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the ones willing to do the right thing for the right reason without regard to the political flack....
the Republicans
and Hillary Clinton...
If you need references just reply...for starters, read Bears book "Sleeping with the Devil"
I totally agree - but of course, you know he wasn't there to check out gas for me or you - he was checkin' to see what his stock was looking like when he leaves in january - my prediction - W. will be the richest ex-president ever in history of this country and his friend Dicke will be richest veepee when he leaves the house in Washington, DC
ron
http://video.google.com/videoplay?docid=3340274697167011147
you will have to copy and paste into the address.
I don't think you went far enough. Both parties are corrupt. These people are going to be the death of this nation.
I couldn't agree more my friend.
Yep, the same great country that produced those nice young men who visited the World Trade Center.
You couldn't be more right. How do you Arizonans feel about the success of your esteemed Senator?
I'll have to check it out. Thanks.
http://minutemanpost.blogstream.com for some more comprehensive ideas regarding this matter.
the esteemed senator from Arizona is esteemed variously by different people. There are many conservatives are holding their noses this year as they vote for the GOP flag bearer. There are some GOPers who will sit this one out. There are others who are abandoning the GOP ship and swimming over to the D ship.
ron
In regards to your "OIL" question above: Here's what "I" earlier posted in a thread (Oil Shortage) at my blog site:
I just saw the five biggest Oil Company Executives/ceos on C-SPAN at a congressional hearing a short while back. Each said, that the REAL price of ONE BARREL OF OIL is about $60 a barrel in actual costs/terms.
They ALL stated, PUBLICLY, that ''SPECULATION'' accounts for the OTHER HALF of the selling price of one barrel of oil.
So, EVERY TIME someone in our current 'administration' gets on t.v. and sabre rattles against our enemies, etc., it just only FEEDS the PANIC and FRENZY of speculators.
So, THIS DUMB old GRUMPY geezer's advice to said admins:
SHUT UP! YOU are KILLIN' us REGULAR citizens!
YES, there ARE BAD people and BAD countries in the WORLD. Always have been .... Always WILL be.
But, just send our 'DIPLOMATS' to these BAD BOYS' countries to TELL them in PRIVATE whatever you want to TELL them!
PUBLIC THREATS to these IDIOTS only make them bolster 'their' feeble world arguments that the MIGHTY U.S.A. are BULLIES once again.
STOP playing 'their game'!
THEY know and WE ALL KNOW, that ANYTIME the U.S.A. WANTS to or NEEDS to ''take care of someone or some country'', it CAN and it WILL happen!
Again, Close thy lips! It's like threatening your 'kids' at home a GAZILLION times. STOP IT!
Either DO something or STOP the MULTIPLE threats! After awhile, the KIDS turn the parents OFF because they've heard it a GAZILLION times. Psychology 101. ~SIGH~
The OTHER thing contributing to AMERICA's price of oil being bought is the FALLING DOLLAR! .... WE pay about 50% MORE than MOST other countries because of our WEAK currency against global money market exchange rates, etc.!
GOTTA' FIX that one, also, folks!!
FINALLY: GRUMPY, old TallPockets is a COMMON SENSE type o' fella' ....
So, would SOMEONE please explain to him, just HOW it is that a SHORT time ago, the price of one barrel of oil was about HALF of what it NOW is?
Yet, to MY readings and such, I've NOT seen a DOUBLING of WORLD WIDE USEAGE of said OIL in that SAME time frame/period?
This DUMB old man could 'understand' it IF ACTUAL USEAGE of OIL HAD, indeed, DOUBLED in the SAME window of time. But, it HASN't. So, WHAT gives?
"SPECUALTION, SPECULATION, SPECULATION" ....(Panic, Panic, Panic) .... Grrrr ....
Hmmm .... maybe TallPockets should walk up to the LOVELY lady he saw last week at the 'grocery' store and SMILE at her and tell her:
"Hello, good lookin'. I'm SPECULATING that life will get more stressful very soon for you and for me, so with that in mind sweetie, would you please come home with TallPockets for the next few nights?
Just IN CASE my 'speculations' come true!
WINK.
(T.P. 'speculates' even THAT line won't work for him!) .... GRIN.
One comforter short of a really nice waterbed yours ....
TallPockets.
