This time from KIRO TV. I was watching the local news two days ago when I saw a piece on gas prices that could have been done by the Maria Cantwell campaign. The piece began with a discussion of rising gas prices, and then quickly moved to Cantwell arguing that what country needed was anti-gouging legislation.
Here's what the piece did not include: Any mention of the gas tax increase. Any mention of Senator Cantwell's so far successful efforts to prevent oil drilling in ANWR. Any mention of the cost effects of environmental restrictions on gasoline refining. Any mention of OPEC, an organization that is not composed entirely of friends of the United States. And, most of all, any reply from the McGavick campaign. KIRO has every right (in my opinion) to run pieces like this, but they should be honest and label them as campaign contributions (with, of course, an estimate of their value to the Cantwell campaign).
(I'm not absolutely sure which KIRO correspondent did this campaign contribution. I think it was Gary Horcher. I emailed him to check on the point, but he has not replied.
How much has the refusal to drill in ANWR cost us? No one knows, of course, but you can do your own back-of-the-envelope estimate by looking up the current price of a barrel of oil and multiplying that by an estimate of the oil in ANWR. Current public estimates of recoverable oil there run between 4 and 16 billion barrels. Because petroleum products are so heavily taxed, much of the money from ANWR oil would go to our federal and state governments.
KIRO also omitted an important argument, which I'll mention, even though I disagree with it. Many environmentalists want higher gas prices, in order to discourage consumption. It would be delightful to see a local reporter ask Cantwell whether she agrees with those environmentalists. I suspect that she does (but would refuse to say so in a campaign). I am nearly certain that no local reporter will ask her that question before November.)
Posted by Jim Miller at April 20, 2006 01:00 PM | Email ThisGive us all a break
Posted by: TomMolto on April 20, 2006 01:02 PMI'm tired of libs lying about what some other lib told them Fox was up to.
Actually, your reaction is typical for a lib - shut everyone else down so that your message remains by itself. Mao would be proud, comrade.
Posted by: Steve_dog on April 20, 2006 01:07 PMFrom each according to their means to each according to their needs!
Posted by: James on April 20, 2006 01:12 PMThis is mostly a rhetorical question but we hear about the lack of refining capacity constantly yet Washington State has some great capacity but some of the highest prices in the nation. Some of that is taxes of course but the effective gas tax is not meaningfully higher ($0.03 per gallon is a rounding error on current prices) and quite a bit lower than other states (data confirmed with taxfoundation.org).
It seems to me that these facts undermine the "refining capacity" argument.
This is a digression from the point of the post but one to which I would like to know the answer.
Posted by: Rex on April 20, 2006 01:22 PMPull your head out and use both hands...
If you actually watched Fox, you'd know you're completely full of it.
Posted by: dan_55 on April 20, 2006 01:23 PMBy increasing the price, consumption is lowered as people switch to higher mileage cars, reduce their driving or both. If the government forces prices down, consumption will not go down and we will have shortages, gas lines, etc.
So would you rather have millions of peoople making their own decisons on how they reduce consumption based on their individual circumstances, or have the government solution of lower prices but at the cost of sitting in gas lines for hours hoping the station doesn't run out of gas before your turn arrives, hoping to make you tank last until the next odd/even or whatever day or forego your weekend visit to your aging parent?
Artifically lowering the price of anything always results in poor allocation resources and shortages.
This is the same reason government sponsored universal health care doesn't work. The government reduces the cost of health care to the individual to "free" or some token co-pay. Demand goes up due to the low cost (at least directly out of the individual pocket), and now you have waiting times that can stretch into the months or years as scarce health care resources must be rationed over a large number of people.
Posted by: BornRight on April 20, 2006 01:26 PMFox, Rush, Medved, etc. are 24 hour campaign contributions for the extreme right.
Now...get over it.
Posted by: TomMolto on April 20, 2006 01:30 PMSo let's thank those who have conceded defeat -- and return to the subject of the post, KIRO's campaign contribution.
Posted by: Jim Miller on April 20, 2006 01:31 PMTwo out of three examples (Medved/Rush)to back up your statement are NOT on FOX.
Both hands, pull hard.
Posted by: dan_55 on April 20, 2006 01:33 PMHave you heard ST's on time and under budget adds?
Hey if I left home to go pick up the new Mercedes S500 that we agreed to spend $105,000 on, and then stop by and play pinball at the corner tavern on the way home and told my wife it would cost $20 for the evening and I would be home by midnight......then after leaving home I decide to fly to the Bahamas, gamble off $75,000 and be back by Christmas with a new Ford crown Victoria, I will be dipped and rolled if I am going to try to tell her that I accomplished the task ‘on time and under budget’ just because I actually only gambled off $70,000 and made it home by Thanksgiving.
