The U.S. economy has digested surging energy costs in the past few years with little more than a hiccup. But now, some economists are warning, energy prices have gotten so high that the economy could lose steam. Not helping is the fact that the latest gains are coming as some economic cushions for consumers that have been in place for several years, such as a strong housing market, are slipping.

"At some point, we can't absorb it," National Association of Realtors chief economist David Lereah says. If oil prices stay at current levels, or go higher, "confidence is really going to come down. ... It is possible that this economy can get hit."

Oil prices in recent weeks have gushed to record levels, not adjusted for inflation, while the average price for regular gasoline is exceeding $3 a gallon in many parts of the USA. Gasoline prices have risen more than 40 cents in the last month.

In a USA TODAY survey of economists taken April 20 to 25, 40% said higher energy prices are the No. 1 risk for the economy. While other risks were cited, such as a decline in the housing market and terrorism, energy was the top concern.

Economists mentioned that higher energy prices pose potential troubles for both economic growth and inflation.

While none of the economists forecast a recession - or even a single quarter of declines in economic output - this year, some said higher energy costs might act as a significant drag and warned it could get worse.

"If (energy prices) were to go up significantly higher, then I think recession would get up on the screen," DuPont corporate economist Robert Shrouds says.

http://news.yahoo.com/s/usatoday/20060427/bs_usatoday/energypricescoulddrainenergyoutoftheeconomy

Good reason for the government to drop fuel taxes.

Good reason for the government to drop fuel taxes.


Yea, 18 cents a gallon will make a huge difference when the oil companies are gouging you for 4 bucks a gallon..:rolleyes:

They should cap it at a buck

Yea, 18 cents a gallon will make a huge difference when the oil companies are gouging you for 4 bucks a gallon..:rolleyes:

They should cap it at a buck

That's more profit than the oil company makes, and the government doesn't do anything to produce the gasoline. I pay $2.85/gallon right now. If you eliminate the government's profit (18cents) and the oil company's profit (7cents), that leaves me paying $2.60/gallon. You want to cap it at $1.00. Just how long do you think you will be able to buy gas at all when the oil company LOSES $1.60/gallon?

Yea, 18 cents a gallon will make a huge difference when the oil companies are gouging you for 4 bucks a gallon..:rolleyes:

They should cap it at a buck


Then you would be insisting that gas companies lose over $3 a gallon just because you are unwilling to make the necessary lifestyle changes to support you gasoline habit.

The ban on oil drilling in Alaska isn't helping.

Other things that are Not Helping:

- low margin requirements on futures; speculation adds $5-$10 per barrell
- state and local regulations requiring custom formulations which prevent oil companies from using excess capacity in one area to supply demand in another
- no refineries have been built in the U.S. since the 70s

Oh yeah, let's not forget the requirments for ethanol content that were put in place in a misguided attempt to help out the corn industry.

I know a guy here who's gasoline bill went from $60 dollars a month to $250.

All the oil in Alaska and Canada amounts to about 3 months supply. That won't help anything.


-

Dont worry about us in Canada. We have the oil sands in Alberta.
So I keep waiting to hear that we are harboring weapons of mass destruction and should be invaded.

You're right, gas prices will continue to rise regardless of what we do in America, because the global demand for oil is rising as China's economy grows. All we can do is research alternative energy sources, and find ways to benefit from China's growth.

Hey, I hear you can get stuff manufactured there for cheap!

That's more profit than the oil company makes, and the government doesn't do anything to produce the gasoline. I pay $2.85/gallon right now. If you eliminate the government's profit (18cents) and the oil company's profit (7cents), that leaves me paying $2.60/gallon. You want to cap it at $1.00. Just how long do you think you will be able to buy gas at all when the oil company LOSES $1.60/gallon?


You're numbers are BS..

Gas has gone up over a $1.35 a gallon here with only a ten dollar increase in price per barrel.

Why can't you guys face up to the fact we're being screwed?

Then you would be insisting that gas companies lose over $3 a gallon just because you are unwilling to make the necessary lifestyle changes to support you gasoline habit.


Do you ever have anything constructive to add besides your trolling?

Gasoline prices are not just a function of the price of oil in the spot market.

Other things that are Not Helping:

- low margin requirements on futures; speculation adds $5-$10 per barrell
- state and local regulations requiring custom formulations which prevent oil companies from using excess capacity in one area to supply demand in another
- no refineries have been built in the U.S. since the 70s


All I see is excuses, excuses as to why the poor poor oil companies can'y lower the price for us as they make world record corporate profits..:rolleyes:

Funny how you'll never admit that the only reason no refineries have been built is because the oil companies don't want to build anymore so they can artificially keep the price higher than it should be..


