Fuel Cost on the Rise, So What?

[Mark Derail]

American gas is not subsidized significantly to the best of my knowledge. It is taxed, although at a lower rate than Canada and a lot less than Europe.

Grumpy, you're in for a shocker! The gas & oil industries 'profit' immensely from government help...your tax dollars help keep gas price low. Some of the variance in price is in fact, sales taxes.

Fossil Fuel Subsidies | The Price of Oil

The website "PriceOfOil.org" is not a political website or other such nonsense.

Shift The Subsidies

ShifTheSubsidies.org also explains things. The above websites will do a much better job than I could to explain, how the American taxpayer, is actually helping "behind the scenes" to make oil companies richer.

True scenario with Shell here in Montreal. The Quebec gov't was subsidizing an entire oil-to-gasoline plant in the East end of Montreal. Shell complained that it needed to upgrade the infrastructure to remain competitive.

1,200 jobs at stake, the previous "socialist" party, the Party Quebecois, gave away millions in subsidies.
Shell took the money, offered no obligations.
Cheque cashed in, they closed the plant. Saying it was cheaper to produce gasoline in the US and ship gasoline via trucks to Montreal, than to convert locally. Employees fired.

Not one penny was reimbursed by Shell. Oh, and GM did the same "frak you" to the Quebec Gov't with the making of the Camaro. Guess what, the Camaro is back...made elsewhere for cheaper. Then GM went bankrupt...history.

Point is, guess who holds whom "by the balls" ?

How much money does the U.S. government give oil, gas and coal companies?
Estimates of the value of U.S. federal subsidies to the domestic oil and gas industry alone (not coal) range from “only” $4 billion a year, to an amazing $41 billion annually. One recent comprehensive study of U.S. energy subsidies (see graph below) identified $72.5 billion in federal subsidies for fossil fuels between 2002-2008, or just over $10 billion annually

 

[Mark Derail]

So the discussion would be, if gasoline were not subsidized as much, and say gasoline pump price jumped 2$ or 3$ per gallon more. How would that change your lifestyle?

Would that help or hinder the US economy, if some 10$ Billion wasn't "given away" to the oil companies?

Keeping in mind that the US debt is in the trillions, an order of magnitude of 1000x more, so 10 billion divided by 1,000 is only 1%.
Keeping in mind that what Obama has done to the NASA budget...for even less money.

What if that same money went to public healthcare?

Wouldn't the cities benefit from people using more public transit, less pollution?
People choosing housing in the faraway suburbs to cut housing costs, would simply adopt car-pooling, less congestion, better overall MPG of all motorists.

If your gasoline budget per month was doubled...would you go bankrupt?

 

[mathauck0814]

So the discussion would be, if gasoline were not subsidized as much, and say gasoline pump price jumped 2$ or 3$ per gallon more. How would that change your lifestyle?

Would that help or hinder the US economy, if some 10$ Billion wasn't "given away" to the oil companies?

Keeping in mind that the US debt is in the trillions, an order of magnitude of 1000x more, so 10 billion divided by 1,000 is only 1%.
Keeping in mind that what Obama has done to the NASA budget...for even less money.

What if that same money went to public healthcare?

Wouldn't the cities benefit from people using more public transit, less pollution?
People choosing housing in the faraway suburbs to cut housing costs, would simply adopt car-pooling, less congestion, better overall MPG of all motorists.

If your gasoline budget per month was doubled...would you go bankrupt?

Right - and this goes back to my first post. If you're susceptible to commodity fluctuation (even dramatic ones) you have larger financial issues and likely can't afford to be diving in the first place. Continuing to do so would just represent another in what would seem to be a string of bad financial decisions. If you're prone to this type of behavior, then why should you let it effect you at all? Just continue on One more credit card, right?

 

[Jax]

Right - and this goes back to my first post. If you're susceptible to commodity fluctuation (even dramatic ones) you have larger financial issues and likely can't afford to be diving in the first place. Continuing to do so would just represent another in what would seem to be a string of bad financial decisions. If you're prone to this type of behavior, then why should you let it effect you at all? Just continue on One more credit card, right?

That's easy to say, Mat, but a family has to get to work, get the kids to activities and the doctor, has to get groceries . . . yeah, a double gas jump can really hurt, because EVERYTHING goes up, as well.

 

[rhwestfall]

truck gets 12 mpg.....
boat gets 1 mpg...

I'm screwed!

 

[mathauck0814]

That's easy to say, Mat, but a family has to get to work, get the kids to activities and the doctor, has to get groceries . . . yeah, a double gas jump can really hurt, because EVERYTHING goes up, as well.

You asked how it would impact diving, not how it would impact a struggling family who's not diving... but ok.

 

[Peter_C]

You asked how it would impact diving, not how it would impact a struggling family who's not diving... but ok.

