At the rate gas prices are going up these days, it won’t be long before rent-a-cops will be standing beside gas station pumps. There will be stories about people getting into their cars only to find they won’t start because someone has siphoned off fuel from their gas tank. Yes, it’s coming to that.
As gas hops, skips and jumps toward four dollars a gallon and beyond, anger at the oil companies and their profits grows apace. Huge as its profits are, Big Oil is not the main cause for our gas pump pain. If oil companies had the power to raise the prices as high as they are now, they would have already done it years ago.
Since oil moguls are making money on a scale never seen before in modern history, they make a good target. The sight of those horrid men testifying before Congress would make anybody scream for the heads.
The Democratic presidential candidates have been traveling around primary states essentially saying, “If you elect me, I will abolish tax loopholes for oil companies,” the implication being that this will make a difference in the price we pay at the pump. It won’t. Retail gas prices are not set by tax loopholes. Yet there is no reason whatsoever that oil companies should be getting those tax breaks. Repeal ’em, already!
Republicans like to say repealing oil company tax breaks is class warfare, which makes sense. Suspending the federal 18.4-cents-a-gallon excise tax for the summer driving season makes absolutely none. John McCain is for it, perhaps because he is enjoying one of his senior moments. Hillary Clinton, ever the pander bear, is also for this eccentric tax moratorium. “Middle-class families are paying too much and oil companies aren’t paying their fair share to help us solve the problems at the pump,” quoth Lady Hillary. In truth, she has no idea how to solve our country’s gas price problems. To his credit, Barack Obama refuses to go along with this scheme.
At this point the last thing we should be doing is encouraging increased gasoline usage. More demand for gas means higher prices; how will the lost revenue be made up? Hillary Clinton has a plan for everything except how she is going to pay for it. However, American voters are frequently gullible and dangling dippy tax moratoria in front of them can get a person elected. It’s almost as good as standing on the street corner passing out $100 bills and calling it economic stimulus.
Television informs us of other reasons the price of oil is so high: restless Nigerians sabotaging pipelines carrying oil destined for American refineries, pirates sailing out of a Somali port attacking a Japanese tanker, angry Arabs, uncooperative Iranians, crooks and militias stealing Iraqi oil, and more.
Although the Saudis deny it, rumor has it Ghawar, the world’s largest field, is also in decline.
On the plus side, Brazil’s state oil company, Petrobras, has recently discovered a major oil field off that nation’s southeastern coast. As large as that field is, it is not big enough to take care of the planet’s increasing demand for black liquid–and the oil won’t be accessible for many years. In the immediate future and perhaps beyond, there will not be enough surplus oil to drive down prices and keep them down.
The wars in the Middle East aside, George W. Bush, Treasury Secretary Henry Paulson and Alan Greenspan, have played no small part in driving up the price of gasoline. Since oil is traded in dollars, the Bush/Greenspan inflation is taking its toll. To protect themselves against the depreciating dollar, oil producers jack up the price of crude. The less the dollar is worth, the more the price goes up.
Meanwhile, hedge fund billionaires are making their own contribution to higher gas prices. We can be sure that they are taking their shrinking dollars out of their piggy banks and investing them in something that not only keeps its value but renders a profit, and that’s oil. Ordinary people watch their savings shrivel as their government bonds and certificates of deposit lose spending power. Yet the billionaire class is preserving its capital by speculating in black gold. A byproduct of their speculations is a persistent rise in oil prices.
We may soon see millions of Americans struggling to use less gasoline. If gas begins averaging four or five or even six dollars a gallon, we could even see our country’s first serious attempt at energy conservation since the Carter Administration, and it will not be a pretty sight.
As far as the current Administration is concerned, instead of a conservation program, a corking good recession or a small depression should suffice. It will drive down the price of gas at the same time it drives people to the unemployment office. One way or another, the free market will take care of it.
