Okay, so we all have seen how that rich dude retired and got 36 million dollars severence. The argument, of course, is well, “he made us record profits!”. Who got these record profits?
YUP, the oil companies – who boasted 36 BILLION dollars in profits while I use 30 bucks to fill up a Civic at the pump. Its not right, and the Government refuses to do something about it.. so what do we do?
Well, I got a forwarded email (which I usually hate – but this one got me thinking). We can try to push the price of Gas down. A pundit needs to get behind this – a Bill o’Reilly, or an Al Franken – Here it goes.
Boycott Exxon and Mobil. We, the American people are not going to revolt, not going to buy hybrids, not going to carpool, and not going to ride bikes to work. We should, but we won’t. What do we do? Stop going to Exxon and Mobil – and buy your gas elsewhere. Exxon and Mobil will lower prices to entice you back (They control most of the Market share). People will go back, and then the places you went during the boycott will lower their prices. Boycott on, until we see Gas prices going back to where they were, or at least until we hear about the profits being down to, say 5 billion,or 10 billon.
Its easy to do, and it makes sense, at least to me. Thoughts?
Al Franken–scary
Here’s the immediate problem with this–I’ve never seen an ExxonMobile station that didn’t cost at least 5-10 cents more per gallon than the Hess/Sunoco/whatever station across the street. Yet, there are always cars there. So, clearly, getting prices down relative to another station is not something that significantly drives demand.
In addition, boycotts only work if they can be tightly controlled. If you were to convince everyone to start such a boycott, who would call the end of it? Once Exxon brought their prices down to the level of the next guy, why wouldn’t everyone think “mission accomplished” and start skipping the longer lines at the neighboring station? No reason, of course, they would think that. Then prices would climb back up.
I don’t understand it, but Exxon clearly offers a value proposition that a lot of people like. I avoid them because I think they’re quite expensive already, but many people are happy to pay extra–maybe they think the gas is “better.”
“It’s not right.” Hmmm. What is your moral basis for saying such a thing? Is it not right that a Toyota minivan costs more than a Chrysler minivan? Is it not right that one of us has a larger income than the other? Is it not right that one of us is healthier than the other? Better looking? Smarter? Taller? (I’m not writing this to suggest a direct comparison between you and myself, just between any two people.) Why does Microsoft get $12 billion in income when I have to pay $250 for Windows? Why does Walmart make $11 billion in profits when I have to pay $30 per shopping trip? Why do people make meaningless comparisons?
I agree that the Government should get involved–about half of that $30 fill-up is going to them. Time to cut that theft drastically.
Al Franken – hysterical
His books are downright hilarious.
No right..
Certainly i can’t dictate right and wrong, but I guess the point is that while the market supports the prices, it is a need based market. It is an energy market, and as socialist as this might sound, I think that the disparity between the profits of the gas companies and the (sometimes crippling) price of Gas to the consumer has to be closed a bit.
I’m not an economist, so I wish I could get into more with you on this topic.
Visit the Official Justin Timpane Website Music, Acting, and More! http://www.timpane.com
Hmm
Say you bought $1000 worth of stock in Microsoft, circa 1983. Then Microsoft takes off and now your stock is worth $1,000,000. Are you going to sell some of that stock back at a loss because people have to spend $400 a pop for Office?
The oil companies paid the market price for that oil when they bought it, and now they’re selling it at market price. The selling price just happens to be a lot more than the buying price. If it was the stock market, you’d be think what a great investor they were.
I don’t think they have nearly the control over the price as you’d think (do they)? They just happen to have a LOT of oil, and we use a LOT of oil, and we’re buying it at a good but more than they bought it.
The G7 plus a few other countries (Russia, China, UAE) are meeting to dicuss what to do about oil prices, among other things. The want to reduce the amount of price fluctuation due to speculation.
If we’re willing to be a slave to oil, then why shouldn’t the oil companies make money off of us? Everything else has risen in price, including the value of your home. Gas prices should remain constant?
It doesn’t SEEM fair, but it is. We just need to start using our resources more wisely and looking for alternative resources. If we reduce the demand, the price will drop. I’m personally looking into radiant heating, for my house and water. If solar panels were more cost-effective, I’d get those too. What kind of heat do you have in your house right now?
