How expensive is gas?

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 10:58 am

By Paul Sakuma, AP

RACastanet · Post by **RACastanet** » Fri May 21, 2004 1:49 pm

By historical measurments, the cost of gasoline is pretty much where it has always been if inflation and constant dollars are considered.

The problem is that the Petroleum industry has been so efficient over the years that the U.S. consumer has been conditioned to expect prices growing slower than inflation. If you compare the price we pay for bottled water (and in most cases it is merely filtered tap water) to gasoline, an extremely difficult product to produce, you should realize that we should be complaining about beverages, not gasoline.

Rich

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 2:30 pm

Maybe...

Consider the cost of a TV over time, Rich. Consider the fact that I paid $400 for my first HP calculator in 1973, and $2,200 for my first 4.77 MHz PC clone with 64 MB of RAM in 1983. Now you can buy a COLOR TV for $100 bucks (that would have been chump change in 1950 dollars), they give calculators away for promos, and I paid about the same $2000 bucks (no adjustments for inflation) for a 3 GHz machine with a Gig of RAM - that plays movies.

Consider the price of a shirt in 1960, and one today - inflation adjusted.

Comparatively speaking, I'm not impressed. But frankly I'm glad gasoline is getting more expensive. I hope it gets to be $4/gal. That's what it takes to get consumers out of their OPEC-guzzling Suburban assault vehicles, and into something that doesn't fund terrorism.

But I wax extreme...

The hybrid Ford Escape is coming out this summer, Rich!

Just in time to compete with a hybrid Lexus 330 that has the identical 6 cylinder engine AND an electric motor. Vrooom!!!

- Bill

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 2:41 pm

Ford Escape Hybrid

- Bill

RACastanet · Post by **RACastanet** » Fri May 21, 2004 2:50 pm

Hello Bill. No question, technology is a great example of productivity. However, petroleum production is another paradigm. Chip technology is improving while pumping crude out of the ground gets harder every day.

Also consider EPA and other regulatory changes. Getting lead out of gas was a good thing, bit that required more raw product to achieve required octane. Then, 90% of pollutants had to go, ok that is good. More equipment required. Then, 90% of the remaining 10%. Tough, but with billions of new equipment, doable. Then 90% of the remaining 10% of 10%. Very expensive to do. Now another 90% out. Plus local 'formulations'.

What we have is severely dimishing returns in the refining process. But, in constant $$$, no change to the consumer.

By the way, what I wrote aove was paraphrased from an editorial by one of your favorites... Geroge Will... from an editorial about two weeks ago. Today A. B. Hinkle has a similar editorial. He cites that a loaf of bread has gone up 900 percent since 1964. Where is the outrage? But, the bottom line is that we have twice the buying power than we did in the 50s and 60s because of productivity increases.

So, gas at $4.00. OK by me. The industry will be encouraged to produce more! Give profit where profit is due!

Rich

RACastanet · Post by **RACastanet** » Fri May 21, 2004 2:51 pm

I need to boogie on up to Quantico now, but I will get into the hybrid discussion later.

Rich

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 2:53 pm

Toyota unveils Lexus luxury hybrid

New RX400h follows a gas/electric hybrid version of Toyota's Highlander.

Toyota Motor Corp., one of the world leaders in environment-friendly auto technology, on Tuesday unveiled the world's first luxury vehicle using a hybrid powertrain, due for release in the United States this year.

The Lexus RX400h sport utility vehicle (SUV), based on Toyota's second-generation hybrid technology, will be more fuel-efficient than an average compact sedan and have peak output of almost 20 percent above the non-hybrid RX330 SUV.

I remember once, Rich, when you said the reason why people weren't making these things was because there was no demand. Try going down to a Toyota dealer today, and buying a Prius. Check out the waiting list.

Dimwitted CEOs, and lazy-a$$ed engineers. There's money to be made here, and Detroit's beating a dead horse (power). Where is American excellence in engineering and technical superiority???

At least Ford gets it.

I'm an engineer, American, a manager, and a consumer, so feel like I have a right to give Detroit hell.

And yes, this is important. Hybrids are an important technological stepping stone to Nirvanna - the fuel cell vehicle.

- Bill

Vash · Post by **Vash** » Fri May 21, 2004 2:58 pm

Bill Glasheen wrote:But frankly I'm glad gasoline is getting more expensive. I hope it gets to be $4/gal. That's what it takes to get consumers out of their OPEC-guzzling Suburban assault vehicles, and into something that doesn't fund terrorism.

But I wax extreme...

- Bill

That would suxors. What about us broke-ass college kids who have to commute an hour every other day in broke-ass trucks? I can barely afford the prices right now. Don't even consider buying the high grade stuff.

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 3:04 pm

I feel your pain. Lived for years on an NIH stipend of $400/month. I drove a Plymouth Champ (Made by Mitsubishi) that got 45 mpg.

The point I have here is that Detroit has no vision. No leadership. They should anticipate the demands of the consumer rather than wait for the working poor (and students) to suffer so badly that they have to choose between driving and eating.

