28 April 2006

Who is to Blame for High Gas Prices?

A while back I was in Paris, France. Next to the restaurant we were eating at I saw a drunken homeless guy passed out. Amazingly enough he managed to hold up his hand in the hope of getting some money. Unbeknownst to him, his cheap wine was spilling from his bottle onto the ground. That is how I equate our addiction with oil. We are vastly ignorant of the world around us, but we complain and demand that something be done about high gasoline prices while we willingly fill the tanks of our cars and trucks.

How about some perspective? No one complains when they pay $7.50 a gallon for bottled water or Coca Cola or Mountain Dew at the gas station (take a 0.5 liter bottle for $1 and do the math – 1 gallon is approximately 3.785 liters). By the same token, a 0.5 liter bottle of $3 a gallon gasoline is about $0.40. There is significantly less processing and handling with water when compared to gasoline.

No one was complaining when oil was less than $15 a barrel (a barrel is 42 gallons by the way) and gasoline was less than $1 a gallon and oil companies were losing money and laying people off. No one was complaining when gasoline hit $2 a gallon. Now with gasoline breaking the $3 a gallon barrier again this year people are clamoring for “help” and our politicians are more than ready to oblige with ridiculous legislation in order to garner our support in the upcoming election cycle. The latest Senate bill includes an increase in refining capacity and development of known oil reserves in ANWR and in the Gulf of Mexico which is important in reducing gasoline prices and our dependence on foreign oil over the long-term. However, words cannot begin to describe the exasperation that I have with the following portions of this bill:

  • A gas tax holiday rebate for consumers of $100;
  • Suspension of deposits into the Strategic Petroleum Reserve for six months to make more oil available for consumer use; and
  • Consumer Anti-Price Gouging Protection
The $100 rebate check is the most irresponsible idea to come out of Washington D.C. in recent times. This is a meaningless gesture by our government representatives to garner favor in an election year. First, the $100 will not solve the problem. It only puts a small band aid on a larger, gaping wound. Second, we have record deficits and are borrowing more than $1 billion a day. Now you want to spend even more money that the federal government does not have. Third, it will do nothing to lower gas prices.

How exactly will this work? Do both my wife and I get $100 because we both drive? Do we get $300 because we have daughter? What is the cost of producing the checks and sending them out? How much more of a burden will this have on the federal deficit? I personally do not feel comfortable with borrowing $100 from my daughter and future grand children to satisfy the reelection goals of career politicians.

Suspending oil deposits into the Strategic Petroleum Reserve will have NO affect on gas prices and is also very shortsighted. Without increased oil refining capacity the extra oil will have NO impact on gas prices. Instead, the legislation should have included measures to unify the formulations of gasoline so that these refineries do not have to make a certain blend for a certain part of the country.

I am no apologist for the oil companies; however, they are making money because we consume a large volume of gasoline and diesel. Exxon-Mobil sold 89 billion gallons of gasoline last quarter. Higher consumption means more sales which translate into more profits. The profit margin per gallon of gas is roughly $0.09 per gallon. State and federal taxes per gallon average $0.459 per gallon (The federal government gets $0.184 per gallon). Who is gouging who? I would posit that they are making money through volume and not through price fixing. Will you suggest price controls? We saw how well that worked in the 1970’s.

Doesn’t the federal government already tax the oil companies’ profits? What exactly would be gained by taxing them more? Where was the government when oil companies were losing money and jobs because of the low price of oil and gasoline? The people to blame for their obscene profits are you and me because we do not reduce our consumption. We belly up to the gasoline trough on a daily basis.

Oil prices will continue to go up as China and India begin to surpass our consumption rates. That is a fact. Will the federal government continue to have inquiries and hand out checks because the law of supply and demand increases gasoline prices? The days of $1 or even $2 a gallon gasoline are long gone. The days of $3 and $4 a gallon gasoline are here. Deal with it. Use it as an opportunity to see that America has an oil addiction. Use this opportunity to look forward and invest in new technology that will make America the leader in alternative fuels and energy. We can sit around and mope and institute worthless stop gap measures, or we can heed the early warning and create and prosper by a different path. Change is upon us and unless you realize it and act upon it America will become nothing more than an addict wandering around mumbling about how it needs more oil.

If you want to do something about high gasoline prices sell your SUV, buy a diesel (my diesel VW Jetta wagon gets on average 45 mpg) or hybrid automobile, car pool, bicycle, walk, or use the bus. Stop bitching about it, because we are all part of the problem. And if you drive a large SUV like an Excursion, Yukon, or Hummer I do not want to hear your woes. You made your bed now sleep in it.

Photo by KCThinker. Street sign on side road in the Black Forest, Germany.

12 April 2006

It is Time for a Revolution

It is time to take back our government from the special interests and the wannabe movie star-like representatives and senators. It is time to kick out the Democrats and Republicans and try something new. They have had more than 100 years to figure it out and I have had it with them. Okay, every once in awhile they have done something right (civil rights legislation, for example), but the last 15 years have seen our government representatives turn into adults with nothing more than a grade school mentality. They argue like two third graders except with bigger words and an all too willing press corps.

It is time to call bullshit on both parties. I am sick of both parties dodging the big issues in favor of steroids in baseball or complaining about how unfair the college bowl championship series is or finger pointing after Hurricane Katrina or why a United Arab Emirates company should not run some of our ports or using a controversial topic like immigration to pull out the race card. (Look over there stupid Americans while I screw you over here and over here). I am tired of hearing one party complain about the other parties’ ideas without proposing their own ideas. I am tired of our politicians changing their stances at the drop of some stupid poll that sampled two hundred people. I am sick of the pork barrel spending projects. I am disgusted by the lack of responsibility these government representatives have for our hard earned money (we are borrowing over $1 billion a day to keep this country running). I am flabbergasted that these folks do not have a single unique idea in their heads and care more for their political careers than their country.

This country needs leadership desperately. Neither party has impressed me lately. I think a comparison of the Al Franken show on Air American and the Rush Limbaugh show on the EIB network sums it up best for me. While listening to Al Franken recently I heard that the Republicans were screwing up national security and do not have a plan. Tuning into Rush Limbaugh I heard that the Democrats were screwing up national security and do not have a plan. I think both are right in a manner of speaking. Neither party has a clue nor are they willing to stick their necks out for fear of the electorate. It is a bloody shame because the time to act with common sense is upon us. We need to get serious about our skyrocketing national debt, the impending social security and health care crises, failing education, illegal immigration, and a myriad of other important topics. Let’s figure out what went wrong when something goes wrong and fix it instead of playing the blame game and having hearings after hearings after hearings, and months and years later rehashing it again because we learned nothing from all those hearings. We keep making the same mistakes over and over. Partisan bickering does not do this country any good.

We need real leaders who are willing to fight the K Street special interests and do what is right, not what is politically expedient for their careers. We need to work together to solve problems. We need to take back our representative democracy.

I used to think that the Democrats had it right. Then I decided that they did not and started voting for Republicans. Now I find myself with no one to vote for. Voting for the lesser of two evils at this point is not a real choice. Is it wrong to want real choice when it comes to our elected representatives?

Photo by KCThinker. Root in rocks with leaves and water. Catskills, New York.