21 May 2008

Oil


Everyone hates high gas prices. As I'm going to start a 60-mile round trip daily commute next week, I hate high gas prices, too.

But as I stated three weeks ago, in the midst of all the complaining, we don't hear much analysis.

I solicited the knowledge of those much smarter than I am, and luckily, my uncle James responded.

Essentially, he said the price is based on supply and demand, with the factors of China and India's growing economies and how our oil suppliers hate us thrown in.

Pretty much what I figured.

What kills me is how much blame President Bush gets for gas prices. Senator Patrick Leahy called the major U.S. oil execs before Congress this morning and began his statements with, "In the eight years since Bush took office, gas prices have risen yada yada yada...." as if the president has a lever in the Oval Office he can pull to lower or higher the prices whenever he wants.

Sigh.

So the Senate is upset that Exxon Mobile Co., Shell and ConocoPhillips are making money while hardworking Americans are paying $3.89 for gas.

But we know the high prices are a result of factors beyond the control of American companies.... at least as things now stand. Glenn Beck translates what Senator Leahy and other members of Congress are really saying:

Let me tell you what we've done here in Congress.

We told you that drilling in ANWR is off limits. We told you that drilling off the coast of Florida and California is off limits. We told you, Mr. Big oil, that there wouldn't be any new leases for drilling in the Gulf while China and Venezuela and even Cuba pursued these leases and have just signed 100-year leases on the oil in the Gulf of Mexico.

We here in Congress have promised, as all three presidential candidates have also promised, to introduce and pass in the next term a cap and trade legislation bill that will increase the price of gasoline according to the EPA by an additional $1.50. Some people say it could be as high as $5 additional per gallon.

We have said that we're shutting down oil fields in Colorado. We won't let you develop shale oil fields in several Western states.

We told you through our policies that we would not allow you to build a new refinery in over 30 years. In fact, this great country, under our tutelage, has even reduced the number of operational refineries by half since 1982.

We have even told your potential competitors in the nuclear and hydroelectric industries that we would send the environmental lawyers after them if they even dared think about building a new plant or a new dam.

We've refused to fund or allow the deployment of coal-to-oil technology which has been around since the 1930s. We've told you that you have to make different blends of gasoline, let states like California dictate what unique gasoline blends you have to make for them. We will not reduce our federal gasoline tax. We won't even consider reducing it for the summer months.

So Mr. Big Oil, tell me why exactly are gas prices so high?


Right between the eyes.

What's going on here is that our politicians are dead set on getting us off oil. That's fine. Oil is going to run out eventually, probably sooner than we'd like to think.

But so far, there is not a viable replacement for this energy source. As uncle James said,

Let's talk about something else that I think is an issue--bio fuels. In theory, it makes a certain amount of sense that we "grow" our fuel. Renewable energy is a good thing and all. However, since most material, like corn, that can be used for bio-fuels are also a part of our food chain, does it make any sense to starting burning our food as gas? Doesn't that just increase the demand for corn which in turn drives up the cost of beef, chicken and everything else that depends of corn? Don't get me wrong, I would be happy to see the American farmer become as rich as those Arabian oil sheiks, but at some point in time, I don't think we can grow enough corn to fuel all the cars of the planet.

Not to mention the fact that it takes something like 1.3 gallons of gasoline (tractors, etc.) to grow enough corn for one gallon of ethanol. Uh...

So Congress is killing us by not allowing us to be even close to self-sufficient with oil, which means we're at the mercy of people who hate us, which means we have no control over the price.

But it won't do to have the American people realize this. Their 11% approval rating might sink even further. So they create a pre-emptive scapegoat in American gas companies, just in case their standby of "blame Bush!" isn't enough.

It's brilliant. And despicable.

Oh, and this is not a partisan issue. Both Republican and Democrat politicians are to blame for this one.

5 comments:

Eric said...

Oh James, James, James,...oops I mean Brandon,

The one reason gas prices are so high?...

Because there is no other option. (Ok I'm sure it's a lot more complex than that but still bear with me).

In a "perfect" capitalistic system supply and demand is greatly influenced by options. Where are my options when it comes to a dependable means of transportation (OK so I guess I could use my long board but seriously though, stay on topic).

I have not had one single option of fuel since the creation of the automobile; and no one has done anything to create new options till our recent surge in gas prices.

This urks me to high heaven.

What century do we live in? Oh yeah the 21st. Name for me will you one other technology in our mainstay that is over a century old? (with the exception of the spatula)

Sure tree huggers and politicians have made it so we can't drill anywhere in the US, but why are we still drilling?

Seriously, why are we still drilling?

My opinion, because it makes money and a lot of it. Forget about the fact that it is just shy of what the cavemen did...it makes money so that's why we still dig it out of the ground.

"The powers that be" have not lifted a finger to try to come up with a new way to produce fuel because they don't think it is worth it, period. They don't need to because they are still making money off a 100+ year old model of business.

And since it is officially taboo to mention the "conspiracy theories" (in which oil mongers buy up effective alternatives and brush them under the rug) I can't even mention that in a debate. Fact is though, there is nothing stopping them from doing just what the conspiracy theories theorize about, so why not consider the theories?

Long comment but oh well, I've never done it before.

Matty Gibb said...

I think the question should be, why is gas so cheap in America?
finance.yahoo.com/family-home/article
/104996/Why-Gas-in-the-U.S.-Is-So-Cheap

Take a look at comparisons with other nations.

Brandon said...

Eric:

I was with you until the conspiracy theory.

The more people required to keep a secret, the less likely it gets kept. If there were boxes full of alternative, practical fuel sources in a basement at Exxon somewhere, don't you think someone would have leaked it already?

And G:

A good question. Maybe it has to do with governments encouraging their people to use mass transit options through gas taxes?

We're not so good at mass transit in the U.S., so there is less tax on gasoline.

Just a theory.

Eric said...

Yeah, well like I said. It has become taboo to even mention conspiracy theories. Maybe I can get Mel Gibson and Julia Roberts to go into Exxon's basement for me.

Filbert Karo said...

Hehe Uncle James