Why the hell does every act of nature have to drive up gas prices. ? WTF?

from cnn.com...

>>>>>Midwest floods may send gas up 15%


Soaring corn prices could increase the price of ethanol, driving up demand for oil and sending gas prices even higher. Some think it's time for Congress to act.



NEW YORK (CNNMoney.com) -- Continued flooding in Iowa and Illinois - the nation's top two corn-growing states - is inciting fears that the cost of the high-priced crop could soar even further, driving up ethanol and gas prices, too.

Days of heavy rain across the Midwest "corn belt" region have wreaked havoc on the crop, sending front-month prices to $7.08 a bushel on the Chicago Board of Trade Friday. Corn futures have risen for 7 straight trading sessions.

Since ethanol - a mandated ingredient in U.S. gasoline - is produced domestically with corn, rising crop prices could send already record gasoline prices even higher.

"The floods in the Midwest will have a major impact on ethanol," said Phil Flynn, senior market analyst at Alaron Trading in Chicago.

Gasoline in the United States is comprised of only about 6% to 10% ethanol, as mandated by federal and state governments. But Flynn believes gas prices could jump 10% or 15% if corn were to hit $10 a bushel and crude oil maintains its current high level.

With the national average of gasoline at a record $4.07 a gallon, according to AAA, a 15% increase would translate into an additional 61 cents.

"Crude oil is still the predominant factor why gas prices are high, but don't think that 6% to 10% isn't going to matter," Flynn said.

Congress' ethanol quandary
Congress continues to search for a way to relieve Americans' pain at the pump, and if gas prices spike another 50 or 60 cents, members may look to change their ethanol policies.

"Congress is going to have a hard time justifying mandating the use of ethanol in gasoline if we lose one-third of the corn crop," Flynn said.

But simply relaxing ethanol mandates may not be enough. According to the latest short-term energy report released by the U.S. Energy Information Administration, use of ethanol has reduced U.S. oil demand by 440,000 barrels a day.

If the nation consumes less ethanol, crude oil usage - and prices - could rise as well.

"For every drop of ethanol that we're not using, we'll be using (more oil-based) gasoline," noted Flynn.

Flynn argued that the market should determine ethanol's price, saying the root of the problem was Congress' rushing the use of ethanol in the first place.

"The problem with ethanol is that it was driven by the government and not by market forces," Flynn said. "Ethanol would have come on naturally had the government not acted."

Reducing the ethanol tariff
Another potential solution that is gathering support in Congress is reducing or eliminating the foreign ethanol tariff. The import tariff of 54 cents a gallon on ethanol keeps the price of imported ethanol high in an effort to support domestic farmers.

Much of imported ethanol is made from sugar cane, which is cheaper to produce than domestic corn-based ethanol.

Energy industry experts say lifting the tariff entirely will likely lower gas prices by 10 cents a gallon, but legislation that proposed canceling the tax found little support in Congress. As a result, Sens. Dianne Feinstein, D-Calif., and Judd Gregg, R-N.H., recently introduced a compromise bill to reduce the tariff to 45 cents.

"The need for inexpensive and cleaner-burning fuels continues to grow, and yet U.S. refiners are forced to pay a 54-cent tariff on ethanol imported from Brazil and other foreign sources," Feinstein said on the Senate floor last week. "This makes no sense, given the record oil prices and the limited supplies of domestic ethanol."

Gregg noted that ethanol cannot be transported through pipelines, which makes the domestic product hard to come by in some states. As a result, many non-midwestern states are forced to use foreign ethanol and pay the tariff at the pump.

"States outside the Midwest, especially ... coastal states, are at a huge disadvantage when it comes to accessing domestically produced ethanol due to shipping challenges," said Gregg on the floor. "Imported ethanol from Brazil and other friendly nations can be provided to these coastal states more easily and at a lower cost." <<<<

and here in minneapolis the dang sky is purpling over with more rain clouds as i type this

I live in Iowa, a state supported by corn and even I know corn is one of the least efficient means of producing ethanol.

Maybe someone should hip congress to that fact. Wait, they do know it, they are just worthless.

If we really want to figure out the "gas crisis" we should be asking a few questions.

If drilling in the US ie; protected lands, will ease the price of oil, why are the US oil companies sitting on 10,000 land leases for drilling issued in the last 4 years?

Why do we accept the "supply and demand" argument when demand has not gone up?

Why are US refineries not operating at capacity?

Why are we not pumping crude from US controlled fields in Iraq?

Why, when crude costs $20 a barrel to extract are we paying $140?

When you find the answers, it becomes clear that deregulation of the industry, consolidation, and "dark markets" are the cause of this perceived "gas crisis".

Call your representatives and ask why they are sitting back and allowing this. Then ask if they will share some of their payoff with you since gas is so expensive.

ethanol is a bad idea, imo. just not a good idea. bad.

Mars23 said:

check this out:

WASHINGTON - Saved by Senate Republicans, big oil companies dodged an attempt Tuesday to slap them with a windfall profits tax and take away billions of dollars in tax breaks in response to the record gasoline prices that have the nation fuming.

GOP senators shoved aside the Democratic proposal, arguing that punishing Big Oil won’t do a thing to lower the $4-a-gallon-price of gasoline that is sending economic waves across the country. High prices at the pump are threatening everything from summer vacations to Meals on Wheels deliveries to the elderly.
The Democratic energy package would have imposed a 25 percent tax on any “unreasonable” profits of the five largest U.S. oil companies, which together made $36 billion during the first three months of the year. It also would have given the government more power to address oil market speculation, opened the way for antitrust actions against countries belonging to the OPEC oil cartel, and made energy price gouging a federal crime.

continued at
http://www.msnbc.msn.com/id/25078420/

XxAxX said:

That's the big one right there. People act like it is a global issue when actually the US owns the exchanges. It is speculation in this country driving up the price.

Even the Saudi's acknowledge it is our doing.

You know what is jacked up? the excuses they use to raise prices. We always here about refineries and how fuel needs to be shipped from them to get to the consumer. Hello, we are surrounded by refineries yet that never seems to translate into lower prices for us locally.

Profiteering.

It's disgusting.

And then shit like this goes on at the local level.

http://www.reportonbusine.../Business/