As everyone knows, the price of gasoline in the USA has been steadily marching up into the low US$3.00 per gallon range to achieve all-time high pricing. Reliable sources state that the price run-up is due to simple shortage of supply. According to testimony from energy analyst Paul Sankey of Deutsche Bank, the US refines 17 million barrels of petroleum per day against a demand of 22 million barrels per day. An interesting analysis can be found at the Oil Drum.
We are in a very precarious position here. An oil shock caused by a catastrophic loss of refining capacity will result in a wild price spike (some estimate US$100/bbl) while gasoline is in the mid $3.00 range already and a major perturbation to the economy- or worse. Unfortunately, we are bogged down in the ill-conceived GW-II, the second of the energy wars.
Lamentations on Chemistry 
I was at a lecture by a greman refinery guy the other day and he said that the price increase for fuek in germany, always around easter, is due to american companys buying all the refined reserves at this time. Because they don’t make enough and teh american gets his big truck out at this time and rediscovers the joy of driving. Crude Oil is not the problem.
Hi Gaussling! Interesting little factoid here. I do wish there was less focus on the price of gas – my paper publishes the price on the cover everyday.
I tend to think that various market forces play a role and that most of what our representatives are doing is posturing.
So, I know I’ve read elsewhere – nobody is building refining capacity in the US, even though demand is increasing – and the argument is that there is no reason to increase refining capacity because – soon there will be no way to increase the amount of crude!
Peak Oil!
Agri-giant maize pimp Archer-Daniels-Midland has leased Congress and diverted US corn production to biofuels, guaranteeing massive negative ledger entries in both fuel and food sectors. America stands strong knowing its escalating depedence on imported oil and imported food is as strong as its unsunderable relationshops with its business partners. As Franklin Delano Roosevelt cemented perpetual world economic hegemony with Josef Stalin, so Bush the Lesser has guaranteed America wll get what it deserves – good and hard.
Save ANWAR! Conservation means somebody else in the tenebrous future deserves to consume it; and not them, either.
Hi Bill,
Sorry that you have to hear about petroleum prices in the blogosphere. I think you made a good point about peak oil and the lack of incentive to build new refinery capacity. Seems obvious once it is out, but frankly I hadn’t thought of that angle.
My interest is the geopolitical effect a major price runup will/would have rather than a “USA Today” view on gasoline prices. Hydrocarbon feedstocks for manufacturing have to compete with the fuel market for petroleum. For instance, polymer manurfacturers who are vertically integrated into hydrocarbons from the wellhead to the polymer train may fare better than those who buy their feedstocks on the commodity market.
I love Uncle Al’s writing. It is so urgent, yet so very lyrical. I’m still trying to understand his contention that the vacuum is chiral.