Dems in Congress propose INCREASE in gasoline tax :huh !?!

[Nashwan]

Right now, the bottleneck for gas supply is the refineries which are operating at near 100% capacity. So supply is essentially inelastic.

No, US refineries have been operating at pretty low capacity all year. They were at 87.1% last week, which is very low for July (average around 95% at this time of the year in the past)

That's why refiner's margins are so low. In June the refiners took only 8.5% of the final price to cover their own costs and profits, which again is very low by long term standards.

[Getback]

Didn't McCain co-sponser that bill.

BTW, you guys don't really believe it's about revenue more than control and power.

[BTW]

Looks like we can mark you down in the category of voters who should know better.

Right now, the bottleneck for gas supply is the refineries which are operating at near 100% capacity. So supply is essentially inelastic.

Econ 101: When supply is inelastic, the price will rise until the quantity demanded falls to match the quantity supplied. So removing the tax will have virtually no effect on the price consumers pay.

Where will that extra money go? The oil companies.

Where does the money come from to make up the lost revenues? Under McCain's plan, you. Other taxes you pay will be shifted to fill in the holes (he's a little vague on that part).

Lack of refineries isn't making oil sell for $130+ per barrel, Einstein. Refineries affect gas and diesel prices - not crude oil prices. You watch too much CNN?

Edit - refining costs are about 20 -30 cents a gallon of $4 a gallon gas.

oil costs is about $3 a gallon of $4 a gallon gas. Oil availability DOES matter.

http://www.instituteforenergyresearch.org/2008/05/10/will-a-halt-in-spr-additions-lower-gas-prices/

[myelo]

Lack of refineries isn't making oil sell for $130+ per barrel, Einstein. Refineries affect gas and diesel prices - not crude oil prices. You watch too much CNN?

Edit - refining costs are about 20 -30 cents a gallon of $4 a gallon gas.

oil costs is about $3 a gallon of $4 a gallon gas. Oil availability DOES matter.

You're missing the point genius. Removing the gas tax doesn't increase supply. In the short term (and the proposal is short term) the oil companies aren't going to produce any more gas then they are producing right now.

[BTW]

You're missing the point genius. Removing the gas tax doesn't increase supply. In the short term (and the proposal is short term) the oil companies aren't going to produce any more gas then they are producing right now.

Simply announcing the United States was going to begin drilling more (there is drilling in the Gulf of Mexico) offshore, and in ANWR would cut the price of oil by 30% immediately. Thats before a drop of oil comes out of the ground. But Dimocrat ( or dimwit- terms are interchangeable) Pelosi won't allow a vote on that. The problem isn't greedy oil companies or evil speculators. Its dimwits or Dimocrats like Pelosi who spurn developed technology like oil production for pie in the sky undeveloped and untested technology. Because those technologies are undeveloped, the drawbacks are yet discovered which lead the dimwit Dimocrats to believe there ARE NO DRAWBACKS.

[Nashwan]

Simply announcing the United States was going to begin drilling more (there is drilling in the Gulf of Mexico) offshore, and in ANWR would cut the price of oil by 30% immediately.

It would have no effect on oil supply for 5 years, and no effect on prices now. Even in 5 years the effect on price would be marginal.

How on earth can anyone believe that a commitment to a minor increase in oil supply 5 years from now will have an immediate effect on prices?

[BTW]

It would have no effect on oil supply for 5 years, and no effect on prices now. Even in 5 years the effect on price would be marginal.

How on earth can anyone believe that a commitment to a minor increase in oil supply 5 years from now will have an immediate effect on prices?

Minor increase? Do you have any idea how much untapped oil the US has? Underneath the Rocky mountains, there is 22 times more oil than what is in Iran. Eight times as much as is in Saudi Arabia. You're spouting the Dimocrat line. Do you get this? The United States has enough oil to be oil independent. Fact is some of the untapped oil could be had in *TWO * (not 5) years. A shift in United States policy that it was going be committed to drilling this oil now would affect the price of oil immediately, as that price is being affected by futures not immediate supply.

So you are completely wrong. A shift in policy would affect oil prices immediately (and create 100,000+ jobs). But hey, being wrong is no hindrance for a Dimocrat

Here's a link about the US's "minor" oil supply.

http://www.kiplinger.com/businessresource/forecast/archive/The_U.S._s_Untapped_Bounty_080630.html

[Nashwan]

Minor increase? Do you have any idea how much untapped oil the US has?

Yes. I also don't confuse oil and shale.

Fact is some of the untapped oil could be had in *TWO * (not 5) years.

Source? The facts are the oil industry is working flat out at the moment. All these little fields take a lot of resources to develop. It ain't happening in 2 years.

A shift in United States policy that it was going be committed to drilling this oil now would affect the price of oil immediately, as that price is being affected by futures not immediate supply.

No, it's current supply. In fact, futures prices are usually lower than spot prices. Last time I checked (a few weeks ago) oil for summer 2010 delivery was about $1 a barrel less than the spot price.

