Government

by Chris Messner

Created on: April 27, 2011

  How could the price of gasoline in the United States be pinned completely on either the government or the oil companies?  Isn't there a pretty long list of other factors that affect how much you pay at the pump?

   What other factors?  How about refining capacity, transportation costs, crude output from our foreign suppliers, consumer demand (which is based partly on the vehicles consumers choose to buy) relative to supply, or pricing decisions by fuel retailers?

   But, as I am forced to choose between the government or the oil companies, I have to blame the government.

   Our government likes to sell itself as the solution to all problems.  The reality is that our government often creates conditions that result in problems.  In some situations, our government IS the problem.

   The United States of America is a major petroleum-producing country.  In spite of our oil production, we are still forced to import somewhere between half and two-thirds of the petroleum we consume. 

   For nearly 4 decades, our government has known that Middle Eastern oil-producers have had us over a barrel (ha ha), yet our elected officials did virtually nothing to spur development of alternative fuels or increase our petroleum production.

   Last year's BP disaster pointed out the real dangers of offshore drilling.  But where was our government, specifically, the Department of the Interior, before the disaster?  Where were the disaster preparedness provisions or the safety inspections?  Where was Interior Secretary Ken Salazar, who proclaimed himself "New sheriff in town" when he was appointed to the post?

   The polite answer is, "Nowhere", until after the disaster occurred.  After the spit hit the fan, the government pretended to be on top of the situation.  After some investigation, however, the government was found cozied up in bed with the oil companies, issuing permit after permit for offshore drilling while waiving safety and disaster preparedness requirements.  Yes, well into Salazar's "new" regime, right up until the time of the disaster.

   Yet the government will not allow drilling in the Alaska National Wildlife Refuge, which holds huge petroleum deposits.  Yes, the environmental concerns are real and valid, but the BP disaster proved that oil can cause an environmental disaster on land from 40 miles out at sea, and the petroleum has to come from somewhere to feed our insatiable appetite for gasoline.

   Meanwhile, Detroit continues to crank out vehicles that get 15 miles per gallon (or less) and consumers keep buying them, and you are hearing nothing about that from Uncle Sam.  When the price of crude peaked at $147 per barrel in mid-2008, SUV owners were frantically trying to sell their gas hogs at ridiculously low prices.  Then when the price of crude dropped back to $30 per barrel, everyone started breathing easier and buying gas hogs again. 

   I have to believe that everyone knew, in the back of their minds, that $4 per gallon gasoline would be back sooner rather than later, and less than 3 years after the peak, here we are.  Even though the current price of crude is almost 25% below the 2008 peak, the price of gasoline is pretty much as high as it was then.

   It costs you $200 to fill up?  You're spending $500 or more a month on gasoline?  That's your fault for your choice of vehicle.  That's your Uncle's fault for not acting to allow greater production and supporting alternative fuel development. 

   It's not the oil companies' fault.  You should be thanking the oil companies for keeping you supplied with fuel.  You should be grateful that you don't have to wait in line for an hour to fill up.  You should thank your lucky stars you aren't restricted to buying fuel only on certain days of the week.

   What?  I'm crazy?  That will never happen? 

   Sorry.  You're the one that's nuts.  I've already been down that road.  It happened in the mid-'70s when the price of gasoline nearly doubled and the supply nearly dried up.  It happened more than once, and it's not fun.  I speak from experience.

   It's true.  America's oil companies make huge profits.  Some would call them obscene.  But that's what capitalism is all about.  Most of the big oil companies are publicly held, and if you want a piece of the pie, all you have to do is buy their stock or buy into a mutual fund that holds their shares.  That's how you tap into the system.  Make the rising prices and increased profits work for you.  Don't go crying to your Uncle.  He'll screw both the oil companies AND the public, but the public will get the worst of it.

   America's consumers are consumed by consumerism.  The government is thrilled that you think the oil companies are to blame.  Uncle Sam is doing everything he can to shift your focus away from him and onto them.

   You might wanna start from scratch and take a fresh look at the whole issue.

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