Peak Oil is You
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Page added on July 16, 2013
So About That $2 Gas…?
U.S. gasoline prices are expected to remain volatile for the month because of geopolitical fallout in the Middle East. Concerns over the global oil supply are fading away from the minds of most consumers and few people care even less about the unrest in Egypt. A weekend survey said gasoline prices were in decline, though that did little to ease the minds of American commuters scratching their heads at the pump during the first major heat wave of the season. A year ago, American consumers were paying substantially less for gasoline. While U.S. oil production gains mean fewer imports, there appear to be few guarantees for energy security, and lower gasoline prices, in the near term.
Motor group AAA reports an average Monday price for a gallon of regular unleaded gasoline of $3.61. That’s more than 4 percent higher than last week, which translates to a 2 cent increase every day since July 8. A weekend assessment from Lundberg Survey said gasoline prices declined by less than 1 percent compared to last month. The U.S. Energy Department said it expects gasoline prices for the season to level off at around $3.50 or so, though that’s still higher than the $3.39 average reported year-on-year.
Former House Speaker and presidential hopeful Newt Gingrich said a then-struggling U.S. economy can’t afford to spend billions of dollars overseas to buy foreign oil when there was plenty of that Texas tea at home in the United States. Gasoline prices, he said, could drop to $2.00 per gallon if drilling activity increased dramatically in the United States. A year later, nearly 90 million barrels of oil was produced worldwide and almost half of that came from new drilling operations in the United States. Gasoline is still nowhere near $2.00 per gallon even though the United States is mentioned in the same breath as Saudi Arabia.
The International Energy Agency said this week fears of so-called peak oil are more or less unfounded in part because of production gains from the United States. Production from the Bakken formation in the Northern Plains states helped move the North Dakota economy from failure to frenzy in roughly a decade’s time. Issues overseas, however, are driving domestic gasoline prices higher as oil on the international market stays above the $100 per barrel mark for the first time since last year.
Those like Gingrich and the American Petroleum Institute said building a pipeline like Keystone XL would shield the North American economy from the overseas turmoil wreacking havoc on retail consumer markets. API says 70 percent of the people it surveyed said Keystone XL would help with national security issues tied to energy markets. A rival survey of public opinion from the Pew Research Center found 83 percent of the people in the United States wanted the government to focus more on domestic issues and leave foreign affairs to the foreigners. For energy matters, however, those two issues mix.
Gingrich and his supporters said a dramatic new way of thinking about U.S. energy potential would shield the North American economy from overseas turmoil. That’s done little, however, to persuade U.S. refiners that they’re the ones, not retailers or consumers, that have to cover the costs for price increases in the global energy market.
16 Comments on "So About That $2 Gas…?"
GregT on Tue, 16th Jul 2013 10:43 pm
“A year later, nearly 90 million barrels of oil was produced worldwide and almost half of that came from new drilling operations in the United States.”
I was wondering how the US could possibly become a major oil exporter, now I see why.
“The International Energy Agency said this week fears of so-called peak oil are more or less unfounded in part because of production gains from the United States.”
More or less? Unfounded in part? What kind of a statement is this?
“Gingrich and his supporters said a dramatic new way of thinking about U.S. energy potential would shield the North American economy from overseas turmoil.”
A dramatic new way of thinking will shield the economy? Well then, let’s get thinking dramatically!
With political speak like this mumbo jumbo, Newt just might have a chance at the Presidency. The average person might actually believe this BS.
TIKIMAN on Tue, 16th Jul 2013 11:08 pm
$2 a gallon… Ha!
Obama will do everything in his power to keep the price of oil high. He want’s the US to be like Europe. Living like his brother in Kenya.
GregT on Wed, 17th Jul 2013 12:06 am
Obama does not rule the world, or even oil prices. He only does what he is told to do, just like every other political leader that values his or her life.
BillT on Wed, 17th Jul 2013 1:21 am
What you fools in the US don’t realize is that you ARE paying somewhere in the neighborhood of $10 per gallon now. How do I get that figure?
Well, you pay about $4 at the pump. Then you subsidize the industry to the tune of billions per year in so many ways it would take pages to cover them all, but it ranges from lack of prosecution of oil company failures, to financial manipulation to make cheap money available. Then there are the ‘oil wars’ of the last 13 years. We would not be in the Middle East if it was only desert. So, many billions on subsidies and many trillions in war costs add up to much more than $10 per gallon. Not to mention the bit of human blood in every gallon.
rollin on Wed, 17th Jul 2013 1:30 am
Even though the cost of oil products is only a small fraction of the overall cost of living or most business, it appears to have been given massive powers by experts on the economy. These small changes should not have such a massive influence on our culture and it’s operations, especially since it is fairly level across the globe.
I think the experts should stop waving the small oil component and look at the real reasons for economic faltering and lack of growth. Oil costs the Chinese just as much, yet they are still growing their economy.
