Charles Krauthammer spells it out for us:
Today, every time an Iranian mullah opens his mouth about nukes, the risk premium for Persian Gulf supply interruptions jumps again. Crude oil prices alone account for about $1.70 of what you pay for a gallon at the pump. So 10 years later, I’ll wager again. Here’s what the Bush search for price gougers and profiteers will find:
(1) Demand is up.
China has come from nowhere to pass Japan as the number No. 2 oil consumer in the world. China and India — between them home to eight times the U.S. population — are industrializing and gobbling huge amounts of energy.
American demand is up because we’ve lived in a fool’s paradise since the mid-1980s. Until then, beginning with the oil shocks in 1973, Americans had changed appliances and cars and habits and achieved astonishing energy conservation. Energy use per dollar of GDP was cut by 30 percent in little over a decade. Oil prices collapsed to about $10 a barrel.
Then amnesia set in, MPG ratings disappeared from TV ads and we became “a country of a million Walter Mittys driving 75 mph in their gas-guzzling Bushwhack-Safari sport-utility roadsters with a moose head on the hood, a country whose crude oil production has dropped 32 percent in the last 25 years but which will not drill for oil in the Arctic National Wildlife Refuge for fear of disturbing the mating habits of caribou.”
I wrote that during the ‘96 witch hunt for price gougers. Nothing has changed. Except that since then, U.S. crude oil production has dropped an additional 12.3 percent. Which brings us to:
(2) Supply is down.
Start with supply disruptions in Nigeria, decreased production in Iraq and the continuing loss of 5 percent of our national refining capacity because of Katrina and Rita damage. Add to that the mischief of idiotic new regulations. Last year’s energy bill mandates arbitrary increases in blended ethanol use that so exceed current ethanol production that it is causing gasoline shortages and therefore huge price spikes.
Why don’t we import the missing ethanol? Brazil makes a ton of it and very cheaply. Answer: The Iowa caucuses. Iowa grows corn and chooses presidents. So we have a ridiculously high 54-cent ethanol tariff and ethanol shortages.
Other regulation requires specific (”boutique”) gasoline blends for different cities depending on their air quality. Nice idea. But it introduces debilitating rigidities into the gasoline supply system. If Los Angeles runs short, you cannot just move supply in from Denver. You get shortages and more price spikes.
And don’t get me started on the missing supply of might-have-been American crude. Arctic and Outer Continental Shelf oil that the politicians kill year after year would have provided us by now with a critical and totally secure supply cushion in times of tight markets.
In March 2000, the price of gas hit $1.80. Scandalized congressional Republicans shamelessly pushed for repeal of Bill Clinton’s whopping 4.3-cent gas tax increase. Now that the president is a Republican, what do you think Senate Democrats are proposing? A 60-day suspension of the federal gas tax. It would cost $6 billion and counteract the only good thing that comes with high gas prices — the incentive to conserve.
George Shultz once said, “Nothing ever gets settled in this town.” But even Shultz, who has seen everything, must marvel at the perfect regularity, the utter predictability, of the bottomless cynicism of Washington in the grip of gasoline fever.
It’s as simple as supply-vs-demand. The full article can be found here.
Well said from someone I rarely agree with.
It’s unbelievable that he wouldn’t even mention the fact that oil companies are making record profits right now.
Oso, that is irrelevant. Every company has a right to make money unless of course you can prove that they were was some conspiracy to fix the prices. So far, from every government investigation in the past three decades at least, this has not been the case. So what we are left with is high prices due to the radical lefts insistance that we:
a) not drill and
b) not built a refinery
The more important question is why can’t we do both as well as develop other technologies as the same time?
Or, if you want to take Oso’s point of view, you could point to the fact that the US Government takes in more revenue from high gas prices than do the oil companies. But what does that prove anyway? Nothing.
If one were to be serious about reducing oil company profit or the price of gas, the thing to do is fix one or more of the problems above mentioned by Krauthammer.
But because liberals want two contradictory things - high conservation and cheap gas - they would rather cloud the issue than talk about the real economics of what is behind our high gas prices.
