Wow - is OS the only capitalist in this thread?  What's with all the people advocting "making" the oil companies do something, or the government "effecting" a price change?  And what the heck is "price gouging" anyway?

Since when is it the government's business to regulate gasoline prices?  We WON the cold war, remember?  That means that the oil companies can charge whatever they want.

That said, I think CarbineKid got it right with the tax relief issue.  That would be a very short-term relief.  Price, supply, and demand interact.  If the price artificially goes down, then demand goes up, and then the price goes back up again.

The way to lower price is either increase supply or reduce demand.

Hades wrote: Gas prices hit $3.50 a gallon here over the weekend, Woot. I am actually for the higher gas prices. I wish it would jump to $10 a gallon. My reasoning, is purely selfish. Less people on the road to pollute the air and get in my way. Purely a survival of the economically fittest kind of thing. If $10.00 a gallon isn't enough to get people off the roads, I a even willing to pay $50 a gallon.

Also you got a tC, gas wouldnt be to much of a **edited** for you. And That V8 'Stang is pretty efficiant for a V8. Dont you get upwards of 20mpg?

My local government has proposed and approved a nickel/gallon hike to our gas taxes ... needless to say, on top of the local rising price of gas prices, this comes as a slap in the face. I can agree with this one OS. Supposedly the tax hike was for local road repair ... leaving me to wish that our governments, local and federal, would start budgeting like a sane, fiscally responsible indavidual or buisness. Alas, this can't be done by wishing ... and it's a subject rarely directly adressed by politicians during elections ... so it's difficult to vote on this issue.

OPINION! I know what will happen with the prices of gas. It will sky rocket we'll cry about it, and bend over, and take it like we always do. You know why? Because no one is willing to do what it takes and drive a pos ford aspire to work every day becuase "it's not safe!" and "it's uncomfortable" and good for them honestly, they can kill themselves economically and kill the middle class who will stoop down to buying an aspire but you know who will fair the best though? The poor people, when you've got nothing you can't lose anything.

This is opioniated, I'm awaring every one becuase had I wrote that people would probebly want to act like I was writing things I thought were facts, but what I do know is this, when my parents were my age and gas prices spiked like this their parents refused to pay $1.00 for gas at 50 gallons, so they bought smaller cars. But we are of the gratification generation and we will simply pay the $3.00 cry about it and move on. That's life when you don't want to lower your standards becuase everything was given to you.

Razgriz Ghost wrote: OPINION!

lolz

:)

OS I wasn't around but from things I heard from my grandparents and folks they dealt with it how I explained, got smaller cars and used less gas, prices stabilized becuase enough people did it. We need to do that again and like it.

Clark I figured that was the best possible way to avoid confrontation.

CarbineKid wrote: OS are you telling me that the Oil Companys have rigged the market in the past!?!?!?! Of course I'm sure they are not doing that now

CarbineKid wrote: Our Goverment has it share of the blame, but its OPEC, the speculators(whom I have the bigget problem with) and the rest of the oil cartel thats to blame here.

"Rigged" the market?

I will grant that OPEC engages in anti-competitive behavior that would be illegal in the US, but frankly there are enough non-OPEC oil producers in the world to limit OPEC's ability to manipulate oil prices - at some point price pressure sets in.  OPEC countries control about 40% of the world's crude supply, and simply does not have enough market share to unilaterally "set" international prices for what is, after all, a commodity (not to mention that even OPEC members break OPEC rules regularly).  And I am not sure what you mean by the "rest of the oil cartel".  Several of the main oil producers are political enemies, and certainly don't talk nicely.  Others are simply corporate entities, subject to local regulation.

Sure, some anti-competitive behavior has a way of sneaking in, but your apparent accusation of general price fixing doesn't make sense.  And, of course, it doesn't match reality.  Oil prices (and gasoline prices) actually DROPPED against inflation for years and years, and only with this latest market correction have oil prices returned to where one would expect them to be.

Based on historical evidence, I would argue that oil prices were most likely kept articificially LOW by political pressure from the US and other major consumers.  You should thank the US government for keeping gas prices low for decades, not blame it when the price finally went up.

And the speculators?  I am not sure what you are blaming them for.  Sure, they add short-term volatility to the market during corrections, but in the long run they are essential to keeping prices low and stable.  Speculators are the risk bankers.  They take short-term risk for a fee, allowing long-term investors to take safe long-term positions, for the betterment of all.  You should be thanking the speculators for helping keep the gas prices low for decades, not blaming them when the prices occasionally spike.

You want to know who/what is to "blame" for higher oil and gas prices?  It's rather simple:  Demand.  Demand-Supply=Price.  Supply is relatively fixed, as these things go, but demand keeps going up, and has recently spiked significantly.

