To: Les Singer; Secretary, DOE From: Policy Group Office of Secretary Les Singer Subject: Answers for the reporters I know that there a many questions being asked in regards to gasoline prices and comments made by J.R. We as the policy group are doing the best that we can to work on answering all of your questions and coming up with explanations to make sure that you fully understand. The answer to your question on why price ceilings will prevent the laws of supply and demand from operating is actually quite simple, but before answering it you must understand what a price ceiling is.
Gas Prices Should be Lowered Gas prices can be expensive most of the time and almost everywhere you go. It’s hard to find a reasonable gas price. Maybe you should blame the global demand for gas prices being so high.
Have you ever wondered about the Dakota access pipeline and thought is it good or bad. The Dakota access pipeline is an “Oil pipeline that would run diagonally across Iowa, through 18 counties, from northwest Iowa to southeast Iowa” (Tyler Durden, 2016). Even though I do not support the pipeline, because of damaging reasons, it does help our economy become more desirable. First I do not support this pipeline considering it does not help our environment.
Dakota Access Pipeline “What is this you call property? It cannot be the earth, for the land is our mother… how can one man say it belongs only to him?” (Massasoit 1). Over the past few months, a land related disagreement has emerged between an American Indian tribe called the Standing Rock Sioux and the United States Army Corps of Engineers (USACE). The dispute revolves around the creation of a 1,172-mile pipeline which will carry crude oil from Sioux territory in North Dakota to Illinois (Energy Transfer 1).
The Dakota Access Pipeline should not be built under the Missouri river because if the pipeline is built more water will become contaminated. In a CNN article about the pipeline, it states “The Dakota Access pipeline would fuel climate change, cause untold damage to the environment, and significantly disturb sacred lands and the way of life for Native Americans in the upper Midwest,”(CNN). The Dakota Access Pipeline is one of the most controversial pipelines ever made and said that this pipeline can hurt multiple things at once. There is a bunch of pros and cons to this pipeline but to ignore all those pros and let's talk about the cons, CNN states that others said there might be a possible breach of the pipeline in the future. The pipeline
The Dakota Access Pipeline has been a very controversial subject, it makes you truly think what would be best for most people in the situation. Like every story, there are two sides, and what one finds right or wrong is up to them. Here is exactly what the Dakota Access Pipeline is, and the pros, and cons. The Dakota Pipeline is a giant project that will run an oil pipe from North Dakota to Patoka, Illinois that's around 1,000 miles of 30-inch pipes.
I, Sitting Bull, am very disappointed in the actions taken by the United States Government. In the 19th Century, my people and I were endlessly treated terribly and attacked by the U.S. Government. We had to defend ourselves when the colonists started to move out west almost 150 years ago, and we are still facing the same problems today. The Dakota Access Pipeline will poorly affect my people, the Sioux.
The Dakota Access Pipeline, has sparked quite the controversy. The oil pipeline would stretch over four states, and has many positive and negative possible effects. Many can debate whether or not this pipeline is ethically correct, but no one can debate the few positive economic effects on the nation. One such effect, “1,500 jobs total per year in Iowa for the course of construction.” (Sammon)
No matter the cost of gas prices, the stations will still be full since one of America’s top natural resources is gas and if gas prices go down income follows as directly
Putting gas at a high price like today would make it profitable to extract oil by using more advanced technologies and deeper wells in more hostile areas of the world. This shows how the “law of supply” plays a role in the economy. The “law of supply” states that the higher the price, the greater the quantity supplied, and that is exactly how the supply of oil is being determined today. The decrease of the supply of oil has caused prices to increase because the government needs to earn more of a profit to produce more oil. One of the reasons for our high gas prices is that there is a decrease in supply, and high gas prices would cause an increase in supply of
These gas stations have so little control over the price of the gasoline it sells because these gas stations face a large amount of competition, not only from each other but also from other gas stations nearby. For example, if a gas station raises its price, it is bound to lose a broad number of customers so as a result many gas stations are severely limited in raising its prices. In addition, one interesting point is that the gas stations can sell gas at the market price and are not required to lower their prices but if they choose to lower its prices by 1 or 2 cents due to heavy competition, they are bound to increase their sales
The government should not control the price of gas because that would take away the benefits of fluctuating gas prices from state to state and station to station. While it may seem that gas prices would be “fairer” if the government set them, they would actually be unfair to some states. The government shouldn’t have control of the price of gas because the fluctuations of prices would have a negative effect on the majority of American citizens who are not in the top 1%. If gas prices increase, lower class citizens would have a difficult time affording gas, along with their other basic needs.
Gas prices should not have a set price by the government. Although its seems as if there would be no problem and gas prices would always stay at a reliable price, there are many factors that would make this have a major impact on the economy. Such as if the government sets the price too high, then people will not be buying gas and will not be able to go to places that need to go and there would be a surplus of gas. If they set the price too low then there would be too many people buying it so there would be a shortage of gas. If the government sets a price, it would be bad for all the gas stations.
Now gas is like a competition, you have to find the best prices before anyone else does. You do not want to wait for one open gas pump, which will take about ten minutes considering the people who clean their cars while waiting to fill up their tank. Not only do they clean their cars while getting gas, but they buy things they want from the store which takes about five minutes and they always take their time. Gas prices can vary during certain times periods. Many things can cause gas prices to skyrocket, such as supply and demand for crude oil, so if the gas is $3.89 it can become $4.76 which is ridiculous.
1) Government may intervene in a market in order to try and restore economic efficiency. One of the ways the government intervention can help overcome market failure is through the introduction of a price floors and price ceilings. If prices are seen to be too high, price ceiling or a maximum price could be imposed on a market in order to moderate the price of the product. This policy is often used when there are concerns that consumers cannot afford an essential product, such as groceries. The effect of a maximum price could create a shortage as it could lead to demand exceeding supply for that particular good.
