Reaping What We've Sown
By Edward Daley (05/03/05)
With gas prices higher than ever, and economists speculating that things are only going to get worse before they get better, it's not surprising that average Americans want to know why saying "fill 'er up" at the pumps these days may result in them being forced to sell a kidney on eBay in order to pay for it.
While several factors come into play, the current price of crude oil, which is now around $50 a barrel, accounts for roughly half of the total cost of gasoline to consumers. About a quarter of the price we pay can be attributed to state and federal taxes, and the remaining 25 percent is split fairly evenly between distribution and refining costs.
It's important to note that the latter 25 percent also includes oil company profits, however, in March of this year the American Petroleum Institute estimated that oil companies currently net approximately 7.2 cents per gallon sold. Since the average gallon of gas goes for $2.24 at the present time, that accounts for only 3.1 percent of the total price at the pumps.
Suffice it to say that those greedy, blood-sucking oil companies that liberals hate so much, aren't screwing us nearly as hard as Uncle Sam is, since he's taking over 8 times more cash out of our pockets than Exxon, every time we shove that nozzle into our gas tanks.
And although taxes really open up our monetary veins when we fill up our cars, nobody is inserting a bigger catheter into them than OPEC. Indeed, the Organization of Petroleum Exporting Countries is clearly putting the wood to us and most other industrialized nations on a regular basis.
First it cuts its oil output, and waits for demand to skyrocket. Then it increases production and sells as much "black gold" as possible... at a premium. Once the forces of supply and demand cause oil prices to drop below a certain, predetermined level, it then cuts its output once more, and the roller coaster ride begins anew.
That entity makes obscene amounts of money by manipulating the ebb and flow of worldwide oil prices, yet, even though OPEC has the ability to greatly influence the global market, its effects on the price of gasoline in this country wouldn't be nearly as profound, if we weren't so dependent upon foreign oil sources. Tell me, who's really to blame for that? Is it Saudi Arabia, Kuwait, Venezuela, or any other major oil producing nation?
No. After all, when did the United States last build an oil refinery, or construct a nuclear power plant, for that matter... a quarter century ago? Hell, we haven't stepped up domestic energy production one bit in all that time, and in fact we've shut down dozens of refineries in recent decades, yet our demand for energy keeps growing by leaps and bounds.
The U.S. Geological Survey (USGS) has assessed that the United States is sitting on as much as 112 billion barrels of recoverable oil. And even if they've overestimated the true amount by, say, 30 percent, we've still got enough oil to meet our energy needs for many years to come, yet the majority of these reserves continue to go untapped. The main reason for this is federal environmental laws, which have effectively made drilling off limits in much of the country (tens of millions of land acres), as well as in most areas off shore.
To put the amount of oil America may have at its disposal in perspective, let's compare our potential reserves to those of Saudi Arabia. The Saudis have approximately 262 billion barrels in their reserves, which is only about 150 percent more than the USGS suggests we have, and they are the number one exporter of oil in the world. We, on the other hand, are the top importer of oil, consuming 3 times as much as we produce every day.
In addition to an inadequate energy infrastructure, state and federal regulations effecting gasoline refinement, which, once again, have been created primarily because of environmental concerns, further limit our production capacity. For instance, as I write this article our existing refineries are forced to produce upwards of 50 different types of gasoline... 50 DIFFERENT TYPES! This seriously hinders their efficiency, and restricts availability in various local markets throughout the country.
Keep in mind that no one is suggesting certain reasonable measures shouldn't be taken to protect our environment from the potential ravages of industry. Clearly that's the responsible thing to do, however, we've taken the whole idea of it to preposterous levels in recent years, and the situation just keeps getting more absurd as time goes on. Think about it... whenever anyone of the conservative political persuasion even suggests doing something productive, like drilling for oil in ANWR and other domestic locations, which are not at high risk of suffering any real harm due to such undertakings, every liberal from Malibu to Manhattan acts as if he wants to poison their children.
Frankly, that's just plain nuts!
The trouble with this country isn't that we don't have the technology or the resources to free ourselves from the grip of foreign oil dependency. We do. Our problem is that, for the past 25 years or more, we've let a bunch of whinny, let's-all-hold-hands-and-sing-kumbyah environmentalists undermine our viability. We've allowed these tree-hugging peons to set us back economically, because we haven't had the guts to confront them and their representatives in public office, head on, and expose their political correctness for the dangerous lunacy that it is.
What was once the land of independence has become a land of increasing dependency, and no turban-wearing opportunist from another country is responsible for that. It's U.S. citizens who keep voting into positions of governmental authority, overly protective mother figures, who's only solution to our energy problems is to suggest that we all drive Yugos from now on.
So the next time you're at the pumps, getting agitated over the prospect of breaking another 50 dollar bill, ask yourself who's chiefly to blame for the outrageous gas prices you're paying. If your answer is greedy Haliburton executives, the taxman, or evil foreign oil merchants, you might want to avoid inhaling so many gas fumes in the future. While it's true that none of those folks are doing you any favors, the most ominous threat to your wallet is a bunch of homegrown, radical environmentalists, who would rather save some endangered species of dung beetle than the United States of America.
http://www.usgs.gov
http://api-ec.api.org/frontpage.cfm
http://www.eia.doe.gov/emeu/cabs/saudi.html
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