BTW 3:
TallPockets saw the famous OILMAN T. BOONE PICKENS last week on C-SPAN doing his YEARLY inteview with them at Georgetown University on ENERGY matters.
T. BOONE said a few things that caught this old man's attention ....
(1) IF we used CORN for ETHANOL to replace the oil/gas used for CARS, etc., we'd have to plant about 98% of EVERY ACRE of LAND in America. Needless to say, T. Boone thought that wouldn't be a possibilty. WINK?
(2) The inclination to use CORN based ETHANOL is going to DRAMATICALLY INCREASE FOOD prices across the board. NO kiddin'!
(3) T. Boone said it takes more energy to make a gallon of Ethanol than one gets OUT of one finished gallon product. ???
(4) T. Boone said HE would SWITCH to NATURAL GAS, which he says we have in GREATER abundances and is EASIER to get to and is MUCH CLEANER burning for our climate/atmosphere and try to get AS MANY VEHICLES on NATURAL GAS for TRANSPORTATION in America.
He would then use the balance needed with OIL based products for HEATING, etc.
(5) He said NUCLEAR plants were MUCH more desirable in the energy area these days and there is MUCH SAFER technologies available then back in the THREE MILE ISLAND days of nuclear reactors.
(6) REFINERIES: T.BOONE said he kept 'hearing' that we haven't built a refinery in YEARS. He said, while that WAS true, he said the OIL companies HAD INCREASED the SIZE and PRODUCTION OUTPUT CAPABILITIES of the EXISTING refineries.
AND (get THIS folks!), T. BOONE said that PRESENTLY, the OIL companies are operating at about 82% of MAXIMUM CAPACITIES! .... HEAR THAT folks???
T.BOONE went on to say that about 90% operating efficiencies is where HE would say would be FINE .... GRRRR ....
(7) T.BOONE has his OWN ENERGY company now. He's bought HUGE WATER rights (UNDERGROUND/WATER TABLE - NOT 'surface' waters). He says WATER will be the NEXT highest COMMODITY and SOONER than we think!
(8) He also stated that he's investing in the BIG WINDMILLS/turbine driven and they can make a BIG DENT in ENERGY in many states like Texas and the PLAINS.
(9) Finally: T. BOONE said RUDY GIULIANI was gonna' have HIM as his ENERGY EXPERT on his Prez' Campaign. However, T. BOONE said that RUDY NEVER MET with him ONCE about ENERGY problems/issues/solving in America these days. But RUDY DID apparently, according to T. BOONE, send RUDY MANY LETTERS .... requesting CAMPAIGN MONEY DONATIONS to RUDY's campaign for Prez'.
T. BOONE was NOT amused by that. SMILE
Later all .... I'm OUTTA' ENERGY after typing all this. AND, I need a HIGH BLOOD pressure pill .... OR TWO .... OR THREE.
WINK.
TallPockets.
by TallPockets For Prez 2008 (PM , CC ) on Friday May 2, 2008 @ 9:47 AM
SIGH.
My BEST to you and yours,
TallPockets.
I think you just earned my vote in the upcoming election. I have noticed that you propose solutions. Too bad that can't be said of the special interest lap dogs in D.C. Some things just make sense, yet those are the things we never hear. May God bless you and yours.:)
MR.P: HELLO, again. MY APOLOGIES for using YOUR site so much on THIS topic! However, this old man feels it a PRIORITY for ALL kinds of reasons, this issue.
I will next post TWO ONLINE articles for YOU and ALL reading this topic! GREAT SUBJECT POST, Mr.P!!! ........
Oil price spike has wide economic impact
Continued surge could spark 'something worse than a mild recession'
By John W. Schoen
Senior Producer
MSNBC
updated 6:17 p.m. ET, Thurs., May. 22, 2008
As dire forecasts about runaway oil prices become reality, it’s impossible to know how much higher they’ll go. But the impact of the price surge already is being widely felt. And if prices go much higher, the damage to the U.S. economy will be deeper and wider than the fallout from the run-up so far.
Oil prices have doubled in the past year and have shot up nearly 50 percent since January to a record $135 a barrel. Much of the rise appears to be driven by speculators betting that tight supplies — or outright shortages — will push prices even higher.
Consumers — already hit with rising prices and flat wages — are being stretched further. As the Memorial Day weekend kicks off the summer driving season, gasoline prices are at record levels, reaching a national average above $3.83 a gallon. Some analysts predict the average will break past $4 as early as next week. In some parts of the country, prices are already closing in on $5.
