Miss Mango

It wouldnt bother me, since I hardly ever drive anymore anyway. But Im not sure how good it would be for anybody else.

Didnt they do like, ration coupons during the Great Depression? I imagine they could do something similar for gas.

telekinetic

Absolutely not. If gas becomes scarcer, make it more expensive. The free market will figure it out.

__________________
twisted no more

Cynthetiq

gas rationing?

I lived through the odd and even days of gas purchasing in the 70s. It wasn't pleasant at all. Sitting in the car for hours upon hours waiting to buy gas. No thank you.

As for rationing? Hell, I only drive 8,000 miles per year. I'd be happy to sell my portions at an additional premium on Ebay.

__________________
I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not.

yellowmac

Yeah, I don't really see why gas rationing right now would be reasonable. Even the idea of gas rationing mentioned during some pundit's commentary on television would probably be enough to spike the price of oil by $20...

ngdawg

What is there to ration? The rising prices have nothing to do with scarcity and everything to do with investor speculation.
This article was written in 2004: Oil Reserves Some is actually quite amusing:
Three years after the prediction that we'd be running out of oil, we're still at it.
Gas ration coupons were distributed during WW2 to support the war effort by preserving gas usage for our armed services, so there was a gallant reason for doing so.
What we need is good old-fashioned gas wars, where gas station owners would run "sales", forcing their competitors to match or beat the price. Unfortunately, it is the oil companies setting the prices to keep pace with the crude prices and still maintain their really hefty profits. Someone needs to step up and announce he'll take only 11 mil a year instead of 12 mil in salary so that his company's prices are reasonable.
There also needs to be a cap on speculative oil pricing.

ASU2003

http://money.cnn.com/2008/05/23/news...ex.htm?cnn=yes

This article laid it out pretty good. Unless there is more exploration and more drilling and refining to bring supplies up, gas prices are going higher due to the fact investors know their is no easy alternative and people won't stop consuming it.

It should be in the oil companies interest to produce more in order to sell more, but they are making more now than they were when gas was cheap due to the fact they take a percentage for their profits instead of what the government does and takes a set amount per gallon in taxes.

As for oil rationing, there are people who use too much and should cut back. It would be interesting to see if the government could put limits on it like if you drive a SUV, you only get enough to go 600 miles/month, but if you drive a fuel efficient car, you get enough to go 1200 miles/month. It would be hard to limit the taxi drivers, truck drivers, and other people who use fuel for their jobs though.

I would vote to increase the gas tax in order to provide subsidies to people who take public transportation, use alternative fueled cars, or for R&D on new efficient cars.

Willravel

I thought you were 25.

I'd rather have the price of gas go back down to $1.00 per gallon and have us run out in about 3 years, so people will finally understand how the free market is the worst idea in human history.

Cynthetiq

there are lots of other derivatives that would be problematic due to no oil.

plastics, synthetic materials, even machine manufacturing would be hit hard.

__________________
I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not.

Willravel

I could have sworn you were 25.

Cynthetiq

nope... very much over 30, probably why i'm such a curmudgeon.

__________________
I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not.

Willravel

I'll make a note of that.

What's a cum-dungeon?

ASU2003

Yes they would. Maybe a test shutdown of all gas production would get people's attention to how dependent we are on the stuff.

Well, except for the Amish, they don't care. It would be a good idea for us to come up with new ways of doing everything as if oil doesn't exist.

snowy

My SO is studying to be a chemical/environmental engineer, and so he has a good knowledge of what, precisely, around our house comes from oil. We've been slowly replacing disposable items in our household that use petrochemicals with reusable items that do not, and reusing what plastics we can instead of recycling (plastic recycling in our area is a joke--they pack it up and ship it off to China to be burned).

No, I would not support gasoline rationing. Eventually we will reach a point where people will be forced to find an alternative means to get around, to package their lunch, to fertilize their crops. I can't say that's a bad thing. We're going to go through some awful growing pains in the process, trying to figure out how to change from a fossil-fuel driven society to something else entirely. Personally, I'll just keep riding my bike, reusing my plastics, and buying organic produce.

__________________
If I am not better, at least I am different. --Jean-Jacques Rousseau

Bear Cub

No, I would not support it. Not only am I a selfish fan of gas guzzling for pleasure (both racing and leisurely driving), but my job requires that I travel on the road a LOT. Kind of hard to make it from TX to CT on a weekly ration.

