Bush reaction to feul emergency

I see they had no problem temporarily lowering environmental standards for gas production. That's fine. It's an emergency situation and production needs to be stepped up to help meet demand.

What I don't understand is why he doesn't also impose a temporary cap on consumer gas prices. I've heard reports of stations in Atlanta charging up to $5.50 a gallon. I guess bottom line profits are a priority over the average person being able to get to work.

*aggh! Someone fix that headline please!

[Edited on Aug 31, 2005 by googuse]

Did you miss that day of right wing indoctrination camp? The market will fix everything! Duh.

I just saw it for 6.09 a gallon right outside of ATL!!!!!! HOLY FUCKING SHIT!!!

"Whoah...I tell ya...I get no respect around here...no respect at all"

*does the "I can walk to work" dance*
I saw 5.21 a gallon here in the suburbs of south Atlanta.

Well, I've heard that the fuel market is relatively inelastic, to what degree though I don't know.
In general, the rising price in a scarcity situation tends to help rather than hurt, as it forces people to buy only what they need, as well as provides immediate incentives to producers to bring more product to the market.

I never really took any economics classes, so I am hoping someone can explain something to me.
How is it, that when the price of crude oil goes up, so do the oil companies' profits?
It's seems to me that when a company's costs go up, their profits should go. . .well, down.

[Edited on Aug 31, 2005 by MrStitches]

Can you show that this is actually the situation?

I'll have to look around, but I know I've heard lately that the oil companies have been having a great year.

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[Edited on Aug 31, 2005 by MrStitches]

I believe Nixon tried this in the 70's. It resulted in gas shortages, fuel limits and long, long lines. Price controls can be a nightmare.

Well, that by itself isn't really all that telling. Compare that to overall use, the fact that there is a war on (which is *always* good for producers) etc... If gas usage has just plain gone up, which wouldn't be surprising, that would explain it pretty well. I'd be interested in an actual analysis of immediate or short term profits compared to immediate increases or decreases in oil prices though.

They pass those costs on to the consumer (and then some--although supposedly gas stations only make a few cents on the gallon due to competition--their real profits are in the sundries they sell in the station, car repairs, etc.)

In business, sales volume really makes a difference, because a lot of that money is invested by the company, causing their profits to skyrocket, depending upon their investments and market conditions, of course.

*Edited for spelling*

[Edited on Aug 31, 2005 by Holden_Caulfield]

Yeah, I'm sure they're dying because they can't afford to fill up the gas tank.
And I'm sure their thirst and hunger is directly tied to how much they pay per gallon of gas. Because it's a *price* thing, not that there just isn't any fucking food or water to be had because they got hit by a hugely destructive force of nature.

That's true, but oil prices are at a record high, and so are their profits.
And their profits have increased by a lot (44% in a year).. Like I said, I never took any economics classes, and it just seems crazy to me.

I'm wondering how this fucking goofball managed to conquer the world's second-largest oil reserves without reaping any benefits. When we were on the brink of invading Iraq I was thinking "Oh well, this war is total bullshit, but at least capturing that oil will serve our strategic interests."

Oops.

You'd think the genuinely war-mongering, pro-imperialism conservatives would be really, really pissed off about this outcome.

Nick

Well, the oil companies have been able to increase the price of oil to match their increased cost. US consumers have shown that they dont care what oil prices are (as Helter said, it's relatively inelastic)

Well I don't know any details, but I'd imagine that a war and subsequent occupation halfway around the world requires a hell of a lot of fuel.
As I said, I'd be really interested in seeing some conclusive data on this, but there are a lot of variables....

Well, it would have been a lot cheaper to buy oil directly from Saddam's regime.

Instead, we spend billions to establish a democratic government, and then buy the oil from them.

which really makes you wonder about the "blood for oil" argument...

You think they really didn't know how much it would cost?

Scuse me, but when GWBush leaves the White House and can resume sitting on the boards of the world's major oil companies, you don't think he'll reap the benefits of this oil price insanity? To warmonger and murderer, add "war profiteer".

I think I'll chip in "disaster vulture" as well.

CNBC says that the reason for the increase in oil prices is because of an increase of global demand for oil. China and India are growing at an explosive rate and need oil to fuel their growth.

The reason for the increase in Gas prices is a whole different story. First we don't have enough refineries to turn oil to Gas (our oil inventories continue to increase, but our gas inventories were at all time lows before the hurricane) Second, after the hurricane two of the three major oil pipelines are shut down due to power failures in the South. It is simple suppily and demand. The gas companies have a small supply of gasoline and there is no more comming for a while (it takes 3 weeks for the gasoline to get from New Orleans to New York) THIS IS WHY GASOLINE PRICES ARE JUSTIFIABLY HIGH.

Im sure they are raking in the profits with all the refineries and oil platforms in the south being shut down for a week.

Yeah, actually many many people were stranded in the city, even if they had cars. Some simply did not have 40-50$ for enough gas to drive out of the way of the storm, and some could not get any gas because they stopped delivering it to the pumps.