Friday, April 28, 2006

Check Your Oil Ma'am?

Well you've probably not been asked that question in a long time, but it's time that we all gave ourselves a reality check on crude oil and gasoline prices.

Watching all the politicians act as if they're going to do something that will immediately ease the cost of gasoline is comical, especially when you consider that the problem has been a long time in coming. Investigations into price fixing, claims of excessive profits, etc. It's a sad, pathetic joke by a bunch of gutless wonders trying to show all of us how much they care in an election year.

First, let's get a few things straight.......

  • Ninety percent (90%) of U.S. gas stations are PRIVATELY owned, not owned by the big oil companies. Enough of the conspiracy theories, please.

  • For the last five years the oil industry has averaged a little more than a 5% profit margin. They pay three times more in taxes, than they earn in profits. Last year their profit margin was higher because of the current state of the oil market (around 8 1/2 percent). Compare that to other industries that make profit margins of 10-15-17 percent. Nobody is demanding investigations of them.

  • The price of crude oil is determined on the open market by traders, trying to anticipate the FUTURE cost of oil, which is a very tricky, highly speculative business. It's NOT decided in some cigar smoke filled board room in Texas.

  • Political instability contributes greatly to the future cost of oil. Every time that idiot in Iran (President Mahmoud Ahmadinejad) opens his mouth and says something stupid, the market spikes $2-$5 per barrel.

  • India and China are in such a economic boon right now that those two countries by themselves consume MORE oil that the entire planet did just TEN years ago. You don't think that hasn't affected the crude oil market?

  • Thanks to the environmental whackos, the United States has NOT built a new oil refinery for nearly 30 years! If we had done so, that would greatly help the current situation.

  • Again, thanks to the environmental whackos, American oil exploration has practically ceased and even though we have known large deposits of oil, just sitting there, we aren't taking it out of the ground. It's insane.

  • Hurricanes Katrina and Rita didn't help matters much. Although the damage that occurred was significantly less than was first feared. Still, it had a definate impact on crude oil prices, thus gasoline prices and the fact that another hurrican season is about to begin doesn't help matters.

  • There definitely needs to be MUCH more money spent on developing new energy sources, hopefully renewable ones, so that we aren't so dependent on foreign oil. This has been true for decades, yet little more than "window dressing" has been done in this area.

I think that's enough "reality" for one day. So the next time you hear your local Congressman or Senator waxing on and on about how much he "feels your pain at the pump", tell him where he can apply the ointment.