Gas Prices Reaching All-Time High

[Diggin Jiggin]

I am ok with them drilling in alaska if they do it responsibly. But I bet we will not see this have any impact upon the price of gasoline.

The problem is not just the price of crude, it lies as much with our own energy infrastructure, the capacity to store heating oil and gasoline, our oil refinery capacity and our energy policy. It really seems like the refiners are basically holding all the cards. I just went to ask.com and did a search on US refinery capacity, as I knew I'd heard some funny stories about this... I'll throw in a link to it...

Here's the bottom line. Since 1981 the US oil refiners have closed 50% of the US refineries. So even if we had more crude, they could not refine more of it. They could build new facilities and refine more, but they have no incentive too. Until the govt steps in nothing will change, and with our energy friendly president don't hold your breath. Basically the refiners, like any good business, try to produce just enough to meet our needs. They want to operate to the minimum capacity needed, and they want HIGH prices for the gas that they produce.

Hey, if you can make 50 cents on a gallon of gas, or produce 2 gallons and make 25 cents per gallon, which would you rather do.... They make the same money either way, so why do more work?

I know this is a really complex issue and I am just looking at one little piece of it, but I really think that the only thing that will change when we get oil from alaska, is that the company that gets the oil rights to drill the oil will make a ton of cash, the refineries will get the crude cheaper so the oild companies will make a ton of cash, but there is very little incentive for them to pass along the savings to us. Did anyone notice when we had the gas price spikes last year that the oild companies recorded 'record profits'.

Its not like we are going to stop driving our cars. They will not produce More gas, so there will never be a glut of gas, which is what you would need to really see prices come down...


http://www.rgj.com/news/stories/html...sp7=local_news