What Is The Real Reason Gas Prices Are So High?
Here is a guest post by Pamela Lyn at Pam’s Coffee Conversation.
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As Daniel J Weiss reported in his article “Up, Up and Away” the escalating oil prices in America can be attributed to a number of factors.
He writes:
Analysts suggest that there are five primary factors contributing to the year-long rise in crude oil prices:
- the low value of the dollar,
- increased demand from China and India,
- dwindling supplies,
- political instability in some oil producing nations, and
- an assumption from speculators that prices will continue to rise.”
I’d also add to the analyst’s list:
- the lack of a government energy policy that benefits the consumer not just the oil industry
- a failure on the part of the oil industry to reinvest its profits into the development of alternative energy
- corporate greed and collusion, and
- a failure to be honest with the American consumer
The truth that most politicians don’t want to tell you is this:
- the low value of the dollar is tied to the sub-prime mortgage and credit crisis as well as the US trade deficit.
- demand from China, India and other developing nations will continue to increase and there’s nothing that the US government can do about that
- It took millions of years to create the fossil fuel that it has taken the world a little over a hundred years to consume. There is a limited quantity left in the world and when it’s gone, it’s gone. So running the risk of destroying pristine wilderness or coastline for centuries will only buy consumers another decade or two of oil.
- the US should not ( and cannot ) intervene in the political affairs of every oil producing nation just because we need their oil and,
- in a generation whose mantra is “greed is good”, there will always be speculators.
In short, oil prices will continue to go up. As long as Americans are addicted to oil they’ll do anything to get their fix and the Oil pushers will bank the profits while they can. Have you heard the phrase “Get It While the Getting Is Good”.
It’s Time for An Intervention
There is an answer to the problem of high oil prices. It’s called adjusting our lifestyles as we switch to alternative energy solutions. Think of it as a form of detox and rehab that involves a serious commitment and a lot of discomfort. But that’s not the answer that most people want to hear. And, it’s not an answer that will get most politicians re-elected.
Republicans like Senator Mitch McConnell (R-KY) want to convince you that the US oil crisis and consumers’ discomfort will be eased by allowing drilling in the Artic Natural Wildlife Refuge (ANWR) or along the California and Florida coastlines (S.2958). In fact, Senator Lisa Murkowski (R-AL) argued before Congress today that drilling in ANWR is reasonable, environmentally feasible, and will correct the “supply and demand” imbalance that is driving up oil prices. Iaf you buy that argument then you probably still believe that the Iraq oil revenues are paying for the US invasion of Iraq. You are in denial.
At a recent campaign rally Sen. McCain expressed support for drilling for oil domestically, as long as states allow it, and also pushed development of solar, wind, tidal, and nuclear power.
On the other side of the aisle, the Democrats (and even Republican presidential candidate, John McCain) are suggesting that the government stop adding to the US strategic petroleum reserve. Senator Hillary Clinton has proposed a “gas tax holiday”. These two are short term solutions that are beginning to remind me of giving morphine to a dying patient to ease the pain.
Don’t get me wrong, I am as financially affected by rising gasoline prices as the vast majority of American consumers. Any idea that will help give me a break at pump, the supermarket, anything that is shipped and on utilities will be welcome but haven’t we learned from the credit crisis that the party now and pay later concept just doesn’t work.
American consumers need an intervention. They need politicians, journalists, scientists and environmentalist who are willing to speak the truth. Americans need to be told that the pain that they are experiencing today is not going to get easier just by putting it off for a few years.
To borrow a phrase from Al Gore this is just one more “inconvenient truth”.
cross posted at Get The Facts and Get Involved
Comments
Comment from Catherine Morgan
Time: May 13, 2008, 7:31 pm
Hi Marie. I wish I could say I was surprised. I guess you should feel lucky it didn’t go up to $4.99…although it won’t be too long till that happens too.
Comment from Pamela Lyn
Time: May 13, 2008, 7:40 pm
Hopefully, we’ll get a little break soon so everyone can catch their breath. But I have this funny feeling that right after the November election we may see that $4.99 mark. Big Oil will try to milk as much out of the time between the election and the inauguration as they can.
Comment from Catherine Morgan
Time: May 13, 2008, 7:49 pm
Hi Pamela. I have a feeling you are right about $4.99…I guess we can only hope it doesn’t go any higher. We are at the mercy of Big Oil.
