Wednesday, April 26, 2006

The High Price of Gasoline

I have recently received an e-mail from two different sources that is being circulated on the web. For those who may not have seen it or don't remember it, I reproduce it below:

"This was originally sent by a retired Coca Cola executive. It came from one of his engineer buddies who retired from Halliburton. It's worth your consideration.

Join the resistance!!!! I hear we are going to hit close to $4.00 a gallon by next summer and it might go higher!! Want gasoline prices to come down? We need to take some intelligent, united action. Phillip Hollsworth offered this good idea.

This makes MUCH MORE SENSE than the "don't buy gas on a certain day" campaign that was going around last April or May! The oil companies just laughed at that because they knew we wouldn't continue to "hurt" ourselves by refusing to buy gas. It was more of an inconvenience to us than it was a problem for them.

BUT, whoever thought of this idea, has come up with a plan that can really work. Please read on and join with us! By now you're probably thinking gasoline priced at about $1.50 is super cheap. Me too! It is currently $2.79 for regular unleaded in my town. Now that the oil companies and the OPEC nations have conditioned us to think that the cost of a gallon of gas is CHEAP at $1.50 - $175, we need to take aggressive action to teach them that BUYERS control the marketplace..... not sellers.
With the price of gasoline going up more each day, we consumers need to take action. The only way we are going to see the price of gas come down is if we hit someone in the pocketbook by not purchasing their gas! And, we can do that WITHOUT hurting ourselves. How? Since we all rely on our cars, we can't just stop buying gas. But we CAN have an impact on gas
prices if we all act together to force a price war.

Here's the idea:

For the rest of this year, DON'T purchase ANY gasoline from the two biggest companies (which now are one), EXXON and MOBIL. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit. But to have an impact, we need to reach literally millions of Exxon and Mobil gas buyers. It's really simple to do! Now, don't wimp out at this point.... keep reading and I'll explain how simple it is to reach millions of people.

I am sending this note to 30 people. If each of us sends it to at least ten more (30 x 10 =3D 300) ... and those 300 send it to at least ten more (300 x 10 =3D 3,000)...and so on, by the time the message reaches the sixth group of people, we will have reached over THREE MILLION consumers. If those three million get excited and pass this on to ten friends each,
then 30 million people will have been contacted! If it goes one level"


I am amazed that so many hair-brained schemes are so readily and so enthusiastically distributed on the web and the issues that prompt this outpouring of indignation. In this case it is the high price of gasoline.

First of all there are hundreds of people dying in the Dafur genocide. There are hundreds of thousands of Iraqis dying in their country even without counting our own brave soldiers. Our own country causes people to disappear - they call it rendition - and to be tortured. Some may very well be terrorists, but others are totally innocent and after being tortured are told, "so sorry, we made a mistake!" How many are never heard of again because their disposition covers up the mistake, we will never know.

We are having our phones tapped without any court warrants as provided for by our constitution and our laws. They tell us that this only involves the bad guys but how do we know. Our President tells us "Trust Me" but can we, as the Congress dominated by his cronies’ refuses to exercise any oversight. Corruption is rife. Legislation, inserted in the dead of night called "Earmarks" rewards those willing to pay either by so-called campaign contributions or by outright gifts of vacations and other "gratuities". This costs us untold billions while the Congress refuses to change the "system".

My friends there is a serious cancer growing on our body politic and we ought to rise up in anger and outrage.

BUT WHAT IS IT THAT TRULY OUTRAGES US! HIGH GASOLINE PRICES. I hate to say it but high gasoline prices are good for our nation. If high gasoline prices will cause us to use less gasoline that is a positive good. It would be better if the windfall from these high prices went into our government coffers where it could be used to repair our highways and our infrastructure, instead of into the pockets of the oil companies, but there is a finite amount of oil that can be pumped and no one has yet found a way to repeal the law of supply and demand. If the world tries to buy more oil than can be produced by suppliers prices will rise. Is there a way to prevent this? Yes! It was done during World War II. It is done with price controls and rationing. The time may come when this will be necessary but it isn't necessary yet and hopefully it will not become necessary. It should be used only during true emergencies.

I can think of many reasons not to buy from Exxon-Mobil. They are environmental predators. But boycotting them will not bring down oil prices. That is a pipe dream! What is driving the high price of gasoline is the high price of oil and that is a price that is a world price and it makes no difference where the oil is bought.

