Monday, April 11, 2005

Aggita From Gas

Ok, so gas prices are high. No news there. If you listen to the news, you'd swear they are the highest they've ever been, and in an illogical manner, they are just that. And depending on who you read, it is all President Bush's fault, too.

Well here I go, dispelling these rumors. First of, let me state for the record I DO NOT ENJOY THESE GAS PRICES. I drive about 1100 miles per week, so I am spending about $100 per week on gas (not to mention tolls), so don't tell me I don't know what I am talking about (I welcome your comments and criticisms, but don't use that tired excuse, ok?).

That much said... these prices, however high they've become, are not the highest they've ever been. Adjusted for inflation, and there's little reason NOT to make this adjustment, the prices were higher in 1980 than they are today. You may not wish to admit it, but facts are facts.

Why are they so high now? Simple, irrefutable law of Supply and Demand rules the day (as laws are wont to do). Right now, Americans drive a lot. And not only in big, honking SUVs, but in general, we all drive a lot. Sure, SUVs don't help the situation, but they aren't the curse they're made out to be. Rather, they are another in a series of attempts to demonize those that can afford them (but that's another thread altogether). American's always have driven a lot and will continue to do so; that's not quite a 'law', but it is a safe bet.

China is buying thousands of barrels more of oil this year than last. Some suggest they're stock-piling in in their deserts (it won't go bad!), others say they're using it to build their naval fleet. I don't pretend to know the answer here, but it is a matter for our Intelligence community to research.

That's the demand side of the equation. The Supply side is hampered here at home, once again. Here's a quiz:

Which state has built a new oil refining plant in the last 20 years?

a) Texas

b) Alaska

c) Hawaii

d) Pennsylvania

BUZZZ The answer, of course, is e) NONE OF THE ABOVE. We have not added new capacity to our refining system in 20 years. Yet AAA (as well as common sense) will tell you there are more cars on the road today than in the 1980s, and we're driving further than ever. Supply and Demand can't be ignored! So even when we eventually have the ANWAR oil online, while it will help produce healthy competition to the Saudis, it won't be enough to dramatically lower prices if we don't create more refineries to process it.

The senior US Senator from the great state of New York, Charles Schumer, has repeatedly called for the release of oil from the Strategic Oil Reserve. For starters, that would decrease the amount of said oil in reserve during a TIME OF WAR (perhaps he hasn't kept up on the news?). More importantly, if our refineries are working at full-tilt, exactly what good would this drop in the proverbial drop in the bucket accomplish? Nothing, sad to say. You'd think an experienced Senator would know this stuff.

Want an easy way to give relief to consumers all across the country? Easy! The US Senate should call for an end to the GORE TAX, the gas tax passed in 1993 by a deciding vote of Vice President Al Gore. The Republican Majority is long over due for acting like they are in the majority. Something like this is tangible, visible and makes COMMON SENSE. Its high time to eliminate the high taxes on fuel, and this tax should be the easiest to eliminate in this political climate.

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