[*BCM*] The price of gasoline has lots of inputs
Thomas John Vitolo
tjvitolo at bu.edu
Wed Jun 7 10:28:44 EDT 2006
Gas prices are up, but it's not as simple as the two reasons you cite.
It's true that global demand (China and to a lesser extend, India) is up.
It's true that the MTBE additive was banned -- but the rest of that claim is
wrong. The MTBE additive was banned because it poisions ground water and has
been linked to cancer. It wasn't banned with three months lead time -- it was
banned with *years* of lead time -- the first legislation bassed in the year
2000. The reality is that the refineries didn't bother to make sure that they
were prepared, knowing full well that they had a rather captive audience.
Additionally, ethanol absorbs water and so can't be shipped by pipeline
pre-mixed with gasoline (unlike MTBE), and there were transportation issues.
The fault doesn't lie with a Congress interested in preventing health risks.
The fault lies with the refiners who didn't secure the necessary supply chain
Some other reasons why price is higher:
* GWB's war in Iraq reducing available supply from Iraq.
* GWB's squabbling with Iran resulting in jitters on the market, a market
concerned that Iran will both cut its supply and slow up the Strait of Hormuz.
* GWB's squabbling with Chavez in Venezuela, resulting in more jitters.
* tUSA's high tax on imported ethanol ($0.54/gallon) restricting supplies of
* Gas prices always go up around Memorial day, because people like to drive
more in the summer, particularly on vacation weekends.
* There was that small rainstorm in New Orleans which tUSA's FEMA wasn't
prepared for, resulting in a dramatic reduction in the ability for tUSA to
convert crude to gasoline.
* Congress' policies on autos and SUVs/trucks over the past few years,
including the subsidy of vehicles more than 6,000 lbs GVW, as well as a refusal
to improve CAFE substantially for many years.
* tUSA still using oil to make electricity -- including 26% of MAs electricity.
Pushing alternative energy sources in New England, Florida, and Hawaii would
reduce the amount of oil used in tUSA to generate electricity (about 2.5% of
tUSA's oil use), freeing up some more supply.
* tUSA's increasing of the speed limit from 55 to 65 to 70, 75, or 80.
Reducing back to 55 (and enforcing) would save about 15% of all gasoline
consumed in tUSA.
It's far more complicated than you make it out to be, and it's the result of bad
energy policy for many many years -- particularly the constant massive oil, gas,
and coal subsidies while completely ignoring the chances to encourage growth in
the ag & tech industries of alternative (read: green) energy. That civil
engineers and city planners think progress is measured in the number of lanes
the local highway has doesn't help, nor does Congress' insistence that Amtrak
break even financially even though their services do lots of good in tUSA
(including reduce demand on oil).
But it's always easier to blame the Commies than to take responsibility for our
own actions as a society, isn't it.
Quoting Justin Wong <lilwong at bu.edu>:
> Right. It's all the SUV owners' fault= Such a trite, mind numbingly
> view. Gas prices are up this season for 2 major reasons. 1: global
> (think CHINA) 2: those idiots in congress that also don't know
> economics- see the last Energy bill, congress decided to switch gas
> additives to ethanol a few months ago, right before peak demand
> season, the
> refineries couldn't keep up...
> -----Original Message-----
> From: bostoncriticalmass-bounces at bostoncriticalmass.org
> [mailto:bostoncriticalmass-bounces at bostoncriticalmass.org] On Behalf
> David Hammond
> Sent: Tuesday, June 06, 2006 7:57 PM
> To: 'Boston Critical Mass'
> Subject: RE: [*BCM*] Be the change you want to see in the world.
> Yeah, Baby, let's give the hummer-lovers an issue they can rally
> around and
> elect far-right demagogues with. Maybe then the Republi-fascists can
> bikes altogether.
> And you're what? 125 - 300 lbs (guessing) on a <40 lb bike, and
> you're gonna
> run a 5000 lb SUV off the road? What are you - one of the squirrels
> on that
> Geico commercial? To which funeral parlor should I send flowers?
> Hey, even
> better: mention me in your will first.
> SUV owners should be ashamed and embarrassed, not righteously
> How can we sustainable transportation enthusiasts accomplish
> I have a horrendous, gut-wrenching, nauseating photo of an Iraqi
> machine-gunned by U.S. forces. Suppose prints of that photo with
> caption "Keep Gas Cheap" get shoved under SUV windshields? Or a
> "Katrina Thanks You, NOLA Hates You", in 48 point bold arial?
> Or how about conducting a NOLA-style funeral procession for the
> Earth, in
> the parking lot of a huge auto/SUV dealership, where everyone gets
> in front of the nightly news cameras?
> Or simply, how about a CM where folks pause at a busy intersection,
> point at
> the SUVs passing through, and shout "Shame, shame, shame!"
> "If you want to win, and not just make a grand gesture of defiance,
> do not
> adopt or accept your enemy's strategy, tactics, battlefield, choice
> weaponry, or process of propaganda" Leon Trotsky
> Let's get it right this time.
> Dave Hammond
> > Goddamn hippie liberal bullshit. I want to see a world where every
> > has four slashed tires and a gas tank full of sand. I don't want to
> > 'respect' motorists - I want to run them off the road.
> "(And so on...)
> Hmmmm. While Boston does seem to be a pretty good fit for you and
> world view, maybe you'd be even happier in Badhgad?
> been trying to leave Boston, and it's lovely worldview for a few
> years now,
> but appearantly not trying hard enough 'cause I'm still here..."
> "One day we must come to see that peace is not merely a distant goal
> seek, but that it is a means by which we arrive at that goal. We
> pursue peaceful ends through peaceful means." - Martin Luther King
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