Posted on 06/20/2008 5:31:08 AM PDT by moneyrunner
Pravda was a beacon of journalistic truth and technical prowess compared with the Virginian Pilot
When you combine arrogance, bias and stupidity in a single package you have the editorial writers for the Virginian Pilot.
Today’s proof, boys and girls is the editorial page which has on it two editorials that are perfect examples of what I’m talking about. The first, No easy answers for high gas prices, proves that the editors are not only clueless about why prices are high but freely admit that they have no idea what to do … except offer platitudes. Let’s get to their answer first: We all know the simplest and cheapest solution to high gas prices is to use less and conserve more, and work like the dickens to find something else on which to base the economy to begin a real shift to alternatives like nuclear and biofuels and solar and wind.
For the rest of the editorial they spout the Obama talking points which are too tiresome to relate, except this one which is not only wrong, but spectacularly wrong:
(Excerpt) Read more at moneyrunner.blogspot.com ...
Did you see WAVYs poll? 87% want offshore drilling.
The Pilot is the biggest pile of garbage! I subscribe for the coupons, sports, comics, and because I have cats.
The paper is a perfect mish-mash of editorials from junior high schools, letters to the editor which must be chosen from the school for lefty semi-literates, mostly leftwing columists with an occasionl rightward one thrown in the mix, and observations that ring with “Duh” from the editor.
I’m embarrassed to call it my hometown paper. Of course, I’m horribly embarrassed to bring anyone from out-of-town past that monstrosity known as Town Park Center in VABeach. It’s a skycraper looking for all the world like a pimple on an elephant’s rump.
Cities rose from peoples’ interactions and needs. They don’t rise from building in the middle of nowhere with nothing around them. Pembroke Mall is such a draw. /s
Except in Brazil. But that’s another story.
Hellno....Hellno...Hellno....
Why do you torture yourself like this each day?
(Rhetorical question, I’m reading it online as I type this)
The Pilot's poll is running 79% in favor.
If we pay $4/gal. for gas, don’t clueless newspaper editors such as this realize that people will drop their newspaper subscriptions, which no one really needs with the internet these days?
I'm not sure the responder has it right, either. The price of oil IS set by supply and demand, but that market encapsulates present and future supply and demand. If large scale users of distillate fuels (e.g., airlines) expect higher prices in the future, they buy large quantities now. This bids up the price.
Now here's the magic bullet that fixes everything: If the Congress simply announced that ANWR, the OCS, and all federal lands would be opened up for exploration, the mindset of those large scale users is altered into thinking that future supplies will cost less. Therefore, they buy less now waiting for those future supplies to come online.
Am I going too fast for you, Nancy, Chuckie, and Obama? Pay attention..
Because they know that future supplies will cost less, the demand curve for current contracts slides to the left, putting and IMMEDIATE downward pressure ON CURRENT PRICES!! If you idiots would simply take your thumb out of your collective a$$e$ and open everything up, we wouldn't need to wait more than 10 MINUTES before the current prices started to fall.
So why won't you act on behalf of the American consumer? Because you don't want anything good to happen to us on GW's watch. You arrogant, self-serving, hacks. You ought to be tarred and feathered...maybe worse.
Exactomundo!
Now for extra credit, how much profit does a Big Oil company make on a barrel of crude it buys from the Saudis, et al as compared to how much it would make on a barrel of Gulf of Mexico, ANWR or Coastal California crude?
I prefer newspapers, as I do not like being dictated to by a piece of equipment as to where I can get the news, comix and other information. I sit in front of a computer all day, 5 days a week, the last thing I want to do when I get home, is have to turn the computer on and sit at a desk in my own home or hold a hot device in my lap and worry about spilling something on it, or having to set it somewhere carefully everytime I want to get up. Besides, what would my dog have to look forward to fetching every morning, if I didn’t get the paper? My wife and probably many other women just do not want to access a computer on sunday morning to look at the sales, or print out coupons while having coffee or eating breakfast. Computers are great, I make my living with them, but I do not want to design my home life and recreation around them and have to rely on an ISP connection.
I heard on the news this morning, that there is plenty of oil available, but what is driving the prices up, is speculation. Which one is right?
I must admit, I don't know. However, whatever it is, I'd be more than happy to let them have all the profits and, if I were in Congress, I would ban the phrase "windfall profits tax" from the English lexicon.
The Obamaloonies all spout the same talking points; spilled oil, 7-10 years, no effect on prices, oil companies making “excess profits”, can’t drill our way to energy independence, etc that are all easily repudiated.
1. Spilled oil washing up on beaches is NOT a problem or else the envirowhackos would have LSM cameras out filming it. Anyone seen a beach covered in crude oil on the news in the past 15 years?
2. Using the same logic of not having the oil from the drilling for 7-10 years, we shouldn’t bother with planting fruit trees because it will be years before they bear fruit.
3. Corporations don’t pay taxes, they pass them on to the consumer as a cost of doing business. Passing a windfall tax on the oil companies won’t produce a single drop of oil and will actually INCREASE the prices at the pumps.
4. Saying we can’t drill our way to energy independence is like saying you can’t eat your way out of hunger.
They're both right, and not mutually exclusive views. There is plenty of oil available, as evidence by no shortages in the market. Shortages are what you saw in the early 70's when there were huge lines at gas stations, odd-even days, and other rationing schemes. That problem was caused by the Nixon Wage and Price controls. As soon as those were lifted, the shortage disappeared. (Seems there might be a lesson to be learned there...leave markets alone and they'll work it out.)