“We're already in a mild recession,” said Lakshman Achuthan, an economist at the Economic Cycle Research Institute. “I think if we go towards $150 (a barrel), we start talking about something worse than a mild recession.”
The surge in oil prices is hitting some parts of the economy harder than others. Companies that use lots of oil have already been hurt; the recent surge will only make matters worse.
Airlines have been struggling to make a profit, even as they cut jobs and flights. American Airlines became the latest to announce it was tightening its belt another notch, saying Thursday that it plans to shrink capacity by as much as 12 percent and cut thousands of jobs.
To offset the rapid rise in jet fuel prices, the airline also said it plans to start charging passengers $15 to check the first bag of luggage for each passenger. United Airlines said it’s considering a similar move. The carriers already charge $25 for a second bag.
“(Higher oil prices are) going to send some smaller airlines into bankruptcy," said Nick van den Brul, an airline analyst at the French investment bank, Exane BNP.
Surging gasoline prices are further dampening sales at U.S. carmakers, whose product lines are more heavily oriented toward higher-profit, lower-mileage trucks and SUVs than their foreign competitors.
Ford Motor Co. said Thursday it’s cutting production by 15 percent in the second quarter of this year and another 15 to 20 percent in the third quarter. Ford now says it won’t hit its target of getting back in the black by next year and may have to lay off more workers and close more plants.
Some parts of the economy will hold up relatively well; companies and regions that produce oil will do better. Oil companies are enjoying a spike in profits because production costs have not risen nearly as rapidly as market prices. Those higher profits could help boost local economies in regions where oil and natural gas are produced.
But those benefits will be more than offset by the negative effects of the surge in energy costs. Higher oil prices have already begun to spill over into higher costs for a variety of products and services, including food prices.
The threat of higher inflation makes life even more complicated for policymakers at the Federal Reserve, who have been slashing rates for nearly a year to try to offset the fallout from the housing slump and turmoil in the credit markets.
The surge in oil prices could force the Fed to reverse course and begin raising rates — before the benefits of those rate cuts have had time to take hold. Minutes of the Fed's April policy meeting, released Wednesday, indicated that the central bank could start raising rates in the fall.
The biggest concern is the potential impact on consumer spending, which accounts for about 70 percent of U.S. economic activity. Consumers have already been hit by the slump in housing prices — eliminating the equity "piggy bank" that many homeowners tapped as prices were rising. Home prices fell 3.1 percent in the first quarter of 2008 compared with last year, according to data released Thursday by the government’s Office of Federal Housing Enterprise Oversight.
Another widely followed reading, the Standard & Poor’s/Case-Shiller index, has shown even larger declines for major U.S. metropolitan areas.
Rising gasoline prices are one more burden on consumers. Economists estimate that every additional penny at the pump takes roughly $1 billion out of overall spending. Taxpayers getting rebate checks designed to revive spending and get the economy moving again have already spent much of that bonus to gas up their vehicles.
So far, there seems to be enough oil and gasoline to go around: Refineries are still adequately supplied with crude, and gas stations aren’t running out of fuel.
Prices are surging as traders see an increased risk of that happening. But that so-called panic buying could quickly reverse, sending oil prices sharply lower.
“This is all about psychology, and we are not very good at oil companies about forecasting the psychology of prices," Jeroen van der Veer, CEO of global giant Royal Dutch/Shell, said on CNBC Thursday. “So we'd better prepare ourselves for more volatility because if this is psychology, it can change very quickly.”
The spike in oil prices also has brought calls for government action, despite the limited short-term impact those responses could have. The Department of Energy has suspended purchases of oil for the Strategic Petroleum Reserve.
But Energy Secretary Samuel Bodman said Thursday he did not support the idea of selling oil from the reserves to try to drive down oil prices.
The petroleum reserve "is meant to deal with ... the physical interruption of the flow of oil to our country. We don't have that issue today," Bodman told a House hearing.
The last such move came in September 2005, when the U.S. released millions of barrels of oil from its reserves as part of a coordinated effort by the International Energy Agency to head off possible shortages. But the amount conrolled by the United States is a relative drop in the global barrel and would likely have little impact on market prices.
