The topic of the day in other parts of Al Gore's Interwebs seems to be the blame game as it relates to the prices you and I are paying at the pump for gasoline.
I don't have to tell you we're paying through the nose. We are. It cost me $60.00 to fill up my 2001 Nissan Xterra today. With the heat wave we just had here in the northeast, I got a whopping 18 miles per gallon for my hard-earned gasoline purchase. I'm as frustrated as you are, believe me.
You figure that, a year ago, we were paying about a dollar less as a national average. No, really...I looked it up at GasBuddy.com. I even made a spiffy little chart:
On June 10, 2007, the national average for a gallon of unleaded gasoline was a little over $3.00 per gallon. In that time, the price of crude oil has more than doubled from $65.00 per barrel to today's close at $138.63.
Why is this important, you might ask? In a campaign season where we hear about the "obscene and record profits" that the oil companies are getting, these behemoths seem to get the lion share of the blame.
If it's not the oil companies, it's President Bush. You know, he and his oil executive cronies who are making millions of dollars, hand over fist, due to the Iraq War. Their greed and lies have caused us all to pay more at the pump---that is, if you believe half of what you hear.
Or, maybe it's the weak American Dollar. I mean, it was made that way as a result of the policies of George W. Bush, so it made the price of gas skyrocket since we can't buy as much from the Saudis with the value of our dollar. We have to spend more to get the same amount.
If it's not the Bushies, the weak dollar because of Bush policies or the oil companies, it must be the Republicans in general. Why, just today on a blog of the Kansas City Star, the GOP was being thrown under the bus for the skyrocketing price of gas:
With oil companies receiving more than $4 for each gallon of gas they sell, Senate Democrats today tried to eliminate the $17 billion in tax breaks Congress has awarded them in recent years.
It also imposed a windfall profits tax.
But Republicans wanted nothing to do with either. In a largely party line vote, they blocked the Democrats' attempt to bring the tax issue to a vote, so it died on the Senate floor.
Wow...they covered all three bases right there, practically. They got the oil companies by making it sound like all $4 in the price of a gallon of gas went straight to profit. They got the Republicans and they talked about imposing a windfall profits tax--which, in laymen's terms, means "you made more money than you should have as an evil capitalist so we're going to tax you even more to penalize you and restrict the growth of your business."
I'm no economist, but I'm pretty sure that's all kinds of bad.
So, who is to blame?
Well, I'm pretty sure that it's not George W. Bush, either. Yes, the dollar is weaker and, while that might have something to do with his foreign policy I'm willing to bet it's not got as much to do with the price of gas as people might want us to believe.
I'm also pretty sure that it's not the oil companies or their "record profits." They don't pull the crude oil out of the ground. They just buy it by the barrel and turn it into the petroleum products we use in our every day lives. Let's take a look at the breakdown of the cost of a dollar of gasoline...
Seventy cents of each and every dollar of gasoline goes toward the price of the crude oil from which it was refined. That's seventy percent. That's not profit to the oil company; that's pure cost.
Thirteen cents of each and every dollar of gasoline goes toward taxes that we pay. And, like actual mileage, that number may vary depending on the state in which you live. The Government is taking almost 50 cents per gallon (at today's prices) and they do nothing to turn crude oil into gasoline, nothing to transport it to the gas pumps and they certainly don't put it in your car for you.
The remaining seventeen cents is refining and retailing and, presumably, this is where the oil companies come in to play. After all is said and done, they make roughly 7.5% (or $0.075) on every dollar of gasoline sold. Less than eight cents. Those are the "outrageous profits" that the Liberals want me to get upset about.
Don't believe me? OK. That's fair. In the interest of multiple sources and all, here's a picture from a hearing chaired by Vermont Senator Patrick Leahy just a couple of weeks ago:
His math is a little different, but it's essentially the same ratios. He projects the oil company profit at 8.3 cents per dollar which isn't much of an improvement over the 7.5 that I quoted.
Oh, and Senator Leahy is Vermont's Senior Senator and has been in office since 1975. He's also a Democrat.
Our gasoline price woes are an age old story and they're as simple as "supply and demand."
We are addicted to a substance that we do not produce in great enough quantity. We are forced to buy much of the crude oil we refine from other countries, we pay the price the market dictates...and, right now, the market dictates quite a bit.
So, the only way to cause the price to come down is to increase the worldwide supply. More supply = lower cost of crude = lower gas prices.
We must begin drilling for our own oil again in the United States. Whether it means drilling within 50 miles of the US coast line or drilling in the Arctic National Wildlife Refuge, we must drill for oil. Opponents say that the amount of oil we'd be drilling for wouldn't solve our problems long term. Well, they could be right, but they could just as easily be wrong. No one knows for sure how much oil there is...no one.
The price of crude oil is driven largely by speculation. If it were announced tomorrow that the United States had lifted its drilling prohibitions and would once again resume domestic oil exploration and production, what do you think would likely happen to the speculation on the oil market?
The likely result is it would drive the price down and not up.
The price of oil isn't coming down any other way.
What about renewable energy sources, you might ask? Shouldn't we be investing in the future to lessen our dependency on fossil fuels in general? My answer is: absolutely! The only problem is that doesn't do us any good in the here and now when working families are having to spend twice as much as they on gas as they did 18 months ago. The dollar is weaker, wage increases are down, inflation is on the rise...we need to lower the burden on people now and putting all of our eggs in the basket of new and renewable technologies doesn't help us relieve that pain point.
We are paying through the nose and we have the ability and the knowledge required to ease some of our own pain, but lawmakers don't want to. Is this a bit of an oversimplification? Perhaps...but even in its simplest form, the conclusion is still the same: the majority of cost in a gallon of gas is the crude oil purchased to produce it. To lower the cost of gas, you must first lower the cost of the crude. It really is that simple.
Who is to blame? Congress is to blame, in my opinion. They won't untie our hands to bring these prices down. Don't get mad at the oil companies or the President or anyone else other than the people who represent you in Congress.
It's time to drill for oil here and the time to do it is now.
Send a message. Call your Senator and Congressman. Sign this online petition: DRILL HERE. DRILL NOW. PAY LESS. We did it with the McCain-Kennedy Immigration Bill and we can do it with this.
It's time for Congress to understand that we're tired of paying for their shortsightedness.
William Smith
ConservativeBlogger.com
