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The dumbocrats want to hike taxes on oil again.... thats exactly what an economy nearing recession needs, higher taxes on one of the most costly things americans need on a daily basis. That'll surely help tank the economy so they can then blame the Bush Administration for it.

 

I still find it stupid that a gallon of gas costs me more than a 12 pack of Sam's Choice Diet Cola.

 

And whats your basis for this argument? It costs considerably more to produce a gallon of gas than a 12 pack of cola. Your argument is like saying "I find it stupid that a Ford GT costs more than a Focus." It holds absolutely no merit and shouldn't even be considered as a valid statement in a sane world.

 

I find it stupid that a gallon of milk costs more than a gallon of gasoline...

 

Well then how did it cost less way back when?

 

Everyones bitches and whines about gas. But not nearly as many people complain about grocery prices, that's what everyone should be ticked off about.

Do you happen to know what inflation is? Just a guess, it probably has something to do with it.

 

(Shines shaking his head...) Have yall ever heard of supply and demand? China and India have increased their consumption over the past decade...

 

Quickly.... The costs of production have risen due to reserves are now harder to produce and are producing less. Many of the reserves we've been using for the last hundred years were found because the oil was literally oozing out of the ground. It doesn't take much to get that oil out of the ground. We are now having to go back in and try to get whats left over, which costs more. Additionally, reservoirs that we previously thought were not recoverable are now being produced to keep up with the demand. We are drilling wells in Western ND that just 5-10 years ago people thought the area was completely dry. We've produced pretty much all of the easy to get to stuff and are now working on getting oil out of much more difficult places. Some of the reservoirs we are producing are "tighter" than your cement driveway. That means, water/water flows much easier through concrete than it does the rock that its contained in. I could go on but I have to go to class, ironically a reservoir class.

 

This is a more complete answer to “Why does oil cost so much more now than it did just a few years ago?”
First things first, we all know there is a finite amount of oil in the world. It is believed to be around 6x10^12 barrels. Of which we’ve used about 1x10^12 leaving 5 x10^12. At current usage rates this gives us about 140 years before we run out. We are currently producing 1 x10^12, we believe we can produce another 1 x10^12, leaving 3x10^12 of which we are not sure how to produce.
The reason we currently cannot produce half of the worlds known oil reserves is two-fold. To understand why we must first have some knowledge of the composition of a reservoir or “pool”. The term “pool” is misleading since the common misconception is that oil is contained in free flowing underground lakes. It is not. It is contained in the pores of sedimentary rocks (usually sandstones or limestones). The amount of pore space is a function of the type of material that formed the rock, the geometric packing of the sediments, and the pressure exerted while forming the rock. In order for fluids to flow out of the rock, these pores must be interconnected, a concept known as permeability. These rocks are under pressure and as such when a well is drilled the fluid tends to flow toward the well bore (which is at a lower pressure). This method is known as primary recovery.
Primary recovery is very inefficient. It typically only retrieves around 20% of the original oil in place (OOIP). This is the cheapest recovery method though, and the one that we’ve been using primarily for the last 100 years.

 

Continued.
Once a well no longer produces from the primary method, secondary methods are employed. The typical well drilled today will not produce unless secondary methods are used from the very beginning. The methods used involve fracturing formation or acid jobs to improve permeability, pumping units, etc. These methods can get another 20% or so of the OOIP, but at a slower rate of production.
Once the well no longer produces tertiary methods can be used in certain circumstances. These would be water flooding, CO2 injection, steam and bleed, etc. These will again allow us to get another 20% but also at a slower rate of production.
If you’re following along with the math this leaves us with nearly ½ of the OOIP still in the ground, of which we currently have no economical means of producing.
The second reason we cannot produce ½ of the worlds known supply is that it is currently in either places that we are incapable of drilling (i.e. deep oceans) or the oil is not economically recoverable such as tar sand or if the permeability is too low that current well stimulation methods are ineffective.
As I said before we’ve used up virtually all of the easy to get to oil. There is no more “good old days” of drilling a “gusher”. All the oil we can get now is requiring us to use more technology, more man power, more research, and ultimately more money to retrieve. This is only going to promote the growth of the major oil companies who have the money required to search for and produce oil. The investments are getting higher and higher. People get upset over $100 billion dollar profits, what they don’t understand is that they invested $10000 billion dollars to make that much money.
My great-grandfather started “wildcatting” around 1940. He made a great living drilling for oil since back then it was relatively easy to find and produce. Today, it would be impossible for an individual to be able to do something like that. Way too much money involved, way too much research and technology for just one man.
So to answer your question, “Why is oil so much more expensive now than it was just a few years ago?” Because it is far more costly to produce.