San Fran's paying $4.53 a gallon
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Joined: Mar 2001
Posts: 13,713
From: The Golden State
What people don't realize is that the oil companies started to close refineries back in the mid 1990's to drive prices up. 24 refineries were closed between 1995-2001 alone. Refineries have a lifespan of 30-50 years, and all are now over 30 years old. We have no spare refining capacity at the moment, and if more are not built prices will only get worse.
There's no restrictions on maintaining refineries, and on existing refinery space, there's no restrictions on adding capacity.
The reason prices tend to be higher here is the blend of gasoline we use. We use 2 different blends, one for summer and one for winter. That tends to screw with our prices here.
There have been many times in the past when gas in California was cheaper than prices in the Northeast. Why? California recieves a disproportionate amount of oil from Alaska.
As for refineries, if I'm not mistaken, NO ONE has built a new refinery since the 1970s.
The cover story is because of enviromental rules, but like pointed out above, there's no restrictions on adding capacity to existing refineries, yet instead of that, companies have been closing refineries.
1. It saves on maintence expenses
2. It keeps a lid on supply... and you know what that means.
Still relatively cheap compared to the rest of the industrialized world.
Just remember what ever we are willing to pay China will pay more to keep their 8-10% annual economic growth going. Even if we level off on our consumption China and India will keep consuming even at higher prices and probably keep pushing the price up.
Just remember what ever we are willing to pay China will pay more to keep their 8-10% annual economic growth going. Even if we level off on our consumption China and India will keep consuming even at higher prices and probably keep pushing the price up.
The other point you nail is that there isn't an industrialized, 1st world nation on the planet that has fuel prices as cheap as we do. But the difference is narrowing very quickly due to the dropping value of the dollar.
However, one other industrialized 1st world nation is comes close to our price for fuel. Australia comes close.......damned close.
If the US dollar falls any more (it will) and Australia continues with it's sound economic polices (which is more than likely) Australia could see themselves paying less for gas than we do within a couple of years.
How's that possible?
1. Most all oil transactions are based on the US dollar, which currently is very low on the world market (a combination of high deficits, low intrest rates, and the amount of money in circulation), especially next to the Aussie dollar, which has also gotten stronger over the past number of years. This makes items purchased with US dollars cheaper to other countries on the world market, or at the very least, disproportionately impacts us next to other countries.
2. Australia, though they purchase oil on the open market with everyone else, is energy self sufficent. They produce enough gas and oil to keep themselves going without depending on outside sources.
Example:
* Victoria's (the state Melborne is in) average price right now is about $1.30 per liter.
* There's 3.78 liters to gallon, making 1 gallon equal $4.91AU per gallon.
* The Aussie-American dollar exchange rate right now is $1.20A to $1US.
* That puts a gallon of gasoline around Melborne Australia at just $4.08 per gallon
Pretty impressive when you consider that Australia also has much higher taxes on gasoline than the US!
I'm not going to comment on the "If taxes were lower, we'd pay less" school of thought.
Last edited by guionM; May 14, 2007 at 01:45 PM.
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Joined: May 2004
Posts: 2,043
From: Shelbyville, IN
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Joined: Jul 2001
Posts: 1,742
From: Langley B.C. Canada
here in vancouver we are paying 1.28 per liter, and as far as i know there arent any stations that sell E85 so even if you have something that will run on other then gas you cant get it.
At 1.40 for premium to put in the camaro it cost me 80 dollars to fill the tank and that takes me to work three times. it cost me over 300 dollars a month just to drive to work taht doesnt even include me just driving around for everyday things.
At 1.40 for premium to put in the camaro it cost me 80 dollars to fill the tank and that takes me to work three times. it cost me over 300 dollars a month just to drive to work taht doesnt even include me just driving around for everyday things.
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Joined: Mar 2007
Posts: 1,173
So I shouldn't be complaining to much about $2.97 for 93 here?
And as guionM mentioned the dollar is fallig but as the dollar loses value there is less and less benifit to moving production out of the USA, the fact that we have let our dollar slip so far has really angered the chinese.
And as guionM mentioned the dollar is fallig but as the dollar loses value there is less and less benifit to moving production out of the USA, the fact that we have let our dollar slip so far has really angered the chinese.
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Joined: Aug 2000
Posts: 6,165
From: Sterling Heights, MI
Quite honestly, I think the reason California has the highest prices is because they have the most people, and thus the highest demand.
So I shouldn't be complaining to much about $2.97 for 93 here?
