Gas Prices

[[AK]Nuts]

Everyone I know pesters me about gas prices. "Why are they so high?" "Why do they fluctuate?" "Do you really get a fat bonus when prices are high at the pump?" (The answer to that one is yes... 8% bonus this year and an 8.5% pay raise!)

Here's some official information (propaganda if you like) about gas prices. Some of you may find it informative. Others will feel that I'm just repeating corporate lies... Eitherway, here's the explanation about gas prices. And again, please keep buying gasoline at Chevron, Texaco and CalTex stations around the globe as you fill up your monster SUV's. The wallet you pad may just belong to someone you know. (like ME!) Thanks.

Oil Pricing

-nuts

[[AK]Clay]

I'm right there with you Nuts.

Crude oil has lots of H2S and mercaptans in it - nasty stuff. They get most of it out and recycle it for other uses, but some of it ends up in the product, so they wash it with aqueous caustic (basically oven cleaner) to remove the nasties. But then they end up with a super stinky toxic wastewater because the nasties are in the oven cleaner. That's where my pay check comes in. I do R&D on capital systems that we sell to the refineries to destroy the wastewater

When you get oil out of the ground beneith the ocean, you pump seawater into the edges of the oilpatch to push the oil up the pipe. If there's barium in the formation, then the SO4-- dissolved in the seawater forms a scale that plugs up your formation, your pipe, everything. So the SO4 ions have to be removed - that's where the guys across the hall from me come in.

A booming oil market is just fine.

[[AK]Squidly]

So is there any "price gouging" going on? I'm involved in a big discussion about this in a different forum. There are a lot of people who are convinced that the oil companies are jacking prices well beyond what they should be.

[[AK]Nuts]

I don't think there's artifical inflation or price gauging going on. Prices fluctuate. Nothing more, nothing less. When Levi's are on sale one day for $19.99 and the next week they go back up to $29.99... it just doesn't make the news. And believe it or not, gasoline sales don't make up a majority of the profit for oil companies. Think about all the other things that are made out of petroleum.... plastics, asphalt, health and beauty products, etc... Gasoline is just a minor player and raising the price of gas (which is already a low profit product when compared to the investment to get it to the consumer) does little to impact the bottom line. What does impact the bottom line? The price per barrel. And that is general controlled by governments. For example, we pull oil out of South America. Our exploration, our wells, our pipes, tankers and refineries, our trucks, our pumps and our employees; yet we only get about 20% of the profit. The rest goes to the host nation. Now take that oil, refine it down to gasoline and sell it for $2.00 a gallon; you're just not making a big profit.

-nuts

[[AK]Hylander]

Futures and speculators play a part in it as well.

[[AK]Pops Murphy]

Course it doesn't hurt that ChevronTexaco just posted a 30% profit for the quarter. The highest in the company's history. All that plus a $5 billion cash reserve. Now we know why it's called "sweet" crude

[[AK]Squidly]

See numbers like that are the reason behind the questions. Soon this might be moved to the political forum.

[[AK]Leonidas]

A third of the cost of a gallon of gasoline is taxes. So why are high gasoline prices an evil oil company plot instead of an evil government plot?

[[AK]Squidly]

Good point...I may have to use that line... lol

(In some states it's a lot more than 33%)

[[AK]Hylander]

I can't repsond any further to this thread without getting political.

[[AK]Nuts]

Also, in California the people and legislators have passed so many laws that prohibit refinery growth, prohbit new refineries, and restrict importation and movement of oil that that we force our old processes and technologies to continue to support the 8th largest economy in the world. I'm sure similar measures are in place around the country.

And who is to blame? Liberals. If you don't care about the environment, you're evil. Hence you have to vote John P. Liberal who'll fight pollution. And of course when you fight pollution it's easiet to target big companies rather than your average voter. So your representative in government doesn't pass laws to limit highway speeds. He doesn't restrict 4500lb vehicles. He doesn't do anything that would hurt the voter. No. He attacks (via rules, regulations, fines and taxes) the oil companies. And when folks complain about the price of gas, he knows that they are going to look at the gas station and not at the capitol. He comes out as a friend to the world, and Chevron looks like the bad guy.


FACT:
In 1975 the average MPG for a vehicle in the U.S. was 22.1mpg and weighed 3220lbs
In 2004 the average MPB for a vehicle in the U.S. is 20.8mpg and weighes 4066lbs.

[[AK]Squidly]

Yes, yes it's all true...but lets not feel too bad for oil companies. They're HARDLY suffering.

In fact they're making money hand over fist.

[[AK]Abaddon]

Yeah ... no tax or regulation really cuts into their profits ... the oil companies just hike the prices to pass the costs directly to the consumer. But the idiots passing the laws don't understand that.

[[AK]Abaddon]

Squid,

Sorry ...

Not realizing I was the moderator here (did not know that!) I typed my reply over your post and saved it ... then saw it attributed to you. I then deleted it so there would be no confusion about who posted it .

I was knocking both the oil companies and the government. The government makes the laws and the oil companies pass the cost of the laws directly to the consumer. They aren't going to let it affect their profit margins.


And I will be carefull about hitting the little EDIT button instead of the BIG post reply button in the future.

[[AK]Gunny Highway]

I believe that the price at the pump should directly reflect the price per barrel. Only problem with that is when they feel that the prices are too low they lower their output so they can raise the price per barrel hmmmmm sounds like price gouging to me no matter how much sugar you put on it, it is still shit! They said they didn't lower the prices in the fall to prevent an increse in spring well so much for that line of BS prices went up 16 cents a gallon yesterday.