Trends in Gasoline Production and Price
The first chart below, derived from data provided by the Energy Information Administration, shows the weekly history of domestic production of gasoline in the U.S. from 1983 through last week. The second chart is a blow-up for the period from April of 2006 until April 20, 2007.
The next chart plots average U.S. gasoline prices, again courtesy of the Energy Information Administration, over the time frame of the second chart, above.
The very first chart presented, the one that shows U.S. gasoline production over the past nearly 25 years, is informative. Probably its most obvious (and maybe even reassuring) feature is its upward trend, principally the result of steadily increasing demand for gas, as can be seen in the graphic at right, which shows year-by-year vehicle-miles driven from 1995 through 2007 (with 2006 and 2007 being projected from existing data).
However, that gasoline production graph at the top of this article is dominated by another feature: high volatility in the production levels is clearly not merely an occasional phenomenon, but a persistent characteristic. But, whereas that striking up-and-down pattern has always been there, a more careful look at the graph reveals something troubling about the roller-coaster of the cycles: the downward stroke in each cycle is getting stronger. In fact, the deepest down spikes were generally hitting their low points at higher and higher production levels until the output trough in February of 2000, which appears to mark the start of the current era of declining output levels at the low points of the strongest production plunges, as seen in the zoom-in graphic at left, which covers gas production during the period from 2000 to present. The 2005 cycle had a lower low than the 2003 cycle, the 2003 cycle had a lower low than the 2001 cycle, and the 2001 cycle had a lower low than the 2000 cycle. Worse, the 2005 cycle could be considered a double low spanning the last half of that year and the first half of 2006, a proposition that seems (and the operative word here is seems) to be supported by the emergence of the 2007 downturn now beginning to cause rising gas prices at the pump.It does not take an economist to figure out where gas prices are headed either in the short or long run. The exact price drivers will be paying by this Summer is somewhat hard to predict, but a fair estimate would be in the range of $3.50 to $4.00 per gallon for regular unleaded. If another war breaks out in the Middle East, multiply those prices in that range by two to three.
As far as the longer term outlook is concerned, after going into nose-bleed territory long enough for consumers to have wholly unproductive fits and Congressmen to hold equally unproductive hearings, gas prices will again settle back, although probably not down to where they will be as low as they were several months ago.
In the much longer term, the economist John Maynard Keynes succinctly summed up the situation: "In the long run, we're all dead." The only issue in that inevitable event, then, is the cost of the disposal of your carcass should you choose cremation using fossil fuels as the accelerant.
The Dark Wraith bids motorists many happy trails over the coming driving season.
Comments
Wrote My Pet Goat:
Wrote kelley b.:
Now why would they want to develop inexpensive solar based alternative energy sources to fuel the economy, when they can sell every drop of what's in the ground at an ever increasing price first?
Wrote My Pet Goat:
Well, fvck me. Just drove by the station I use for reference and it's now $3.359.
Wrote Dark Wraith:
The Dark Wraith is glad he didn't wait until next week to publish this article.
Wrote Dark Wraith:
Good evening, Mr. Shakes.
Funny you should stop by. I was thinking about you just last night during an e-mail exchange with OddJob. He had sent me the link to this new, delicious YouTube video about Karl Rove and Clippy, the animated helper from the Windows Office Suite.
In the spirit of mutual sharing, I sent him an 18-second YouTube video of Clippy that came out about a year ago. The reason I like the one I sent OddJob is because the actor in the scene for some reason vaguely reminds me of you. I'm not sure why, but every time I see that video, I think that you could have played that part.
Anyway, if you and anyone else reading this comment have not seen these videos, click on the links. I would encourage you first to watch the one referred by OddJob, since it is so timely. The other one, the 18-second job, is simply a generic expression of frustration with some of life's small but persistent annoyances.
The Dark Wraith hopes readers enjoy.
Wrote Father (maybe soon to be Padre) Tyme:
DW,
You've outdone yourself on this one! (dryly) I think I know who you really are - Richard Lewis! Nah...he's more optimistic!
So our glass is half-full; and that half is unrefined as well, which lessens the volume.
Any idea the cost of gas or living in Paraguay?
Adios, amigo.
Wrote Dark Wraith:
Too late, Father Tyme.