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Joined: Nov 1998
Posts: 3,252
From: Knoxville, TN
Bob
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Joined: Sep 2002
Posts: 9,705
From: Oakland, California
http://www.contracostatimes.com/search/ci_5862022
The costs of these current upgrades are huge:
Tesoro's revamp at Golden Eagle has a price tag of $400 million to $500 million.
ConcocoPhillips expects its project will cost "hundreds of millions" of dollars.
Valero's upgrade in Benicia is expected to cost $400 million to $500 million.
Chevron did not provide a cost figure for its project.
Yet refinery operators are poised to harvest big-time dividends from plants that can process heavy crude.
Tesoro's revamp at Golden Eagle has a price tag of $400 million to $500 million.
ConcocoPhillips expects its project will cost "hundreds of millions" of dollars.
Valero's upgrade in Benicia is expected to cost $400 million to $500 million.
Chevron did not provide a cost figure for its project.
Yet refinery operators are poised to harvest big-time dividends from plants that can process heavy crude.
Registered User
Joined: Mar 2002
Posts: 158
From: Yreka CA
Right now the gas here in Yreka CA is 3.559 for regular. It dropped from 3.639 2 weeks ago. Super unleaded is 20 cents more. Totally insane. We need many more refineries but some wack jobs in the federal government wont do it so we pay BIG!!!
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Joined: Dec 2005
Posts: 1,502
I think most places in the US require a "summer" blend and a "winter" blend. They are always talking about all the refineries having to be taken offline briefly to make the switch. Quite honestly, I think the reason California has the highest prices is because they have the most people, and thus the highest demand.
Quite honestly, I think the reason California has the highest prices is because they have the most people, and thus the highest demand.Gas prices in SF are also not the best example because prices in SF are *always* 10-15 cents higher than out in the suburbs. Supposedly because fewer stations equals less competition, but more likely just because people are willing to pay more.
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Joined: Mar 2001
Posts: 13,713
From: The Golden State
That's not the government interfering there, hotrod.
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Joined: Feb 2000
Posts: 509
I've already made up my mind...so don't confuse me with the Facts! I need to live my fantasy as long as possible. It must be the [insert your enemy's name here] that is causing me this pain!
We need a new law to make people [insert your favorite pet peeve] adhere to my beliefs.
All Hail our Dear Leader
We need a new law to make people [insert your favorite pet peeve] adhere to my beliefs.
All Hail our Dear Leader
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Joined: Feb 1999
Posts: 2,947
From: Springfield,OH. U.S.A.
I don't usually buy Shell Gas anyways, their usually about $0.10 to $0.30 more/ gallon....they can keep their "V-Power"...
Gas was $3.57/ Reg here last week, and now is back down to $3.07 most places.
We should Boycott main offenders like Shell, until they striaghten up. It's not about hurting daily profits, but shaking up Wall Street and hurting their stock values.
Gas was $3.57/ Reg here last week, and now is back down to $3.07 most places.
We should Boycott main offenders like Shell, until they striaghten up. It's not about hurting daily profits, but shaking up Wall Street and hurting their stock values.
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Joined: Jan 2000
Posts: 10,285
From: Albany, NY
The Richmond Refinery here in the Bay area, just northeast of San Francisco is well over 100 years old.
There's no restrictions on maintaining refineries, and on existing refinery space, there's no restrictions on adding capacity.
....
False.
The reason prices tend to be higher here is the blend of gasoline we use. We use 2 different blends, one for summer and one for winter. That tends to screw with our prices here.
There have been many times in the past when gas in California was cheaper than prices in the Northeast. Why? California recieves a disproportionate amount of oil from Alaska.
As for refineries, if I'm not mistaken, NO ONE has built a new refinery since the 1970s.
The cover story is because of enviromental rules, but like pointed out above, there's no restrictions on adding capacity to existing refineries, yet instead of that, companies have been closing refineries.
1. It saves on maintence expenses
2. It keeps a lid on supply... and you know what that means.
There's no restrictions on maintaining refineries, and on existing refinery space, there's no restrictions on adding capacity.
....
False.
The reason prices tend to be higher here is the blend of gasoline we use. We use 2 different blends, one for summer and one for winter. That tends to screw with our prices here.
There have been many times in the past when gas in California was cheaper than prices in the Northeast. Why? California recieves a disproportionate amount of oil from Alaska.
As for refineries, if I'm not mistaken, NO ONE has built a new refinery since the 1970s.
