Gas prices

[Project824 0]

A little off topic, but I was at a pretty interesting speech a few months ago (name or speaker slips my mind). Apparently Brazil's been developing biofuel alternative ethanol from sugar cane, and ethanol now accounts for 40% of their national non-diesel consumption. The speaker then crunched some loose numbers based on how much has been spent on the war in Iraq and projected we could have been at 50% ethanol consumption in automobiles by 2015 while spending the same amount of money.

I'm sure some of the statistics were skewed, as they always are, and I'm sure ethanol has its drawbacks as well, but it does make you think a bit. I believe ethanol is less pollutant as well.

[Allsmokenopancake 0]

A little off topic, but I was at a pretty interesting speech a few months ago (name or speaker slips my mind). Apparently Brazil's been developing biofuel alternative ethanol from sugar cane, and ethanol now accounts for 40% of their national non-diesel consumption. The speaker then crunched some loose numbers based on how much has been spent on the war in Iraq and projected we could have been at 50% ethanol consumption in automobiles by 2015 while spending the same amount of money.

I'm sure some of the statistics were skewed, as they always are, and I'm sure ethanol has its drawbacks as well, but it does make you think a bit. I believe ethanol is less pollutant as well.

Brazil is 100% energy independent. The ethanol can be derived from sugar cane or corn. Sugar cane is the most efficent (I believe) but the push, if you could call it that, going on here, is for the corn ethanol.

[godiogo 0]

A little off topic, but I was at a pretty interesting speech a few months ago (name or speaker slips my mind). Apparently Brazil's been developing biofuel alternative ethanol from sugar cane, and ethanol now accounts for 40% of their national non-diesel consumption. The speaker then crunched some loose numbers based on how much has been spent on the war in Iraq and projected we could have been at 50% ethanol consumption in automobiles by 2015 while spending the same amount of money.

I'm sure some of the statistics were skewed, as they always are, and I'm sure ethanol has its drawbacks as well, but it does make you think a bit. I believe ethanol is less pollutant as well.

Hey Project. I not sure about exact figures, but yes here in Brazil a lot of the cars run on gas and/or ethanol (you can mix). It pollutes less but is not as efficient as gasoline.

Though it has been heralded as the 'next fuel' by some, it has its problems as well. To fill an SUV's gas tank will corn-based ethanol, for example, it takes enough corn to feed a family of four for a year. Also, those who produce crops for fuel often use every last bit of the crop they planted, leaving nothing in the soil (nutrients, etc.) for the next harvest. There's a pretty interesting document against biofuels here.

[toroytorero 0]

That Kunstler fellow seems to be a total dick.. he has a real hatred for modern architecture it seems.. though if I had a last name like his I would have a lot of hatred in my heart too.

here in texas it's 2.99 but the govt is going to give us a .20 break over the summer.. or so I've been hearing.. haven't seen it yet.

after reading more of that guys site I swear he's a character right out of an Ayn Rand book.

[jmiro 55]

ayn rand there is a name i havent heard since college

[godiogo 0]

That Kunstler fellow seems to be a total dick.. he has a real hatred for modern architecture it seems.. though if I had a last name like his I would have a lot of hatred in my heart too.

here in texas it's 2.99 but the govt is going to give us a .20 break over the summer.. or so I've been hearing.. haven't seen it yet.

after reading more of that guys site I swear he's a character right out of an Ayn Rand book.

Yeah Kunstler is not watered-down at all, but he does make some interesting points once you get past the fire and brimstone.

[Thockey17 1]

I enjoy exploiting natural resources.

[godiogo 0]

I enjoy exploiting natural resources.

Everyone does.

[Thockey17 1]

I enjoy exploiting natural resources.

Everyone does.

I've got a car sitting in the garage that gets 3 miles per gallon....on aviation fuel. Beat that.

[hockeyherb 1]

A little off topic, but I was at a pretty interesting speech a few months ago (name or speaker slips my mind). Apparently Brazil's been developing biofuel alternative ethanol from sugar cane, and ethanol now accounts for 40% of their national non-diesel consumption. The speaker then crunched some loose numbers based on how much has been spent on the war in Iraq and projected we could have been at 50% ethanol consumption in automobiles by 2015 while spending the same amount of money.

