So, why are gas prices so high?

[AKIron]

Demand is dropping quite substantially in the U.S., however the Chinese government is able to take the monstrous number of excess trade dollars that it accumulates and keep gas prices a couple of bucks lower than we pay so world demand keeps increasing.

Too bad "free" trade with them is a one way street, it would be nice if we could ship some SUV's over there, but they require that most autos be built in country, I wonder when that protectionism is going to devastate their economy like we are told it would ours.

shamus     

When it comes to natural resources like our oil I'm all for protecting it. It should never be more profitable to export our oil than to sell it domestically. Of course that isn't really our problem right now but it could be as we become less dependent on oil as we surely must.

[NavyOne1978]

we'll run out eventually.... but until then lots of people will live in denial....

[Bodhi]

we'll run out eventually.... but until then lots of people will live in denial....

Perhaps, but just maybe you could not believe the hype and realize that this price spike has less to do with supply and demand and more to do with greedy investors driving up prices as well as the continued deficit spending the US government has used to finance it's social nonsense which is driving the dollar down. 

But hell, man, be a sheep and follow the hype.

[lasersailor184]

Taxes aside, the gas in europe isn't any more expensive than here in America.  But of course, it's often easier to throw a heroin addict into cold turkey withdrawal than it is to take away tax money from a socialist.

[Bodhi]

Taxes aside, the gas in europe isn't any more expensive than here in America.  But of course, it's often easier to throw a heroin addict into cold turkey withdrawal than it is to take away tax money from a socialist.

so sadly true.

[Gh0stFT]

Gas is still very cheap. Even here were we have some of the highest prices (three time what you guys pay) it is cheap.

must be something very powerfull,
US. gas prices averaged $3.45 a gallon. That compares to over $8 a gallon here (Europe).
The difference is staggering and they whine about! 
But hey it works, we still drive cars

[crockett]

I heard its cuz the hippies wont let us drill for oil in Alaska and the Gulf of Mexico. And China and Cuba are drilling in the Gulf and the Atlantic and sucking OUR oil reserves dry. This is all because of our Congress from what I've heard. They've made it where WE cant drill in our own country and our own waters, but China AND Cuba, both known for not caring at all about enviromental situations are drilling there. Why dont we just kick em out? Why dont we just drill for oil in our own country. Because democrats and Congress wont let us. This is getting out of hand... I swear....

We don't have a lack of oil.. We have a lack of refined product. Drilling in Alaska has little to do with anything other than right wingers loving to play the blame game.

[Captain Virgil Hilts]

We don't have a lack of oil.. We have a lack of refined product. Drilling in Alaska has little to do with anything other than right wingers loving to play the blame game.

And tell us, who is to blame for not having the refinery capacity to refine said oil?

[Nashwan]

We don't have a lack of oil.. We have a lack of refined product.

Nope, the US has plenty of refined product at the moment. So much, in fact, that refineries have been cutting back because they can't charge enough for gasoline thanks to the glut.

Gasoline stocks earlier this year:


Refiners margins have also shrunk. In April gasoline cost $3.46. That breaks down to:

Crude oil - $2.52 (72.7%)
Taxes - $0.40 (11.5%)
Distribution - $0.20 (5.8%)
Refining - $0.35 (10%)

There have been times in the past when lack of US refinery capacity pushed up gasoline prices, for example spring 2007 the refiners were getting 88c per gallon of gasoline they produced. No doubt there will be similar shortages again in future, although they could easily be avoided by building a couple of months of gasoline stocks. But the current price of gasoline has nothing to do with shortages of refining capacity, and everything to do with the price of crude oil. With oil at $130 a barrel, enough for a gallon of gasoline costs about $3.10. Add in state and federal taxes of 50c or so per gallon and there isn't much left over for the refiners and retailers.

[angelsandair]

Did anyone think that we may run out of gas one day?

You know that that wont be in yours, mine, nor my children's life time....

There's enough oil in South Dakota and Alaska alone for atleast 100 years for the U.S. Not to mention off the coast, West Texas, California.... If we drilled in America, gas would be very very cheap, but congress (which has been nominated as the worst congress in history) keeps passing laws to keep us from drilling and refining in America. If we refined our own gas in modern refineries and drilled for oil, gas would be a whole lot cheaper. The gas companies only get 4 cents out of each gallon of gas that you buy. Rest is taxes...

[Jappa52]

Gas is still very cheap. Even here were we have some of the highest prices (three time what you guys pay) it is cheap.

Hhhmmmmmm ok, picture living in a state the size of Texas and having a job that requires you to drive hundreds of miles daily for several months out of the year.  Then picture your vehicle holding 25 gallons of this "cheap" fuel and you having to fill up 2-3 times a week for several months.  I guarantee you wouldn't think these prices were still cheap.

[NavyOne1978]

for all the EU and Brit posters out there.. One of the reasons that the gas prces are hurting us more than the higher prices over in EU is simply that our nation is designed, and built for vehicular traffic... with the exception of a few major cities, public transportation is practically non existant..  The distances between major cities is far greater than most of the EU.  And the united states road and interstate system isnt designed for the gas sipping scooters and mopeds that are so common overseas..
And if you take into account that the US is physically bigger than almost all of europe, it makes it a nightmare to put out of pocket all the money required for gas..  Think of driving anywhere from 10-100 miles to work, EVERY DAY...  I used to drive 35 miles myself, and that isnt even considered a long commute..

Also, over 1/2 the vehicles in EU are small diesel cars, with mpg of 35-50, where the average american car runs on gasoline, and gets 20-25 mpg..

Therfore, the "cheaper" gas here hurts our pocketbook equally,if not more than residents of Europe.

[Ack-Ack]

Luckily I live about a mile from my job, so I walk to and from work unless I've been reading the O'Club and am running late. The guys that will get pounded are the commuters, but I haven't noticed an increase in carpooling (the traffic reports still show a backlog at the Bay Bridge every day) although I understand BART ridership is up slightly.

I'm lucky as well that I live within 3 blocks of my work, which obviously cuts down on my fuel spending.  If I had to commute everyday to work, I think I would have sold my Jeep by now but as is, I only have to fill up my tank every 3 weeks.  So, at least the increased fuel prices haven't hit my all that much in the wallet.

One thing though that does irk the crap out of me is that I live in El Segundo where Cheveron has one of their research refineries and a private gas station for their employees.  Cheveron employees only have to pay $2.75 a gallon but yet at the Cheveron gas station at the corner, gas is $4.65 for regular unleaded. 

I think I'm working for the wrong company.


ack-ack

[bj229r]

"We are the only country throwing up barriers to producing the energy we own. It's not happening anywhere else in the world," said Richard Ranger, an upstream manager for the American Petroleum Institute, in an interview.

Over half of all U.S. reserves of oil are off limits for drilling. Offshore, it is more than 80%. According to the Energy Information Administration, the U.S. possesses 4.5 billion barrels in proven oil reserves, and undiscovered technically recoverable crude oil reserves are estimated at 10 times that much — 44.5 billion barrels.

link If we cant drill our way out, we can certainly get close

[wrongwayric]

And tell us, who is to blame for not having the refinery capacity to refine said oil?

EPA, Greenpeace, and all the other wackos out there. There was a brand new refinery built out in colorado that came on-line and caught so much flack from the wackos and the EPA that the company that ran it shut it down and built another one in mexico. So instead of producing it here, they now import the finished product and charge more for it.