Jesus... are you as tired of the bullshit as I am?
The last time gasoline soared to $4 per gallon, we were told it was because the price of oil was being driven so high. And when we questioned why the price of gasoline at the pump was soaring past $4, even though the more expensive oil wouldn't hit the pipeline for several months, we were told that the oil companies needed the money now, to buy the oil later.
And we were told that the reason the price was going so high was NOT because of the "Enron loophole," but the soaring demand.
At what point does the average American's "bullshit detector" go off?
As I write this, the price for a barrel of oil is right around $99 a barrel. That's down from the $114 high this time around. Coincidentally, that peak was hit the same day that President Obama ordered the DOJ to look into gas prices. Now, the average price of a gallon of gas is currently $3.95 a gallon, pretty much unchanged in the last couple of weeks, even though the barrel price has dropped more than 10%. Of course, the peak of $114 hit during this price bubble is about 24% less than the $150 peak it hit about 3 years ago. And the current price of a barrel of oil is 33% less than that.
Now, I don't mean to get all "math-y" on you, but if we're to believe that gas prices and oil prices are somehow related, then we should be asking a few questions because, proportionally, if we were to hit $150 a barrel this time, a gallon of gas would have to go to almost $6.
So, in the last two weeks, the price of a barrel of oil has dropped by 10%, but the price of a gallon of gasoline has not budged. They collected the money back BEFORE the $114/bbl oil was refined and placed in our gas tanks. That means the stuff we're putting in our tanks right now was paid for a long time ago.
Not only that, but the laws of supply and demand are getting killed here. Demand for gasoline is way off lately, as more and more people find themselves cutting back. Add to that the wildly successful Cash for Clunkers program, which took a million or so low mileage vehicles off the market, and the fact that Saudi Arabia and OPEC were covering any shortages caused by the various possible disruptions in the Middle East, and you have to wonder why the price of oil was rising in the first place.
This is the second time in six years that a major spike in oil prices has occurred, and neither time has there been ANY disruption in the supply of oil. None. In 1973, there was a shortage. In 1979, there was a shortage. After Katrina, there was a small disruption, but only for a week or two. In 2008 and 2010-2011, when oil and gasoline prices spiked, there was no disruption in supply whatsoever.
So, what gives?
Why is the average price of gasoline still $3.92 per gallon? The last time the price of a barrel of oil closed at $99, the price at the pump was below $3. In fact, on the way up this time, when a barrel of oil was $99, the average pump price was $2.92 per gallon.
Ever since the price spiked in the wake of Hurricane Katrina, oil companies have recorded the highest profits ever. Not just record profits for big oil, mind you; record profits for corporations in the United States. And while the Democratic president has tried to kill our subsidies to them, the Republicans in Congress insist on keeping them alive.
That's right, folks. In addition to whatever you're paying for gasoline, you should also know an extra nickel per gallon is being paid to them out of your taxes. Nice, huh?
In other words, families are pinching pennies to fill the tank, truckers are being forced to give up routes and even their businesses because of the price of diesel, airlines are having to cut back routes and charge hefty fees for checked baggage to pay for fuel. The reason inflation seems to be out of control is at least partly because everything in the store has to be hauled by someone burning oil.
The ONLY industry NOT negatively affected by high oil prices is the oil industry.
Best case scenario, if we transformed all energy policy by next month, we would still be dependent on oil for at least the next 30-40 years to a very great extent. There are more than 100 million households, and tens of millions of businesses that depend on fossil fuel driven vehicles at the moment, and our system has suffered through 30 years of neocon neglect. We must encourage conservation and alternative fuels, for sure, but we have to be realistic. Though no one should expect gas to be dirt cheap, is it really too much to ask for the price of a gallon of gas to at least be reasonable? If we're going to pay $4-5 for a gallon of gas, shouldn't a portion of that amount go to developing alternative fuels, better mass transit and cleaner technologies? People in Europe and elsewhere have been paying upwards of $4 a gallon for "petrol" for years; they're probably laughing at us for whining about the prices right now. But they have been using a lot of that money do build out their transportation infrastructure and to make their society less dependent on oil. When our prices spike, all of the money goes into oil company pockets. If we have to nationalize oil to prevent these pirates from screwing us, then do it.
And please, wingnuts, stop with the whines about the "free market." There is no "free market" in oil. The "free market ended back in the late 1960s, and was confirmed over and done, when oil was embargoed in 1973.