My $.02 Weed
Fluid market
The problem with this idea is that petroleum and by-products are a “fluid market”. If gas demand at these particular stations drops (and I’m not going to get into the economics of a boycott to talk about if that will happen or not), that gas can be sold elsewhere.
It’s a fungible commodity. What will happen is that the “good guys”, to cope with the sudden demand, will have to buy supply from additional sources. And who do they buy it from?
The “bad guys”.
The only people this would hurt would be individual service-station operators; you’ll see prices at the “good guys” rise, while prices at the “bad guys”, even if sold at pre-“gas war” prices, will begin to look cheap.
Fact is, we’re seeing the result of the free market at work in gas prices. We have more cars than ever, consuming more gas than ever, and traditionally fruitful oil reserves in the Gulf Coast are diminishing.
Oil is the single biggest factor in our trade deficit. If we don’t do something to curb our demand, prices will continue to rise due to diminishing supply.
—
Matthew P. Barnson
Disagree..
See, The Exxon/Mobil conglomerate has the power to reset the price – and the “good guys” will be able to handle the load, getting the gas from more competitive sources (as they have better understaindings of the economics involved than the average citizen).
Exxon and Mobil have the power reset the market price, and, I think, would do so.
On a side note, if you don’t like the boycott idea, make a suggestion.. what CAN the consumer do to make it so that Oil companies don’t make HUGE profits at by gouging their customers – The companies have the oil, and they’re selling at a HUGE profit margin – how do we combat that?
Visit the Official Justin Timpane Website Music, Acting, and More! http://www.timpane.com
Easy…
Easy. Stop driving so much. Enough of us stop driving so many places, and start taking public transportation instead, and the prices go down.
—
Matthew P. Barnson
Concur with Matt…
Not just public transportation, but the feds need to encourage as many small employers as possible to get into telecommuting. There’s not much of my job that I can’t do from home a few days a week, scheduling meetings for set days in the office. And I’m just one small non-profit.
Work where you live. When I was working on finding a new job two years ago, I had set a strict rule: limit commuting as much as possible. So, my new job is 3 miles from the office. I may have passed up other great opportunities, but lifestyle and financial factors overruled. So many people here in the DC area commutes 20, 30, 50 miles a day, along the worst bottlenecks: sometimes it amazes me there aren’t more incidents of road rage along the Beltway or I-66.
And let’s not forget, on this issue of gas prices, how well we’re off here in the Colonies. Our friends in the UK and other EU states are really taking it on the nose this time around; when you look at the higher costs of the gas with the high taxes added on, some of reports I looked at put gas (petrol) at more than $6 a gallon. Sure, there are lots of other factors, but that’s still nearly or more than double what we’re seeing.
Yeah but….
I can understand the arguement about less driving. I have broken that rule for the last few years. From 3/04 – 1/06 my commute was 70 miles wach way. I became all too familiar with the Dulles Greenway / Tollroad. I now only commute 45 miles each way, since i have been moved back from the customer site to teh corporate office.
I have a house on a nice peace of land in Harpers Ferry, WV. We moved out there mainly because of the house prices. A few years ago I had looked at townhouses in Gaithersburg, which is where we had our apartment while house hunting, and was not willing to pay the outrageous prices when we were able to pay 1/2 and get a house on land out here.
What i am stuck with is a commute to everywhere 🙂
Government agencies are slowly building facilities out here and I am definately looking into jobs with them, but till then, the local economy can not support the wages a single income family needs to make a living. My reccomendation on a fix is to write your senators, congressman, and local elected officials. Get the local, state, and federal governments to stop the price gouging (sp?) and to bring a fair economy back to an industry that is aparently out of hand.
Plus..
Charles town Slots are right nearby..
Visit the Official Justin Timpane Website Music, Acting, and More! http://www.timpane.com
Flawed Theory
There is more to the Exxon’s of the world than just offering gas. The advertising campaigns that these stations present create brand loyalty. People will find themselves going to exxon because yes they think that the gas is better and they feel comfortable going there (Creatures of habit).
