Gas Prices

It was down to $0.89 in 1999 or so. They really need to raise the gas tax (that's coming from someone who'd be hit hard by it).

mattchuck2 wrote

They really need to raise the gas tax.

Hi, Matt,
Thanks for the reply.  Can you remind us why it is a good thing to have higher gas taxes?  And what explanation do you make to wage earners who haven’t had an increase in their standard of living during this entire economic expansion?
Best,
Mike

While we wait for Matt, It amazes me how much oil we pump out of the planet. It's a vast and continuous  amount. OPEC alone pumps 30 million barrels per day. 5 years ago, the excepted worldwide number was 100 million barrels per day, 3 billion barrels per month, year after year.

A higher tax encourages less use of a good or service.

People should use less gas because we're destroying winter.

This isn't difficult.

Also, it would be nice if we had a little money for infrastructure improvements, too:

http://www.vox.com/2014/5/12/5708034/its-time-to-raise-the-gas-tax

Although increasing the price of gasoline helps to reduce usage it is a tax that hits the poorest people the hardest.
What we need to help with infrastructure is to raise the tax on trucking. To help the fuel usage issue, and making rail more competitive. If your issues is global warming, have a talk with the India and China, see how far you get.

The US doesn't have the rail infrastructure to handle more freight to that level.

Don't know if you heard the news, PeeTex, but China just agreed to cut down their greenhouse emissions drastically.

mattchuck2 wrote

Don't know if you heard the news, PeeTex, but China just agreed to cut down their greenhouse emissions drastically.

Just wait and see little grass hopper.
See how well they have done enforcing intellectual property and copyright agreements, human rights agreements, etc.

mattchuck2 wrote

Don't know if you heard the news, PeeTex, but China just agreed to cut down their greenhouse emissions drastically.

They wouldn't be the first to pull out of a carbon reduction plan. USA supported Kyoto under Clinton but backed out and didn't ratify under Bush. I really don't see China doing much, I think that recent news item was a lot of show.

Trucking taxes was suggested but that would also adversely affect those that can't afford it because transportation costs get passed on to businesses who then pass them onto consumers (and/or cut jobs, again, generally an effect felt worse the lower down on the food chain a worker is).

I'll second the amazement at just how much oil is pumped and we are still pumping. I know there is all that talk of peak oil and going into a production decline at some point. But it is still pretty mind boggling just how much fossil fuel is available.

The only answer is to keep pushing technology and if we are lucky, some breakthroughs will happen to reduce energy consumption via efficiencies. Alternatives are coming down in price... but I guess that is where a fuel tax would help as the alternatives need to have a low enough premium to make them worth buying...

In one way, lower fuel prices doesn't help me much. I bought my TDI pricing out $4/gallon gas (assuming continuing rising prices) figuring my return on investment in diesel would come by around 140k miles. Lower gas prices means I won't see that return for much longer (plus unleaded never hit $4/gallon). That said, I don't plan on ever trading up so eventually the return will come... and in the meantime, I'm burning a bunch less gallons compared to a gas burner.

riverc0il wrote

Trucking taxes was suggested but that would also adversely affect those that can't afford it because transportation costs get passed on to businesses who then pass them onto consumers (and/or cut jobs, again, generally an effect felt worse the lower down on the food chain a worker is).

In one way, lower fuel prices doesn't help me much. I bought my TDI pricing out $4/gallon gas (assuming continuing rising prices) figuring my return on investment in diesel would come by around 140k miles. Lower gas prices means I won't see that return for much longer (plus unleaded never hit $4/gallon). That said, I don't plan on ever trading up so eventually the return will come... and in the meantime, I'm burning a bunch less gallons compared to a gas burner.

Rail is much more efficient than trucking and even with the way the tax code is set up, favoring trucking it is still competitive (barely though). If we had rail incentives we would reduce fuel consumption and wear and tear on our infrastructure.

As far as Diesel fuel goes, you are actually consuming more crude oil than a gas powered car, it takes 4 gallons of oil to make 1 gal of diesel and it takes 2.3 gallons of oil to make 1 of gasoline. It use to be that refining was much easier and less energy intensive for diesel but with low particulate low sulfur diesel, that has changed. And then there is the green house gas thing, Diesels are lean burn engines, they inherently produce NOx which is one of the worst green house gasses, that is why we have Tier 3 emissions standards in the US and Tier 4 for off highway engines.

Drive as little as you can, recycle as much as you can and reuse, repurpose even more.

mattchuck2 wrote

China just agreed to cut down their greenhouse emissions drastically.

riverc0il wrote

They wouldn't be the first to pull out of a carbon reduction plan.