What's got people ticked off is that they don't like the price that currently clears the market. The problem is that the spot price of oil is a mix of demand caused by current users (of which China and India are now huge players where a few years ago they almost didn't exist) and future users. Speculators are betting that future supplies will be less than future demand, thus causing them to bid up current prices. Do something that alters their future outlook, and prices will react accordingly.
If Congress had any brains, they'd immediately open up ANWR, OCS, and federal lands to exploration. This would immediately alter speculator expectations and I'll be you'd see an IMMEDIATE downward pressure on oil prices. Don't buy into the "it-will-take-ten-years-to-take-affect" BS that ignorant tree huggers are trying to espouse. My guess is it would take ten minutes for the price to start dropping.
Now if Congress could just forget their own self-interest long enough to do what's right for America, we'd be in much better shape than we are now. However, my faith in Congress doing what's right is just about zero right now...
So when it is said that the price is a result of supply and demand, supply isn’t determined by availability?
Taxes on crude oil production
Most States impose a severance tax when oil (or gas or another natural resource) is produced from property within their territory. It is generally a percentage of the sale price and thus varies with markets. In 1996, States collected a total of about $3.3 billion in severance taxes on oil and gas production. For Alaska, the State by far the most dependent on oil production activity, severance taxes account for about half of all State tax revenue. In other large producing States, severance tax revenue is important but is less than 10 percent of total tax revenue.
Royalties are not taxes but fees paid to landowners, whether private or public. (As noted earlier, private ownership of mineral rights is unique to the United States.) Payment of royalties is universal, part of a standard contract to produce oil or gas from a given property. The amount of the royalty percentage is part of the negotiation process and thus varies with boom and bust cycles in the industry. Generally, oil royalties are about 1/7 (some 14 percent) of the sale price. Royalty agreements with the Federal government have generally required a higher royalty payment. In 1996, the Federal government collected approximately $3 billion in royalties on oil and gas production from Federal property, including Federal offshore areas.
Excise and Other Taxes
U.S. import tariffs on oil are generally modest, except on gasoline. They are a fixed level per unit and thus become more important at low overall market prices. Depending on the density of the oil, crude oil and fuel oils pay 5.25 cents per barrel (for heavier quality) and 10.5 cents for lighter oils. Transportation fuels, such as gasoline and jet fuel, pay 52.5 cents per barrel, or 1.25 cents per gallon.
Excise taxes are an important source of revenue to the taxing authority, whether the authority is the Federal, State, or local government. Among oil products, highway fuels are by far the most heavily taxed. Federal excise taxes on gasoline are 18.3 cents per gallon and on diesel fuel are 24.3 cents. In addition, the Federal government collects a fee of 0.1 cents per gallon to finance the Leaking Underground Storage Tank Trust Fund. Furthermore, State taxes on gasoline vary from less than 10 cents per gallon to about 40 cents, averaging about 22.6 cents per gallon in early 1998. Taxes on diesel used as a highway fuel show a similar range and also average 22.6 cents per gallon. These data for State taxes include "excise" taxes as well as other taxes, such as sales taxes that some States impose on gasoline and diesel. State excise taxes alone, as of early 1998, average about 18 cents per gallon.
This was gleaned from this website: Click here for:http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/price_taxes.htm
No, it is determined by availability, but in the futures market, that availability includes what's available today AND in the future. If you know that long run supplies are going to increase, it does affect the current price.
Oil on beaches
http://abcnews.go.com/US/wireStory?id=3838623
http://www.foxnews.com/story/0,2933,309696,00.html
http://www.abc.net.au/news/stories/2007/11/13/2088902.htm
http://www.marinergroup.com/oil-spill-history.htm
I didn’t see a single reference to an oil spill in the Gulf of Mexico due to an oil platform. Also, those same oil tankers will STILL come into US harbors, they will just come from 100 miles away instead of 7,000. There is a HUGE savings of natural resources right there.
I am a masochist.
No, in reality I would not subscribe to the Virginian Pilot. My wife reads it and I look at the “Hampton Roads” section as I eat breakfast. I do this to try to understand what Liberalism is thinking about today. I also see the Virginian Pilot as a good indicator. You can learn a lot from people who are consistently right as well as people who are consistently wrong. You go along with those who are right and you do the opposite of these who are wrong. And no one is more consistently wrong than the Virginian Pilot.
I can’t disagree with the way you define the problem either. It all depends on your perspective. But I would quibble with your “supply/demand” assumption in this respect. The reason that there is such an incredibly sharp rise in the price of commodities like oil is the result of an active futures market in them. In the absence of a futures market, the supply/demand relationship would be a great deal simpler and the price moves would be much more gradual. The presence of speculation in the futures market creates a great deal more volatility than would be present in a spot market for “things.” The reason is simple: the futures market not only attempts to balance real current supply with real current demand, it also introduces “guesstimates” of future supply and demand; things over which there is a great deal less certainty. Once you introduce uncertainty, plus greed and fear, strange things start to happen with prices.
Try this thought experiment: imagine a futures market for cars. Buy a car today for delivery in 5 years? Then introduce speculators who will think about things like technological innovation, fuel efficiency, battery technology, CAFÉ standards, resale value, “the trend is your friend,” etc. Your car prices would fluctuate much more wildly.
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