So I'm clear: it is NOT about changing the topic. My topic response was 100% in line with your topic. Just a matter of scale. For the stuff you complain about, the republicans do everything 100 times more than the democrats.
That isn't a change in topic.
Posted by: TomMolto on April 20, 2006 02:04 PMI stareted with Fox...was accused of several things (including changing the topic by the original poster) so I had to EXPAND the examples so you would get it.
Then you get on me because Rush and Medved aren't on Fox?
Man...how do you guys ever think beyond the party's talking points...
Posted by: TomMolto on April 20, 2006 02:06 PMTrue. Why don't you explain to the nice people what MBTE is?
Posted by: South County on April 20, 2006 02:13 PMNow take a look at these dueling press releases by McGavick and Cantwell on gas prices.
On December 19, 2005 Cantwell said the following on the floor of the Senate:
I understand the Senator from Alaska thinks this ANWR provision is in the interest of some, because I think it is in Alaska's interest. In 2005, petroleum counted for 86 percent of the State of Alaska's general revenues--86 percent of their State revenues. In fact, according to a published article, State officials expect that at least until 2013, 74 percent of Alaska's general purpose revenues will come from oil revenues. So I get why the State of Alaska cares so much. In fact, CBO recently calculated that Alaska will get $5 billion in revenue from this legislation if it is passed. Of course Alaska cares about this. Of course Alaska would hold up the legislative process and keep us here extra days to get this bill passed and get ANWR in by hook or crook, any possible way. Of course they would.
But don't say that this is in the national interest. What is in the national interest of our country is to get over our overdependence on foreign oil. We need to start doing that now, as well as get off of our overdependence on domestic oil and fossil fuels in general. Instead of implementing this Arctic drilling program, we ought to be implementing policies that help us diversify and move forward, so people can have affordable energy rates in this country and not be held hostage by these special interests.
Jim--there's your admission by Cantwell that she agrees with the environmentalists--discourage consumption by raising gas prices.
The D's need some remedial courses in economics it appears. There are only two ways to do this - increase supply or reduce demand. That's it. Anything else is lipstick on a pig.
Posted by: Palouse on April 20, 2006 02:48 PM"High prices are bad because of price gouging..."
"High prices are good because they will force the move to alternative sources..."
I must admit, there are times I feel oil companies are gouging and other times I just think it is "supply and demand in an environmentalist appeasment regulatory scheme".
This round of high prices are probably "bad" because the money goes to the wrong place - corporations.
When the auto makers make big profits on selling alternative fuel vehicles at inflated prices, and the alternative fuel companies (big corporations) make a big profit in the new fuels - will Cantwell's followers denounce the "profits of big corporations" - or will corporations be "good" by then?
Who are the people, groups, companies, governments that keep bidding the price of oil upwards? I can get mad at Exxon or Texaco; I can get mad at Bush or Opec; but who is really driving the oil prices up because they are always "afraid" of something - every day, every hour? They need an intervention.
Who has blocked new refineries in America for the last 30 years?
In the last 20+ years, who passed laws requiring over 40 different fuel mixtures depending on the region?
Who continually blocks legislation intended to reduce our reliance on foreign oil sources?
As for the oil companies, I made a chart that has barrel cost from $10 - $100. According to the industry, 19.5 gallons of each barrel is used for gasoline production. The cost of each gallon of oil allocated to gasoline refinement is from .24 cents to $2.38. If you allow for costs and profits of 135%, a gallon of gas can average from .32 cents to $3.21 a gallon. Throw in the distributor, resellers and TAXES and the price per gallon goes up considerably.
For example, last June, I paid about $2.25 a gallon. Subtract .464 cents for taxes and the gas at the retailer was only $1.786. Pump taxes increased that gallon of gas by almost 22%.
Today, at $2.90 a gallon, the before tax price is $2.406 - 17% of the pump price being taxes.
My point is that the taxes "buried" in the gas price make it look worse than is really is.
According to my chart, from $10 - $100, thus far, the gas prices have averaged around an center point of about 135% - 35% charge above cost of the oil. Not scientific, but not wholesale gouging either. The tax schemes, regulatory requirements, refining costs, and distribution costs do a really good job of hiding any ability to know precisely - to the penny - whether gouging is happening.
By the way - haven't there been other companies that have recently announced large percentage profits? Should Congress go after them too and place price controls on their products?
Posted by: SouthernRoots on April 20, 2006 03:39 PM1) Gasoline is a freely traded commodity. The price is set based upon demand. Period.
