Make The Gas Face For Those Little White Lies

One of the nation’s biggest oil lobbyists in January warned the President that he could make life very uncomfortable for his re-election chances if he didn’t approve the Keystone XL pipeline.

The oil industry’s top lobbyist warned the Obama administration Wednesday to approve the Keystone XL oil pipeline or face “huge political consequences” in an election year.

Jack Gerard, president of the American Petroleum Institute, said it would be a “huge mistake” for President Barack Obama to reject the 1,700-mile, Canada-to-Texas pipeline. Obama faces a Feb. 21 deadline to decide whether the $7 billion pipeline is in the national interest.

“Clearly, the Keystone XL pipeline is in the national interest,” Gerard said at the trade association’s annual “State of American Energy” event. “A determination to decide anything less than that I believe will have huge political consequences.”

Jump to six weeks later:

Soaring gasoline prices are threatening to undercut President Barack Obama’s re-election prospects and offering Republicans an easy target. With prices pushing $4 a gallon and threatening to go even higher, Obama sought Thursday to confront rising public anxiety and strike back at his GOP critics.

Obama said dismissively that all the Republicans can talk about is more drilling — “a bumper sticker … a strategy to get politicians through an election” — when the nation’s energy challenges demand much more. In a speech in Miami, he promoted the expansion of domestic oil and gas exploration but also the development of new forms of energy.

For all the political claims, economists say there’s not much a president of either party can do about gasoline prices. Certainly not in the short term. But it’s clear that people are concerned — a new Associated Press-GfK poll says seven in 10 find the issue deeply important — so it’s sure to be a political issue through the summer.

You do the math.  I’m thinking Big Oil already has, and they’re liking the numbers they see.  The Republicans and the Village certainly aren’t above concern trolling President Obama, either.  Remember, he’s “bad for business” when he doesn’t give corporations the “certainty” of a negative tax rate and all the steak fajita grandes they can eat on Tuesdays.

Presidents may not be able to do much about gasoline prices, but oil companies sure as hell can.

Share On Facebook
Share On Twitter
Share On Google Plus
Share On Pinterest
Share On Reddit

132 replies
  1. 1
    4tehlulz says:

    I’m sure the six weeks of Iran war talk has nothing to do with it.

  2. 2
    Zandar says:

    Yeah, funny how that came outta nowhere.

  3. 3
    c u n d gulag says:

    You know what might make in impression on these rich MFers and oil corporations?

    If the only gasoline we bought was in making Molotov Cocktails to be used to bomb their f*cking gas stations.

    Sadly, none of us is in a position to do that.
    And they know that.

    Our only hope maybe, if we let them use oil-sands, they’ll allow us to use it as a lubricant while they continue to ream our asses.

  4. 4
    Comrade Javamanphil says:

    But the news team will never report it because there’s too much evidence to support it.

  5. 5
    Knockabout says:

    The more intelligent pundit would conclude that the President’s plan to hit Iran with steep economic sanctions is backfiring and instead hurting American drivers more than the mullahs in Tehran.

    Of course we don’t have one of those handy, we have Zandar instead.

  6. 6
    c u n d gulag says:

    @Comrade Javamanphil:
    And if they do, more white chicks will be made to disappear so the MSM can do what they do best.

  7. 7
    Chyron HR says:

    @Knockabout:

    Bomb Iran for cheap gas!

    Watch out guys, we’re dealing with an economic genius over here.

  8. 8
    Enhanced Voting Techniques says:

    I thought gas prices have been jacked for a while now.

  9. 9
    chopper says:

    the API is already starting to re-run their horseshit about oil reserves in the US. they’re pushing the line that obama’s sitting on enough oil to make us completely self sufficient by 2030 (despite the fact that by then we’d need to find way more oil just to keep up with growth and losses in current wells).

    expect a lot of the GOP to push the ‘we have the resources’ shit this year.

  10. 10
    Rafer Janders says:

    Oh for fuck’s sake. Oil is a global commodity whose price is set by global supply and demand. US oil companies cannot, even if they wanted to, set the price.

    Rising gas prices now are due to a variety of sources, most of them out of anyone’s hands: economic growth in the US, more demand in China and India, political tensions all across North Africa and the Middle East, threats of war with Iran, warmer temperatures, etc.

    Also, too, for every industry like the oil companies that want high gas prices, there are many more industries — basically any industry with a supply chain that’s dependent on trucks, ships and planes to ship parts, supplies and finished goods — that want low oil prices.

  11. 11
    chopper says:

    in other words, expect a lot of disinformation about ‘oil shale’ and the green river formation.

  12. 12
    scav says:

    oh, and cue the Obama’s-the-most-in-the-pocket-of-big-corporations-evah chorus. oh this is going to be a long one.

  13. 13
    General Stuck (Bravo Nope Zero) says:

    @4tehlulz:

    I’m sure the six weeks of Iran war talk has nothing to do with it.

    Add on to that, reports of Saudi King or Prince, or whatever, stubbed his toe last week, and you obviously have fwee market [[[PANIC]]] and Mo Profit! @#%$^$^& + GOP talking point.

  14. 14
    Knockabout says:

    Where did I say bomb anyone?

    No wonder this crowd thinks Zandar is smart. Bombing Iran would only get us cheap gas after another economic collapse. Not worth the price.

    But Occam’s Razor states the most likely cause of gas jumping 60 cents in six weeks is the sanctions. They are economic war. Don’t need to worry about Obama stupidly bombing Iran to ruin the economy his sanctions are doing it for him.

  15. 15
    4tehlulz says:

    @scav: Well, if Obama was really principled, he would have stopped the use of fossil fuels via a signing statement.

  16. 16
    rlrr says:

    @chopper:

    Just because there’s oil in the ground doesn’t mean it makes economic sense to exploit it.

  17. 17
    ant says:

    so why did these same people run up the price in 2008 then?

    Because high gas prices were good news for John McCain?

  18. 18
    4tehlulz says:

    @rlrr: Well, once President Santorum bombs Iran, resulting in a blocked up Hormuz, $300/barrel oil would make that sensible.

    Everyone (at Exxon) wins!

