...High Fuel Prices and its Effect on the U.S. Economy The United States economy as a whole has been rapidly dwindling down of late, from its all time high marks in the late 1990’s and early 2000’s. Many Americans believe that the cause for this large downswing in the economy is due to the fact of the cost that the United States is putting into the War in Iraq. The war has caused some economic inflation over the past couple of years however; there are other factors that tie into the economic problem of America. One key factor that many people are surely aware of is the high and outrageous gas and fuel prices across the country. Though many Americans are aware of the extremely high gas prices, they don’t fully understand how fuel prices have a monopoly effect on the country and how the U.S. economy is greatly affected because of this. (How Gas Prices Affect Our Economy) Over the past few years gas and fuel prices always seem to be in the news. At first, prices seemed to be high one week and low the next. Now, it just seems that the prices are extremely high and won’t go down. Many times you hear big time politicians say the reasoning for these high prices is due to shortages of oil. This is not the case, for there is no shortage at all. Gasoline reserves on hand are at the highest levels they have been since the early 1990s and the oil deposits under ground aren’t running out either. (There Is No Gas Shortage – BusinessWeek ) So why are politicians saying there is a shortage...
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... It is indeed very lucrative for potential owners to purchase gas stations in our current economic condition where gas prices are at sky high, especially in places where public transportation is scarce. On average, the whole United States have faced an increased in gas prices nearly 5 cents from March 21st, 2014 to April 4th, 2014 (Reuters, 2014). According to Reuters, Lundberg survey has shown that this increase in gas prices was caused by an increase in demand. In fact, the United States has been experiencing gas prices increasing since early February this year after gas prices saw a price fall in late 2013 (Reuters, 2014). Despite of the fact that gas prices and demand for gas is high, it makes sense for cousin Edgar to spend his money on purchasing gas stations because the facts suggest that he could gain a lot of profits by operating gas stations. However, there are other various factors that cousin Edgar must take into consideration before spending his money, such as the gas demand and supply, the price elasticity of both, the cost of gas production, as well as the future challenges that awaits him in the future. One thing that Edgar must know about what can affects demand is the availability of substitute product, which in this case the substitute product for gas would be the use of public transportation. In places where there is a good public transportation system like in San Francisco, the demand for gas could be more elastic compared to Los Angeles, because consumers...
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...BADM 103-3977 Business Abstract #2 With the steady rise of gas prices across the country, people are buying less fuel for their use. Compared to last year’s statistics, Americans have bought less gas for the past five weeks. December was the last time there was such a low demand for fuel, but this was because the snowstorms caused Americans to cut back. Before this current decline, the demand for fuel was on the rise for two months. Analysts expected the trend to continue due to the economic recovery improving, but according to a March survey by the Oil Price Information Service, sales have fallen at 70 percent of the nation’s major gas station chains. Even as gas prices continue to rise, people are still having issues with saving. This is because the cost of gas is going up faster than people can cut back on spending. Compared to last year’s prices, gas is 32 percent more expensive than it was in April 2010. The price of fuel has risen due to unrest in North Africa and the Middle East causing an increase in global demand for crude oil which squeezed the supply. Majority of the analysts forecast a high of $4 a gallon but some foresee $5. Drivers across the country are hunting for cheaper gas, some using the help of a mobile phone app. Other drivers are starting to consider the mass transportation systems within their area. There are also owners of SUVs trading them in for more fuel efficient models. This is evident with sales of the Hyundai Sonata and Elantra...
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...economy as a whole”, which includes unemployment price level and national income(Miller, p.3, 2014). For example, in Microeconomics topics studied in this...
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...petroleum, and natural gas rising, energy companies are innovating new ways to extract these nonrenewable resources. These new methods are beneficial to consumers, but can also pose a threat to society's health. Natural gas drilling, or hydraulic fracturing, creates new jobs and job opportunities, but releases harmful byproducts that would have stayed trapped within rock deposits far beneath the surface of the earth; therefore, the causes and effects of natural gas production near population centers deserve thorough investigation. Hydraulic fracturing is, by definition, “the process of injecting liquid at high pressure into subterranean rocks, boreholes, etc., so as to force open existing fissures and extract oil or...
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...at oil prices in terms of inflation, we realize that this is one of the strongest components why the economy is collapsing and now we are on tipping end of a dangerous bout of deflation. The problem of deflation is that it renders any and all debts dangerous and a country as indebted as the United States of America, simply cannot risk that outcome of it. The economy is affected by many factors that determine if it is strong enough or simply too weak. These factors have to do with buyers consuming goods and services and how often they do this. Do the goods and services that are consumed by people create wealth, jobs, and a better overall economy for a country? In this paper I will discuss how the oil practices affect the economy and to what extent. Throughout history we have seen evidence of some economies that have evolved faster and stronger than others. Policies that the government places on industry, technology and the environment can all affect the prosperity of an economy. Of the factors that affect economic growth the industry of oil and gas is one that holds a dominant spot in the world's and America's economy today. When evaluating the economic growth factor of economy and specifically oil and gas one must consider some factors such as: the relationship that it have with the whole economy, the way it affect economic growth, what it a cause or effect of economic growth, along with a few others. In respect to how economy is affected by oil and gas all of...