I think you have it in your head diving is some super expensive sport for all. It is not. My partner and I can go diving for the day for under $10 combined, counting gasoline and fills, just not including lunch, which we usually bring. Having all of our own gear makes it one of the cheapest sports I have ever done. Now traveling to exotic dive vacations is a whole other topic.

 

[GrumpyOldGuy]

So the discussion would be, if gasoline were not subsidized as much, and say gasoline pump price jumped 2$ or 3$ per gallon more. How would that change your lifestyle?

Would that help or hinder the US economy, if some 10$ Billion wasn't "given away" to the oil companies?

Keeping in mind that the US debt is in the trillions, an order of magnitude of 1000x more, so 10 billion divided by 1,000 is only 1%.
Keeping in mind that what Obama has done to the NASA budget...for even less money.

What if that same money went to public healthcare?

Wouldn't the cities benefit from people using more public transit, less pollution?
People choosing housing in the faraway suburbs to cut housing costs, would simply adopt car-pooling, less congestion, better overall MPG of all motorists.

If your gasoline budget per month was doubled...would you go bankrupt?

You are right, I choose my words poorly. Subsidy is a very broad term. My company makes widgets, I am in R&D so we get a tax break. Ergo the US government is subsidizing my job, kinda, maybe....

Anyway lets take you 40 billion (the high end number from your website) away from the oil companies and add it to the current gas taxes. Based on current use, that would add about 35-40 cents a gallon to the cost.

That is certainly not anything close to the difference between gas inside the US and in Europe or Canada. Actually it makes a strong argument the the "subsidies" are cost effective and should be continued. Unfortunately I don't think its that simple of an answer, either way as long term cost for our dependency on middle east oil are practically beyond comprehension (both dollars and lives).

 

[dmoore19]

I work in the O&G industry. $100/bbl+ oil and $5/gal gas will effect me. On the other hand exploration for O&G right here in the USA means I get to keep my job and pay my taxes.

As for the comments about the age of cars on the road in America today. One thing that needs to be taken into consideration, cars are more dependable and last longer without major overhauls than they have ever been. I would not have considered buying a used car with 100K on it in 1975. Today it doesn't seem like4 a real problems.


How a billionaire fills gas tank for $1 a gallon - CNN.com

Here ya go guys. The US has a huge supply of Natural Gas. Natural gas is cheap, dirt cheap right now. Natural gas is clean burning and loaded with energy and new techniques for producing it are being found daily.

The US also has huge supply of coal, something in the neighborhood of 200 years worth. Is clean coal technology not at least worth a look? The technology should be developed IMO to bridge us over until viable wind, solar or hydrogen technologies can be developed.

 

[Dan G]

I find it interesting how so many people do not seem to understand the impact of rising fuel prices. So, how will this affect you as a diver?

- Boats pay more for fuel, so boat costs go up.

- Gasoline for compressors go up, so fills go up.

- Costs more fuel to get to a dive site, you may stay closer to home or not go so many times.

- Airline prices go up, adding to your diving holiday costs or make it unaffordable.

- If you send tanks out for hydro, the cost of the truck transferring them go up, so cost of hydro goes up.

- Dive gear bought at an LDS will go up, because the delivery cost will go up.

- Diver gear bought online will go up because the UPS / FedEx delivery costs go up.


Anyone else have something to add?

Wait - that's one of those damned statistics!

Due to the goatscrew that was "Cash for Clunkers", thousands of Americans traded in (for destruction!) plenty of pretty decent vehicles in the five to ten year-old range! What that did was cost the taxpayer a fortune, take a blank-load of perfectly good vehicles off the used car market, removed hundreds of viable engine and transmissions parts out of the market, and made the stupid auto unions happy as hell!

I know that middle American doesn't have the money to buy new, and there are not many cheap, reliable used cars available. F'ing Obamanomics!

Jax, I always respect your posts, particularly as emotions run over there in the Cozumel forum, and I am going to have to call you out a bit on this one. Starting this thread is right out of one of the most recent Republican National Committee's talking points memos that are used instruct what topics pundits should speak to as a way to attack President Obama and/or the Dems.

Now I would have no problem with you starting a thread that is titled: "Blame Obama for high gas prices." That would be straightforward and your intentions would be clear. However, to start a conversation and to give the impression that you have no agenda is disingenuous and not up to the high standard you typically set here on SB. Please know that I have a lot of respect for you and I would not even bother to respond if I didn't.

That being said, it is important to know that oil and gas production has increased dramatically over the past 3 years. Domestic oil producers are actually exporting their fuel overseas because they get a greater profit when they do so. I do not begrudge them wanting a bigger profit, but attempting to drill our way out of this issue has not worked since all of that oil they are extracting is not ending up in US cars.