Also, "dill, baby, drill" will NOT solve the current problem. Oil prices are global in nature, and the price is set by speculators based on global demand. Sure, in a perfect world, if 100% of the oil used here was produced here, our oil companies would only charge us $1 a gallon, right? But let's get real; if the price of a barrel of oil was $20 less here than "over there," the oil companies would sell the oil "over there," wouldn't they? I mean, there's patriotic, and then there's stupid. Right wingers think everyone's as stupid as them, though, so no one should be surprised by such naivete.
There is truly only one solution to our oil problems, and that is to use less. The amount you spend on gasoline isn't just based on the price per gallon; it's also about the number of gallons one has to use, as well. For example, if someone has a car that gets 40 miles per gallon and drives 12,000 miles per year, at $4 per gallon, their monthly gas cost is $100, while the pickup owner who gets 20 mpg pays $200 per month and the Hummer owner who gets 10 mpg is paying $400 per month.
If you want to pay less for gasoline, in other words, the key is to use less and/or drive more. Likewise, the key to getting us off imported oil is to use less, not drill more.
When Jimmy Carter was president, we passed quite a few very strong energy-saving initiatives, which were designed to reduce our consumption by 5% per year, and they were working until Reagan killed them in 1983. If we had continued saving 5% per year over our projected consumption from 1983 until now, we actually would not be importing oil right now.
Yeah, I said it -- we would not be importing oil right now.
And if we'd followed through with solar and wind power initiatives started under Jimmy Carter, we could have developed a significant infrastructure for these technologies by now, and we wouldn't be forced to play catch up with European and Asian powers to the extent we will have to. And for you right wingers who don't think we have to compete, sit down and shut up. We're America; of course we have to compete.
Here's something else to consider for those who think more drilling will solve the problems. Right now, oil companies hold leases on 69 million acres of land they're not currently drilling. They also control tens of thousands of oil rigs that are currently capped and producing nothing. Oil companies have been complaining for years of a lack of available drilling equipment, and they're still complaining about refinery capacity. We're actually refining a lot of oil overseas and shipping it here, because we don't have the capacity to refine all of it.
And to answer the obvious question, the right wing is lying their asses off when they claim environmental constraints have precluded the building of new refineries. First of all, given the number of regions of the country that are in dire need of jobs and economic stimulus, it defies common sense to even suggest that, since 1973, oil companies could find no community in the country willing to ease its environmental regulations enough to allow a refinery, and federal regulations are in no way insurmountable.
The real reason for a lack of new refineries is because oil companies make money on the front end and the back end, and they don't pay refiners enough to make their product.
And that's indicative of the problem. The oil companies want the money for themselves. When the barrel price goes up, it doesn't cost them money, it makes them money. They make deals with most oil-producing companies, and they get between one-third and one-half of that barrel price. So, when the price doubles, so does their cut, so their net cost for a barrel of oil doesn't even come close to doubling. That is why their profits spike when the barrel price spikes. They don't care about you, they don't care about the refiners, and they don't care about the country. They care about their bottom line, and nothing else, which would be fine in a free market, but not in the de facto monopoly that has emerged in the oil market.
And one other thing; the oil companies have another strategy along those lines. There is actually an underlying strategy behind their tendency to sell us far more imported oil than domestic. They want the rest of the world to run out, while conserving what's left here. The sooner they drain the Middle East and South America dry, the more valuable will be the oil they sit on. Congress can give them more offshore leases, but they still won't drill there, until theirs is nearly the last of the oil on the global market.
The status quo doesn't work, and hasn't worked for a generation; we need to change our thinking. I traveled the entire length of the United States a few years ago, and there are so many open spaces where solar and wind farms could be placed, to reduce our dependence on oil by a significant amount. Germany has been pushing solar power for several years now, and their program, which was supposed to produce enough solar power to provide 30% of the nation's power needs by 2030, is now looking like it will reach its goal 12 years early. The only thing preventing us from doing that is political will.
Can we afford to pay this much for gas? Can we afford to waste as much energy as we do? Can we afford to fall so far behind the rest of the world when it comes to the coming "green" economic boom?
The world is changing, and we cannot afford to not conserve the oil we have and replace as much as possible. Stop letting oil companies lead us around by the nose, folks; throw out the neocons, and let's get lower gas prices and conservation, and solar and wind power...
It can be done. President Obama has shown leadership on this. What are we doing to help him? You want to pay less to drive? So do I. But to do that, we have to stop using so much oil. Period.
