Some time ago, I wrote a piece called "An Inconvenient Truth" where I detailed our dependence on Big Oil, how it will get worse, and how there is very little we can do about it. A lot of people accused me of defending G.W. (again) and being a shill for the oil companies. At that time I felt that considering the War in Iraq, troubles in Iran, Venezuela, Nigeria, and the destruction of oil refineries by Katrina, the high prices weren't all that out of line. Further, I demonstrated for you how, like it or not, it wasn't G. W.'s fault and the prices were consistent with rises in other countries. Well, as you all know, the price of gas has gone through the roof again just in time for summer vacations. (surprise, surprise) This time I have a few problems with it that seriously should be looked into. If G.W. won't do it, then let's get the Democrats off their collective asses and see if the Big Oil CEO's can lie their way out of this one.
So what's so different this time? Plenty. Oil production in Iraq is now about 2 million barrels a day nearly twice what it was this time in 2006 when oil prices peaked at $78 a barrel. Despite what you hear on CNN, things are looking better for the region that produces most of Iraq's oil. (The Sunni's control very little in their deadly triangle) Analysis by petroleum firms put the possible export figure as high as 4 million barrels a day . The War in Nigeria is pretty much settled with Shell Oil set to resume pumping out an estimated 2 million barrels a day, Iran is settling down a little and Venezuela, well, is still Venezuela. The big news for petro-watchers is that there were no major hurricanes in the 2006 season to slow down refineries. It seems the stage is set for a summer of low gas prices, right? Wrong. With an absence of problems to blame their yearly hike on, Big Oil has decided to create its own problems by shutting down at least a dozen of it's refineries for reasons ranging from repairs to they needed the window screens dusted and dandelions were all over the yards. (O.K. I made the last one up). The fact is, this time they're gouging us pure and simple.
So how can I tell that their not justified like the last time when I pretty much defended them? I went back to my old friend Math.
Back in July 2006, when gas was going for $3.015 here in Michigan, (according to AAA) oil was going for $78.40 a barrel, now, according to AAA, gas is at $3.271 and Oil at last check was going for $63.85 a barrel. That makes no sense at all. But wait, don't they say it's because of refining costs? O.K., let's look at refining costs and see if their argument holds up. Refinery costs, for some strange reason, are always lumped together with profits. (hmmmm, I wonder why?) But, even at that it doesn't make sense. In 2006, refinery and profit was only 19% of the cost of a gallon of gas, so, if we do a little math (God I hate Math) it makes sense that we should be able check the past gas prices at $63.85 a barrel and see how much more they're charging us for refinery and profit. (my guess is mostly profit.) The last time oil was at roughly $64 was mid September, 2006 and gas was at $2.60 a gallon. That means the refinery and profit on that price was $.494 at 19% in 2006, and when you subtract that roughly $.5o from the 2006 price of $2.60 you get a net cost of $2.10 before refinery and profit. That means refinery and profit is now $1.17, ($2.10 subtracted from $3.27) more than double what it was a year ago! My guess is a large percent of that will show up as profit in the next quarter. What are the Democrats doing about this you ask yourself? Well, a quick check of DNC.ORG shows them more concerned with the Gonzales firings, Paul Wolfowitz, (honestly, does anyone care?) and the appointment of the new War Czar than what your paying at the pump. In fact, the only mention of it is in a blog.
So what can we do about it? Nothing. Thanks to the Democrats who forced the CEO's of Big Oil to testify in front of Congress when they didn't do anything wrong (instead of waiting until they did) and G.W. and the Republicans acting as a force field against any future Congressional over site, Big Oil sees this as their chance to rape and pillage to their hearts content. I guess there is an offhand chance that G.W. may see this as a chance to improve his sagging poll numbers and ask his buddies to lay off, but frankly, I think Big Oil is now so global, so powerful, and so free to sell their wares where ever they please that they don't care what America, G.W., or anyone else thinks. The only good solution I see is screaming at the top of our lungs for an end to our dependency on oil and maybe our grandchildren will see the day when Big Oil will go the way of buggy whips and kerosene lanterns. Until then, bend over and touch your toes. H.C.
So what's so different this time? Plenty. Oil production in Iraq is now about 2 million barrels a day nearly twice what it was this time in 2006 when oil prices peaked at $78 a barrel. Despite what you hear on CNN, things are looking better for the region that produces most of Iraq's oil. (The Sunni's control very little in their deadly triangle) Analysis by petroleum firms put the possible export figure as high as 4 million barrels a day . The War in Nigeria is pretty much settled with Shell Oil set to resume pumping out an estimated 2 million barrels a day, Iran is settling down a little and Venezuela, well, is still Venezuela. The big news for petro-watchers is that there were no major hurricanes in the 2006 season to slow down refineries. It seems the stage is set for a summer of low gas prices, right? Wrong. With an absence of problems to blame their yearly hike on, Big Oil has decided to create its own problems by shutting down at least a dozen of it's refineries for reasons ranging from repairs to they needed the window screens dusted and dandelions were all over the yards. (O.K. I made the last one up). The fact is, this time they're gouging us pure and simple.