__________________
Living in the United Socialist States of America.

Baraka_Guru

This is an extreme statement, and it is false.

It has something to do with investor speculation. The other factors include peaking production (it is happening), creeping demand (India and China are still far behind in per capita consumption compared to the average G8 nation), and, of course, the eroded value of the American dollar (oil prices are set in U.S. dollars; this is why oil futures are so attractive right now). And, if you can believe it, there are more factors as well.

You are paying more at the pump because of a host of reasons. Let's not be mislead by reducing it to a single reason. It isn't that simple.

That said, I would support rationing where there were outright shortages, say, on the provincial (or state) or national level. Rationing would fix any problems caused by stoppages of gasoline deliveries. Allowing the free market to "fix" the problem (as though it has done so in the past) likely won't work. There are geographic issues and changing consumption patterns that would likely stymie any real reading of what the market is doing if gasoline had shortages. You don't want you economy literally grinding to a halt due to mismanagement of a valuable resource. We ration other things in times of shortages; why not gasoline?

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

ngdawg

Because gasoline is a commodity, not a necessary resource, although we've come to treat it as such. The world got along for millions of years without the use of crude. Once its properties were discovered, we made it an evil necessity to life.
My statement that it's a speculative market markup is not my opinion, it's said almost daily on the news business report I listen to every morning. While there are addons (taxes, etc.,) and the so-called devalued dollar, everything that has risen in price the last three years is attributed to the price of fuel and nothing else. The cycle becomes vicious-oil prices go up, raising fuel prices which raises distribution costs which are passed thru in product pricing which devalues our spending dollar.
"They" have been saying for decades that we will run out in X years and we haven't. Because we haven't, technology is slow to come up with alternative fuel sources for the masses. Bio-Diesel, Ethanol, Methane based fuels barely touch the surface and more can be done to utilize these and others. Ironically, there are pessimistic reports that state the production of ethanol is a contributing factor to the rise in starvation rates in third world countries. I'm not sure I'm buying that one yet....

Baraka_Guru

This is a good observation, but I'm not sure if it's limited to only the last three years. I think it goes much further than that. This is where we get into "oil dependency." We know that beyond transportation, there are many uses of oil.


I'm not sure who's been saying we're going to "run out," but the more sensible analysts have been saying we're going to hit peak production, and there are many indicators suggesting it's happening. New oil projects are dwindling, and they're having a tougher time getting to the sweet light crude of existing projects. This, essentially, makes up what we call "peak oil," for the most part. This drives prices up as it becomes more valuable through rising demand in contrast to questionable supply. This is where speculation comes in. But, as I said, all the factors are at play at once. When the price of oil becomes too much to bear--that is to say, it contributes to high inflation for a certain period--then we will see the alternatives have their day. This is because they will be more financially viable, not just because of technology, but because of comparative prices.

Whether this is the case will become more evident in the days to come. It can be argued that an unnecessarily high meat and dairy production is the prime contributor to starvation, but that is a topic for another thread. But for the purposes here, realize that diverting cropland from food to energy must have an impact on food prices, as it reduces production and therefore supply. Demand for food rarely declines. It's basic macroeconomics. The prices should go up.

The U.S. notoriously "dumps" grain into Third World markets. This is why it's so hard for farmers to compete there. If Americans demand the corn for ethanol, there will be less of this dumping and therefore less supply to these countries.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

ngdawg

Did you read my first post? I quoted an article written in 2004 that oil production would peak by Thanksgiving, 2005. There are several other articles predicting the same thing, written within a six month window of the one I quoted.
We're three years past and again, predictions are we are going to "peak" within a year. Looks like a case of crying "wolf".
Right now, it is more expensive to produce a gallon of ethanol than a gallon of gas. Since gas now contains 10% ethanol, one can conclude this too is adding to the price at the pump and that 10% is not helping anything at all, including the air quality. To date, ethanol is a negative. It'd take major refinements in the thinking process to make it a positive.
The US also notoriously pays to NOT grow grains and other foodstuffs to keep the costs and growth under control here. Lift some of those restrictions and pay TO grow and the burden would be, if not lifted entirely, at least lightened.
It is also imperative that, instead of tossing tons of grains grown to third world countries, we endorse and support self-sustaining farming there. The familiar "Give a man a fish, he eats for a day, teach him to fish, he eats all his life" applies. We wouldn't dream of teaching our own kids to call crying they're hungry as adults, then run over with food, yet we do it with the other half of the world. Only by telling them, "Here's your seeds, get to work", will we be able to use our own resources in furthering alternative fuel testing and usage.

eribrav

I think you need to get some other opinions because the one that's on your news report is completely wrong.

