Gas prices again

[Kayz]

Squirrels are not nocturnal, so your dog is just a yappy piece of shit that barks at nothing!

Well, then squirrells in your area must be flaming bitch-ass pussies because in my neck of the woods, squirrells roam the streets at night. Especially the black squirrells. They get all liquored up on Colt 45 and run wild in the streets wreaking havoc.

 

[sc redneck]

2.90 for diesel today.. pay gets smaller by the week..

 

[Kayz]

2.90 for diesel today.. pay gets smaller by the week..

That's cheap. Diesel in my area has been $3.10 for nearly 4 months.

 

[Grizzly]

2.90 for diesel today.. pay gets smaller by the week..

Quit crying! As if you're the only one who is taking it in the ass because of rising cost of business. It's not like every business owner in the country hasn't seen his overhead go up or anything.

 

[Grizzly]

Well, then squirrells in your area must be flaming bitch-ass pussies because in my neck of the woods, squirrells roam the streets at night. Especially the black squirrells. They get all liquored up on Colt 45 and run wild in the streets wreaking havoc.

You have black squirrels? I thought they only lived in Michigan.

 

[THL]

Quit crying! As if you're the only one who is taking it in the ass because of rising cost of business. It's not like every business owner in the country hasn't seen his overhead go up or anything.

I'm starting to think that you and Bob Smith are somehow in on this whole scam. It's almost as if you are enjoying it.

Oil companies and pharmacutical companies have a lot in common. Neither of them seem to care about anything but money, no matter what the cost to the rest of the population. What do you think would happen to somebody if they came up with a way to heat and power our homes with a self contained device that actually sends electricity back to the power companies? Or if somebody came up with a cure for cancer? I'd like to think that that person would become instantly rich and famous and go down in history as one of the great minds of our time. But I highly doubt that would be the case.

Not that anything like that has ever happened.

 

[Kayz]

You have black squirrels? I thought they only lived in Michigan.

...they do, but they have found their way into my neighborhood and have ruined it the way the black squirrells ruin everything else they touch. They are a total drain on the eco system. Squirrell on squirrell crime has gone up 33%!!!

FYI...this is all a joke Grizz. Not sure if you are catching my drift or not.

 

[Kayz]

I'm starting to think that you and Bob Smith are somehow in on this whole scam. It's almost as if you are enjoying it.

Oil companies and pharmacutical companies have a lot in common. Neither of them seem to care about anything but money, no matter what the cost to the rest of the population. What do you think would happen to somebody if they came up with a way to heat and power our homes with a self contained device that actually sends electricity back to the power companies? Or if somebody came up with a cure for cancer? I'd like to think that that person would become instantly rich and famous and go down in history as one of the great minds of our time. But I highly doubt that would be the case.

Not that anything like that has ever happened.

I was watching a show on HGTV just last week about "green homes" in Aspen Colorado. Obviously these people are rich as fuck and many of the new houses being built are "green houses", which generate their own power through a variety of ways (solar, etc.). Several of the houses generate MORE power than they can use each month so the local power company actually buys the power from the homeowner at a reduced rate, which in turn saves other townspeople money on their electric/gas bills.

And since when did profit become a 4 letter word??? The whole point of business is to make as much money as one possibly can. The beauty of a capitalistic economy is that a business, for the most part, can charge any price they want for their products as long as the market will bear that price. With respect to the oil companies, the market is currently bearing $3.00 per gallon for gasoline so that is what they are charging. They are not price gouging by any means. Now, what does piss me off is that the oil companies are saying they are dumping all the extra profit back into maintenance and r&d, and are using this to justify their high profits (high in a dollar sense, not margin). I just don't buy this at all and that is evident this week when BP shut down Prudhoe Bay due to pipe corrosion. Pipe corrosion occurrs as a result of neglect and is very preventable. The last time those pipes were inspected was 1992!!! Prudhoe Bay is by far the US' largest oil reserve currently being mined..don't you think that the viability and smooth operation of that facility would be at the top of BP's "to do" list with respect to maintenance.

The problem as I see it is 2-fold:

1) When gas prices and thus margins are low, the oil companies don't want to invest in preventive maintenance.

2) When gas prices are high and margins are high, the oil companies don't want to take the plant offline for maintenance...they want to keep pumping oil.

 

[Kayz]

Oil companies and pharmacutical companies have a lot in common. Neither of them seem to care about anything but money, no matter what the cost to the rest of the population.

I have to disagree with this statement here, especially with respect to the pharm companies. Pharm companies produce drugs every day that save/help millions of people live healthy productive lives. Sure they make a lot of money, but the pharm industry as a whole reinvests about 17% of GROSS SALES back into r&d. Last year, I believe Merck reinvested almost 21% back into r&d. Companies like Pfizer, GSK, Merck, Otsuka cold easily bank an additional $1-3 billion dollars if they did not care about r&d.

If you want to blame anyone for the high cost of medicine, blame the federal government who makes these companies spend $5 billion and 10 years to bring a single drug to market. They are rewarded with a multi-year exclusive rights patent to recoup these costs, but once the generic hits they are shit out of luck. Pharm companies have a relatively small window of time to turn a profit on a single drug.

 

[dennis]

8/09/06 central texas..3.00 per gallon...I hear all your talk about who's to blame but answer me this....why in the hell is diesle fuel higher than gas for the 1st time ever in history ????It is not as refined but 3.09 gallon here.....talk about a conspiracy...you would think the us goverment is trying to put american goods buss..out of bussiness..talk to a trucker and find out their take on this..a big rig gets 4-6 mpg and burns deisle ?!

 

[Grizzly]

Dude, that was just silly. What does the American gov't have to do with the rising cost of fuel? The only thing they have to do with gas prices is in the buttload of taxes included in the prices.

