Tag Archives: Gas Prices

Gas prices hit all-time high – again – in Obama-supporting California

From liberal USA Today.

Excerpt:

Gasoline prices in California rose to another all-time high on Sunday after passing a four-year high a day earlier, according to AAA.

The four-cent-per-gallon jump Sunday was even bigger than Saturday’s jump, which was just a fraction of a penny.

AAA reported in its latest update on Sunday that the statewide average price for a gallon of regular unleaded gasoline is $4.655. Saturday’s average of $4.6140 was the highest since June 19, 2008, when it was $4.6096.

Sunday’s price, like Saturday’s, was the highest in the nation, with the Golden State leapfrogging Hawaii this week as the state with the most expensive fuel due to a temporary reduction in supply.

Californians are paying 24 cents per gallon more than motorists in Hawaii, according to the AAA report. In some locations, fuming motorists paid $5 or more per gallon while station owners had to shut down pumps in others.

[…]A web of refinery and transmission problems is to blame, analysts said. The situation is compounded by a California pollution law that requires a special blend of cleaner-burning gasoline from April to October, said Denton Cinquegrana, executive editor of the Oil Price Information Service, which helps AAA compile its price survey.

The radically leftist New York Times explains why this is happening:

Excerpt:

California typically has substantially higher gasoline prices than most of the country because of its tough environmental regulations and high taxes. Gasoline supplies are traditionally tight this time of year as refiners do maintenance work to switch from summer to fall gasoline blends mandated by the California pollution-reduction regulations. But this year, energy experts say, the local gasoline market is particularly chaotic because of the refinery shutdowns.

[…]“California requires a specific blend of gasoline that only the refineries on the West Coast make,” said Bill Day, a spokesman for Valero. “So when there is a shortage of that blend, you can’t just send supplies from somewhere else.”

Wow, even a stopped clock is right twice a day.

Here’s a more full explanation from Ken Green of the American Enterprise Institute. (links removed)

First reason is limited supply with higher demand, which has been made worse by Obama:

The primary reason for high gasoline prices, as any economist will tell you, is very simple: world demand for oil is strong, and the supply is limited. The cost of crude oil dominates the price of gas: in January 2012, it represented 76 percent of the price.

Second reason is Middle East tensions, which has been made worse by Obama:

Risk also influences the world price of oil. Unrest in the Middle East is a perennial cause of worry over world oil supplies, and explicit threats by Iran to close the Straits of Hormuz can’t be promoting confidence in oil consumer markets.

Third reason is blocking domestic energy production, which has been made worse by Obama:

Another source of supply uncertainty is the moratorium that the Obama administration has slapped on U.S. development of domestic oil production in the last two years. Since the Deepwater Horizonoil rig disaster in 2010, U.S. domestic oil production has slowed significantly, especially in the Gulf of Mexico. The permitting slowdown as a result of the spill is estimated to have cost the United States $4.4 billion in output costs, 19,000 jobs, $1.1 billion in wages, and over $500 million in federal, state, and local government lost tax revenues.

Fourth reason is higher taxes on gasoline, which has been made worse by lots of Democrats:

The tax bite in a gallon of gasoline is nearly equal to the costs of refining, distribution, and marketing combined. That fluctuates, of course, because most gas taxes are percentage based. At $3.79/gallon, taxes account for about 53 cents.

Fifth reason is global warming hysteria, which is the Democrat religion:

In order to fulfill air pollution reduction plans in states and localities across the country, gasoline sold in the United States has been fractionated into about 17 different boutique fuels sold in dozens of discrete markets. With three grades of gasoline per fuel, refiners are producing over 50 separate blends. Such boutique fuel requirements both increase price volatility and the height of price spikes as a function of the distance-to-market of boutique fuel producers and consumers, according to the Energy Information Administration. Boutique fuel requirements also increase the absolute price of gasoline sold in boutique markets, according to the U.S. Government Accountability Office.

Sixth reason is denial of refinery permits, which has been made worse by Obama:

Another factor contributing to the increased price of gasoline is the reduction in the number of operating refineries in the United States over the last 30 years. The number and capacity of U.S. refineries peaked in 1981, and, since then, 171 plants have closed, although the remaining plants have increased output to offset a loss of production. Though most of this reduction has been caused by the low profit potential of refineries, but others see a significant cause in “extremely tight environmental restrictions, not-in-my-back-yard community opposition, and the high cost of new construction.” Refinery profit margins have played a role in recent gasoline price hikes. TheEIA suggests that “The sizable jump in retail prices this year reflects not only the higher average cost of crude oil compared to previous years, but also an increase in U.S. refining margins on gasoline (the difference between refinery wholesale gasoline prices and the average cost of crude oil) from an average of $0.34 per gallon in 2010 to $0.45 per gallon in 2011 and $0.42 per gallon in 2012.”

