[StellarKnight]

By now most everyone's heard that there is some sort of correlation between the "poor" state of the U.S. economy and rising fuel costs. Here's my question: if the economy is in such a poor state, how is the rising cost of fuel an indication of that fact?

Looking at our most consumed fuel resource gasoline, the price has probably risen something close 110% over the last 4 years.

There's no denying that gasoline prices have risen quite drastically, just as there's no denying the authenticity of the title quote. But how is that proof the economy's in the ****ter, especially when you consider the fact that domestic production is at its highest point in almost a quarter century, and foreign import is dropping substantially?

Originally Posted by http://www.aei-ideas.org

Buried in this week’s 213-page August Monthly Energy Review from the EIA is the fact that U.S. crude oil production for the lower 48 states is estimated to have reached a 23-year high in July of 5.865 million barrels per day. If so, that would be the highest monthly production of crude oil in the lower 48 states in more than 23 years, since April of 1989 when 5.88 million daily barrels of oil were produced. From January-July of this year, the EIA estimates that oil production in the non-Alaska states increased more than 14% compared to the same period last year, boosted by the strong, ongoing gains in North Dakota oil (+66% year-to-date through June 2012 vs. last year) and Texas oil (+35% year-to-date through June compared to 2011).

Originally Posted by bloomberg.com

In 2011, the U.S. relied on imports for 44.8 percent of its petroleum consumption, down from 60.3 percent in 2005, according to EIA data. This year, the nation should end up at about 42 percent, Sieminski said in a telephone interview after the lunch.

Originally Posted by bloomberg.com

North Dakota’s oil output rose to 639,000 barrels a day in May, the highest since at least 1981. Texas is at its highest level in more than 20 years, pumping 1.8 million barrels a day in April and May, according to the agency, a unit of the Energy Department that gathers data on energy production and use.

This increase in domestic production has undeniably resulted in a boom for the domestic oil & gas industry, as we've seen the employment numbers for domestic producers shoot up 23% in the past two years.

Originally Posted by http://www.aei-ideas.org

Acompanying the boom in domestic oil and gas production has been a huge boom in “shovel-ready” jobs for that sector. Over just the last two years, employment in the oil and gas industry for drilling-related jobs has increased by more than 23% to 195,500 jobs in July, which is the highest level for those jobs since early 1988, more than 24 years ago. America’s booming energy sector has been creating an average of 85 new jobs every business day for the last year, and those are just the direct jobs for oil and gas extraction, and doesn’t count all of the indirect jobs created throughout the supply chains for oil and gas.

A recent Bank of America/Merrill Lynch report estimates that the economic benefits to the U.S. economy from the booming domestic energy production, especially from the surging output of unconventional shale gas and oil, are approaching $1 billion per day.

For those who believe that rising gasoline prices are an indication that the economy is performing poorly, are you also claiming that the boom in domestic production is completely unrelated to the increase in gasoline prices at the pump? If you acknowledge that a causal relationship may exist between gasoline price increases and increased domestic production, how do increasing fuel prices prove the economy is floundering?

[quakcer]

Electricity is an outdated technology anyway, so this won't be as big of a problem as it seems.
Besides, electricity causes global warming and cancer.

[F1VENOM]

There's no mention of electricity outside of the title.

[StellarKnight]

Originally Posted by F1VENOM

There's no mention of electricity outside of the title.

It was from some article I was reading which tried to link the title quote to the rise in fuel costs, then went from there on how the economy was doing bad.

I just want to know why the rise in gasoline prices is a per se indication that the economy is doing ****ty.

[F1VENOM]

Correlation is causation.

[StellarKnight]

Originally Posted by F1VENOM

Correlation is causation.

The people pushing the narrative that the economy is in the ****ter would certainly like you to believe that.

[yesme]

so the economy is doing great because of higher fuel prices? anyone tell that to the truckers yet?

[barrel roll]

I'm going to respond once I get to a PC.

[StellarKnight]

Originally Posted by yesme

so the economy is doing great because of higher fuel prices?

Nowhere remotely close to what I said.

[FreeEnterprise]

Oil prices are dependent on the value of the dollar. So the massive inflation that no one wants to talk about, are evident in the cost at the pump.



For example, when Bush was in office, and oil hit $130 a barrel, we only paid around $2.79 a gallon.

Yet, today, we are paying $3.89 a gallon and oil is around $93 a barrel.

That is a result of printing money and devaluing the currency which causes inflation. Since the oil prices are directly traded based on the value of the dollar, that inflation is evident. But, the media/liberals like to ignore that fact... And instead pretend that everything is fine, and inflation is good, or something. When in fact, if you made $50,000 two years ago, and make $50,000 this year, that money has DROPPED significantly in value, as you used to be able to buy much more gasoline than you can buy today with the same amount of dollars. Which HURTS the economy, as people have less money to spend, because everything costs more.




