Agreed. Unfortunately food is a right, and if the gas situation is making it difficult for people in disadvantaged, assisted living situation to obtain food, then this needs to be a governmental concern. Could be as simple as charitable organizations given a tax refund on necessary fuel expenses. Won't require much additional bureaucracy to track (either for the organization or the government), and allows the charities some amount of cost certainty (a huge deal for charities). There'd need to be some sort of checks to prevent abuse of the system, but in general, the sort of people who volunteer their time for a program like Meals on Wheels are probably low risk for attempting to defraud Revenue Canada. Probably there's already options available for charities to deal with this sort of thing, but because of the nature of government funding, you can't get funding ahead of time to compensate for how variable costs may fluctuate. It would likely simply require modifications to existing programs.
Agreed. Unfortunately food is a right, and if the gas situation is making it difficult for people in disadvantaged, assisted living situation to obtain food, then this needs to be a governmental concern. Could be as simple as charitable organizations given a tax refund on necessary fuel expenses. Won't require much additional bureaucracy to track (either for the organization or the government), and allows the charities some amount of cost certainty (a huge deal for charities). There'd need to be some sort of checks to prevent abuse of the system, but in general, the sort of people who volunteer their time for a program like Meals on Wheels are probably low risk for attempting to defraud Revenue Canada. Probably there's already options available for charities to deal with this sort of thing, but because of the nature of government funding, you can't get funding ahead of time to compensate for how variable costs may fluctuate. It would likely simply require modifications to existing programs.
Well thought out. This is exactly what should be done. Charities should get a full excise/GST/PST exemption on their fuel in order to keep their costs down and serve their clientele. It shouldn't be too easy to abuse, seeing as you'd likely have to file for it with proof of charitable status, mileage checks on licensed vehicles, and proof of purchase with company accounts.
Well thought out. This is exactly what should be done. Charities should get a full excise/GST/PST exemption on their fuel in order to keep their costs down and serve their clientele. It shouldn't be too easy to abuse, seeing as you'd likely have to file for it with proof of charitable status, mileage checks on licensed vehicles, and proof of purchase with company accounts.
It's already sort of being done for farmers....purple gas (and diesel) is much cheaper than commercial.
It might be a lot harder to control if you did it for charities though.
Love to do something, but judging by the responses on this thread and the common public perception in calgary and canada for that matter, its completely okay for prices to rise to 3 dollars a litre and see governments do nothing to put a hold on it when the indsutry is making more and more every year. If you look up prices across the globe, many governments have taken action in smaller countries to put some limits on price fluctuations perhaps ours can look at doing the same?
You fail to understand that when a commodity costs a certain world price, domestic suppliers simply won't supply said commodity in the domestic market. They'll just export it or fail to import it to domestic refineries causing massive domestic supply shortages. IE either pay the going price, or face the pumps going dry. China couldn't whether out the massive losses their companies were facing by subsidizing gasoline prices to their people. You can't artificially change the price a good without seeing corresponding changes to the demand curve and the supply curve.
From the Wall Street Journal Dated June 19, 2008:
Quote:
BEIJING -- China will raise domestic gasoline and diesel prices by 17%-18% from midnight, the government said Thursday, as it responds to near-record crude oil futures and criticism of its fuel subsidies.
The surprise move raises prices by 1,000 yuan ($145.30) per metric ton and will be the largest increase in over four years although local prices will still be below the international market.
In a statement, the government's National Development and Reform Commission said the decision was aimed at ensuring domestic supply, noting that refiners were suffering "heavy losses."
It's the first oil product price increase since Nov. 1 and comes at a time of widespread fuel shortages in China as filling stations run out of dieselto sell or ration purchases by truckers. China is also increasing jet kerosene and jet fuel prices and from July 1 is raising retail electricity prices.
The move will relieve pressure on state oil titans PetroChina Co. and China Petroleum & Chemical Corp., known as Sinopec, which have been haemorrhaging money on their refining business.
It also comes ahead of a key meeting of oil producing and consuming nations in Saudi Arabia on Sunday to discuss the strength of crude oil prices, which some governments say are threatening to trigger a global recession. Countries like China that control oil product prices have come under fire from the U.S., U.K. and others, which say that direct fuel subsidies distort the market by giving consumers little incentive to save energy.
China is the world's second-largest energy consumer and is forecast by the International Energy Agency to account for more than half of the global oil demand growth of 800,000 barrels a day in 2008.