The cover story is because of enviromental rules, but like pointed out above, there's no restrictions on adding capacity to existing refineries, yet instead of that, companies have been closing refineries.
1. It saves on maintence expenses
2. It keeps a lid on supply... and you know what that means.
They have played that one well.I see a few reasons for not adding refining capacity.
1) like you said, more refinery = more maintenance and construction cost. Plus more gasoline means supply > demand. With less supply prices will go up so they can make more money while supporting less infrastructure.
2) It could also be that they know peak oil is coming. It makes perfect sense. Why build more capacity when you are only a few years away from the peak amount they will ever be able to produce. 2010 is the predicted year for peak oil globally (give or take a year of two) should get interesting in the next 10 years.
Last edited by Z28x; May 16, 2007 at 09:06 AM.
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Joined: Nov 1999
Posts: 2,801
From: Nashville, TN
As always, there's more to the story.... and there is.
I live here, I know where the gas station is, and I know the story behind it.
But instead of me explaining it, here's an article from the SF Chronicle that explains the entire situation:
(The oil company/anti government lapdogs around here might want to skip this article )
Shell has been sticking it to this guy (and other independent owners) for some time. Shell has also been sticking it to a dealer who was down the street from me when I was living in Monterey who owned a group of gas stations in the scattered within the neighboring counties.
FWIW: I bought my gas today over on Lincoln for about $3.63 per gallon. That's on the high side for the area, but it's right on the route to work, and I'm not going to drive all over town to save 10-20 cents per gallon (about $2 per fill-up).
I live here, I know where the gas station is, and I know the story behind it.
But instead of me explaining it, here's an article from the SF Chronicle that explains the entire situation:
(The oil company/anti government lapdogs around here might want to skip this article
)Shell has been sticking it to this guy (and other independent owners) for some time. Shell has also been sticking it to a dealer who was down the street from me when I was living in Monterey who owned a group of gas stations in the scattered within the neighboring counties.
FWIW: I bought my gas today over on Lincoln for about $3.63 per gallon. That's on the high side for the area, but it's right on the route to work, and I'm not going to drive all over town to save 10-20 cents per gallon (about $2 per fill-up).
As much as I hate govt meddling in private enterprise...for the sake of the rest of the economy I think its time they step in. No, not by confiscating profits...as they'd just up their prices or cut back on re-investment...... I think the govt ought to enact some sort of capacity tax which is inverse to the amount of refining capacity. Create an incentive so that by building/expanding refineries, oil cos could cut their tax bills. You'd have to make the scale pretty massive, though, to counterbalance the profit they can reap by not adding capacity and then watching prices skyrocket. Any revenues from the capacity tax should go 100% to alternative fuel infrastructure (i.e. building ethanol refineries and offering incentives/tax credits to gas stations that install E85 pumps)
Last edited by Chris 96 WS6; May 16, 2007 at 08:32 AM.
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Joined: Jan 1999
Posts: 1,547
From: Panhandle of West Virginia
Today's story:
Big Oil attacked over record gas prices
NEW YORK (CNNMoney.com) -- Big Oil went on the defensive Wednesday, denying accusations from a consumer group that mismanagement and a lack of competition are the reasons behind this spring's record gasoline prices.
Gas prices hit $3.10 a gallon Wednesday, according to AAA. It's the fourth record day in a row, and the surge has been attributed to low gasoline supplies caused by a lack of refining capacity.
"They have no interest in building spare capacity because that would undermine their pricing power," said Mark Cooper, Director of Research for Consumer Federation of America.
Cooper pointed to the record earnings at oil companies and said in any other industry this would attract new businesses.
But he said the domestic refining industry has continued to consolidate, allowing operators to shun building refineries, run existing ones at full throttle, and thus cause many of the accidents and outages the nation has experienced over the last few months.
"This is just mismanagement," he said. "But they get away with it because there is no competitive discipline."
The oil industry points out that while a new refinery hasn't been built in decades, overall refining capacity has increased at a rate that's the equivalent of adding one refinery a year.
The nation's top four refiners - ConocoPhillips, Valero, Exxon Mobil and BP account for less that 50 percent of the country's refining capacity, a concentration that's smaller than many other industries, said Ron Planting, an economist at the American Petroleum Institute.
API economist John Felmy said that whenever the industry tries to add refining capacity, it faces opposition from surrounding communities.
Moreover, Felmy questions why the industry would make major, expensive refining expansions when President Bush is calling for a 20 percent reduction in gasoline use by 2017.
API produced numbers showing the amount of gasoline being produced was increasing.
