Gas Prices

[KeithE]

Bought gas at $2.199/gal yesterday.

attempts to explain why.





Any other theories or prognoses out there?

[Dave Roberts]

Part of this may be that OPEC wants back in the driver's seat of the oil economy. They do not welcome new sources, and they have the capacity to flood the market. It's a short-term gain for American consumers, but I'm not so certain that we will not be paying a price later, especially if it cripples the efforts to diversify energy sources for our economy. OPEC wants to foster dependence on cheaper oil for the long-term gain of greater oil consumption.

[Sandy]

The effect of OPEC, and its ability to have such tight control of the market, is waning. US production and development has increased, countries like Mexico, Venezuela, Iran, and even Russia, are more desperate for the revenue, and as a result, less prone to cooperate with price fixing, and a lot of the economic controls on oil production, refining, and sales, from the previous administration, designed to the full advantage of the oil producers and suppliers, have been allowed to lapse. Plus, the increase in the number of energy efficient automobiles on the road and some other conservation methods as well as alternative fuels, have reduced demand significantly. I don't think the price will bounce back as quickly or as high in the future. The sale of oil futures doesn't indicate that it will.

[KeithE]

I saw $2.129 today at one place in Huntsville.

In addition to what Dave and Sandy have said, I think the demand has also gone down a little bit due to more .

reflecting less demand.

[Haruo]

And newer cars, even if they aren't hybrids, are quite a bit less likely to guzzle gas than they were a few years back. Here in Seattle there are, for example, an increasing number of Smart cars (not meaning the driverless ones Google is working on, but the little stubby boxes that look like an Isetta on steroids). Most of them are shared vehicles (Car2Go), but there are also privately owned ones. And I can attest that it's amazing how many bags of groceries one of them can carry.

[KeithE]

Who needs the Keystone XL Pipeline shortcut (green below) just to meet diminishing gasoline demand. It’s a political football these days and not a serious economic need else the oil industry would pay for it itself.



Note they already have a pipeline in operation (dark purple, orange, blue) to pipe dirty oil from the Tar Sands to aging Gulf and Illinois refineries and a spur to connect to Houston refineries (light purple) in the works to be completed next year; this is to make transport of Tar Sands dirty/expensive oil faster and to pipe light crude from North Dakota’s Williston/Bakken area.

The cost of the pipeline expansion (green above) stands at . One would think the oil industry could get together and fund that, given their annual profits of and . My sense is that they would only build a spur across northern North Dakota at 1/10 the cost (if they had to do it themselves). Another example of corporate welfare (this time to the un-needy). Time to wean the oil industry from the government trough.

[Haruo]

But if they had to pay they'd probably just outsource the tar sands to the Turks and Caicos or someplace.

[Tim Bonney]

Well, at least they are taking it through Nebraska and avoiding Iowa.