TIKIMAN on Wed, 17th Jul 2013 1:39 am
Rollin –
“Even though the cost of oil products is only a small fraction of the overall cost of living or most business” I disagree with the business part. even if your a huge corporation shipping shit with thousands of trucks, a few cents will put a hole in profits, that profit loss will trickle down with layoffs, higher prices for good/services etc.
Gilbert Godfrey on Wed, 17th Jul 2013 1:47 am
When Gingrich said that bit about 2 bucks a gallon he knew it was false, a lie, a desperate come on to the gullible one’s to vote for him. That’s all, nothing more. Every politician must have his or her roots selling some version of snake oil.
What I do find fascinating is where the price of oil and fuel ends up. Right at the threshold of what people will stomach without belly-aching too much, but not a cent less. If they complain too much the news service begins to pick it up and then for trumped up reasons it comes back down until the slaves are once again complacent. It lies between both shadow and substance, from the pit of man’s fears to the summit of his endeavors, or something like that, with all of us stuck in a twilight zone episode with a twisted poignant meaning we will all get too late.
GregT on Wed, 17th Jul 2013 1:50 am
“Oil costs the Chinese just as much, yet they are still growing their economy.”
If you really think about it, it is mainly the US that is growing the Chinese economy, at the expense of American jobs, and the American economy. America has a massive trade deficit with China.
Also, as you take a look around you, ask yourself what you see that did not require oil to extract resources, refine, manufacture, transport, distribute, and finally make it into your home. That would be pretty much nothing. Almost everything around you has a massive amount of oil factored into it. It is entirely, the cost of doing business and the cost of living, in modern industrial society.
rollin on Wed, 17th Jul 2013 3:56 am
Again, the US has a GDP of 15 trillion and a trade deficit with China of 200 billion. That is a deficit of 1.3% of our GDP. Not really a world shaking amount.
China has a GDP of 7 trillion, so that 200 billion is about 3 percent of their economy. How is that driving 10 percent and higher growth?
BillT on Wed, 17th Jul 2013 10:29 am
rollin, when you are bankrupt, ANY drain is a big event. The US is bankrupt. They are counterfeiting dollars to pay the bills. That’s like taking one credit card to pay on another. sooner or later, it all stops.
Arthur on Wed, 17th Jul 2013 2:49 pm
“The US is bankrupt. They are counterfeiting dollars to pay the bills. That’s like taking one credit card to pay on another. sooner or later, it all stops.”
For the moment the US gets away with it. I am not so convinced the US is already ‘bankrupt’ and it is very difficult to go bankrupt as long as you can print money (within limits of course). The real danger for the US lays in the future, in the coming ten years, when a large part of the competent part of the workforce retires. Again, you can’t have a world class economy with a third world population. That’s where the US is most vulnerable: cities like Detroit going bankrupt, increased racial tension, Euro’s having enough and attempting to secede.
GregT on Wed, 17th Jul 2013 3:45 pm
If the GDP, employment, and housing numbers were real, the federal government wouldn’t be running a 1 trillion dollar plus deficit, and the fed wouldn’t need to ‘stimulte’ the economy to the tune of 85 billion per month. Which, by the way, is doing nothing but create an even bigger hole of debt, that the US will never be able to climb out of.
bobinget on Wed, 17th Jul 2013 4:39 pm
Check out this latest EIA report:
http://ir.eia.gov/wpsr/wpsrsummary.pdf
The election is over. The ‘black guy’ won’t be running again. You can stop with the anti government, doomer right wing bull. America is back. The GOP is splintering into two ineffective parties, business, employment is improving. (see how much diesel is being consumed).
Two wasteful wars are winding down. Alternative energy is pushing ahead with new business models
that promise to change the way electricity delivered.
Natural gas remains so cheap some greedy bastards are even exporting it instead of creating even more US jobs.
Housing is back. Pent up demand is putting lots of folks back to work at living wages plus.
Best of all inflation, while not dead, is still manageable thanks to lower cost NG that will save our chili when, not if, the Mid East implodes.
One sure way to judge the US economy is by comparing it to the others… I rest my case.
GregT on Wed, 17th Jul 2013 4:47 pm
You can’t have a ‘world class economy’ without cheap energy and abundant resources. Both of which are getting more expensive and difficult to extract.
GregT on Wed, 17th Jul 2013 9:25 pm
“One sure way to judge the US economy is by comparing it to the others… I rest my case.”
In the race to the bottom, the country that is able to monetize the most debt ‘appears’ to have a better economy.
Appearances can be deceiving, but only for so long.
BillT on Thu, 18th Jul 2013 1:44 am
bobing… how do YOU know that he will not be running. If he declares a “National Emergency” and Marshal Law, and suspends elections, he doesn’t need to pretend to run. At this point
I give that option a 50+% chance of happening. He still has 2 1/2 years to decide. All it would take is a false flag of the right size … and the stupid Americans would beg for it.