I already admitted to authorities at Homeland Insecurity that you are a major figure in the world-wide al-Qu'eso conspiracy that's plotting to move a billion illegal immigrants from south of the border into the United States with the intention of turning every steakhouse in America into a combination all-you-can-eat nachos diner and Unification Church bookstore.
The responsible authorities will be waiting for you at the airport. (And personally, I'd opt for the requisite body search with one of the TSA guys who doesn't wear that disturbingly happy smiley-face lapel pin.)
The Dark Wraith looks forward to disclosing some additional co-conspirators during the next waterboarding session.
[Although I could have done without the, "Everybody's Gone Surfin'" background music: it just detracted from the whole ambience thing.]
Wrote trog69:
Thanks a lot, Capt. Happy Funhouse. I'm leaving on an extended road trip @ the first of May. I'll probably have to sell my car to get back to Tucson, but Az. is very much a 'have vehicle or die' state so perhaps I better plan on staying in Chicago on my return, westbound.
On an upbeat exit, why do I have no doubt that the song you referenced has indeed played at at least one waterboarding session?
Wrote My Pet Goat:
The Dark Wraith is glad he didn't wait until next week to publish this article.
Maybe even this weekend would be too late. One local station is at now at $3.419 (saturday). It's not the same one referenced above, but still...
Wrote Father Tyme:
DW,
It used to be that investors counted heavily on the tobacco companies here and more likely abroad for huge returns on their gamble but now I'm curious just how many of these concerned people have made a killing (no pun intended) on switching over to Big Oil.
With the sacreligious profits the oil companies are making, there has to be a special group that's really benefiting from war.
It might be amusing to look at the portfolios of people like O'Reilly, Savage, Limbaugh, the Bushes and company to see where their money is; if that's possible. Then let their listeners know how the suffering of their kids is making these assholes rich.
Just a thought.
P.S. My name...Jose Jimenez..and those guys at the airport have cold hands...and especially long fingers! Thanx!
Wrote jahf:
In the much longer term, the economist John Maynard Keynes succinctly summed up the situation: "In the long run, we're all dead." The only issue in that inevitable event, then, is the cost of the disposal of your carcass should you choose cremation using fossil fuels as the accelerant.
A more relevant saying might be, "Life sucks. And then you die." With peak oil happening, life is about to seriously suck for us oil addicts, and not just because it will "cost more" of that social fiction called money to get it.
Once you're dead, what happens to your body isn't up to you, and the living may soon not be in a position to worry much about its disposition.
Wrote elf:
Good Evening DW,
So I guess Sam's Club ain't really saving me that 5 cents is it. LOL
Oh and I wish the heck I would of had the imagination to find "X" the way that student did. Might have helped me some in Geometry 101 in H.S. Never did get the hang of those theores.
Also need to mention I think Nine Inch Nails has done some pretty interesting music. Have been told it is just one guy.
Wrote PeterofLoneTree:
(From the comments below):
The Dark Wraith is still trying to decide if he should write a post on what it means for space and time not to really exist.
Patricia of Lone Tree has given orders that the lawn is to be mowed by the time she arrives home from work tomorrow. I plan to use your statement above as justification for the job not being done. And I will keep you advised on her reaction when I tell her that The Dark Wraith as much as said that the lawn and the time required to mow it are figments of her imagination.
Wrote Dark Wraith:
But what happens to you, Peter, will simply defy the physics of space and time... or lack thereof.
The Dark Wraith awaits the trail of subatomic particles streaming from the Midwest.
Wrote Dark Wraith:
Good evening, elf.
Nine Inch Nails is a band, but there is only one permanent member, who brings together other musicians for tours and albums.
And as far as cheap gas is concerned, I usually go with German food, notably sauerkraut and pork.
That, or my world-famous corn-and-green bean cheese casserole.
The Dark Wraith will not allow OPEC to go unchallenged.
Wrote PoliShifter:
This whole entire situation is fucked to the point where I think the best thing may be for the United States to nationalize oil production taking over the major oil corps Cheveron and Exxon.
The Rationale?
Well, the whole point of invading Iraq in the first place was to get that cheap oil. Remember Wolfowitz said the Iraq Oil would pay for the reconstruction and then some.
So what happened? Where's the cheap oil and gas?
