Oil

Supply is everything…all else follows. UK has those prices becaus they tax the living shit out of it…full stop!😂😂😂
 
Last edited:
Oh it’s regulations, taxation and dumb special blends but the main culprit is The base price of oil. Drill baby drill!
We have no pipelines coming into the state so fuel has to be shipped in. The regulations and taxes make running a refinery an unattractive business UNLESS operating at very high profit levels as from 1982 until now the total number of CA refineries has dropped from 40 to 17 (somehting like that per the CA Inside article). As the EV mandate draws nearer why would oil companies do anything but jack prices up further to maximize profitability of assets that will be statutorily obsoleted?

After thinking about the pure economics I am really surprised we don't have $10/gal gas in CA. I wonder what their internal calculation of the demand destruction price point is - I'm guessing somewhere near $8
 
Free market as in unsubsidized fossil fuel industry like UK? Nope, then it'll still be about $7/gallon on national avg
https://www.globalpetrolprices.com/gasoline_prices/

So what you want is a subsidized fuel without CA gas tax and regulations



From that excerpt, supply isn't the issue. :poop:

You are looking at the gross cost of fuel without factoring the much higher sales (VAT) tax that they pay. The average sales tax in the UK is 46% or $3.21/gal based on your linked fuel prices, compared to only $1.18/gal in tax we pay in California. Even comparing to CareBears' ultra low Costco price, we are still paying more than they do in the UK when normalizing for the sales tax.

So by your own admission, the UK is more of a free market than we are, and they pay less for fuel than we do. They do, however, pay more in sales tax than we do.

Why Is The UK Sending Gasoline To America As Prices Explode?​


On the face of it, the flow of gasoline from the UK to the U.S. looks counterintuitive to market forces as UK gasoline prices are $3 a gallon higher than the gasoline prices in America.

But gasoline in the UK is taxed much more than the levies on gasoline in the U.S., that's why British drivers pay much higher prices at the pump, as do most other motorists across Europe.

If taxes are left out of the equation, it actually makes sense for UK exports of gasoline and blending components to flow to the United States, Bloomberg's Lee notes.

Gasoline prices in the UK—where total taxes on gasoline account for an average 46% of the retail price...

 
Last edited:
You are looking at the gross cost of fuel without factoring the much higher sales (VAT) tax that they pay. The average sales tax in the UK is 46% or $3.21/gal based on your linked fuel prices, compared to only $1.18/gal in tax we pay in California. Even comparing to CareBears' ultra low Costco price, we are still paying more than they do in the UK when normalizing for the sales tax.

So by your own admission, the UK is more of a free market than we are, and they pay less for fuel than we do. They do, however, pay more in sales tax than we do.

Why Is The UK Sending Gasoline To America As Prices Explode?​


On the face of it, the flow of gasoline from the UK to the U.S. looks counterintuitive to market forces as UK gasoline prices are $3 a gallon higher than the gasoline prices in America.

But gasoline in the UK is taxed much more than the levies on gasoline in the U.S., that's why British drivers pay much higher prices at the pump, as do most other motorists across Europe.

If taxes are left out of the equation, it actually makes sense for UK exports of gasoline and blending components to flow to the United States, Bloomberg's Lee notes.

Gasoline prices in the UK—where total taxes on gasoline account for an average 46% of the retail price...


vat is 20%

However, there is substantial difference in these prices among countries. As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices. One notable exception is the U.S. which is an economically advanced country but has low gas prices. The differences in prices across countries are due to the various taxes and subsidies for gasoline. All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different. Use the drop menu to see the prices in gallons.

so without fossil fuel subsidies in the us, you think prices will remain low?
 
Wow...the stupidity is just breathtaking.... Brain surgeon Elizabeth Warren has resurrected the "Windfall Profits Tax" to punish those evil oil companies...the same "Windfall profits tax" (even using the same name) that Brother Jimmy laid on the "evil 70's oil companies" that led to the disastrous oil shortages and offshoring of production of that era....Never one to learn from a mistake, this is what our current leadership proposes....Wow!!

Oil Market Chaos Deepens As Sen Warren Pushes Windfall Profits Tax For ?Big Oil?