 

[dennis]

Where I am going with that is this :seems to me the goverment is not doing much to help our US trucking industry to ship our american made goods across this great country of ours.Rising cost of freight = rising cost of product.And I was hoping that The Big Grzz could answer my question about why is the cost of deisle more than gas ? Does not make sense to me at all ?

 

[Kayz]

why is the cost of deisle more than gas ?

Allow me to tackle this if I may. There are several reasons as to why this is so:

1) The largest users of diesel fuel are commercial vehicles (tractor trailers, trains, some planes, etc) and farm equipment. Tractor trailers are without a doubt the most vital tool to keep the US economy moving. Truckers cannot buy less diesel fuel or park their trucks. Rail companies cannot say "we're not going to ship anything across the country"...it would criple the US economy. Keep in mind that most trains and tractor/trailers average about 6 miles to the gallon versus a little over 20 MPG for a consumer vehicle. Thus, the amount of fuel consumed by the trucking/agriculture industries is staggering when compared relatively to regular gasoline. It's simple...diesel fuel keeps the country running so it can be sold at a premium. Normally, trucking and rail companies just pass these increased costs along to their customer which then trickle down to the end user, so the cost of diesel fuel isn't as big of a deal as you'd think. The companies basically say "...we will ship this truckload of goods to this location for $xxxxx...take it or leave it". It costs me pretty much the same amount of money as it would cost you to make that shipment so the consumer really doesn't have many options to choose from with respect to what freight company to use. We both have insurance costs, truck maintenance, driver wages, and we both have to spend about the same for diesel fuel.

2) A refinery is able to generate much more gas out of a single barrell of oil than it can diesel, so it makes more sense from an economic sense to use their oil to make gasoline. Look at it this way for simplicity:

1 barrel of oil may be used to make either 20 gallons of gas or 17 gallons of diesel.

20 gallons of gas @ $2.90 per gallon = $58.00 in revenue.

17 gallons of diesel @ $3.10 per gallon = $52.70 in revenue.

There's just more money in gas right now.

3) Following Hurricanes katrina and rita, there was a great deal of talk/fear about a national gas shortage. So, refineries dedicated much more refining capacity towards the production of gasoline leaving diesel a little short on the supply side.

 

[dennis]

Kayz....good explanation dude..I had no idea you could make more gas than deisle from the same amount of oil..I assumed the opposite being that deisle is less refined than gas..you answered my question ! Thanks dg

 

[Kayz]

Kayz....good explanation dude..I had no idea you could make more gas than deisle from the same amount of oil..I assumed the opposite being that deisle is less refined than gas..you answered my question ! Thanks dg

yeah, diesel is easy to make due to the fact that is not refined as much. I'd say that in the next 5-10 years, smaller companies will be able to make their own diesel fuel.

My best friends dad is an engineer for the Air Force and he was telling me that the USAF is making a lot of their own jet fuel. My friends dad lives on a farm and has some tractors, bobcats, backhoes etc. He actually used the same process that that Air Force uses to make 6 gallons of diesel fuel (that burns cleaner than any fuel on the market) IN HIS KITCHEN that he put in his backhoe..and it ran flawlessly!! This fuel can be used in ANY diesel fuel engine.

The technology was developed by Sasol out of S. Africa. My friends dad was telling me that a smaller unit is in the works that would enable small businesses to make much of their own fuel using some common ingredients. It should be interesting to see where this technology goes.

 

[Bob Smith]

I'm starting to think that you and Bob Smith are somehow in on this whole scam. It's almost as if you are enjoying it.

I wish some of that money was going in my pocket.

Oil companies and pharmacutical companies have a lot in common.

Average profit margin for oil companies is about 9%. Average margin for pharma companies is about 17-19%. Average margin for financial services/banking companies is about 14-15%. Average margin for industrial companies in the US, about 9%. I dont see where oil companies profits are out of line.

Just as an example, Citibank is the largest financial services company in the US (possibly the word). Their margin in 2005 was ~21% (net profit of $25 billion). ExxonMobil is the largest company in the world. Their margin was 9% last year, with net profits of $36 billion. Exxon had THREE TIMES more revenue ($371 billion) than Citi and only $10 billion more in profit, yet everyone bitches about how excessive their profits were.

 

[Grizzly]

Where I am going with that is this :seems to me the goverment is not doing much to help our US trucking industry to ship our american made goods across this great country of ours.Rising cost of freight = rising cost of product.And I was hoping that The Big Grzz could answer my question about why is the cost of deisle more than gas ? Does not make sense to me at all ?

And they damn well shouldn't! The gov't has NO BUSINESS in the economy of this country. A mixed economy is flawed. It ends in either socialism or dictatorship.

 

[Bob Smith]

And they damn well shouldn't! The gov't has NO BUSINESS in the economy of this country. A mixed economy is flawed. It ends in either socialism or dictatorship.

You cant escape the govt involvement in the economy, either through spending or taxes. But I dont think the govt should be involved in bailing out private industry.

 

[Kayz]

But I dont think the govt should be involved in bailing out private industry.

I could not agree more. Delphi (not a private industry, but similar in nature) wants their contract thrown out and wants the government to pick up the tab for their pensions. That is bullshit, especially when Delphi has dozens of foreign subsidiaries who are making money left and right. Delphi used US dollars to build plants overseas, but now refuse to use foreign dollars to help subsidize their floundering US branches.

 

[Grizzly]

You cant escape the govt involvement in the economy, either through spending or taxes. But I dont think the govt should be involved in bailing out private industry.

I was only speaking in terms of right and wrong. At the moment, the gov't sticks its nose in most everything, eventhough it shouldn'.