One thing on taxes, I consider gas tax to be a useage tax. Why should general tax revenue go to maintaining roads etc. People who drive need to be pay for the roads etc.
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OK, I'll bite. Please show me one example of a person who doesn't use roads.
Even if you don't drive a car, your groceries get to the store via roads. There's countless other examples of how non-drivers use roads, so I'd be interested to see an example of somebody who doesn't use roads.
It's already sort of being done for farmers....purple gas (and diesel) is much cheaper than commercial.
It might be a lot harder to control if you did it for charities though.
Yeah, I was thinking about that, but that only works because farm vehicles are single-use. You can't (legally) use purple gas in the trucks that you drive to town for errands, even if you also use it as a field truck. My understanding of Meals on Wheels is that most drivers are using their own vehicles, so it would need to use a milage-tracking system.
OK, I'll bite. Please show me one example of a person who doesn't use roads.
Even if you don't drive a car, your groceries get to the store via roads. There's countless other examples of how non-drivers use roads, so I'd be interested to see an example of somebody who doesn't use roads.
OK, I'll bite. Please show me one example of a person who doesn't use roads.
Even if you don't drive a car, your groceries get to the store via roads. There's countless other examples of how non-drivers use roads, so I'd be interested to see an example of somebody who doesn't use roads.
When you buy a sack of potatoes the gas tax that the trucking company paid when they filled their gas tank is built into the price of potatoes, so it's still a usage tax, even if you're a hippy with no car that doesn't ride the bus. Everyone is paying it, just the proportions differ by how much transportation is required for the goods you buy and how much you drive yourself.
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Flamesaresmokin your posts show a pretty profound misunderstanding of how a few things work.
Oil producers do not control demand.
Do you honestly think that every oil company can simply double their production tomorrow? Trust me with oil at $130/bbl, they would if they could.
If a company is able to increase production byu 10%/year they're considered to be growing pretty quickly. Of course several small companies are able to do much higher numbers, but the ammount of oil the produce is not even a drop in the bucket. Oil production is a factor of many things, but where the evil oil exec decide to turn the tap to is simply not one of them.
As for refinery capacity, that is a simple business decision. The margins simply weren't there for a very long time. Why don't you go build a refinery if you think it's that simple? Besides, refinery capacity has very little to do with the cost of a barrel of crude. It certainly affects the price of gasoline, diesel etc, but $130 CRUDE has very little to do with refinery capacity. And right now the cost of crude has more to do with high gas prices than refinery capacity does as well.
Finally, if you really think that Ed Stelmach is a great friend of the oil and gas industry, I have to ask where you've been the last year. Trust me there are more than a few folks in the industry (myself included) who would love nothing more than to see Eddie step down.
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Finally, if you really think that Ed Stelmach is a great friend of the oil and gas industry, I have to ask where you've been the last year. Trust me there are more than a few folks in the industry (myself included) who would love nothing more than to see Eddie step down.
This is very true, there are some VPs at our company who do not have a great deal of love for Mr. Stelmach.
Flamesaresmokin your posts show a pretty profound misunderstanding of how a few things work.
Oil producers do not control demand.
Do you honestly think that every oil company can simply double their production tomorrow? Trust me with oil at $130/bbl, they would if they could.
If a company is able to increase production byu 10%/year they're considered to be growing pretty quickly. Of course several small companies are able to do much higher numbers, but the ammount of oil the produce is not even a drop in the bucket. Oil production is a factor of many things, but where the evil oil exec decide to turn the tap to is simply not one of them.
As for refinery capacity, that is a simple business decision. The margins simply weren't there for a very long time. Why don't you go build a refinery if you think it's that simple? Besides, refinery capacity has very little to do with the cost of a barrel of crude. It certainly affects the price of gasoline, diesel etc, but $130 CRUDE has very little to do with refinery capacity. And right now the cost of crude has more to do with high gas prices than refinery capacity does as well.
Finally, if you really think that Ed Stelmach is a great friend of the oil and gas industry, I have to ask where you've been the last year. Trust me there are more than a few folks in the industry (myself included) who would love nothing more than to see Eddie step down.
You crazy nut. Where do you get these ideas???
Just kidding. I'm just so used to disagreeing with you it sort of came out before I had time to think
Seriously though... Great post. Pretty much what I was going to say after reading flamesaresmokin's post.
And I like the idea that charities such as Meals on Wheels should get some kind of access to cheaper fuel. It just seems right. Hopefully the recent news coverage prompts local and provincial governments to look at doing something like that.