The price surge has also revived debate on U.S. energy policy. Some longer-term proposals that have failed to win the support of the majority in Congress, like opening up new areas of the U.S. for oil drilling, may now get another look.
“We have to expand domestic exploration, we have to add additional new refineries, we have to add nuclear power into our electricity grid portfolio, we have give rewards for conserving energy and have to continue to invest in research and development,” Rep. Adam Putnam, R- Fla., said Thursday. “We have to have an ‘all of the above’ energy policy.”
© 2008 MSNBC Interactive
URL: http://www.msnbc.msn.com/id/24778287/
Oil execs defend huge profits before Senate
‘Laws of supply and demand are at work,’ Shell chairman explains
The Associated Press
updated 6:58 p.m. ET, Wed., May. 21, 2008
WASHINGTON - Since regular people are scrimping to pay for gasoline to go to work, Sen. Patrick Leahy wanted to make it personal for the men of Big Oil.
How much money did you make last year? the Vermont Democrat asked the top executives of the country’s five biggest oil companies. They had been summoned to a Senate hearing to explain the extraordinarily high cost of oil and gasoline and their companies’ profits.
Three executives said their compensation was in the millions. Two said they didn’t know.
“I wish I made enough money that I didn’t know how much I make,” replied Leahy with no intention of hiding the sarcasm.
It was a tone that dominated the oil executives’ appearance Wednesday before the Judiciary Committee, a panel that Leahy chairs.
It was the second time this year that the executives of Exxon Mobil Corp., Chevron Corp., BP America Inc., ConocoPhillips Co. and Shell Oil Co. had been summoned to testify before Congress. When they came in early April oil cost about $98 a barrel. On Wednesday, it bounded past $134 a barrel for a time and gasoline cost a national average of $3.80 a gallon.
The executives, whose companies reported $36 billion in profits during the first three months of the year, wanted to talk about tight supplies and growing global demand. They said that while the companies made billions of dollars, they also spent billions to find and produce more oil.
But senators complained the executives were trying to come across as “hapless victims” while raking in record profits. They wanted to press the executives about public anguish over paying $60 or more to fill up a car’s gas tank.
“Where is the corporate conscience?” Sen. Dick Durbin, D-Ill., asked.
“People we represent are hurting, the companies you represent are profiting,” Leahy told the executives. He said there’s a “disconnect” between legitimate supply issues and the oil and gasoline prices motorists are seeing.
Sitting shoulder to shoulder in the hearing room, the oilmen said they understood people were hurting, but they tried to blunt the emotion with economic analysis.
“The fundamental laws of supply and demand are at work,” said John Hofmeister, chairman of Shell Oil Co., acknowledging it is something the oil industry has been saying for some time and that the explanation may sound “repetitive and uninteresting.”
Profits have been huge “in absolute terms,” conceded J. Stephen Simon, executive vice president of Exxon Mobil Corp., but they “must be viewed in the context of the massive scale of our industry.” And high earnings “in the current up cycle” are needed for investments in the long term, including when profits will be down.
“’Current up cycle,’ that’s a nice term when people can’t afford to go to work” because gasoline is costing so much, replied Leahy with sarcasm.
The exchanges got personal with Leahy wanting to know how much the executives earned last year.
It’s $12.5 million in total compensation, said Simon, the Exxon executive.
John Lowe, executive vice president of ConocoPhillips Co., said he didn’t recall his total compensations, nor did Peter Robertson, vice chairman of Chevron Corp. Hofmeister said his was “about $2.2 million” and not among the top five salaries at his company’s international parent. Robert Malone, chairman of BP America Inc., put his “in excess of $2 million.”
The executives said restrictions on U.S. oil and gas development is adding to the tight supplies and that they’re worried about being targeted for possible new taxes.
“I urge you to resist these punitive policies,” said Hofmeister.
It was not what many senators wanted to hear.
You have “just a litany of complaints that you’re all just hapless victims of a system,” Sen. Dianne Feinstein, D-Calif., told the executives. “Yet you rack up record profits ... quarter after quarter after quarter.”
One senator after another cited the pain that high energy prices are causing farmers, small businesses and people trying to find a way to afford a vacation trip this summer.
“Is there anybody here that has any concerns about what you’re doing to this country with the prices that you’re charging and the profits that you’re taking?” Durbin asked.
The titans of America’s oil industry sat quietly for a moment.