2) A large part of the price of a gallon of gas is the tax. Although the price to refine, market and distribute gasoline is set by demand, the tax portion of the price of gasoline does not vary based on demand. The higher the price, the more you get taxed.
3) Most of the scarcity of gasoline that sets the price is based on Federal regulations which mandate the addition of ethanol to the gasoline for alleged environmental benefit. This of course ignores the environemental impact of the production and delievery of ethanol which is a major component of gasoline. And based on many farming regulations and subsidies created by the Federal government, ethanol is not produced in tandem with gasoline in terms of the number of refineries, distribution, etc. hence it becomes the limiting factor on production and the primary component which leads to scarcity and increased price.
4) Ethanol can only be added to gasoline late in the production of the finished product and must be added just-in-time due to its high water absorbtion. Water is bad for gasoline engines. This further creates scarcity in the production of the finished product for the pump, which further leads to high prices.
5) In many states the mandated addition of ethanol is season during the summer months. Hence the jump in prices we see every spring.
If you want to blame anyone for the high price of gasoline, blame the government. Specifically the Federal government which mandates the addition of ethanol with very questionable benefit. Particularly given the detriment of that increased fuel price has on the economy as a whole. Next you can blame the local governemt for high state taxes on gasoline. Then blame mass transit failures like Sound Transit which eat large portions of the tax revenue that might otherwise be spent appropriately requiring less tax.
Gasoline companies are not evil. They produce an excellent product that we all value and use every day. They do so depsite incredible forward outlays that must be made, with huge risks if the price is not predicted accurately. And they do so within the rigor of an extremely draconion set of laws and regulations. If you don't like oil companies, you can buy cars that run on alternative fuels, but to blame oil companies for high prices is wrong and unamerican. Bottled water cost far more per gallon than gasoline. Think about that. Do you hate water companies?
And the price of gasoline is largely expolited for its emotional value. The reality is that a typical consumer would pay less than $400 in a year for even a year round increase of 50 cent per gallon on the price of gasoline at the pump. And that's assuming one buys a tank of gas every single week, which many do not. This issue is yet another shameless attempt by the left to villify American business, the concept of profit which is the very incentive for all of us to remain productive. all for cheap political benefit.
If you don't like high gas prices, vote Cantwell out of office as she is a major contributor to many of the above problems. Or realize that you've been manipulated by a non-issue and shut up.
Posted by: Jeff B. on April 20, 2006 03:50 PMThe IEA (the U.S. Gov't) says that the impact of the conversion away from MBTE was felt in 2003 and 2004 - there's no reference to any impact in 2005. (see the link below) The IEA attributes the high gas prices (at least as recently as 2005)to high oil prices and continued disruption in refining capability from Katrina. If you have any contrary sources attributing the dramatic price spike to MBTE policy changes I'd sure be interested in seeing them.
http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/primer_on_gasoline_prices/html/petbro.html
Posted by: MaryL on April 20, 2006 04:00 PMThis is coming in the middle of a construction rush at refineries to upgrade to low sulfur diesel production, which will be substantially in place by Q3.
This is the time of year that refineries go through what's called "turn around." This means maintenance is performed and production set for the gasoline season, as opposed to the heating oil season.
Gulf Coast crude production is not yet back to pre-Katrina levels. Neither is refinery capacity. The combination of the two means that gasoline inventories, which have been historically high, have been dropping significantly.
MTBE=methyl tertiary butyl ether, is an "oxygenation agent." It's been a part of EPA's plan for reducing pollution by changing the combustion characteristics of fuel. The only approved substitute is ethanol.
Unfortunately, ethanol is also being touted as a separate fuel additive. The term E15, for example, refers to a mixture of 15% ethanol/85% gasoline. It's very popular, especially in the Midwest.
Ethanol is also a component in the manufacture of biodiesel, another suddenly popular fuel.
There's some question whether the ethanol industry can meet demand this summer for these different markets. There's bound to be transportation bottlenecks too.
This is what you addressed thusly: "the burdens of environmental regulation have not dramatically increased during that time." Not on oil, but definitely on gasoline.
Would you like to discuss elasticity of demand, futures market's reaction to geopolitical factors, and characteristics of commodity pricing as they apply to gasoline?
http://tonto.eia.doe.gov/oog/info/twip/twip.asp
Posted by: South County on April 20, 2006 05:10 PMAnother reason prices are high on the West Coast, we do not produce enough gasoline for our own consumption and therefore pay a premium to ship it in from the Midwest. Certainly we make enough in WA for our own consumption, but refiners here can make more money selling to CA and AZ where there is a shortage because of the 'boutique' gasoline requirements in those states.