  19. 19
    c u n d gulag says:

    The price increase is also due, not to sanctions, but by speculation.

  20. 20

    Yes, I’m a broken record.

    If we have entered Peak Oil, it won’t matter what the president does. Nothing will have a significant effect on gasoline prices.

    When the Prez encourages alternate energy production, he might have a significant effect on our quality of life later on.

  21. 21
  22. 22
    chopper says:

    @Knockabout:

    But Occam’s Razor states the most likely cause of gas jumping 60 cents in six weeks is the sanctions.

    just like back in 2008, where gas started climbing way up because of iran sanctions. wait, what?

  23. 23
    28 Percent says:

    @4tehlulz: I don’t see how war talk could do it without showing up in the supply and demand curves.

    The articles I read this week say that demand is down, we produce more than half our oil supply domestically, the country we import the most oil from is Canada, and that our refining capacity is high enough that we’re now a net gasoline exporter. However, two-thirds of the volume on the oil commodities exchange is now generated by speculators. The price is being artificially inflated by millionaires and billionaires working at creating yet another bubble.

  24. 24
    General Stuck (Bravo Nope Zero) says:

    @chopper:

    And then suddenly went down, when democrats won the US government. Then went back up when wingnuts won the House and …… FWEE MARKET farces take hold.

  25. 25
    Rafer Janders says:

    @c u n d gulag:

    Not really. Speculation only comes into play when there’s lessened supply — you can’t effectively speculate on the price of goods that are cheap and available — and lessened supply and high demand indicate, guess what, increased prices.

    Basically, speculation is a sympton and not a cause of high gas prices, and those high prices are caused by the usual convergence of lower supply and higher demand.

    Also, speculation is a trade, so for each trader betting on the rising cost of gas, there has to be another trader taking the opposite bet. For every speculator who’ll make money if prices go up, there has to be a speculator who’ll make money if prices go down, so to a large extent speculation cancels itself out.

  26. 26
    PeakVT says:

    Here’s the global production and consumption forecast for 2012 and 2013 if anyone cares to look at such things.

  27. 27
    chopper says:

    @c u n d gulag:

    the majority of it is due to demand outstripping supply. china is expecting to grow by 8% this year and they and india are grabbing every spare drop of crude on the market and asking for more. meanwhile, every large producer has been pumping balls-out in spite of depleting fields. every supergiant field is currently depleting.

    speculation and mideast tensions are a nice layer of frosting on the cake.

  28. 28
    c u n d gulag says:

    Rafer, and Chopper, thanks for the additional info!

  29. 29
    jonas says:

    Oil companies can do stuff at the margins, mostly involving refinery capacity, to affect the price of gasoline, but they can’t really set global oil prices. It’s really the speculators now who are hedging on both instability in the Middle East and economic growth in the US, China and India.

    It’s also worth pointing out that Obama has ramped up the sale of oil leases in the Gulf and in Alaska.

  30. 30
    Violet says:

    @Rafer Janders:

    Speculation only comes into play when there’s lessened supply—you can’t effectively speculate on the price of goods that are cheap and available—and lessened supply and high demand indicate, guess what, increased prices.

    Is that just like the speculation that happened in the mortgage markets and with home prices? Seems like the financial wizards played with numbers and that in turn caused lots of problems in those markets. There were plenty of homes all along as is evident by the empty houses one sees in a lot of areas. But speculation raised the prices.

    Hedge funds are speculating on oil and prices are going up as a result. There are other reasons since we don’t live in a bubble, but the kinds of people who play with other people’s money for a living are contributing to the price increase.

  31. 31
    General Stuck (Bravo Nope Zero) says:

    I think it’s a little funny, when folks show up with numbers generated by a system that is monopolized to justify what amounts to overnight large spikes in oil prices and gasoline. Oddly tracking US political events.

    edit – and claiming the global commodity status of crude oil, which of course is precisely the condition that makes it ripe for rank speculation, for about any half baked reason, devoid of specific production costs for each barrel of oil that is produced into gasoline at the pumps.

  32. 32
    28 Percent says:

    @Rafer Janders: You’re assuming rational markets though.

    You’d think that after 2008 we could at least all agree that Bubbles Happen.

  33. 33
    BGinCHI says:

    @Knockabout:

    But Occam’s Razor states

    You don’t know what “Occam’s razor” means, do you?

    I’ll give you a hint: what you want there is “false causality.”

  34. 34
    Knockabout says:

    So either Obama’s sanctions, Obama’s failure to regulate speculation, or Obama failing to provide enough supply. Take your pick of the reasons to see how much blame he should get. Boy, so glad we have a guy who cares about the little guy in the White House.

    Then again higher gas prices means more green energy programs, right.

  35. 35
    BGinCHI says:

    I have bad news for everyone here. When Rick Santorum is elected President, he is going to just flat-out make this country smarter and more competitive. You know how I can tell?

    This (via TPM):

    Santorum: Colleges Are Secular ‘Indoctrination Mills’

    Rick Santorum’s been criticizing colleges – and President Obama’s push to increase college attendance – for a while now. He’s attacked the push for widened access to college education as smacking of “snobbery,” and has unfavorably cited statistics that he claims show 62 percent of young adults who enter college with religious beliefs leave without them.

    However, he kicked things up a level during a recent interview with Glenn Beck. He told the right-wing talk show host that President Obama’s push for expanding college-going could hurt America:

    “I understand why Barack Obama wants to send every kid to college, because of their indoctrination mills, absolutely … The indoctrination that is going on at the university level is a harm to our country.”

  36. 36

    They pulled this on the wrong president, and I expect it to backfire. Watch Obama turn alternative energy and price gouging oil companies into national memes. Political aikido is his specialty.

  37. 37
    chopper says:

    @Knockabout:

    Obama failing to provide enough supply.

    oh, the lols.

  38. 38
    dead existentialist says:

    @Knockabout: Knock it off.

  39. 39
    Jay C says:

    @Rafer Janders:

    Oh for fuck’s sake. Oil is a global commodity whose price is set by global supply and demand. US oil companies cannot, even if they wanted to, set the price.

