Why are gas prices so high? Congress not allowing new refineries in 25 years...wow..

[HueyCobra8151]

Wow, say it ain't say...Congress not allowing a refinery to be built in 25 years, or Congress requiring oil to be shipped from Angola when it could be produced here MIGHT just have something to do with gas prices as well...

The CEO of Chevron talks at a Senate hearing:

Two ways to look at this: CEO of Chevron is an evil lying greedy corporate SOB -or- CEO of Chevron might actually understand a thing or two about the reason why gas prices are so high...

ok, three ways: Both of the above.

link

 

[HueyCobra8151]

Before it comes:

HueyCobra you are obviously a Conservative hack and you just love the corporations who are all corporationy in their corporation buildings...screw you

Ok, I beat you to it...I know what you were thinking...yeah...you.

 

[Brett327]

Where does it say in the linked article that congress has prohibited additional refining capacity (like your misleading headline suggests)? I saw an interview w/ EOM CEO about this issue and he was very up front about the refining issue. Adding capacity in that area does not serve their bottom line in the current conditions. Let's face the facts: Gasoline is a price-elastic necessity and the free market is a b!tch. Just be glad that the economy isn't in the tank like it was in the 70s when gas was even more expensive than it is right now and your car loan was at 25% APR.

Brett

 

[DanMa1156]

And just so you know, oil is nearly perfect competition; it doesn't matter where it is produced. We make a big deal out of it because it just so happens that we are militarly and politically at ends with the countries we get it from often. Think about it; (say) we had a ban on Iraqi oil for some time. Should that raise the price of oil? Not in the least. Why? Because it is a global market. All that means is that Iraq has less demand from the US, but it can ship more to other countries demanding it, say Europe. As a result, say Saudi Arabia and Venezuela as examples, other oil producing nations are facing less demand from Europe and more from the US, so it evens out. Oil from one nation isn't regarded as better, it is like an agricultural product, there is near global information on it, and nearly the same global pricing.

 

[CommodoreMid]

It is far from perfect competition; it's oligopolistic.

 

[DanMa1156]

Perfect competition in the sense that it is like an agricultural product: buy a potato from Joe's farm and it's little or no different from John's farm. All sellers have to sell at the same price, because there is nearly perfect knowledge about the market price. In this case, however, you're right, OPEC, a cartel, can actually control that price; however, over the long run, gas is not elastic, therefore, it must sell near the market price.

 

[HueyCobra8151]

ie: It is a commodity

 

[Herc_Dude]

While I think the prices on gas blow just as much as the next guy, and I wish something would change (i.e. Alaskan drilling, hydrogen research sucess, etc...) I did hear something very interesting today - the CEO's of the oil companies have been making a 8% profit, which is consistent for most CEO's of various companies in different markets. Still, their profits have gone up 50 to nearly 80% in the past few quarters, which just leaves me with more questions. But hey, gas just dropped to $2.03 in Garrisonville today ... below $2 soon? Just more food for thought...