So you are completely wrong. A shift in policy would affect oil prices immediately.

Source?

Here's what the government task force report in to oil prices concluded a couple of days ago:

The Task Force’s preliminary assessment is that current oil prices and the increase in oil prices between
January 2003 and June 2008 are largely due to fundamental supply and demand factors.

The world economy has expanded at its fastest pace in decades, and that strong growth has translated into
substantial increases in the demand for oil, particularly from emerging market countries. On the supply
side, the production of oil has responded sluggishly, compounded by production shortfalls associated with
geopolitical unrest in countries with large oil reserves. As it is very difficult to rely on substitutes for oil in
the short term, very large price increases have occurred as the market balances supply and demand.

There's one reason why oil prices are high:

Edit: from theoildrum.com , but the image is originally from the task force report.

Increased production in the future won't affect prices until that gap between economic growth and oil production growth closes.

[angelsandair]

democrats... socialists... have always felt that you could tax your way into prosperity.

lazs

Let the stupid people in America screw this one up. The percentage of people in America who thinks that George Bush blew up the Twin Towers and created AIDS just to kill blacks are in that stupid catagory. They can also go in the retarded catagory.

[Carrel]

So you are completely wrong. A shift in policy would affect oil prices immediately (and create 100,000+ jobs). But hey, being wrong is no hindrance for a Dimocrat

Do you have any idea who signed the moritorium on oil exploration? Take a guess--- Carter? Nope. Clintion? Nope. It was Bush Sr. who signed the moritorium on offshore oil exploration. Did you know that? Because you keep on blaming the Dims, and the Repugs had SIX YEARS where they had the votes in Congress, not to mention the White House, and could have reversed it easily at any time.

This is one more example of Bush's and the Repug's failure at leadership, yet the insipid here will continue to pretend everything bad that's happening right now is because of the Dims who had no control and weren't in power when these decisions were being made.

[angelsandair]

Do you have any idea who signed the moritorium on oil exploration? Take a guess--- Carter? Nope. Clintion? Nope. It was Bush Sr. who signed the moritorium on offshore oil exploration. Did you know that? Because you keep on blaming the Dims, and the Repugs had SIX YEARS where they had the votes in Congress, not to mention the White House, and could have reversed it easily at any time.

This is one more example of Bush's and the Repug's failure at leadership, yet the insipid here will continue to pretend everything bad that's happening right now is because of the Dims who had no control and weren't in power when these decisions were being made.

Yes, but do you realize that Bush JR got rid of the ban. That congress still wont TOUCH it. GWB has 4 times the approval rating of Congress. And Congress has at most an approval rating of 9%. I've seen it as low as 6%.

[Hornet33]

Do you have any idea who signed the moritorium on oil exploration? Take a guess--- Carter? Nope. Clintion? Nope. It was Bush Sr. who signed the moritorium on offshore oil exploration. Did you know that? Because you keep on blaming the Dims, and the Repugs had SIX YEARS where they had the votes in Congress, not to mention the White House, and could have reversed it easily at any time.

This is one more example of Bush's and the Repug's failure at leadership, yet the insipid here will continue to pretend everything bad that's happening right now is because of the Dims who had no control and weren't in power when these decisions were being made.

And during that six years you keep harping on gas prices rose at a consitent rate along with the cost for everything else. Nothing unusual there so nothing needed to be done. Now that the price has tripled in the last year something needs to be done. Bush did what he could by removing the executive ban. Now it's up to Congress (the people who make the laws) to do something. Of course this Congress hasn't done ANYTHING worthwhile since they got there so who are you going to blame?

[Chalenge]

...

Use the extra to cut income taxes, or more likely corporate taxes.

Corporate taxes? You mean the taxes we pay for corporations when we buy their products? Corporations dont pay taxes you can trust that!

[Chalenge]

How about we burn 'K' Street to the ground, end all tax breaks for oil companies, tax 'em the same rate the IRS taxes you and me (33%+) and lock down all domestic production for domestic distribution.

That will only pass the taxes paid along to consumers and the price will go up just the same.

I dont believe imported oil is taxed but I do know taxes have been suggested for years. Hillary complained about profits of the oil companies and how she wanted 'to take that money' (theft in my book) and use it in her own way. Well she should take another look. Oil companies profit about $0.11 on the gallon. The truckers that deliver the final product make almost as much ($0.09) and when you add Federal Taxes State Taxes and Local Taxes there is as much as another $1.27 added to the price. The highest profit on gas of course is OPECs which is currently well over $2. The people that make the least are the marketers and retailers at about $0.04.

Taking OPEC out of the equation would drop the price of gas by at least $1.60/gallon. Oil companies would not increase costs above the current actual cost of production of $0.33/gallon because they would redirect R&D funds as required and we would not be sending that money to a foreign land.

[Maverick]

How can anyone think that NOT doing oil exploration and exploitation of same will have any beneficial effect on oil or fuel prices in 5 years? 

Seems pretty darn silly to think that not looking for and getting new sources is going to make prices go down or even stay the same later on.