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By Robert Rapier on Feb 25, 2012 with 53 responses

Why Bill O’Reilly’s Gasoline Price Solution Doesn’t Work

Today’s column was supposed to be about what has happened with ethanol exports following the expiration of the ethanol tax credit. That is an interesting story (and exactly what I felt would happen once the credit expired), but it will have to wait until next week, because there is a story of much greater public interest. In fact, this current column was originally about President Obama and gasoline prices, but there is a peripheral issue of importance that I thought I would address first. I will get to the gas price discussion in a day or two.

I did two interviews on the subject of Obama and gas prices last week. One was with Brian Beutler at Talking Points Memo (TPM):

The Truth About Political Attacks Over High Gas Prices

The second was with Alan Colmes from Fox News Radio. (A podcast of this is available at the link).

I will summarize the highlights from these interviews in the next column, elaborate on some points (like why I favor both expansion of renewable energy and the Keystone XL pipeline), and explain why President Obama is not to blame for current gasoline prices.

During my interview with Alan Colmes, he mentioned an idea that Bill O’Reilly has proposed, and that is to address gasoline prices by discouraging U.S. oil companies from exporting their products. Here is O’Reilly discussing the idea. Let’s dissect a few of his comments:

O’Reilly: We began covering the skyrocketing oil prices last Friday with Lou Dobbs. He was candid. Saying because of the mild winter, there is plenty of oil and gas in the U.S.A. So supply and demand here should dictate lower prices.

With all due respect, Bill O’Reilly has a fundamental misunderstanding about oil supplies. There is not “plenty of oil and gas in the U.S.A.” He is confused over net exports of oil and net exports of finished products as I will get into below.

O’Reilly: But of course, they are not lower. They are much higher because the oil companies are shipping their products overseas. Measured in dollars, so oil products are now America’s largest export worth $88 billion a year to the oil companies. A decade ago, oil exports were not even among the top 25 exports. Most of the oil stayed here. And with working Americans getting hammered by stagnant wages and huge unemployment, this is yet another punishing situation for the folks.

Exporting finished products is NOT why gasoline prices are high, as I explain below.

O’Reilly: However, if the Obama administration wanted to, it could ask Congress to raise export taxes on the oil companies to encourage them to sell their products here. Think about it. The oil companies are regulated by the federal government. They can’t drill on land nor in American waters without permission from the feds. Many Republicans want to drill baby drill but what’s the point if all the oil goes to China? Increased production obviously doesn’t mean lower prices for us.

Here is O’Reilly’s fundamental misunderstanding in a nutshell, and the reason his proposal would have zero impact on gas prices. He seems to believe that U.S. oil companies are drilling for oil, producing gasoline, and shipping that overseas. If you look at oil imports and exports, you will see that in fact our net imports of crude oil are still 9 million barrels per day – a number that has not changed much in the past few years. We have oil refiners like Valero — who don’t actually produce oil at all, importing oil from countries like Mexico and Brazil, refining it, and shipping gasoline back to them. Between just Mexico and Brazil (and there are others), we are importing 1.5 million barrels of oil per day, and sending them back about a million barrels a day of finished products. (Some of the oil we get from them does stay in the U.S. as finished products).

So how might O’Reilly’s proposal play out? It is easy enough to see what would happen. If you put a high export tariff on fuel and made it unattractive for U.S. oil companies to export their products, they simply would not import as much oil. So as gasoline demand continues to fall in the U.S., instead of continuing to import 9 million barrels per day and export 1 million barrels of finished products, we might only import 8 million barrels of oil per day and then export zero. It would not impact the balance of fuel supplies at all within the U.S., but it would lead to faster closures of U.S. refineries as their export markets dried up. So you would see the export problem “solved”, and the consequences would be no change in U.S. gasoline prices (Brazil and Mexico would then source their gasoline from someone else who benefitted from the refining jobs) and there would be further loss of refining jobs in the U.S.

Bill O’Reilly is doing a disservice to the American public by promoting a false belief: that the U.S. is awash in oil and that gasoline prices are high because we are shipping gasoline overseas instead of selling it domestically. The truth is that the U.S. does not produce nearly enough oil to meet our fuel demands, but we import a bit more than we need and export some of the excess as finished products, creating jobs and helping the balance of trade in the process. The reason we are doing this is that domestic demand for gasoline has fallen in recent years, and refiners can therefore either close more refineries or they can find other markets for their products.