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...Introduction: I get the main idea of the essay, but it was very confusing. "In today’s society since the 1900s the rise of gasoline prices got a lot of Americans upset about the rise of the price for gas they saying that the economy went over bored with the price that’s being held at local gas business." Thesis: The main problem with American is that the whole complete consumption that’s all over the world about these high gas prices the number one thing we could do about this problem is for us Americans to confine the big amount of gasoline that is being use for our cars, or we could just get as many people to sign up and do a whole lot of partition door to door about the issue and get people to vote and complain about the high price of gasoline and the cause of it being so high such as the price for oil. -This is more of a call to action than a thesis.- A Well-Presented Issue: This issue of high gas prices is controversial. Statistics and authorities have been paraphrased to present the issue. " In Septembers of 2011 a gallon of gas in New York State only went up just 50 cent in Colorado it increased on 25 cent. Some of the increase is only because of the different tax rates only in two states but due to some bargain the price of oil coming in from a different country such as CanadaThe president of the united states Mr. Obama stated in the source since the price of gasoline has went up there will be more jobs issued out to a lot of Americans so that they could put more money inside...
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...Hydraulic Fracturing Hydraulic fracturing is a process of drilling and injecting fluids at a high pressure into the ground to break rocks and release methane gas and toxic chemicals and contaminate groundwater. “Hydraulic fracturing is used after the drilled hole is completed. Put simply, hydraulic fracturing is the use of fluid and material to create or restore small fractures in a formation in order to stimulate production from new and existing oil and gas wells. This creates paths that increase the rate at which fluids can be produced from the reservoir formations, in some cases by many hundreds of percent.” (Pennsylvania Department of Environmental Protection, 2010) This process allows production in older oil and natural gas fields. Hydraulic fracturing has been used in the United States since the 1940’s. “The U.S. has vast reserves of natural gas that are commercially viable as a result of advances in horizontal drilling and hydraulic fracturing technologies enabling greater access to gas in shale formations. Responsible development of America's shale gas resources offers important economic, energy security, and environmental benefits.” (United States Environmental Protection Agency, 2013) Fractures in Onshore shale and Tight Rock formations are oil fracking. It can be natural or man-made through rock. The fluid includes water, sand, ceramic and often chemicals. “High-pressure Fracking is done from a wellbore drilled into reservoir rock formations to increase the...
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...Introduction The shale boom experienced by the United States since the mid-2000s ushered in unprecedented production and reserves estimates of oil and gas in the lower 48 states. This sustained supply and production has been a result of technological advancement, particularly improved techniques in hydraulic fracturing, has kept prices for natural gas extremely low while crude oil prices have fluctuated and changed over time. One reason for this is the different nature of exportation in the two hydrocarbons. As will be discussed below, the transportation and exporting of natural gas is much different than for crude oil. Natural gas must undergo a liquefaction process in order to travel by specialized cargo ship, the alternative to a pipeline, which adds substantial costs to the activity. There are currently no operational natural gas export terminals in the lower 48 states, but a few are under construction. The large sunk costs will be a large part of our consideration of the exportation of natural gas. The U.S. has traditionally been a net importer of gas, and considering the high upfront costs of building export terminals, the sale of American gas has been isolated almost exclusively to the domestic market. The only exception to this has been to export natural gas only where existing pipelines can carry it, which has limited foreign export to North America. Despite this historical trend, calls for the US to begin exporting natural gas have been growing louder as the potential...
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...Introduction Government spending has been an instrumental component and reflection for the United States economy. As an integral part of the business cycle, the last several years have been through the trough since the recession in 2008. While government spending has been increasing, for a couple years it did reduce in addition to maintaining a steady quantity of spending up until the past few years of recovering and growth. As a result, there has been a steady increase of spending in the past three, with anticipation of greater spending in the years ahead. While the overall amount of spending has been increasing as a result of a stronger economy, there has been a surplus of oil and petroleum drilling. Given the lower demand for drilling, the oil and petroleum industry has been greatly affected with Exxon Mobil reporting lower profits, and BP has been reporting a loss, with anticipation of mass layoffs ahead. (Krauss, 2016) Fiscal Policy, Tax Rates, and the Economy Roughly 35-36% of our total government spending accounts for the gross domestic product (GDP). After the government bailout funding for banking and stimulating the economy with an additional $700B after 2008, over 42% of the annual GDP was of government spending. Federal income tax hovering between 16.8-17.2% for median class income has been consistent for the past several years. “Today's government spending levels are indeed too high, at least relative to the average level of tax revenue the government has generated over...