As far as prices in general go take into account that since Hurricane Rita the nations largest single producer of gasoline has been shut down. BP's Texas City Refinery shutdown last fall and is just now, slowly, coming on line. It produces 3% of the nations gasoline supply.
Posted by: ChuckJ on April 20, 2006 06:18 PMhttp://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2006/mtbe2006/mtbe2006.pdf
The switch from MTBEs to Ethanol will have an impact on prices in 2006.
"Ethanol Supply and Distribution
Both capacity and transportation issues imply a very tight ethanol market for at least the
first part of the year. Table 1 shows that about 130 thousand barrels per day of additional
ethanol may be needed to replace the MTBE currently used in RFG. The East Coast will
need an additional 90 thousand barrels per day of ethanol, and Texas will need most of
the remaining 40 thousand barrels per day. Table 2 shows that today’s ethanol
production of 275 thousand barrels per day is fully utilizing the available capacity of 283
thousand barrels per day. Although planned ethanol capacity could fill the additional 130
thousand barrel per day requirement, these new facilities will not start soon enough to
meet 2006 demand needs as companies are making changes during the first quarter 2006."
"The availability of ethanol storage and transportation infrastructure may be an even
greater challenge than finding additional ethanol supply during the first half of 2006. The
90 thousand barrel per day increase in ethanol to the East Coast represents 2.5 times the
quantity of ethanol moved to the East Coast in 2005. Rail cars and barges may not be
available.
The increased volumes of ethanol to be used in RFG during the first half of 2006, and
perhaps for the entire year, will not be met by increased domestic ethanol production
alone. Some of the increased use of ethanol in RFG will be met by increased domestic
production, some by increased imports from areas like Brazil, and the remainder by
taking ethanol currently used in conventional gasoline in the Midwest and shipping it to
the East Coast and Texas for RFG blending. Removing ethanol from conventional
gasoline reduces conventional gasoline volumes, but replacing lost conventional gasoline
is easier than replacing lost RFG volumes."
"SAN FRANCISCO (AP) - Google Inc. (GOOG)'s first-quarter profit rose 60 percent"
Google is price gouging someone!
Posted by: SouthernRoots on April 20, 2006 06:39 PMGood info. Thanks.
Of the 31 cents collected, 11½ cents goes to cities and counties for streets and roads. The remaining 19½ cents is used to maintain and improve the freeways, state highways, bridges and ferry system.
I know I read in the Times that China is now a major consumer of oil and has hundreds of thousands of cars and oil consuming machines that it did not have just a decade ago. China's thirst for oil is quickly growing to equal our own. Add their economic growth along with recent gains in India, Pakistan, the former Soviet Union and a post NAFTA South America.
Do the mental midgets on this board not understand that when multiple countries now tap into the oil supply that belonged mostly to the U.S. and Western Europe prices will rise?
What do they teach in school these days?
Cantwell and her back to the cave allies present all sorts of fancy, schmancy excuses not to drill in ANWR. "There'e no oil there." they simper. Well let's drill and find out then. If there is just dry holes the oil companies are out millions. Of course Cantwell and her buds are worried that oil will be found and plenty of it.
Another ignoramus excuse is "Even if oil is found it will take years to get to market or it will be sold to Asia like much of the North Slope oil."
Well what the hell is the problem Maria? Just the presence of another hugh depot of oil will lessen the speculative pressure on oil prices now, even if it take a couple of years to get to market. And so what if it is sold to Asia? Oil is a world wide commodity and anything to increase supply will again lessen the upward pressure on prices.
As much fun as it is to rag on the hapless Cantwell she can't be blamed for everything. Bush made a half-assed attempt to get ANWR opened and then slunk away with his tail between his legs when the Democrats spoke crossly to him. Ever heard of the bully pulpit George? You could skewer Cantwell like a bug on a pin. And of course Bush gave his bro down in Florida a pass on drilling off the coast.
Posted by: Bill K. on April 20, 2006 11:43 PMI guess Cantwell really is nervous about Mike if she's got her lackeys working overtime this early. (She should be. Every time they do a poll, Mike gains on her, and the election is still a long way away.)
The intent seems to be to try to convince people that Mike doesn't stand a chance, to don't contribute and don't step onto the bandwagon.
Sorry moonbats, that ship has sailed. The McGavick candidacy is real and do-nothing Maria is in for a very rocky re-election campaign.
(I hope she still has friends at Real Networks so she can get her old job back.)
Posted by: johnny on April 21, 2006 12:10 PM