 

  1. By Benny BND Cole on February 25, 2012 at 4:31 pm

    Just to punish myself, I have become interested in energy and monetary policy in the last several years.  I am a regular reader of R Squared, as many know.
    The punishment part is not reading the always intelligent RR, but reading what others with platforms say about energy.  
    RR has tremendous patience, and can answer the buffoons with their braying commentary. But really—how do you debate, when the dunce-cappers build faulty arguments on mushy or nonexistent premises? 
    Oil prices are high as thug-nations have crimped supply, while the global economy grows.  Think Russia, Nigeria, Mexico, Venezuela, Libya, Iraq, Iran, Saudi Arabia. 
    Sadly for the globe, the monkey-thug states have the oil, and not one place is one where you would like to do business or where free enterprise, clean governance, contract law and property rights mean anything. 
    You want to fix this problem? Tax gasoline, free up domestic production.  
    Thanks to price signals, the problem is part-way to solving itself anyway, and with price signals, won’t even be a problem in another 10 years. 

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    • By Bob Armantrout on February 26, 2012 at 8:12 am

      As most of our oil comes from Canada, it must be a “monkey-state”.

      I learn something new every day.

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  2. By Russ Finley on February 25, 2012 at 5:15 pm

    Benny BND Cole said:

    “…buffoons with their braying commentary.”

    Well put, sir.

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  3. By scott6963 on February 25, 2012 at 5:41 pm

    Thank you for discussing the BS that O’Reilly and Dobbs are putting out.  As you mentioned, it really is leading his viewers astray and probably adding some weight to BO’s talking points and his war against “Big Oil”.  I’m throughly disgusted with what he (O’Reilly) is doing and surprised that he doesn’t research the subject at least a little bit before going into a full week of mouthing off about it.  I have been a faithful viewer of the Factor — no more! 

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    • By ed on February 27, 2012 at 12:57 pm

      I too am a follower of the Factor.  I usually agree with O most of the time but I agree he is off totally off base with this one.  I will continue to watch but I am trying to send him info that refutes his view of the oil problem.  I watched Charles K on his program last week and in about three short sentences totally destroyed O’Reillys view of the problem and how to fix it. I wiil not vote for O’Bama but I have to agree this problem is not totally his fault but I think his ling term decisions on oil will hurt him.

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  4. By armchair261 on February 25, 2012 at 7:39 pm

    Here’s a case where a few graphical displays might be effective. 
    One showing, for example (and at the same scale), 1) US crude oil production, 2) US crude oil imports, 3) US crude oil exports.
    A second showing 1) US gasoline production, 2) US gasoline imports, 3) US gasoline exports. 
    Overlay price on the right hand scale. It will then be obvious at a glance how foolish O’Reilly’s thoughts on the subject are.

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  5. By Walter Sobchak on February 25, 2012 at 8:13 pm

    Same idea as Ed Markey (Dumbkopf, MA). Sort of like reverse Mercantilism, but stupider.

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  6. By Tom G. on February 25, 2012 at 11:16 pm

    I am having a somewhat difficult time understanding this whole discussion.  As I see it the only way to reduce gas prices is to decouple the U.S. from the world market and then drill baby drill.  Or to just stop using so much of the stuff and transition to a cleaner, cheaper and more abundant fuel.
    If we were decoupled from the world market AND we produced enough of our own oil then would the old supply and demand market forces come into play?  I don’t think so; unless of course we prevented oil companies from exporting any oil produced in the U.S.  I hate to sound like a defeatist but I guess we need to accept the fact that oil companies can charge what ever they want for fuel – $4 or $5 or $6 or even $10 a gallon since supply and demand is no longer a factor.  Oil goes to the highest bidder.  There will be other people around the world willing to buy what the American people can no longer afford.  
    It’s like the decoupling of our public utilities.  When utilities are allowed to decouple they can charge any price they want and sell to anyone willing to pay their price.  That takes local or state control away and makes electricity almost like a world  commodity like oil.  I guess someday we will have a choice of paying $.25 kWh from PG&E or hydro power from Canada at $.12/kWh.  When we get the smart grid built such strategies will become possible.  It seems like loyalty to a company or even a country no longer matters.

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    • By Robert Rapier on February 26, 2012 at 12:36 am

      I hate to sound like a defeatist but I guess we need to accept the fact that oil companies can charge what ever they want for fuel – $4 or $5 or $6 or even $10 a gallon since supply and demand is no longer a factor. 


      But it is a factor, just on a global scale. The only way a scheme like O’Reilly’s could work is if you forced oil companies to continue importing oil, but then did not allow then to export the finished products. But in that case, the government might as well just take over the oil companies.

      RR
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      • By Michael on February 26, 2012 at 12:54 am

        What other industrialized countries have nationalized the oil and energy companies.
        What would be effect?

