Gas prices on the rise: Is Obama to blame?
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WASHINGTON, March 19, 2012 — Everyone at the gas pump is yelling, “Ouch!” Republicans, Democrats, and Independents. In some parts of the country, gas is headed north of $5 for regular. That is a chunk of change out of stagnanting middle class incomes. For the poor it is devastating. So who’s to blame?
This being an election year, Republicans eagerly point the finger of blame and shame at President Obama. Not fair, counter Democrats, saying the President has no control over fluctuating gas prices.
So who’s right? Let’s look at the facts and let them tell the story.
Why are gas prices rising?
For a whole host reasons, the American consumer is not in the driver’s seat:
* China and other emerging economies are driving the prices up as their demand for oil and gas increases. U.S. Energy Information Administration
* Warmer weather almost always means higher prices, just as it does each year. Then each year prices rise, level off in the peak summer driving season, and then drop in the fall. This is in part because of “refinery maintenance schedules, the annual shift of production to warm-weather fuel blends and other technical factors,” according to US Economics Weekly.
*Speculators are contributing mightily to the rising price at the pumps. Investors in the commodities market speculate that the price will be more than they originally paid and they will profit handsomely. In fact, speculators are leaving the stock market for commodities and oil futures, betting the price of oil will continue to skyrocket. Who are these speculators? According to the head of Petroleum Marketers Association, Dan Gilligan, it includes respected institutions such as Harvard Endowment and the California pension fund.
* War mongering makes speculators think oil will become even more valuable as an investment. Every time Israel rattles its sabers or every time Tehran inches closer to a nuclear bomb or every time a candidate suggests bombing Syria, oil prices get a boost. If we were to enter into still another war in the Mideast, oil would become scarcer, making the sky the limit for speculators.
Actual war with Iran could lead to a sudden loss of 2.2 million barrels of oil a day, the amount that Iran currently exports. That would send prices through the roof. Or if Iran were to successfully “block the Strait of Hormuz, through which 17 million barrels of world oil flows each day, that could be even more catastrophic.”
So why don’t we so do as Sarah Palin once said, “Drill, baby, drill” right here at home?
If we started drilling right this minute, it wouldn’t solve the problem of higher gas prices. In fact, we are drilling more than ever before. Refineries are working at capacity. However, since oil companies are in the business of making money, they ship petroleum and petroleum products overseas. In September 2011 alone, “the United States exported 3.2 million barrels of refined petroleum products a day and imported just 2.2 million barrels a day. That’s a surplus of exports over imports of roughly a million barrels a day.”
“For the first nine months of 2011,” according to the U.S. Energy Information Agency, “the U.S. exported 752 million barrels of refined petroleum products: gasoline, jet fuel, kerosene and such chemical-industry feed stocks as ethylene, butane and propylene.” The reason? Our slowing economy hit the oil industry in the pocketbook and there is more money to be made abroad in new, robust economies like China. But don’t cry for the oil companies: their profits are up, as they raked in $1 trillion from 2001 through 2011.
Besides, if we drill, how much would stay here anyway? To hear the whine of the oil companies, they are overregulated and haven’t enough places to drill. Actually, oil companies have a plethora of places to set up their rigs, they just aren’t. Of course, the oil companies want federal lands opened up as well.
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