cnbc: Killer Combo of High Gas, Food Prices at Key Tipping Point

[PeterMP]

Are you referring to coal?

They are not limiting how much oil and gas can be used,but rather the emissions,which makes production costs higher for NG and oil AND prohibitively high for coal.

Why would the prices drop with higher costs and more demand from having to pick up the coal use lost?

Where do ya think we are gonna get electricity?...the non-existent green sources?

add

By midyear 2012, refineries and fossil-fuel-fired electric utilities will be required to begin lowering their greenhouse gas emissions under a recent court settlement reached by the Environmental Protection Agency and several states and environmental groups. Refineries and power plants are responsible for 40% of U.S. greenhouse gas emissions, EPA said when making the announcement on Dec. 23.

Under the settlement, EPA will use Clean Air Act regulations to propose emissions standards for power plants in July 2011 and for refineries in December 2011 and to issue final regulations in May and November 2012, respectively.

http://pubs.acs.org/cen/news/89/i01/8901notw6.html

Efforts to stop EPA from regulating greenhouse gases through the Clean Air Act have been led by chemical companies, manufacturers, and their allies in Congress and are likely to continue this year.

But the costs of the refined product isn't what is going up.

The costs of crude oil is going up, and it isn't just the US, but across the world, and emissions can be cut by cutting any fossil fuel, not just coal.

(and coal prices across the world are up too)

What your talking about would be causing prices of final products in the US to go up, but global prices for raw products to go down (as US demand decreased as a function of increases in final products in the US).

[DRSmith]

So if Exxon is making 2 cents a gallon

and the gov is making 48.1 cents a gallon

should the government give it back also.

Maryland is looking to add 12cents more a gallon now..

IF President Obama came out and said we are going to drill tomorrow and we are going to reach 55% domestic drillin in 3 years the speculators would sell the next day.

Oil back to 2.60$

we only seem to be trying to increase the cost at the peoples expense.

http://energyalmanac.ca.gov/gasoline/margins/index.html

And Opec says they will cut production or the unstable middle easr is used drive prices

As long as you buy oil on the world market it does not matter what happens

You want a balanced budget or better yet surpluses to pay off the debt stop giving money to people who do not need it.

---------- Post added April-30th-2011 at 10:26 PM ----------

The EPA certainly has gone down that road

http://www.npr.org/2011/01/03/132612887/epa-to-enforce-new-emission-rules-on-power-plants

http://pubs.acs.org/cen/news/89/i01/8901notw6.html

you think it has no effect ?

add

Why ignore Chu's remarks?....He Mr Irrelevant???

In a sign of one major internal difference, Mr. Chu has called for gradually ramping up gasoline taxes over 15 years to coax consumers into buying more-efficient cars and living in neighborhoods closer to work.

“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” Mr. Chu, who directs the Lawrence Berkeley National Laboratory in California, said in an interview with The Wall Street Journal in September

---------- Post added April-30th-2011 at 08:37 PM ----------

Perhaps you should look where they made those profits?

No need to shutter the business,they will simply cut unprofitable parts in the US

the tax deductions are directly related to domestic production of oil,which by it's very nature requires workers and equipment/infrastructure

Keep it up and you will understand what it's like to ration gas and spend hrs in line (well ,maybe not you...you'll be in Canada where they are exploiting natural resources;))

Oil is a product that does not need government support for private industry, if it does than it does not live by the law of supply and demand

[twa]

You do understand how much US electricity is generated by coal?

NG and Oil have lower emissions(burn cleaner) and are easy to switch to than nuclear(which we are still twiddling our thumbs over)

You must think those that control production(and speculate) can't see the future....oil and NG ain't going down a whole lot w/o changing the dynamics

What's really funny is we are gonna reduce coal use while we increase shipping it to China exponentially.