I must admit that I too find myself thinking it is obscene that oil companies are raking in the cash while many consumers suffer. And it is easy to hold them in contempt and ask that the government bring them to heel. However, we cannot overlook factors which play a role in determining the cost of gas. What role does the political curbing of oil drilling born from environmental concerns play in the cost of gas?
If we as a society want or “need” cheaper gas than there are hard choices to be made. People can complain all they like, but scarcity is a fact, and it is that fact which compels us to make choices. Clamping down (denying them of their property) on oil companies will only hurt us all in the long run. It’s not brain surgery, its economics. The political hurdles placed before oil companies, which prevent the oil industry from producing gas more efficiently (cheaper) than they otherwise would, must certainly help to create the “high” price of gas at the pump.
Ay, Oso, Oso, Oso….
The Tax Foundation points out that over the past 27 years, gasoline taxes too, $1.34 Trillion out of the consumers pockets. That is more than twice the total profits of all the oil companies during the same period.
“Talk about gouging”. Direct your dissatisfaction where it belongs.
Stop high taxing socialists in our government……that’s where the gouging is at……$1.34 Trillion is more than ALL oil companies combined. All. Who’s making the profits…..gov’t or the oil companies?
Oso-
What’s unbelievable is that the statement “oil companies are making record profits right now” is all you have to bring to this debate.
Maybe Krauthammer didn’t bring it up because it is already all over the news. Or, more likely, maybe it was because he would then go over his 1000 world limit explaining how it actually wasn’t true.
He would have to bring up things like inflation (i.e. Standard Oil making $1 in 1906 is not the same as Exxon making $1 in 2006) and things like return on capital/sales/equity etc, etc, etc (i.e. a $100 mil company making $10 mil is MORE profitable than a $100 bil company making $4 bil).
I’m guessing he would also throw in a line about how all those profits are not going to buy caviar and expensive bottles of red wine for the CEO. We need hundreds of billions to find new energy sources over the next few decades. Where is that money going to come from?
You got it… profits. That’s why Chevron didn’t announce a $4 billion dividend to go along with their $4 billion profit.
I, personally, would have liked it if Krauthammer had pointed out that someone like me doesn’t have a right to “cheap gas” that someone else had to find in some far off land, drill to get it out from under the earth, ship across land and sea to California, refine so it could be used in my car, and finally deliver to me by building a station near my apartment where I can swipe a piece of plastic and fill up my tank.
If that process means a week’s worth of gas in my own car costs $50… who am I to complain? I have the right not to buy it and walk, bike, carpool, etc. to where I need to go.
But, hey, nobody’s perfect. I still thought it was a good article. Thanks for pointing it out HP.
Oso-
Rereading that first line it is way too harsh. It goes without saying that you bring much to this debate. Although I am sick of that line, I apologize. It was not what I meant.
Later,
Peter
My oh my how home court advantage inspires confidence.
Israel,
Even though I went to a catholic elementary school, I somehow missed the 11th commandment that says every company has the right to make money. You’re gonna have to bring me something more than the “natural rights” argument that businesses can seek profits without restrictions.
HP,
You were just over at our blog a few days ago where you read that we want conservation, better public transportation and higher gas prices. Meanwhile, I agree with all of Krauthammer’s explanations of higher gas prices except that he omitted that gas companies are taking advantage of the above conditions to charge higher prices than normal market conditions would allow for. Your reply should be that if that’s true, one of the oil companies should lower their prices in order to get a greater market share, but why would they when consumers keep buying regardless. Which brings me to Peter.
Peter,
Fear not my friend. I have grown accustomed to - nay, appreciative of - your insistence that I am intelligent, but what I say is not. My first comment wasn’t trying to “bring anything to the debate.” I was just pointing out that a total explanation of rising gas prices should include the fact that a greater chunk of what you pay at the pump goes into the pockets of CEOs and investors. I just sorta thought that would have been more complete of an explanation.
I share with you 100% your view that consumers are the ones to blame. But how does a libertarian change consumer habits?
Let’s pretend we’re living on Easter Island hundreds of years ago and a housing boom on the island is making our economy hum like a hummer. Developers are loving it. As are real estate investors. And construction builders - they’re salary has doubled. But most of all, landowners with big timber supplies are making out the best because theirs is the resource that everyone needs. It’s a good time to be on Easter Island.
