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Oily Hand Waving

Does anyone besides me feel like all the explanations and self serving discussions on why the price of gas has skyrocketed feel like world class hand waving?

Oily Hand Waving

At the University of Washington when someone got up and tried to explain his scientific position, but didn’t have real information and facts to back their explanation up we called it hand waving.  Hand wavers didn’t last long in our group----and!!!!-----hand waving was a good indication that that they were trying to put something over on us.

Does anyone besides me feel like all the explanations and self serving discussions on why the price of gas has skyrocketed feel like world class hand waving?  It seems no one can present a lucid argument to explain why gas prices are rising.

Competition in our free market economy helps keep profits and prices down to a reasonable level.  We have three grocery stores in town that are easy to get to.  Consequently none of them can indulge in price gouging.  Grocery stores are a great example of how the free market is supposed to work.

Antique shops or teriyaki restaurants are another good example of competition in town.  As soon as it looks like teriyaki restaurants are making good money more open.  This cuts down the profits of the other ones.  Sometimes through competition one or more closes, but this process adjusts the prices and profits to a reasonable level.

I’ve included a graph of the oil companies profits from 2009-2011 along with the changing price of gas (the dashed orange line).  It’s no surprise that as the price of a barrel of oil rose so did the price of gas at the pump and------here is the shocker!!!!-----so did oil company profits.  And where did the record oil company profits come from?  Our pockets, either at the pump or through paying higher prices for products made using oil.

If oil companies were grocery stores in Enumclaw, competition would eliminate record profits.  Surprise, surprise---- because oil companies are few in number and have their hands in all aspects of the business from pumping oil out of the ground, refining and selling at the pump, competition is sorely lacking.

If one oil company raised the price at the pump and others didn’t, they would be soon forced to lower prices.  But if a juicy excuse comes along (summer consumption, normal Middle East turmoil, etc.) for all the companies to raise prices the whole network of oil companies and Wall Street speculators goes into gear to produce record profits at our expense. 

Unfortunately at this time there is really no solution to this lack of competition since the oil companies and their Wall Street colluders are protected by very powerful interests in Congress.

The only “bottom line” that matters is profits and record profits prove the lack of competition is real. Anyone for “oily hand waving”?