The high cost of oil is driven by the demand for the product, specifically the top marginal demand, and the inability of producers to make more.

The price of each barrel is set in the global marketplace. If you don't want to pay $130 a barrel, but someone in China does, then you won't get that barrel to consume.

Finally, pumping oil at $130 a barrel is very VERY profitable for the producers. If it were speculators driving up prices then the producers would be drowning the market in oil right now, taking advantage of those high prices. Yet the fact is that world production is not going up, and inventories are not rising. This is de facto proof that we are in a supply constrained environment, not one driven by speculators.

Seer666

Very American thinking there. Short time, instant gimmie though process. If they flood the market, then the price ends up dropping again. Or they can keep production at a steady pace, and milk the high price for all it's worth. Keep the price high, then once people are used to the high prices, increase production, drop the price marginally, and rake in the cash. Long term thinking. Something we need to do more of if we are going to get around problems like this.

__________________
Bad spellers of the world untie!!!

I am the one you warned me of

I seem to have misplaced the bullet with your name on it, but I have a whole box addressed to occupant.

Baraka_Guru

Yes. I think perhaps my response wasn't detailed enough to reflect that, because I was speaking directly to it. Read on.

This is because no one really knows what goes on until they get more data. Analysts don't "cry wolf," but they are often wrong. A more accurate term would be "inaccurate." They do make corrections and perform new analyses. It's actually quite boring, but the data is out there that suggests we are hitting a peak.

Isn't it possible that prices are partly a reflection of this peaking production in Saudia Arabia and elsewhere? Remember, over the long term, increasing production to keep up with demand requires expanding capacity for tapping new oil. There is a limit to this game; the world is only so big. If it's not peaking now, then when?

This is why there needs to be funding for research and development on fuel alternatives as a whole.

They should shift some of the subsidies going to meat and dairy producers into other agricultural producers for various uses.



If I'm reading that right, over 74% of your agricultural subsidies go into meat and dairy. That's a lot of grain right there going into cows and pigs and such instead of directly for human use (biofuels, for example).

America already has more than the resources it needs. The Third World isn't holding it back. America dumps into world markets because of oversupply and their competitive advantage when it comes to pricing and production. I think they make money at it too. Consider that local prices could be lower than world prices and they can sell at prices lower than the cost of production elsewhere. This is "dumping." But we shouldn't get too off topic here.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

smoore

+1. I'm all for driving less but rationing doesn't do that. The oil companies will do a fine job of pricing people out, then maybe everyone will cut back. Hell, price it to the "walk away" point. I'll use my 2 gallons to get to work and back and curse the $25 it costs, but I'll still buy it to go to work.

__________________
smoore

TheNasty

The burns that could be made here.... yet no one has taken advantage of them.

host

IMO, the "free market", offers no long term solution to the petroleum price cycle problem. You've seen what has happened to demand for housing, how declining demand has affected house price levels. Declining house prices have caused lending standards to tighten, as more borrowers default on their obligation to make loan payments.

Commercial, consumer, and mortgage loans are available to fewer borrowers, as numbers of qualified buyers, under new, tighter lending rules, lessen, affecting overall demand for a wide variety of products and services.

What is happening to housing valuations, is creeping into the broader economy. Demand is driven by borrowed money. When there is less ability to borrow...there is not a shortage of funds available to borrow, there is a climate now that heavily favors the restriction of lending to only those who are so sound financially, that either don't need or are not interested in borrowing.

This is a consequence of the pessimism of lenders, and it infuences a decline in consumer confidence. In the late 1970's, it became the norm, with prices generally rising 12 percent annually, to buy now, before prices rise further.