As trees get more scarce, their value goes up, but more and more of the islanders are saying that the trees need to be conserved, that it’s in everyone’s best interest. They even want the government to come in and tax the purchase of newly felled trees in order to fund a replanting program. The island conservatives, however, will have none of it. They point to the booming economy, they say the government has no right to prevent a company from seeking profits, they point out that it’s consumer demand that is driving up timber prices and that taxes would only slow down the economy.
Of course, we all know what happened to Easter Island.
Oso,
It isn’t as simple as lowering gas prices to get more market share, after all, prices can be (and probably are) at equilibrium, so lowering prices would not result in a greater market share. That only works when companies collude together and force gas prices above equilibrium, not necessarily in all markets.
The reason Krauthammer left out oil company profits is because oil companies have always tried to maximize profits, this was true when gas prices were low and this is true now when gas prices are high. The only thing that has changed since the time gas prices were low is supply and demand, and so this is why only supply and demand are listed as factors in the rise of gas prices.
Another reason that many people ignore the profits of oil companies when listing the rise of gas prices is that current economics assumes that in all markets, in all circumstances, companies want to maximize profits and consumers want to pay as little as possible. In other words, even when gas prices were low, oil companies wanted to charge much more but were limited by the economic (supply and demand) circumsances involved, and consumers wanted to pay even less than the already low gas price. This was true then, this is true now. Economics works within this framework of each side having opposing interests and the equilibrium point somewhere in the middle.
Altruistic economics, the view that sees some as greedy and others as generous, died along with the belief that communism was an ‘alternative economic model’.
Oso,
It’s too bad you fail to understand the importance that organizations make a profit in our “capitalistic” system. It is “inherent” in that type of system. If not, then we are just left with communism. Is that what you are advocating?
I recommend that you read Basic Economics by Thomas Sowell. It’s a great book and helps you think about ramifications such as limiting profits on organizations.
BTW, using Easter island is a poor example. After all, businesses in our system do not operate in a environment of no restrictions. As a matter of fact, our businesses are pretty heavily regulated.
I came here via Oso’s del.icio.us feed. While I try to steer clear of these types of discussions, I can’t help but feel obligated to make a couple of corrections:
Israel said:
Every company has a right to make money? Since I’m Iraqi, I’m probably not as familiar with the U.S. consitution as you are, but I don’t remember reading about the right of companies to make money anywhere in there - especially when that right trumps the freedoms of actual, real people by making money via the spoils of war.
HP said:
I don’t know which liberals you’re talking about, though I’m sure they’re wonderful people. I don’t fall into the left-right / liberal-conservative mouse trap, but most “liberals” I know care more about alternative energy sources and environmental conservation (you know, for your kids and all) than about cheap fuel.
Observer said:
Spot on! It’s not brain surgery - though if it was, we’d have died long ago. I find it truly amazing that you refer to “denying oil companies of their property”. Have we truly fallen so far to have to debate whether the oil beneath the Earth, so important to the economic lifeblood of the United States (one country, let me remind you, in the entire world) is more important than the actual Earth which sustains us and it? Environmentalists didn’t start up stories about global warming, the greenhouse effect and polar ice caps just to get attention. These are very real problems with very obvious solutions, but yet your lifestyle, oil addiction and unwillingness leave you unable concede that maybe - just maybe - the problem is staring back at you in the mirror?
There are, simply put, two directions for the United States to take at this point - bite the bullet, cease the kowtowing to the Oil companies (or strong-arm into evolving into something other than oil companies), and focus on changing American’s (your!) habits to ease the transition from an oil-junkie nation to a nation that’s inline with sustainable energy and responsible consumption. Or, you can keep throwing your wallets at Exxon (or CITGO - Chavez is appreciating your money just as much, I’m sure), until the U.S. crumbles under the weight of its own grotesque thirst for shitty SUVs. Either way, it’s all good.
Israel said:
So, the only two choices are between unfetterred, runwaway uber-capitalism or Stalinist communism? Well that’s a shitty choice you’re offering us, Israel. Are you sure there’s nothing in between?