Of course the increase in taxes affects those numbers as well, but didn't Obama promise not to raise the taxes on the middle class, oh wait, a gas tax isn't "directly" a tax on the middle class. or something.

The fact that the administration forces 10% ethanol (corn) in every gallon of gas also raises the cost at the pump. This is an example of the harmful "regulations" forced on our country by liberals. When the corn belt has a drought, the price of corn skyrockets, which raises the cost per gallon since they are FORCED to put in 10% ethanol...

All resulting in "energy prices necessarily skyrocketing".

http://www.consumerenergyreport.com/...ver-the-years/

So we see that printing money causes inflation, but that doesn't fit the liberal narrative, so instead they try to blame other factors when the actual rise is directly related to the 5 TRILLION Obama has blown of our kids and grand kids money. (which we borrowed from China, who could call that debt at any time...).


Now, look at what the EPA is doing to coal plants, and the coal industry. Plants are closing down all over the place, which will result in energy shortages, and outages all over the country. (unintended consequences I'm sure...) These plants being shuttered are not coinciding with new plants being opened, as it is too costly to make an energy plant today with all the regulations. So the liberals are essentially crippling our energy infrastructure, making the costs rise, which will force people to use less energy, since inflation is eating away at their dollars. People on fixed incomes WILL DIE this winter as a result of the massive increases in energy costs, as they won't be able to afford to stay warm and eat, while living in their homes. I wonder if anyone will connect the obvious when that happens...

http://www.cnn.com/2012/07/17/us/emb...war/index.html

"But in the past two years, an increasing number of coal-powered electricity plants across the country have announced closures. Estimates vary, but banking and industry analysis firm Credit Suisse put expected and known closures for 2009-2012 at 111 plants, that's one-fifth of the nation's nearly 500 coal plants."

Look at the location of the closures... This will cause massive energy problems in these already hard hit areas.


This hits Michigan and Ohio the hardest, and they are some of the worst states hurting from the Obama recession...

http://www.instituteforenergyresearc...lant-closures/

Problem is, you don't get economic recovery unless energy is cheap, and everything Obama and the liberals are doing is INCREASING the cost of energy.

Which will only hurt the economy further.




Rising fuel costs mean that poor people now have to decide do they heat their home, and put gas in their car, or do they buy groceries, and pay the mortgage.

Printing money devalues their income, so they can't do everything they did 3 years ago with their money, as everything has gone UP in cost, while their pay even if it stayed the same, actually went WAY down because of inflation.

Health care costs, increased significantly under Obama.
Gas prices increased significantly under Obama.
Food prices increased significantly under Obama.
Clothing prices increased significantly under Obama.

That is why Obama and liberals are bad for our country. They have the best of intentions, but their "fixes" always make things much worse. Government "helping" is the worst possible "fix", as it just increases costs, and debt through inflation.




http://news.investors.com/092512-626...ent-obama.aspx

[StellarKnight]

Originally Posted by FreeEnterprise

Oil prices are dependent on the value of the dollar.

As is most every other commodity on the market.

Originally Posted by FreeEnterprise

For example, when Bush was in office, and oil hit $130 a barrel, we only paid around $2.79 a gallon.

False. Crude hit ~ $130/bbl around June/July of 2008 (dropdown menu to "Imported Crude Oil Prices, then switch the Period Type to Monthly), which is when we saw gasoline averages hit around ~$4.00/gallon here in the U.S.

Originally Posted by FreeEnterprise

Yet, today, we are paying $3.89 a gallon and oil is around $93 a barrel.

Which is why the idea of massive inflation doesn't make any sense.

Let's assume, for a moment, that your assertion is true regarding $130/bbl and $2.79/gallon gas prices in 2008 vs. $93/bbl and $3.89/gallon today. How does that indicate inflation? The price of crude oil has dropped by ~30%, ergo your dollar purchases more crude oil now than it did in 2008.
A barrel of crude oil is a volume of measurement, as is a gallon of gasoline. How does your alleged gap between cost per barrel of crude/gallon of gas between 2008 and 2012 prove some sort of explosion of inflation?

[Lazarusrat]

So lets talk about all these Coal power plants that are going to close...

The reson why these plants are going to close is because they will not comply with the Maximum Achievable Control Technology (MACT) standard which was designed to reduce mercury and toxic emissions, not carbon or CO2. The MACT was passed in to law as titlle III of the Clean Air Act of 1990. Utility companies have had over a decade to bring their plants up to code or face closure...

I find it ironic that now that plants are facing closure people, mainly Republicians, are blaming Obama. Obama didn't create the Clean Air Act, nor did Obama make public utilites fail to invest in their own plants over the past 12 years. Deregulation of the power industry removed the requirement for plants to reinvest new pollution controls which caused that capitial that would have been spent bringing these plants up to code to turn in to profit and revenue for investors. Of course this was creating a time bomb for the average consumer.

The worst part of all this as these plants are taken off line the very companies that failed to invest in their own plants to keep them operational will not only raise their prices to cosumers to pay for the loss of megawattage they will also pass on to consummers the cost of building brand new generating capacity plants.

