Americans enjoyed a brief vacation from high gas prices this last week, but with 20% of U.S. refinery production shut down in the wake of two hurricanes slamming back to back along the Gulf Coast we can expect prices to jump back up to record levels.
The free market responded perfectly to the invisible hand of supply and demand pressures, with gas prices reported to be as high was $5.50 in Florida. Well known Communists such as Florida Governor Charles Crist and American President George Bush, however, proclaimed these free market responses as "gouging" and promised socialist government intervention. "Raising rates to exorbitant levels like this only causes unnecessary panic and fear," said Crist. "This type of behavior will not be tolerated." If federal and state officials follow through on their threats to prosecute free market prices, we can expect real shortages. In fact, gas stations are already limiting purchases and even closing because of severely limited supply.
The refinery closures are impacting gas prices even in Canada, where producers ship their product south because they get a better price from Americans.
While California gets little oil, gasoline and other refined products from the Gulf of Mexico coast, other production from Canada and the Caribbean that normally is shipped to the U.S. West will probably be diverted to meet eastern demand.
Los Angeles Metrolink crash: Metrolink engineer failed to stop for signal. Bottleneck blog at the LA Times has a lot of interesting background information on how Metrolink operates. See also Metrorider LA for discussion from seasoned users of mass transit in Los Angeles. The loss of life is horrible, but it's comparable to about two or three weeks of fatalities on Socal highways.
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Hmmm...the current EIA data doesn't back this up -- national average is $3.648, and the Gulf Coast region is reporting an average of $3.551. Of course, those figures were updated on 9/8, so we'll see what happens when they do their updates.
Bring on $5.00 gas, I say -- keep the pressure on developing alternate energy sources!!!