While I do agree with you Monte about alternative fuels, there is one major flaw in the theory. There is no free market.

When you go fill up your 4WD SUV, you are getting gasoline with is mixed with ethenol. Last I checked, corn is one of those items that receive agricultural subsidies. Oil and gas companies are also given cut-rate leases on public lands for exploration, not market value. In addition, the federal government gives many tax credits and incentives for the oil industry (now, there's a surprise).

So when you go to the pump and pay $2 a gallon, the actual price of the gasoline per gallon is closer to $3 a gallon because of the all the incentives, subsidies, and other tax breaks that don't get factored in. Sure, the federal government has an 18.4 cents a gallon tax plus any state taxes, but that is included in your purchase of gasoline.

So let me ask, if gasoline were $1 more per gallon, do you think there would be a greater incentive/demand for alternative energy sources? It begs the question. Also, if alternative energy (NOT ethenol) were given the same kind of breaks as conventional energy, where would we be today?

Oh yea, before I forget, you do know that you can get a $100,000 deduction for buying a giant SUV and a $4,000 tax credit for buying something like the Prius, right. Let's not forget the pork barrel projects like synthetic coal. All of you will get a kick out of this one if you didn't already know about it.

The moment that government appears at market, the principles of the market will be subverted

---Edmund Burke

Here is a link that might be useful: Synthetic coal scam

Not all gasoline out there contains ethanol. In fact, it's actually pretty rare here in my part of Tennessee, and I don't buy it because I don't want the corn syrup caramelizing in my engine.

Ethanol incidentally has many drawbacks. While alcohol does burn cleaner and ethanol/gasoline mixes produce less CO and volatile organic compounds, ethanol/gasoline mixes do produce higher levels of nitrogen oxide, a major component of smog, as well as toxic acetaldehyde. Finally, the amount of energy required to produce a gallon of ethanol is about as much as any energy savings that could be realized, so it really will make no impact on future energy needs.

Actaully, AZ...the technology is there, the alternate fuel is there, the cars are there. It's called bio-diesel; diesel fuel made from renewable resources grown in this country. And yep, you can even but SUVs that use it, right here in this country. It's not about government and big business keeping everyone down; it's about the Average Joe who refuses to change their ways. Lay the blame where it needs to be laid.

Oil and gas companies are also given cut-rate leases on public lands for exploration, not market value.

Exactly how do you determine that? Every Federal lease that I have been involved with has been obtained in a public lease auction and should reflect exactly the market value of the particular mineral lease. Just because a lease doesn't go for the highest or even the average value of oil and gas leasing doesn't equate to subsidized leasing by any stretch.

Oil and gas bids for leases on public property are based on a compilation of risk factors related to petroleum geology, acreage size, transportation, lease position, economics, environment risk, politics, etc., not on the average cost of oil and gas leasing. The lower the risk and the greater the potential for a good return, the higher the bid. If a mineral lease parcel goes for less than the average leasing rate, it is because companies have determined the risk of a high bid is unjustified, not because the government gave it to them at a discount rate.

I know I have stated this in the past for others, but I don't consider a tax break a subsidy. How can you call giving someone back something they already owned a subsidy? Of course, some political groups consider reducing the rate of a tax increase from say 5% to 4% per year the same as giving a tax break, so I guess from that perverted perspective, giving me back some of the money I already earned could be spun in such a way to convince some less informed that it is a subsidy.

Oh yea, before I forget, you do know that you can get a $100,000 deduction for buying a giant SUV and a $4,000 tax credit for buying something like the Prius, right.

Only if the SUV is used for work in your business, or you live on a farm, as far as I know. Furthermore, a capital expenditure of that value would have to be depreciated in a business over at least three years I believe, maybe more, so comparing the deduction to a straight up $4000 tax credit that an individual obtains in a year, regardless of useage, is comparing apples and oranges. I also suspect there are a lot of places in a job where a Prius isn't going to replace a SUV for work. Few Prius will be found pulling trailers, etc., and probably don't even have an option for a hitch.

Last I checked, corn is one of those items that receive agricultural subsidies.

Actually, I believe most agricultural crops like corn, wheat, soybeans, etc., receive price supports, not pure subsidies. This means they only receive payments when the cost of the crop falls below the target price for the crop. Payments are not automatically received for most major crops. In fact, some of the most direct subsidies paid to farmers are those paid for setting aside land for wildlife and environmental reasons, not growing food.

