Gas Prices.. falling anywhere?

Gary, I think Maine is too rural for gas to have ever taken hold, although several big lines have been run through the state in the past 10 years and there are some new developements that are using it. When I started appraising real estate in the 80's I noticed that the only areas of my city, which is the largest city in the state, (70k+-) only had gas in the old neighborhoods. It seems like from the 1950's up until recently gas was seldom installed. Neighborhoods built in the 1800's up to the 1940's mostly have gas. I've heard it was due to a strong oil lobby, but who knows? People are getting away from oil now, but I'm slow to spend a ton of money on new technology like pellets.

I know what you mean about rural,you would not know it now if you drove around here now but when my Grandparents started to build this house in 47,there was no gas service here either. He started making plans for propane but by the time he had to make a decision about a furnace,a main had been placed.

Several thoughts.
1. Gas lines are very expensive to install in areas where the geology is principally granite or hard rock, and it is subject to shifting. That may account for it being less common in some areas of the east coast.

2. There are CNG cars on the road today. The home compressor unit that compresses the gas from about 3psi delivery pressure to 1,500 Psi, and is necessary to refueling your car, has a metering device. Taxes are paid by therm, just like it is metered to your house. At a filling station it is metered just like gasoline.

3. Ethanol is not a bad fuel, but is certainly not the only answer. It increases the octane rating of gasoline dramatically, keeps the combustion process cleaner, and prevents fuel system freeze and water problems (in closed systems). The guys in my Shelby Dodge club that race very high output forced induction engines (usually running over 30psig boost) commonly use E85 due to its extremely high octane and controlled combustion temperatures. There is less energy in it so you must tune with larger injectors for it. I only boost 24 psig and drive on the street, so I can get by with 93 octane pump gas.

4 Most gas stations already have natural gas infrastructure for heat, and could easily install a compressor and receiver tank without needing a new delivery system. It could be upgraded over years as CNG vehicles are phased in.

5. Hybrid technology is good, and is improving constantly. It is not dependant on the fuel used for an energy source as it only captures wasted energy and saves your brakes.

6. As a wise man on this site once said "If you do what you always did, you will get what you always got".


Tesla stock
09/2010   $19.58
09/2012    $31.50
They are the leading provider of hybrid technology.

FORWARD. It's not just an election slogan, that's why Toyota uses it and has profited on the Prius.

I wouldn't buy stock in old energy technology any more than I would invest in photographic film or print media today.

john, wanted to chime in on a few of your points:

3. Ethanol should not ever be an answer. While I agree with you on your performance points(granted it only applied to newer vehicles or modified fuel systems), the problem is two-fold. A. it is heavily subsidized by the govt to make it profitable to the famers, so without that it would drive ethanol prices close to double straight gas, and B. just remember that the more corn that goes to ethanol means the less goes toward food and the feed we use to grow food(ie cows/chickens). So while gas would get cheaper food costs would sore offsetting any price advantage.

4. The problem is the infastructure is designed around low volume. in order to meet the demands of a fueling stations you would have to signficantly upgrade the supply systems and lines. Though CNG is currently one of the top areas car mfgs are looking towards.

5. While hybrid technology pays dividends at the pump there have been several studies that long-term ownership costs and initial costs far exceed the regular gas engine equivalents. For the Prius in particular they were able to show that it would cost an owner a few thousand more over a 10 year period vs. the camry with all factors held constant.

Most scientists will also agree that we will not run out of petroleum in our lifetimes or that of our children or grand children. The recent discovery of oil sands and very large caches under the northern oceananic regions have forced the studies from the 90s to be re-evaluated and most of academia believe that the previous reported "extinctions" were far exagerated. Granted, we will eventually run out on some grand time scale.

My personal opinion is that the gas combustion engine still has tons of room for improvement. The fact that we have 300hp v6 engines and even 400hp v8s getting in the mid 20s is proof there is a ton of efficiency we can still squeeze out with advances in fuel delivery and computer controls. But just my 2 cents.   

ON a side note are you sure tesla is the leading hybrid group? I think you have your terms confused, tesla specializes in zero emission electrics not gas hybrids. I know they are considered one of the top 3 for zero emissions vehicles, but GEM, a sub group of diamler AG, is the leading producer and has been since 2000. Though I may be wrong, I'm pulling this from memory.

Charlotte, NC is at $3.90 to $3.95 per gal for regular as of today go across the border to South Carolina (10 miles approx) it is $3.40 per gal

WELL FINALLY!!

Oil went under $90 / barrel AND our gas prices fell!!!!! Was 3.99 on Monday...

Today.... da da da daahhhhh. $3.98



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$3.79 for premium by my house. Washington DC is over $4 a gal. 12 years ago when I was graduating from college gas was 89 cents a gal for regular in Georgia.

It's dropped down to $3.80s and $3.90s this week. The State just reported lower receipts for sales tax and a poor outlook for the next quarter due to high gas prices, so it is hurting the economy. Why are prices so high relative to crude prices?

Dropping slowly here, getting easier to find below $3.50.

