Who’s to blame for the high cost of fuel?
Posted on May 20, 2008 - 7:45pm by Everitt Mickey in Business, Economy, News, Politics
The oil companies….right?
Well, actually no. The oil Companies, those eeevil oil companies that have invested untold billions of dollars in exploration, production, development, research ,transportation and retail of fuel, nope…not them. They’re the LAST people that should be blamed.
They’re running as fast as they can while governments of all flavors heap extra taxes and fee’s upon them. Citizens groups and the Main Sewer Media heap scorn upon them and normal everyday folks complain. What are they to do?
The government, aided and abetted by the greens won’t let the oil companies drill in several places where we KNOW there is oil. ANWAR (what a misname. A bleaker area you’d have to go to the moon to find and what wildlife?), the west coast,and the east coast. There’s oil and gas there but ;it’s off limits.
And who says the oil companies should be responsible for alternate forms of energy? They’re oil and gas companies. That’s what they do. Should a trucker be responsible for alternate forms of transportation? Neither for the Oil companies.
So who’s to blame?
Actually it’s the Real Estate Industry, this time. Aided and abetted by the banking Industry and backed up by, who else, the federal government.
It’s like this. There is pretty much a set amount of oil that can be produced and marketed world wide at any given time. Due to various restrictions and political decisions there is only so much energy infrastructure. Demand is constant to steadily rising so there is pressure on the price of fuel to go higher. That’s a given.
Folks have a certain amount of money, (dollars, yen, etc) and they spend some of it on Fuel.
So what happens when Bear Stearns goes Belly Up? First thing is everyone looks for someone to blame. No big bad Oil Company in sight, no trucks, no Doberman pincher’s or no assault rifles. None of the usual suspects. Hmmmm, who could be at fault?
Oh my, oh my.
Not finding any of the politically correct targets available a “crybaby” campaign is immediately launched. It’s successful and the government bails out the banking industry to the tune of (wait for it) several BILLION dollars.
That’s several billion dollars in the economy that didn’t used to be there. (The technical name for that is inflation of the money supply.) More money chasing the same number of goods and services. Another way of looking at it is that the dollar is now worth less than it was, say, twenty minutes ago.
Sooo. the price of fuel, and everything else.…goes up.
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From what I’ve read, I was surprised to hear that the oil prices are a global problem. The prices are out of control around the world, the U.S. is just getting the largest increases in the percentage of rise over time. Worldwide demand is a driving factor.
I find it odd that American’s primary concern is the gas they put in cars. As truckers we know that this is the least of the worries. You can easily decrease your personal transportation costs.
Thanks for racking my brain with the added real estate problem. Part of the real estate problem came from the bank’s inability to say no to redlined areas. If people wanted to buy a house in a redlined area, they had to ok the loan or risk legal problems which were more costly than a loss on a loan. Once the banks became accustomed to taking the enormous risks, they just couldn’t quit grabbing for more.
I fear we are soon in for some really rough times economically, and don’t forget, we’re at war. Fuel price news is starting to trump news about Iraq. Isn’t our military setting on top of a bunch of oil owned by a bunch of folks that kind of owe us a favor?
Fact: the us government gives billions of dollars in the form of grants to oil companies.
Fact: the us government is throwing billions of dollars in the form of bail outs to realestate/mortgage companies.
Fact: the usa consumes 21 million barrels of oil per day!
Fact: the usa produces approx 9 million barrels of oil per day.
Fact: the high cost of a barrel of oil is the direct fault of the market analysts/aka: market speculators
Fact: the us must import the balance!
Fact: there is a recession now underway in the usa.
Myth: there is a shortage of oil on the world market…..the fact is that oil production is right on target.
Problem: ALL OF THE ABOVE.
Solution: reduce dependance on oil…in order to control our lives more effeciently,in an effort to not be so dependant on lunitic countries for their oil!
Transportation: learn to charge for what we do…TRANSPORT!…not run for cheap but run for profit…not overcharge..but not undercharge…understand our place in economics and not be taken for fools by load brokers….work to eliminate load brokers…cut out the selfish middleman….and as a result save benefit from the 10 to 35% that these vulchers keep for themselves…..trucking is a business and so we should learn to profit from this business not continue to be victims of uncontrollable circumstances that in fact are very controllable….by us….strength in numbers
Love the facts, mostly cherry picked out of context, but great stuff. How about a few more?
Oil companies get tax breaks, just like every industry, don’t think that’s the same as a grant. Oil company profits are 4%. It’s such a large number of dollars is because they’re several smaller companies that over time have merged becoming one big company.
Exxon-Mobile pays the most taxes of any company in the world. Ever.
Every one loves to pick on the oil companies, because they’re a nice target. But if you take they’re profits, they aren’t going to look for more oil.
In ten years, China will be using 100% of what we produce today, 81 million barrels.
There is a shortage as compared to the demand today and definitely for the demand tomorrow. If they started drilling in ANWR today, it would take 10 years to get to the gas pumps. Offshore drilling would take longer. Some believe we have hit the peak of production. Google Peak Oil. If nothing else, we’ve peaked on the cheap oil production. Most of the oil that’s left, including Saudi Arabia are tougher and more expensive to extract and produce.
The solution is partially correct, we have to get off of FOREIGN Oil, but there are too many lunatics that don’t want to drill in our own backyard.
The strength in numbers part, you people have learned nothing.
True…the facts that i stated are picked …after all why post what is not relevant?,..
here’s another…..
Fact>>>the main reason for the escallating price of fuel today and for the past couple of years is because of the us dollar not being worth much on the world market…oil is traded in us dollars,and the reason for the us dollar being so low is because of the crumbling real estate market and the billions of badly granted mortgages that have gone into default,as a result of that the true criminals..on wall street…have selfishly gone away from bank notes as security holdings and taken up food notes…because they are more secure due to the fact that we all have to eat…as well as concentrating their efforts on trading crude,this i s what is really driving up the price of fuel at the pumps.
While i do agree that there are many lunatics right here in the usa and canada who do not want to drill off the coast(where it is a fact that oil lies ready to be extracted),or up in the anwar’ region,or many other proved areas,i don’t really think that we need to to be looking at that…not as a remedy,but modernising and or building new refineries should be very seriously looked into.
The true remedy for getting back to decent fuel prices has to be to reel in all these market people who are basically killing the regular folk…like you and me…that’s what i meant by the strength in numbers comment.
Why not do it all? Building more refineries won’t do much if there’s nothing to refine. There’s enough Oil Shale in the Rockies to out produce Saudi Arabia. Not only that we are the Saudi Arabia of coal and until recently coal to oil was too expensive.
We can be completely energy independent if we wanted to. All of those oil jobs could be jobs in the USA instead of forcing oil companies to drill in unfriendly countries. Instead we are wasting money on turning the world’s food supply into an inefficient energy source. It takes more energy to produce ethanol then it produces.
The dollar was falling long before the mortgage fiasco and that’s only a small part of the problem now. Basing our entire economy on borrowing and spending more than we take in and the Fed has lowered interest and the government just prints more and more money. Oil trading has been going on for decades, it’s produced some spikes but is not responsible for today’s problems.
Congress is and has been the problem for many years and they’re the ones that need to be reeled in back to reality instead of the partisanship and concentrating on fund raising for the next election.