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...Not just this deposit but this includes first and last month’s rent which is insane. Not many middle-class families can’t afford a rental home like that. It has to be cheaper, otherwise the distance from school and work may need relocation to find a cheaper area to be in. In California, we are one of the most expensive states out of the country due to a high economy. This time also occurred where many state workers and teachers would have hours cut off and furloughed. Then paychecks would be cut for many families and that the unemployment rate increased. Many people blamed President Bush and Arnold Schwarzenegger but that was not always the case. It caused a great succession for many people to go back to school to invest in their doctors then have a good paying job. What I have noticed for many jobs is that for a basic entry level, you need experience and they prefer a degree, which I do not have. So, in order for me to stand out competitively in the job pole, I need to be exceptional for what I do to make myself presentable that I am able to handle the job. Now that tuition is increasing, it has become...
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...the same question, why do gas prices fluctuate? There are millions of articles, blogs, news reports and people complaining throughout the world about gas prices. People really want to know the answer to this question and unfortunately there is no clear cut answer. After my research one thing that seems constant is that the gas prices are rising but the amount of increase is not consistent throughout the country. Even within the same state the gas prices varies. I leave out my house and the gas is $4.29 per gallon. I drive 4 miles to a suburb and the gas is $3.83 per gallon. I drive across to the neighboring state and the gas prices are $3.69 per gallon. I live in the city of Chicago, IL and every year the city is voted to have the highest gas prices in the country. When I saw the first question it was a no brainer because I really want to know why our gas prices top the national average. I am going to discuss the factors that affect the prices of gas around the country and focus on the city of Chicago. There is no one factor that contributes to the rise of gas prices. The fluctuation of gas prices can be contributed to a combination of factors. Some of the factors that have been seen throughout my research are the price of crude oil, increase in demand, distribution network breaks, refinery capacity, and taxes. The Oil Producing and Exporting Countries (OPEC) determine how much oil to produce and distribute. OPEC attempts to stabilize the prices of crude oil but the supply...
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...Natural Gas in the United States Katrina C National University February 4, 2012 TABLE OF CONTENTS Introduction……………………………………………………………………………………….3 History and Regulations…………………………………………………………………………...4 Formation and Resources…………………………………………………………………………5 Uses of Natural Gas……………………………………………………………………………….7 Extraction Techniques…………………………………………………………………………….8 Hydraulic Fracturing………………………………………………………………………………9 Gasland………………………………………………………………………………………..…10 Conclusion……………………………………………………………………………………….11 Natural Gas SWOT Analysis…………………………………………………………………….12 References………………………………………………………………………………………..13 Natural Gas in the United States Introduction The natural gas market is a topic that I had never given much thought. Prior to selecting this research paper topic the only knowledge that I had of natural gas is that it is an affordable energy source that was used by many families. Growing up in rural Louisiana my parents had a natural gas oven and heaters. My brother actually still uses the natural gas in my parents old home. My parents’ home now is totally electric and my mother complains about the utility bill and the slow cooking speed with electric. Those complaints seem so minute after learning about the dangers of hydraulic fracturing, or fracking. When first giving the list of research paper topics, the worldwide natural gas market and fracking were not on my list of topic options. However, due to my procrastination on choosing one of my first...
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...Why Gas Prices are higher in California than in other Parts of US English 123 James L Hicks Embry Riddle Aeronautical University Abstract The rising gasoline and oil prices have become a global concern since petroleum has many uses around the world and yet its prices have continued rising for the last sixty years. This paper sought to find out why gas prices are higher in California than in other parts of America. The literature reviewed showed that West gasoline market dominated by California is defined by tight balance between supply and demand. Other factors found to be contributing the escalating gas price in California include isolation of the state from other refining centers, market conditions including international demand, Wall Street speculation, poor policies leading to uncontrolled oil cartels, decline of oil production during technical failure, political interferences, and increasing prices of crude oil due to demand forces. Despite there being no quick solution to the challenge, temporary measures such as efficient use of the available resource while looking for alternative cheaper source of energy could alleviate the challenge. Why Gas Prices are Higher in California than in Other Parts of US The Rising gasoline and oil prices have today become a world concern (Garrington, 2012). More concerns are raised considering that petroleum is an important product whose price continues escalating for the last sixty...
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...July 2011 One Question One: Everyone’s Gasoline Problem Gas prices are constantly fluctuating with reviewing the text we see where the United States has depended on the Middle East to purchase the crude oil to manufacture the gas needed to fuel our cars. (Stone, 2007) It was evident that there were issues during the years of 2006 and 2007 when we seen the biggest rise in gas at that time there was not much we could do we needed to purchase the gas to use for everyday functionality throughout the United States we seen here in the state of Florida (Jacksonville) particularly that the prices went from $2.10per gallon to an all time high of $3.06 this increase was not gradual it was almost overnight when this increase was a period just about a month. This tended to come from some events that occurred in the following countries Mexico, Iran, Iraq, Israel, India, and North Korea that have energy markets on edge and the crude oil prices were heavily elevated at that time. (Jacksonville Bussiness Jornal, 2006). When looking at recent information that has been collected on gasoline prices we tend to look at earlier month May 2011, Jacksonville Florida was getting near the $4.00 per gallon with that we then seen a drop in prices from $4.00 down to $3.85. Typically this is when the summer driving season is starting and the elasticity for fuel starts to rise and continues to do so along with that need for gas the prices rise along with it. This is the typical use of economic terms...
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