There is still a large refinery out of commission on the West Coast, and also something on the Gulf Coast which has the speculators exited. The refineries that are running are making as much heating oil, diesel and other things they can sell overseas because the difference in the price of Brent Crude and West TX Intermediate. They can buy WTI and sell it for Brent prices elsewhere. The price at the pump is based more on the Brent price right now than the WTI. The oil coming from South Dakota and Canada is even cheaper than WTI, but due to the lack of infrastructure (Keystone XL and other pipelines that aren't there) the shipping costs are very high.

So what brings the price down? I don't know, but there are actually reasons for it other than because they can.

Bio diesel or even straight vegetable oil was a hot thing around here in 06/07. Once everyone got finished cleaning out their fuel filters and other stuff I don't know many who will even try to use it. Too much hassle to make it and spend the time to get it right. Natural gas will be the next thing here in TX at least, and that's a few years down the road if you aren't in the middle of the oil patch where you can already do it.

395 today.

Having been there and done that I'm not going to go out and spend dollars to buy a diesel to save cents so I can take a trip a couple of times a year.
On our trip home from SJRR '11 pulling the Mustang with my 6cyl Jeep going 70mph I got 16.1 mpg and spent 325.93 on gasoline. It would take a long time to recover the initial cost of the upgrade.

3.59 in Richland MI

$3.699 in Minocoqua, WI. It took 11 gallons to get here, but I was pulling a small utility trailer.

To refresh ones recollection of history I suggest going to the gas buddy site and set the duration to 8 years and click the button that shows oil price along with gas price.

The shortish answer to WTF is that in the short term market oil is both limited and infinite, supply is not controlled by demand but rather opec’s willingness to produce. Gas supply is not infinite due to refinery limitations and is easily manipulated by speculators. Demand for gas is only one part of oil consumption and as we all know demand falls off like a rock at 4 bucks.   At the peak of gas prices (and demand) under gwb there were still additional demands on crude oil price for heating oil, plastics production, power production, etc. Many of those have yet to return due to construction not coming near the bloated bubble levels, but more importantly due to the prevalence of cheap natural gas. The refineries therefore are the primary oil price driver (outside of the 25% tax we all pay to the speculators).   The difference between now and when gas prices peaked in 2008 is that the price to heat our houses over the winter is about half what it was then, plastics prices are considerably cheaper, airline tickets are cheaper, etc.

This does show market inefficiency because the market is driven completely by demand and not by production costs, but it is a tremendously colluded market with many shared resources and no real ability to compete with the established players. We are talking about Oil, and nobody did make that. It was stuff that you end up finding under your feet, or more often than not on public land, treating it like a true product of labor from an economics standpoint is nearly impossible.

We need to realize that the oil in Saudi Arabia basically pumps itself out of the ground and is still profitable to produce at 27 dollars a barrel but all the north American sources are relatively more expensive and without higher oil prices many are not economically viable at all. This is the real reason for the north American oil boom of the last 4 years.. no one just discovered north Dakota or the oil sands, it just became economically viable to produce oil there because of the oil spike in early 2008. Technology has also been a factor but again that technology came about because of investments made when oil prices were high (I remember $145 a barrel and not being able to work in my shop that winter).

Is it a conspiracy to keep gas prices high, I suppose it could be but it if is the refiners and big oil companies are behind it. Certainly there is no government motive to raise them. The type of robust regulation you would need to see actual competition at the drilling and refinining stages of production would likely be counter productive, greater financial regulation is of course needed but blocked by serious lobbying.

There is no point to be scored here from either side.. the true cost of that gallon of gas to the world your children will inhabit is probably closer to the price they pay in Europe than the price we pay here in the us. Gas at the 1.85 levels we saw at the height of the economic crisis encourages manufacturing moving overseas (due to cheap shipping and relative attractiveness of coal production) and US oil production to fall off to the point where we wouldn’t be building any keystone xl or even xs pipelines. It also leads people to buy the cheapest possible refrigerators, air conditioners, furnaces, cars, generators, light bulbs etc.. which tend to be copies of 20 year old american designs shipped over from china or india.   Higher energy prices drive consumers to efficient products produced by the world’s best and brightest, which both helps our manufacturing economy and leaves a better world for our children.

Cheap American natural gas to encourage industry to relocate back to America (and keep home heating costs relatively reasonable) combined with reasonable oil prices (70-90) and gas prices (3-4) put America where it needs to be to build real sustainable growth.    If you want to pay a buck a gallon consider moving to Saudi Arabia. If you want to see a liberal or socialist plan go to europe or japan and see what they are paying.

Truth, you can’t handle the truth! Seriously no he didn’t answer the question cause the answer is yep 3-4 dollars is the normal has been for 6 years except when the economy was in complete free fall.. get used to it. If I was on the stage with a guy who was completely willing to lie and say that the 1.86 a gallon number was realistic and that it was obamas fault and all he had to do was issue more permits and destroy a few nature preserves and that would happen I wouldn’t answer the question either… Except how he did answer, which was to say that yep if Romney destroys the economy to the point where nobody is willing to spend any money on anything just like bush did then yes gas will be $1.86 again.   

And no it is not the job of a government office to control the price of a global commodity I am shocked that any conservative would even consider such a thing as being part of the role of government.