I’m not sure which economics school you studied at, but it would seem that instead of endowing you with the critical thinking required to make informed decisions about the ramifications of each of the various aspects of American-style capitalism, it instead taught you to apply a “Hecho en la URSS” stamp to everything that questions the panglossian oil corporate-run future that awaits us.
If I were you, I’d ask for my money back.
Runaway capitalism doesn’t work any better than communism does. When we allow these entities - in this case, big oil - to expand without restriction, they inevitably roll over the destitute in their sleep:
Whoa… just re-reading my last post. A little too combative - I’m cranky. Sorry.
Oso-
Quick reply. You say:
Why would the govt need to tax to fund a replanting program? Think of the demand side. As the value of the trees went up, businesses would have all the more incentive to replant. No one is to blame, it is just how the market works (and libertarians don’t have to forcibly change anyone’s habits).
-Peter
P.S. Your argument sounds a bit like Jared Diamond’s in Collapse? What he doesn’t bring up in his chapter on Easter Island is property rights and how this would have alligned incentives.
Steven Mansour,
Thanks for the reply. Although, so we can keep this discussion focused, please answer me a few of questions,
1. Do you disagree with anything Charles Krauthammer said above?
2. Do you want the gas prices to be lower than they currently are?
3. If yes to #2, than how do you propose to accomplish what you said above, specifically, “most “liberals” I know care more about alternative energy sources and environmental conservation (you know, for your kids and all) than about cheap fuel.” ?
Looking forward to your reply.
1. Of course demand is up and supply is down, no one is saying otherwise. It’s a very complex series of factors to look at, but we can’t have this conversation and not talk about the fact that despite all the chaos surrounding the industry and the resource of oil itself, oil company profits are still climbing to absurd levels while the consumer takes the brunt of it. Historically, whenever trading a certain commodity turned into a risky prospect, the private enterprises that profiteered mainly from it began to struggle, work hard, and invest in infrastructure to keep their business alive. This is not happening in the oil industry - can you tell me why this is the case? Indeed, legislators are actually trying to restrict other, sovereign nations from drilling on their own property.
2. No, not at all… neither on a personal nor on a global level. In Canada we pay quite a bit more for gas than you do as well - which is why we’re the largest market for sub-compact cars on the continent. If cataclysmic change is what’s needed to ween the west of of oil’s teat, then by all means, keep jacking up the prices. Ideally, I’d prefer it that those in charge of the next generation of primary natural resources wouldn’t be a handful of oil companies and their murderous Saudi Arabian sheik pals. Hopefully, the rising price of gas will help collapse this artificially inflated bubble so that we can start over and do things right.
3. Well, I said “no” to number 2, so I guess number 3 doesn’t apply to me.
s.
Thanks Steven,
Based on your initial response, it did seem to me like you would respond in the negative - just as you did above - to lower gas prices. In other words, it is a fact that you can’t have higher conservation and lower gas prices at the same time; you have to choose one or the other. This is specifically why I said that liberals, atleast those that tend to grandstand on this issue, want two contradictory things: they want lower gas prices and they want higher conservation. The smart ones know they can’t get both, but instead of leveling with the american voter, they tend to confuse the issue by talking about ‘greedy oil companies’ and so forth instead of addressing what they can’t talk about, the real economics of the situation. Why? Because the minute we start talking about the economics of the situation, their contradictory goals come to light. They are either forced to pursue a lower price of gas, which thereby reduces conservation, or they are then forced to defend the high price of gas in order to continue encouraging conservation, but then they get the wrath of the voters at the next election.
So in conclusion, I just want to reinforce my statement above: it is true that you can’t have both, higher conservation and low gas prices. My only problem with liberals is that - like John Kerry during the 2004 election - they want to be on both sides of opposing issues. I wish they would just pick one side and stick with it.
Now, as far as whether you agree or disagree with Krauthammer’s article above, you state,
but we can’t have this conversation and not talk about the fact that despite all the chaos surrounding the industry and the resource of oil itself, oil company profits are still climbing to absurd levels while the consumer takes the brunt of it.
