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Soaring gas prices

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    This is an election year and all parties want our vote. The economy, taxes, jobs, boarders, foreign polocies, even gay rights have been asked and answered (somewhat) but the question about domestic fuel and how to keep gas prices from reaching so high, that getting from one place to another means sacrificing buying food or paying your rent. As Americans, do we have a say or even the power to reverse this path we are forced to share?


    Mark Rodden
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    Since the world market determines gasoline prices, it's extremely unlikely that you'll see a drop in gasoline prices here. Since our rapidly deteriorating infrastructure needs billions of dollars in repairs, what we actually need is an INCREASE in gasoline prices (since part of the price per gallon we pay goes towards "highway maintenance).

    Compared to the result of the world, our gasoline prices are very low, which is why our number one export in 2011 was  - fuel.

    In the first quarter of 2012, the combined profits for Big Oil equaled $38 billion, so you're probably wondering why are government is subsidizing that industry to the tune of roughly
    $4 billion a year instead of diverting that money to green energy development.

    You DO have some control about your energy costs, though.

    Do as much as possible to reduce how much gasoline that you use, and write to your congressmen, and ask him to kill the Keystone pipeline.
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    Yes, let's raise gas prices to $5 by the summertime and see how quickly consumers start tightening their belt.  One of the reasons for higher gas prices compared to 'the rest of the world' (Europe) for example is due to their tax.  The taxes are higher to offset their healthcare.  Secondly, the world currency (for now) is the US Dollar.  When oil is paid for, the US pays with its currency (the dollar) while the European convert their currency (Euro) to dollars, making is more costly.  It is nice to see that you provide all these links, however, they only support the misconception. 

    And by stopping the Keystone pipeline, you will only hurt our economy further. 
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    A good perspective on gasoline prices.  As one who has traveled in Europe, I can appreciate how extra gasoline taxes can force people to use public transport. And the more people that use public transport, the more public transport improves...not only within cities, but also the ultra fast trains that transport people at speeds over 100 mph from the outlying suburbs to the inner cities.

    This Business Insider chart should put things into perspective. Eleven European countries currently have gasoline prices above $8 per gallon. But the average person who uses public transport daily notices it far less. I've traveled in most of those countries as well as living in London, and I can say without exception that their public transport systems are vastly superior to those in the United States. That's what $8/gallon gasoline will do for public transport.

    On another point, when the supply and demand get somewhat close, speculators enter into the market and can drive prices much higher even though supplies are indeed adequate.  That's what's helping to drive prices up now.  As the Wall Street Journal reported,

    "Debate continues over how big a role financial speculation plays in driving recent price increases. No definitive conclusions have been drawn. But money managers from hedge funds, pension funds and other large private interests have been pouring money into Nymex crude contracts. The net long position of money managers surged 48% during the October to mid-November run-up, and the notional value of their positions increased $10.4 billion, to $21.5 billion over that period, according to calculations based on data from the Commodity Futures Trading Commission."

    Abdulla Salem El-Badri, secretary general of the Organization of Petroleum Exporting Countries, also pins the blame on speculators pointing out that the "number of financial oil contracts being traded is 35 times greater than the actual physical supply."

    Attempts to pass laws to penalize speculators have failed in Congress not for lack of trying, but because Republicans have found ways to block the legislation.  After all high oil prices benefit oil companies and oil companies are one of the biggest contributors to Republican campaigns.
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    We're still paying the post 9/11 fear premiums. Potential war (or conflict) with Iran continues to carry serious weight. 

    Quite simply, there are too many racing to bid prices up, due to top heavy economics (low effective tax rates for the wealthy + other government policies that redistribute wealth to the rich), and this all crowds out the physical market players, diminishing the role of supply and demand in the real economy as the ultimate price-at-the-pump arbitrator.

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    Thank you for your insight.  I do have a comment though.  At $8 per gallon (US measure) I can see why mass transit conditions may have advantages over US....but I don't know firsthand.  But, with such high prices, people are 'forced' to take public transportation and therefore (bear with me on this) the 'choice' to take personal transit is removed simply because it may not be affordable to them.  Having lived in NYC, I can appreciate mass transit.  I am just saying that not everyone lives in an area where mass transit is (1) available, or (2) frequently available.  And for those folks outside a metropolitan area, the cost of high prices will have a major impact on the disposable income.  And keep in mind, mass transit is not for runs on some for of energy and that energy will become more costly too.

    One way to offset this is to rid ourselves from the grips of cartels controlling these prices.  And please do not be fooled.....both political parties benefit at the expense of the taxpayer.
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    Newt is an idiot when he claims he can get gas prices down to $2.50/gallon.  With his idea to get the pipeline Obama vetoed, does he realize that this Canadian oil is mined with shale, and not just pumped from the ground?  It absolutely HAS to go through a cleaning/separation process before it could be placed in the proposed pipeline, and does anyone actually think that Canada is going to overlook this cleaning charge when they try to market their oil?  Even if they did, it certainly would not be any cheaper than U.S. oil or Mid-East oil.  So where would the supposed savings be coming from?  And any jobs created to build this pipeline would only be for 1-2 years at the max.  I do believe that Obama had the intelligence to investigate all this, and has eliminated it after seeing that it offers very little, if any, benefit.
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    Newt is an idiot when he claims he can get gas prices down to $2.50/gallon.

    He is the same at all other times also.  But he certainly is making a lot of money on his little adventure.