    Leaving aside, for the moment, the fact that those selfsame “US oil companies” derive enormous profits from high worldwide petro prices, the niceties of “global supply and demand” are likely to be lost on the average American driver/voter whose sole and only experience of said market is what they have to pay, out of their own pocket, for gasoline at the pump. And who are also likely to swallow any demagogic line about who’s to blame: however incorrect, misleading or just plain lies. That’s politics, not economics: different rules apply.

    @Linda Featheringill:

    When the Prez encourages alternate energy production, he might have a significant effect on our quality of life later on.

    “Later on”?? In the USA? Where next season is considered “long term”?? And the most common reaction to proposals for “alternative energy production” is a sputtering tirade of
    Arglebargle hippies! Blah blah eco-freak tree-hugger argle bargle elitist hippies Solyndra corruption garble garble Real Americans! blah blah hippies!” ??

  40. 40
    Rafer Janders says:

    @Violet:

    Is that just like the speculation that happened in the mortgage markets and with home prices?

    No, it’s not, because oil is a worldwide commodity with price transparency traded on extremely liquid global exchanges, whereas home prices are set locally through a very inefficient series of millions of one to one seller to buyer sales taking months to complete. You can’t ignore the fact that the US is not the only part of this market — over 75% of gasoline worldwide is consumed outside of the US, so that’s going to be the determining factor in the price.

    Hedge funds are speculating on oil and prices are going up as a result.

    No, they’re not. Hedge funds are speculating because prices have gone up, but correlation is not causation.

    Think of it this way: a hedge fund thinks it can make money by betting on the rising cost of gas. How does it do so? Well, it has to enter into a trade, and so it has to find another hedge fund or market entity willing to take the opposite bet, i.e. that gas costs will go down. So now you have one trader betting on the rise, and one on the decrease. It cancels out, essentially. You can’t have everyone betting on the rise because you can’t buy something if no one is willing to sell, and vice versa.

  41. 41
    jibeaux says:

    That veritas needs more “in vino” and you troll-feeders are just indulging him.

    It would honestly suck if we elected Rmoney because of gas prices, and if we’re that stupid then we’re getting the president we deserve.

  42. 42
    chopper says:

    @jonas:

    domestic oil production has ramped up, more than it has in 40 years. like every major producer (and we are a major producer) we’re going balls-to-the-wall. why? for the same reason everyone else is. demand is outstripping supply.

    oil companies have started working over the bakken, which only has a few billion barrels of recoverable crude and needs to be fracked to get it. that’s about 3 months worth of supply at current US consumption levels. but at 110/bbl a coupla hundred thousand bbl/day is some big money, even if you have to have a shit-ton of wells that peak and deplete every year and need to be replaced.

  43. 43
    Rafer Janders says:

    @28 Percent:

    Sure, bubbles can happen — but not in this market at this time. US oil companies do not have the power to set the worldwide price for oil, period.

  44. 44
    Violet says:

    I expect Obama is going to have a bad summer where oil prices are high and his approval ratings drop some, the Republican candidate looks more competitive than people thought and folks on the left freak out. Then fall will arrive, oil prices will ease slightly, his approval ratings will go back up, and hopefully he’ll win the election.

    Summers don’t seem to be his thing. He’s consistently not been perceived as well or done as well in the summer.

  45. 45
    jibeaux says:

    In other news, there is just AMAZING stability to that crazification factor. Fourth paragraph.

  46. 46
    Samara Morgan says:

    its not just that. Israel gets half the blame at least for threatening to strike Qom.
    Of course, they Israelis RELLY want O to be a one term president, just as much as the conservatives do.

  47. 47
    BGinCHI says:

    @Violet: It’s the season when the media reptiles bask in the sun instead of doing their jobs.

  48. 48
    gene108 says:

    I wish the media would point out to the “Drill Baby Drill” crowd that OPEC controls 80% of the world’s oil supply and adjust production levels to keep oil prices from dropping, even if the U.S. increases domestic drilling.

    We just don’t have enough oil to make a dent in world oil supply.

    Also, too why isn’t drilling in ANWR a big deal anymore. It seems they’ve forgotten about it and moved onto the Keystone XL.

  49. 49
    RalfW says:

    Every progressive, liberal, and Obama surrogate has to be out there daily reminding voters about oil company profits.

    If people are mad about gas prices, help them do the math:

    Exxon-Mobil earned $3.1 billion dollars a month in profit last quarter. That’s $100 million per day in profit. For one oil company.

    Mad about high gas prices? Don’t blame Obama. Blame the same 1% assholes who’ve been ripping you off for eons.

  50. 50
    Bex says:

    @Violet: As Matt Taibi wrote in “Griftopia,” “Wall Street just opened another table in the casino.”

  51. 51
    rikyrah says:

    THIS is all they have left. honestly, they’ve tried everything else. not shocked in the least.

  52. 52
    Violet says:

    @Rafer Janders:
    US oil companies are a fraction of the total oil market. And no, US oil companies can’t control oil prices. But people who speculate on things can help create bubbles with the assistance of other conditions.

    That doesn’t mean we aren’t in or close to a peak oil situation. We probably are. But short term pricing can be affected by speculation. Four or five months ago, conditions were pretty similar in terms of global oil consumption. Why did prices suddenly start to rise? Iran, other middle east unrest, surely. But speculation can help fuel that rise.

  53. 53
    PeakVT says:

    @Violet: The media is desperate for summer viewers/readers and will run with anything. Plus Republicans aren’t in Washington as much and thus their bullshit spews from many mouths, not just party leaders.

  54. 54
    Elizabelle says:

    @Frankensteinbeck:

    I think so too.

    This is bullying and braying by the American Petroleum Institute.

    Maybe Nancy Brinker is on their board?

  55. 55
    General Stuck (Bravo Nope Zero) says:

    Listen, everyone knows that oil supplies are being depleted, and that demand is really high these days. And that prices for oil and gas are going to rise for these legitimate reasons. This argument is about overnight spikes in prices and falls in price. That have happened devoid of comparable overnight changes in that supply and demand, and, at times, contrary to them. And justified by the activities of a few ‘speculators’ for reasons that have existed all along, like instability in the ME. Why are some liberals defending this bullshit?