Actually, if you take into account inflation, the significant rise in oil exploration expense, and the amount of that profit that oil company CEO’s spend on themselves, you will get a very different picture than the one promoted by politicians of ‘greedy oil companies’, but for the sake of argument, let’s just leave that issue aside for the moment and grant that oil companies are making ‘record profits’. Are ‘record profits’ really an abnormal situation given the supply and demand issues mentioned above by Krauthammer, points that you implied you generally agree with? In other words, is it really unusual for a company that holds a valuable resource to make more money on that resource when that resource becomes scarcer? The scarcer something becomes, the higher the price for it will be, and therefore those that have that scarce resource can charge more and (sometimes) get higher profits, this is true in all markets. Or to say it another way, what allows oil companies to make ‘record profits’ now is the supply and demand issues, not their greed. Here’s a news flash, oil companies have always been greedy, and it is only the supply and demand factors that allow them to make more profits now. So if you want to fix that, you fix the problem at its source, you fix the supply and demand problem.
…and when it comes to addressing the supply and demand problem, you write,
Historically, whenever trading a certain commodity turned into a risky prospect, the private enterprises that profiteered mainly from it began to struggle, work hard, and invest in infrastructure to keep their business alive. This is not happening in the oil industry - can you tell me why this is the case?
Yes, Krauthammer mentioned many of the reasons above, but in short, the problem is because environmentalists have made it so darn expensive and difficult to do so. Can we drill for oil in the arctic or Outer Continental Shelf? No way, the environmentalist won’t allow it. What about Florida? Nope. What about Mexico? Nope. Nope, Nope. Starting a new oil drill exploration is more difficult than building a new home in San Francisco, and trust me, that is DIFFICULT. Or what about the regulations? We need clean air gas, higher levels of blended ethanol, various special blend of gas tailored to individual cities depending on their smog, etc. etc. etc…
All of this without even mentioning what damage Katrina and Rita have caused, and the money needed to fix that.
I commend you for being honest and forthrightly stating that you don’t want lower gas prices. You have seen the trade-offs involved - it is either lower gas prices, or higher environmental (and in your case, foreign policy) standards, but not both - and have sided with environmental standards and regulations. That’s fine, I respect that. I happen to disagree with you, I happen to think that a lower gas price, and along with that, higher economic growth and prosperity for all, is much more important than the greatly limited environmental benefits a higher gas price will cause. But even though I disagree with you, I respect the fact that you have picked a side and stuck with it. I just wish more politicians were as honest.
I find it truly amazing that you refer to “denying oil companies of their property”. Have we truly fallen so far to have to debate whether the oil beneath the Earth, so important to the economic lifeblood of the United States (one country, let me remind you, in the entire world) is more important than the actual Earth which sustains us and it?
-Steven Mansour
To be clear I wasn’t referring to oil when I wrote that, I was making reference to their earnings (money/profits) form their labor. Just like anyone, they too have a right to profit (earn a living) from their work; it’s guaranteed in the Constitution.
And as for the dramatics, no the oil beneath the earth isn’t more important than the actual earth.
Steve,
You’ve employed a typical liberal tactic by being dishonest. Let’s face it, no one is going to deny the fact that we need regulations. As a matter of fact, it is needed to try to make sure everyone is playing by the same set of rules in our capitalistic system. However, to suggest that I advocate that we have unfettered capitalism is absurd. Secondly, insulting someone’s intelligence is not going to get anyone anywhere. So I recommend that before you post late night liberal rantings such as the one you have above, you save it and reread it again the next day. I think you’ll find it sounds like your a radical. Lastly, our debates here is a question of how much to regulate things such as profits. As HP has stated above, oil companies make very little “percentage” wise. The only reason they make so much is because of “economies of scale”. Naturally, with the amount of oil we use in this country, those pennies start to add up very quickly.
Hi HP,
It seems we agree in principal about the idea that conservation and low gas prices are inversely proportional - though not to the point, I think, that you seem to believe that they’re mutually exclusive.