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        • By Ed on February 26, 2012 at 9:08 am

          Michael,USPS, FannieMae, FreddieMac, SallyMae, Department of Education, Homeland Security and other models of government efficiency. (Oxymoron Alert)

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          • By Robert Rapier on February 26, 2012 at 12:38 pm

            Or, if you want an example from the oil industry, Venezuela. And what they have done is that that government has siphoned off too much money, which has reduced the ability of the oil industry to make the investments they need to maintain and grow oil production. So what we see — despite Venezuela’s large oil reserves — is falling production.

            RR
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    • By armchair261 on February 26, 2012 at 6:11 pm

      Tom G says:”I hate to sound like a defeatist but I guess we need to accept the fact that oil companies can charge what ever they want for fuel – $4 or $5 or $6 or even $10 a gallon since supply and demand is no longer a factor.”
      Three questions follow from this silly opinion.
      1) So why don’t they charge $6 or $10? They just don’t feel like it?
      2) Why did “they” want oil prices to fall by 70% between July 2008 and January 2009?
      3) The other major natural resource provided by the oil industry is natural gas. Like gasoline, demand for natural gas is relatively inelastic in the short term, as people aren’t going to toss their gas fired stoves or furnaces, and natural gas power plants aren’t going to shut down and switch to coal overnight. So question #2 is: if the oil industry can so easily manipulate product prices, why has the price of natural gas fallen by over 60% from its pre-recession average, back to its price of a decade ago? After all, the US natural gas market is far smaller than the global crude oil and gasoline markets. So why do “they” no longer want $6.00 natural gas?
      Also, can you cite, specifically who “they” are? I’d like a list of conspirators please. You’re making the charge so you have the list and the evidence, correct?

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  7. By Benny BND Cole on February 25, 2012 at 11:44 pm

    BTW, motor gasoline consumption in the USA is plunging. Some say it means the economy is tanking, but I sense people are changing their habits, driving less and higher mpg cars. In fact, consumers and businesses are reacting to the last spike, not the current one. Changes in consumption are beaching embedded into the economy.  The high mpg cars bought two and three years ago are still on the road, and people have moved closer to work or leaner how to car pool etc. 
    Every oil spike is a nail in the coffin of long-term demand.

    The USA must now have a glut of gasoline. No wonder we are exporting the stuff Our refineries have nowhere to put the stuff. 
    For veteran readers of RR, I have to tweak RR just a bit.  There was a time, a few summers back, that RR surmised that cross-country driving might no longer be possible in the USA what with closed gasoline stations and gasoline shortages. 
    This chart is rather interesting: 
    http://globaleconomicanalysis.blogspot.com/2012/02/huge-plunge-in-petroleum-and-gasoline.html
    I would like to see RR tackle this issue of plunging gasoline consumption in the USA. What does it mean?  It seems obvious we have hit Peak Demand in the USA already. As they have in Europe and Japan. long ago.
    Will the globe hit Peak Demand before Peak Oil? 
    At $100 a barrel I think so. 

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    • By Robert Rapier on February 26, 2012 at 12:30 am

      For veteran readers of RR, I have to tweak RR just a bit.  There was a time, a few summers back, that RR surmised that cross-country driving might no longer be possible in the USA what with closed gasoline stations and gasoline shortages. 


      That is not exactly what I wrote. Here it is:

      Reflecting back on the trip, I firmly believe that we are undergoing a permanent shift in traffic patterns. Those summer RV trips are going to become increasingly reserved for the wealthy, and people are going to think twice about taking long road trips to vacation destinations. The roads are going to be less crowded, and the cars on them will be smaller. The world is going to seem a little bit bigger to future generations.

      I still believe this to be true; that we are in an era of permanently higher gas prices, and people won’t be taking as many of those long summer road trips because it just isn’t as affordable as it once was.

      RR
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  8. By tennie davis on February 26, 2012 at 1:22 am

    RR, exellent post.
    Your argument against an export tarriff and its unintended consequences is brilliant in its simplicity and common sense.
    In fact, just for a second, I thought I was listening to Milton Friedman!
    I highly recommend others on this blog, to listen to Freidman as well.
    He would have been 100 years old this year.
    His death was a national loss
    I think I also need to remind folks that gasoline is not really that expensive when you look at the historical price of it, adjusted for inflation, and the purchasing power that average people have now.
    Also, look at europe’s petrol prices.
    Are they not still driving at 8 or 10 bucks a gallon?
    Remember we’re all in this together. when the price gets to high, it will cause demand destruction………problem solved.
    Free markets, when allowed to flourish, will fix most problems that big government solutions only make worse.