If we want to reduce oil and gas prices, we have to reduce demand.  That's all there is to it.

CarbineKid wrote: my favorite quote: "You know, the only trouble with capitalism is capitalists; they're too damn greedy. " -- Herbert Hoover, 31st President of the USA

Yep, that's our socialist president, all right.  Hoover was wrong about many things, and economic policy was one of them.  His presidency may have been one of the worst things to ever happen to our economy.  Not the guy you want to quote in matters of money.

CarbineKid wrote: Clark you write too much

What can I say - it's an addiction.

:)

Anyhow We could always increase supply. Thats something that could be done here in the US. We have many oil assets that are untapped.

Well, kind of.

The amount of reserves available anywhere depends on the price of crude.  Known reserves that are uneconomical at $35 become economical at $60, and so forth.  At $75 or so, some aggressive shoal extraction technologies become economical.

But the reserves we have, or reasonably expect to find, at <$40 prices, are fairly limited.  These would include the Eastern seaboard and ANWR, for instance.  We could drill all we wanted in these places and it would not put a long-term dent in oil prices.

At $75+, however, we have significant shoal reserves that, as far as I know, could honestly make a significant difference.  But that would require a sustained high oil price.

On a side note it would appear that you believe that gas prices should be this high, and it may be a good thing.

Only in a free-market sense of the word "should".  I believe in an efficient market, and oil prices have been kept artificially low, IMO, which results in market inefficiencies.  All prices "should" float freely to the "correct" price as determined by the market.

As to social policy - that is more difficult.  Clearly a significant increase in gasoline prices would help us move away from oil for our long-term betterment, but you are obviously correct about the short-term pain, which could result in long-term harm.

Clearly we need to wean ourselves from oil in the long term.  Sharply (and artificially) increased gasoline prices may be part of that process, but if so that would have to be done very cautiously to avoid harm that outweighs the gain.

EDIT:  To expand on this point - this recent article:  http://www.msnbc.msn.com/id/18682561/ - http://www.msnbc.msn.com/id/18682561/  describes how increased gas prices have apparently not reduced demand at all.  To me, that means that gas prices are too low.  In a perfectly efficient market, every price increase reduces demand, and every price decrease increases demand.  When prices can go up or down without affecting demand, that means that prices are out of sync with demand.

Therefore, gas prices should go up - at least based on this article.  Of course, this study was over a short period of time, and price/demand interactions sometimes take a while to filter through.  But those details aside, the principle stands, and I would argue that gas prices are currently "too low" from a market perspective.

Clark Kent wrote:   To expand on this point - this recent article:  http://www.msnbc.msn.com/id/18682561/ - http://www.msnbc.msn.com/id/18682561/  describes how increased gas prices have apparently not reduced demand at all.  To me, that means that gas prices are too low.  In a perfectly efficient market, every price increase reduces demand, and every price decrease increases demand.  When prices can go up or down without affecting demand, that means that prices are out of sync with demand. Therefore, gas prices should go up - at least based on this article.  Of course, this study was over a short period of time, and price/demand interactions sometimes take a while to filter through.  But those details aside, the principle stands, and I would argue that gas prices are currently "too low" from a market perspective.

I agree with the gist of your post ... especially the fact that this paticular market does not react instantaneously. I'm not using this as an excuse to justify an argument against your claim that prices are too low, I just want to attempt to explain the problem in more detail, from my own perspective.

I'm a consumer, I drive a car to work and back, that's the primary reason I drive a car. The current situation with my home location and place of work does not allow many choices in as far as alternate transportation. If there was a bus route or alternate means of getting to work without spending the gas, I'd take it in a heartbeat, but those options are not currently available to me. In effect, for the short term I cannot reduce my own personal 'demand' for the product in question, gasoline.

In the long term, depending on my financial situation, more options may become availible to me, I might manage to get a carpool (unlikely for me) ... or I could invest money in a more gas efficient vehicle. However, these things take time.

If every consumer were like me, with my priorities and situation ... the market would indeed take a long time to shift it's demand down as a direct response to increased gas prices. That said, no ... every consumer is in a diffierent situation. Here in the United States, the addiction to gas guzzling sport utility vehicles and sports cars is prevalent, and the owners are mostly willing to pay the price. Would you want to trade of your shiny Mustang for a dorky looking hybrid or small economy car simply because you're paying an extra five to ten bucks per tank?

I can't imagine most americans (and the auto manufactures that they buy cars from) working up the motivation to make effective personal changes unless the price of gas became painful enough to motivate those changes. Buying a different car will almost always require signifigant financal or emotional overhead. For most people, the move to a more efficent car will only take place when the value of owning a more gas efficent vehicle is greater than prestige and ego of driving a currently owned, yet less efficient one; AND the price of switching to a more efficient car seems less than the difference in gas price.