I guess we live on a different planet

---------- Post added April-30th-2011 at 09:40 PM ----------

And Opec says they will cut production or the unstable middle easr is used drive prices

As long as you buy oil on the world market it does not matter what happens

You want a balanced budget or better yet surpluses to pay off the debt stop giving money to people who do not need it.

---------- Post added April-30th-2011 at 10:26 PM ----------

Oil is a product that does not need government support for private industry, if it does than it does not live by the law of supply and demand

Interesting...when do ya'll shut it down?

http://www.climateactionnetwork.ca/e/news/climate-action/2011/issues.php?WEBYEP_DI=3

meanwhile we buy oil from tar sands that is very high in greenhouse gas emissions

I don't know why I bother :beatdeadhorse:

[PeterMP]

You must think those that control production(and speculate) can't see the future....oil and NG ain't going down a whole lot w/o changing the dynamics

Okay, we are back to the root, the people that control production raised prices irregardless of current supply or current demand.

I agree.

[twa]

Okay, we are back to the root, the people that control production raised prices irregardless of current supply or current demand.

I agree.

Now you want to look at who controls prices and production?....it ain't Big Oil

You don't invest hundreds of billions w/o looking to the future

add for my Canadian

Tar Sands 101

The Tar Sands "Gigaproject" is the largest industrial project in human history and likely also the most destructive. The tar sands mining procedure releases at least three times the CO2 emissions as regular oil production and is slated to become the single largest industrial contributor in North America to Climate Change.

The tar sands are already slated to be the cause of up to the second fastest rate of deforestation on the planet behind the Amazon Rainforest Basin. Currently approved projects will see 3 million barrels of tar sands mock crude produced daily by 2018; for each barrel of oil up to as high as five barrels of water are used.

http://oilsandstruth.org/

Your loonies are coming for ya Loonie

[PeterMP]

Now you want to look at who controls prices and production?....it ain't Big Oil

You don't invest hundreds of billions w/o looking to the future

I don't disagree, but there is no way around it w/o committing to using fossil fuels forever.

You have to go through a transitionary period, and the fossil fuel industry is going to get their pound of flesh while they can, and ain't got noting to do with current supply and demand.

Our best hope is to speed the process up as much as possible.

[twa]

I don't disagree, but there is no way around it w/o committing to using fossil fuels forever.

You have to go through a transitionary period, and the fossil fuel industry is going to get their pound of flesh while they can, and ain't got noting to do with current supply and demand.

Our best hope is to speed the process up as much as possible.

Wouldn't it be better to expand domestic sources and use the money earned (and saved from sending elsewhere) to fund that transition?

Hoping ya can transition before destroying the economy seems foolish to me....especially if you believe in a global environment and recognize there will always be a need for oil (even if ya transition off it for fuel)

I wouldn't even object to nationalizing production (though it would seem more efficient and profitable to use capitalism)

added

your qualifier of 'current' supply and demand ignores the way things work in the energy business

[PeterMP]

Wouldn't it be better to expand domestic sources and use the money earned (and saved from sending elsewhere) to fund that transition?

Hoping ya can transition before destroying the economy seems foolish to me....especially if you believe in a global environment and recognize there will always be a need for oil (even if ya transition off it for fuel)

I wouldn't even object to nationalizing production (though it would seem more efficient and profitable to use capitalism)

The only destroying the national economy are the people that control production, and they aren't killing the national economy, but the global economy (actually, I don't think they are trying to destroy the economy. They are trying to walk a tight rope between getting everything they can get and destroying the global economy). Their response is to the threat of the replacement of fossil fuels as our primary method of producing energy.

Are you seriously going to argue in the same thread that we can't cut the tax breaks to the oil companies get and that we should be "earning" money from domestic production?

[twa]

Are you seriously going to argue in the same thread that we can't cut the tax breaks to the oil companies get and that we should be "earning" money from domestic production?