Ethanol is a highly subsidized downstream by-product of the agricultural system. Petroleum companies have long opposed the forced inclusion of ethanol in gasoline because they believe it amounts to an unnecessary and cleverly hidden financial burden absorbed by the average citizen.

By the way, no such target price exists for oil and natural gas. When prices tumbled in the mid 1980's and 1990's, many independent oil and gas producers went broke and they still didn't demand the government step in and subsidize their industry. An attempt by a small group of independents to get Congress to implement a tariff on imported oil was overwhelmingly opposed by the remainder of the oil and gas industry because they felt it also was an unnecessary burden for the average citizen to bear.

Jason, let's reclarify some of your counterpoints.

1. Oil and gas companies are also given cut-rate leases on public lands for exploration, not market value.

Rates of $2-3$ an acre per year is the average lease rate for oil and gas exploration. I don't know about you, but that seems artificially low to me. Show me where I can lease an acre of land for that much. In my book (and many others), that price is too low. I don't know what the "true market" value is, but I am pretty sure that it is substantially higher than that. On top of that, the oil companies have also underpaid any royalties due. Through 2002, that figure was over $800M.

2. Oh yea, before I forget, you do know that you can get a $100,000 deduction for buying a giant SUV and a $4,000 tax credit for buying something like the Prius, right.

The $100,000 deduction is very loose in its interpretation. Many people set up corporations just for the purpose of taking advantage of the deduction. Let me ask you this: Why do people like mortgage bankers,real estate agents, doctors and dentists need to use a Hummer. All you have to do is say you use in the course of business (go to a convention or two, take a couple of clients out two lunch) and take the deduction. The threshold is low--50% in the use of corporation, and boom instant $100,000 deduction. Don't get me wrong, the intent of the tax deduction was to help primarily farmers, small businesses, and contruction companies. Since the SUV's have gotten over the 6000 lbs, they now fall into this category. As usual, Congress hasn't done anything about it.

I was wrong on the $4,000 tax credit. It is a deduction of $1500. It will be reduced by $500 per year until 2007 when it will be completely phased out. Enough said.

3. In my book, subsidies and price supports are the same thing, semantics aside. One is a function of cost and the other a function of price. I am not trying to be cruel, but if you make a product, whether by farming or manufacturing, and cannot make a profit, you should get out. Subsidizing any industry is making the consumer pay twice, once to buy the product, and once by your tax dollars and is not a good use of funds. I do understand that it hurts small farmers, but unfortunately 80% of the subsidies/price supports go to 20% of the farmers, almost all of which are owned by giants such as Archer Midland Daniels. Congress should look into modifying these rules also. That will never happen because the spin will be "it is trying to go after the small farmer".

Unfortunately politics is always involved and the economic functions of pure supply and demand are always impeded. Any artificial reduction of cost(s) or increase in price by government intervention is a subsidy, pure and simple. You can call it what you want, but the bottom line is either a companies "true costs" are lowered or the market price is artifically inflated (or reduced in some cases). We can also talk about the NIH and the drug companies on the same page. (another thread sometime)

The most terrifying words in the English langauge are: I'm from the government and I'm here to help.

--Ronald Reagan

Az, thanks for the link; I feel that I've a lot better understanding of the matter than before. Monte hasn't (and cannot) rationalize what is largely an industry-skewing tax gambit as somehow improving domestic fuel supplies or technologies.

Monte, glad to learn that the industry resists trade restrictions; OTOH, much of the the industry is owned or controlled by transnational corporations and energy conglomerates.

Monte hasn't (and cannot) rationalize what is largely an industry-skewing tax gambit as somehow improving domestic fuel supplies or technologies.

I'm not exactly sure what you are talking about, but in North Dakota the extraction tax breaks, not subsidies, given for tight gas, stripper classification, enhanced recovery investment, horizontal drilling incentive, etc., have been some of the main reasons that drilling and other oilfield activities continued through the depressed oil prices of the mid 80's and mid 90's.

Additionally, the oil extraction tax breaks they receive are largely off-set by increased proceeds from income tax, sales tax, property tax, real estate tax, excise tax, fuel tax, etc., paid by the oil and gas companies and the vendors that work for them.