What's worse is that Chevron, Exxon, BP, and Shell are poised to get massive revenue sharing from Iraq's Oil. Before the Iraqi Parliament is the "Hydrocarbon Law" which would give 80% of Iraq's oil revenues to Chevron, Exxon, BP, and Shell.
In addition, in the Iraq Accountability Bill, the same Bill passed by Congress that Bush is threatening to veto is language that would support Iraq's "hyrodcarbon law" giving Chevron, Exxon, BP, and Shell 80% of Iraq's oil.
We're talking trillions of dollars here.
The rub is that YOU are paying with your future tax dollars to keep our military in Iraq to protect the oil interest these corporations so desire. YOU are paying with the blood of your children, your husbands, mothers, daughters, sons, and in some cases grandfathers and grandmothers to protect the interests of Cheveron, Exxon, BP, and Shell.
Now, if you were getting $1 per gallon in gas, one *could* argue the sacrifice is worth it.
But now, poised to pay $4 per gallon gas, watching your future tax dollars go to Iraq, watching the blood of your family spilt upon the parched Earth, you have to ask yourself...are you getting your money's worth?
I mean, if we are going to occupy a country to secure the future profits for oil corporations, and those same corporations are going to bilk us out of billions of dollars at the pump, doesn't it make sense that The People would be better off owning those corporations?
Wrote Father Tyme:
PoliShifter,
I have a relative that thinks BuSH is the greatest; he can do no wrong; that the media has conspired to make him look bad(!).
He's also a recent (5 years) born again xtian and has 22 and 18 year old sons.
He's an adamant supporter of guns but knows nothing about life in general. When I asked him about his kids being possibly drafted or why they didn't enlist, he told me that there won't ever be a draft and if there were, it would just take the "lower class kids" and enisting is for those who choose not to get education. (He's an HS Grad that just got by with the smarts of a gaggle of geese, but lucked into a great job.)
Hammering home my point again he said that until somebody he knows or is related to has their blood spilled, it doesn't concern him. He drives over 50 miles per day to his 70k per year job in his Ford Escapade. His wife drives 25 miles to her 25k per year job in her Ford Explorer. And in Western Pa. that's a great salary. They say things aren't as bad as the media reports.
Silly us!
Wrote SBGypsy:
Hammering home my point again he said that until somebody he knows or is related to has their blood spilled, it doesn't concern him.
I have a retired neighbor with oil stock who says he hopes gas hits $5/gal SOON!
...and he has 5 kids who are trying to make a living...
Wrote jahf:
Hammering home my point again he said that until somebody he knows or is related to has their blood spilled, it doesn't concern him.
Evidently, this attitude is representative of an effective majority in America.
Wrote PeterofLoneTree:
"Never send to know for whom the bell tolls; it tolls for thee". -- John Donne
Wrote Father Tyme:
PoLT,
If the bell tolls and there's no one to hear it...
who will answer?
Wrote My Pet Goat:
Is the bell ringer hearing impaired?
Wrote Father Tyme:
The bells...the bells...!!!
Wrote Dark Wraith:
This place needs a live band.
Wrote PeterofLoneTree:
BTW, Wraith, check your mail from Liz for a message from me--since we can't seem to exchange e-mails between us.
Wrote My Pet Goat:
My reference station hit $3.419 today...
Wrote Dark Wraith:
Good evening, Mr. Goat.
Gasoline is right at the edge of $3.00 per gallon here, and folks are telling me that, to the North, it's in the $3.29 range. That would put us pretty much on track for a peak averaging a somewhat under $4.00 per gallon this Summer.
It will be higher in your part of the country and somewhat lower in other parts, but I think my prediction is going to be about right, although I am a little concerned that my estimated range might miss the top end of gas prices, but I'm not ready to alter my prediction. The path seems to be tracking pretty close to what my best model shows, but prices are moving upward about a week ahead of my expectations. As long as that gap doesn't widen, I"ll stick with my range; but if it gets to 10 days within the next couple of weeks, I'll push the high end up a notch.
One way or the other, I'm kind of hoping for a mild Summer, the kind where walking to a bus stop and standing around waiting for the always-behind-schedule bus to school won't be a miserable experience.
The Dark Wraith hates taking the bus anyway.