YES....the tax breaks encourage domestic sources and STILL bring in hundreds of billions to US coffers

Are you gonna support sending a trillion dollars to other countries along with the jobs?...I guess we can just raise the taxes on the imports to make up the difference:silly:

Or ya think we can presently transition to spending extra for alt energy w/o breaking the economy? (even at todays price it is not viable)

you are smarter than that....but the fools directing policy I ain't too sure of.

add example

Does getting a job in the US help the US economy?.....

What if they are paying 10% less taxes than someone else ?....should we then outsource that job to Saudi Arabia to prevent "losing" that 10%?

[PeterMP]

YES....the tax breaks encourage domestic sources and STILL bring in hundreds of billions to US coffers

Are you gonna support sending a trillion dollars to other countries along with the jobs?...I guess we can just raise the taxes on the imports to make up the difference:silly:

Or ya think we can presently transition to spending extra for alt energy w/o breaking the economy? (even at todays price it is not viable)

you are smarter than that....but the fools directing policy I ain't too sure of.

add example

Does getting a job in the US help the US economy?.....

What if they are paying 10% less taxes than someone else ?....should we then outsource that job to Saudi Arabia to prevent "losing" that 10%?

Again, we aren't breaking the economy. The oil producers that are raising the prices independent of current supply and demand issues are.

How do the taxes encourage domestic production?

What tax cuts are specific to US oil production?

[redskins59]

The fed wants our core inflation to be in the 2%-3% range. It's not there yet. Once that happens, rates will go up. Nothing to be concerned about yet. Also, uncertainty in the Middle East is hurting us.

[Stillers6SB]

So if Exxon is making 2 cents a gallon

and the gov is making 48.1 cents a gallon

should the government give it back also.

http://energyalmanac.ca.gov/gasoline/margins/index.html

2 cents a gallon? BS

Try closer to 60 cents a gallon!

$10.65 billion profit on 18.6 billion gallons of gas. 57 cents. Not 2 cents.

[DRSmith]

You do understand how much US electricity is generated by coal?

NG and Oil have lower emissions(burn cleaner) and are easy to switch to than nuclear(which we are still twiddling our thumbs over)

You must think those that control production(and speculate) can't see the future....oil and NG ain't going down a whole lot w/o changing the dynamics

What's really funny is we are gonna reduce coal use while we increase shipping it to China exponentially.

I guess we live on a different planet

---------- Post added April-30th-2011 at 09:40 PM ----------

Interesting...when do ya'll shut it down?

http://www.climateactionnetwork.ca/e/news/climate-action/2011/issues.php?WEBYEP_DI=3

meanwhile we buy oil from tar sands that is very high in greenhouse gas emissions

I don't know why I bother :beatdeadhorse:

I do not support tax breaks up here for oil companies and who knows come Monday that may end if the NDP win

As for the tar sands I see no reason why they can not be collected and work put forth to make it cleaner

[twa]

2 cents a gallon? BS

Try closer to 60 cents a gallon!

$10.65 billion profit on 18.6 billion gallons of gas. 57 cents. Not 2 cents.

From their press release they made 7 cents a gallon profit from all refined products in the first quarter,with their main profits coming from overseas markets

Are they lying?

http://www.exxonmobilperspectives.com/2011/01/13/what-makes-up-the-price-of-u-s-gasoline/

---------- Post added May-1st-2011 at 10:02 AM ----------

I do not support tax breaks up here for oil companies and who knows come Monday that may end if the NDP win

As for the tar sands I see no reason why they can not be collected and work put forth to make it cleaner

If it ends the price will rise or production will fall (perhaps another driver of the speculators)

I have no problem with your developing tar sands,but for us to use the environment as a excuse for not developing our own is ridiculous nimbyism...especially when our alt sources of oil are dirtier sources

[Stillers6SB]

From their press release they made 7 cents a gallon profit from all refined products in the first quarter,with their main profits coming from overseas markets

Are they lying?

http://www.exxonmobilperspectives.com/2011/01/13/what-makes-up-the-price-of-u-s-gasoline/

Yeah, why would they lie? Excuse me if I don't take Exxon's press release as gospel!