“Senator,” replied Exxon’s Simon, “We have a lot of concern about that. And we’re doing all we can to put downward pressure on prices.”
© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
URL: http://www.msnbc.msn.com/id/24757944/
About one month PRIOR to the intial March invasion of IRAQ in 2003, Oil was selling for approximately $24 a barrel! Now, it's as high as $135 dollars a barrel. I'll leave the MATH numbers up to ALL here to figure out. SIGH.
The world has 'reacted' to what has SINCE happened. It is now, has been, and will CONTINUE to operate of FEAR and SPECULATIVE commodity oil prices bidding panic UNLESS/UNTIL the FEAR equation is REDUCED to a MORE MANAGEABLE level.
WE MUST tone DOWN the RHETORIC! I liken it to the Great Depression days when folks PANICKED and did BANK RUNS and withdrew all their monies or tried to before all COLLAPSED. Will we NEVER learn, Mr.P?
GREAT nations of HISTORY have COLLAPSED. Most not from FORCE, but from ECONOMIC inequity and solvencies and from WITHIN it's structural defects. HISTORY 101. SIMPLE as that. SIGH.
My BEST and THANKS again, for allowing this old man to VENT on your site. My apologies, once again. Feel free to RETURN such favor ANYTIME at MY feeble site. SMILE.
Blessings to you and yours,
TallPockets.
AP IMPACT: What makes up the price of gas?
By JOHN PORRETTO and JOHN WILEN
AP Business Writers
The Associated Press
updated 12:02 a.m. ET, Sat., May. 24, 2008
Consider the game of chicken that plays out every day across Pennsylvania State Highway 441. In Marietta, where the road hugs the Susquehanna River, a Rutter's Farm Store gas station stands on one side, a Sheetz gas station on the other.
Kelly Bosley, who manages Rutter's, doesn't even have to look across the highway to know when Sheetz changes its price for a gallon of gas. When Sheetz raises prices, her own pumps are busy. When Sheetz lowers prices, she has not a car in sight.
She calls Rutter's headquarters to report the competition's new price and wait for instructions.
"I call a lot of times and say, 'They went down, hurry up! Hurry up! Call me! Call me!' Or it could be where theirs goes up, and I'll say, 'Take your time! You know, I like being busy.' But I have no control over that."
You think you feel helpless at the pump?
Bosley makes a living selling gas — and even she has little control over what it costs.
So how exactly are gas prices set? What determines the hair-pulling figure you see displayed in large electronic or plastic numbers? Why is a gallon of gas, say, $4.11 — not $4.10 or $4.12? Why is the price different across the street?
It all starts with oil.
The biggest factor in the skyrocketing price of gasoline is the historic ascent of crude oil, which has surged from $45 per barrel in 2004 to more than $135 this past week, setting new record highs all the while.
In the first quarter of this year, based on a retail price of gas that now seems like a steal — $3.11 a gallon — crude oil accounted for all but about a dollar, or 70 percent, of the cost, according to the federal government.
The rest is a complex mix of factors, from the cost of turning oil into gas to taxes to marketing costs to, sometimes, nothing more than the competitive whims of your local gas station owner.
Not that understanding the breakdown makes it any less cringe-inducing to fill 'er up.
___
First a primer on how gas gets to your tank:
Once oil is pumped from the ground, it can be sold on the spot market, a last-minute trading arena where oil companies and distributors buy and sell to each other, or straight to refiners. After it's brewed into gasoline, the product can again be sold on the spot market, or directly to wholesalers, who in turn can supply their own stations or sell it to other retailers.
Each step of the way, buyers and sellers negotiate a price until, finally, drivers pay the ultimate tab at the pump.
At the starting point of all this is the price of oil — which, like the oil itself, is nothing if not crude.
The knee-jerk villains are the oil companies, fat with multibillion-dollar profits, frequent targets of populist anger. But wait: The oil companies don't set the price of oil or the cost of a gallon of gas.
Prices are a function of the open market, the result of futures contracts being traded on the New York Mercantile Exchange, or Nymex, and other exchanges around the world.
Buying the current July crude oil futures contract means you're buying oil that will be delivered by the end of July. But most investors who trade futures have no intention of ever accepting the underlying oil: Like stock investors who frequently buy and sell their holdings, they're simply betting that prices will rise or fall.