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  9. By stan on February 26, 2012 at 10:24 am

    There is ONE, yes, only ONE reason the gas prices are higher now……because God, mother nature, Satan….whoever you believe in….has never raised the price of ZERO of oil….it simply comes with our planet…it’s a freebie……PEOPLE’S greed makes the price go up..OPEC’s (mostly) disgusting third world mentaliteed (not a real word, I know) countries are unscrouplulous savages, who can’t even operate in the black as a nation because of classism..AHEM….oh geez…we’d NEVER do THAT, now would we…….with the exception of things like cost of living raises for workers, just like many industries do….well, before wage freezes…lol.
    Everything alse is just plain bullsh.t………..people are just disgusting, and won’t man up to all this phoney baloney finger oointing and lying….it’s all about greed and……Keynesianism. Period, end of story……and to that jerk speaking in a condescending tone to O’Reilly……listen ya little sissy….Bill could eat you alive in a FACTUAL debate……

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    • By Robert Rapier on February 26, 2012 at 12:46 pm

      …it’s a freebie…


      People are free to believe all kinds of crazy things. I guess since oil is “free”, anyone who wants can just go collect it five miles below the ocean floor. And I am sure that the fact that lots of people want this “free” oil should have no bearing on the price.

      Everything alse is just plain bullsh.t………..people are just disgusting, and won’t man up to all this phoney baloney finger oointing and lying….it’s all about greed and……Keynesianism. Period, end of story……and to that jerk speaking in a condescending tone to O’Reilly……listen ya little sissy….Bill could eat you alive in a FACTUAL debate……

      Would the debate involve a lot of talking over and shouting down the guest? I have seen some of those debates. They don’t seem to be all that much about the facts. I have spelled out the facts here. O’Reilly thinks the oil that is produced in the U.S. is leaving the U.S. The Energy Information Administration says that it does not; in fact we operate with a 9 million barrel per day deficit. What is there really to debate? O’Reilly’s idea is based on a false notion.

      RR
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      • By Neil on February 26, 2012 at 1:15 pm

        I agree it is very complicated, but I boil it down to this.  There are surpluses of oil this winter and oil companies have record profits. It does not matter what anyone says except these two facts.

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        • By Robert Rapier on February 26, 2012 at 1:28 pm

          I agree it is very complicated, but I boil it down to this.  There are surpluses of oil this winter and oil companies have record profits. It does not matter what anyone says except these two facts.

          Your sentences contradict each other. If it is complicated, it can’t be boiled down to two simple facts. Your “facts” aren’t even that simple. Oil surpluses are local; there is no surplus globally and oil is a global commodity. And in fact, in locations where there are local surpluses you find the lowest gas prices in the country.
           
          The issue of oil company profits and oil prices confuses cause and effect. They are profitable because oil prices are high; oil prices aren’t high so they can be really profitable.
          RR
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    • By armchair261 on February 26, 2012 at 6:15 pm

      Right, and gold, aluminum, iron, and every other natural resource you can name should also be free, correct? If a copper miner shouldn’t be able to charge you for finding copper, investing in a plant, and delivering it to your doorstep, then who’s going to do it for you? I am wondering what services you and/or your company provide that have give you the exclusive right to charge other people for them.

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    • By armchair261 on February 26, 2012 at 6:16 pm

      Right, and gold, aluminum, iron, and every other natural resource you can name should also be free, correct? If a copper miner shouldn’t be able to charge you for finding copper, investing in a plant, and delivering it to your doorstep, then who’s going to do it for you? I am wondering what services you and/or your company provide that have give you the exclusive right to charge other people for them.

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    • By Optimist on March 1, 2012 at 4:00 pm

      Hehehe Stan!
      Why do you pay for running water? You could just go down to the river (wherever that may be) and collect your own FREE water. But paying the utility to bring it to the tap is just SO MUCH more convenient.

      If you don’t like what you are paying Big Oil: you have choices. You can build an ethanol still and drive on E100. You can collect restaurant waste grease, and make your own biodiesel. You sound like a rugged individualist. What’s holding you up?

      I LOVE Bill O’Reilly: he’s the best comedian on TV, after Glenn Beck. But BOR couldn’t eat a plate of fries in a FACTUAL debate. He’s still looking for “Charlie, over there” the guy who sets US gas prices! Priceless! If not gasless…

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  10. By Edward Kerr on February 26, 2012 at 10:43 am

    Robert,
    Just a few comments and a lament. The average American who complains about the “high price” of gasoline ( and sadly many of them are more concerned with that than their wives fidelity) don’t realize that due to the fact that the US dollar is the worlds reserve currency in which oil is priced globally and our military activities [read that lust for empire] we have traditionally enjoyed much lower gasoline prices than most of the rest of the worlds inhabitants. How long that will continue is questionable.