They're not just a refiner. They may make only 7 cents per gallon on the refining portion of their business.

But they are also a producer where they make much more of their profit. Your graphic that lists 71% for the crude oil is a huge component of their profit per gallon. You can't exclude that from the calculations.

60 cents total profit per gallon is much closer to the truth than 7 cents or 2 cents as the op stated.

$10.65 billion profit on 18.6 billion gallons of gas production. 57 cents per gallon profit for Exxon.

[twa]

Again, we aren't breaking the economy. The oil producers that are raising the prices independent of current supply and demand issues are.

How do the taxes encourage domestic production?

What tax cuts are specific to US oil production?

Putting yourself at their mercy is your own fault.

as far as taxes this gives some decent info and links

http://wizbangblog.com/content/2011/04/26/democratic-talking-points-on-gas-prices.php

All depends on how you define tax or subsidies,the $4 billion example used by the Dems is rather creative...and includes subsidies to the POOR for energy costs

specific to domestic production

http://www.axpc.us/policy/pdf/070321.pdf

http://www.gasandoil.com/goc/company/cnn63423.htm

or if you want the industries side

http://www.api.org/policy/tax/upload/FY2012_Budget-Short_Tax_Issues_Paper.pdf

add

Using two econometric models, a Wood Mackenzie study finds that from 2011 to 2025, increased access to resources

generates $150 billion in additional government revenue; compared to increased taxes which decrease net revenues

by $128 billion.

http://www.api.org/policy/tax/upload/Total_Industry_Taxes_April_2011.pdf

[PeterMP]

Putting yourself at their mercy is your own fault.

as far as taxes this gives some decent info and links

http://wizbangblog.com/content/2011/04/26/democratic-talking-points-on-gas-prices.php

All depends on how you define tax or subsidies,the $4 billion example used by the Dems is rather creative...and includes subsidies to the POOR for energy costs

specific to domestic production

http://www.axpc.us/policy/pdf/070321.pdf

http://www.gasandoil.com/goc/company/cnn63423.htm

or if you want the industries side

http://www.api.org/policy/tax/upload/FY2012_Budget-Short_Tax_Issues_Paper.pdf

add

Using two econometric models, a Wood Mackenzie study finds that from 2011 to 2025, increased access to resources

generates $150 billion in additional government revenue; compared to increased taxes which decrease net revenues

by $128 billion.

http://www.api.org/policy/tax/upload/Total_Industry_Taxes_April_2011.pdf

I haven't had much say in our energy policy over the last 60 years and wasn't even alive for a good chunk of it and don't pretend like we have the ability to produce enough oil to affect prices.

My concern is making sure that my children and grand children don't end up in the same situation.

So if we take industries word for it, we'll see a reduction in domestic production?

Do you know is the IDC tax credit count for non-domestic oil fields?

The problem with any economic analysis is you can't treat oil like a normal commodity. Its price is essentially dependent on one thing, the will of the major oil producers. That price dictates the value of US oil production.

[twa]

The IDC tax credit is for domestic drilling

http://www.dannamckitrick.com/beyond-the-fine-print/2010/03/u-s-energy-policy-intangible-drilling-costs-idcs-and-income-tax-deductions/

I agree oil isn't a normal commodity in that there is no real substitute/alt viable at this time in the US

I believe we can have a major impact on prices (far outside the simple production numbers impact) with expanded domestic access.

Price fluctuations comes more from the margins and perceptions of those that actually control production.

I was using you in the national sense(sorry I get to preaching;)),though each of us are to blame if we encourage vulnerability in supply/pricing of a commodity we rely on

add

Yes ..if we remove incentives domestic production will fall or prices will rise......or BOTH

[Thiebear]

2 cents a gallon? BS

Try closer to 60 cents a gallon!

$10.65 billion profit on 18.6 billion gallons of gas. 57 cents. Not 2 cents.

So your saying every dollar made by exxon is from oil?