A while ago we heard of boycotting oil from the Middle East. Then it turned out that we only buy a small portion of our oil from the Middle East. Most of it we buy from Venezuela. But it makes no difference. In a sellers market if one country doesn't buy it another will. This is a true case of globalization.
Why the sudden rise in oil prices. Well the Iraq war is one. Iraq is pumping less oil now than under the oil for food program. China and India are another. They keep buying more and more. The saber rattling against Iran is probably the most immediate cause. The world and the oil markets are nervous about a cut off from that major source.

There is no short-range solution. Oil prices will fluctuate up and down over the months and maybe years to come. But there is only one trend in the long run and that is up. Get used to it!!!!!!! Get smaller, efficient cars.

Is there something our government can do? Yes! But its effects will only be long term. We can spend billions to develop alternate fuels, efficient means for using those fuels, while making sure that they do not spew CO2 into the air. If we do this we will become the suppliers to the world , a boon to our economy and to job creation and save the world in the process.

THERE ARE NO QUICK FIXES!!!!!! JUST AS THERE ARE NO FREE LUNCHES!!!!!!

13 comments:

Anonymous said...

Right on.  If Brazil can do it, why not us?

Anonymous said...

What does it really take to generate outrage?  We've been wondering.

Anonymous said...

Emil, this ridiculous proposal is just simply not worthy of your intellect and my time. Please just go back to your well reasoned in-depth opinion pieces

Anonymous said...

We haven’t been buying Exxon gasoline since the firm refused responsibility for the Valdez incident. We’ll add Mobil to our no-buy list.

Anonymous said...

This land cries out for judgment!  Ezekial

Anonymous said...

Hear Hear!!!!. Only $5.00 a gallon is not enough. $10.00 is better. Only then will the greed of the big oil conglomerates and their henchman, the sheiks and presidents for life of the greedy oil producers will strangle themselves on their own petards.

Anonymous said...

They will not strangle themselves, but we can strangle them by simply buying less and less oil. Every company in every industry charges as much as the market will allow. Greed is always the driving force. If supply is greater than demand, prices fall until the markets come into balance. If demand is greater then supply prices rise until the markets come into balance. The Bush Administration and the Republican Congress have always taken the approach that demand need not be restrained and that supply needs to keep being increased. Along that line they passed a so called energy bill which gave billions of dollars to the oil industry on the basis that somehow that would increase supply. Of-course it didn't. It did get Republicans a lot of campaign contributions from the oil industry.
The present response is a lark. A hundred dollar tax rebate will increase the deficit but will hardly make a dent in the expenses of motorists. Cutting taxes on gasoline will temporarily lower the price but increase demand, quickly increasing the price again, but with the money going to the oil companies instead of the government. Not buying oil for our strategic reserve adds 25,000 barrels of oil per day. The U.S. imports about 10 million barrels a day. Needless to say this is nothing more then a political ploy.
What will make a difference is increasing CAFA, spending money on research for alternate fuels and greater efficiency in the use of fuels. The administration has increased CAFE standards but in a deliberately self defeating manner. See: http://www.washingtonpost.com/wp-dyn/content/article/2005/08/23/AR2005082300625_pf.html
The benefits of real fuel efficiency standards are set out at: http://www.aceee.org/energy/cafe.htm
As for the argument that higher CAFE standards lead to unsafe vehicles see: http://www.sourcewatch.org/index.php?title=Fuel_efficiency_standards_and_the_laws_of_physics
Nothing, other than less demand will make a difference in the short term, but if we had seriously dealt with the problem years ago it would make a major difference now.

Anonymous said...

Thanks for your interesting response. Clearly you are theoretically correct but it ain't going to happen without an out cry from the masses who have been spoiled by their overreaching indulgence in acquisitions, especially large, fast, powerful gas guzzlers. Americans have been spoiled and indulged all their live and to quote Jung have a huge inferiority complex. Hence the need everything large and powerful cars (penises). In my opinion only castration (cutting off their insatiable thirst for more through making them pay more and more will bring them to their senses). I'm talking revolution here. The extent to which individuals begin to be forced to awareness is the degree to which their pocket hurts. So I say BRING ON THE $10.00 gallon gas. The American people will continue to swallow  the crap they have been handed until it hurts so much that they will rebel. No amount of logic will change that. Don't forget the PROFIT MOTIVE.

Anonymous said...

