Friday, August 29, 2008

Gas prices!

[Note: sorry for some of the strong language in the e-mail version. I always write the first draft the way I intend it to come out and edit it later. I accidentally published the post before I redacted the curse words. Won't happen again.

Buckle up, because I'm fired up. This is going to be a bumpy post.

Did anyone else notice that gas jumped almost 20 cents over night?

Sure, there's TROPICAL STORM Gustav out in the gulf. Actually, strike that. It's not even IN the gulf yet. It's still over freaking Jamaica as I write this. They're not even projecting it to ENTER the gulf until Sunday afternoon which - let me do the carry the 2... - yeah, isn't even for TWO MORE DAYS! And then the National Hurricane Center isn't even expecting it to make landfall until Wednesday!

Why is it that we're told that drilling offshore in the gulf or in Alaska would be pointless because it would be ten years before we would see any of that oil and that it wouldn't affect prices now at all. Yet a storm that's not even in the gulf yet causes the price of gas to rise 20 cents over night? What kind of crap is that? Because it MIGHT disrupt offshore operation on some rigs, so the price goes up? How long does to take for oil drilled in the gulf to get to the refinery, be refined, then make its way to the gas station? I figure a couple of weeks, conservatively. I KNOW I'm over simplifying this. It's not like the oil they pump this week is the gas I'm using in two weeks. I realize they have HUGE storage facilities. I know that the process is much more complicated than I'm painting it here. I realize that any time there's a storm it shuts down all the tankers. My point is that shouldn't something actually HAPPEN before prices jump? This speculation business is out of control.

And then, once the storm passes, why then does it take MONTHS for the price to go back down, not the weeks that a logical supply chain should require? Prices should go back down to pre-hurricane levels (assuming, of course, that none of the pumping rigs were damaged, thereby reducing supply) once the rigs were staffed and pumping again.
[EDIT: Thanks for the education, Layne, on what they have to go through after they shut down a refinery. Interesting stuff. My larger point is that we should have more refining capacity so that a couple of refineries isn't so big a hit to the overall production.]

I was commuting between Brenham and Houston every day during the summer when Katrina and Rita hit the gulf coast. I watched gas prices rise from $2.00 a gallon to $2.80-ish (and over $3.00 in some places) when Katrina hit. Prices subsided to the $2.60 range before Rita hit and they went back up to Katrina levels. And they stayed there. Because they could.  People continued to pay the high prices.  Because prices have always gone down in the past, right?  Why should we alter our driving habits for a short-term spike, right?  Three years later, they're a dollar higher, and that's after an almost 50 cent slip since the height of the summer.

So I paid $2.55 this morning to fill up my truck. It cost $70. When I bought it three years ago it cost $40 to fill it. Earlier this summer it cost almost $90 when prices were hovering around $4.00 (for no good reason.) Anyone else notice that in the last month or so as gas prices slipped back a little that the economy started picking up? There's a link. We're finally at that tipping point where gas prices are affecting everyone's bottom lines. Frankly, I'm surprised that it took this long. And also, frankly, I'm embarrased that when prices dip down to freaking $3.45 a gallon that everyone rushes out and fills up because we've been conditioned to think that we're getting a good deal. Why is the American public acting like such a bunch of mind-numbed lemmings? We're told that there are more pressing issues. Crime... Iraq... The upcoming election... What's hot at the box office... What's Britney Spears doing today... So we accept high gas prices as inevitable and continue with our lives unchanged. We put up with - and accept - this stuff.

I don't fault the oil companies for making a profit. That's what they're in business for. And I hope to God that Obama isn't elected because his rhetoric about "windfall profit taxes" scares the heck out of me. Have we come so close to a Communist state that the government can talk about seizing private corporate profits ... and the public ACCEPTS it???? My friends, that's only one step away from the government stepping in and saying that you made too much last year and that your "excess profits" will be confiscated - in the form of taxes - to be redistributed to the less wealthy. That's the point where the government is deciding what its citizens are worth and what they earn. And that sounds a lot like the USSR, pal.

Of course, I come with a solution. It has four parts. First and foremost is for the government to allow more drilling by not tying the hands of the oil companies. Technology has made drilling much cleaner than in the past, which is the primary argument that environmentalists use when arguing against new drilling.

We also need more refining capacity. The US is still refining at the same capacity that it was in 1976, when the last oil refinery was completed. The population has increased 71% since then.

Third, stop the use of ethanol. It's sucking much-needed corn out of circulation in a year when droughts and floods have destroyed cops across the United States. That grain goes to feed livestock and to make things like corn syrup, which is in almost everything these days. The fact that so much corn is suddenly being used for fuel is a huge reason why grocery prices have risen so dramatically over the past year. It's also an inefficient fuel. It takes 26.1 lbs of corn to make a single gallon of ethanol. That's almost exactly the amount of corn a single person eats in a year. And there's still conflicting opinions on whether ethanol is even good for your car at all.

Fourth, continue to develop new and alternative energy sources. Anyone who says that wind power or solar power alone can give us all the power we need is living a pipe dream. From what I've read, nuclear energy is still the cleanest and most efficient fuel there is in any sizeable (read: usable to power large sections of the country) form. Develop new technologies that can be used twenty or thirty years down the road while we wean ourselves off of oil. It's a little scary that I actually agree with Paris Hilton's energy policy. But as I see it, the best approach is a two-pronged approach, not the either-or choices that McCain and Obama seem to hold.

For another great energy plan, read Congressman Michael McCaul's energy plan. I hope he runs for president in a few years.

So, now you know. That's what a 20 cent rise in gas prices does to me. I know, it's not pretty, but I'm tired of paying it and being quiet about it. I hope other people are as fed up with this continuous ridiculous madness as I am, especially when things can be done about it.

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