Ive had enough of the ridiculously high gas cost. $3.50/ gallon?! that's crazy...once it reaches $4/gal...I will officially take the bus & boycott gas altogether, its taking a chunk off our income & causing a strain to most families, plus businesses have to compensate for their employees' travel expenses.
2006-06-13 11:20:16 · 12 answers · asked by Anonymous in Business & Finance ➔ Corporations
The immediate cause of the soaring gas prices could be attributed to a variety of factors, principal among them is uncertaintly in the middle east.
But economically speaking, the age of low gas prices is now over. Gas is a fossil fuel which is limited in quantity. Our lifestyle until now has assumed that there is unlimited gas and we have been wasteful in our use of this energy.
The theory of peak oil posits that the oil being pumped will peak anywhere between 2003 - 2010. What this means is that oil production will peak or has just peaked recently. Going forward over the next decade and ahead oil production will enter a period of slow decline, putting an upward pressure on gas prices.
Hubert, an american geologist first applied this theory and developed a model to predict that american oil production would peak somewhere in the late sixties to early seventies, and he was pretty close. After that the model has been applied to world oil production.
These models assume that there is anywhere between 1.8 - 2 trillion barrels of recoverable oil reserves in the world. After a point, it will become more and more expensive to pump oil out of the ground beyond a point at which it will be economically infeasible to do so.
People might tell you that this is cyclical, or temporary, etc. But th e truth is that the era of cheap oil is over. With the developing nations increasing their appetite for oil as well, the rate of consumption is going to increase at an increasing rate.
2006-06-13 13:23:55 · answer #1 · answered by juliuzseizure 2 · 0⤊ 0⤋
Supply (which seems to be going down or staying stead) and Demand (which is going up).
I see the price only going up because the demand on world oil markets is going to go nuts thanks to China and India which are both become more and more affluent and have 2.5 billion people waiting. As they prosper, they'll buy cars, open factories, buy consumer goods that require electricity, etc.
My simple and ignorant math tells me this....
If the US and Europe with about 1 billion affluent people consume oil such that a barrel costs $70.00, then adding 2.5 billion more and leaving the supply side the same would cause oil to go to around 240.00 or so a barrel.
Economists would probably laugh at my simple logic here, but I don't know all the fine details.
It's going to get much more expensive unless an alternatives, like Hydrogen, become available.
And one other thing... electric cars are NOT a good alternative. They require electricity to be charged. Where does that electricity come from? Power Plants. Mainly that burn oil. It's not efficient to move that electricity as AC current down a wire, put it in a battery and power the tiny little electric car.
You never hear that from the EcoNazi's though.
2006-06-15 09:55:14 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Soaring gas prices start at the oil well. oil emmisaries are raising there per barrell price all the time. This price increase is then raise even further when the supply is reduced due to an innability to refine oil into gas. This all translates into an outrageous gas price we all pay. Look at the amount of profit Exxon/mobile made last year, they broke all the records for a single year of profit.
2006-06-13 18:27:20 · answer #3 · answered by pilgrimage4him 1 · 0⤊ 0⤋
The price of crude has risen dramatically over the past few years. This translates to higher prices for gasoline as it cost more for the Chevron's of the world to refine it. What's really driving the high gas prices is simply higher demand around the world for crude. China and India is growing rapidly and now replacing their bikes with cars; this puts pressure on oil prices. It's supply and demand.
2006-06-13 18:25:44 · answer #4 · answered by buklao 3 · 0⤊ 0⤋
Gerorge W Bush's soaring EGO
2006-06-13 19:10:57 · answer #5 · answered by BONE° 7 · 0⤊ 0⤋
The wind chill factor in the Arctic.
2006-06-13 18:22:27 · answer #6 · answered by Nocsotulb 3 · 0⤊ 0⤋
Greed.
2006-06-13 18:23:20 · answer #7 · answered by Anonymous · 0⤊ 0⤋
called greed...same as all corporations...bottom line to any business id greed...hell with the common folk..it's all greed...look at ceo's wages..execs of any business....nothing but greed...look at the what happened today..lawmakers give themselves a raise..heck they only make over $ 180,000 a year....why shouldn't they need more....all greed
2006-06-13 18:26:15 · answer #8 · answered by bigjohn_62692 2 · 0⤊ 0⤋
stupid Congressmen that think they know what they're doing but actually don't
2006-06-13 18:41:00 · answer #9 · answered by Anonymous · 0⤊ 0⤋
depends on where you live, could be taxes?
2006-06-18 02:44:53 · answer #10 · answered by intergalacticvillian05 2 · 0⤊ 0⤋