FTCR: Internal Memos Show Oil Companies Intentionally Limited Refining Capacity to Drive Up Gasoline Prices

The Foundation for Taxpayer and Consumer Rights (FTCR) today exposed internal oil company memos that show how the industry intentionally reduced domestic refining capacity to drive up profits. The exposure comes in the wake of Hurricane Katrina as the oil industry blames environmental regulation for limiting number of U.S. refineries.

The three internal memos from Mobil, Chevron, and Texaco (available at http://www.consumerwatchdog.org/energy/fs/ show different ways the oil giants closed down refining capacity and drove independent refiners out of business. The confidential memos demonstrate a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage the major refiners to close their refineries in the mid-1990s in order to raise the price at the pump.

"Large oil companies have for a decade artificially shorted the gasoline market to drive up prices," said FTCR president Jamie Court, who successfully fought to keep Shell Oil from needlessly closing its Bakersfield, California refinery this year. "Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty."

"It's now obvious to most Americans that we have a refinery shortage," said petroleum consultant Tim Hamilton, who authored a recent report about oil company price gouging for FTCR. (Read the report at http://www.consumerwatchdog.org/energy/rp/ ) "To point to the environmental laws as the cause simply misses the fact that it was the major oil companies, not the environmental groups, that used the regulatory process to create artificial shortages and limit competition."



http://releases.usnewswire.com/GetRelease.asp?id=52755


No doubt we'll just hear more opinionated BS that's it's the environmentalists or the Chinese causing the price hikes..

:nonono:

^ The heartbreak of Micro-economic Illiteracy.

What you want CA is for oil companies to see gasoline to you at a loss.

^ The heartbreak of Micro-economic Illiteracy.

What you want CA is for oil companies to see gasoline to you at a loss.


The only illiteracy on display here is done by you since you can't seem to be able to comprehend the simplest things.

Quit tap dancing around the fact that the oil companies intentionally won't build new refineries to keep the price artificially high and either admit you were wrong or move on.

What's funny about all this is how astonishingly little rightwingers know about necessities vs. luxuries.

Such elitists...

You're numbers are BS..


You're right. They make 7-9cents/gallon, not 7. How careless of me. It took me 10 seconds to find this. How long did it take to arrive at the $1/gallon price?

An industry-wide study in the late 1990s showed that oil industry profits amounted to an estimated 7.3
cents on each gallon sold.1 More recently, ConocoPhillips reported that during the third quarter of 2005 earnings from its U.S. refining and marketing operations amounted to 9 cents per gallon. This compares with a national average retail price of $2.60 per gallon during the third quarter, the period of highest gasoline prices in 2005.


http://www.conocophillips.com/newsroom/other_resources/energyanswers/oil_profits.htm


Gas has gone up over a $1.35 a gallon here with only a ten dollar increase in price per barrel.

Why can't you guys face up to the fact we're being screwed?

You want to cap gasoline at $1/gallon. It costs more than that to produce that gallon. And you say MY numbers are Barbra Streisand?

What's funny about all this is how astonishingly little rightwingers know about necessities vs. luxuries.

Such elitists...

What's funny here is how elitist you are in your assumption that you know what's best for everyone, depite your complete lack of understanding of the fundamental tenets of economics.

All I see is excuses, excuses as to why the poor poor oil companies can'y lower the price for us as they make world record corporate profits..:rolleyes:

Funny how you'll never admit that the only reason no refineries have been built is because the oil companies don't want to build anymore so they can artificially keep the price higher than it should be..






http://releases.usnewswire.com/GetRelease.asp?id=52755


No doubt we'll just hear more opinionated BS that's it's the environmentalists or the Chinese causing the price hikes..

:nonono:


"The confidential memos demonstrate a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage the major refiners to close their refineries in the mid-1990s in order to raise the price at the pump." Different time, different business climate. Again, it appears that you desire everyone in the gasoline production chain be willing to lose money so you can pay $1/gallon.

I'd believe 9 cents a gallon back when it was a buck, but not at 3.50.

If they were just passing their higher costs onto the consumer they wouldn't be making the humongous profits that they are, which are breaking records every quarter.

Record prices.. record profits, caused by them gouging us.

ConocoPhillips, what an unbiased source...


The study by petroleum industry analyst Tim Hamilton showed, for example, that from January 17th to April 18th 2005 gasoline prices jumped 65 cents per gallon and refiner profits rose by 61 cents per gallon. The extra four cents went to the state in increased sales tax collection. The study concluded that California's percentage sales tax provides an economic incentive for government officials to promote high prices at the pump because they result in greater tax collection -- an estimated $1 billion more in California during 2005 due to the price gouging. The consumer group recommends a "windfall profits rebate" be instituted.