I'm sure some of the statistics were skewed, as they always are, and I'm sure ethanol has its drawbacks as well, but it does make you think a bit. I believe ethanol is less pollutant as well.

I've read it's the rise of alternative energies like ethanol that are causing the rise in gas prices anyway. Since no one wants to invest in building more refineries now since they're expensive and might not be needed in the future, yet the demand for fuel is still rising we have a supply/demand imbalance that our current refining capacity cannot meet. We're putting ourselves in a catch-22.

Not that I have the answer, just stating what the problem is.

[usahockey22 0]

The idea that ethanol is causing higher oil prices is ridiculous...alternative energies are barely on the horizon of even limited use for the majority of energy consumers. It is actually the other way around, that higher oil prices will cause more use of alternative energy sources...but they are not nearly high enough to make Ethanol a great idea. Ethanol is good for the farmers, because they can charge higher prices for corn, etc (which is a reason food prices have slightly increased)...it does not afford any more efficient use of resources currently. You are just physically using more ethanol in your gas tank, but that doesn't mean that oil wasn't used in order to get that ethanol out of the plants, transported, and into your gas tank.

Inflation-adjusted oil prices in comparison to our average wealth (luxury spending capabilities) are actually quite a bit lower than they have been. Our economy runs on oil, and therefore higher oil prices are a sign of a good economy, as we need it for nearly everything...what we realistically pay as a percentage of our extra money is quite low, and of course still much lower than what almost any other country in the world pays.

You will hear all sorts of things about why we have higher oil prices. Probably a few that make the most sense are that, of course, the quantity of oil demanded is ever increasing, thus driving the prices up, simply. The United States plays a big part in this, but also countries like China and India are using more and more fossil fuels. For the summer, the oil companies switch over to summer blend, requiring that they completely shut down the refineries after each run of oil is produced, and gear them up for a different blend, which different states require...this adds quite a bit to costs. Also I believe a couple refineries recently burned down, which is having an impact.

When people talk about "running out" of oil within the next 20-60 years, they are talking about our cheap oil. We do have enough oil (that we currently know of, surely more will be found) to last for hundreds of years. It's just that oil prices have to hit a certain price per barrel to make it economically feasible to start tapping into these other spots, and our prices are still cheap enough to just keep buying from Canada and the Saudis without looking into these other supplies. This is also why ethanol is still more of a political/pro-environment issue, and not really a very economical solution currently, though people will be gearing up more for alternatives like ethanol in anticipation of high oil prices. The suppliers won't let prices get high enough to really make those worth it though, because they will make less money.

Just remember, over 60 cents per gallon of gas you buy goes straight to the government in taxes...and in countries with more government interference (like europe), they pay the higher price.

[jmiro 55]

missed the fact that international polictics have a huge impact on the stock market which also has a major impact on oil prices. This and holiday travel impacts the price more than anything else. Example is thirty cent (US) swings in the price.

[usahockey22 0]

Right...and gas prices always mysteriously go down during elections and presidential polls as well. Conspiracies are more fun than simple economics.

[Project824 0]

The idea that ethanol is causing higher oil prices is ridiculous...alternative energies are barely on the horizon of even limited use for the majority of energy consumers. It is actually the other way around, that higher oil prices will cause more use of alternative energy sources...but they are not nearly high enough to make Ethanol a great idea. Ethanol is good for the farmers, because they can charge higher prices for corn, etc (which is a reason food prices have slightly increased)...it does not afford any more efficient use of resources currently. You are just physically using more ethanol in your gas tank, but that doesn't mean that oil wasn't used in order to get that ethanol out of the plants, transported, and into your gas tank.

Inflation-adjusted oil prices in comparison to our average wealth (luxury spending capabilities) are actually quite a bit lower than they have been. Our economy runs on oil, and therefore higher oil prices are a sign of a good economy, as we need it for nearly everything...what we realistically pay as a percentage of our extra money is quite low, and of course still much lower than what almost any other country in the world pays.

