Monday, March 12, 2012

More BS From The Traveling GOP Clowns

     Since both the stock market and the jobs market are looking better lately, the GOP has invented a new line of BS: the high price of gasoline is the fault of President Obama. Newt Gingrich in particular is going about bragging that, if elected, he will quickly lower the price to $2.50 per gallon. He bases that figure on the fact that it was $1.13 when he was speaker of the house. Really Newt, if the president has that much control, why don't just we reelect the president from those days: Bill Clinton?
     Actually Newt, along with the rest of the clowns, is figuring on lowering the price by means of their tried and true method: Drill, baby, drill. It is their claim that the Obama administration is holding back production in order to keep the price high. The theory is that by so doing, we will be forced to buy green, energy-efficient cars. Unfortunately, the record doesn't accord with this theory.
     At the end of 2008, under the Bush administration, there were 391 operating domestic oil wells as compared to 1,173 at the end of 2011. In the eight years from December, 2000, to December, 2008, domestic crude oil production decreased from 181.5M barrels per day to 156.8M barrels per day, or -13.6%. By the end of 2011, production had increased to 182.2M barrels per day, or +16.2%. It appears that returning to dubya's policies would be a good way to curtail production.
     So why has the price of gasoline continued to climb? Believe it or not, domestic demand has declined to the point where refined fuel is now our biggest export. Normally in such a situation, one would expect inventories to rise and prices to fall, but just the opposite is occurring. The refiners can get a higher price by exporting than by selling to the domestic market. In fact, several domestic refineries have shut down for lack of business.
     So here is the situation: We sell our crude oil on the world market, then buy it back at a higher price. We refine that and sell it overseas because we can make more money there.
     No president, Democrat or Republican, is going to tell the refiners, “Look, you are going to have to sell a certain quantity of gasoline domestically at a price not exceeding x dollars per gallon.” Nor should he.
     But let's face it – the more crude we refine, the more refined product to sell overseas. Perhaps in order to cut costs for our traveling citizenry, we should be putting more resources into finding alternative fuels. And the green, energy-efficient cars is not a bad idea either.
     An added note: The Boston Globe just reported that the United States is now importing 45% of its petroleum, down from 57% in 2008.
     My books, “There Are Only Seven Jokes” and “The Spirit Runs Through It” are available in paperback, or at the Kindle Store.

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