  56. 56
    dollared says:

    @Rafer Janders:
    You are smart folks, but on this one you’re just wrong. It is now so clearly documented that speculation drives up oil prices on the margin, that it’s conventional wisdom even on the major wire services. Here’s the Miami Herald: http://www.miamiherald.com/201.....rices.html

    anybody who doesn’t think that speculation is the difference between $90bbl and $109bbl does not understand the size of the money in hedge funds, and their available leverage. The raw money is in the hundreds of billions; the leverage reaches the trillions.

  57. 57
    Samara Morgan says:

    @gene108: alsotoo, Americans dont get that the Israelis are playing us like a 5lb brown on 20 pound test.
    To dar ul Islam, a strike on Qom is the equivalent of an arab strike on Jerusalem.
    bonus question: hey Amurrikkka, do you know where Qom is?
    its on top of a fucking mountain.

  58. 58
    Ed Drone says:

    @28 Percent:

    The price is being artificially inflated by millionaires and billionaires working at creating yet another bubble.

    How many of those futures holdings are in Mitt’s Portfolio? I wouldn’t surprise me in the least that he’s not above putting his thumb on the scales — it’s a win/win situation for him: More Money, plus a talking point against his opponent in the election.

    Must be nice!

    Ed

  59. 59
    flukebucket says:

    @BGinCHI:

    It is hilarious to hear a religious fanatic talk about indoctrination.

  60. 60
    dollared says:

    @General Stuck (Bravo Nope Zero)It is now so clearly documented that speculation drives up oil prices on the margin, that it’s conventional wisdom even on the major wire services. Here’s the Miami Herald: http://www.miamiherald.com/201…..rices.html

    anybody who doesn’t think that speculation is the difference between $90bbl and $109bbl does not understand the size of the money in hedge funds, and their available leverage. The raw money is in the hundreds of billions; the leverage reaches the trillions.

  61. 61
    gene108 says:

    @jibeaux:

    I kind of feel sorry for Romney and many other ambitious people, who don’t feel at home within the Democratic Party.

    The only alternative, in a two party system, is running as a Republican.

    Unfortunately the Republican voters are really unrepresentative of the population as a whole, so either you say, “to hell with my personal ambitions and just quit” or you say, “I can ride this tiger and come out on top”.

    Most truly ambitious people will try “ride the tiger”, which is what Romney has been trying to do for many years now.

    I don’t think it’s possible to do it. The tiger will eat you.

  62. 62
    Violet says:

    @gene108:
    If ANWR were profitable, the oil companies would have made it happen. It hasn’t been profitable because it’s hard to get to and hard to get the oil out of there once you do get it out of the ground. That’s why the oil companies haven’t pushed as hard as they could. They’d be happy to drill there were massive government subsidies (additional ones), but as things stand now, with oil prices as they have been, it hasn’t been profitable.

    Once oil prices stabilize higher, then you might find more call for ANWR drilling again.

    People forget that in 1999 the price of oil was $17/barrel. Seems almost impossible that that was only a little more than a decade ago.

  63. 63
    Mark S. says:

    From the last link:

    Gas prices fluctuate seasonally — up in spring, down in fall — for a very specific reason: Butane. As Rapier wrote last year “Butane is a cheap ingredient in gasoline that boils at low temperatures. In winter, this isn’t a problem. But in summer, butane evaporates from gas, polluting the air while leaving us with less fuel in the tank than we paid for. As temperatures rise, refineries replace butane with more costly ingredients and draw down winter inventories just as beach season begins. Chemistry, not corporate conspiracy, limits supply.”

    That’s the first time I’ve ever read this explanation. I have read a bunch of bullshit reasons (people go on vacation and drive more) for why the price always goes up in the summer. This makes a hell of a lot more sense.

  64. 64
    EconWatcher says:

    This is tin-foil hat stuff. Let’s keep our cool; we don’t need this on our side. There are plenty of obvious reasons other than conspiracy and retribution for why the price of oil is spiking.

    (I wouldn’t dispute that speculation can cause short-term gyrations, but I’m not buying a scheme to punish Obama.)

  65. 65
    The Snarxist Formerly Known as Kryptik says:

    @General Stuck (Bravo Nope Zero):

    Because people want to desperately believe that, despite all the horrid and contrarian bullshit we have to fish through day in and day out, things like this still operate in a rational system, driven by rational actors.

    We should have learned long ago though that economics has been one of the least rational systems ever, prone to self-affirming panics and freakouts.

  66. 66
    Citizen_X says:

    @General Stuck (Bravo Nope Zero):

    And justified by the activities of a few ‘speculators’ for reasons that have existed all along, like instability in the ME.

    Iran threatening to close the Straits of Hormuz, and Israel threatening to start a war on Iran (which would also make Iran close the Straits), are a hell of a lot more than the usual “Oh, lah-de-dah, turmoil in the Middle East.” Straits of Hormuz close, and there goes 20% of the world’s oil supply. That’s something worth making some speculatory $$$ about.

  67. 67
    patrick II says:

    @BGinCHI: We should be thankful that Santorum was immune to college indoctrination (sometimes called getting an eduction) while he attended so he could continue to enlighten us with his untarnished eighth grade catholic boy opinions.

  68. 68
    kindness says:

    @c u n d gulag: This!

    I’ve even seen ‘the liberal’ NPR mention that speculators have more refined gas in storage tanks than ever before. Why this isn’t mentioned every single time an article comes out decrying the President for the raise in price means to me they are all in on shitcanning Obama.

    @Rafer Janders: Whopping bullshit. Speculators certainly affect the price of gasoline. They are right now.

  69. 69
    Suffern ACE says:

    @Violet: three bad Summers in a row and you’d think those well-heeled insider Dems would learn to stagger their trips to Rehobeth so someone could be available to push back on the talk shows. I do think Republicans spend a lot of time in spring planning for the summer months and how they can use them to pummel Dems, while Dems spend that time looking for rentals.

  70. 70
    RD says:

    @Knockabout:

    Naderites get the gas face.

