Gasoline Shortages And Higher Prices Likely Headed Your Way

get ready folks,especially us in the south and on the eastern seaboard..10 dollar a gallon gas possible?

http://globaleconomicanalysis.blogspot.com/2008/09/gasoline-shortages-and-higher-prices.html

Gasoline Shortages And Higher Prices Likely Headed Your Way



There is an excellent discussion of the Implications of a Ten Day Refinery Outage on The Oil Drum. I encourage everyone to take a look. The comments are good too. Here are a few snips.

The Oil Drum offers 12 insights as to what is happening and what is expected. Here is my take.

Expect The Wrong Action From Bush And Congress

I do not know what price it would take to get efficient usage of fuel in this outage, but I suspect it is far less than $10. Clearly the drum is guessing, but so am I. What I do know is that the market should set the price and any price people are willing to pay is the fair price.

Letting the free market set rates would encourage efficient usages such as car pooling, taking public transportation, or canceling a 200 mile trip to take the kids to see dear Aunt Millie.

Unfortunately, the most likely government response is: "We will investigate and prosecute those engaged in 'Price Gouging'."

I also expect to hear "There is no shortage" and "Do not panic". Finally the government will suggest car pooling and cutting unnecessary travel, but unless price forces the issue, too few will react. Instead they will react to the statement of "There is not shortage" and continue on their merry way to visit Aunt Millie.

Such unconcern will continue until there are no supplies and people are stranded with Aunt Millie, and/or rationing measures (an extremely inefficient way to regulate use) are put in place. I hope I am wrong about this but this is what the reaction in Katrina suggests.

Broken Window Fallacy

Another reaction I expect is hear will come from a bunch of clowns on CNBC all touting how Ike will provide a stimulus to the economy. It will do no such thing. And I may as well rebut the idea in advance.

Here is a snip from Bill Gross Wants Treasury To Buy Assets To Prevent Tsunami that discussed this very issue.

Yes pipelines, refineries, and buildings will have to be repaired. However, those were productive assets already. Instead of putting money to work building new productive capacity, that same money now has to go to repair what has already been built. Economically this is not a good thing. Nonetheless, the one thing I am most sure of in this mess is a parade of complete fools will appear on CNBC telling everyone how Ike will "stimulate" the economy.

 

Bottom line here is that crude waiting to be refined was not affected. A minor slowdown in refining will be normal, but the small dip in output should not be felt. This, once again as it was immediately following Katrina, an excuse for Texaco and Exxon/Mobil to boost end prices to line the pockets of the senior management (not even the stockholders).

We The People get fucked again.

Pass me some lube so I can minimize my liabilities...

 

the refineries being SHUTDOWN for 10 days is a bit more than a "minor slowdown". i am pretty sure the refineries being down for 10 days is actually due to the hurricane.
freeport and texas city are spitting distance from galveston and there saying 30 days to get power to galveston..

your talking about a 1/4 of the countries refining capacity there.. FAR more than what was affected in louisiana by katrina..

to compare the 2 is akin to comparing apples and oranges..

 

well then... I'll be eating both and watching the rest of the world pay $7 per gallon because I don't own a motor vehicle.

 

i have a vehicle,,just nowhere to go..lol..

ive got 20 gallons here for yard machines and full tank in the car.i have no need to go to town but at the most once every 2 weeks so i should need gas about,,march?? lol

 

i'm really not all that worried

 

Everyone has been trying to talk me into buying this 98 Dodge Ram 1500 sport 4x4 with a Magnum V8 for $1000. It's worth like 3 1/2 times that but the gas will cost me over $100 per tank at the CURRENT price.

I'd have to double my rates to make any $$. Fuck that. I'll sit at home and work on my sailboat.

 

why should you be? you live at home with mom an pop in a city with public transportation.

im sure if i was still under mom an dads wing i wouldnt worry either..

 

thats not even close to why i'm not worried

 

whatever you say..

its ok i know how hard it is to admit the truth for young men in your situation..

 

i love my bicycle.

 

Ours shot up 30 cents here over night.

 

I am worried because even though I do not drive and walk everywhere, this is going to impact everything around us. The cost to ship food will rise and thus food prices will go up. I guess buying local will lessen the blow.

Other than that, I am not worried. Like I said, I do not drive and rarely need public transportation, I just walk an when needed I will get a bike.

 

NOT GOOD NEWS!!!

APNewsAlert

16 minutes ago
HOUSTON (AP) — Hurricane Ike destroyed a number of production platforms and damaged pipelines in Gulf of Mexico

 

Ohhhh snap!

 

the oceans are so disgustingly polluted.

there is no turning back.

 

I don't want to believe it, but it's already 5 in many places.
Down the street it's 4. =\

 

my situation? haha, i'm in the same situation as the majority of my friends are living at home

the only ones who aren't are in the military, living on base or over in iraq.

 

well at least your not alienated...

 

i misspoke, 1 is in the process of buying a house for himself

and that is the plan we all have for our mid 20s