Return to Sanity

This blog has taken what I have come to consider an unwise turn in the last few months.  Outrage at several idiots and the people who provide support for those idiots led me to turn this area into a place to vent my frustrations and voice my discontent.  Clearly the mass media, direct communication, and the court system and regulatory authorities are the proper outlet for such issues.  I will try to turn back toward my original course, that of a personal outlet.  However, I make no promises for my ability to resist temptation should I encounter yet another idiot.  Considering what country I live in and taking into account the last few months of fark.com headlines, that does seem depressingly likely.

I generally consider myself an apolitical creature.  I will never be a politician because I have not mastered their primary skill, the art of lying.  I do listen to talk radio quite a bit, though, and exposure to political topics is unavoidable.  This morning, Herman Cain, filling in for Neal Boortz on WSB-AM in Atlanta, ranted incessantly about the new mantra of politicians everywhere: “Drill here, drill now, Pay Less.”  The more I hear this, the more convinced I become that the United States political machine believes that we are all blithering idiots.

Cain grates on me under the best of conditions.  His questionable grammar and odd pronunciation drive me to distraction.  How can a man pronounce “hour” and “Iowa” such that they are both two-syllable words and sound exactly alike?  His manner of speech goes far beyond an accent.  He speaks his own dialect.

Setting that aside, though, let’s analyze this idea that producing oil domestically will somehow reduce gasoline prices.  First of all, drilling is expensive.  It costs money to have a crew of men wielding a thousand tons of equipment put a piece of pipe five miles into the earth.  Leasing the land to drill into also costs money, and so does extracting and transporting the oil produced — provided the well finds oil in the first place.  Oil companies that spend this sort of money expect a return on that investment.

Oil has a price on the world market.  The U.S. doesn’t set that price, nor does Exxon or BP.  The price fluctuates, hovering at or near what the market will bear.  Let’s say, for purposes of argument, that the current world price for a barrel of crude oil is $100.  If a company could sell domestically-produced oil at $100 a barrel on the world market, why would it sell that oil a penny more cheaply here in the U.S.?  It wouldn’t, of course.  If it can make $100 or even more than that on a barrel of oil, it will.  The mantra should be “Drill Here, Drill Now, buy an American a Yacht.”

I’m all for reducing our dependence on foreign oil.  At the same time, attempting to compel people to get behind that effort by promising lower gasoline prices is dishonest and wrong.  Oil companies are large, powerful, politically-connected, and greedy.  Once the Arabs and other foreign oil exporting nations no longer have a stranglehold on our economy, you can bet that the energy industry will take over.

Few people realize another key fact.  Much of the “oil” we buy and import from foreign nations is finished gasoline.  Why?  Because the United States has not seen the construction of a single new oil refinery in 32 years.  Even if we had sufficient domestic crude oil, we don’t have the refining capacity to produce any more gasoline than we are already producing — which is clearly not enough, or we wouldn’t be importing the stuff.  Drilling solves nothing.

T. Boone Pickens, a lifelong oilman, has already figured this out and is spending millions in advertising trying to get this very message across to the American people.   He claims to have a plan that will get us closer to energy independence and out of a mess that he admits we can’t “drill our way out of.”

Gasoline prices in Atlanta, which were about $3.60 per gallon before Ike threatened Texas, rose in some places to over $5.00 per gallon this past weekend, even before Ike hit.  Refineries in Texas were not heavily damaged, and production was only mildly disrupted.  Prices didn’t go up because of supply and demand. Prices went up because people were greedy and found an excuse to make money from the misfortune of others.  Gasoline prices, unlike crude oil prices, are set by the seller and are subject to all manner of capricious whims.  The price gouging continues even today, well after the storm has passed and everyone has the word that damage was minimal.

Sonny Purdue, Georgia’s governor (that’s what they call you when you’re better at lying than all the other people in your state), signed new laws last month implementing stiff penalties for price gounging, and threatened to enforce them.  Predictably enough, I have not seen a single news report of a gasoline retailer being charged with price gouging, even though hundreds clearly committed the offense.

I’m tired of being gouged at the pump.  Back around 2003 we were paying between $1.00 and $1.50 per gallon for gasoline, and no amount of political nonsense will convince me that it now costs four times what it did then to deliver a gallon of gasoline to my tank.  Greedy people are getting richer and I’m getting poorer, and that makes me angry, political or not, because it makes me feel I’ve got a sign on the back of my pants that says “Drill Here, Drill now!”

3 Comments


  1. Sounds like you need to become a European or even a Communist;-)
    Nowt so bad as unregulated Capitalism, eh?


  2. Don’t become a UK citizen! $5.00 a gallon? Blimey, I wish we were paying that in the UK! That works out around 60 pence a litre (damn Euro measurements!). We pay about £1.10 a litre at the moment, or around $9.00 a gallon (pray excuse any faulty maths, it’s early).
    What stings most about that is getting taxed twice on the same thing. Petrol is taxed anyway, then we pay VAT on top of that. It’s no wonder we’re all bloody skint at the moment! 🙂


  3. It’s down to $4.00/gal now and dropping slowly. The hurricane was just an excuse to grab revenue. I think we ought to drill here because of the capitalism everyone curses so loudly. Yes they will still charge outrageous prices but they will still try to undercut OPEC just enough to cause some competition. It will also provide jobs and tax revenue within the US. I understand that the US would have to get refineries updated etc. To me that equals more jobs. I don’t think it should all be done in a mad rush. The world will not stop spinning if the oil industry is forced to go about things in a slow methodical manner.

    Lets face it. It will either be American companies screwing us at the pump or OPEC screwing us at the pump (over simplified I know). At least if American companies are doing it the economy can get a kiss out of the deal.

    I agree with Scott that there is a lot wrong with the oil industry and its practices. I don’t think that preventing drilling here is going to make things any better. I do think that if we wait for the Arab countries to implode with war and we have nothing in place to fill the oil producing void, taxes on oil products and price gouging will be the least of our concerns. There are some South American oil producing countries that would love to have US oil consumption by the nuts. I would rather not give them that leverage.

    I will look into Pickens ideas more thoroughly. For now “drill here” doesn’t sound bad. “Drill now” may be a bit overzealous.

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