    Lament: What I find most depressing about the fact that knowledgeable and well written articles like this one, may as well never been written at all. Why, you ask?
    Bill O’Reilly spews his froth to hundreds of thousands, if not millions, of viewers while articles that expose Bill’s misinformation for what it is are read by maybe several hundred people, or a few thousand at best. Consequently, only a relative few people are well informed on this MOST IMPORTANT issue of our time. Not simply gasoline prices (that’s not the real issue) but how are we going to solve the problem of relying on a finite resource that is experiencing an increasing demand on it’s services? Services which at this point, do nothing less than underpin our entire global system of delivering goods, services and heating and cooling to our structures. Food is in there somewhere too….So you’ll forgive me if I am feeling a little down today.

    Edward

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  11. By RJN3 on February 26, 2012 at 11:08 am

    Well intentioned patriotic idjiots can hardly save or inform the world. RR please contact The Factor for a personal appearance and clarification. If you enlighten Mr. O’Reilly perhaps he will allow you to float some common sense and reason over the airwaves on a regular basis.

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  12. By Tim on February 26, 2012 at 12:17 pm

    The first person I think of when I want intelligent information is O’Reilly. (yes sarcasm).
     Oil consumption down over last two years. Oil stores at all time high. The top man of oil cartel say’s as long as Obama threatens to cut off “corporate welfare” and does not allow Keystone pipeline they will keep oil prices high. It is legal for oil company’s to trade on their own product.
    To me, that reads blackmail. Has nothing to do with bobble head discussions.

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    • By Robert Rapier on February 26, 2012 at 12:41 pm

      The top man of oil cartel say’s as long as Obama threatens to cut off “corporate welfare” and does not allow Keystone pipeline they will keep oil prices high.


      Who is this? Do you have a link? Unless you are talking about the head of OPEC, nobody in the U.S. has the ability to set oil prices.

      RR
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      • By Tim on February 26, 2012 at 4:32 pm

        I do not have the link and running short of time. It was reported on Democracy Now and on the Tom Hartmann show. Tom’s website usually has all the links of all his discussions.

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        • By Optimist on March 1, 2012 at 4:07 pm

          Yeah! Democracy NOW! There’s an unbiased source of infomation! No idealogical slant! Just the (cherry-picked) facts.

          No Tom, there is no oil bogeyman behind the curtain: sanctions on Iran means less oil supply. Less oil supply means higher prices. Economics 101.

          And, yes: please explain how the phantom “top man” controls oil prices. Why did he fail to do so in 2008?

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          • By Samuel R. Avro on March 1, 2012 at 4:31 pm

            And, yes: please explain how the phantom “top man” controls oil prices. Why did he fail to do so in 2008?

            Part of keeping up the illusion. Don’t forget, “Top Man” is a smart cookie.

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  13. By Benny BND Cole on February 26, 2012 at 12:52 pm

    RR-
    But your title, and some other sentences were gloomy.
     ”This theme was consistent throughout the trip: Light traffic, and very few RVs. My wife commented that high gas prices had really done a number on the traffic. I told her that I thought an era had passed and that going forward we would start looking at personal mobility in a different manner.”
    Okay, you did not predict TEOTWAWKI, but that is an ominous sentence.   
    You have always been a balanced and shrewd observer, IMHO. 
    But here we are, and you can buy all the gasoline you want, for about the same price you did on that trip (despite tensions with Iran, and all the problems with all the thug oil states).  There is no shortage of gasoline, indeed we are exporting the stuff. 
    USA oil production is going up again, and Chevron may be hitting something huge in shallow waters of the Gulf.  Bakken is just a start. People are just beginning to buy CNG cars, and the Volt and Leaf are on the market, cars that run on electricity.  
    In short, the price signal works.  Never underestimate man’s ingenuity, adaptivity, creativity. 
    In 10 years, you will be able to drive across country still—and I hope for the fun of it, and possibly in a PHEV or CNG. 
    The future is brighter and cleaner and more prosperous than today. 

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  14. By tennie davis on February 26, 2012 at 2:43 pm

    Benny, you just nailed it.
    Said what  I would if my typing/writing skills allowed me to articulate ideas to paper better.
    The current natural gas glut, (among other things), will negate some of the pain.
    I think it would be helpful if someone would put up a chart of gasoline prices from 1918 – current adjusted for inflation. (I can’t link)
    Anyway, look at the bright side, maybe a huge asteroid will hit us,then gas will be cheap forever     Hooray.

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    • By Samuel R. Avro on February 26, 2012 at 3:15 pm

      I think it would be helpful if someone would put up a chart of gasoline prices from 1918 – current adjusted for inflation.

      We plan to cover this in one of our upcoming “Editors’ Corner” columns.

