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Friday, May 23, 2008

Why Are Gas Prices So High?

The pain at the pump is affecting the entire economy. Goods, after all, must be transported, and this adds to the cost of everything. With fuel prices around four dollars a gallon, the public is left wondering: "How did all of this happen so fast?"

There are several explanations, most of which point the finger of blame at government ineptitude and short-sightedness. Global demand is at an all-time high, with China, in its new-found prosperity, consuming huge amounts of petroleum. Anyone with any economics education whatsoever can see that this large increase in demand will affect prices. Oil is now above 130 dollars a barrel. Only a year ago, we were panicking that it might someday hit one hundred dollars. Without an increase in supply to meet the increasing demand, costs will only go up.

That explanation would be sufficient if the oil supply were naturally limited to the sources currently being developed, but it isn't. Combining Anwar, the Atlantic and Pacific coasts, and the Dakotas, we have more petroleum potential than the Saudis. We have simply (and stupidly) refused to use it. Environmentals (as opposed to true environmentalists) have fiercely opposed the development of our oil resources. Their solution: drive a Prius. For those of us not in the economic league to purchase such a vehicle, that solution falls far short of the mark. Moreover, if the demand keeps outpacing the supply at this rate, not even a Prius will make gas seem affordable.

Worse still, our refining capacity has not increased for over thirty years. Every time an oil company begins to talk expansion, the local environmentals put up enough of a fuss to foil the effort. Our government has been more responsive to the wishes of the petroleum-Luddites than they've been to the ninety-nine percent of us want affordable fuel. These same morons oppose nuclear energy, a technology which would lessen our dependence on oil. Anything that represents progress and productivity is, to them, anathema.

The government could have ignored the protests of the flea-ridden-hippie crowd and done what's best for America. They did not. Their spineless pandering to those opposed to our continued prosperity is the root cause of the gas crisis. Now the same people who caused the problem argue that it's too late to do anything. If we begin development, it won't produce anything for perhaps ten years. I disagree. If the foreigners who hoard their oil know we're about to flood the market, they may reduce prices to discourage us from doing so.

Next time you go to the pump, thank your local senator for the high prices. There would be plenty of gas if they'd thought ahead.

1 comment:

  1. My friend at work told me she paid $4.35 per gallon for gas yesterday. The prices are also going up due to the upcoming three day weekend. We are at a standstill as far as our own refineries go - so sad and pointless. What happened to government for the people, by the people???


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