With So Much U.S. Oil, Why Is Gas $3.70?

[E_]

Here's one perspective.

With So Much U.S. Oil, Why Is Gas $3.70?

June 29, 2014

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This July 4, the price of gasoline in the US is expected to be at its highest level in six years - at $3.704 per gallon according to the Energy Information Commission.

Separately, this week, the Obama Administration lifted a 40-year-old ban on the exporting of crude oil. Steve Mufson of The Washington Post noted, “The Commerce ruling initially clears the way for as little as 20,000 barrels a day of new condensate exports (minimally processed super-light oil) but that could rise to as much as 200,000 barrels a day, the estimated Gulf coast capacity of stabilization units, according to an analyst report by Citigroup.”

While there is a debate on the left and right as to what this means, one thing is clear – increasing U.S. oil production will not increase your standard of living if you live in the U.S., and will not lower energy costs in nations around the world.

If we have so much oil in the U.S., why hasn’t the price gone down at the pump giving everyone a raise?

Separately, in President Obama’s State of The Union Address in January, he credited part of the U.S.’s success in energy to natural gas.

He stated, "The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.

"I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good."

An “All-of-The-Above Energy Strategy” is no energy strategy. After all the rhetoric and today’s high gasoline prices, why is everyone always asking for more research? We are on a continued plan of more oil, and no natural gas.Let me ask you this, if you bought a natural gas car, where would you fill it up?

The Honda Civic GX first appeared in 1998 as a factory-modified Civic LX that had been designed to run exclusively on compressed natural gas. How is the government helping by building that infrastructure it promised? The answer is that it is not.So, when it comes to vehicles, the excitement around natural gas is all lip service.

I have written that what we need is a plan, industry coordination, finance securitization, and to actualize the notion that clean energy access is the number-one thing we can export to lift millions out of poverty. America has already invested in the research and development needed to show the world how to democratize energy. What we lack is the conviction to actually deploy it.

So, instead we are “plan free,” exporting oil and perpetuating a long-term strategy that is no strategy.In the meantime, we are paying $3.70 at the pump – 3X more than prices in 1999.

Those driving a Nissan Leaf or Tesla, for example, pay little for filling up. And, buying a natural gas car makes no sense, because you can’t fill it up.“All of the above” ensures chaos, but the Government has a responsibility to ensure that even in “chaos” we are headed in the right direction.

I am looking forward to writing the headline that says, “The World finally declares war against $100 oil,” because a tripling of oil prices since 1999 is the main reason we feel so poor.

In the meantime, oil exports from the U.S. has zero meaning to your pocketbook – no matter where you live.

Photo: Heather A. Craig/Shutterstock.com

[JLA]

As the owner of a convenience store with gas, let me tell you the current gas situation is unlike I have seen in the 20 years I've been in the business. I live in Northern KY, and around here the "big boys" i.e. Speedway, Thornton's and United Dairy Farmers are hell bent on putting the "little guys" out of business. For the past 3 or 4 months they have priced their retail $0.15-$0.25 below my COST. In the past it has happened for a week or so every other month. So if I price my gas at cost I'm still losing money every day due to credit card fees which will subtract about $0.10 per gallon from my "profits". My supplier claims they are giving me the best price available, but I think they are seeing the writing on the wall. My gas sales have dropped by more than half and soon we will have to stop selling to stay in business.

Current retails here are $3.84, my cost is $3.99, which is also my retail. You do the math.

[katie]

Sorry to hear that JLA, if you were close by, I'd be coming to your station. It's a sad situation for sure. I pass so many, even a few here in my little burg that have been squeezed out.
I sure wish you the best of luck.

[Nebrios]

I'd support ya to JLA...That 15 to 20 cents a gallon is worth it to me to keep you open ...doing the math is the problem here..you would only cost me $1.50 to $2.00 extra a week in fuel.Id gladly pay more knowing that money stays here in American hands. It amazes me how stupid people react to a 5cent raise in prices.

[JLA]

Stopped selling gas yesterday. The store is still up and running and we were busy yesterday. I don't think not selling gas is going to hurt inside sales, but time will tell.

Thanks Katie and Nebrios for the supportive words. I wish more people felt that way. Too many people support the 'big players' and forget that the small businesses are what drives the economy. My store only employees 8 people, but they all work there because they need to, not because they want to get out of the house.

[katie]

Sorry to hear that JLA... wishing you the best of luck on keeping the inside sales up and running.

[JLA]

Accepted an offer today for the sale of the store. Gas market has come down a little, but still not enough to make any money. If all goes "well" it will take about 2 months to finalize. Time to turn the page to a new career.

Now I really need to get serious about a new job. Expanding my search from Cincy to Louisville, Nashville and beyond.......

[Sunset Lady]

Good Luck on your new career adventure!

[Nervous Wreck]

Wonder how many BILLIONS big oil will profit by this quarter?

[E_]

http://dailysignal.com/2014/10/26/gas-p ... 4gasprices

Today in KY gas runs from 2.59 to 3.58....

[JLA]

Finally sold the store last month, lost my a$$, but at least I'm not losing any more.

Just got a job again with Thornton's.

If you can't beat em, join em.

[katie]

Bittersweet congratulations JLA, maybe this is just a chink in the road of life. Sometimes not having to bear that burden of responsibility can make you stop and take stock of where you really should be in life and that may not be where you want to be or where you were. Only those who have been responsible for a big ticket and employees can know what a burden that can be.

Happy to hear you are at least employed!

[JLA]

Thanks Katie,

It is good to be employed, makes my Mom happy too! Bonus.

[Nervous Wreck]

Love it!

Gas for less than $2 is now widespread.

ref:
http://money.cnn.com/2014/12/15/news/ec ... ?hpt=hp_t2

[Pop-O]

Sure as HE!! not around where I live. Betting on the stations just south of Junction City are probably close to 2 $.

[JLA]

$2.34 today in Northern KY and dropping....

[Nebrios]

Makes me wonder if the falling prices will stay and a mileage tax imposed for infrastructure...

[E_]

Why its over gallon anyway thus they get.more $ the more gas is sold.

[Pinnacle]

What??

[Pinnacle]

Makes me wonder if the falling prices will stay and a mileage tax imposed for infrastructure...

I don't think the falling prices include a reduction in the per gallon taxes that are already imposed. I would tend to believe that the increased consumption from lower prices will result in more tax revenue. The politicians may think that it is a good time to increase the gas tax now that they see an opportunity to take some of our newfound savings...

[Pinnacle]

Why its over gallon anyway thus they get.more $ the more gas is sold.

I meant "what?" to this

[E_]

lol, sometimes I just talk to my phone and it types and I don't catch it didn't type what I said.

That should read: Why, the taxes are figured per gallon anyway, thus there should be more $ with more cheap gas being sold.


I guess the only difference is that it is going down as the charge is figured on the wholesale price but I still thing they will sell MUCH more gasoline with it being cheaper.
http://www.courier-journal.com/story/ne ... /19272847/

[JLA]

You are correct Sir, but...

The tax is going down in KY next year, the tax is charged to the retailers by the gallon, and the lower prices are better for everyone. The timing of the lower prices is almost always during the winter and we should enjoy them while we can, because it will "bounce" back this spring if history holds true. Don't expect consumer prices to drop, diesel prices have not dropped like that of unleaded, so fuel surcharges to companies are still being charged to everyone, and as we all know, that gets passed on.