Thoughts of Gas Gouging
By Kevin Roeten (05/23/07)
Is it just pure emotionalism, or are millions just getting the wrong information? As gas prices soar, so does speculation that we are all being gouged. Maybe we should all calm down, and think a little. It turns out the answers to gas prices are right there in front of our faces. According to "Human Events", all the energy problems we face should be pinned directly on the Democrats.
The term gouging has emotionalism dripping off the page. “Gouging” actually occurs when prices are unconscionably excessive, or when seller raises prices ‘unreasonably’ by taking unfair advantage of ‘unusual’ market conditions. First, gas prices to the seller recently exceeded $70 per barrel, again. Second, the amount charged does not grossly exceed the price of gas in the same area. Third, almost all oil companies make 7-9% margin on every gallon they sell. But at the same time, Microsoft makes ~24% margin, and most clothing retailers make over 50%. Per George Will(TownHall), oil companies make about $0.13/gallon, the government makes $0.184/gallon(federal tax), and California makes ~$0.42/gallon(nations 3rd highest tax). Gas prices just exceeded $3.07/gal, but in real(inflation adjusted) rather than nominal dollars, $3.12 would have to be reached before reaching the cost in 1981. So, ‘gouging’ does not exist.
But how can one party be responsible for the ‘gouge’ so many think they see at the pump? When one examines the true facts of ‘gas guzzling’ America, unforeseen details emerge. The Mineral Management Services(MMS), a subsidiary of the Department of the Interior, estimates that the(US) outer continental shelf has enough oil to replace the current Persian Gulf imports for 59 years. Altogether, the outer continental shelf holds 86 billion barrels of undiscovered oil(MMS). The US consumes about 21 million barrels of oil/day, but produces only about 8 million. But as of today, more than 80% of those areas are off limits to exploration and production.
Democrats are opposed to any drilling in the “shelf”, or even in the Arctic National Wildlife Refuge(ANWR). There, 87 billion barrels await us—and it doesn’t even count the 656 trillion cubic feet of available natural gas. But why would Democrats not allow that domestic oil to be used? Democrats have thwarted any drilling in ANWR, any construction of new gas refineries, and opposed measures to simplify the complex gasoline formula. In fact, we have >15% less refineries because of the new standards being mandated.
Environmental democrat groups(Sierra Club/ Environment Florida) say that any bills for drilling poses a threat to Florida’s pristine beaches and ecosystems. But industry representatives say advances in drilling and production have practically eliminated the risk of any major spill. The platforms and rigs that were destroyed in central Gulf of Mexico with all the hurricanes of 2005(two category 5), showed only a very minor environmental impact(Lisa Flavin/API). The only minor oil spills came from beached oil tankers. Automatic well-head cut-off valves keep oil under the seabed if the rig or platform breaks away. “That’s the testament to the way technology can protect the environment,” Flavin said. “We like to point to that because that was a 100-year storm.”
Actually, facts prove that offshore rigs and platforms have a substructure that acts as an artificial reef. Providing a hard surface for encrusting organisms(oysters, barnacles, sponges, and corals) gives the basis for a food chain for millions of fish, sharks, sea turtles, lobsters, and sea urchins. In essence, the rigs create the critical two factors for marine life—food and shelter. Scuba divers have thronged to go “rig diving”, even when they’re beneficial to both the environment and local economies.
The oil is out there, but the Democrats won’t let us drill for it. It’s a known fact that modern technology has enabled us to drill with no major spills, whatsoever. Gas prices will continue to escalate, not because of gouging, but because legislation is forcing us to rely on only external resources. Oil is in American territory, but Democrats keep us from getting it.
The next time we get infuriated at the price of gas at the pump, we need to show some infuriation at the ‘blocking’ party.
Kevin Roeten
http://kevinroeten.us/
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