conventional gas engine when oil gets too expensive for widespread use as fuel. Long term, I plan to own at least one BEV and at least one Flex-Fuel engined vehicle for longer trips. That should cover my anticipated transportation needs for the 2-3 decades of life I have left.
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Re: US$2 gasoline makes a comeback in the US

Unread postby ennui2 » Sat 05 Dec 2015, 17:09:56

KaiserJeep wrote:IMHO, an engine that accepts E85 fuel can be fed longer than a conventional gas engine when oil gets too expensive for widespread use as fuel.


I've got nothing against having a car that can accept E85. I don't see why all gas cars don't already have that feature by now. But promoting this as some sort of smart buy for doomers, though? Not going to make much of a difference. A used diesel car would be a better idea.
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Re: US$2 gasoline makes a comeback in the US

Unread postby KaiserJeep » Sat 05 Dec 2015, 18:20:06

Well, then think of the time before the oil shortage when corn subsidies still exist. You can buy an E85 fuel that gets 3/4ths the mileage for 2/3rds the price of gasoline or E10 fuel mixtures.
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Re: US$2 gasoline makes a comeback in the US

Unread postby ennui2 » Sun 06 Dec 2015, 04:11:32

KaiserJeep wrote:Well, then think of the time before the oil shortage when corn subsidies still exist. You can buy an E85 fuel that gets 3/4ths the mileage for 2/3rds the price of gasoline or E10 fuel mixtures.


Sounds like a really short-term approach to saving money whereas a high-price durable good like a new car is more of a medium to long-term investment.

When I bought my Mazda 3 over 10 years ago I made a resolution to drive it into the ground but simultaneously I told myself it would be the last pure gas car I'd ever buy. I probably saved a lot more money than your strategy ever will by paying the loan off and not having car payments all this time. A lot of people fixate on price at the pump when a payment on a new car is really where your expenses are.

I recently did some looking into a Volt and if I were to lease it, I'm having to pay probably over $300 a month, which is what I was paying to buy the Mazda, for the privilege of going gas-free. But I don't come close to using $300 worth of gas a month with the Mazda. It's really not going to save me any money over the course of the lease vs. how I commute right now, even if gas goes back up to $4/gallon. As such, having one is really a luxury. The only way you can start to factor in fuel savings is after the vehicle is completely paid off, but then my monthly bill would be significantly higher. Pstarr will probably snark over this, but I know what it is and what it isn't. It's not a get-out-of-peak-oil-free card. It's primarily something people who have the disposable income can opt into in order to feel better about not using gas.

It's just that in our consumer culture we are so indoctrinated in the refresh cycle of new car followed by new car that we just assume there's always going to be a car payment but it doesn't have to be that way.
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Re: US$2 gasoline makes a comeback in the US

Unread postby KaiserJeep » Sun 06 Dec 2015, 04:47:52

Well, you couldn't prove it by me. My three Jeeps are model years 1967, 2001, and 2003 - all older than your Mazda.

I plan one BEV for local stuff, and one FFV for visiting my grandkids.
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Re: US$2 gasoline makes a comeback in the US

Unread postby ROCKMAN » Sun 06 Dec 2015, 11:29:16

A small tidbit about gasoline prices: PEMEX is opening gasoline stations in the US. And the one that just opened in Houston: $1.54/gallon. Just looking for another profit center: PEMEX spends about 25% of the revenue it gets from its oil exports to pay for its refined product imports. I assume what PEMEX is doing is swapping oil in kind for gasoline from Gulf Coast refineries. Given the potential for a significant increase in US gasoline consumption it sounds like a good move at the right time. Also consider how many Mexican expats in the US that might like to support the PEMEX effort.

It's very unlikely PEMEX is exporting refinery products to the US.
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Re: US$2 gasoline makes a comeback in the US

Unread postby Synapsid » Sun 06 Dec 2015, 16:53:47

Here in the central Puget Lowland there are a few Spirit gas stations. Today I checked the price for regular and found it $1.34 a gallon higher than at the 7 Eleven down the street ($2.55/gal), yet people buy gas there.

Not long ago while passing the station I saw on the pumps "Our gas is all gasoline. No ethanol."

I feel (obscurely) pleased.
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Re: US$2 gasoline makes a comeback in the US

Unread postby Tanada » Sun 06 Dec 2015, 19:06:43

Synapsid wrote:Here in the central Puget Lowland there are a few Spirit gas stations. Today I checked the price for regular and found it $1.34 a gallon higher than at the 7 Eleven down the street ($2.55/gal), yet people buy gas there.

Not long ago while passing the station I saw on the pumps "Our gas is all gasoline. No ethanol."

I feel (obscurely) pleased.


In no logical world does the energy difference between E-10 and E-00 make up for that kind of a price differential.
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Re: US$2 gasoline makes a comeback in the US

Unread postby Synapsid » Sun 06 Dec 2015, 19:13:32

Tanada,

Agreed.
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Re: US$2 gasoline makes a comeback in the US

Unread postby KaiserJeep » Sun 06 Dec 2015, 21:05:49

Here in the Golden State, it actually costs you money to be "greener" by buying and burning E85. Not so in the cornbelt of the MidWest - E85 is about 1/3rd less than the E10 or E00, and all three fuels are commonly available, with E10 and E00 in Regular and Premium grades. Less common but still available is LPG (with road tax applied), #1 Diesel conventional and (this last is rare) Biodiesel. This was my impression from driving around Wisconsin and Minnesota on vacation and house hunting. In the Milwaukee area I saw CNG available - but only for large fleet and municipal vehicles.