Of late, on the Nymex, oil futures have been rising.
Why? Blame the falling dollar. Oil is priced in U.S. dollars, and the weaker the dollar gets, the more attractive dollar-denominated oil contracts are to foreign investors — or any investor looking for a safe haven in the turbulent stock market.
The rush of buyers keeps pushing oil futures to a series of new records, and the rest of the energy complex, including gasoline futures, has followed. That pushes up the price of gas that goes into your tank.
"Crude is the driver," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill. "As long as it stays up there, gasoline's not going to be able to decline much at all, even if demand slips. That's just the way it is."
There is some evidence Americans are buying less gas as the price marches higher, and common sense suggests they would cut back even more if gas rose to $4.50 or $5 a gallon.
Lower demand should mean lower prices — but it takes time for that to happen, given the enormous scale of refining operations that produce gasoline.
"Once demand begins to slow, that needs to translate into inventories, then you get some price weakening," Ritterbusch said. "But it takes a while."
Oil and gasoline prices often move in the same direction, but they aren't linked directly. In fact, while oil prices have more than doubled in the past year, gasoline is only up about 19 percent during the same time.
Oil prices often fluctuate with production decisions from the Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world's crude, or when conflict in the Middle East or Nigeria threatens supplies.
For example, oil prices rose $2.46 in one day last month amid reports a ship under contract to the Defense Department fired warning shots at two boats in the Persian Gulf that may have been Iranian.
A Navy spokesman later said the origin of the boats was unclear, but the news raised concerns that a conflict between U.S. and Iranian forces could cut oil supplies from the region. That same day, gas prices rose another 2.1 cents to a then-record national average of $3.577 a gallon on other supply concerns.
And the rise has only grown more dramatic. Oil sprinted higher this past week, rising more than $4 a barrel on Wednesday alone and past $135 on Thursday.
As for gasoline prices: They're closely tied to demand from U.S. drivers and how efficiently refineries are operating. Falling production or inventories often send prices skyrocketing.
Those prices can vary greatly depending on the region.
The Gulf Coast is the source of about half the gasoline produced in the United States, and areas farthest from there tend to have higher prices because of the cost of shipping gas via pipeline and tanker truck all over the country.
Some of those places, like California and New York, also have higher local taxes that push the price higher.
Oil companies may not set the price of oil and gasoline, but not everyone is willing to sit back and let them claim to be innocent bystanders.
In particular, for the second time this year, Big Oil's biggest executives were on Capitol Hill in recent days getting pummeled by many in Congress for their record profits while Americans struggle with record fuel prices.
"Where is the corporate conscience?" Sen. Dick Durbin, D-Ill., asked the top executives of the five largest U.S. oil companies.
___
Soaring gas prices have led to cries for a variety of answers, from Hillary Rodham Clinton and John McCain's suggestion to suspend the federal gas tax this summer to President Bush's call to open the Arctic National Wildlife Refuge in Alaska and some offshore waters that are now off limits to oil development.
Others have suggested a windfall profits tax on oil companies, although some economists say that might actually hurt supply. Oil companies say they're not to blame for spiking fuel prices, and their earnings, measured against revenue, are in line with other industries.
On top of that, rising oil prices have sharply cut profit margins for refining, and that hits the major oil companies — which both pump oil and refine it for use as gasoline.
A giant like Exxon Mobil can handle the blow. Its refining and marketing profits for the first quarter were down 39 percent from a year ago, but Exxon still banked a nearly $11 billion profit because of the hefty prices earned on crude it pumped out of the ground.
Smaller refiners aren't so fortunate. Sunoco Inc.'s refining and supply business lost $123 million in the first quarter, hurt by lower margins. Tesoro Corp. lost $82 million for the same period.
In any case, huge profits at big oil companies like Exxon Mobil and Chevron aren't because of high prices at the pump. Their massive profits are tied to their exploration and production arms, which are benefiting from record crude prices.
Higher crude costs also have squeezed profits at the refining arms of companies like ConocoPhillips, which don't produce enough crude themselves to refine at full capacity without buying more oil from other producers.
CEO Jim Mulva said ConocoPhillips, the second-largest U.S. refiner behind Valero Energy Corp., buys about 2 million barrels of crude a day at market prices to refine into gasoline and other products.
