Sarcasm, Honesty, Objectivity

Here is a break down of dollars and cent cost rising of US gas prices.

You can see the mounmental increase over time.

So I have found an amazing website that does nothing more than how gas prices work.

Howstuffworks.com (Link attached).

“

When you pump $30 into your tank, that money is broken up into little pieces that get distributed among several entities. Gas is just like any other consumer product: There’s a supply chain and several groups who are responsible for setting the price of the product. The media can sometimes lead you to believe that the price of gas is based solely on the price of crude oil, but there are actually many factors that determine what you pay at the pump. No matter how expensive gas becomes, all of these entities have to get their slice of the pie. According to the U.S. Department of Energy, here’s an approximation of where each dollar you spend on gas goes:

• Taxes: 11 cents
• Distribution and Marketing: 6 cents
• Refining: 10 cents
• Crude oil: 73 cents “

This little except shows exactly where all the money you spend goes to. On the site it goes through and breaks down each of these aspects into a “what it is and does.” The site talks about some of the reasons for the gas price surges

“However, a new reason emerged during the spring of 2007: legislation out of Washington to incorporate more ethanol into transportation fuels, enough to reduce daily oil imports by 1.5 million barrels by 2017. Between October 2007 and April 2008, ethanol-blended gas was between 4 and 12 percent more expensive than regular gas .”

The introduction of ethanol was though to make things cleaner and cheaper when it came to producing and consuming gas. However, with the gouging of the price of corn, the relative benefits were destroyed by the mass spike in price. The next topic covered is OPEC… in short.

“The single largest entity impacting the world’s oil supplies is the Organization of the Petroleum Exporting Countries (OPEC), a consortium of 13 countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

Together, these 13 nations are responsible for 40 percent of the world’s oil production and hold the majority of the world’s oil reserves, according to the Energy Information Administration (EIA). . When OPEC wants to raise the price of crude oil, it simply reduces production. This causes gasoline prices to jump because of the short supply, but also because of the possibility of future reductions. When oil production dips, gas companies get nervous. The mere threat of oil reductions can raise gas prices.”

This article talks about how flawed the system of OPEC can send shock waves of price fluctuations followed by our local US supplies and the controversial arctic oil sites. Why I spent an entire article talking about this site is because its important that people know where the fuel we use comes from and the controversy following it.

Other great articles are on how oil drilling works and how refining oil works.