Oil producers do not control demand.
Do you honestly think that every oil company can simply double their production tomorrow? Trust me with oil at $130/bbl, they would if they could....
Exactly. Oil companies greed helps keep prices deflated. Supply and demand. They are getting more, they try to supply more. Unfortunately for them and their trust funds, as well as us, they can't just "turn it on".
1. Oil companies do not set the price of the product they are selling.
2. Oil companies do not set the demand of the product. That is you purchasing the oil
3. Oil is becoming more and more costly to produce. The general public does not understand how much money is invested into producing oil! That is what happens to much of their huge money inflow.
4. People who work in the industry work hard. If you can't beat them, join them.
Meals on Wheels must be run differently in Alberta. Here the drivers are volunteers who use their own cars, so I would guess unless they stop volunteering due to gas prices, that won't affect the delivery of meals.
My Mom did this for a couple of years after she retired, a lot of retired people volunteer for this service in our area.
You mean, if we all stop buying gas from Shell and Esso, like the e-mail says. then nothing will change?
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The only reason prices are so high is because the supply is being controlled by the oil companies (by not building refineries or increasing production) and its putting people out of business and forcing charitable services out of operation along the way.
Yeah, because publicly traded companies operate exactly the same way OPEC does.[/sarcasm]
Publicly traded companies try to make as much money as company as they can. In fact, they have a responsibility to their shareholders to do so. That means investing in areas with high profit margins. That means increasing supply and bringing down prices and profit margins. That's the mechanism by which the market works.
The reason they are enjoying high profit margins is because the demand curve has shift. In the long run, supply will increase to the point where the oil companies are making a "normal" profit (risk adjusted). However, since it takes time to increase supply, they are currently making a high profit margin. Unfortunately for all of them, you, and Meals on Wheels, they can't just magically increase supply.
You want supply to increase? Well then, I guess you support burning a non-renewable resource at a faster rate. Increasing CO2 emissions and global warming. Maybe loosening evironmental standards so that supply can be increased cheaper and more quickly. In fact, why not get rid of the entire approvals process, and take less time to engineer the new facilities to be safe to operate? Just make it a free-for-all, and you'll increase supply. But I don't think that's the way to go.
And for what it's worth, high crude prices are actually bad for refining companies. Their feedstock becomes more expensive. Refineries make their money on the price gap between crude and gasoline.
How does one respond this? Sorry to say but when people like you say that not driving is an option it really makes you sound like you haven't lived a day in a canadian city.
Try finding a reasonable house/apartment in the downtown area of calgary, not gonna happen. Besides what are you supposed to move everytime you get a new opportunity? And last time i checked this is canada and we have snow on the ground anywhere from november 1st to may 31st....sure there might be days its nice inbetween that period but your sure as hell not going to travel by foot or bike during those months very often.
Like it or not if supply is controlled by an industry, cost is directly affected...simple economics here. No new refineries in canada in over thirty years, jeez that doesn't sound like supply is being controlled. Do a quick search and see how many refineries have been built globally in that time as well. Reference the calgary housing market the last few years for another common example of this supply and demand theory, its basically the same situation we have seen with oil and gas as well.
I don't recall blaming stelmach for meals on wheels, how about you re read my post...many politicians LIKE stelmach are not going to legislate cleaner burning fuels and price changes simply because of the support they receive from individuals involved in the oil and gas industry. Either way having a quarter of the worlds vehicles running on hydrogen would be a huge improvement on the current situation.....Thinking it would be less harmful to use gas is just wrong.
The fact you think that it is solely up to the average person to support charities and other services like meals on wheels is pretty sad. We all play a part and should toss in some cash but how aboutenron or shell write a few cheques, they could do a lot more with there billions of yearly profits then those of us earning average wages. They runs on donations and i've even participated in the service before. Its going to take a hell of a lot to save something that is so dependant on the costs of fuel when they continue to skyrocket. Pretty sad when society and people like you care more about a company making an extra zero on the yearly income then that of charitable programs.
And your damn right i'm blaming the government. They can gather to legislate almost anything, but wont jump in and put a hold on gas prices continuously rising when companies are continuously making more? I'd be fine with the prices at the pumps if oil companies were making a third of what they are now. Fact is, if the government legislated prices go back to 1.10 a litre every oil company would still make billions.
Tell me how you see this as fair to canadians and everyone else in the world? Oh and not to mention, how sick is someone that claims someone is "masking there own complaints behind a charity"? Infact, i'd say your post is pretty terrible...at least I take the time to look at some situations and realize that things can be helped and that maybe its time for runaway profits to stop.