If you can buy the E85 (the natives call it "corn fuel") for 1/3rd less, and it gets 75% of the mileage of E00, there is a modest financial advantage accompanied by a modest inconvenience which is more frequent fuel stops.
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Re: US$2 gasoline makes a comeback in the US

Unread postby pstarr » Sun 06 Dec 2015, 22:42:55

Not without subsidies from the evil Big Gubmint.
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Re: Gasoline price affordability

Unread postby Keith_McClary » Sun 03 Jan 2016, 15:01:58

Dubai (Platts)--29 Dec 2015 530 am EST/1030 GMT

Saudi Arabia has hiked the price of gasoline, domestic gas for power generation as well as ethane feedstock in its 2016 budget as part of a broader program to cut subsidies and reduce its budget deficit.

Gas prices have been increased to $1.25/MMBtu from $0.75/MMBtu, and ethane, the main feedstock for petrochemicals, to $1.57/MMBtu, up more than 100% from the long-standing fixed price of $0.75/MMBtu, the official Saudi Press Agency said late Monday.

The new prices take effect from Tuesday, SPA said.

The price of 95 RON gasoline was raised by 50% to Riyal 0.9 ($0.24)/liter, while that of 91 RON gasoline was raised by 66.67% to Riyal 0.75/liter.

The sharp increase was a surprise as the finance ministry said Monday that it would implement a "gradual" five-year program aimed at structural economic reform, including fuel price hikes, to improve energy efficiency.

State-owned Saudi Aramco has a total refining capacity of 2.91 million b/d across wholly owned and joint venture refineries in the country. It produced 115.57 million barrels of gasoline in 2014.

Most of this was, however, shipped overseas by their JV partners, leaving the country a net importer, with an average of 744,784 mt of gasoline imported each month this year, according to Joint Oil Data Initiative data.

Domestic fuels have been heavily subsidized, but Riyadh has been under pressure to bring its spending under control as its budget deficit in 2015 ballooned to Riyal 367 billion due to lower revenue from crude exports.

The country announced Monday a Riyal 513 billion budget for 2016, down from $229 billion in 2015.

The new budget, King Salman al-Saud's first since taking the throne in January, includes a spending of nearly $224 billion.

No details on the country's oil price assumption or crude export levels were disclosed.
http://www.platts.com/latest-news/natur ... n-26323825
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Re: Gasoline price affordability

Unread postby Outcast_Searcher » Mon 04 Jan 2016, 14:25:45

salinsky wrote:Who are the potential enemies of Denmark that the Danes need to fear?

Hard to say. Who predicted Hitler would try world conquest before he did? Who knows what games someone like Putin will play?

I would strongly prefer that the US use its military more for defense, or hire out its services for things like protecting the Strait of Hormuz, instead of just having the US taxpayer pay the whole bill. On the other hand, just pretending like there are no threats in the world and no military power isn't needed isn't particularly realistic either, given the number of wars ongoing at ANY given time.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Gasoline price affordability

Unread postby Keith_McClary » Mon 04 Jan 2016, 16:50:42

Outcast_Searcher wrote:I would strongly prefer that the US use its military more for defense, or hire out its services for things like protecting the Strait of Hormuz, instead of just having the US taxpayer pay the whole bill.

Then your military would become mercenaries on the Saudi payroll. What could go wrong?
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Re: US$2 gasoline makes a comeback in the US

Unread postby Tanada » Thu 04 Feb 2016, 09:23:27

Reasons why $2/gallon is not causing a massive economic boom for the USA, much more at link below quote.

The Dallas Fed, whose area includes the oil patches of Texas, Louisiana and New Mexico, estimates that a 50 percent fall in oil prices now adds around 0.5 percentage points to economic growth over a year, half of the impact seen before America's oil boom.

One reason is that the oil sector has grown over the past decade, so spending and job cuts there weigh more on the whole economy. Cheaper oil also helps less because cars and machinery have become more fuel efficient, according to the Dallas Fed.

Thanks to hydraulic fracturing and shale drilling boom that made the United States the world's top oil producer in 2014, the nation also imports less oil than ever.

That goes to explain why in the public eye the modest benefits of cheap energy enjoyed by all get overshadowed by the havoc the oil slump wreaked in the energy sector and the nation's oil patches.

Tumbling prices forced producers and oilfield services companies to slash budgets, driving some into bankruptcy and many deep into the red. Markets have grown so bearish about the sector that when oil producer Hess (HES.N) reported a fourth quarter loss of over $1.8 billion, its shares have risen because investors had braced for even more damage.

http://www.reuters.com/article/us-usa-e ... SKCN0VA27U
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Re: US$2 gasoline makes a comeback in the US

Unread postby marmico » Thu 04 Feb 2016, 10:02:04

Households think that $2 gasoline is temporary. Counterintuitively, after tax savings has increased since the June 2014 gasoline price top.

https://research.stlouisfed.org/fred2/graph/?g=3lO6

The leading tailwind decline in upstream oil/gas capex of $70 billion over the last 4 quarters has been offset with a lagging headwind increase in household consumption. Give it another two quarters for spending to kick off.

https://research.stlouisfed.org/fred2/graph/?g=3lOo
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