You will hear all sorts of things about why we have higher oil prices. Probably a few that make the most sense are that, of course, the quantity of oil demanded is ever increasing, thus driving the prices up, simply. The United States plays a big part in this, but also countries like China and India are using more and more fossil fuels. For the summer, the oil companies switch over to summer blend, requiring that they completely shut down the refineries after each run of oil is produced, and gear them up for a different blend, which different states require...this adds quite a bit to costs. Also I believe a couple refineries recently burned down, which is having an impact.

When people talk about "running out" of oil within the next 20-60 years, they are talking about our cheap oil. We do have enough oil (that we currently know of, surely more will be found) to last for hundreds of years. It's just that oil prices have to hit a certain price per barrel to make it economically feasible to start tapping into these other spots, and our prices are still cheap enough to just keep buying from Canada and the Saudis without looking into these other supplies. This is also why ethanol is still more of a political/pro-environment issue, and not really a very economical solution currently, though people will be gearing up more for alternatives like ethanol in anticipation of high oil prices. The suppliers won't let prices get high enough to really make those worth it though, because they will make less money.

Just remember, over 60 cents per gallon of gas you buy goes straight to the government in taxes...and in countries with more government interference (like europe), they pay the higher price.

Leave it to the Middlebury guy to take this somewhere it didn't have to...

[usahockey22 0]

Leave it to the Middlebury guy to take this somewhere it didn't have to...

You are welcome to add your own thoughts on the matter, if you have any...

[Project824 0]

Leave it to the Middlebury guy to take this somewhere it didn't have to...

You are welcome to add your own thoughts on the matter, if you have any...

Relax it was a joke, and really more of a compliment than anything else. I was implying you actually gave it some higher thought, and that's coming from a Princeton guy.

[usahockey22 0]

Yes, I know, was just wanting to see what other people thought.

I actually have nothing to do with Middlebury, except that my cousin played for their team the last four years...just graduated, and unfortunately they couldn't pull of the 4-time d3 championship for his senior year. I'm just a fan of the team for this reason.

One of my uncles went to Princeton as a math major..what are you studying?

[jmiro 55]

Right...and gas prices always mysteriously go down during elections and presidential polls as well. Conspiracies are more fun than simple economics.

I was stating that economics do impact the price, however it is also driven by many other factors than those that contribute to supply and demand in a simple economic sense. I mentioned nothing about conspiracies unless you consider international trade and the politics of it conspiracies. However I just didnt go into the grandious detail you did.

[toroytorero 0]

mildly interesting read.

gas prices high - but not high enough

[usahockey22 0]

From what has been estimated by some economists, it would take 7-8 dollar per gallon gas or higher for most Americans to really start limiting their fuel consumption. I believe that this is around the average price in Europe now.

[kovalchuk71 212]

nvm. I dont want to accidentaly start something

[Chadd 916]

From what has been estimated by some economists, it would take 7-8 dollar per gallon gas or higher for most Americans to really start limiting their fuel consumption. I believe that this is around the average price in Europe now.

I saw some interesting numbers on the news the other day. Something like 70% of people making under $35k a year consider current gas prices a hardship while 35% (or so) of people making $55k+ a year don't consider it a problem. It is having an impact on a significant portion of our population.

[usahockey22 0]

I'm guessing it was just a poll? The thing is that most people will complain about gas prices and say that they don't like it, but when it comes to purchasing gas, people are buying more and more, regardless of the price. When you look at the gas being bought at the pumps, it really isn't having an impact, though of course we all don't like the higher prices. It will take prices much higher than they are today to really notice a decrease in demand quantity.

[JR Boucicaut 3802]

But people don't have a choice - they have to drive.

[Chadd 916]

But people don't have a choice - they have to drive.

Especially people who have a longer commute thanks to housing prices in some markets.

I'm guessing it was just a poll? The thing is that most people will complain about gas prices and say that they don't like it, but when it comes to purchasing gas, people are buying more and more, regardless of the price. When you look at the gas being bought at the pumps, it really isn't having an impact, though of course we all don't like the higher prices. It will take prices much higher than they are today to really notice a decrease in demand quantity.

There is a lot of anecdotal evidence that travel is decreasing for lower income folks. Small reductions can easily be offset by the overall increase in numbers of inefficient, larger SUVs.