Why should a power company invest money it was making back into their plant to make it MACT compliant when they could pocket the money now and in 10 years shut down the plant and say "Blame the government! They are making us close! It will cost close to a $1 billion dollars to build a new plant. The ONLY way we can pay for the new plant is to pass the cost on the you the consumer. We are so sorry about this {insert sad face here}. BTW if own shares of our stock you can expect a heathly jump in their value."

End result is the Utiliy companies operating under deregulation discovered that they could not only maximize their profits by no longer being forced to reinvest in thier plants and they could force comsumers to pay for brand new ones at 0 risk to themselves. These guys are laughing all the way to the bank.

[StellarKnight]

It looks like there's a wave of NG plants to be built within the next couple of decades to make up for the closure of coal-fired powerplants:

Cheap Natural Gas Unplugs U.S. Nuclear-Power Revival

Across the country, utilities are turning to natural gas to generate electricity, with 258 plants expected to be built from 2011 through 2015, federal statistics indicate.


The EIA has forecast that the nation will add 222 gigawatts of generating capacity between 2010 and 2035—equivalent to one-fifth of the current U.S. capacity. The biggest chunk of that addition—58%—will be fired by natural gas, it said, followed by renewable sources, including hydropower, at 31%, then coal at 8% and nuclear power at 4%.

[FreeEnterprise]

Most of the plants being closed around here are owned by local governments...

Your concept of them being owned by a company and that company "laughing all the way to the bank" just shows that you don't know power generation in our country. They aren't profitable enough for many business people to want to mess with them, especially when you realized they are regulated like nothing else in our country...

But, hey, it must be those GREEDY 1%'rs or something.

lets GET EM!

We must need more wind and solar... AMIRITE?

http://www.breitbart.com/Big-Governm...g-failed-solar

[Lazarusrat]

Originally Posted by FreeEnterprise

Most of the plants being closed around here are owned by local governments...

Your concept of them being owned by a company and that company "laughing all the way to the bank" just shows that you don't know power generation in our country. They aren't profitable enough for many business people to want to mess with them, especially when you realized they are regulated like nothing else in our country...

But, hey, it must be those GREEDY 1%'rs or something.

lets GET EM!

We must need more wind and solar... AMIRITE?

http://www.breitbart.com/Big-Governm...g-failed-solar

So Ohio, one of the areas "hardest hit" according to your article, gets its power from...
First Energy Corperation, AEP Ohio, and Ohio Power Company. All of which are privately owned business.
Plants in Montana are both owned by MDU, which is a privatetly owned corperation as well.
As for Michigan, largest power company is I&M. Also a private company.

Further more no power plant in Colorado, Wyoming, Montana, and Idaho is owned by the state or local government.

No offense but I don't think you know what you are talking about... When the power industry was deregulated where did you think all the "cost savings" that people pointed to as proof deregulation was a good thing came from? Some of it did come from not having to fill out as much federal paperwork but the majority of it came from not having reinvest in their plants and transmision grid that used to be required by gov regulation.


Finally no one was talking about Solar or Amirite. Jesus, you might as well bring up Enron because that is about as relavant to MACT forcing coal power plants to close even after being on the books for 12+ years as Amririte is to this discusion.

[drgonzo]

Originally Posted by StellarKnight

False. Crude hit ~ $130/bbl around June/July of 2008 (dropdown menu to "Imported Crude Oil Prices, then switch the Period Type to Monthly), which is when we saw gasoline averages hit around ~$4.00/gallon here in the U.S.

It never ceases to amaze me just the volume of complete falsehood the right perpetrates. And they just put it out there like it ain't no thing. The sad thing is, though people like us know better, a huge number of people don't.

[licence2kill]

umm this graph proves you wrong free enterprise...lol

[Lazarusrat]

Originally Posted by licence2kill

umm this graph proves you wrong free enterprise...lol

I don't think he will listen.. Instead he'll complain about the rich being unjustly scapegoated and toss out a strawman as a distraction.

[StellarKnight]

Originally Posted by licence2kill

umm this graph proves you wrong free enterprise...lol

I was hoping you'd chime in on that graph. Care to explain what the graph indicates? There seems to be a lot of confusion on this forum as to the role inflation plays in the economy, and I figured gasoline prices was as good a backdrop as any to try and clear the air.

[licence2kill]

does the value of the dollar effect gas prices? yes, but not in the way people like FE think about it. devaluation drives up gas prices if its expected to increase RGDP. if not, then the actual cost doesn't change.

the actual cost of gas, in the long run, is determined by supply. and looking at the graph all the major price increases coincide with known supply shocks.

[barrel roll]

So that chart shows... inflation vs a commodity?

I see the results of Nixon and Carter.

I don't see the info that tells me WHY gasoline was being sold at those prices. (eg - taxes, production costs, subsidies, etc etc)