8 governors call for investigation of oil companies

[Joseph_Botwinick]

Eight governors have now asked President Bush to investigate alleged price gouging. Those governors base their assertions on a study done by University of Wisconsin economist Don Nichols, who says for gasoline to cost $3 a gallon, the barrel price that OPEC charges would have to be $95. Since OPEC is presently charging $58 a barrel, Professor Nichols concludes the USA oil companies have some explaining to do.

Again, "Talking Points" is not conspiracy operation. When we see all the oil companies failing to answer simple questions, when we see their high-paid mouthpieces in D.C. hiding, when we see analysis that U.S. oil concerns and energy concerns are exploiting tragedies like Katrina and the war on terror, we get angry.

Finally, all of us can do something. All Americans should cut back energy consumption, as I've said, as much as possible. Not buy gas on Sundays. Let's send a message to these energy people who operate in the shadows.

The coming winter will punish millions of Americans who have to heat their homes using gas or oil. No question we're going to get hurt. The government owes us some oversight, but we owe it to ourselves to use less oil. Let's do it.

And that's "The Memo."

Getting to the Bottom of High Fuel Prices

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[ September 22, 2005, 11:14 PM: Message edited by: Joseph_Botwinick ]

 

[KenH]

Other than some gouging here and there by local gasoline stations, I doubt that anything will come of this.

The price of gasoline is set on the NYMEX. I really don't understand why people like Bill O'Reilly can't grasp that concept. It works the same way as gold, silver, pork bellies, soybeans, etc.

Also, the great profits that oil companies have been making is mostly on the upstream end due to the price of oil going up, not on the downstream side on the spread between the price of gasoline and the price of oil. Oil companies end up making a net margin of $.03-.04/gal. when things are going well on the downstream end - even with gasoline having increased in price during the past year. Some months the net margin may be higher than this - about $.10/gal. - and other months they lose bunches of money on the downstream end.

I find it amazing that people want to jump on oil companies while they sit silently by while hospitals charge exorbitant prices for an aspirin tablet and doctors charge exorbitant prices for operations and even for a mere office visit.

Someone might say that doctors have spent tens of thousands of dollars for to obtain their license. Fine. Then get an understanding of how much money it costs to explore and find crude oil and pay for all of the unavoidable dry holes a company drills before finding commercial quantities of oil and how much it costs to keep a refinery running and meeting all of the EPA regulations.

Sometimes I think that spoiled Americans think they have a right to $1.00/gal. gasoline. Well, I've got news for them - they don't.

 

[Joseph_Botwinick]

Sometimes, I think that spoiled, rich fat cats in the oil industry think they have a right to soon to be $5.00 per gallon for gas. Well, I've got news for them - they don't, as long as the market says we are not going to pay for it. The best way to send that message is to follow my solution: Drive less, buy less gas, buy from the cheapest gas station around. It is called the free market.

Joseph Botwinick

 

[KenH]

Nichols analysis if flawed in two ways.

1) With gasoline at around $65, we are paying $2.59/gal. in my town, not $3.00.

2) There is a certain amount separation now between the price of crude oil and the price of gasoline because we have more crude oil available than we have refining capacity available - even when all of our refineries are going. And we are still short about 5% of our refining capacity due to damage caused by Hurricane Katrina. And now refineries on the upper Texas coast have been forced to shut down awaiting Hurricane Rita.

Look at these numbers: The prompt month crude oil contract on the NYMEX closed at $66.50/bbl. today. The prompt month gasoline contract on the NYMEX closed today at $2.0388/gal., or $85.63/bbl. The spread between the two is, therefore, $19.13/bbl., which is only $.455/gal., not the $.85-.90/gal. that Nichols claims. Which, taking into account transportation cost, markup, etc. makes the $2.59/gal. that I am paying locally right in the ball park of where it should be

Also, regional differences, EPA mandated boutique gasoline formulas, etc. also have to be taken into account in different areas.

Any serious, honest, non-political, non-personal agenda driven study of the price of gasoline will show that Nichols and O'Reilly don't have a leg to stand on in their charges of price gouging except for isolated instances of individual gasoline stations - certainly no widespread conspiracy.

Nichols' and O'Reilly's blather is, frankly, silly and one would be wise to refrain from joining in their blather.

 

[carpro]

This issue has been investigated in other times of rapid rises in fuel prices. Politicians like to use this issue for more media face time.

Nothing illegal is ever found.

Just the market place at work.

 

[KenH]

Originally posted by Joseph_Botwinick:
Sometimes, I think that spoiled, rich fat cats in the oil industry think they have a right to soon to be $5.00 per gallon for gas.

You have absolutely nothing to back up that statement, Joseph. You are sounding like a Cindy Sheehan now.

 

[Joseph_Botwinick]

Originally posted by carpro:
This issue has been investigated in other times of rapid rises in fuel prices. Politicians like to use this issue for more media face time.

Nothing illegal is ever found.

Just the market place at work.

You are correct that it is not illegal to exploit the suffering of others for personal gain...but it is immoral. You are also correct that it is a matter of the free market working the way it works. Thus, is the reason that consumers should send a message to the oil companies by cutting back their demand.

Joseph Botwinick

 

[Joseph_Botwinick]

Originally posted by KenH:
</font><blockquote>quote:</font><hr />Originally posted by Joseph_Botwinick:
Sometimes, I think that spoiled, rich fat cats in the oil industry think they have a right to soon to be $5.00 per gallon for gas.

You have absolutely nothing to back up that statement, Joseph. You are sounding like a Cindy Sheehan now. </font>[/QUOTE]Silly, inane, emotional personal attack on your part...let me add unwarranted. I have not blamed President Bush nor Israel nor the war in Iraq for the greed of the oil companies. Neither do I call for America to leave Iraq. You really should think about that one.

