#1. The primary indicator for inflation is the Consumer Price Index for Urban Consumers (CPI-U), and it most definitely includes food and energy. It can be criticized for its chain-weighting system, for its basis of weighting housing costs, for its relative weighting on various components, for excluding certain taxes, and other things. BUT CPI-U INCLUDES FOOD AND ENERGY. The CPI-U is not the index that Ben Bernanke looks at when he sets Federal Reserve monetary policy. He uses CPI-U ex food and energy and the Producer Price Index for that purpose.
#2. The problem isn’t so much that oil prices or motor gasoline prices are going up. The problem is that the US$ is being, and has been, trashed. Helicopter Ben Bernanke and Lil Timmy Geitner are intentionally trashing the dollar, and prices of ALL commodities are going up. You may not like them, but you can’t blame the Saudis or the Vens for hiking oil prices as long as the priced in US$. BTW, this didn’t start with Obama. GWB appointed Helicopter Ben and the TARP bailouts began in his Administration.
#3. As India, China, and SE Asia have become more capitalist, they have become more prosperous. As they prosper, their economies demand, and can pay for, more imported crude oil, particularly from the Middle East. This increases demand, but does not significantly increase supply. (The Indians, Chinese, and Thais have made some discoveries of oil and natural gas, but not nearly enough to satisfy their growing appetites for hydrocarbons.) An elementary understanding of economics informs us that if demand curve shifts upward and the supply curve stays about the same, the price goes up.
Anyone who says that they the price of oil or motor gasoline “should be” different from the market price is expressing their ignorance of economics, the free market system, and the oil industry. Even the CEO of ExxonMobil, under oath, said he didn’t know what the price should be; he only knew what it was.
No two ways about it: the watermelon environmentalists have worked tirelessly and exploited every opportunity to shut down the US oil exploration and production business, and this has had some effect on retail prices. They’re even working to shut down onshore natural gas E&P. This strongly suggests that climate change is not their real agenda; rather, the greenies just use the AGW hysteria to advance a Marxist agenda.
WRT refining, no sane investor would put a nickel in a new US refinery, especially on the West Coast. Californians voted to continue implementation of AB32, which certainly is going to reduce West Coast refining capacity. The majority of CA voters apparently want higher gasoline prices, and Sacramento is hellbent on delivering them.
Most recent investment in existing refineries has been for product environmental quality, not expansion. I cannot imagine a scenario that would cause private investment in a grassroots US refinery of any significant size, absent some completely unforeseeable, revolutionary technology development.
WRT “weenie Republican governors”, the states have no ownership rights beyond three nautical miles from shore. All the ultradeep water drilling is more than three miles out. You really shouldn’t blame them for that, but to the extent that deep water drilling is banned within the three miles, you have a point. Also, like him or not, Texas Gov Rick Perry is challenging the EPA pretty aggresively on its global warming dictates.