$2 per gallon

4/10/2006 10:08:40 AM

^^depends on where you are. several larger cities are debating on requiring special blends. ultra low sulfur diesel is coming out this year too in heavy swing.

as a side. it is funny how regulators make these new requirements without bothering to check the technical problems associated.

i.e. sulfur in diesel is actually a good thing in diesel and it contributes to lubricity. ultra low will not have enough so fuel makers have had to come up with lubricity additives ($ goes up) to prevent engines from seizing up.

i.e. sulfur in gasoline. several car manufacturing companies use silver in fuel tank equipment. the required technology associated with making low sulfur gasoline reduces one type of sulfur but not another (one that negatively interacts with silver). as a result when LSG came out, a lot of fuel gauges failed. regulators didn't bother to consult with fuel makers or auto makers to see the repercussions of their requirement.

i.e boutique blends. to reduce emissions in various cities, officials would rather see people pay more at the pump than improve signals and traffic flow. most studies show that improved traffic would be a far better improvement in emissions than the new fuel.

anywho, buy shell, k. or exxon.

4/10/2006 10:52:26 AM

over off of wilmington st in the garner area, its usually cheaper by 0.05 or so...i saw ranges just now from 2.65 to 2.80

4/10/2006 10:53:33 AM

^^ Why don't you guys get your junk together and gradually introduce these additives into the fuel/changes in the mix/ethanol/whatever. You know... this month you have converted 20% of the fuel being produced over to the new formula and next month you'll be up to 60%, etc.

Instead you make sweeping changes at the last minute and cause shortages in supply for the raw materials used in the new formulas. It almost seems like that is how you want it to be so you can give the formula change excuse as a reason why the price at the pump is so high. Anything to keep the price up.

I vaguely remember the price at the pump excuse during the winter months being attributed to some sort of additive to help gas hold up under the colder temperatures. Then everyone was surprised to hear how gas would go up again because they had to change the blend for the summer months - which consisted of not putting in that additive - which meant it should have been cheaper.

Be postwarned that I do not know what I am talking about. I just remember hearing people complain about this.

[Edited on April 10, 2006 at 11:11 AM. Reason : -]

4/10/2006 11:10:13 AM

haha because it isn't as simple as converting gas a to gas b. individual cities have different formulations - as in chicago's is different from LA's which is different from Atlanta's on and on til infinity. our blending engineer lovingly calls it the 33 flavors of gas.

refining units don't just spit out gasoline. gasoline is a concoction of up to 20 different blendstocks, including naphtha, straight run, alkylate, etc. different components and recipes are used to meet the various requirements in these cities - i.e. sulfur, RVP, benzene, etc. we literally batch process a lot of the boutique blends. sorry, unless you want to petition these cities to go to one low emissions stock, then that is what you will get.

the EtOH is coming on because of regulation. it isn't something we'd prefer to go to as is presents shit tons of logistical problems. any and all additives or special formulations will increase your cost. if we are required to use a more expensive additive or formulation, the consumer gets to pay for that. (i believe the winter/summer thing you are thinking of is for volatility - in summer you want less volatile components to decrease emissions in the hot weather and less volatile components are more expensive to make. also you can't just gradually change. units are configured for summer or winter mode. it can be compared to flipping a switch.)

anywho, back to work.

4/10/2006 11:24:19 AM

Nice to know at any rate... thanks.

4/10/2006 11:31:24 AM

Quote :

"But if I realized I could sell my product for over DOUBLE of what it sold for last year and everybody that was buying it then, kept buying it now, I would. So would Exxon and all those other jackasses."

No you wouldn't. Why? Because if you can sell it for less than that, still make a tidy profit and keep all of the customers you have now, you can pick up more customers, keep customers interested in buying and continuing to use your product and get new customers to want it. Remember that part of being competative is being cheaper than the alternative. The longer gas prices stay higher than people want, the more they're going to look for alternatives.

Quote :

"BTW, good luck getting anyone to believe those sap-stories when the fuel companies pulled in the biggest profits of any company in the history of the world recently. I'm sure they're bleeding money..."

Just some quick napkin math here:

Energy use is increasing == more profits

Further more lets say when gas was $2 / gallon the companies were making 25% of that back in pure profit. So every company gets 50¢ per gallon sold. Now say they sell a million gallons, thats $500,000 profit. Now let's say that gas goes up to $3 / gallon and they sell that same million gallons. They would have to cut their profit margins to ~15% in order to make exactly the same as last year. IOW without cutting the margin, OF COURSE the company is going to post higher profits each year. And that's not counting for increasing energy use. So if your evil oil company actualy cuts their profit margin back to 17% from 25% they'll still post record profits.

Quote :

"The reason I don't believe that is America did just fine from *-2004."

Let's see, from *-2004 (with * being about the mid 90's) gas went from ~90¢ / gallon - $2.00 / gallon or there abouts. Since about 2000 or so regulations on gas have gone up considerably from the early 90's, plus there's that whole war thing going on in the middle east, energy demand world wide has continued to climb, and then there's that whole hurricane thing, yeah that didn't help much. In short, there's more demand, and less supply and we all know how that works. OPEC be damned even without them prices would be on the rise they just make it change from a problem to a pain in the ass of a problem.

Quote :

"Oil companies do not care to ever see the price of gas go down, there's just no incentive."

