Posted on 04/11/2005 5:58:56 PM PDT by OESY
Gas prices are at record highs again. Many think oil companies are to blame. In fact, a May 2004 poll showed that 77 percent of Californians believed this to be true. However, this just shows the media have failed to properly inform people about who's causing high gas prices.
One thing is certain: oil companies are not to blame for high gas prices. These companies are responsible for producing the gasoline we need. In California, where gas prices are among the nation's highest, the oil industry has been repeatedly investigated to find evidence of "price manipulation" and none has ever been found.
Although there are other causes of high gas prices, such as high gasoline taxes, the primary cause is environmental regulation. For example, environmental regulation has significantly restricted drilling for oil in Alaska and on the continental shelf. More drilling will increase the gasoline supply (up to 10 percent from greater Alaskan drilling alone) and thus lower prices.
Further, there are currently 18 different gasoline formulations in use across the United States, making it much more costly to produce and distribute gasoline. These blends aren't needed due to requirements of automobile engines, nor are they required by oil companies. The blends, including different ones used at different times of the year and in different geographic areas, are forced on Americans by environmental regulations. Among other things, the regulations force refiners to incur greater costs in switching from the production of one blend to another. They also force refiners to produce a more costly "summer blend," which is partially responsible for the current rise in price.
The situation is worst in California, where environmental regulations are strictest. For example, California was one of only three states to require the removal of the octane booster MTBE in January 2004. This reduced the gasoline supply by almost 10 percent.
Using corn-based ethanol as a replacement doesn't help much since California's strict emissions regulations require the removal of almost the equivalent in other gasoline components to accommodate ethanol. Ethanol alos must be shipped from the Midwest in trucks since it cannot be produced in refineries and doesn't travel well through pipelines. As a result, gasoline prices were predicted to increase 35 to 40 cents. Given that the average price in 2004 was almost 30 cents higher than in 2003, these predictions weren't too far off.
Additionally, the California government forced gasoline stations to install double-walled underground tanks, which forced many stations to rip perfectly good single-walled tanks out of the ground. It also imposes the harshest emissions requirements in the country, which makes necessary the use of a more costly, special blend of gasoline not produced anywhere but in California. It's no accident that gas in California is generally 30 to 40 cents above the national average.
From drilling to refining to distribution, environmentalists have done everything they can to raise the price of gasoline.
The above raises a question: Why do environmental regulations exist?
One might think they exist to protect consumers, but the evidence doesn't show this. For instance, MTBE was banned based on claims that it causes cancer. However, it has never been shown to be a danger to humans in the amounts to which they might be exposed. Claims that it "causes cancer" are based on experiments in which mice were fed doses almost 70,000 times larger than to what humans might be exposed. No scientist worthy of the title would make claims based on that kind of extrapolation.
Environmentalists are not actually concerned with the well-being of man. Their real motive is to sacrifice man to nature by stopping industrial activity. This is what they explicitly state. For instance, Adam Kolton of the Alaska Wilderness League states, "Drilling the wildest place in America is objectionable no matter how it's packaged." David M. Graber, a research biologist with the National Park Service, states, "We are not interested in the utility of a particular species, or free-flowing river, or ecosystem, to mankind. They have ... more value – to me – than another human body, or a billion of them."
Oil companies deserve to be praised for producing an abundance of gasoline despite the massive burden of environmental regulations foisted upon them. To increase the gasoline supply further, we need to start by eliminating these regulations. If the government makes the choice to protect people's freedom, gasoline below a dollar-per-gallon won't be just a relic of the past.
Yes siree! Count on anyone dealing with the United States to be fair and honest when selling us oil!
It's kinda like Bill Clinton's confessions. "I did it just because I could." (And ...just maybe, there's a heckuva lot of demand for diesel.)
California was one of only three states to require the removal of the octane booster MTBE in January 2004. This reduced the gasoline supply by almost 10 percent.
That's a bogus conclusion because the reduction in mileage from adding MTBE equals or exceeds that of the volume made up by adding it...
...ping.
"The reason, the ONLY reason, for the gasoline prices today is the bleeping regulatory EPA and the bleeping evironazis.
Bleep them all, bleep it!"
Uh....no. It's a little more complicated than that.
MTBE was banned based on claims that it causes cancer.
And because it's water soluble, was hell on older car fuel systems, has a miniscule (~15-35 ppb) odor threshold in water. It's just all around crap, and it was foisted upon the public with great assistance from refiners...
Someone will correct me if I am wrong, but I believe that most gasoline taxes are not based on a percentage of the price per gallon but on a certain number of cents per gallon. So they don't increase when the price of a gallon of gas increases.
California's strict emissions regulations require the removal of almost the equivalent in other gasoline components to accommodate ethanol.
Well duh! If you're adding X% of something to a total, you've got to remove or displace X% of other components...
ayn rand had the left figured out in the 1960s.
look at her book "the new left: the anti-technological revolution". must read.
environmental cost and all makes gas way too high no arguement there, but what about frickin iraq shouldn't we be swimming in oil by now?
now before everyone bites my head off i voted for bush and support him on most but fill'n up my truck is cost'n me big time now! bush was an oilman wasn't he?, what's he waitin for? his national energy policy is doin nothin and i hold him accountable for these prices. say what you will.
Let me be the first to tell you...........
EXCELLENT POST!
Could have something to do with economies of scale in retailing and distribution. Or because the market will bear it.
I'm not so sure, I heat my home with oil. In a little less then a month my price for heating oil went from $1.89 to $2.04 per gal. The product that I buy is dyed #2 Diesel fuel, non taxable for off road use only. The I-94 price for Diesel is $2.279/gal which includes a Wisconsin $0.315/gal excise tax and a Fed $0.244/gal bite. So the same gallon of motor fuel w/o the road tax should cost no more than say $1.72. My question, who is getting the other $0.32/gal which amounts to about $80.00 a fill every month.
By the way, Wisconsin currently has the highest fuel excise tax in the nation. Thought you might like to know.
Regards,
GtG
You do understand, oh simple one, that the price of oil has nothing to do with refining capacity?
You people are so transparent.
The taxes are fixed, regardless of the price of gasoline. They don't go up when the price of gasoline goes up.
I'm curious whether you're ignorant of this fact, or just a stupid troll.
Why would an administration composed of oilmen possibly want to lower gas prices and oil company profits?
In California there is a cents-per-gallon gas tax (~$0.18 if I remember coorrectly) AND sales tax which can be as high as 8.5%. The losers are actually trying to propose an additional $0.10 tax while hoping the rubes don't figure out they already got nearly all of it with the price increases of the last ~2 years...
f.y.i.
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