Matt, You raise a good point about the recent statement by the White House and China.  This should be tempered with some realism.

The joint announcement employs language very carefully. The joint statement is not binding in any way.  You can read it at the Whitehouse.gov press release.  Throughout, the operative word is “intend” or “intention”, which makes clear the statement is not meant to create any new obligations.  Since China is still run by a one-party regime seeking to be this century's global power exceeding the US, it is unlikely to take any course of action that will impede this goal, including steps that will slow its economic growth.  

Gas is down to $2.91 in Saratoga County!  

First, Missouri has really crappy roads... they really do not tax enough.  

Second, we are using around a 2/3 less gas per day in 2014 then we did in 2000.  All those hybrid cars, all those extremely fuel efficient sedans, and the lack of the SUV, and the higher price has really cut down on our consumption.  

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=a103600001&f=a

The bigger thing is as consumption has gone down the tax revenue has done the same.  

Add to that Canadian oil which was before very expensive to refine is now cost effective to refine because refineries have made the investment in new distillers that can deal with the sulfur from this crude.  This has gone a long way to releasing us from the OPEC price fixing.  

Really, I think we are in a pretty good place.  All the legislation that went through that made cars more efficient is working.  We are using two thirds less fuel then we did 15 years ago.  We are pulling more domestic oil out of the ground and refining it here.  If the trend continues we will slowly get off the gas and move to other ways of powering our transportation.  If you have driven across the midwest lately you will notice how many wind farms are popping up... I would really like to see the same thing here.  

Then again... my entire life up until age 22 was paid for with money made at a refinery and my first job working for a contractor at said refinery... so... I might be biased.  

Footer wrote

First, Missouri has really crappy roads... they really do not tax enough.  

Footer, thanks for a thoughtful and informed reply. I only disagree with you to say gasoline taxes are complicated and used for different purposes among the states. They are not used solely to fund roads and infrastructure in most states.   Missouri may have crappy roads, but so do New York State and Connecticut, which have nearly twice the Missouri gas tax rate.

Best, Mike

Michaeltokyo wrote

Footer wrote

First, Missouri has really crappy roads... they really do not tax enough.  

 Missouri may have crappy roads, but so do New York State and Connecticut, which have nearly twice the Missouri gas tax rate.

Best, Mike

I've lived in Illinois, Missouri, Oklahoma, Kansas, Georgia, and NYS.  NYS has some of the best roads in all the places I've lived.  Go to the midwest or go down south and road projects take YEARS to complete.  The project that happened on the twins bridges on the northway would have never happened the way it did here in any of those states.  It is common for bridges to be completely shut down for a year or more while construction is occurring.  I can't tell you how many times I have been on an interstate with a 45 MPH speed limit and one lane for 40 miles and not a sole working.  Our roads up here might not be perfect, but at least when they set out to do a project that will inconvenience you they have the courtesy to actually get it done.  They might spend more to do that but at least rush hour still happens without issue.  Also, don't even get me started on snow removal.  Georgia's answer to snow/ice removal was "wait for it to melt".  Illinois might have one plow out per 30 miles of interstate.  Up here you get 4 plows every 20 miles or less.  

Not saying NYS is perfect in the way they spend tax dollars... far from it... but you can see some of your tax money working for you vs what other states are doing.  

I have to agree with you. All one has to do is ride a bike between Blue Mountain Lake and Newcomb, where else would you find a nice shoulder like that on a stretch of highway in a wilderness. Yes, there are some nasty parts but for the most part the roads are pretty good.

That sounds a bit odd to me...especially given below:  Of course, it could be true by all means, I am not a scientist.

"As of mid-year, margins on U.S. Gulf Coast-produced diesel were running just above $16 barrel, while the margins on finished gasoline were much lower at just under $8 barrel, and that trend is not new. The data were provided by Valero in a recent investor presentation."
http://www.cnbc.com/id/100943620#.

That is consistent with my understanding, supply and demand driven pricing. diesel consumption has not seen the decrease gasoline has.

- deleted -

^ Sorry. Read a question wrong.

I'd heard that crude "naturally" distilled/refined into 1 part diesel and 3 parts gasoline. (Numbers made up). So at some level diesel used to be a by-product of the process and pretty cheap. But as the consumption of diesel (home heating oil too?) grew beyond 25% of the total it got more expensive, and as people switch to diesel it would drive the cost up more.

Bueller?

You  keep changing the subject of my original post.

Saratoga County lowest gasoline is at $2.88.  Where do you think this will bottom out?

I don't mind paying less to drive.

Mike