This means that IF the government, OPEC, the shortage of refineries, genuine shortage of supply or anything else causes a raise in gas prices, artificial or otherwise, then the response from the consumer market will take a signifigant amount of time to adjust ... and we'll suffer the higher prices in the meantime.

I don't like this at all ... I have to pay for the gas, but as a conservative Republican ... I am not going to expect or ask my government to 'fix' the problem. I agree with Clark that if the price is high ... it's high and that any artifical government tinkering with the market would be detrimental. Instead, I personally beleive in waiting things out, ajusting my own lifestyle to be less dependent on gas.

 My current vehicle is a 93 Honda Accord that gets roughly 25 mpg. It will probably be years before I get my next car, but when I do, I will very seriously consider buying a hybrid for two reasons. 1. To save money on gas, and 2. to spit in the eye of anyone artificially raising the price. I beleive in the free market, and if we vote with our money, we can hurt the people who are (or aren't) gouging gas prices. 

If the price is artifically low as Clark claims, we need to adjust and move on. If it is artifically too high, then whoever is making it so will end up paying for it later, but only if we adjust our demand. The demand for gasoline isn't somthing that just the US government is responsible for ... it's our problem, because we're the saps who have to buy it, no matter what price it's set at.

Interesting post.

I think your description fairly fits most Americans, which is no small part of why I think there is a time lag in the price/demand interaction.

But two thoughts:

1.  You are too focused on the individual situation.  "Demand" in the US market (or any other market) is the combined collective demand.  It is not required that all, or even most, individual consumers change their behavior, in order to change demand.

For instance:  Many Americans are not in a position to realistically carpool, and won't.  But what if, say 10% of Americans do start carpooling, thereby cutting their individual gasoline usage by, say 40%?  That is a 4% reduction in overall market demand - more than enough to have a price impact.

Similarly, maybe a few million Americans cut back on visits to cross-town relatives, or schedule events closer to home, or take the small car instead of the big car to the shop, or take other minor measures to reduce discretionary gasoline usage.  If 25% of American households reduce their gasoline usage by 5%, that's another 1.25% on a national level.

If US demand suddenly dropped 5.25%, I would wager that gas companies would notice.

It isn't necessary to change the "baseline" consumer behavior to affect prices, or effect massive changes in total demand.  All changes are always at the margin.  There are some consumers for whom gasoline prices are irrelevant - either because it is already too expensive, or because no price could be high enough to change their behavior.  It is all about the people in the middle - and you are not in the middle, at least not yet.

2.  You also answer your own question.  You indicate that you will probably buy a more fuel-efficient car next time around, but you won't trade now.  This will effect prices.  Drastic change in individual behavior is not needed - if nobody replaced their car "now", but everybody bought a leaner car next time, that would result in massive reduction in overall demand.

Millions of cars are bought and sold in this country every year.  If even a relatively small number of car buyers gave serious consideration to mileage when buying, the net result would be significant - as we saw in the early 70s.  Few people in the 70s immediately replaced their existing cars when the shortage hit, but they bought smaller cars next time around.  Gasoline usage was significantly reduced as a result.

Short version:  Everybody doesn't have to change.  Only those at the tipping point will change their behavior.  Price sets the tipping point, and right now hardly anybody is at the tipping point, because prices are too low.

http://jlnlabs.online.fr/bingofuel/html/aquagen.htm - http://jlnlabs.online.fr/bingofuel/html/aquagen.htm

There are many biomass power plants around the country.  Two basic technologies:  aerobic digesters and anaerobic digesters, anaerobic being more common.  In either event, they mostly run off "agricultural waste" - poulty litter and similar - or landfill gas.  These have been in operation for decades.

The main issue is one of scale and fuel supply.

It would be tough to fit one on a car, but they certainly generate electricity that can be used to power electric cars.

I think you are missing my point, OS.

We could use methane as a fuel on cars.  But most engineers will tell you that if we are to do that, the better technical solution would be an internal combustion engine rather than a steam turbine.  Using a steam engine would drastically reduce your accelleration, speed, and range.

It's not a political point, but purely technical.

As a matter of engineering, using steam to translate a combustible fuel into energy is an decent plan for some applications (like large, stationary power plants), not so good for other applications (like small, on and off cars). 

I have nothing against steam.  If it turns out that steam is the correct energy translation mechanism for vehicles, then we should use steam.

Fine.  Whatever.

OS - Steam is not a political issue.  Steam does not pollute, steam does nothing at all.  Steam is just an engine design, like an ICE.  Steam engines are used in a variety of applications, just like other engine designs.

