Posted on 08/22/2005 10:23:33 AM PDT by BulletBobCo
Last week, a disgruntled consumer expressed frustration to a stranger at a gas station on Silas Deane Highway in Wethersfield: "Would you believe I paid 10 cents a gallon less only yesterday? This is outrageous. Is this why we sent our soldiers to Iraq?"
As gas prices have reached $2.60 per gallon and beyond, there is anger in the land. There is also confusion. It's as if the overthrow of Saddam Hussein was supposed to produce cheap oil for the world's biggest user of fossil fuels. It's also as if Americans are entitled to cheap oil.
Turmoil in the Middle East is not the reason for high oil prices. If there is blame, ascribe it to the rise of India, China and other former Third World nations as economic powerhouses. Their appetite for petroleum to fuel their industrial engines is huge.
Inadequate refinery capacity is also a cause for the price crunch. But, foremost, we should look at ourselves in searching for who is to blame. Americans' lifestyles tell the story of a nation that is by far the biggest consumer of oil. We use at least one-quarter of the oil produced in the world, most of it imported.
When supplies are short, producers naturally have the upper hand. Oil-producing countries and oil companies are enjoying windfalls, while consumers have been asked to grin and bear it. So far, users have paid more and more, although there's been grumbling along the way.
Experts are predicting $3 per gallon prices by December. That's still less than consumers pay in most other developed countries, goes one argument. True, but Americans are far more dependent on oil products than people in industrial Europe and Asia.
Fuel-conserving vehicles are omnipresent in much of the world, with the notable exception of the U.S. If Chinese and Indian families required as much gas and oil to run their households and businesses as we do, the world would not have enough energy to meet the global demand.
One superficially comforting thought is that oil prices, high as they are, are still lower in constant dollars than they were in the early 1980s. Yes, but that threshold, which is about $3.30 per gallon, could easily be reached at the current rate of price ascent.
The wonder of it is that the galloping prices haven't led - yet - to skyrocketing inflation. Many producers of goods and services have absorbed the shocks without passing on much of it to consumers. But that cannot last. If the price push continues, inflation is likely to raise its ugly head.
We have it on no less an authority than President Bush, who said earlier this month that the massive energy bill he signed wouldn't bring down the cost of energy in the foreseeable future. He's right.
More ominously, gas lines due to supply shortages could return, as they already have in some parts of the world.
What can be done?
Our leaders should push their constituents much harder to conserve. The new energy bill pays lip service to conservation, possibly because being more aggressive would require sacrifice and invite a political backlash.
The bill contains incentives for developers of alternative fuels, but not nearly enough. Conspicuously absent from the legislation is language aimed at improved fuel efficiency from manufacturers of motor vehicles.
The centerpiece of the federal strategy is to extract more fossil fuels from the ground and oceans, even if that means environmental despoilment. Also, nuclear power is making a comeback, even though its development is very expensive.
It shouldn't take a seer to figure out that pumping our way out of the problem is no lasting solution. Americans should be prepared to pay higher prices until they show a better energy ethic. We remain unwilling to demand more from ourselves by way of conservation and more from our leaders by way of development of alternative fuels.
Preparing for a safe and prosperous future requires a massive national research and development effort now. The effort should rival American taxpayers' historic investment in space exploration.
I am not indifferent to price. I know that all prices are way too high.
While we're at it, how about adding a few (hundred) new refineries. There'd be a two-fold benefit: one, increased capacity that should lead to lower prices; two, a leap in manufacturing jobs.
Of course, the Democrats would say those are the wrong kind of manufacturing jobs.
Said last summer he filled his vehicle for $35 and now it costs $90........well, I say...BULL!!!!
sandbar, you make me want to buy stock in a tin foil company. Oil is a market commodity ... repeat after me ... supply, demand .. supply, demand ...
Nope. I thought the point was "no war for oil".
"And that'll push your car along exactly how?"
Easy. Either electric cars, recharged by nuke power plants, or hydrogen cars w/ the hydrogen manufactured by nuke generated power.
Power is pretty much power. Changing its form, storing it etc. is just a matter of engineering.
Solar power satellites
"Every company does it's markups as a percentage of revenue."
Not really.
Yep! If the DNC hadn't been obstructing the President's energy bill for the past 4 years, and Kerry/Kennedy weren't such Limousine Liberal hypocrites, the folks in New England could be turning off some of their inefficient fuel-oil power plants this winter and getting their fixed-price power from the Cape Wind Project:
I heard a comodities broker this morning on a Denver radio station say that China is not the one causing this. He said it not only uses less than one-tenth of the oil that what we do, it's use has fallen short of what was predicted.
He puts the blame on OPEC. Says they are deliberately cutting back on the supply of oil just to test how high the price can be driven without people complaining about it and without significantly hurting the economy.
Yep, I like the idea of wind power too!
We sure get enough of it out of DC. LOL
Recycle it of course. Aren't Greenies in favor of recycling?
>>just a matter of engineering.
And conversion of 70+ years of automotive infrastructure to a new power source. Service facilities and expertise, fueling stations, etc. And we'd need to increase central station power generation and related transmission and distribution enormously.
While it's do-able, it darn sure isn't happening overnight, or even in 5 or 10 years.
Just coming back from vacation in SB, I'd love to see the Channel Islands turned into a giant wind farm to power SoCal. The enviro-whackos would never allow it.
"Power is pretty much power. Changing its form, storing it etc. is just a matter of engineering."
And with "changing its form" goes a loss, or reduction of the total power.
Burning hydrocarbons, to make electricity for car batteries makes no sense.
One reason we use gasoline is that is is a very efficient, easily transported fuel.
>>>Between 1981 and 1989, the number of U.S. refineries fell from 324 to 204, representing a loss of 3 million bbl/d in operable capacity. Since then, the number has further dropped to 149.
Many of those refineries that closed after 1981 were inefficient plants that had previously been supported by price controls and allocations. Deregulation effectively removed the major prop from underneath many marginally profitable, often smaller, refineries.
While we haven't built a refinery in almost 30 years, we have expanded capaciry at existing refineries. In fact, capacity today with 149 refineries is higher than in 1976 when there were 276. The current 16.9 billion bbd capacity is higher than at any point in almost 25 years.
http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_21.pdf
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