Sure their is. The longer gas prices stay cheap but the oil companies make good money off of it, the longer they will remain profitable in general. As I said before, the more prices spike, the more people will look for alternatives and the more people wil jump at it when it comes. If it costs 10¢ / mile to operate a car currently and I'm an oil company I want that to probably go down if I can still maintain a nice profit because when it goes down there will be more extranious use (vacations, road trips etc) and it makes the 15¢ / mile cost of the alternatives look that much more uninviting.

4/10/2006 12:00:18 PM

^ All that sounds fine and dandy, but it lacks one thing: realism.

Do you have any idea how many vehicles that run on gasoline only are moving around the world as we speak? Even if another energy source comes out, people will still use their gasoline powered cars. And not just cars, I'm talking lawnmowers, go-karts, and the billions of things with engines in them. We ain't switching away from gasoline anytime soon and not until it's absolutely necessary, which will cause a huge deal of havoc but you can bet the bank that is what happens.

And gas is unlike any other good in that it has no realistic long-term substitutes. People will buy gas no matter what for at least decades to come. If gas suddenly went to $5/gallon, the amount of people driving around would probably only decrease 1-3%, because other than bussing it or carpooling (Americans hate the inconvience), there's no other way.

If you're reaction is "NO WAY", chew on this: If someone told you in 2003 that gas prices would increase over 300% and *remain there* within 2-3 years, would you have believed them? People adapt their lifestyles in order to afford gasoline. It simply does not follow normal market trends in any way, shape or form. How can you expect it to when 1) it's delivered by criminals and 2) there's no long-term alternative or way to make gasoline users switch to anything else.

[Edited on April 10, 2006 at 12:43 PM. Reason : s]

4/10/2006 12:42:42 PM

Quote :

"Do you have any idea how many vehicles that run on gasoline only are moving around the world as we speak? Even if another energy source comes out, people will still use their gasoline powered cars. And not just cars, I'm talking lawnmowers, go-karts, and the billions of things with engines in them"

Which is preciesely my point. Major road vehicles and large engines are the only things currently that really NEED gasoline. Everything else uses it becuase it is a cheap and convenient source of power. The higher gas prices go, and the longer they stay high, the more and more attractive alternative energy looks. Right now I can drop a little over $100 and get myself an electric lawnmower. Sure it's an initial outlay, but as gas prices go up, why would I continue to use a gas mower? Hell I could probably sell the gas mower for ~ half of the cost of a new mower. go-karts are becoming more and more frequently electric based. Same with golf carts. Small engines can easily be run off of electricity. They weren't before because a gas engine was cheap and easy. Not so much now

As for cars, the hybrid and all electric market has actualy been on the rise in recent years, and if you think that's not going to speed up as governments look for ways to get out of the mess we're in currently you're deluding yourself. But the real market and the thing that will come sooner rather than later the higher and longer gas prices rise will be retro kits. The day somone figures out how to make a current car become a hybrid or better for less outlay than a new car, there's going to be a lot of money flowing in directions other than into the gas pumps.

Gasoline isn't going anywhere that is true. But the longer and higher gas prices go, the faster the gas market will die. $5 / gallon prices are not conducive to long term profits for the gas companies any more than McDonalds charging $6 / burger is conducive of long term profits for McDonalds.

Everyone wants to charge as high a price as people will pay but you're deluding yourself if you don't think that the gas companies are trying as hard as they can to keep prices low too. They more than anyone else are accutely aware of the threat alternative energy is to them, and I assure you that they are looking into it too. Why? Because they have the infrastructure and the power to move it. The game the gas companies have to pay is to keep gas profitable but low enough cost to stave off any major energy shifts until they are in a position to market it. Higher gas prices mean shorter time tables for them.

Quote :

"And gas is unlike any other good in that it has no realistic long-term substitutes. People will buy gas no matter what for at least decades to come. If gas suddenly went to $5/gallon, the amount of people driving around would probably only decrease 1-3%, because other than bussing it or carpooling (Americans hate the inconvience), there's no other way. "

Sure there is. When gas continues to go up, you watch how many people suddenly think a few bucks to ride public transport is a good idea. As gas goes up, the cost of EVERYTHING goes up, and you can be damn sure that even if consumer joe doesn't do much to improve low cost alternative energy transportation the big corporations will. And you seem to think that americans won't bus or carpool. Clearly you've never been to NYC or anyplace with a real public transportation system. Trust me when I say people will glady front the tax money to avoid getting raped at the gas pump because they won't see all of the costs. When people see the $3.00 price tag at the pump and see a $50 bill to fill up their tank they feel it in their wallets. But when people see $1.25 to ride the bus they won't pull out their W2s and add the taxes they paid too.

Quote :

" If someone told you in 2003 that gas prices would increase over 300% and *remain there* within 2-3 years, would you have believed them? "

Nope, and it's a good thing too because in 2003 gas was hovering right about $2.00 and now it's just below $3.00. Hardly a 300% increase.

Quote :

"People adapt their lifestyles in order to afford gasoline. It simply does not follow normal market trends in any way, shape or form. How can you expect it to when 1) it's delivered by criminals and 2) there's no long-term alternative or way to make gasoline users switch to anything else. "

And as you so deftly pointed out

Americans hate the inconvience

Americans have money, and you can bet that as this inconvenience continues, alternatives will look better and better.

4/10/2006 5:21:42 PM