There are a great deal of things you do not understand about the oil industry, or frankly commerce in general and city planning with a post like this. I've bolded the things I'll comment on.
I don't even know what supply is controlled by an industry means, do you mean oil companies are holding back supply? Yea because many companies hate selling crude at 140 per barrel. Every private company is turning over every rock they can at these levels. You know OPEC isn't private industry right?
Canada exports crude, it doesn't need any refineries. If they made money someone would build them, at these prices, in North America refineries are not even running at full capacity because there isn't the demand for oil priducts. There is no gasoline or diesel crisis .. there is a crude oil crisis.
You are completely ignoring demand in every arguement you make. If people demanded central housing it would be built, Calgary is spread out because that is what people have wanted. Now as a city, all the suburbites have to pay for it. Sounds fair to me.
Anyone who looks for the government to 'fix' the oil crisis equals someone who has no idea what is going around them as it relates to energy. What exactly would you propose the government do? Oil is a worldwide commodity, it can't do anything to fix prices, all it could do is take the tax off of gasoline, which I think is about a dime in Alberta ... but then AB or any other jurisdiction would make it up somewhere else. And reducing the taxes would not do anything in the long run, the larger prices are intented to force demand down to rightfit with supply, government interaction cannot 'solve' the problem the increase in price is trying to rectify.
You can't legislate the removal of runaway profits. In fact if there is one thing I see on the supply side that is raising prices of oil it is nationalized companies that are either to bloated, lazy, untalented or indifferent about operational excellence, resource development or macro economics.
What this world needs right now is less people who are completely uneducated about the energy crisis we are it. It is lazy and ignorant to just blame big companies and governments for fixing runaway profits. Price is aways a function of supply and demand. People get mad at the companies who are suppling a commodity that people have made a decision to be addicted to.
Last edited by Flames in 07; 07-02-2008 at 10:58 PM.
The economic supply and demand argument. It can't be beat. Of course, when 2008 comes to and end there will be the same amount of oil used by the world as there was in 2007(my prediction), the price of the barrel of oil will still jump from an average of $80(2007) to 140(2008). Then the argument will become that even though demand has stabilized, oil is harder to find and extract therefore even though demand has not increased, the actual supply is running out. Oil supplies will have peaked. A funny thing though, the economic supply and demand model when it came to oil may have held during the 80's and 90's. But these last three years look a lot more similar to another so called supply and demand model that everyone was calling normal. The housing industry in the US. I call BS. No model can explain for $10 jumps and drops daily on a simple demand and supply theory. Supply and demand models do not explain prices going from $50 a barrel to $200 a barrel in 3-4 years. Thats quite the curve there. I've seen that somewhere before too. OOh, the US housing industry. Did people stop wanting to live in shelters in the US?? Is a new love for sleeping in the great outdoors mitigated the need for home ownership and private property. There's only so much many houses and so much land, houses shouyld never drop in value.
Don't be fooled by all these supply and demand theorists. Because the US is still by far the largest consumer of oil in the world. I think its approximately 25-30 percent of all the oil produced. When there demand is stagnant this year and the world's demand is stagnant by the end of this year, ask all the supply and demand proponents why oil is still rising. They'll start preaching, "no more oil to be found, no more oil left." I guarantee it. The supply and demand argument will be forgotten faster than you can say, "fill er up".
As always, look at the big picture. Economics, politics and society are tied together to create nations. As wealth becomes concentrated in fewer and fewer hands, the vast middle class becomes more and more disenchanted. The ultra rich should always leave some breadcrumbs for the middle class. It allows them to be obscenely wealthy and have a society they can use their wealthy and status in. Hey, 95% of the wealth in the hands of 5% of the people is okay with the middle class. As a magnate, do you really want to risk having 99% of the wealth for 1% of the people. Your wealth is only real if it actually has any real economic power. Don't ever initiate possible uprisings by the majority. Keep them happy. Hey, I have some dollars I've saved up. I'd like to spend my hard earned money before we have sort of radical shift. So please ultra rich people, think of me. Think of my bank account. I've worked hard and if you're gonna do somehting funky, let me know in advance so I can start blowing my money before it becomes meaningless. Appreciate it.
Last edited by flamey_mcflame; 07-03-2008 at 03:17 AM.
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You mean, if we all stop buying gas from Shell and Esso, like the e-mail says. then nothing will change?