Comment from Melinda Calvert
Time: May 13, 2008, 8:29 pm
We are only at their mercy if we continue to fall into line (ie: the gas line for one). As commented in this article, these guys are lying through their teeth and scaring the daylights out of a gullible population. If we cut down on our use of oil (drive slower, travel only when necessary, use mass transit), sooner or later the Big Oil Geeks will get the message.
Comment from patrick
Time: May 13, 2008, 8:44 pm
Even with gas near the Four Dollar mark here in southern California I see people everyday driving like their car is running on water and not gas because the way they drive they are flushing money down the toilet!….I think most people don’t have a clue as to just how much gas is waasted by poor driving habits. I work at auto auctions and I see the big V8 motored vehicles still selling like they were last year and the years before. It seems they don’t give a damn about the high cost of gas. Years ago there was a young man named Tom Ogle who invented something that replaces the carburator on cars and trucks and it got 200 miles per gallon! and he was murdered because he refused to sell his patient to the oil companies who were going to put it on the shelf. I believe our Government had a hand in Tom’s death because 1 out of every 20 jobs is oil related some how and with everybody getting 200mpg it would have a adverse affect on our economy and depress it severly.
Comment from George sait it
Time: May 13, 2008, 8:56 pm
First…there is no shortage of oil. There is also not enough demand in the world for us to run out of oil. They have you believing that it took millions of years to produce oil when that is just not the case. Do some research! Don’t believe everything you hear or read on the surface. But if they can keep you believing in the theory of evolution then you will continue to buy the big lie perpetrated on the planet that we will run out of oil.
Secondly…why do we think we are at their mercy…cut your consumption. Carpool, get a smaller car, ride a scooter you can do something! Lowered demand increased supply causes prices to fall we were taught. So if you can be convinenced that there is excess pressure on demand…then the inflated price makes sense to you! Then we will agree to allow drilling in the artic and every where else to bring down prices. But ask ourselves this. Why are the oil companies forcast for oil output flat for the next 10 years? Sounds like created excess demand pressure.
Wake up people.
Comment from Sal
Time: May 13, 2008, 10:20 pm
George you are right, there is no shortage - only the one our government is causing by stockpiling all they can in the reserve and not allowing it on the open market. Since we purchase most of our oil from Canada and Venezuela, which is shipped already refined, we are being sold another bill of goods by the oil companies that they need to continue to received the billions the government gives them for research and development as well as build new refineries. The wonderful state representatives we send to Washington should all be voted out of office and not replaced. It’s about time we sent them all the message we are tired of their lying to the American public - the ones who pay their salaries and send them to Washington to represent and work for them; unfortunately these lovely representatives end up looking out only for themselves.
Another way to cut consumption of gasoline is for everyone who doesn’t have to work to stay home and not drive at all at least one day each weekend (like the good old days when stores were closed on Sundays). This gasoline crisis doesn’t just effect what you spend on your car, it also effects food, clothing, electricity prices. It’s about time we all stood up and said “Enough is Enough!
Comment from Christina Waldman
Time: May 13, 2008, 10:39 pm
I would like the person who posted about Tom Ogle who invented something that replaced the carburetor and got 200 mpg that he says was murdered to tell me how to get more information about this man. I don’t disbelieve this person, it’s just the first time I’ve heard about it and it’s so horrible if true. I would like to know more about it, and where this person got his/her information.
Comment from kathy
Time: May 14, 2008, 3:33 am
l2 G learn to google
click on Tom Ogle and his environmental car…use the offered link to view all the artlcles and the results of his 200 miles on 2 gallons of gas test drive…he was killed (you think) soon after.
Comment from Gene
Time: May 14, 2008, 4:42 am
I’ve been saying for months that this whole ‘fictional’ gas price thing is to scare is into believing drilling in ANWR is our only recourse. And BINGO…The Bush regime comes out last week and the first thing he says is ‘we need to drill in ANWR…”
It is all a lie for big oil and we need to stop this lie somehow…just like when congress holds those fake sessions w/ oil ceo’s that is supposed to make us feel like they are doing something. Then the next profits come out w/ another huge gain. A LIE.
Comment from Roger
Time: May 14, 2008, 12:16 pm
Rising oil prices are a global problem, and not just confined to the U.S.
We are all at the mercy of the oil producing nations.