Rates of $2-3$ an acre per year is the average lease rate for oil and gas exploration. I don't know about you, but that seems artificially low to me. Show me where I can lease an acre of land for that much. In my book (and many others), that price is too low.

If you would like to take a trip to South Dakota to the ranch where I grew up and I will show you just such a place and many more. My father, and now my brother, have received anywhere from as high as $5.00 to as low as $1.00 per acre for a 5 year lease. Oil and gas production exists less than twenty miles away. What do you think the lease should be for a remote piece of Federally owned, rugged, mountainous terrain located 200 miles from the nearest oil and gas production? Such is the case for many Federal leases. If the acreage is closer to proven production and more accessible it will draw a larger bid. There is no set minimum bid other than perhaps a minimum $1.00/acre. Often, bids on very remote and risky areas go to relatively cash-poor independent land men/speculators who purchase the lease with the hope of promoting and reselling it to a more financially able buyer.

Furthermore, the mineral lease only gives the company the right to extract the covered minerals and nothing more, and they have to commence operations before the lease expires or the lease is simple a sunk expense. This is why environmental groups file an endless series of frivilous and unfounded lawsuits, rather than trying to actually justify and prove their accusations in court. They really don't care if the lawsuits produce fruit as long as they delay operations long enough for the leases to expire.

Additionally, before the start of drilling, mineral lease owners still have to deal with the surface owner, in this case the Federal government, and it is by far the most unreasonable of surface owners. For example, while the BLM will allow a simple scratch road be constructed into a location for drilling, the Forest Service requires a road that, short of paving, would satisfy most highway requirements. If the well turns out to be a dry hole, the scratch road can be easily and quickly reclaimed without significant earth moving, etc., while the Forest Service's super-highway equivalent gravel road requires the use of major earthmoving equipment, replanting and recontouring, etc., to return the area to the original condition. The total reclaimation time difference between the two can be as much as a year or two.

You are correct that the mineral lease gives the company the right to extract the specific item, but in almost all cases, there are royalties which due to the landholder. In most cases, the landholder is the federal government. Almost all of these companies underpay or don't pay the royalties due. Additionally, these companies are not prosecuted, at least on the federal level for their practices of non payment. The non payment and lack of prosecution tells me this is a hidden subisidy, because it a reduction in their costs (royalties). It doesn't matter what you try to call it; fact is, it is cheating taxpayers out of revenues.

The reason the Forest Service requires roads is for the practice of fire suppression. IMHO, the current policy is seriously flawed, but this is something that should be discussed more thoroughly in another thread.

Monte, take a look at the land lease holders as of March 2004. It is more of a land grab, than an actual use of the land. The land gets listed on company books as assets, which looks better on their books, which attracts investors. Six companies Tom Brown, Encana Oil and Gas, Anadarko, BP Amoco, Devon Energy and Marathon Oil, together control 3.9 million acres of federal oil and gas leases. Just 1.2 million acres, or 30.8 percent of the total, is actually producing oil and gas.

Just more food for thought---

You are correct that the mineral lease gives the company the right to extract the specific item, but in almost all cases, there are royalties which due to the landholder. In most cases, the landholder is the federal government. Almost all of these companies underpay or don't pay the royalties due.

You need to do more reading outside of the environmentalist skewed propaganda. Royalties are only paid on leases that are currently producing oil and gas or whatever mineral is being extracted, and not on the entire leased acreage in every case. While the Federal government is generally the surface owner as well as the mineral rights owner, that has absolutely nothing to do with who gets the royalty payment. If you own the surface and someone else owns the minerals, you only have rights to a one time surface damages payment if negotiated before the lease is awarded, and not to a dime of royalty payment. Non-payment of royalties due the government or any other payee is a criminal offense and there are such strict accounting rules to cover this that underpayment or non-payment is extremely rare and almost always prosecuted to the full extent of the law. The rare occurance generally has involved bankruptcy situations where the royalty owners are not the only payees who get shafted.