BTW, gasoline is $4.00/gal and even more expensive in much of Europe. Even Germany, where you can drive on the Autobann at any speed you wish. And there? One out of every two vehicles sold is a diesel. The new technology there is quiet, fast, and odor free. And you can make the fuel out of the waste from a McDonalds (a.k.a. biofuel).

- Bill

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 3:08 pm

I go on and on about this one. Rich get all over me in return. No problem...permanent friends here. But I don't get why Detroit doesn't get it when people are hurting now, AND, the likes of Bin Laden got their money to foment terrorism and train assassins from oil revenue that we (Americans) gave them. No problem making a buck on natural resources, but I'm all for waging a war against extremists by every means possible.

I'd a lot rather push the envelope of technology and be a world leader in doing so than put the best military in the world at risk of being killed on the battlefield and in the liberal media. Starve 'em, I say. Let them ride camels!

(Gonna catch some PC hell for that one...)

- Bill

Guest · Post by **Guest** » Fri May 21, 2004 3:18 pm

Bottled water is sold in 350 ml bottles for $1.25 in Banff thats $12.99 a gallon

. Everyone buys lots of it, even though the town water supply tastes better and is purer in most cases. Our Aquifer runs hundereds of feet deep under the mountains and the water it contains has been filtered through miles of glacial morraine. Hard to find better filtered water.

Gasoline is at an all time high 88.9/ liter or $3.23 per gallon. But no matter what the price I still wouldn't recomend it as a bottled water substitute

In seven years the price of gasoline has doubled in Alberta. from 44.3 to 88.9/liter. Inflation has not doubled, production costs have not doubled, infact they are dropping.Taxes...make up the largest part of the increase.

Taxes and death the only things in life that are guaranteed.

Good point about consumer electronics Bill. In a competetive market prices fall as companies fight for market share.Cost savings in production are used to drop price points and increase share.

This does not happen in the oil industry, production methods are constantly improving but the cost savings are diverted into exploration and everyone charges the same price for their product. Anti trust and combine laws never seem to effect these large industries with few but well heeled players.

The government is not interested in cracking the golden egg. Huge tax vehicle for any government as the end user is forced to pay huge taxes at the pumps.The petroleum industry has a record of making large politcal donations, I guess it's easy to look the other way, why bite the hand that feeds you.

But frankly I'm glad gasoline is getting more expensive. I hope it gets to be $4/gal. That's what it takes to get consumers out of their OPEC-guzzling Suburban assault vehicles, and into something that doesn't fund terrorism.

I'd not be so quick to make that wish. Terrorist countries are not the only ones producing petrol. What happens to the cost of those cheap electronics or that loaf of bread when the cost of diesel hits $4.00/gallon? Like it or not we live in a gasoline driven economy. The maunufactured goods and food stuffs in this world economy are transported by diesel trucks, diesel trains, and diesel ships. A doubling of transportation costs will impact the price of just about everything you purchase. The good old disposable income will plunge and inflation will run rampant as the economy tries to adjust. Hey it will even impact the cost of hauling the trash from the curb.

End of Rant

benzocaine · Post by **benzocaine** » Fri May 21, 2004 3:53 pm

The government is not interested in cracking the golden egg. Huge tax vehicle for any government as the end user is forced to pay huge taxes at the pumps.The petroleum industry has a record of making large politcal donations, I guess it's easy to look the other way, why bite the hand that feeds you.

Laird,

Due to the popularity of fuel efficient vehicles, some law makers are devising a method of taxing mileage instead of fuel. We can't win for losing!

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 3:57 pm

Laird

I'm with you on this one. The price of energy has more to do with the economy than any other item. Politicians only THINK they control the economy.

But put some good old fashioned Apollo 13 I-want-it-now research into this stuff, and you'll have alternatives coming out the yazoo. And there will be big bucks to be made by the country that figures it out. Energy is gold, and the world will beat a path to your door.

I just don't know why people wait unit things are desperate before they get off their butts and do something about it. They didn't wait for horses to die of a rare disease before working on technology to replace them. It's not like we don't already know what the score is on petroleum.

And you can run those diesel trucks on french fry...er...freedom fry grease! I believe the Brits call them chips, no?

- Bill

Dana Sheets · Post by **Dana Sheets** » Fri May 21, 2004 4:02 pm

Hey Laird,

Just zoomed around your website - very nice! I hope you enjoy building your club and moving foward as a sensei in your area. Seems like you've got all the ingredients in place and lots of support.

Best of luck,
Dana

Post by **gmattson** » Fri May 21, 2004 6:04 pm

My brother was in in army during the 60s, stationed in Greenland, working on projects which he couldn't discuss. He mentioned that he rode to and from the underground tunnel his group was creating, in a sealed battery propelled vehicle. Used it for over a month without charging or replacement. No one was allowed to open the container or ask questions about it.

Lots of interesting equipment was developed by his group, some of which became property of private organizations, who in turn, used them in large construction projects. (I can only imagine how compaies were chosen to receive those multimillion dollar machines)

No one has seen that battery though.

How expensive is gas?

How expensive is gas?

OT - Laird's club

I still believe we already have the technology