With housing, and increasingly, with most other discretionary items, the consumer will defer purchases as prices are falling, or be unable or uninterested in borrowing funds (credit card purchases, home equity loans...). A "wait and see" attitude develops amongst potential buyers.

Against this backdrop, I expect that the Fed is losing it's battle against it's actual greatest concern, a severe, deflationary downturn.
http://www.marketoracle.co.uk/Article4657.html .

I predict $2.00 per gallon gasoline, by March, 2010, because of declining worldwide demand, so I see no need to consider rationing. Cash always is king when it is difficult to borrow. The value of even weak currencies like the US dollar will rise in value in these conditions, as more people prefer to hold their money, not spending or lending it while they "wait and see", all over the world.

The "free market", will crush investment in alterantive energy projects, as it has since 1981, and most recently, when crude oil briefly dropped below $15 per bbl., less than 9 years ago. Unless the US government does what has been practiced in Europe for more than 30 years, tax petroleum products to maintain a "floor" level that permanently encourages conservation and investment, we in the US will be prisoners of petroleum. The wise course would be to fix a price for fuel at current levels, via a new federal tax. Half of our $800 billion annual trade deficit is from importing so much petroleum.

ngdawg

It's off topic, but it isn't. Everything is related to a degree because this so-called 'peaking' is causing a backlash. Right now, the US pays probably the cheapest price for gasoline. But, there's the very possible potential that we will meet what is paid in Europe and elsewhere.
The other side of the "dumping" coin is, if we help to bring the poorest countries up to speed in self-sustaining food production, we could, very possibly, increase their dependency on crude. Yet, reports indicate that our supplying of grain to them on a continuing basis hurts our own efforts for alternative energy research and technology.
So, what do we do? Rationing gasoline wouldn't work nowadays. We have become so dependent on our independence that other avenues have lagged. Mass transport is abysmal; alternative fuels are out there (NJ's PSEG was running vehicles on methane and I think that was stopped, perhaps due to a time limit- although the program was working fine); So-called hybrid cars still run on gas-my father's diesel VW Rabbit got better gas mileage 30 years ago than the hybrids out now.
The cost of fuel has permeated every part of our daily lives and I don't think rationing would bring that back down to acceptable levels.
One possibility is governmental limitations via taxes on profits, but I don't know that that would stop this runaway bus, only slow it down.
The only thing I am absolutely sure about is the chunk of change we are losing every month because what used to cost us less than $30 a year ago for each car each week runs us over $50 each a week now and we ain't rich.
A friend has a Suburban and it costs him close to $100 to fill it. He can't ditch it, sell it or garage it, either. We are at the mercy of the oil cartel and they couldn't care less.

host

ngdawg, aren't we printing colored pieces of paper, propped up by China and Japan buying the US dollars from their own exporters, with colored pieces of paper printed by those two governments, who use the US dollars they've traded their colored paper for, to buy US Treasury bills, financing our national debt, which is increasing by $700 billion, in just the present year?

I'm asking if the "oil cartel" countries aren't still willing to trade their real, exhaustible supply of oil (oil output is declining in the UK, Mexico, and Norway...) for our colored paper, printed up from scratch, in an inexhaustible supply?

Couldn't the "cartel" countries make a convincing case that our money, propped up in a circular scheme, described above, is just what it is, printed up, colored pieces of worthless paper? What would it be worth if Japan and China stopped buying the US dollars it's exporters receive from our importers?

Who would buy the glut of dollars, or the T-Bills our government either sells at ridiculously low interest rates.....or dies?

ngdawg

Kinda my point...long as we have some colored paper and they have oil, we will keep throwing colored paper at'em...so they can build indoor ski mountains.

filtherton

I already ration my gasoline use; it is the result of a fairly common condition known as being poor.

ngdawg

It was reported this morning that the government is looking into the possibility of falsely inflated oil prices. This morning's business report on WCBS Newsradio stated that speculators in the stock market have been controlling the rising cost of crude and if found to be so, charges could be filed.

Complete Report

Redlemon

Ever since Enron screwed up the California power market a few years ago, I've suspected much the same thing occurring in the fuel market. I'm sure it isn't the only factor, as many have pointed out above, but during the California power crisis, everyone had all sorts of perfectly reasonable alternate explanations as well, but Enron was the main reason.

mp3: "Enron's Got the Power", DJ Twombly

__________________
I can't read your signature. Sorry.

Baraka_Guru

This is for the U.S. market. You know, where gasoline is cheaper than many other developed nations.

