Gas Prices -- Help at last?

Heh... and this is really the punchline. Think about it: crude oil is
far and away our civilizations most precious natural resource and it's
being sold for less than drinking water (or it had been up until now). I
don't think anyone really believes that prices like that are
sustainable, especially given that the oil supply is finite and
non-renewable.

Interesting.

a. In one corner we've got folks saying that the big, bad Oil Companies
are making obscene, HUGE profits at current prices.

b. In the other corner, we've got guys like you saying that the price
is too low, and shouldn't be so cheap.

If supply and demand is in action here, (a) and (b) can't co-exist.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

In article .com,
"Jay Honeck" wrote:

a. In one corner we've got folks saying that the big, bad Oil Companies
are making obscene, HUGE profits at current prices.

b. In the other corner, we've got guys like you saying that the price
is too low, and shouldn't be so cheap.

If supply and demand is in action here, (a) and (b) can't co-exist.

Think taxes. There are people (waaaay too many) that think gas
should be taxed so that it costs a "more reasonable" price at the
pump (i.e., the insane prices in other countries).

--
Bob Noel
no one likes an educated mule

Jay Honeck wrote:
Heh... and this is really the punchline. Think about it: crude oil is
far and away our civilizations most precious natural resource and it's
being sold for less than drinking water (or it had been up until now). I
don't think anyone really believes that prices like that are
sustainable, especially given that the oil supply is finite and
non-renewable.


Interesting.

a. In one corner we've got folks saying that the big, bad Oil Companies
are making obscene, HUGE profits at current prices.

b. In the other corner, we've got guys like you saying that the price
is too low, and shouldn't be so cheap.

If supply and demand is in action here, (a) and (b) can't co-exist.

It's safe to say, however, that both of these analyses are overly
simplistic. In fact, a) and b) can coexist and here's how:

a) While it might be true that the oil companies are making record
profits at the current time, I can promise you they're sweating bullets
right now about the price of gas and other petrolium products. Why?
Well, they know, like any other business owners/ops know, that there's
an upper limit to the price of their products. This works like any other
business - you want the highest possible price for your product that
does NOT reduce demand for it. In fact, any time you bump up the price
of your product you're taking a risk in this regard. You know how all
this works so I won't go into it. But I think the dynamic going on here
should be obvious.
This was an ugly, ugly lesson for the oil companies back in the 70's
when US production peaked, causing prices to skyrocket and shocking the
economy into conservation. I promise you this experience is still fresh
in their minds and a lot of sleep is being lost over it.

b) The obverse is true as well - you don't want your product priced
excessively _low_ either. There are two consequences of this: 1)
excessively low margin and 2) possibly excessive demand. Up until now,
the margins and supply have been permissive enough to allow selling gas
more cheaply than H2O here in the US.

That's no longer true, for reasons that I think are obvious. The need
for more refining capacity (big cost!), increasing
shipping/processing/etc costs, gubbamint regulation and questionable
supply (this is a dissertation-long issue here) have made the old
cheap-as-hell pricing scheme simply unsustainable.

So, you can see the rock/hardplace situation he cheap gas is not
sustainable, but TOO high of a price hike might shock the economy into
conservation which NO business would EVER want for its products....

Truth is, I wouldn't want to be an oil company right now, because
they're fixin' to get into some really hard times. The current drama
going on at the gas pumps right now speaks directly to this issue...

As I said, we're lucky to only be paying 3 bucks right now...


LS
N646F
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

Also, as someone else pointed out, them thar refineries ain't cheap. In
fact, those things cost buttloads of money to build, run and maintain.
Huge buttloads...... Not only that, don't forget about those oil rigs
down in the gulf that broke off their moorings during the hurricanes and
are now Galveston beachfront resorts. Those things are going to cost a
hell of a lot to replace too......

All of which are depreciated and amortized over a scheduled period of
time. The actual cost is paid by all consumers, amounting to pennies on
the gallon.

I'm not one to defend the oil companies, and I'm as ****ed about gas prices
as anyone.

really? last time I was in the US (2002) I paid less for gas than for
bottled water ... either your gas price is too low or you're asking too
much for (bottled) water.

Bottled water in America is a very effective I.Q. test.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

On 8 Oct 2005 12:05:16 -0700, Jay Honeck wrote:

Bottled water in America is a very effective I.Q. test.

ah. I see. Mr. knoweverythingbetter. What about a x-country and a wife
wearing&needing lenses?

Your with chlorine (sp?) cleaned water is %$&§$%!!!

#m
--
Either you are with us, or you are with the terrorists.
http://www.whitehouse.gov/news/releases/2001/09/20010920-8.html

Bottled water in America is a very effective I.Q. test.

ah. I see. Mr. knoweverythingbetter. What about a x-country and a wife
wearing&needing lenses?

Oops. Sorry. I thought we were talking about "bottled water" in the
abstract, versus the price of gasoline.

I didn't realize that you, Martin, of all people, would be suckered,
er, I mean, "influenced" into paying more for a bottle of *water* than
for a gallon of milk!

:-)

BTW: Contact lens wearers (which I presume is what you are referring
to) should use sterile saline solution in their eyes -- not Evian!
That crap is FULL of stuff you wouldn't want to put in your eyes.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

Another German jerk know-it-all. I've got my well pipe down 250' (that's 75
meters for you idiots on the metric system) into pure snow and ice runoff
from the Sierra. Betcha mine is cleaner than yours.

Jim



"Martin Hotze" wrote in message
...


Your with chlorine (sp?) cleaned water is %$&§$%!!!

Jay Honeck wrote:

Bottled water in America is a very effective I.Q. test.

Maybe where you live, but not around here. Run the normal series of tests that
any keeper of marine fish runs on his tank on my tap water and then tell me it's
dumb to pay $1/gallon for bottled water. Next Wednesday I have a job replacing a
toilet. Different water company. The old one clogged up with iron and other
deposits within two years of installation. The plumbing salesman asked "and she
drinks that?"

Good question.

George Patterson
Drink is the curse of the land. It makes you quarrel with your neighbor.
It makes you shoot at your landlord. And it makes you miss him.

Bottled water in America is a very effective I.Q. test.

Maybe where you live, but not around here. Run the normal series of tests
that any keeper of marine fish runs on his tank on my tap water and then
tell me it's dumb to pay $1/gallon for bottled water. Next Wednesday I
have a job replacing a toilet. Different water company. The old one
clogged up with iron and other deposits within two years of installation.
The plumbing salesman asked "and she drinks that?"

Yech.

Sounds like you folks need a new well? (And/or water treatment plant?)
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"