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Re: Why gas prices may soar... 

By: killthecat in ROUND | Recommend this post (3)
Sun, 08 Jan 12 6:17 AM | 45 view(s)
Boardmark this board | De's Test Board 		Msg. 37813 of 45651
(This msg. is a reply to 37811 by Decomposed)
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Now that the most polarized and paralyzed Congress in memory has managed to kill one of its most resilient boondoggles — the three-decade-old, multibillion-dollar subsidy for corn ethanol — we hope it has not exhausted its resolve and will take a hatchet to other harmful energy subsidies, chiefly those it gives to fossil fuels.

The ethanol subsidy was allowed to expire last Saturday, a death blow that was all the more remarkable coming just a few days before the Republican caucuses in the cornfields of Iowa, where the subsidy has long been seen as untouchable.

The 45-cent-per-gallon tax credit for oil companies to blend ethanol into gasoline cost taxpayers $5 billion to $6 billion a year, deepening the budget deficit. It boosted corn prices and increased food prices generally by encouraging farmers to replace other crops with corn. Its environmental virtues were less than advertised. Billed as a lower-carbon replacement for fossil fuels, corn ethanol generated more carbon dioxide than gasoline after taking into account the emissions caused when new land was cleared to replace the food lost to fuel production.

Several factors conspired to kill the tax break (as well as an exorbitant tariff on imports aimed at keeping cheaper Brazilian ethanol out). Conservatives did not like the subsidy’s price tag and liberals saw it as a form of corporate welfare. It was also unnecessary and redundant. Corn ethanol is now commercially viable without the subsidy and is further supported by a Congressional mandate requiring refiners to blend up to 15 billion gallons a year.


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The above is a reply to the following message:
Why gas prices may soar...
By: Decomposed in ROUND
Sun, 08 Jan 12 4:30 AM 		Msg. 37811 of 45651

Jan. 6, 2012, 12:01 a.m. EST

Gasoline prices start the year with a bang
Prices at the pump at highest-ever for the launch of a new year


By Myra P. Saefong, MarketWatch

SAN FRANCISCO (MarketWatch) — Gasoline prices at the pump started the year off with a bang — at the highest-ever level for the start of a new year, and analysts expect a particularly volatile 2012.

The average U.S. price for a gallon of regular unleaded stood at nearly $3.28 on Jan. 1, according to AAA Daily Fuel Gauge Report. That’s over 20 cents above the year-ago price and almost 63 cents above 2010’s starting level.

The price kickoff to the new year -- a record high for the start of a year, according to Tom Kloza, chief oil analyst at the Oil Price Information Service (OPIS) -- doesn’t bode well for consumers. That’s especially the case because retail gasoline prices typically don’t peak until April to July.
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A convergence of factors in the spring that include shutdowns for refinery maintenance, the “painful ... switch from winter to summer gas and the overenthusiastic purchases of investors and speculators, make a second quarter spike not just predictable, but inevitable,” he said.


More: http://www.marketwatch.com/story/gasoline-prices-start-the-year-with-a-bang-2012-01-06

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