I was reading my favorite forum and came upon this post. I think it does a great job at explaining the rising price of gasoline


For all you people that think that oil companies control gas prices, why didn't they raise them when gas was really cheap about 5 years ago? Remember when it was $.89 a gallon (~$8 a barrell)? Oil and Gas companies were really hurting, yet they couldn't raise it. Do you think people would have howled if they had raised it to $1.29? $1.49?

Secondly, note that oil is around $65 a barrell at the moment, but what do you pay? $2.50? So the price has gone up eight fold while the price at the pump has only gone up three fold. I consider that pretty good efficiency.

If you live in CA or somewhere and are like OMFG I PAY $9 a gallon, well, call your congressman. The fact of it is you can have cleaner burning gas or you can have cheaper gas. Over time it will get better as technology improves, but it takes longer and thus costs more to refine cleaner burning gas.

Secondly to this, if everywhere used the same blend, competition would be higher, but the market is so fragmented with different blends that it stifles competition. Northern Cal takes a different blend of gas than So. Cal!

Then there is the refinery issue, and people haven't been willing to build refineries because the environmental regulations are so costly it's obscene. So when the gas price is low, people can't afford to build a refinery, and when it's high people worry that it'll go down, or their new refinery will be crippled by EPA regulations.

Finally, I grew up in an oil family in Midland, Tx. There aren't many big companies left there, it's all now independent operators drilling wells. It's local people exploring and drilling wells that are an average of 2 miles deep. We are working hard to find all the oil we can because it pays well, but regulation always drives costs up. Some of the environmental stuff is good that has been enacted in the last 30 years, pump jacks and tank areas are much cleaner, but you always feel like you are under assault. It's
"you drill oil wells, you are destroying the environment! We are going to regulate the hell out of you!" and then "The gas price is too high, you guys suck, you are gouging us all!"

Sorry for the rant, I just get so tired of the ******** conspiracy theories Nobody ever seems to think of the people behind the wells, drilling 24 hours a day, it's hard, back breaking work. Then there are all the dry holes you drill, which cost you $2 million and make you $0. Yeah if you hit a great well you'll get rich, but it ain't that easy folks.

I think we should dial down the regulations. Thats probably an overly simplistic view of things. I've heard enviromentalists say that rising oil prices isn't necessary a bad thing, given the effect it has on the environment. It should costs as much as the toll it takes on the environment. That said, I don't really agree.