Joseph Botwinick

 

[Joseph_Botwinick]

Originally posted by KenH:
Any serious, honest, non-political, non-personal agenda driven study of the price of gasoline will show that Nichols and O'Reilly don't have a leg to stand on in their charges of price gouging except for isolated instances of individual gasoline stations - certainly no widespread conspiracy.

Nichols' and O'Reilly's blather is, frankly, silly and one would be wise to refrain from joining in their blather.

I don't really know much about Nichols other than 8 Democrats like his research. Therefore, the charge of political agendas might be valid on that point. I am curious, however, what political agendayou think the mostly conservative and independent Bill O'Reilly is harbouring.

Joseph Botwinick

 

[KenH]

Originally posted by Joseph_Botwinick:
You are correct that it is not illegal to exploit the suffering of others for personal gain...but it is immoral.

Other than some isolated gasoline stations you cannot prove any exploitation is taking place in the sale of gasoline. All you are doing is making unfounded charges that you have absolutely no proof for. That's the same thing that Cindy Sheehan is doing on another subject. On this subject you are writing on this board in her style - unfortunately, since I know you are a better person than that.

But I understand, you are reading what these people are saying and you are frustrated over the spike in the price of gasoline due to the hurricanes. I share your frustration about it but I work in the oil industry and I understand why it is happening, and that knowledge overrides any emotional response I may have about the spike in gasoline prices.

[ September 23, 2005, 12:10 AM: Message edited by: KenH ]

 

[KenH]

Originally posted by Joseph_Botwinick:
I am curious, however, what political agendayou think the mostly conservative and independent Bill O'Reilly is harbouring.

Bill O'Reilly has this shtick that he is looking out for the "folks". From listening to his TV show, he apparently thinks that there is one man somewhere in the United States that sets the price of gasoline on a daily basis. He is showing a very, very, very poor understanding of the free market, especially the NYMEX. Maybe if he cleaned out salt water disposal pits and laid flow lines and painted Christmas trees like I have I might respect what he is has to say on this subject.

Anyone who wants to put aside poltical/populist posturing and know the truth on this subject can read:

The Truth About Oil LINK

 

[KenH]

*DOUBLE DOUBLE POST POST*

 

[Joseph_Botwinick]

Originally posted by KenH:
</font><blockquote>quote:</font><hr />Originally posted by Joseph_Botwinick:
I am curious, however, what political agendayou think the mostly conservative and independent Bill O'Reilly is harbouring.

Bill O'Reilly has this shtick that he is looking out for the "folks". From listening to his TV show, he apparently thinks that there is one man somewhere in the United States that sets the price of gasoline on a daily basis. He is showing a very, very, very poor understanding of the free market, especially the NYMEX. Maybe if he cleaned out salt water disposal pits and laid flow lines and painted Christmas trees like I have I might respect what he is has to say on this subject.

Anyone who wants to put aside poltical/populist posturing and know the truth on this subject can read:

The Truth About Oil LINK </font>[/QUOTE]Ken,

Why don't you e-mail him at [email protected] and set him straight? He might even read your letter over the air and educate everyone about the truth.

Joseph Botwinick

 

[KenH]

I emailed him after his Tuesday night show and I emailed him after his Wednesday night show, Joseph.

I haven't heard from him. Maybe he is hiding from me and refusing to deal with the truth I presented to him.

 

[carpro]

Originally posted by Joseph_Botwinick:
</font><blockquote>quote:</font><hr />Originally posted by carpro:
This issue has been investigated in other times of rapid rises in fuel prices. Politicians like to use this issue for more media face time.

Nothing illegal is ever found.

Just the market place at work.

You are also correct that it is a matter of the free market working the way it works. Thus, is the reason that consumers should send a message to the oil companies by cutting back their demand.

Joseph Botwinick </font>[/QUOTE]That is the only thing I can guarantee will work.IMO

 

[KenH]

Considering the fact that the demand for gasoline is currently outstripping the supply of gasoline in the U.S., conservation would be a good idea.

I traded in my pickup in May for a Honda Accord. That looks like a great move now on my part.

 

[Joseph_Botwinick]

Originally posted by KenH:
I emailed him after his Tuesday night show and I emailed him after his Wednesday night show, Joseph.

I haven't heard from him. Maybe he is hiding from me and refusing to deal with the truth I presented to him.

Perhaps you are correct. We will see if he happens to mention your e-mail.

Joseph Botwinick

 

[KenH]

Originally posted by Joseph_Botwinick:
We will see if he happens to mention your e-mail.

I doubt it. I think he is more interested in the email response to his verbal fracas with Phil Donahue on Wednesday night over Cindy Sheehan and the Iraq war.

 

[billwald]

Still waiting for someone to explain why gas should be sold for less than people are willing to pay. There are always options. You say you live 30 miles from your place of work? You can move, get a motorcycle, or sleep in a camper and go home on weekends.

 

[Johnv]

Other than some gouging here and there by local gasoline stations, I doubt that anything will come of this.

Oil companies have been investigated more times than I can count. There's never been evidence of price-fixing. I don't expect the outcome here to be any different, especially in light of the fact that, when adjusted for inflation, gasoline is still cheaper than it was 20 years ago.

Originally posted by KenH:
Sometimes I think that spoiled Americans think they have a right to $1.00/gal. gasoline. Well, I've got news for them - they don't.

We consumers can get the price that low if we want. We simply need to greatly reduce our use of oil, which will result in much supply and litle demand. That will result in the lowering of gas prices, probably well below 1.80 per gallon.

But we don't want to do that. We want it good, fast, and cheap. When told we can have 2 of the three, we take good and fast, and complain about the cheap.