I must say that I was disappointed that only two of those who commented seemed to agree with me that genocide and people dying, etc. is more serious than high oil prices.

Anonymous said...

Good G-D. I'm not concentrating on oil. I was merely trying to raise a point about big oil. Of course immediate world concerns surround the viciousness and greed that drives the miserable starving masses into oblivion. These humans are so helpless that they cannot mount a revolution. They depend on us ( the western world who fail them at every turn). Of course the US is a huge offender but by no means the only one. Our great responsibility is our power to lead and we have abandoned that role long ago,,so how in hell can we expect morality from the rest of the world when we have lost ours.
"Brazil can do it because they have a much smaller population and thus can achieve a greater degree of independence because they have enough for their population. Oil prices and world horrors like that in Dafur and Chad are not a separate matter . They are connected to the same monumental greed and callousness that drives big oil and big immoral govertments.

Anonymous said...

1.) "I agree with some of the comments about the relative importance in this world of high oil prices.
2.) "Compared to Europe our prices are cheap.  Why should we have “cheap” oil when that means  funding militant Arab regimes.  If you are truly interested in decreasing energy prices there have been many proposals floated but the biggest opponents are not conservatives but liberals.
3.) "Build many many more nuclear facilities ala Japan.
4.) "Begin artic drilling in Alaska.
5.) " Consider alternative sources such as wind but the biggest opponent so far is Ted Kennedy.
6.) "Increase taxes per gallon and rebate them to individuals in personalized social security accounts (see today’s NYT)
7.) "What do all these proposals have in common- rejected by liberals.  They just far prefer to point with alarm."

Anonymous said...

I will answer you point by point and for that purpose I have attached numbers to each of your paragraphs.
"1.) No comment is called for.
"2.) That is not true. It is liberals who have been urging conservation which is probably the single most effective means. They have also been urging research into alternative forms of energy. The first has been vehemently opposed by the Right and the second has gotten lip-service by the Administration but very little in real funding. Increasing the CAFE is the single most effective means to deal with the matter, as I have pointed out, but this has been anathema to the Right.
"3.) This may have to be embraced if other means fail but the radio-active waste created is really scary as is it's dangers as a target for terrorists.
"4.) It is strange that the party that invented environmentalism - Teddy Roosevelt - should have become its worst enemy. Anything that will destroy the environment seems to have appeal. We all share this planet - we should all have a stake in preserving it. Drilling in the Arctic would produce relatively little oil. See Foreign Affairs at: http://www.foreignaffairs.org/20010701faessay4995/amory-b-lovins-l-hunter-lovins/fool-s-gold-in-alaska.html where it is stated, "First, the refuge is unlikely to hold economically recoverable oil. And even if it did, exploitation would only briefly reduce U.S. dependence on imported oil by just a few percentage points, starting in about a decade. Nor would the refuge yield significant natural gas. Despite some recent statements by the Bush administration, the North Slope's important natural-gas deposits are almost entirely outside the refuge. The gas-rich areas are already open to industry, and environmentalists would likely support a gas pipeline there, but its high cost -- an estimated $10 billion -- would make it seem uneconomical.
"Furthermore, those who suppose that any domestic oil is more secure than imported oil should remember that oil reserves almost anywhere else on earth are more accessible and more reliably deliverable than those above the Arctic Circle. Importing oil in tankers from the highly diversified world market is arguably better for energy security than delivering refuge oil to other U.S. states through one vulnerable conduit, the Trans-Alaska Pipeline System. Although proponents argue that exploiting refuge oil would make better use of taps (which is all paid for but only half-full), that pipeline is easy to disrupt and difficult to repair."
5.) This is something that liberals have consistently supported. Ted Kennedy does not oppose it anywhere except in the one place where it would be an eye sore to his constituents.. His position is parochial, to be sure, but no Senator can survive if he ignores his constituents opposition to a project in their back yard.
"6.) Playing politics never stops. If the Right can get its foot in the door toward destroying Social Security it will do so. What has the price of oil have to do with Social Security? Taxes on oil should be used to finance research on conservation and alternative sources of energy.
"7.) Stop playing games. It isn't worthy of you.

Anonymous said...

We just returned from the local version of the Darfur rally, wanting to do what little we can to get our government to do what it should be doing to stop the killing there.  What little we can to is to urge all of our friends to go to www.savedarfur.com and take a minute or two to fill out and send the message to President Bush to stop talking and act.