In the case of oil and gas production, the acreage that the royalty is paid on is only that acreage within the spacing unit containing the well. Generally, the largest spacing unit available is 640 acres and sometimes it is much smaller. Once a well is drilled within a lease, the lease is generally held by production until that well is abandoned. More wells can be drilled if the geology support it. However, the Federal government does not lease land based on its ability to potentially produce oil and gas so many leases contain acreage that would never be drilled regardless of whether it was leased or not.

For example, if the Federal lease the company owns is for 30,000 acres and they drill one well, the royalty will only be paid to the royalty owner under the spacing unit containing the well, not for the entire lease. There are no differences between this procedure and those applied on private leases, so no special treatment exists as you imply. As more wells are drilled within the lease, the royalty payment will reflect the increased acreage of the additional spacing units.

Spacing units are determined by the regulatory agency in charge, usually the state oil and gas commission where the lease is located. The spacing unit size is based on the operators geology and petroleum engineering evidence, submitted to the oil and gas commission, supporting the area actually drained by the well.

It looks like you must be checking into Federal leases owned in Wyoming and Colorado based on the list of companies given. Those companies concentrate primarily on natural gas in Wyoming and Colorado. They have had to deal with some of the most rediculous wildlife and environmental regulation I have ever seen. They have to stop drilling during antelope breeding season because it supposedly will disrupt their breeding. Surprisingly, as sensitive as these animals have been portrayed, they seem to thrive in farmland areas of North and South Dakota with constant exposure to people and farm equipment.

Just so I don't get accused of being a subversive industry mole again, I work in the oil and gas industry and what I described above is what I am involved with on nearly a daily basis.

Monte,

Royalties are not paid on acreage leased, but on the amount of oil produced. The standard commercial royalty lease is 1/8 (if the company produces 80,000 bbl one year from a well, the leaseholder gets the gross value of 10,000 bbl.) We lease a fair amount of acreage, and always hold out for a 3/16 royalty interest (we would get the gross revenue from 15,000 bbl under the above scenario). We also get a very small amount at the onset for signing over the oil rights, whether oil is struck or not, or even if they do not even drill. That is indeed based on acreage. We also get payments for such exploration practices as shot charges (exploration seismology), or anything else requiring surface disturbance.

I am writing simply as a leassor of numerous oil and mineral leases.

Royalties are not paid on acreage leased, but on the amount of oil produced.

It is only that simply if you are the only owner of the mineral rights under the spacing unit the specific well occupies.

For example, if you own the mineral rights for the southwest quarter section (160 acres) of a 640 acre (full section) standard spacing unit and someone else owns the remaining 480 acres, you would only get a 1/8th royalty payment on one fourth of the oil produced from the well in that spacing unit. The other mineral owner would receive a 1/8th royalty on three fourths of the oil produced from the well in that spacing unit. The well can be physically located on either mineral owners acreage and they will both get royalties on their fraction of the production from the well. This type of mineral rights ownership is the rule rather than the exception in most areas. I'm familiar with producing wells where royalty payment have been divided as many as 100 ways. The reason I didn't go to this detail before is because in large Federal leases, multiple mineral ownership is less common.

On the other hand, if the standard spacing unit for the field in the above example is 160 acres, rather than 640 acres, you would receive a 1/8th royalty on all of the oil produced only if the well is drill in your quarter of the section, or zero if it is drilled anywhere else in that section, since those minerals are owned by another.

With today's technology it is also possible to have a well drilled on land where you own the mineral rights and yet receive no royalty payment. Modern directional drilling techniques allow wells to produce oil from under areas that can not be drilled from the surface above them. A well can be drilled horizontally for great distances, often measured thousands of feet or even miles. The royalty payments will go to the mineral rights owner of the spacing unit underwhich the oil is produced. That mineral owner may not be the mineral or surface owner where the actual surface well site is located.

We also get a very small amount at the onset for signing over the oil rights, whether oil is struck or not, or even if they do not even drill.

That is a common leasing practice and is usually referred to as a bonus payment. Most mineral leases in areas where leasing demand is higher will pay a bonus, but it is rarer in areas with little ongoing exploration. Just like the lease rates, the bonus payments are subject to supply and demand forces. In an area just to the west of where I am located, the mineral leases are sometimes well over $200 - $300 per acre per year for small parcels, especially if those parcels are located within a proven spacing unit. Those kind of prices are only paided when that acreage is needed to complete a lease of a much larger block and would never be considered for very large tracts. But just as those lease rates are very high, within 10 to 20 miles away the leases are for a few dollars an acre and no bonus.