Some engine designs are better for some fuels and applications, other engine designs work better under different circumstances.

There is no conspiracy or prejudice against steam - it is used in many different contexts, including some solar energy power plants.  If anything, there is great support for steam engines among the greenies, because you can add a steam turbine to an ICE to improve efficiency in some circumstances - this is what power engineers call a "combined cycle" design.

If somebody comes up with a a practical and efficient steam powered car, they will get built and sold.

My poo-pooing comes from having seen this all too often - something "new and revolutionary" turns out to be old hat and rejected.

Methane-powered steam engines are already in use around the world, as I mentioned earlier.  Nothing new there.  Fuel supply is one of the major limiting factors, as I also mentioned earlier.  As a result, methane-powered cars would be difficult.

Moreover, some designs suffer more than others from on/off/variable usage (like in a car) versus constant on (like a baseload power plant).

The most perfectly scalable engine technology that I am aware of are electrical engines, which are almost equally efficient at any RPM, and suffer no particular loss when idle.

At the other extreme would be nuclear reactors, which can be controlled only with great difficulty and expense.  Nuclear power plants, for this reason, generally run non-stop for 12-24 months at a stretch before taking a break for refueling.  (nukes also use steam, but for purposes of this paragraph I am addressing the reactor side of the facility)

In between you have ICE technology and steam-based technology. 

ICEs are pretty good at scaling - you can easily increase and reduce   fuel usage along with energy needs, and you can run the ICE at a fairly low percentage of maximum, if you choose.  Far from perfect, but decent.  This is part of why ICE power plants are used as "peakers" that go on and off several times a day, and why ICE is a decent car technology.

Steam engines, on the other hand, are fundamentally unwieldy.  A minimum amount of steam pressure is required for them to work, which means that you need to burn fuel at a reasonable rate at all times, regardless of output desired.  As a result, you cannot run the engine at a low pace - coal plants (which use steam) typically are physically incapable of running at less 25%-50% of maximum without becoming unacceptably inefficient.  It is also difficult/slow to change the output without waste, since changing the steam pressure is not an instant process.  Coal (steam) power plants are less desirable as peakers for this reason. 

So - could there be a steam car?  Sure.  But given some of the operational characteristics of steam engines versus other engine designs out there, there would have to be some significant advances in steam engine technology before it would become competitive, or even viable at all.

Fill your car up with aluminum

Researcher: Aluminum-based pellets make hydrogen when wet, offering alternative fuel source.

< = =text/> POSTED: 12:34 p.m. EDT, May 18, 2007

CHICAGO (Reuters) -- Pellets made out of aluminum and gallium can produce pure hydrogen when water is poured on them, offering a possible alternative to gasoline-powered engines, U.S. scientists say.

Hydrogen is seen as the ultimate in clean fuels, especially for powering cars, because it emits only water when burned. U.S. President George W. Bush has proclaimed hydrogen to be the fuel of the future, but researchers have not decided what is the most efficient way to produce and store hydrogen.

In the experiment conducted at Purdue University in Indiana, "The hydrogen is generated on demand, so you only produce as much as you need when you need it," said Jerry Woodall, an engineering professor at Purdue who invented the system.

Woodall said in a statement the hydrogen would not have to be stored or transported, taking care of two stumbling blocks to generating hydrogen.

For now, the Purdue scientists think the system could be used for smaller engines like lawn mowers and chain saws. But they think it would work for cars and trucks as well, either as a replacement for gasoline or as a means of powering hydrogen fuel cells.

"It is one of the more feasible ideas out there," Jay Gore, an engineering professor and interim director of the Energy Center at Purdue's Discovery Park, said in a telephone interview on Thursday. "It's a very simple idea but had not been done before."

On its own, aluminum will not react with water because it forms a protective skin when exposed to oxygen. Adding gallium keeps the film from forming, allowing the aluminum to react with oxygen in the water, releasing hydrogen and aluminum oxide, also known as alumina.

What is left over is aluminum oxide and gallium. In the engine, the byproduct of burning hydrogen is water.

"No toxic fumes are produced," Woodall said.

Based on current energy and raw materials prices, the cost of making the hydrogen fuel is about $3 per gasoline-gallon equivalent, about the same as the average price of gasoline in the United States. (A gallon equivalent is based on the amount of energy contained in the fuel.)

Recycling the aluminum oxide byproduct and developing a lower grade of gallium could bring down costs, making the system more affordable, Woodall said.

Another old idea pretending to be new.

Aluminum pellets have been around since the 70s, at least.  Last time I checked they were nowhere close to being anywhere close to cost competitive.