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Bob McCoy March 28, 2012 at 02:50 am
I'm waiting for the excuse that global climate change (storms) has made extracting and shipping oil more problematic, and therefore oil companies need to cover the higher associated cost. All this while denying that human activities have an effect on the climate, or that repeated record years of storms and temperatures have any meaning--in fact it's all just random chance, just like their repeated record years of profits. After all, a fair coin can, and will, come up heads 20 times in a row, if flipped often enough. Just random chance, Dorothy--please! stay away from the curtain.
dexterjibs March 28, 2012 at 08:51 pm
What is the profit that oil companies make on a gallon of gasoline sold compared to the profit the government makes on a gallon of gas sold? And, how many "livable wage" jobs that do companies provide families across this country? And, what type of financial boost do oil companies provide retirees and stock holders, who, in turn, put back in the economy?
Justin Time March 28, 2012 at 10:24 pm
dexter that is the worst argument I have ever heard. If thats the "benefit" then drill for oil in the US, build more refineries. More jobs, less money sent overseas, higher profits, lower prices and People will be able to purchase more products and improve the economy.
Bob McCoy March 28, 2012 at 11:14 pm
dexterjibs, to make your point, why don't you do the research, and then answer the questions that posit to 'make' your points. To help out, I'll say "I don't know," and then you can tell the readers the oilco/gov profit ratio; the number of jobs made; the value of the oil taken from the commons; and other statistics. Rhetorical questions are usually answered by the questioner. "In 2010, the CEO of Exxon-Mobil received $29 million in compensation. How many employees could Exxon have hired with that money?" "Well, 580 $50,000 jobs, 725 $40,000 jobs, or a paltry 290 $100,000 jobs."
"If the CEO of Exxon works standard working hours, how much do the shareholders pay for the CEO to take a five-minute bathroom break?" "$1,168." So please, enlighten me on the answers to your questions ;>)
dexterjibs March 29, 2012 at 12:03 am
I was just asking questions. Wasn't making an argument either way. But you sure sem defensive about it. But, we should drill for more oil, build more refineries, drill for more natural gas, build more nuclear plants, mine for more coal etc. You will see more jobs and cheaper energy prices. It is economics 101.
dexterjibs March 29, 2012 at 12:08 am
Who cares what the CEo made? I just wish i had his job and I don't begrudge anyone what they work hard to make. Just answer my simple questions. You "chicken little sky is falling" environmentalists want to shut everything down in regards energy production which will cause prices to go up, supply to go down and jobs to be lost. Then you all %itch and moan about high gas prices then you want to avoid the real cause of it. BTW, oil companies make about 8 cents in profit per gallon. Which they use to give individuals actual money and they use it for further research. Government makes about 50 cents per gallon of pure profit. get a clue.
Bob McCoy March 31, 2012 at 10:46 pm
Mr. Xterjibs, thank you for those answers to your questions. I checked your reference to your Econ 101 book, "Chicken Little," but failed to connect the dots to the environment or oil production. I thought, though, that you might enjoys some CIA- type realities (https://www.cia.gov/library/publications/the-world-factbook/geos/us.html) regarding the US and oil: proven oil reserves for the US are 20.7 Billion barrels. US oil consumption is 19.1 Million barrels per day. So, if we sucked all our oil out of the ground, we would be independent at the current consumption rate for about 1100 days--three years. Natural gas, according to the sky-is-falling CIA is about 11 years worth, if we maintain current consumption.
Well, how about the US hold its current oil consumption steady, and we go after all the proven Saudi Arabian oil? Their proven reserves of 263 Billion barrels will last a little over 37 years for US-only consumption. So, we're up to 40 years if the Saudis sell only to us, and don't consume any oil in production of proven reserves or shipping oil to us. Of course, with the world's human population doubling about every 35 years, those 40 years might be cut a bit short because of per capita oil consumption. Now, I grant you that your heroes Chicken Little and Henny Penny might find some more oil that nobody noticed, perhaps as we've only been looking for a hundred years or so, but I doubt they will find enough for 40 years of US consumption, but then, I'm clueless.
dexterjibs March 31, 2012 at 11:35 pm
Ok, tell me what the magical alternative energy source that has been developed that can replace oil tomorrow? You can't name it because it has not been created. But you want to put the screws to oil drilling and other energy sources we have access to all in the name of "saving mother earth". When in relaity, you are going to destroy the U.S. economy. Go ahead and put on your Barney the Dinosaur outfir you have hidden in your closet and then you can "use your imagination" and that magical energy source will come to fruition (in your own clouded mind). I firmly believe we need to use all resources we have available within our borders (oil, shale oil, natural gas, coal, hydroelectricity, sun and wind). You and your ilk won't be happy until we are all living in tents or caves while our enemies (political and economic) are raping our resources. Heck, China and Russia are already close to taking our oil tha is off shore. Geez, get a clue. BTW, studies have shown we have alot more oil than 1100 days worth.
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Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors. Write a new post... What's up? Make an announcement, speak your mind, or sell something
Margaret Santjer (Editor) June 18, 2013 at 10:46 am
Thanks for posting this Jenene! If you haven't yet, be sure to add it to our clickable garage saleRead More map, too: http://enumclaw.patch.com/groups/summer/p/post-your-yard-sale-for-free-on-enumclaw-patch
Margaret Santjer (Editor) June 18, 2013 at 10:47 am
Hi, LouAnn. We'd also love to have you post your sale on our clickable garage sale map, if youRead More haven't yet: http://enumclaw.patch.com/groups/summer/p/post-your-yard-sale-for-free-on-enumclaw-patch
Jenny Manning (Editor) June 12, 2013 at 12:27 pm
Awesome. I'll have to give them a try. Thanks for sharing your experience at Oshio Sushi, Jaclyn!
Liz Clark June 12, 2013 at 09:21 pm
We finally tried it too. Good, but not necessarily affordable. Tough to compete with our favoriteRead More (Trapper's Sushi).
Susan Etchey June 4, 2013 at 03:37 pm
My mistake. Merchants ..no spell check on this site!
Akiko Oda (Editor) June 4, 2013 at 04:43 pm
Thanks for posting, Susan! We encourage you to also fill out this form to be included in the yardRead More sale map that we'll publish later this week. http://enumclaw.patch.com/groups/summer/p/post-your-yard-sale-for-free-on-enumclaw-patch
John Locatelli June 5, 2013 at 10:09 am
This is a great chance to buy quality items at good prices!!
dexterjibs June 2, 2013 at 11:46 pm
What f you don't have FB? Can you tell us Enumclaw Patch readers what you are looking for?