FTCR sent President Bush a copy of the study today and called upon him, in a letter, to warn oil companies against profiteering in the wake of Hurricane Katrina and issue an executive order prohibiting profiteering if necessary. (The full letter can be read at the end of the press release.)

"Oil company profiteering, not increased production costs, is the cause of the price spikes at the gasoline pump and Californians deserve their money back," said FTCR president Jamie Court, who served with Hamilton on the California Attorney General Gasoline Pricing Task Force. "Hurricane Katrina will only increase the probability of profiteering and should be a wakeup call to legislators."

"The continued failure of public officials to compel refiners to create more refining capacity and increase inventories will result in gasoline prices rising to $4 per gallon relatively soon," stated Hamilton. "The system is rigged for price spikes and the refiners know it."

The study examined the causes of the doubling of the average price of gasoline from $1.36 per gallon on January 03, 2000 to $2.72 on August 15, 2005. Among the main findings are:

*Increases in the prices charged for oil by OPEC countries are not primarily responsible for the dramatic increase in gasoline prices in California. Much of California's crude oil is harvested locally by major refiners who control their own fields. OPEC nations only supply approximately 20% of the oil delivered to refineries in California. Fields controlled by the oil companies in California or Alaska provide the majority (66%) with the remaining 14% coming from non-OPEC foreign locations

* California consumers will pay an estimated increase of $15.5 billion more at the pump in 2005 than in 2000 because of profiteering by oil companies and government's failure to act.

* No public evidence exists of substantive increases from 2000 to 2005 to oil companies in the cost of a) producing crude oil; b) refining oil into gasoline or diesel; or c) transporting the refined products to market.

* The 2005 California gas prices spike -- with pump prices increasing from $1.93 of January 17 to $2.72 by August 15th -- was directly tied to the exportation of large quantities of CARB motor fuel in 2005. By exporting fuel out of the country, refiners and traders deliberately decreased available supplies during a period of peak demand.

* Inflated profits for California oil companies from their refining operations -- including an increase of 61¢ per gallon in profits from January 17 to April 18 -- were a principal factor in the jump in gasoline prices.

* California, which also collects a gasoline excise tax, is one of only 9 states that maintains a sales tax on purchases at the pump. Gasoline price increases in California will increase collections of the 7.25% state/local sales tax during 2005 by an estimated 6¢ per gallon (40%) or approximately $1 billion -- creating the largest gas tax increase in the history of the state.

* California's percentage sales tax provides economic incentives for government officials to promote high prices at the pump. The sales tax has created an implied partnership between the oil industry and California government as both dramatically benefit from the rise at the pump. The risk that elected officials constantly searching for additional tax revenue will become "hooked" on high pump prices is real.

* While gasoline sales tax collection increased by over 150% after adjustment for inflation since its enactment in 1972, the minimum wage level, also set by the legislature, has fallen nearly 12.5% during the same period.


http://www.consumerwatchdog.org/energy/pr/?postId=5084&pageTitle=New+Study+Finds+Oil+Company+Profiteering +Behind+Gasoline+Price+Spikes%3B+Bush+Called+Upon+ To+Prevent+Profiteering


This is criminal, we've got collusion, fraud, profiteering, etc. And the government is in bed with the oil companies so nobody is coming to our aid.

Notice it says the profits rose by 61 cents per gallon, so it's even more than that.

You only care about taxes taxes taxes, yet the increased prices by the oil companies results in more tax intake by the government. It's quite a scam they have going, I just hope that it and the combined costs of the oil wars which us taxpayers also pay for don't totally screw this country when the economy completely collapses.

And don't ever forget who pays for the oil wars, you'd think they oil cartels could cut the people who hands them their welfare check could cut us a break in return...

What's funny here is how elitist you are in your assumption that you know what's best for everyone, depite your complete lack of understanding of the fundamental tenets of economics.


You guys ARE elitists, you worship huge corporations, and you have nothing but contempt for the common man. What is more elitist than putting the insatiable greed of fat cats who are already billionaires over the poor and the middle class?????????? Explanation please...

I don't know what's best for everyone, I don't recall ever saying that, but I seem to have a much better grasp on economics than people who have a pro-corporatist outlook on everything. And economics bores the hell out of me, but some things are just common sense. And I have the facts to back my assertions up.

But let's not change the subject from the price gouging being done by the oil cartels.

economics bores the hell out of me, but some things are just common sense.