  71. 71
    General Stuck (Bravo Nope Zero) says:

    @Citizen_X:

    When Obama and dems took office in 2009, when gas prices suddenly plummeted, Iran was having its internal revolt, that was fairly ominous at the time, for who controlled that country. Ditto for all the Arab spring stuff later on. And the threat of Israeli of American air strikes on Iran have been there all along, along with the US going to war with Iran, see Seymour Hersh, and then there was Iraq, and prices still rose and fell often devoid of supply and demand conditions. What was consistent with this flux, was dems running the US govenment and talking of regulating the speculators with leg, and walla, gas prices stabilized to around $2.70 and talk of new regulation on this trading group fell away. Republicans win in 2010, and gas prices start to rise again, devoid of real time changes in s and d. And now the wingnuts need an issue and talking point, and prices skyrocket overnight, and I don’t minimize Netanyahoo and the likudnicks playing their part in more bombing Iran talk before our election. I don’t buy any of it. You can, if you want.

  72. 72
    OzoneR says:

    Is anyone shocked? Stevie Wonder could’ve seen this coming when he axed Keystone.

    An environmentalist cannot compete with an oil companies, because one has the country by the balls, which the country willingly served up on a plate, and the other has been demogogued to oblivion.

  73. 73
    BGinCHI says:

    @flukebucket: Well…I don’t know about hilarious. I’d call him a fascist for wanting to get everyone to think the same way and to desire a “pure” American and all that, but I think Rick is too stupid to have an ethos.

    Santorum’s real bitch about higher ed is that it doesn’t push the kind of indoctrination he’d prefer. Making people think doesn’t contribute to his master plan.

  74. 74
    OzoneR says:

    @PeakVT:

    The media is desperate for summer viewers/readers and will run with anything.

    Well with any luck, a shark will bite a white girl. That’ll take up about 3 weeks.

  75. 75
    General Stuck (Bravo Nope Zero) says:

    @EconWatcher:

    but I’m not buying a scheme to punish Obama.)

    I don’t call it a scheme to punish Obama, I call it pure self interest to keep the status quo, which is only threatened by big kid on the block, America, passing laws to regulate the speculation weasels. It is not a formal conspiracy, I would call it more a wink and nod, from people where fear is what makes them tick, in part. That and wealth. And they know full well, they are protected under any republican in political power in the US of A. No more complicated than that. imo.

  76. 76
    pseudonymous in nc says:

    @jonas:

    Oil companies can do stuff at the margins, mostly involving refinery capacity, to affect the price of gasoline, but they can’t really set global oil prices.

    And there is a finite number of a) drilling platforms; b) trained riggers to get the stuff out of the ground, even if you know exactly where to drill for the stuff. This is not Beverly Hillbillies stuff.

  77. 77
    OzoneR says:

    @Samara Morgan:

    Americans dont get that the Israelis are playing us like a 5lb brown on 20 pound test.

    This is different from the rest of our history how exactly? Remember the Zimmerman Note?

    Foreigners have been playing us since the Barbary Wars.

  78. 78
    trollhattan says:

    @Knockabout:

    I believe we have found the ghost of veritas, sans “Obambi.” Must have had his other handle banned. Again.

    Hey genius, the president has upped the CAFE standards twice. That’s how you decrease the impact of fuel costs–you permanently reduce demand.

    Of course GWB did the same thing with his recession-depression. That definitely cut into our fuel consumption.

    Better trolls, nao?

  79. 79
    Citizen_X says:

    @kindness:

    Whopping bullshit. Speculators certainly affect the price of gasoline.

    And Rafer specifically said they could–when supplies are tight worldwide, as they are now.

  80. 80
    Violet says:

    @OzoneR:
    A serial killer targeting white girls at a shark-infested east coast beach resort would be a tr i fec ta.

  81. 81
    OzoneR says:

    @4tehlulz:

    Well, if Obama was really principled, he would have stopped the use of fossil fuels via a signing statement.

    I actually heard someone suggest once that way to solve this problem is put a hefty tax on gas-burning vehicles so the auto companies will only make electric vehicles.

    I couldn’t even organize a response it was so stupid.

  82. 82
    pseudonymous in nc says:

    @Mark S.:

    That’s the first time I’ve ever read this explanation.

    The summer grade / winter grade thing? Yeah.

    And what everyone else said about OPEC: if the US increases production (if there’s available capacity) then the Saudis just tweak theirs downwards.

  83. 83
    Samara Morgan says:

    @OzoneR: so isnt it time to grow up?

  84. 84
    rumpole says:

    Give me a fucking break. This is tin foil hat country. Is it possible? Sure. Is it likely? No less likely that GSachs or others buying up commodities contracts in anticipation of future demand caused by economic expansions.

    It is weird that prices are going up in the time of lowest demand. Commodity speculation might be one reason. But you’re a long way from proving cause, much less motive.

  85. 85
    Samara Morgan says:

    @pseudonymous in nc:

    if the US increases production (if there’s available capacity) then the Saudis just tweak theirs downwards.

    zactly. because we are already at Peak Oil.
    Time to cut Israel loose?

  86. 86
    Rick Taylor says:

    I’m not sure how much affect it has had on oil prices, but I agree with Knockabout that the strategy of using economic sanctions on Iran until they say uncle and agree to our demands has been a failure. Ironically, after Obama was attacked in the 2008 elections for saying he’d be willing to negotiate with Iran, the administration has shown surprisingly little willingness to do so.

    Of course, any of the Republican Presidential nominees would be far far far far far far worse. I’m praying Obama wins, because I don’t see how we avoid a catastrophic war with Iran with a Republican president.

  87. 87
    Jager says:

    In California we have the highest prices for gas in the US. I go through a tank of gas every two weeks driving around 20 miles a day, I fill it when the low fuel light goes on, the car routinely takes right at 22 gallons at that point. I filled it last night, 95 bucks for unleaded regular, two weeks ago it was 91 dollars, the increase is costing me .28 cents a day. Settle.The.Fuck.Down!

  88. 88
    Samara Morgan says:

    @kindness: but how are they able to affect price?
    because Our Crazy Ex-GF Israel wants to strike Qom.
    and some statistically significant percentage of you ‘slines support that.