Damage payments for exploration work like seismic shots is also common and often is even mandated and set by the state regulatory agencies.

Monte, it is a CBO report that I am citing, not some whacked out environmental group about the underpaid royalties (ok, don't go there). Take a look at the CBO report Table 3. And from my accounting background, if these assets were not on these company's books, their ratios would look way out of whack and they could not attract any investors.

I am not disputing why some of the leases are not being used, but I telling why there are so many. Just for #$its and giggles, go through the balance sheets of some of those companies and take out the 70% of land not being used, and then tell me how the books would look. It is basically a land grab. Just a thought.

For example, if you own the mineral rights for the southwest quarter section (160 acres) of a 640 acre (full section) standard spacing unit and someone else owns the remaining 480 acres, you would only get a 1/8th royalty payment on one fourth of the oil produced from the well in that spacing unit. The other mineral owner would receive a 1/8th royalty on three fourths of the oil produced from the well in that spacing unit.

Where we lease only a quarter section (very rarely, but it has happened), we sign a separate lease. If they drill and hit on our quarter section, we get a royalty. If they drill on someone else's land, of course we don't get anything. Again, we never lease for a 1/8 royalty interest; we always demand at least 3/16.

I'm familiar with producing wells where royalty payment have been divided as many as 100 ways.

I am in on a lease where my fraction of ownership is in the hundredths of a percent. Even though it is a good producing tract, it just pays enough for a haircut or two every year. However, I was mainly refering to lands we own outright and lease periodically.

Most mineral leases in areas where leasing demand is higher will pay a bonus, but it is rarer in areas with little ongoing exploration.

We never lease without an initial payment. Some other wildcatter will come along and make an offer later. It may be the only money we see for the length of the time of the leasehold.

I am not disputing why some of the leases are not being used, but I telling why there are so many. Just for #$its and giggles, go through the balance sheets of some of those companies and take out the 70% of land not being used, and then tell me how the books would look. It is basically a land grab. Just a thought.

I am not sure what you are trying to point out but I did a little math on the numbers from Table 3 and compared the value of the underpayment of royalties for oil and gas in 1998 to the total value of the oil produced on Federal land during the year of 1998 and it amounts to less than 2% and would be even less if I included the gas revenues. Not sure that is going to seriously impact any financially solid oil and gas exploration and production company. Keep in mind that these guys drill land based wells that cost as much as two to three million dollars each and off-shore wells that cost 10's of millions each. This is a drop in the bucket in the oil and gas business.

Also, oil and gas companies can not include anything but proven reserves as an asset when considering the valuation of their property for stock reports, etc. Possible and probable reserves can not be shown and these categories along with non-prospective areas include much of the undrilled acreage in Federal leases. The large blocks of acreage are still available to others for use when the land is leased for oil and gas exploration.

Much of the Federal land in North Dakota, for example, is also leased for grazing land, used for hunting and fishing, and for tourism and sightseeing, etc. If we had trees in North Dakota we could even lease out timber rights. Mining rights are also available for coal and other metals and minerals.

Owning an oil and gas lease does not mean they have exclusive access and use of the Federal land. The fact that much of this acreage goes undrilled for the duration of the lease is more often due to conflicts with groups who oppose the mineral leasee's right to access the land. It costs money to buy and maintain the lease on the Federal land and these companies aren't going to stay in business if they lease land with no intention to drill or explore, or as your suggest, as a land grab.

The fact that much of this acreage goes undrilled for the duration of the lease is more often due to conflicts with groups who oppose the mineral leasee's right to access the land.

Not to mention that there frequently is no oil down there, or so little and so difficult to prospect that the company never even drills.

Its labor day weekend....the prices should drop a little after monday typically....hmmmm lets see what happens.

Yes, they probably will go down; however, given the tightness of crude production and the normal switch over to making fuel oil, there will be continued upward pressure on petroleum prices.

It's been widely reported in non-US main media that the Administration has asked the Sauds, among others, to pump more oil prior to the Nov. election. Of we in the US deny the importance of oil in our national politics and international relations. We would never go to war over oil.

