Watching the dollars wheel spin feverishly past on the gas pump these days is somewhat equivalent to the cogs whirling in one’s head, trying to fathom why prices have skyrocketed in the past month, reaching historic highs for this time of year.
In my town, prices are up more than 50 cents per gallon, with almost daily increases. Some areas of the country are already seeing $4.50-4.75 … and the busy summer driving season is still three months away.
Determining where the fault lies in escalating gas prices is much like a hamster on a revolving wheel — one gets nowhere fast.
The blamers are many, their villain of choice diverse: It is (pick one or all) Obama’s fault, or the monopolistic oil companies, Congress, OPEC, China, refiners, environmentalists, the EPA, the lack of new refineries, the closing of refineries, Hurricane Sandy, Winter Storm Nemo, not enough new energy, too much new energy, exporting of U.S. energy, speculators, and on and on.
Ironies abound: The media talking heads were yammering of late that U.S.-produced oil and gas supplies are at an all-time high. This on the heels of reports that oil, gas, and refined petroleum products are now the leading U.S. export.
Raising, of course, the inevitable question: If the U.S. is producing so much more oil and gas, why aren’t prices stabilizing or going down? The analysts say, well dummo, the oil market is just one giant barrel that everybody’s oil is poured into, and price of the oil in that metaphoric barrel is a function of the world market, blah, blah — and oh, just incidentally, because the companies can get more selling it to China and Europe and elsewhere than they can get here.
Then there’s the refinery paradox, spawning articles and analyses that would stretch the length of the in-limbo Keystone pipeline. Critics point out that no new refineries have been built in the U.S. in 30 years because of environmental opposition and overly stringent EPA regulations, that besides, the oil companies have shut down almost half the refineries in the U.S., that refinery profits have been ballooning in recent years, and the companies use refinery capacity as an excuse to manipulate prices at will.
Not so fast, says the other side: Indeed, no new refineries were built for over three decades and a lot of old, inefficient facilities were in fact shut down, but at the same time capacity at existing facilities has been continually expanded. Further, they say, it wasn’t the EPA or environmentalists that thwarted the building of new refineries, but the huge investment required and the low profits in refining.
Others say it’s all the fault of speculators, who care not a whit about pump prices, as long as they can make a buck trading futures. Ah, the traders say, but that’s just the market at work — a price-setting mechanism, don’tcha know.
As for the president and Congress, well, they have about as little influence over pump prices as you or I. They can bluster and bloviate, and even take some oil from the nation’s strategic reserve, but any effect is minuscule and very temporary.
You get the picture: He said, she said, and nobody’s any nearer to a revelation.
But while Joe Citizen may not comprehend the big picture, he knows all too well rising gasoline prices mean more hard-earned dollars being sucked into the gas pumps. And the price of everything he buys, from groceries to clothes, goes up and up … because everything he buys is touched by oil and transportation.