  89. 89
    Downpuppy says:

    @gene108: OPEC only controls a bit over 40% of supply – 31 out of 74 million barrels a day. They do claim 80% of reserves, but those are either underground or only exist on paper.

  90. 90
    Samara Morgan says:

    @Downpuppy:

    They do claim 80% of reserves, but those are either underground or only exist on paper.

    Peak Oil.
    ;)

  91. 91
    kgc16 says:

    @ant: Late to the thread, but thank you for pointing that out! My family took a trip from Ohio to Florida in June of 2008, and gas was going for $4.00 a gallon. Today everyone is acting like this is the first time this has happened, and OMG, we need to fire Obama! Here in Ohio, the price of gas has been ranging from $2.99 (very briefly) to $3.79, for months now. It’s just another fear-mongering talking point, but we can always depend on the press and the punditry to run with whatever rubbish the Republicans are offering up.

  92. 92
    Samara Morgan says:

    @Rick Taylor: yup, we will become Romans.
    Apollo Pythias.

  93. 93
    Samara Morgan says:

    @Jager: get used to it.
    ;)

  94. 94
    trollhattan says:

    @Jager:

    Silly person with your silly maths. Let’s keep it fact-free, shall we?

    I fill my car about once a month–sometimes it costs more, sometimes less. Recently it’s more, but because I keep a purchase journal I know what every price paid has been and we’re not even close to my peak. It does give the local teevee news something to do with their mobile production vans in lieu of actual news. Yet another reason I don’t watch the local news.

    Time to permanently install the “This blog is Obama’s Katrina” header?

  95. 95
    chopper says:

    I’d say about 10-12 bux a barrel is from craziness in Iran.

  96. 96
    General Stuck (Bravo Nope Zero) says:

    @Rick Taylor:

    Iran wants a bomb, above all else. They likely believe it is an existential question for them to get one. It is a fear that is not unfounded after Bush’s misadventure in Iraq. You can’t really negotiate with that thinking. Other than going through motions for pol reasons. Iran is thumbing their noses at us and the world, and saying stop us if you can, meaning by force, and we will make your lives miserable if you do that. And they can. I don’t think Israel will attack Iran, because they don’t have the bunker busters to do much harm. And the US isn’t going to before November, with our better bunker busters, and not even likely while Obama is president. Israel would be opening another pandora’s box in that very rough neighborhood, with little return as the Iran nuke program would keep on ticking like the energizer bunny. They are likely just going to have to tighten their defenses more, and like the rest of us, live in a nukular world where an attack can come at any time. The Mullahs could decide to try and destroy Israel with the bomb, but they ought to have their own graves dug, if they do.

  97. 97
    dollared says:

    @rumpole: This is not tinfoil this is just business. Who is driving up oil prices? Hedge funds. Who benefits the most from the bubble? Hedge funds. Whose taxes would double if Obama is reelected? Hedge fund operators. Who are their natural allies? Energy companies, foreign oil producers and Republicans.

    This is not tinfoil hat territory. You just don’t seem to understand the alliance of interests and the scale of hedge fund investments – and the low returns on other investments.

  98. 98
    bartkid says:

    >You do the math. I’m thinking Big Oil already has, and they’re liking the numbers they see.

    Okay, here’s some more math homework:
    How much of that billions of dollars promised payout for the Deepwater Horizon explosion has really been paid out?

    What are the net taxes paid by BP, Chevron, ExxonMobil, Shell, Total S.A., and CononcoPhillips?

    I think both figures are close to zero.

  99. 99
    trollhattan says:

    @chopper:

    And if it weren’t for that, something else would fill in nicely. How about a nice Mexican refinery explosion? Putin acting like a jerk? Chaos in Nigeria? Even McMegan’s calculator knows awhl’s “fungible.”

    Since the Saudis and various other producers dislike the Iranian regime so very much, they’re probably countering Iran’s moves somewhat and partly stabilizing the crude price. Sheer greed versus politics.

  100. 100
    Chris says:

    @Violet:

    Is that just like the speculation that happened in the mortgage markets and with home prices?

    Very similar, yes. However, because oil and gasoline are commodities, the bubbles do not last as long (N months vs N years).

  101. 101
    RD says:

    @Rick Taylor:

    but I agree with Knockabout that the strategy of using economic sanctions on Iran until they say uncle and agree to our demands has been a failure

    What’s the alternative?

    If Israel “mows the lawn” with precision strikes it will make Iran twice as determined to protect themselves.

  102. 102
    divF says:

    @Jager: If I did the arithmetic correctly, your car is getting less than 13 miles / gallon. This might be a time to consider getting a more fuel-efficient car, if your finances permit it.

  103. 103
    Sad Iron says:

    What do you expect them to do? As we all know, oil profits have been waaaaaaaaay down under Obama. I mean, those guys aren’t making shit.

  104. 104
    Chris says:

    @Rafer Janders:

    Think of it this way: a hedge fund thinks it can make money by betting on the rising cost of gas. How does it do so? Well, it has to enter into a trade, and so it has to find another hedge fund or market entity willing to take the opposite bet, i.e. that gas costs will go down. So now you have one trader betting on the rise, and one on the decrease. It cancels out, essentially. You can’t have everyone betting on the rise because you can’t buy something if no one is willing to sell, and vice versa.

    Sorry, but this is just flat-out wrong.

    The hedge fund guy doesn’t have to “find someone betting that costs will go down”. He buys a contract that says “I will take delivery of [number of barrels of oil] in [location] on [date]”. (There’s a yes/no bit in this contract about physical delivery too, but that has no effect on the basic principles.)

    Let’s imagine for a moment that our contract-buyer has bought something saying “I’ll take delivery in June for $150”. Where’s the guy betting on the loss? There is someone re-selling the contract he bought yesterday that says “I’ll take delivery in June for $145” (he’s locked in a $5 profit now), or there is the oil co pumping stuff from a well for $75 (they’ve locked in a $75 profit now). Nobody selling here is betting on prices to go down, they’re just taking a profit now regardless of whether prices stay at $150, or go up, or go down, in June.