Seventh reason is three rounds of quantitative easing, which causes inflation and a weak dollar, which has been made worse by Obama:

In recent congressional testimony, Robert Murphy, of the Institute for Energy Research observed: that: “From its peak in March 2009, the dollar has fallen 17 percent against other major currencies. Therefore, holding everything else constant, the dollar depreciation alone from early 2009 can explain a 20.5 percent increase in oil prices (quoted in dollars)….It is on the basis of such calculations that a recent Joint Economic Committee report estimated that Federal Reserve policies have added almost 57 cents to the price of a gallon of gasoline for American motorists.

The article also debunks the leftist myth that “speculators” are the cause of high gas prices.

It’s election time – make sure you have the facts so you can make the case.

UPDATE: Stuart Schneiderman links to a Wall Street Journal article that discusses California’s cap-and-trade (carbon tax) policy, and their restrictions on pipeline construction – both of which raise gas prices for consumers.

Mitt Romney unveils detailed energy plan to create jobs and lower gas prices

From Yahoo News.

Excerpt:

Mitt Romney unveiled an energy plan Thursday that would give states the power to determine whether drilling and mining should occur on federal lands within their borders as part of a larger effort to increase domestic oil, coal and natural gas production and achieve energy independence by 2020.

[…]Under current law, the federal government controls oil, coal and gas permits for federal lands. But Romney argued determination should be up to state officials, insisting individual states are in a better position to “develop, adopt and enforce regulations” on local basis than the federal government–which his campaign says has been unduly influenced by Washington politics.

This is going to get him some votes in North Dakota, Montana, Ohio, Pennsylvania, West Virginia, Alaska, etc. We have a lot of energy just waiting to be extracted from the Bakken an Shale and the Marcellus Shale, for example. Just keep the federal government out it and get on with getting the price of gas back under $2. Put people back to work, too.

policy paper released ahead of the candidate’s speech by the Romney campaign argues President Barack Obama “has intentionally sought to shut down oil, gas and coal production in pursuit of his own alternative energy agenda.”

Romney said that loosening regulations on the energy industry will benefit taxpayers by lowering gas costs and reducing the cost of consumer goods, which have increased as companies pay higher energy prices. He’ll argue that allowing more federal drilling would not only bring money back into the nation’s budget but would result in lower energy prices that could create jobs, lower the trade deficit and increase the nation’s security.

“Three million jobs come back to this country by taking advantage of something we have right underneath our feet. That’s oil, and gas, and coal. We’re going to make it happen. We’re going to create those jobs,” Romney said Thursday. “Let me tell you what else it does. It adds $500 billion to the size of our economy. That is more good wages. That’s an opportunity for more Americans to have a bright and prosperous future.”

The push is part of what Romney touted as an effort to achieve energy independence by 2020, a plan that also includes expanding offshore energy development along the coast of Virginia and North and South Carolina as well as approval of the Keystone energy pipeline linking Canada to the United States.

I think that Romney is doing a good job now of articulating specific policies that will fix the economy.

GAO study: EPA regulations will kill coal plant jobs and raise energy prices

From CNS News.

Excerpt:

New regulations issued by the Environmental Protection Agency will lead to the closure of older, coal-fired power plants and boost electricity prices in some parts of the country, according to a new report from the Government Accountability Office.

The GAO, at the behest of Sen. Jay Rockefeller (D-W.Va.), reviewed a host of information from government sources such as the EPA and Energy Information Agency (EIA) as well as private energy-sector forecasters to determine the likely impact of four new EPA regulations aimed at coal-fired power plants.

[…]GAO found that as many as 12 percent of coal-fired power plants may be closed because the EPA regulations make it too expensive for power companies to operate them, despite coal being one of world’s cheapest fuels.

“It is uncertain how power companies may respond to four key Environmental Protection Agency (EPA) regulations, but available information suggests companies may retrofit most coal-fueled generating units with controls to reduce pollution, and that 2 to 12 percent of coal-fueled capacity may be retired,” GAO said.

These changes – either installing expensive retrofits or closing power plants – will drive up electricity prices by as much as 13.5 percent in some areas of the country.

“Available information suggests these actions would likely increase electricity prices in some regions,” GAO said. “Regarding prices, the studies GAO reviewed estimated that increases could vary across the country, with one study projecting a range of increases from 0.1 percent in the Northwest to an increase of 13.5 percent in parts of the South more dependent on electricity generated from coal.”

Coal is the country’s single-largest source of electricity, accounting for 42 percent of power generation in 2011, GAO reported.

[…]The regulations at issue were all put in place by President Obama’s EPA to deal with power plant emissions and industrial waste called coal ash, the byproduct of burning coal.

This is another issue to communicate to everyone who will be voting in November. We already have price inflation from rising gas prices due to insufficient energy production at home, as well as currency inflation from several rounds of money printing and debt monetization. If we have to add to that higher electricity costs, then we really will be in trouble.