So how can I tell that their not justified like the last time when I pretty much defended them? I went back to my old friend Math.
Back in July 2006, when gas was going for $3.015 here in Michigan, (according to AAA) oil was going for $78.40 a barrel, now, according to AAA, gas is at $3.271 and Oil at last check was going for $63.85 a barrel. That makes no sense at all. But wait, don't they say it's because of refining costs? O.K., let's look at refining costs and see if their argument holds up. Refinery costs, for some strange reason, are always lumped together with profits. (hmmmm, I wonder why?) But, even at that it doesn't make sense. In 2006, refinery and profit was only 19% of the cost of a gallon of gas, so, if we do a little math (God I hate Math) it makes sense that we should be able check the past gas prices at $63.85 a barrel and see how much more they're charging us for refinery and profit. (my guess is mostly profit.) The last time oil was at roughly $64 was mid September, 2006 and gas was at $2.60 a gallon. That means the refinery and profit on that price was $.494 at 19% in 2006, and when you subtract that roughly $.5o from the 2006 price of $2.60 you get a net cost of $2.10 before refinery and profit. That means refinery and profit is now $1.17, ($2.10 subtracted from $3.27) more than double what it was a year ago! My guess is a large percent of that will show up as profit in the next quarter. What are the Democrats doing about this you ask yourself? Well, a quick check of DNC.ORG shows them more concerned with the Gonzales firings, Paul Wolfowitz, (honestly, does anyone care?) and the appointment of the new War Czar than what your paying at the pump. In fact, the only mention of it is in a blog.
So what can we do about it? Nothing. Thanks to the Democrats who forced the CEO's of Big Oil to testify in front of Congress when they didn't do anything wrong (instead of waiting until they did) and G.W. and the Republicans acting as a force field against any future Congressional over site, Big Oil sees this as their chance to rape and pillage to their hearts content. I guess there is an offhand chance that G.W. may see this as a chance to improve his sagging poll numbers and ask his buddies to lay off, but frankly, I think Big Oil is now so global, so powerful, and so free to sell their wares where ever they please that they don't care what America, G.W., or anyone else thinks. The only good solution I see is screaming at the top of our lungs for an end to our dependency on oil and maybe our grandchildren will see the day when Big Oil will go the way of buggy whips and kerosene lanterns. Until then, bend over and touch your toes. H.C.
6 comments:
hi h.c.,
i was just having a conversation yesterday with someone about the extreme gas prices. except for letting our voices be heard regarding our concerns, about the only thing people can do right now is pay the price. you know it's all part of the "game" because the prices always go up around holidays and summer vacation time.
what can you do? if you own a car, you have to use gas. even if the prices drop some, it probably won't be that much, and it's only going to increase in the future. unless we do go back to the days of horse and buggy, i don't think it's much we can do. it's all about power, greed, and control. excellent points, especially the math.
Thanks Heiress,
You are, of course, absolutely correct. These oil companies are now so global they are untouchable. A lot of people seem to be stuck in that '70's mentality of the U.S. being the consumer of all the worlds resources and therefore strong enough to bully corporations. Those days are gone. All they have to do is rip up that "Headquarters" sign and move to Belgium and we can't do a damn thing about it. Most Oil companies aren't even American with the exception of Exxon/ Mobil and if we give them too much grief they'll move too. Thanks for your insight.
it's what all the news media were talking about today on t.v. they even sent one of the channel's t.v. crews in one of the gas stations in my neighborhood to get customer's comments about the risen gas prices. how interesting to have them come into my neighborhood and today right after your discussion here!
i think the U.S. is stuck too in thinking they are the consumer of the world's resources and have all the power, etc. i'm an american, but i don't agree with a lot of what they do.
Hey Heiress,
It's because we're Americans that we're allowed to disagree with our Government. No matter how fascist people may think we've become, all I have to do is watch "The Daily Show" for 5 minutes and I know dissent is alive and well and America is still healthy. It's nice to have one of my pieces be relevant, I don't usually comment on day to day events. Thanks as always for adding another view.
"Taking it in the gas"?! Do you kiss your mom with that mouth?
Interestingly, with industry cramming itself in centralized locations, it makes it difficult for average citizens to get anywhere without using their cars. Even alternatives like carpooling and using other modes of transportation leave us vulnerable.
I hate to admit it, but oil companies have us aced right now.
Hey Dre,
I thought it was kinda clever. In answer to your question, yes I do, but she swears as bad as me. (Just kidding Mom) That's the most frustrating thing about our situation, there isn't much we can do about it. I'm going to invent a peddle car and put in a windmill at home.
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