"Big Oil?s first priority is to maximize profits.

It?s also their second priority, third priority, and on and on.

We can?t let them use Putin?s invasion as an excuse to pad their bottom line with war-fueled profits. So I?m working with Senate Democrats on a windfall profits tax."
https://tradeforprofit.net/2022/03/...rren-pushes-windfall-profits-tax-for-big-oil/

Carter's ?Windfall?

May 9, 1979
WASHINGTON, May 8 ? President Carter's proposed tax on ?'windfall? profits of oil companies goes before Congress tomorrow, and it is likely to touch off a political donnybrook as intense, if not as protracted, as last year's struggle over the President's energy program.

The Secretary of the Treasury, W. Michael Blumenthal, will open the Administration's case when he testifies tomorrow before the House Ways and Means Committee. As he does so, the windfall profits tax is under attack from two directions.

Some opponents of the President's decision to remove price controls from crude oil produced within the United States are working to defeat the tax and thereby make decontrol untenable. But the tax is also drawing fire from the oil industry, which heartily favors decontrol
https://www.nytimes.com/1979/05/09/archives/carters-windfall-profits-tax-issue-and-debate.html

Carter's windfall profits tax fell far short of its projected revenues, partly because it discouraged domestic production and partly because worldwide economic events caused oil prices to fall sharply during the early 1980s. According to the Congressional Research Service, the Carter-era windfall profits tax:

Reduced domestic oil production by 3-6%; and
Increased foreign oil imports by 8-16%.
If foreign producers have the capacity to offset all the lost domestic production, then the windfall profits tax will simply shift domestic consumption from domestic to foreign oil with no effect on pump prices at all. On the other hand, if foreign producers can't turn up the taps to offset reduced U.S. production?Saudi Arabia in particular may not be able to meet its ambitious production targets?then not only will we be more dependent on foreign oil, but pump prices will rise to bring demand in line with newly-reduced supply.

So there's your windfall profits tax in a nutshell: reduced domestic production, increased dependence on foreign oil, and pump prices either unchanged (best case) or higher (worst case).
Exact same old argument and exact same old proven failed policy…don’t fall for it twice just cause you are too young to remember the last time it didn’t work…

Biden considering imposing a 'windfall tax' on energy company's profits: President will make oil and gas firms the villains on Halloween and blame them for soaring prices at the pumps in a final push before the midterms


· President Joe Biden is considering a 'windfall tax' on energy companies

· A 'windfall profits tax' would fall on the profits of energy firms that are in excess of their typical annual profits

· Biden trying to lower gas prices ahead of midterm election

· Congress would have to approve any new tax

· Biden making remarks on energy prices at White House Monday afternoon

https://www.dailymail.co.uk/news/ar...ing-windfall-tax-energy-companys-profits.html
 
Exact same old argument and exact same old proven failed policy…don’t fall for it twice just cause you are too young to remember the last time it didn’t work…

Biden considering imposing a 'windfall tax' on energy company's profits: President will make oil and gas firms the villains on Halloween and blame them for soaring prices at the pumps in a final push before the midterms


· President Joe Biden is considering a 'windfall tax' on energy companies

· A 'windfall profits tax' would fall on the profits of energy firms that are in excess of their typical annual profits

· Biden trying to lower gas prices ahead of midterm election

· Congress would have to approve any new tax

· Biden making remarks on energy prices at White House Monday afternoon

https://www.dailymail.co.uk/news/ar...ing-windfall-tax-energy-companys-profits.html

That windfall tax would never pass pass today and for sure won't pass after next Tuesday.
 
The 3 problems are lack of refineries, high taxes, and the super special blend.
No, it’s oligopolies with barriers to entry. Same problem as the deregulated energy market when companies figured out an unplanned emergency “maintence” created more profit than producing.

Those barriers though are breathing or not.
 
Of course it is…

Biden’s Energy ‘Windfall’ Tax Is Election Theater For Economic Illiterates

President Joe Biden has accused oil companies of “war profiteering” and is threatening to impose a windfall tax if they fail to boost domestic production — and improve the Democrats’ fortunes in the 2022 midterms. It is ugly political theater. Demanding private entities act on behalf of the party or face punishment from the state, as the president might say, is semi-fascisty behavior.