The other issue with the boycot against Exxon is that fuel is only a drop in the bucket. Exxons has a huge Index of Industries: Adhesives Agriculture Apparel & Fabric Automotive Aviation Cleaning Construction Consumer Products Electrical Energy & Power Entertainment Food & Beverage General Manufacturing Government Healthcare & Medical Heating & Cooling Industrial Machinery Landscaping Lubricants & Wax Blenders Marine Merchandising Metals Mining & Quarrying Packaging Paper & Forest Products Plastics Printing Safety Transportation & Shipping
I have not research the profits of the other areas versus automotive fuel income, but i am going to go out on a limb and say that they mamke profits in more than the fuel area.
Some Tips
I don’t think a boycott will work for the simple reason that people are too attached to their cars.
The problem in this country started half a century ago when oil and bus companies managed to convince city governments to abandon their train & trolley transit systems in favor for the bus. In recent years, the problem has become urban flight. Everyone has moved to the suburbs, away from urban work-central, for cheaper housing and greater space. One of the reasons I live in the city is to avoid filling up the tank more than once a week.
For those of us who can’t pack up the kids and drive in a new plug-in hybrid to a new home miles from the job, here are some tips I heard on a podcast to lower the fuel cost per mile:
-The easiest way to save gas is to slow down. Most cars reach their peak efficiency between 55 and 60 MPH. For every MPH over 60MPH, you can expect to spend an average of $0.21 more in fuel cost per mile. This means that driving 70MPH on the highway can cost you up to $2.10 per mile which on a 15 mile highway stretch runs $31.50…one way! -Remove unnecessary weight from the car. Every 100 pounds of weight removed saves an average of 2% savings per refueling stop. -Maintaining proper air pressure in the tires can save up to 3% per refueling stop, or $0.08 a mile. -Avoid excess idling. Idling burns gas while gaining 0 MPH.
Specifically…
Since buying my Insight, I’ve become a bit of a “gas-saving maniac”, trying to figure out how to eek more mileage from my vehicle.
To a point, of course. Most cars’ fuel efficiency goes down at speeds below 45MPH these days; we’ve designed them to not be very “draggy” in the air. The way I drive that brings me the most mileage is to “ride the throttle, not the speedometer”. I figure out the minimum and maximum speed which is acceptable to me on a particular trip, and then try to keep my right foot as stationary as possible. I only press it further when I drop below my minimum, and only release it a bit when I’m above my maximum. On my nightly trip to work along a highway with a 60MPH speed limit and very few stoplights, I normally do 55-65MPH, allowing my car to accelerate a bit downhill and decelerate a bit going uphill.
The two forces which eat your gas mileage the most at higher speeds are wind resistance and rolling resistance (rubber on the road). As your speed increases linearly, the wind resistance increases logarithmically. The problem slaps you in the face if you deal with aircraft. To fly a plane at 300MPH versus 200MPH, for instance, often requires doubling the amount of power required, rather than just adding 50% more. Not to mention additional structural strength to keep from ripping the wings off…
“Proper” means “hard”. If you are willing to run your tires at the maximum rated pressure, you’ll generally find you get more even treadwear and substantially improved gas mileage.
The downside? Your stopping power in inclement conditions is reduced a bit. Siping the tires at your local tire store will help. This is an operation which cuts the tread laterally and improves stopping ability.
Anyway, the difference between running my summer tires at the manufacturer’s recommended 38PSI front and 35PSI rear, versus my preferred 44PSI all around? A whopping 6-8 miles per gallon in a car that was already averaging around 52MPG. That may not sound like much, but on a 10-gallon tank that’s one extra trip to work and back home for me.
—
Matthew P. Barnson
Let’s Try This Again
Apologies, my friends, for being a moron when calculating #s in the preceding post. One more time!
Let’s agree that the total miles driven per 18 gallon tank of gas is around 300 miles. The starting point for our savings comparison will be a vehicle with an 18 gallon tank filling up at $2.64 per gallon of gas. Total cost = $47.52.
Here’s how much we would save per refueling stop if driving at 60MPH (instead of the hypothetical 75 highway miles we drove on that 300-mile tank of gas at 70MPH), getting rid of the excess 100 lbs. of weight in the trunk, and ensuring we’re at 32PSI instead of 25PSI tire pressure.
75 miles of highway @ 70MPH, @ $0.21 extra fuel spend per mile = $15.75 Reducing 100 lbs. from the trunk, 2% savings = $0.95 savings Maintaining proper air pressure, 3% savings = $1.42 savings
Total savings = $18.12. This doesn’t seem right to me. The first statistic found that gives the $0.21 more in fuel cost per mile is essentially the amount saved by not having to fill up as frequently. Thus, I’m not sure the $15.75 works, or is appropriate.
