why is oil so high now 40 years ago it did not have this affect on gen. public...?

Question

off shore storms had no affect on oil prices, or huracaines hitting the good old U.S.of A. land did not affect the prices of oil and gas.. what does the government think that the older generation is STUPID!!!! AND why does it cost more to make ETHANOL. up north it is cheaper than regurlar gasoline....

Answer 1

rule of supply and demand. more people (especially in China) driving cars, so increased demand means an increase in price because the supply has remained somewhat constant.

Answer 2

Oil prices behave erratically for two reasons, (1) production of crude oil and refining require large and irreversible investments, and (2) oil and its derivatives (gasoline, heating oil, etc.) are storable. Storability enables speculative hoarding, while the magnitude of investment ensures that supply cannot quickly catch up with demand. So speculators drive prices up, but eventually they run out of storage space, and prices collapse.

As usual, the governments are a big part of the problem. The U.S. government usually piles up petroleum reserves when prices start to go up. The Japanese government does the same, but in secret.

As to ethanol, it's a little more complicated than you think. The cheapest ethanol is made of sugar cane. The largest manufacturer of sugar-cane ethanol is Brazil. In the U.S., ethanol is made of corn, which makes it about 50% more expensive. As a result, the U.S. government both imposes tariffs on Brazilian ethanol to protect domestic producers and pays subsidies to those domestic producers (the largest of which just happens to be Archer Daniels Midland).

The cost of sugar-cane ethanol, meanwhile, is in line with extracting oil from tar sands or synthesizing gasoline from natural gas or coal (the latter, by the way, has long since been commercialized by Sasol in South Africa, so it is not an experimental technology). Extracting oil from shales is more expensive than sugar-cane ethanol, but less expensive than corn ethanol. So there are plenty of alternatives to consider before corn ethanol...

And then there is the issue of heavy oils. The reserves of heavy oils are known to exceed the reserves of traditional oil, but until recently heavy oils were thought to be barely recoverable. Now Chevron has a steam injection technology that allows to extract up to 40% of heavy oil. Other companies are not far behind...

Answer 3

Because the big oil companies have used this chance to raise the gas tax. It is ridiculous how much they are getting out of our pocets now, I think it is something like 17 cents per gallon going to just one man. It's not the storms at all, it's our own economy. Congress is passively attempting to talk down the gas tax but I have seen no proof of it actually happening.

Answer 4

the demand is much higher now than it was 40 years ago