Wrote snuffy:
'evening,Dark Wraith
This is but the begining.In less than 5 years the top 10 producers will have to cut exports at least 50% .5 dollar gas will be a wonderful dream,as will full foodstores,stable jobs,and "the non-negotiable american way of life"
Best info on the net is a place called"theoildrum.com".Its where the petro-geologist,and othe scholarly,scientific types hang out,and bolg about peak oil,and energy news in general.one of their latest series was about watering out of the ghawar feild,what is consitered the single,largest pool of oil on the planet.
3 dimentional graphics spell it out,as well as a analisis by a leading group of science guys that provide hard ,brillent scary evaluations of what it really means.{the artical that I am speaking of is called"water in the gas tank" by stuart saniford,in april 03" drumbeat"}
Wrote Phydeaux Speaks:
Good Evening, Dire Wraith -
Just wanted to chime in and tell y'all that gas at my local country store was $2.849 on Friday and $2.999 today for regular. Can't wait for that magical $4.00 mark :( .
I think I'm gonna build a goat cart like my Dad had when he was a kid (there's a pic of it at my site - scroll to the bottom of the page - don't read anything, though... I wouldn't want to be accused of blogwhoring! :) )
Wrote Weaseldog:
I wrote this song for people who get all creamy for war, but would never dream of actually being in one.
http://www.youtube.com/watch?v=7-L7U1dL_Ws
I'm also trying to build a discussion group focusing on the positive things we can do before Peak Oil leads to our deaths. The BBS is here:
http://pobbs.briarthicket.net/index.php
Wrote My Pet Goat:
That would put us pretty much on track for a peak averaging a somewhat under $4.00 per gallon this Summer.
Have you look at the price of diesel? The reason I ask is that in one or more of the previous price runups, the cost of diesel outpaced gas by a fair margin. this time though it is increasing at a much slower rate; $2.999 vs. $3.419.
Is there an easy answer for this that you are aware of?
Wrote Dark Wraith:
Good afternoon, Mr. Goat.
Deisel and other "distillates" have definitely shown recent behavior anamalous to other cycles. Truck drivers have been getting killed by the high price of deisel gas for months, now, but in this current cycle, gasoline has risen in price so aggressively compared to deisel, which in some areas of the country has barely moved in weeks, that the two fuels are now around the same price. That's certainly the case in this part of the country.
Although I have only anecdotal information right now, I have heard that the capacity to produce of distillates has finally risen and stabilized after a long period of difficulty, and what we're seeing is the effect of a somewhat longer-term effort to get refineries to the point where the manufacture of deisel and other distillates was at a more desirable level.
The same, however, really can't be said of gasoline, which is going through cycles of increasingly wide range from peak to lowest production. Worse (and I am right now doing what in math is called "signal processing analysis" on this proposition), it looks like there is a slight degree of "negative bend" in the trend line not just of lowest production levels in the cycles, but also of average and peak production across the cycles.
Although this is bad news in the short run, it might not be so much the case in the longer run because refinery capacity will be expanding over the coming few years. Against that good news, however, is the fact that the U.S. will be competing for oil that is more expensive, and that oil will be more expensive because of long-term higher exploration and exploitation costs, as well as because we'll be dealing with inexorably accelerating (and aggressive) demanders like China.
I am somewhat concerned about the fact that deisel fuel now looks to be at parity with gasoline, and I worry about this because it might induce too many people to think that deisel-fueled cars are a good substitute for gas-powered vehicles.
They're not. Distillate production is--to some extent, anyway--a substitute for gasoline production, and all a big switch from gas-guzzlers to deisel-guzzlers would do is sharpen the pain of the tradeoff between the two.
It's the same story with ethanol- and electric cars vis-a-vis gasoline vehicles. There will always be something of value traded away wheneiver people make a technological switch-over.
Funny how that works.
The Dark Wraith doesn' much care for deisel fumes, anywy.
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The exact price drivers will be paying by this Summer is somewhat hard to predict, but a fair estimate would be in the range of $3.50 to $4.00 per gallon for regular unleaded.
We just tapped $3.299 yesterday. At the rate of this recent runup, we'll be at $3.50 in two to three weeks. At this point, I don't know what the exact price drivers will be paying either, but I do know what the exact price drivers are.