Black Gold: Tops $130/barrell

[ZoomZoom Diva]

The destination and even to an extent the price of the oil could be determined by the legislation opening the areas for exploration as part of the terms of the lease.

The government has allowed monopolies by not requiring refineries to compete against each other, by allowing excessive and massive mergers and acquisition. Minimum markup laws and other pricing regulations that limit not how HIGH prices can go, but rather how LOW they can go only makes matters worse, and eliminates an important incentive to compete. States have made matters worse by legislating the different formulations and blends, often for political reasons (see ethanol). Since the citizens have had the power of choice taken from them by government, the citizens are entitled to some protection and stability in the price that would have occurred naturally in a truly competitive environment.

 

[spek1098]

The destination and even to an extent the price of the oil could be determined by the legislation opening the areas for exploration as part of the terms of the lease.

The government has allowed monopolies by not requiring refineries to compete against each other, by allowing excessive and massive mergers and acquisition. Minimum markup laws and other pricing regulations that limit not how HIGH prices can go, but rather how LOW they can go only makes matters worse, and eliminates an important incentive to compete. States have made matters worse by legislating the different formulations and blends, often for political reasons (see ethanol). Since the citizens have had the power of choice taken from them by government, the citizens are entitled to some protection and stability in the price that would have occurred naturally in a truly competitive environment.

I agree with much of that. The direction the government has been taking since Carter though has been that of deregulation, not increased regulation. Fixing the issues you state won't happen until politics becomes less polarized and the repubs and dems can find the middle ground again.

With the drilling, in the end it still goes into a world market, it will only mean that we import 5% less oil, that is if we can get at least a million barrels a day from up there. I also don't think many companies would be willing to sign leases like that. But ok, the government puts price controls on the crude that comes from up there. Then how is the government going to translate that into lower prices for the consumer (rather then increased profits for the refineries, wholesalers, and gas stations) without regulation over the entire oil industry?

 

[spek1098]

Oh, I guess I thought of a way. They set a price for the oil. Say $100 a barrel. Say oil is $130 a barrel. The $30 difference could be taken as a tax and give back to the public as a rebate. But there are tons of issue with that, like can we trust the government to actually give the money back and not spend it. Yea, not likely.

 

[ZoomZoom Diva]

It's a combination of excessive government intrusion preventing the exapansion of drilling and refining capacity and government simply allowing de facto monopolies and collusion to run rampant.

The competitive measures would take care of excessive profiteering. When companies truly compete, or are required to act as if they are in a competitive market, consumers will receive the benefit as companies now have to compete for business. It would provide an incentive for oil companies to produce their products less expensively.

 

[DrWebster]

Hear my words, the gas woll go up a tad yet, but then it will break and come back down. There is a lot more impact on todays pricing by the futures trading apparently and we may be in for a rough summer, but it will break and fall, and continue to fall at similar rates to which it has increased in the fall.

Maybe, but I highly doubt we will ever see gas below $3.50/gallon again.