I'm in a conundrum. As usual my heating oil provider sent me a pre-pay offer for #2 heating oil. Right now I can choose to gamble $1.69/gal and pre-buy as much as I want for this winter. Or wait to take my chances on lower prices in the comng months. Last year I prepaid for 600 gals @ $1.29/gal and the price went as high as $1.66 by Jan. I've got 10 daze to decide......vgkg

Diesel and reg unleaded gas are about the same on our trip from Maine to Rhode Island last weekend sept 9-12, being about 1.99 a gallon average.

They're going to rise again, due to the shutdown of numerous offshore rigs in the Gulf of Mexico due to Hurricane Ivan.

Regular unleaded is about $1.67 currently in Tennessee, more on the interstate where they can overcharge passing Yankees and tropical storm refugees.

I came across this article and although it about a monthold I found it interesting the heroic efforts that seem to be made in this article all in the name of oil.

now more current news on oil price projections to go up.

Oil hit $50 last night, and closed today at $49.80 at the Nymex. Now the next benchmark is $55.

We'll see what happens next.........

I took the plunge and pre-paid $1.69/gal for #2 heating oil before the deadline. Unless it turns out to be a very mild winter it looks like a good deal. The Saudies said yesterday that they'll crank open the crude spigets but with refineries going full steam would it really make a big difference? Where's that hydrogen when you need it ;o). vgkg

Above $52 and still rising. I don't believe that gasoline prices will subside even though we are going into the slower driving season. It is about $2.10 out here and has gone up about 20 cents in the last two weeks.

Vgkg--good move on locking in the price. It will give you some measure of at least predicting your bills (weather aside).

gas is at 2.04-7 a gallon today in Maine.

Try $2.39.9-2.59.9 for regular here on the Left Coast.

2.14-2.34 here.

$1.89 here in central Va (much cheaper than northern Va), good ol' sleepy central/southern Virginie - may the rest of the nation continue to stay away and ignor her :o). Boy those Arabs sure are holding off until the last minute aren't they....fair weather friends? ha! vgkg

$2.37-$2.57, in the Phoenix/Scottsdale area. Can't figure out why we are so expensive compared to all of you in the East.

I just filled up with 87 octane unleaded for $2.59*9 per gallon with premium at $2.89*9.

crude price just came down a bit.

2.69 here for regler.

Just got a honda for two hundred bucks that gets around 35 mpg.

Gas on this island has suprassed the cost of used vehicles.

Lowest price here - $1.87/galllon.

2.09/gal. for mid-grade. 2.10/gal. for diesel.

AzDesertRat...When I lived in Texas in the 70's, I was told by a collegue that people of the oil states usually always paid more for their gas than someone far away in another state where fuel had to be hauled away to. While I never quite understood that, perhaps like walmart they buy in large amounts to bring costs down?! (my guess, or it became habit to get other states more addicted?!-really reaching there on guessing, nonetheless consistantly, It seems to have held true all these years I noticed.

G4, I have heard that too. But, we are not an oil producing state. As a matter of fact, we don't even have any refineries. All of our gasoline is shipped via pipeline from Texas and California (1/2 and 1/2, I think). Last year, one of the pipelines burst which sent out gas prices well over $3 (in some cases, $4) as well as causing shortages in our fuel supply.

No one wants to build a refinery here. Refiners want big tax breaks, and people have the NIMB (Not in my backyard, in case you didn't know) attitude. The legislature is stingy and doesn't want to give the tax break, and people don't want a refinery in their backyard (not that I don't blame them).

So when are they going to develope a solar powered car.......

How will oil prices affect you.

From the Washington Post

Higher Oil Prices Soon To Squeeze Consumers

By Justin Blum and Nell Henderson
Washington Post Staff Writers
Monday, November 1, 2004; Page A01

Until about five years ago, Deere & Co. used oil-based products to manufacture the exterior panels on its John Deere agricultural combines. But then the company decided to start using alternatives, displacing some of that oil. The typical combine's panels now include material processed from about 2 1/2 bushels of soybeans and about half a bushel of corn.

"Here's a new use for corn and soybeans," said Barry Nelson, a spokesman for the Moline, Ill., company, "and we can put it right on the combine for our customers harvesting this crop."