"I think the refining industry is doing all it can," said Felmy.
Felmy said several other factors are contributing to the high gas prices. Those include higher crude prices since the start of the year attributed to tensions with Iran and violence in Nigeria; a decline in gasoline imports due to a strike in Europe; strong demand in the United States; and higher prices for ethanol, which is blended with gasoline to make it cleaner burning.
But the Consumer Federation's Cooper said the refining industry hasn't even tried to build new refineries, and has instead closed 50 since the 1990s rather than make investments to make them comply with pollution laws.
"They would rather not try and blame their neighbors," he said.
As for the push into alternative fuels, he said, "So now we have to suffer through years of higher gas prices? They would recoup their costs before that time."
To bring gasoline prices down in the short term, Cooper urged Congress to use its antitrust authority and investigate whether the refining industry has become too monopolistic.
He also called for creating of a strategic gasoline reserve to help ease price spikes when a refinery is taken offline, brushing aside suggestions from Felmy that such a reserve would be costly to build and operate.
"It may cost us a penny or two more, but [paying these premiums] of 60 cents or $1.20 is ridiculous," he said. "They want us to be penny wise and pound foolish."
In the long run, Cooper said reducing demand is key, a concept advocated by many industry observers.
"Refining capacity is not the issue, the issue is we need to reduce demand," said Ben Schreiber, energy advocate for U.S. Public Interest Research Group, calling for an increase in fuel efficiency standards. "We are not taking the simple steps we need to take to reduce energy consumption."
NEW YORK (CNNMoney.com) -- Big Oil went on the defensive Wednesday, denying accusations from a consumer group that mismanagement and a lack of competition are the reasons behind this spring's record gasoline prices.
Gas prices hit $3.10 a gallon Wednesday, according to AAA. It's the fourth record day in a row, and the surge has been attributed to low gasoline supplies caused by a lack of refining capacity.
"They have no interest in building spare capacity because that would undermine their pricing power," said Mark Cooper, Director of Research for Consumer Federation of America.
Cooper pointed to the record earnings at oil companies and said in any other industry this would attract new businesses.
But he said the domestic refining industry has continued to consolidate, allowing operators to shun building refineries, run existing ones at full throttle, and thus cause many of the accidents and outages the nation has experienced over the last few months.
"This is just mismanagement," he said. "But they get away with it because there is no competitive discipline."
The oil industry points out that while a new refinery hasn't been built in decades, overall refining capacity has increased at a rate that's the equivalent of adding one refinery a year.
The nation's top four refiners - ConocoPhillips, Valero, Exxon Mobil and BP account for less that 50 percent of the country's refining capacity, a concentration that's smaller than many other industries, said Ron Planting, an economist at the American Petroleum Institute.
API economist John Felmy said that whenever the industry tries to add refining capacity, it faces opposition from surrounding communities.
Moreover, Felmy questions why the industry would make major, expensive refining expansions when President Bush is calling for a 20 percent reduction in gasoline use by 2017.
API produced numbers showing the amount of gasoline being produced was increasing.
"I think the refining industry is doing all it can," said Felmy.
Felmy said several other factors are contributing to the high gas prices. Those include higher crude prices since the start of the year attributed to tensions with Iran and violence in Nigeria; a decline in gasoline imports due to a strike in Europe; strong demand in the United States; and higher prices for ethanol, which is blended with gasoline to make it cleaner burning.
But the Consumer Federation's Cooper said the refining industry hasn't even tried to build new refineries, and has instead closed 50 since the 1990s rather than make investments to make them comply with pollution laws.
"They would rather not try and blame their neighbors," he said.
As for the push into alternative fuels, he said, "So now we have to suffer through years of higher gas prices? They would recoup their costs before that time."
To bring gasoline prices down in the short term, Cooper urged Congress to use its antitrust authority and investigate whether the refining industry has become too monopolistic.
He also called for creating of a strategic gasoline reserve to help ease price spikes when a refinery is taken offline, brushing aside suggestions from Felmy that such a reserve would be costly to build and operate.
"It may cost us a penny or two more, but [paying these premiums] of 60 cents or $1.20 is ridiculous," he said. "They want us to be penny wise and pound foolish."
In the long run, Cooper said reducing demand is key, a concept advocated by many industry observers.
"Refining capacity is not the issue, the issue is we need to reduce demand," said Ben Schreiber, energy advocate for U.S. Public Interest Research Group, calling for an increase in fuel efficiency standards. "We are not taking the simple steps we need to take to reduce energy consumption."