How much in taxes did they pay 30+ billion?

So the Gov't is taxing the company for billions and the people for billions.

And the subsidizing of corn to ethanol to the pump also?

I try not to villify anyone not breaking the law and paying the most taxes of anyone...

How many jobs do they provide? Winner!

[PeterMP]

The IDC tax credit is for domestic drilling

http://www.dannamckitrick.com/beyond-the-fine-print/2010/03/u-s-energy-policy-intangible-drilling-costs-idcs-and-income-tax-deductions/

I agree oil isn't a normal commodity in that there is no real substitute/alt viable at this time in the US

I believe we can have a major impact on prices (far outside the simple production numbers impact) with expanded domestic access.

Price fluctuations comes more from the margins and perceptions of those that actually control production.

Yes ..if we remove incentives domestic production will fall or prices will rise......or BOTH

Want to explain what happened during the gas crisis of the 1970s then?

[twa]

Want to explain what happened during the gas crisis of the 1970s then?

the one in 73 that was a embargo or 79 when the Shah's fall created disruption and panic??

A embargo is clearly gonna have a outsized effect,the 79 one is closer to a minor fluctuation and speculation having a major impact.....much like today

add

Still trying to figure what you are asking

[PeterMP]

the one in 73 that was a embargo or 79 when the Shah's fall created disruption and panic??

A embargo is clearly gonna have a outsized effect,the 79 one is closer to a minor fluctuation and speculation having a major impact.....much like today

I was thinking about 73, but if US production is so powerful (keeping in mind that global demand has even increased), I'd be interested in seeing you explain both.

[twa]

It was a different world....we had price controls that actually prevented fully utilizing domestic sources.

If we were hit with a similar embargo(73) today it would likely be less of a impact (on supply,not price) due to more potential sources

the 79 one was complicated by both price controls and the Carter ban on Iranian oil import

US production under price controls and it's options were rather limited by law rather than source

Now we limit areas we can develop by law....do you sense a theme?

[PeterMP]

It was a different world....we had price controls that actually prevented fully utilizing domestic sources.

If we were hit with a similar embargo(73) today it would likely be less of a impact (on supply,not price) due to more potential sources

the 79 one was complicated by both price controls and the Carter ban on Iranian oil import

US production under price controls and it's options were rather limited by law rather than source

Now we limit areas we can develop by law....do you sense a theme?

Not in '73 we didn't. The price controls were put in place in because prices were going through the roof because of the embargo 1973.

[twa]

Not in '73 we didn't. The price controls were put in place in because prices were going through the roof because of the embargo 1973.

Yes we did,they were expanded in response to the 73 one

http://wiki.mises.org/wiki/1973_oil_crisis

Government regulations were also imposed on the oil industry. The price of petroleum products was controlled first by jawboning in 1969 and then by mandatory controls in 1971. This period witnessed the most rapid rate of inflation since the Civil War. As the real price of oil declined, the supply of domestically produced petroleum declined and the share of petroleum imports increased. At controlled prices, the earnings of oil producers declined, and there was little incentive to invest. By the time of the oil embargo of 1973, there were only one-half as many drilling rigs in operation in the continental US. as there were twenty years before. Dependence on imported petroleum approached half of the total consumption.[3]

added history lesson free of charge

Some people believe that the embargo was directly responsible for long gasoline lines and for service stations running dry. The shortages were, in fact, a byproduct of price controls imposed by President Nixon in August 1971, which prevented oil companies from passing on the full cost of imported crude oil to consumers at the pump (small oil companies, however, were exempted from the price control regime in 1973). In the face of increasing world By May of 1973 (five months before the embargo), 1,000 service stations had shut down for lack of fueloil prices, "Big Oil" did the only sensible thing: It cut back on imports and stopped selling oil to independent service stations to keep its own franchisees supplied. and many others had substantially curtailed operations. By June, companies in many parts of the country began limiting the amount of gasoline motorists could purchase per stop.