    If the price in June is actually $108, it’s only the contract-buyer who takes the loss, when he receives the stuff at $108 and has paid $150 for it.

  105. 105
    Mnemosyne says:

    @Rafer Janders:

    Think of it this way: a hedge fund thinks it can make money by betting on the rising cost of gas.

    No, they don’t, because they don’t speculate on the price of gasoline. They speculate on the price of crude oil.

    You keep conflating the two when they are two different products. US oil companies don’t have a whole lot of control over the price of oil, but they have a huge amount of control over the price of gasoline, because they’re the ones that sell it to us. And, as we have seen in the past, the price of oil only has a loose connection to the price of gasoline.

  106. 106
    Samara Morgan says:

    @General Stuck (Bravo Nope Zero): Israel is destroying itself.
    do you always become what you most despise?

  107. 107
    Rick Taylor says:

    @General Stuck (Bravo Nope Zero):

    Iran wants a bomb, above all else.

    I don’t buy it.

    Back in 2009, they told the IAEA they were going to need 20% uranium for their reactor (a reactor the west gave them back when the Shah was in power), and asked to be able to buy it. The IAEA offered a deal where Iran would give 3% uranium to a third party, and then, months later, would ship them the enriched ore. Iran objected on what seems to me to be the entirely basis they were unwilling to simply trust the ore would be returned when promised. I know we think we’re such honorable folk we’d never take advantage of a situation, but we are the parties who invaded and over through a neighboring country using completely false reasons. Since then, Iran has made counter-proposals, including one negotiated with Brazil and Turkey, where Turkey would hold the ore. We shot down that proposal, and have taken the attitude it’s our way or the high way.

    Now it’s possible you’re right, and the Iranians are bound and determined to get a nuclear weapon, and any negotiation on our part would have been useless, but short of being able to read peoples minds I don’t understand how anyone can say that with such confidence. To me this feels just like the lead up to the war with Iraq, where it was just a given that of course Hussein had weapons of mass destruction, and anyone who denied it was a fool.

  108. 108
    Chris says:

    @chopper: I’m no pro, but Fadel Gheit is, and he claims that oil “ought to” be running about $75/bbl now. Since WTI is over $105 and Brent is over $115, that implies at least $45 in speculation.

  109. 109
    Keith G says:

    Sorry sander but I don’t feel that the speculation that a few lobbyists and oil companies have caused international price of oil to increasute is supported by the evidence you have provided. You need to do better.

    I’m not sure that anybody with any credibility would be willing to argue that a couple companies can push some buttons and change price of oil (minus a catastrophe). Show the doubters that we are wrong.

    In the mean time, go to the Internal Business Times and read, “why are gas prices going up”. It’s an interesting article

  110. 110
    dollared says:

    @Chris: Yes. and by Rafer’s logic, the price of every stock, bond, piece of real estate, tulip and tickle-me-elmo would never rise or fall.

  111. 111
    chopper says:

    @Mnemosyne:

    uh, the price of oil is very closely correlated with the price of gas. crude makes up the vast majority of the cost of a gallon of gasoline. refinery costs and profits are usually about 30 cents a gallon, retail costs and profits about 20. give or take. taxes and fees make up 30-65 depending on yer state. the rest is crude.

    in CA gas is just over 4 bux a gallon. about 3.50 of that is crude and taxes.

  112. 112
    Rick Taylor says:

    @RD:

    What’s the alternative?

    We could have taken Iran seriously when it negotiated a deal with Brazil and Turkey that involved Turkey holding uranium while uranium was enriched. We could actually negotiate with them. Negotiation is more than just offering the other party what you think is a sweetheart deal, then using economic extortion until they say uncle, while refusing to consider any counter-proposals.

    And again, just to be clear, as much as I’m criticizing Obama, all the Republicans are horribly worse. In fact, given the prejudices of Americans, Obama may be the best we could reasonably hope for as a leader at this time.

  113. 113
    chopper says:

    @Chris:

    I didnt say the craziness in Iran was the only instance of speculation going on. tho I’d say 75 is a bit lowball for the ‘true cost’ of crude. some speculation is due to simple futures that have always been there, some is due to worries about the Mideast, some is due to worries of demand outstripping supply. hard to tell how they all divvy up tho.

  114. 114
    chopper says:

    @Mnemosyne:

    you have to remember, refiners don’t buy all their crude spot. much of it is delivered on futures some of which are noticeably cheaper. but the actual cost of the precursor makes up the majority of the cost of gas. it’s like saying that the cost of butter has little to do with the cost of cream.

  115. 115
    RD says:

    @Rick Taylor:

    To me this feels just like the lead up to the war with Iraq

    You are against negotiations. You disapprove of military intervention.

    What exactly is it you’re advocating?

  116. 116
    Mnemosyne says:

    @chopper:

    As of today, the average price of gas in California is $4.222. So even if we use your calculation, almost a dollar of the price is not taxes and crude.

    Sorry, it’s no good trying to cry poverty for the poor, poor American oil companies when they’re making money hand over fist even with crude prices where they are. Clearly they’re manipulating the price of gasoline if they’re making $100 million in profits a day even when crude prices are high.

  117. 117
    Chris T. says:

    @chopper: Agreed (about it being hard to tell which parts of price-over-marginal-supplier-cost are which).

    (I have no idea whether $75 really is the marginal cost of the last barrel of oil.)

  118. 118
    Mnemosyne says:

    @chopper:

    it’s like saying that the cost of butter has little to do with the cost of cream.

    To extend your metaphor, what I’m saying is that American oil companies are manipulating the price of butter, but when we call them on it, they say, “Hey, don’t blame us, cream is expensive!” Which is not exactly proof that they’re not also manipulating the price of butter for political advantage.

