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"And ye shall know the truth, and the truth shall make you free." - John 8:32
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Author:  Alan Caruba
Bio: Alan Caruba
Date:  April 17, 2006
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Gas Prices Rise! We’re Doomed!

As long as I can remember, the price of gasoline has risen just before the summer months, known for greater travel as folks pile into the car to go to the beach or drive to some vacation destination. In early April, however, oil prices rose more than a $1 per barrel, a high point over the passed seven months, and the mainstream media went berserk with reports that seemed to say that our entire economy was in free fall.

As long as I can remember, the price of gasoline has risen just before the summer months, known for greater travel as folks pile into the car to go to the beach or drive to some vacation destination. In early April, however, oil prices rose more than a $1 per barrel, a high point over the passed seven months, and the mainstream media went berserk with reports that seemed to say that our entire economy was in free fall.

House Democrat Leader, Nancy Pelosi, loosed a statement on April 11 saying, “the President has failed to take any action to lower gas prices.” I have scoured the Constitution to find a provision that says anything to the effect that the President is in charge of the global oil market or is empowered, nay, required to do anything about gas prices.

According to Ms. Pelosi, “Since President Bush took office in 2001, gas prices have increased 82 percent, but he continues his reverse Robin Hood policies of massive giveaways for big oil and gas companies at the expense of consumers.”  What exactly these “massive giveaways” are remains a mystery to me. Indeed, the Bush administration has been singularly unable to get Congress to open ANWR to the extraction of a huge reserve of oil that would not only increase the world’s supply, but likely reduce the price per barrel. The same is true for offshore reserves of oil and gas.

What would the Democrats do? “Our plan would empower the FTC (Federal Trade Commission) to crack down on price gouging to help bring down skyrocketing gas prices, increase production of alternative fuels, and rescind the billions of dollars in taxpayer subsidies, tax breaks, and royalty relief given to the oil and gas companies.”

The Democrat plan would drive up the price of oil and gas while wasting still more billions in research and tax credits for so-called alternative fuels. If such fuels were cost-efficient they would be in production right now. Ethanol is, if anything, a political payoff to the agricultural interests in the nation’s farm states. It costs a lot to produce and contributes nothing to the efficiency of an auto’s operation.

Why isn’t Ms. Pelosi recommending tax credits to encourage the building of more oil refineries? Major changes to the federal and state environmental restrictions on drilling for oil? The elimination of environmental gasoline formulations that require different blends, for example, for California and Illinois, repeating this process throughout the nation. Why isn’t she on the front lines demanding that America has access to the huge deposits of oil in Alaska that exist beneath the tender hoofs of caribou?

And why isn’t Ms. Pelosi mentioning that one the largest part of the cost of every gallon of gasoline you put in your vehicle are federal and state taxes? While Americans are paying over $2 a gallon, last year the price per gallon in England was close to $6 where taxes make up more than 60% of the pump price as compared to 20% in the U.S. It is probably up to $7 or $8 in Great Britain. In 2005, it was over $5 a gallon in Italy, Germany, and France. It was just over $4 a gallon in Spain, Japan, and Canada.

In case you haven’t noticed, there is considerable turmoil in Iraq these days. Its oil production, despite sitting atop the second largest reserves in the Middle East, has been severely obstructed, often due to the deliberate destruction of pipelines. Next door in Iran, there is much talk of going nuclear, a prospect that scares the hell out of everyone, but especially oil traders. In Nigeria, turmoil which is largely unreported has forced more than a half million barrels a day off the global market. The aftermath of Hurricane Katrina is still being felt as more than 300,000 barrels per day in the Gulf of Mexico remain offline while oilrigs are repaired.

Information about the factors that affect gas prices is not a secret. I found some of it on the Internet site of ExxonMobil where they noted that, “Americans feel the full effect of these changing commodity prices at the pump. On average, crude oil alone accounted for 53% of the U.S. pump price last year, with refining and marketing costs accounting for a further 25-30%.”

Meanwhile, the U.S. Energy Department reports that the demand for gas was up nearly 1% in the first quarter of this year as compared to last year. Crude oil is a global commodity that is publicly traded on world markets. If drivers in the U.S. use more, the price responds to the formula of supply and demand. We still pay less for gas than most of the rest of the world.

While Ms. Pelosi wails about rising gas prices and wants to make life even more difficult for “big oil”, most Americans are likely to ignore the rise in the cost of gas as we “fill her up” for a bit more travel this summer, oblivious to everything that oil traders worry about on an hourly basis.

Alan Caruba
National Anxiety Center

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Biography - Alan Caruba

Alan Caruba passed on June 15, 2015. His keen wit, intellect, and desire to see that "right" be done will be missed by all who his life touched. His archives will remain available online at this site.

Alan Caruba was the founder of The National Anxiety Center, a clearinghouse for information about media-driven scare campaigns designed to influence public opinion and policy. A veteran public relations counselor and professional writer, Caruba emerged as a conservative voice through his weekly column, "Warning Signs", posted on the Center's Internet site (www.anxietycenter.com) and widely excerpted on leading sites including this one.

A member of the Society of Professional Journalists, the American Society of Journalists and Authors, and a charter member of the National Book Critics Circle, Caruba applied a wide-ranging knowledge of business, science, history and other topics to his examination of issues that included protecting our national sovereignty, environment and immigration, education and international affairs.

Caruba resided in New Jersey and had served in the US Army, had been an advisor to corporations, trade associations, universities, and others who used his public relations skills for many years. He maintained a business site at www.caruba.com.

Caruba performed many reviews of both fiction and non-fiction at Bookviews.Com, a popular site for news about books of merit that do not necessarily make it to the mainstream bestseller lists.


Read other commentaries by Alan Caruba.

Visit Alan Caruba's website at National Anxiety Center

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