Math..
Umm… If I put 15 bucks in my tank, that will take me more than 75 miles on its own.. Right? If Gas is 3 bucks a gallon, how manymiles do you get a gallon. You can’t possibly save even 50% of fuel costs?
Either way, yes, driving in the peak range is best.
BTW: I wasn’t saying boycott gas.. just Exxon / Mobil.. go to shell BP, Amoco, 7-11, wherever.. just try to getthe biggest ones to lower their prices. (When everyone started flying Southwest, United lowered its prices to compensate.. that kind of thing.)
Visit the Official Justin Timpane Website Music, Acting, and More! http://www.timpane.com
Running out of gas
While your advice (drive slower, remove weight, pump up tires) is sound, something is still amiss with the $0.21/mile figure. The above vehicle costs $0.16/mile to operate. Obviously, 10 mph is not going to cut fuel economy by more than half. Maybe they meant $0.21/gallon of (virtual) additional gas cost (which would be more like a 10% drop in economy). I found the $0.21 figure used here in that sense, although the base fuel cost is missing (and very important).
In the above scenario, this turns a $47.52 300-mile trip into a $41.37 trip (with all benefits calculated in). In other words, 15.67 gallons, instead of 18. Opportunity cost: 43 minutes of your life (@ 70 vs 60).
What your Podcast source seemed to have glossed over, but Matt hinted toward, is the most important factor of all–gradual accelaration. Flooring it from a stop is about like dumping gasoline on the street.
All I can say is, I’m glad when I bought our minivan in ’04 that we skipped on the Toyota, which required 91-octane. And my other car’s a Prius. And the other one’s a Kawasaki. (Can’t say I’m easy on the throttle with that one…but it’s still almost as good as the Prius.)
More facts
Yes, I wrote that I’m not too confident in that $0.21 per MPH over 60 stat, which of course puts the others in doubt.
Another way to save gas is to not use the AC. Talk about a gas guzzler!
Front page of today’s USA Today is reporting mass transit systems across the U.S. are increasing ridership at a big rate because of high gas prices. Last Thursday was the sixth-busiest day in history on the DC Metro. Stats are given for SLC, Tulsa and San Francisco.
Also, I’m not a fan of the Democratic party this morning, as they are calling for a tax on ‘obscene’ oil profits. We’re penalizing the oil companies for operating in a market in which tax dollars are routed to those ‘obscene’ federal highway construction projects? The market is already trying to correct itself. GM is rolling out a new slate of cars under its Yellow brand that are based on E5. Here in MN, there’s a bill that’s going to introduce the electric plug-in hybrid, a car that runs mostly on electricity that gets plugged in to the house every night.
Republicans too?
I posted this here, but according to WJZ-TV, the Republicans are talking the same talk…but note that no Republican lawmakers were named in the typing of this stunt.
My $.02 Weed
Flip side to mass transit
I’m certainly not an expert on this, but with at least with buses that use regular or diesel fuel, if there’s an increase in service associated with an increase in fuel prices, aren’t municipalities also going to see an increase in expenditures for mass transit? More usage means more maintenance and repair costs, possibly more upfront costs in buying new or refurbished vehicles. Sure, for Metro and other electric-powered modes of transport, there won’t be an increase in some of those costs, but I would wonder if there’s not some trickle-down costs that haven’t been examined yet.
I suppose there is an offset that could be found by increased rate hikes, but that just gets people back in their cars, doesn’t it?
And let’s not forget DC’s own ‘code red’ days: when the temps and heat index hit a certain value, some of the bus services are offered at reduced rates or free altogether, to encourage drivers to become riders in order to cut down on emissions from all those idling cars. If gas prices remain the same, and the heat index gets to record levels and stays there, and ‘code red’ days get declared with the associated free rides, what does that do to a city’s budget?
And somehow, Congress thinks that by chastising oil company CEOs for doing their jobs – returning a dividend to shareholders – that will lower prices. My economics theory is a little dusty, but I’m not seeing the connection there.
Additional Tip
I heard this morning another tip for better gas mileage. For those of us driving manual, the “quicker and smoother” we can get to 5th gear, the top manual gear, the better the gas mileage.