You understand that their are more factors at play here than environmental concerns about drilling in wildlife refuges and such - these restrictions are nothing new, and are not enough in and of themselves to account for the recent jump in gas prices. So even though we agree on most of the statement you made by quoting Krauthammer, I still feel that the brunt of the responsibility for the current surge in prices lies with the way that the oil companies are set up. Traditionally, oil companies have help no punches in seeking to pad their bottom line, including displacing peoples, unrestrained exploitation of natural environments, and destruction of animal habitats - if that’s not runaway capitalism, then I don’t know what is. There’s no conspiracy here - oil companies are out to make money (though I disagree about it being their “right” - your freedom ends where mine begins, and so forth), and the current situation helps brings to light the flaws in the way the oil industry is set up. The global economy - including oil and energy -is moving away from an [American] oligarchy to a “Small piece loosely joined”-type system. Big oil can adapt (like, say, Apple or Toyota do in their respective industries) or it can fall under the weight of its own inability to cope with a changing world (such as GM is suffering).
As for downplaying the amount of money that oil CEOs spend on themselves, I have to point out that you’re mistaken. What about Exxon’s CEO and his stunning $400 million pay and retirement package? That seems somewhat out of line with even Wall Street standards…
Asides from that, well I don’t think that we think differently on the rest of the issues you mentioned. Supply is down, and demand is up. Of the nine largest known oil reserves left in the world (Saudi Arabia, Canada, Iran, Iraq, UAE, Venezuela, Russia, Lybia, Nigeria), only three are really “allied” with the United States (Saudi Arabia, Canada and UAE) - two of which are not very reliable in the long term because they’re spending more and more time trying to suppress nacent revolutionary movements within their borders (not Canada, if you had to ask). China and India jumping into the barrel now too, and unless they develop some new alternative energy source overnight, well, there won’t be enough to go around for everyone. The world market understands this, ergo prices are high.
Thanks for your comments about sticking to your ideals - yeah, too many self-proclaimed “liberals” I know will talk all day about this stuff, then turn around and do exactly the opposite. I guess the difference is that I get upset about it, and you must be laughing about it.
s.
Hey Steven,
Thanks for your reply. First off, some points of agreement. I agree that not all the recent spike in gas prices can be attributed to environmental restrictions. However, while not all of it can, a significant amount certainly can, specifically the more constant rise in gas prices over time. If environmental restrictions were laxed, or if for example, other areas like the Arctic National Wildlife Refuge in Alaska or the Outer Continental Shelf were opened for oil exploration, I have no doubt that it would result (given time) in a large drop in gas prices, certainly well below current gas prices.
I also feel that you are being especially harsh on oil companies. Sure, there have been instances of profiteering, like the Exxon example you gave, but that is really a small piece in the grand scale of things. Remember, Exxon and American based oil companies cannot set the price of oil, in a market where oil can be be purchased from the middle east, latin america, russia, and elsewhere, it is simply not possible for oil companies to have much power in what prices get charged for gas. The prices, like most things in the free market, are set by supply and demand.
You write,
Traditionally, oil companies have help no punches in seeking to pad their bottom line, including displacing peoples, unrestrained exploitation of natural environments, and destruction of animal habitats…
What makes oil companies different from any other company? All companies, whether oil companies or not, have a common objective of maximizing profits, in ‘padding their bottom line’. Much of what you criticize oil companies of doing can also be said of all companies in general, and therefore your problem is not with oil companies specifically, but with capitalism generally (a topic for another day).
Your critique that oil companies engage in, “unrestrained exploitation of natural environments, and destruction of animal habitats” is also not a fair charge either, after all, these are oil companies we are talking about, not insurance salesmen. Their goal, indeed their sole objective, is to supply the most oil possible. And to some environmentalists, anything oil companies do in trying to supply oil is considered an “unrestrained exploitation of natural environments, and destruction of animal habitats”. Do you believe that building the Alaska pipeline was an example of “unrestrained exploitation of natural environments, and destruction of animal habitats”? I certainly don’t think so. The Alaska pipeline has shown the world that an environmentally friendly oil exploration can be built without the “destruction of animal habitats”, and in doing so, supplies nearly one million barrels of oil a day. Yet as environmentally friendly as the Alaska pipeline has been (and that was nearly 30 years ago, todays technology is vastly more superior and environmentally friendly), many environmentalist protested and continue to be against it.
In short, there is very little a company whose objective is to supply the world a natural resource it so desperately needs can do to satisfy the objections of all environmentalists.