Other than appealing to the anger and frustrations of economic illiterates, windfall taxes (a tax on allegedly excessive, or unfairly obtained, profits) make zero sense. They neither bring down the price of energy nor increase supply. All windfall taxes do is disincentivize oil producers — their business already facing an existential threat from Democrats — from investing in long-term production. And, as with all corporate taxes and regulations, the cost will be passed to the consumer.

https://thefederalist.com/2022/11/0...is-election-theater-for-economic-illiterates/

 
Sell low buy high….brilliant.

Biden Admin Quietly Raises The Price It’s Willing To Pay To Refill Oil Reserves
The Energy Department announced Friday that it would begin buying oil to refill the U.S. Strategic Petroleum Reserve (SPR) at prices below $96 per barrel, even though the White House previously stated that the department would begin buying back oil at a price of $67 to $72 per barrel.
The Energy Department declared that it would start to repurchase crude oil at a lower price than the $96 per barrel average price that barrels were previously sold for to secure a “good deal” for the taxpayer, according to an official press release. However, the White House said in October that the department would buy oil back once the average price of oil reached $67 to $72 a barrel, touting the plan as a “win for taxpayers.”
https://dailycaller.com/2022/12/16/...willing-to-pay-refill-strategic-oil-reserves/
 
So how have prices come down? Winter blend is that much cheaper? Russia still warring with Ukraine.

Why have profits been so high during these times?
 
Look out oil... here comes... the ocean!


“We have split natural seawater into oxygen and hydrogen with nearly 100 per cent efficiency, to produce green hydrogen by electrolysis, using a non-precious and cheap catalyst in a commercial electrolyser,” said Professor Shizhang Qiao, the team’s co-lead. Seawater typically needs to be purified before electrolysis splits it into hydrogen and oxygen. The team says its results, using cobalt oxide with chromium oxide on its surface as the catalyst, had similar performance to a standard process of applying platinum and iridium catalysts to highly purified and deionized water.

Yet another good reason to live near the coast. :)
 
Reliance on oil a concern in Europe... so alternate forms of energy are growing:


Growth of wind and solar power has saved the European Union (EU) €12 billion in avoided gas costs since Russia invaded Ukraine, according to a new analysis from energy think tank Ember.

This Friday, February 24, marks a year since Russia invaded Ukraine. And in that rough period – from March 1, 2022, to January 31, 2023 – EU wind and solar grew by 50 TWh (+10%) since the start of the war, generating 23% of EU electricity in that period (546 TWh).
The annual increase in wind and solar alone reduced the amount of gas required for electricity generation by 90 TWh (9 bcm) and avoided gas costs of €12 billion ($12.78 billion).

[...]

Russia’s invasion of Ukraine shocked Europe into action. Suddenly, gaping vulnerabilities due to fossil fuel dependence became a stark reality. The last year has been a scramble to address these risks through an accelerated transition to a cleaner, more secure power system. At the year marker of Russia’s devastating war in Ukraine, it remains critical that the EU rapidly expands solar and wind to attain permanent energy independence.

At least that's one benefit from Putin's stupidity.
 
Life finds a way. I told you to always follow the money. Capitalism at its best…if there is money to be made…companies will find a way..not because of but despite dumb government attempts at social engineering…money will always win out….Drill baby Drill!!!

The Russia-Ukraine war remapped the world’s energy supplies, putting the U.S. at the top for years to come


· Since Russia’s invasion of Ukraine, the U.S. oil and gas sector has boosted exports to the point where the U.S. is at the top of the world’s energy-exporting nations.

· This week new data from the U.S. government showed the U.S. exported a record 11.1 million barrels a day of oil and refined products.

· “It’s amazing to think of all those decades of concern about energy dependence to find the U.S. is the largest exporter of LNG and one of the largest exporters of oil. The U.S. story is part of a larger remapping of world energy,” said Daniel Yergin, vice chairman of S&P Global.

 
Back
Top