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  15. By Rufus on February 26, 2012 at 4:43 pm

    Non-subsidized E85 is selling for $2.74/gal in Nebraska.   Of course, it is only E70 at this time of year; in a couple of months when it is truly E85 it will probably be cheaper.I can’t seem to put up a link.  ?  Oh well, you can go to e85pricesdotcom and click on Nebraska.My Kingdom for a small-displacement/high compression engine with a true ethanol sensor, heated injectors, and appropriate EGR timing.  :)

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  16. By Benny BND Cole on February 26, 2012 at 5:14 pm

    Tennie Davis–
    Thanks for the compliment. Top of the Sunday to you, and I certainly your future–and everyone who reads RR—is brighter, cleaner and more prosperous. 

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  17. By armchair261 on February 26, 2012 at 6:18 pm

    Note – seems to be an error somewhere. When I click “Reply”, my reply is attaching to the wrong post. 

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    • By Robert Rapier on February 26, 2012 at 6:41 pm

      Note – seems to be an error somewhere. When I click “Reply”, my reply is attaching to the wrong post. 


      The threading is a bit screwy at the moment. That’s why I extract little snippets so it is clear. But Sam is working on getting it fixed.

      RR
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    • By Samuel R. Avro on February 26, 2012 at 8:05 pm

      armchair,

      Please email me with the exact details of what happened so we can get this fixed. Let me know which post you were attempting to reply to, and where it went instead. It may also help if you included the browser you’re using (type and version) along with the operating system of your computer. Send it to editor@consumerenergyreport.com

      Thanks — Sam.

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  18. By JohnF on February 26, 2012 at 7:06 pm

    At last some sanity about this.  Perhaps O’Reilly could also research his notion of the U.S. exporting products to China and India?  A simple check of the EIA Petroleum Supply Monthly will show those notaions are not where the products are going.  And the ascertain about record oil company profits???

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  19. By Tom G. on February 27, 2012 at 1:07 am

    Robert:
    Have you taken the time to review this video on carbon negative fuels?  It is on Google’s Solve for X website.  Towards the end of the video it talks about current/future testing of the fuel underway in California.     
    http://www.youtube.com/watch?v=zkYVlZ9v_0o

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    • By Robert Rapier on February 27, 2012 at 12:21 pm

      Have you taken the time to review this video on carbon negative fuels?  It is on Google’s Solve for X website.


      First thing, I fixed the link to make it clickable.

      Second thing, as soon as I saw that guy in the video I thought “Wow, he needs a haircut.” :)

      A lot of people have asked me about this company; what they are doing isn’t much different than what we were doing at Choren: Use fast growing woody biomass to make liquid fuels, but you have some char left over which could make the process carbon negative. The key to this is just how much your energy inputs for the rest of the product life cycle happen to be. It is possible that they are greater than the energy embedded in the char.

      RR
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  20. By Tom G. on February 27, 2012 at 11:16 am

    R2   
    How about that, the superscripts function works just fine.  Just have to click to turn it on and then click again to turn if off.  
    The website is wesolveforx[DOT]com  for the article/video regarding fuels.
    Sorry the link is not functional; well at least it is not functional using Google Chrome. I was able to copy and paste it into my browser and it did work.  

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  21. By Tom G. on February 27, 2012 at 11:20 am

    Strange:  I typed the above comment in the same block as this comment and the R2 was shown as R2 as a superscript.  Yet when it was posted to the site the “2″ was not a superscript.  
    Strange little gremlins working in here, ha ha.  
    Using Chrome Version 17.0.963.56 m – hope this helps. 

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    • By Robert Rapier on February 27, 2012 at 12:10 pm

      I am using Chrome as well, and seeing little issues here and there. Letting Sam know as they pop up.

      Thanks, RR
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  22. By mac on February 27, 2012 at 12:37 pm

    Tennie Davis said:

    I think it would be helpful if someone would put up a chart of gasoline prices from 1918 – current adjusted for inflation.——————————————————————————————————–
    Here is a link for inflation adjusted gasoline prices from 1920 to 2006 from DOE  Vehicles Technology Program.http://www1.eere.energy.gov/vehiclesandfuels/facts/2006_fcvt_fotw426.html

    Average Annual Retail Price of Gasoline, 1920-2006

    Note: 2006 data are for March 2006.
    Supporting Information

    Retail Price of Gasoline, 1920-2006

    Year
    Retail Gasoline Price
    (current dollars/gallon)
    Retail Gasoline Price
    (constant 2005 dollars/gallon)