Thanks again for the comments, I have learned alot and enjoyed our discussions, as I mentioned above, while we may disagree, I still respect your consistency and principled stand on this matter.
I like chicken
You made a lot of excuses.The real truth is the oil companys can do what they want and they do!!!!!!!!!!The profits are at all time highs they have a licence to steal.Add the fact Bush is invested in oil like a lot of his goverment counterparts and he can not get in again so he dont care!!!!!!!!He corruppted American politics like no other in history a warmonger taboo.The real facts are and have been for a long time total corruption at the expence of the american people.The only thing that would change it would be everyone cutting back and boycotting stations everyweek but it would take a lot of people sticking together which you dont see too often.
I have heard all the Bush has caused this that I want to hear. I have heard both sides, and I reason to myself which one makes most sense. Supply and demand makes sense. The ability to drill for oil or make new refineries ( something liberals want to stop) has to make a difference in price. The last refinery that was built in the US was in 1976. Now let me see, Do we have more cars on the road than in 1976? Yeah. Do we need to process more oil than in 1976 to keep all our cars going? Yeah. Would US companies drilling for oil on US property help to stabilize our oil needs? Yeah. Would less restrictions on the types of gasoline sold (different standards for gas in Chicago than in LA) make a price difference? Yes. Do I care about record oil profits? No. My house is worth several thousand more than it was worth in 1999, so it is at a record profit, but the core product is still the same. Same thing with Oil profits. What changed? The time value of money! Liberals always want to gripe about something yet they NEVER have a way to actually resolve an issue. They want to keep it on the table so that can point at it and say it is a Republicans fault. You have to dig a little deeper than that to find out that no refineries and shaky supply from OPEC make for higher prices. Oh! Did I mention OPEC. I suppose they have NOTHING to do with the cost of OIL? They meet every so often to cut production (which makes prices SPIKE) just to make more profit. Why don’t Liberals point that out. Yes OPEC makes profit liberals, perhaps they should berail them some. I guess that would shift to much argument away from it is Bush’s fault! With liberals it is all about keeping people unaware of what is really the CAUSE of the problem than to have them get educated to understand the issues and to weigh both sides of an issue. Just keep them dumb and let the liberal media keep up the good work of “BUSH CASED IT TO MAKE MONEY FOR HIS OIL BUDDIES” just for the sake of getting more votes from an uninformed voter block. Oh! By the way, God cared FAR more about man than he ever did the EARTH. The bible planly says that the Earth will be destroyed, yet he sent his son to die for us so we can spend eternity with him in HEAVEN (not Earth).
Gasoline supplies in the U.S. are at a 14 year high. So supply is not the problem right now. The problem are speculators on wall street and other markets that driving the prices of crude up. Supply and Demand will always win out in economics. Gasoline prices and Crude prices will drop eventually drop to record lows again and level off according to supply and demand and not speculation in the worlds markets.
Came across your post while doing research. Thanks for your information and keep up the good work.
The reason gas prices are much higher is because of the continuing fall of the U.S. Dollar. Oil is priced in dollars (at least for now) and as the value of the dollar falls, the price in many things, not just oil, rises. Basic economics, although maybe a bit more sophisticated than your “supply and demand” equation. That is true as well, but there is actually plenty of supply in the face of rising demand. That will change, and soon, but right now the collapse of the U.S. Dollar is the real story here. Oh, and when oil is priced in euros, that won’t make it cheaper for Americans to buy gas. You can expect NO gas available anywhere within 24 months, and food riots within 30 months.
Good luck, morons
If you think this administration has nothing to do with the price of oil, I have some ocean front property in Arizona to sell you. There has ALWAYS been s demand. China, nor any other country doubled in size. First, it was Katrina, second it was Iraq, third it was demand. What is the flavor of the week? There are many factors that affect the price of oil, corruption has to be on that list as well.
If you think this administration has nothing to do with the price of oil, I have some ocean front property in Arizona to sell you. There has ALWAYS been a demand. China, nor any other country doubled in size. First, it was Katrina, second it was Iraq, third it was demand. What is the flavor of the week? There are many factors that affect the price of oil, corruption has to be on that list as well.