Currently here in London the price of petrol is £4.95 a gallon, that is US$9.65 approx.
I don’t believe that the shortage is a lie, just more a question of oil companies getting as much as they can while the goings good.
The biggest problem faced here by rising fuel prices, is the knock on effect in the stores, as everything is transported by road.
Supplies must be maintained while huge investment needs to be made in renewables.
Comment from R.L. Reynolds
Time: May 26, 2008, 6:04 pm
We can blame the oil companies, speculaters, the “in the toilet” dollar, and the Bushies and be correct. However, let’s not forget the auto industry. They have also ignored the big picture and continued to pump out the gas hogs. They have done very little to promote fuel efficiency. As a result, they are all in trouble. Toyota has replaced GM as the number 1 manufacturer. Why? Because they got in on the ground floor and produced reliable, fuel efficient vehicles. There will always be a need for trucks (until we get Scotty’s transporter beam. The technology is here for 60+ mpg cars. The technology is here or very close for electric and hydrogen cars. We need to demand these from our auto makers. If they don’t produce them, the Japanese certainly will! Put 200 million of those on the American roads and you will see a real change in the demand for more drilling, polution will tumble, and the environment will get a much needed break. So will your pocketbook. Picture that happening world wide and you can picture OPEC and the oil companies with very few places to peddle their over priced product.
Comment from Whyputaname
Time: May 27, 2008, 11:08 pm
Love your article!
I heard on C-Span this morning that it is the speculators in the stock market that are calling the shots. The spokes person on there called it the Enron Loop Hole. Now if this goes by way of what happen to Enron, we are in big trouble!
Back in Dec. of 2002 late on a Friday, a republican presented a bill to deregulate the oil and gas industry. The spokes person said that no matter how much oil they put into the system price of gas is going to go up.
I am reading some of the posts on here and I have sneaking suspicion that they created this for the purpose of drilling for more oil.
People we are pretty much getting the old shaft up the yang yang!
Comment from lxatoledo
Time: May 31, 2008, 11:10 pm
Whyputname– has got it right. It is all financially driven, if the speculators think that futures / commodity prices are going to show solid ROI’s then they will continue to invest. It is a facade and illusion of limited supply and people acting like “sheep” that has gotten us here. Open your minds, think for yourself and turn the freak’n TV off. Personally, I blame Al Gore……..fact of the matter was that prices were relatively flat until “An Inconvient Truth” came out and people started buying the hype.
That whole don’t buy gas for a day, week, ride a bike crap………I’d call my financial investor and start dumping mutual funds, stocks, etc that have monies tied to any oil supplier/refiner. You hit em in the pocket where the returns are not there anymore and the market will correct. Stop asking for the goverment to save you, take some personal responsibility.
Comment from thomas cataldo
Time: June 11, 2008, 4:18 pm
speculators are the cause of outrageous prices at the pump.
Comment from SHANE ALGARIN
Time: September 10, 2008, 2:32 am
It’s well past the time for the Democrats and Republicans to grow a spine and win back our respect. They can be much more persuasive with honesty, rather than deception. The offshore drilling ban has been around for decades. High gas prices have not. A ban on offshore drilling is not a significant explanation for high gas prices.
The top reasons for high gas prices:
1. Lack of competition translates into paying more at the pump.(Exxon merges with Mobil, ChevronTexaco, BPArco, etc )
2. Were the diplomatic skills of this administration up to par, oil prices would be far more stable. Invading Iraq has only brought instability. Angering Russia by placing our military and our missiles at their doorstep only brings more instability.
3. If the dollar was as strong today as it was when Bush took office, $140 would fetch closer to 2 barrels of oil.
4. CAFE standards are too weak. Future technology is promising, but fuel efficiency could double using old technology.
It seems like our President wants high oil prices. But that would make him an oil man…inconceivable!
WE NEED ATTACK DOGS BRAVE ENOUGH TO STAND UP TO BIG OIL! Instead we get politicians too eager to roll over. Send a message to congress and the administration that we’re on to their game. We know the real reasons for high gas prices.
Comment from Marie
Time: May 13, 2008, 7:26 pm
I was pumping gas at a Giant Eagle…price was $3.49 gal.- when I looked at the price again when I was done pumping, they had changed it to $3.99!!! These companies do whatever they want with the prices of gas and oil.