    1920
    0.30
    2.91

    1921
    0.26
    2.87

    1922
    0.25
    2.93

    1923
    0.22
    2.51

    1924
    0.21
    2.39

    1925
    0.22
    2.48

    1926
    0.23
    2.58

    1927
    0.21
    2.37

    1928
    0.21
    2.39

    1929
    0.21
    2.45

    1930
    0.20
    2.33

    1931
    0.17
    2.18

    1932
    0.18
    2.56

    1933
    0.18
    2.68

    1934
    0.19
    2.75

    1935
    0.19
    2.69

    1936
    0.19
    2.73

    1937
    0.20
    2.71

    1938
    0.20
    2.70

    1939
    0.19
    2.63

    1940
    0.18
    2.57

    1941
    0.19
    2.55

    1942
    0.20
    2.45

    1943
    0.21
    2.32

    1944
    0.21
    2.28

    1945
    0.21
    2.22

    1946
    0.21
    2.08

    1947
    0.23
    2.02

    1948
    0.26
    2.10

    1949
    0.27
    2.20

    1950
    0.27
    2.17

    1951
    0.27
    2.04

    1952
    0.28
    2.03

    1953
    0.29
    2.10

    1954
    0.29
    2.11

    1955
    0.29
    2.12

    1956
    0.30
    2.15

    1957
    0.31
    2.15

    1958
    0.30
    2.05

    1959
    0.31
    2.05

    1960
    0.31
    2.05

    1961
    0.31
    2.01

    1962
    0.31
    1.98

    1963
    0.30
    1.94

    1964
    0.30
    1.91

    1965
    0.31
    1.93

    1966
    0.32
    1.93

    1967
    0.33
    1.94

    1968
    0.34
    1.89

    1969
    0.35
    1.85

    1970
    0.36
    1.80

    1971
    0.36
    1.76

    1972
    0.36
    1.69

    1973
    0.39
    1.70

    1974
    0.52
    2.08

    1975
    0.57
    2.06

    1976
    0.61
    2.11

    1977
    0.66
    2.11

    1978
    0.67
    2.01

    1979
    0.90
    2.43

    1980
    1.25
    2.95

    1981
    1.38
    2.96

    1982
    1.30
    2.62

    1983
    1.24
    2.43

    1984
    1.21
    2.28

    1985
    1.20
    2.18

    1986
    0.93
    1.65

    1987
    0.95
    1.63

    1988
    0.95
    1.56

    1989
    1.02
    1.61

    1990
    1.16
    1.74

    1991
    1.14
    1.63

    1992
    1.13
    1.57

    1993
    1.11
    1.50

    1994
    1.11
    1.47

    1995
    1.15
    1.47

    1996
    1.23
    1.53

    1997
    1.23
    1.50

    1998
    1.06
    1.27

    1999
    1.17
    1.37

    2000
    1.51
    1.71

    2001
    1.46
    1.61

    2002
    1.36
    1.47

    2003
    1.59
    1.69

    2004
    1.88
    1.94

    2005
    2.30
    2.30

    2006*
    2.40
    2.35

    * March 2006 only.
    Source: Energy Information Administration,
    Monthly Energy Review, April 2006, Table 9.4. Historical data from
    1920-1975 are from other EIA sources.
    Consumer Price Index from the Bureau of Labor Statistics was used to calculate constant dollars.

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  23. By Benny BND Cole on February 27, 2012 at 2:27 pm

    “”Looking for signs that the automotive landscape may be changing sooner than most people realize? Here’s one. Envia Systems, a start-up battery company that counts General Motors as a significant investor, has announced it has produced a cell with an energy density of 400 watt-hours per kilogram (Wh/kg). It also claims they will be priced somewhere in the $125 per kilowatt-hour neighborhood. Put another way, a $20,000 car using these cells could travel 300 miles on a charge. Even if that scenario sounds a bit optimistic, color us impressed. GM must be pleased, too, since when it made its $7-million investment is also concluded a separate licensing deal to use Envia’s new technology in future vehicles”"
    But these batteries in a with a small onboard motor (perhaps ethanol or methanol only ICE) and you have a car that will use a few gallons a year for most urbanites (and we are an urban nation). 
    OPEC can drink its oil. 

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  24. By ben on February 27, 2012 at 4:22 pm

    Tennie Davis asked a good question and Mac offered a handy chart.  Thanks.I dare say that the chart confirms what we know; the forces of supply and demand are alive and well and, like it or not, they actually work.  The affordability of liquid fuel prices has proven a boon to our national economy through wars, natural disasters and some boneheaded political judgments.  The mindlessness of Bill O’Reilly is more pandering to the crowd than serious commentary (at least one hopes he’s not this ignorant).  One only hopes that an increasingly disgruntled public will resist the siren song of demagogues (Newt Gingrich is the sort that comes readily to mind) and looks to the practical implications of expedient fixes out of Washington.  For those who have been following the quality of techical erudition from that Oklahoman engineer-writer, we have come to appreciate that what seems to be a simple explanation is often merely a simplistic one–and one that does injustice to the truth.  That serves none of us very well and, more often than not, those who have the least margin for error in their family budgets.  Yet, those who have been entrusted with a measure of influence exceeding their common sense, continue to peddle initiatives akin to snake-oil rather than crude oil.  We might explore why popular perception about the recent lack of energy affordability is largely attributable to a set of circumsatnces that bedevil greater progress in the current “recovery” and, in turn, frustrate the interests of average workers and retirees.  Ah, but more on that later.Ben     

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  25. By mac on February 27, 2012 at 4:49 pm

    Ben.