  119. 119
    Keith G says:

    A a heartfelt apology to Zandar as my voice recognition software murdered his name and I didn’t pick it up on the edit

  120. 120
    Jager says:

    @divF: We have two,I drive the Grand Cherokee with the Hemi V8 because my commute is short. We have the Jeep because we use it to pull our small Airstream. My wife drives a C Class Benz and she gets 24-26mpg with it on a 38 mile mixed commute, it gets 30 on the highway. BTW, the Grand Cherokee gets 21-22 on the highway without the trailer. Jeep has a GC with a V6 diesel that gets 27…they don’t sell it in the US! I thought seriously about getting the Benz SUV with the Bluetec diesel, unless I drove 20k plus a year the numbers don’t work.

  121. 121
    chopper says:

    @Mnemosyne:

    as of the 20th ca branded gas was 4.04. crude made up 2.90 of that. .30 was refinery costs and profits, about .64 was taxes and fees and a whopping 18 cents was retail mark up.

  122. 122
    chopper says:

    what I’m getting at is, crude makes up the majority of the price of gas. whether you love or hate the oil companies, that’s the fact.

    and the number was actually 65 and 19 in the above post.

  123. 123
    chopper says:

    @Mnemosyne:

    and you’re saying that the cost of cream is meaningless, even when it makes up most of the cost of butter.

  124. 124
    Mnemosyne says:

    @chopper:

    what I’m getting at is, crude makes up the majority of the price of gas. whether you love or hate the oil companies, that’s the fact.

    So your argument is that it’s impossible for American oil companies to manipulate the price of the gasoline they sell to consumers because the price of crude is so high?

    I guess those $100 million profits a day mean those guys are the luckiest bastards in the world since the prices they set for gasoline just happen to bring them record profits despite the price of crude oil.

    and you’re saying that the cost of cream is meaningless, even when it makes up most of the cost of butter.

    No, I’m saying that if the dairy makers are raking in $100 million in profits a day from butter, their whining about how they’re forced to charge that much because the price of cream is so high is, frankly, bullshit.

    The high price of crude oil does not rule out the probability of manipulation of gasoline prices by oil companies. Unless, again, you think they’re just having a five-year-long run of blind luck that just happens to gain them massive profits.

  125. 125
    chopper says:

    @Mnemosyne:

    So your argument is that it’s impossible for American oil companies to manipulate the price of the gasoline they sell to consumers because the price of crude is so high?

    yeah, that’s exactly what i said. come on, mnem, you’re usually above this sort of horseshit strawman garbage.

    there’s clearly manipulation in the cost of crude. not a whole lot in the cost above that of gasoline, cause the margins for gasoline are thin – in CA, for example, refinery, distro and gas station costs and profits add up to about 12% of the retail cost of gas, and a lot of those costs are real; it costs a lot of money to build, maintain and run a refinery, distribute gas and run a gas station. not a whole lot there to manipulate vs crude.

    what i’m saying is that your argument that crude costs have little to do with the cost of gas is straight-up wrong. and it is. even in CA, which is the worst example i could use for my argument since taxes and fees are super-high there, the cost of crude still makes up 72% or so of the retail cost of gas. that’s clearly a large majority of the cost, and the percentage is even higher in all the other states with lower gas taxes.

    don’t try to move the goalposts to some argument about price-fixing in the crude market (and you appear to be mixing up the market for crude oil and the market for gasoline) that you didn’t make. the prime mover in the cost at the pump is the cost of oil. period.

  126. 126
    chopper says:

    i mean, refinery costs make up about 30 cents a gallon in CA. that’s like 8% of the cost of gas. what of that 30 cents is actual costs and what is price-fixing? what of the 19 cents a gallon for distro and station costs is price fixing?

  127. 127
    General Stuck (Bravo Nope Zero) says:

    @Rick Taylor:

    The only deal with Iran that would mean anything, is complete openness for inspection of any facility the UN and world required. The rest is just bantering back and forth. Iran has not, and will not agree to such conditions, and they are not the only ones. It is unlike Iraq, in that we had some baseline studies of previous inspection efforts to extrapolate with, as well as known facilities. Once the inspections resumed, and those CIA picked targets for inspection began, that Iraq had agreed that anything could be inspected, and honored that agreement. Those targets id’d by us for the inspectors to look up were filled with nothing but cobwebs. But Bush went to war anyway. Iran has agreed to no such inspection protocol. and won’t, till they have their Islamic bomb. A republican gets in the WH, and then it will look and feel like Iraq. I suspect Obama won’t call for an action that will likely fail its objectives, like precision bombing, when we don’t fully knew where to precision bomb, and the targets are underground. With the only way is all in invasion, like Iraq. And that is politically a non starter, precisely because of Bush and Iraq. Not to mention a worn out military.

  128. 128
    OzoneR says:

    @General Stuck (Bravo Nope Zero):

    Not to mention a worn out military.

    Iran is a much larger much more powerful country than Iraq, I’m not sure we can get by them unscathed even WITH a strong military. You’re talking a long war with a catastrophic financial and human cost.

    It’s just not possible.

  129. 129
    GARY CAMPBELL says:

    @c u n d gulag: I think that was a great idea about using molotovs to destroy gas stations. It would follow also that police stations would be targets as well.
    I believe there are more subtle ways to strike the beast. One of which could easily be deployed without detection. Sprinkle furniture brads (small very sharp nails) into the driveways of gas stations, police stations and bank parking lots, etc. The tire companies will love it, but as soon as the public realizes there is an effort to harass and destroy the storefronts of these criminals NOBODY’S goin there! Viola! Americans will be empowered to fight back against these bastards!
    Also squirt guns with brake fluid will remove paint off of any car, even if it’s the gestapo’s cars. Mark em for the trash they are.
    It would be a short step from there to an American Spring and THEN MOLOTOVS with High Test!

  130. 130
    Thirty Twice says:

    This looks like the administration’s answer to the oil company’s political threat. Both sides may use Iran for their own purposes.

    http://news.yahoo.com/geithner.....01792.html

  131. 131
    Mister Papercut says:

    Just here for the 3rd Bass post title…

  132. 132

    […] . . a coincidence. February 25, 2012 | Posted by: Frank | Posted in: Titans of Industry | Bookmark this post […]

Trackbacks & Pingbacks

  1. […] . . a coincidence. February 25, 2012 | Posted by: Frank | Posted in: Titans of Industry | Bookmark this post […]

Comments are closed.