"If oil costs us $30 a barrel or $40 a barrel or $120 a barrel, that's why the cost of gasoline is what it is," he said. "It's not because of taxes. It's not because of ... refining and distribution. It's because of the cost of oil."
___
But it's not only about the price of oil. Other costs are a factor — though they've remained relatively stable.
For example, federal and state taxes added 40 cents to a gallon of gas in the first three months of this year, roughly the same amount as they added four years ago.
California's 63.9 cents of tax is the nation's highest, Alaska's 26.4 cents the lowest. How the money is used varies from state to state, though the federal take helps to build and maintain highways and bridges.
Marketing and distribution costs — the tab for delivering gasoline from refiner to retailer — were 27 cents to start the year, only 6 cents above the cost four years ago.
The cost of refining added 27 cents to a gallon in the first quarter of this year, a nickel less than what it added in 2004, according to the Energy Information Administration.
That refining occurs at sprawling industrial complexes across the U.S., with most of the biggest along the Gulf Coast. Barrels of crude arrive each day by pipeline, ship and barge. The refineries, by heating, treating and blending the raw oil, turn out products like diesel and lubricating oil.
And, of course, gasoline.
___
What happens when that gasoline makes its way to your neighborhood gas station?
Major oil companies own fewer than 5 percent of gas stations. Most are owned by small retailers — and many of them say they're struggling these days to turn a profit on gas. That's because wholesale gasoline prices have risen sharply in recent months — again, blame it on crude — but station owners have been unable to raise pump prices fast enough to keep pace.
And you can't keep jacking up the price when drivers are buying less.
Gas station owners face a balancing act: They must try to maintain a price that allows them to afford the next shipment of gasoline but not give the competition an edge.
Stations pay tens of thousands of dollars for each gas shipment before they see a cent in the register. Eventually, many make only a few cents on a gallon of gasoline, a margin that can disappear altogether when credit card fees are added in.
Thank goodness for beef jerky and sodas.
Most gasoline retailers long ago got past any illusion they can make money by selling gas. They rely on gas sales to drive traffic to their shops, where they hope auto repairs or food and drink sales will help them turn a profit.
"You're always out there competing with the guy next door — literally with the guy across the street — and worried too about how you're going to pay for your next supply," said Rayola Dougher, a senior economic adviser at the American Petroleum Institute, the oil industry's trade association.
In the Philadelphia suburb of Havertown, Pa., earlier in the week, Sunoco station operator Steve Kehler received a load of gasoline — 9,000 gallons — which, at a wholesale price of $3.729 a gallon, cost him 4 cents more than the previous load.
That left him in a sticky situation: Should he raise prices right away to recoup some of his higher gasoline expenses, or should he hold off for a couple of days in hopes his competitors will also have to raise their prices?
"I'm surrounded by $3.89's, and I'm already at $3.91," said Kehler, referring to his prices and those of some nearby competitors. "I'm going to play a little waiting game right now."
The $33,600 Kehler must pay for his overnight gasoline delivery won't be debited from his bank account for a few days. That gives him a little breathing room, time to hold prices steady. Hiking prices too quickly will hurt sales.
"I'll probably change it tomorrow night, at closing," Kehler said. "I'll go up 4 cents."
That will put Kehler at a gross margin of about 20 cents a gallon. After paying credit card fees, labor and rent, Kehler will be lucky to break even on his gasoline sales.
But many times, he loses money selling gas. Kehler, like most other service station operators, relies entirely upon his car repair business for income.
Of course, the plight of retailers is little consolation for drivers.
Mayra Perez said she works two fast-food jobs to help support her family, and gasoline is becoming harder to afford. She said perhaps the government should step in to help ease the burden, possibly by placing price limits on gasoline.
She was filling the tank of her compact car in Miami this past week to the tune of $3.89 per gallon for regular gas.
"This is horrible," she said. "On the weekend, my husband and I use only one car to save on gas.
"But then there's the cost of food, milk, eggs, the rent."
___
AP Business Writer Adrian Sainz in Miami contributed to this story.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
URL: http://www.msnbc.msn.com/id/24794469/
This kinda sheds some light on that three ring circus we have going on up there on Capitol Hill doesn't it?
BUT NOT IN MY STATE!!!!!!!!!!!!!!!
NIMBY is alive well - and as long as this the case, we will not have a comprehensive energy policy in this country!
ron