    Assuming a 300 mile range electric battery eliminates the range “problem” for EVs. there is still the re-charge hassel  – all those nasty cords and waiting around for your ev to charge.

    The answer is that EVs can be charged inductively.  You simply drive over a charging plate and while you are in the store or restaurant or at work, your car charges automatically.  No cords.  No fuss.  No muss. No vandalism.

    Software in the charging unit reads your bank card and automatically debits your account.  Your car’s battery stays topped off as your wife journeys through-out the city on her shopping spree.

    Inductive charging is not as efficient as contact charging by 10% or more, but the convenience factor may make it more than worthwhile. A number of people around the EV industry have suggested it will eventually go that way.

    This is not science fiction  The old EV-1 from the late 90′s had an inductive charging paddle.

    I agree,  the automotive scene may be changing more quickly than we thought. 

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  26. By Surya Gunasekara on February 27, 2012 at 5:12 pm

    Seemingly under the radar, the biggest flaw in Bill’s plan is that it conflicts with the plain language of the Constitution.  We do not tax exports in this country because Art. 1 Sec. 9 Clause 5 specifically states:

    “No Tax or Duty shall be laid on Articles exported from any
    State.”

    This point was so fundamental to ratification, that our founding fathers put it right into the text.  For an excellent historical analysis of the Export Clause, please see Prof. Jensen’s paper. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=461161

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  27. By tennie davis on February 27, 2012 at 5:15 pm

    Thanks mac, for simplicity, let’s just look at 1920 and 2006.
    1920 $2.91 or 30 cents.
    2006 about $2.40
    Now admittedly, its a wee bit more expensive now, but let’s take my argument to its logical conclusion.
    In 1920, if you were middle class, you drove a model T on bad roads, but it had electric start, whoo-ee!
    If you were poor, you walked around ankle-deep in horse crap.
    Henry Ford paid his workers $5 for 12 hours of labor, good pay for the time. Thats 42 cents per hour.
    Roughly speaking, at 30 cent gasoline, about 1 hour of labor purchased 1 gallon of gas with 12 cents left over for beer, but beer was illegal;(
    Today’s average wage is about $20.
    $20 will buy 5 gallons of overpriced gas from evil oil companies;)
    What does all this mean?
    It means we’re fat pampered whiners.
    I’ll drink to that……. legally.
     

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  28. By Tom G. on February 27, 2012 at 5:43 pm

    Ben – I agree.
    Even an old retired dude like myself who has a garage and a place to plug in would like inductive charging.  There is just no excuse for all automobile manufacturers to NOT HAVE a standardized physical location for the charging paddle/plate.  This should be no different than what we have done to standardized tire and battery sizes or even simple things like clothing or shoes sizes.  Why we even have to mention something so basic is beyond me. 
    There are automotive manufacturing associations which should have planned for this years ago during the early EV and hybrid design stages.  Left front corner for all vehicles designed for the U.S. market seems about right to me.  Directly in the line of sight of the drivers field of vision.  Since we are discussing something so basic I guess we should also state; “reverse for other countries”. LOL
    Have a great day

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  29. By mac on February 27, 2012 at 8:20 pm

    Ben, Tom

    With a garage floor mounted induction charger.  the moment you park over the charge plate your battery begins to charge.  The car is charging even as you unload  your groceries take them into the house to the pantry and freezer.  It’s charging as you check the mailbox.  It’s charging as you begin to make supper. 

    “Oops”, you say “I forgot the French bread,”  So you run back to the car, hit the garage door opener, jump in and it’s off to the grocery store again,  No problem. As you return home and park the charger again comes back on.  No fuss. No muss. No cords  No nuisance factor of having to plug in when you get home, then unplug when you have to go back to the store because you forgot something and then plug in yet again when you get back for the second time..

    That’s why the Rolls Royce Electric prototype comes with an inductive floor charger as standard equipment.

    Let’s face it, people are going to forget to plug in. 

    The latest excuse for being late to work will be: “Sorry Boss,  I forgot to plug in my car last night.”

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  30. By Tom G. on February 27, 2012 at 9:47 pm

    Mac said: ”
    The latest excuse for being late to work will be: “Sorry Boss,  I forgot to plug in my car last night.”
    You are a man of few words – but the ones you use are pretty darn funny.  You must be a supervisor, LOL
    Thank you for the smiles.  

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