Interesting. It looks like they're setting themselves up for disappointment. Or, perhaps, they will just spin it. We'll have to wait and see. I think price manipulation would make up only a small fraction of the change in prices.

EDIT: World crude price increases have greatly outstripped the increases of the average price of U.S. gasoline. The two are connected somehow. Some economists are foreseeing a doubling of gasoline prices by 2010. This can't all be due to price manipulation.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

dksuddeth

making gasoline more expensive will not only damage the economy in the US even further, but the ONLY people that it's going to affect are those that are already struggling and those close to it. Why on earth would you WANT to make gas more expensive unless your entire agenda was to push society off of fossil fuels? realize that doing that is going to cause many more families in to poverty.

__________________
"no amount of force can control a free man, a man whose mind is free. No, not the rack, not fission bombs, not anything. You cannot conquer a free man; the most you can do is kill him."

ASU2003

Because I have investments in it. I am a buy & hold type guy. The problem with this setup is that it is supposed to encourage new production, new drilling, new refineries because businesses can make more money. But, there will be a point where the oil supply doesn't keep up and can't be increased.

I don't see this leading to wide-spread poverty though. It will be an adjustment and people may need to learn to cut-back, use alternative transportation, or car-pool places.

dksuddeth

Then you are clearly not looking at the bigger picture.

As fuel prices increase, transportation cost increases will be added on to the cost of the final product, which includes foodstuffs. Those families living just above the poverty line will soon find themselves below it. Those 'middle class' families will soon be lower class by necessity.

all 'cutting back' means is having less to spend and provide necessities.

__________________
"no amount of force can control a free man, a man whose mind is free. No, not the rack, not fission bombs, not anything. You cannot conquer a free man; the most you can do is kill him."

Cynthetiq

neither are you...

by the statements you're making, it means that job wages won't increase at all and are flat. But they aren't. You are also implying that people cannot or are not free to look for another job that pays more. Employers are always on the lookout for better talent and must be competetive in their wages.

People also change careers because wages are attractive. In the gogo 90's people took computer courses because the demand was high. It was so high that ancillary jobs like headhunters placing them also increased.

Your statement is an old statement that seems based on the old job cradle to grave mentality of yesteryear.

__________________
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smoore

I dunno, Cynthetiq. We haven't seen an increase in our scale here in Denver for 7 years now. Back in the Clinton administration we got four increases in scale that roughly matched the inflation I perceived. My wages have been flat for the entire Bush administration. (No conspiracy here, probably just coincidence.) A lot of us are pushing the union to get their butt to the bargaining table.

__________________
smoore

Cynthetiq

The challenge there is that you are not responsible for the changes of your wages, you are tied to the union.

but if you were to take a job in a non-union shop, there is a possibility that you could be offered more (or less) depending on the job. But the option is there for you to look for different work.

__________________
I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not.

host

Are you saying that the solution to coping with dramatically rising prices for necessities, fuel and food, is for everyone to seek and presumably obtain, a better paying "non-union" job?

Will you concede that the possibility of doing that can only realistically be open to a small number of the workforce....less than 10 percent in the current economic environment, and, that.....for the rest, the relief is only "in the looking", the feeling that one is attempting to take control of the situation?

If not, where would the 13.5 million "better paying jobs", even for 10 percent of the US work force, to successfully follow your advice....possibly come from? The situation is aggravated more, compared to two years ago, by the illiquid housing situation, making it difficukt to sell and relocate, and the drop in the credit ratings of millions, making it difficult to pass a credit check as a condition of hire.

IMO, you're advice is a possible solution for maybe one out of twenty workers feeling the pinch. The advice to "conserve" would seem as meaningful.

Cynthetiq

No, my point is that wages are not flat. There's tons of link and articles I'm sure you could dig up that show wages are not flat and do increase. They may sometimes increase faster than inflation and sometimes not.

A person who makes the choice to be a union member does so at whatever tradeoffs and consequences this includes good and bad.

__________________
I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not.

Plan9

+1 (speaks for the common man who ditched the SUV in favor of something more sane)

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