Well, that's self-evident.

"The confidential memos demonstrate a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage the major refiners to close their refineries in the mid-1990s in order to raise the price at the pump." Different time, different business climate. Again, it appears that you desire everyone in the gasoline production chain be willing to lose money so you can pay $1/gallon.


And it's still going on today, or did you think those record profits are because the oil companies invented tress that sprout gold?

Take a look at this which proves they are doing the same exact thing RIGHT NOW.

Crude Oil And Demand Fall, But CA Gas Prices Skyrocket -- Proves State Motorists Are Being Overcharged


Santa Monica, CA -- California drivers were paying more than $3.36 a gallon for regular gasoline Monday, up four cents from Friday and nearly 50 cents more than the rest of the country, even as crude oil prices have dropped dramatically to $7 below last month's $75.35 peak.

Because oil companies blamed the cost of crude oil for gasoline's rise from $2.25 a gallon at the start of the year and gasoline prices spiked immediately with every upward twitch in the crude oil price, there is no excuse for California's prices, said the nonprofit, nonpartisan Foundation for Taxpayer and Consumer Rights.

Even the California Energy Commission was at a loss last week to explain the continuing spike as oil prices began to fall, vaguely citing a possible gasoline supply shortage.

"If crude costs and demand are dropping, gasoline prices should be too, but for the fact that oil companies are charging as much as possibly simply because they can,¿ said Judy Dugan of the Foundation for Taxpayer and Consumer Rights. "Oil companies owe the public an explanation."

Demand, usually up about 4% per year, is flat this year over the same period last year. It is up to elected officials to use their bully pulpits and every legal tool to see that refineries drop their prices as quickly as they rose, said FTCR.

"Rising crude oil prices accounted for only a small fraction of the $1.11 rise at the pump since the first of the year," said Dugan. "The profit trough is full and Big Oil has done substantial damage to consumers. Now even the phony excuse of crude oil prices has run out."


http://www.consumerwatchdog.org/energy/pr/?postId=6225&pageTitle=Crude+Oil+And+Demand+Fall%2C+But+CA+Gas+ Prices+Skyrocket+--+Proves+State+Motorists+Are+Being+Overcharged


Read that over and over again real closely until it sinks in.

We're being gouged, simple as day.


Guilt and Blame Set In

We understand that, for effect, there is a cause. Battered women often feel, or are made to feel, that they are to blame for their battering. It is very difficult for them to place responsibility where it belongs--with the batterer. Some people have said that a battered woman is very much like a prisoner of war, because she is often dependent on her batterer emotionally and physically.


http://www.seedsofhopeiowa.com/Make%20The%20Change.htm


Such a strange phenomenon...

Well, that's self-evident.


Yes, like world record all-time historically high oil company profits at a time when the cost of gas has shot up from a dollar a gallon to 3 in just a few years.


http://abcnews.go.com/WNT/story?id=1029991

"The huge profits are enormous because the public is drastically overpaying what it costs to produce," said Joan Claybrook, president of the consumer advocacy group Public Citizen.

Many of these companies long ago bought oil reserves at prices of $10 to $25 a barrel. With prices peaking near the $67 mark, the profit margin has been enormous.


:eek7:

Wild proposal...Increase Gasoline taxes. Institute a Carbon tax. Transfer tax points from Income tax to a carbon tax. It would drive up the price of a gallon of gas and reduce Income tax. Actually you could go all the way and virtually elimate income tax by using a Carbon tax, Net effect would be to encourage in the simplist way possible the development of alternative energies and at the same time lessent the burden on the individual who uses a hybrid vehicle, takes the bus, or uses a high % ethanol fuel. Dedicate a portion of the tax to infrastructure development and repair eg roads and bridges.

Many of these companies long ago bought oil reserves at prices of $10 to $25 a barrel. With prices peaking near the $67 mark, the profit margin has been enormous.

And what do you think they're paying now? Will you be as outraged if they pay $75/bbl for futures now and lose money when the price drops?

Wild proposal...Increase Gasoline taxes. Institute a Carbon tax. Transfer tax points from Income tax to a carbon tax. It would drive up the price of a gallon of gas and reduce Income tax. Actually you could go all the way and virtually elimate income tax by using a Carbon tax, Net effect would be to encourage in the simplist way possible the development of alternative energies and at the same time lessent the burden on the individual who uses a hybrid vehicle, takes the bus, or uses a high % ethanol fuel. Dedicate a portion of the tax to infrastructure development and repair eg roads and bridges.

That would be very nice, but could you imagine the shrieks when it turns out the rich would pay very little in taxes, but the poor would pay huge amounts?