For weeks now, economists have watched the steep rise in oil prices and concluded that a combination of improved energy efficiency and market competition have buffered the U.S. economy against the inflation and other economic problems triggered by earlier oil shocks. Since the first Arab oil embargo in 1973, American industry has shaved by about 50 percent the amount of oil it takes to produce $1 of economic output. During the latest oil spike, the fear of losing customers has led businesses to trim profits, squeeze other costs, or postpone investment and hiring instead of increasing prices to consumers.

So far.

From major manufacturers to local bus companies, evidence is building that the slack in the system is being used up and soon consumers will feel the effects of $50-a-barrel oil.

Whirlpool Corp., the home appliance maker, has announced plans to raise prices by an average of 5 to 10 percent on average, largely because of increases in its oil-related costs.

The price changes likely "would be reflected at the consumer level," and not just absorbed by retailers, Chairman Jeff M. Fettig told industry analysts recently, according to a transcript of his remarks prepared by CallStreet LLC.

Giant Food LLC, the Washington region's biggest grocery chain, has experienced a 30 percent increase in the cost of diesel fuel for its delivery trucks over the past year, and it has absorbed some of that through computer-aided loading and routing of the trucks to maximize efficiency, said Barry F. Scher, vice president of public affairs.

......

Full article use link

I noticed as of 2 years ago that fuel surcharges were becoming more the norm for our wholesale deliveries being brought into our family run business as well as $200 min in any orders some as much as $1500.00, where once the deliveies were "free" and less to no minimum.

Speaking of solar cars...Dh and I were just talking about that after a recent visit to the boston science museum this past weekend. There were solar race cars there, and build it yourself toy versions of solar cars which actually worked and worked well(as long as there was a bright light source).

We were surprized how well the solar toy cars did work as long as the light source was intense enough. Otherwise a battery with stored energy would be essential or a supplimented fuel such as gasoline or hydrogen or corn oil by-products would be the way to go.( ditto on many of the threads over the past year this topic comes up time and again)

being as it seemed to rain here in Maine at least once a week this past season, the solar would have been very limiting(nonetheless...I look forward to an alternative or suppliment to the gasoline situation)

I heard the price of oil dropped by half a barrel?! Such rumors will need to be verified. What does anyone know? The rumor I have is there is now a glut.

I'm not sure of today's pricing but have read several comments about a world-wide glut in crude oil. Must not be effecting the US much because gasoline prices in my area have fallen only a few cents/gallon over the past couple of weeks. So what's the problem? Too much oil products being diverted for military uses in the Middle East and elsewhere in the world?

Yesterday's price for #2 Heating oil = $1.99/gal. Doubtful if the crude price reflects the refined products price very much. Glad I locked in at $1.69/gal. vgkg

U de man, Vgkg! I never weighed in with an opinion when you asked if you should lock in a price back then. I think you should lock in the earlier price. :)

I see where the price of crude dropped to around $42/barrel yesterday, if that keeps going down the price of #2 may drop below $1.69 by the time I get my first delivery, ha. Who knows? Perhaps it's even folks like me that "pre-buy" who cause the later price to go up? Mid-Atlanic winter season is predicted to be colder and snowier than normal so I guess I'm ready? vgkg

Vgkg, Concerning the locking in of a price....Imagine what it is like for farmers to lock in on a commodity price!! Now we are speaking about thousands rather than tens and hundreds.

A great spill in the Delaware last week, see link for more details.

I was wondering how this might or may impacted any prices.

It seems wildlife and vegetation seem to have been wiped out in the immediate area of the spill.

Yeah Wayne, like rolling the dice alright - High Stakes!
GGGG, at least it was "gallons" and not "barrels". I feel for the Delaware folks up there, but am thankful it doesn't lead into the Chesapeake Bay, she's sick enough as it is....

I believe the reason the price hasn't come down is that refineries have been operating at 100% for years. It'll take several months of low crude prices to finally reach the gas pump. And of course, those of us who drive diesel have been chuckling over the fact that our fuel has remained a constant amount for two years now....

Unless you're in Southern California, in which case you are paying more than $2.00 a gallon for any fuel, and where for some odd reason gas stations often charge more for diesel than for gasoline (usually when they are about to jack the price up on other types of fuel).

99....thats the post not the price, unfortunately.

Have a safe and warm winter.