I think this sums up why we pay what we do for gas and what we should do to help ourselves.
POLITICIANS AND GAS PRICES
Yesterday Exxon/Mobil posted a record quarterly profit of $9.9 billion, thanks to soaring oil and gasoline prices. Shell reported a $9 billion profit yesterday. The oil business is booming...and why? Good 'ole supply and demand. But don't tell that to politicians.
Politicians like Republican Senate Majority Leader Bill Frist see this as an opportunity to score politically with voters. Because many in the general public have been brainwashed by government schools, they do not understand the free market. Time to make a little political hay over the situation. So what exactly is going on?
As I said, supply and demand. Companies like Exxon/Mobil, Shell, BP and others explore and extract a barrel of oil out of the ground...we'll say they spend $15 doing this. But oil is now going for $70 a barrel on the open world market. So what are the big oil companies to do? Sell it to people at a discount, just because politicians say so? Nope...they are beholden to their shareholders to make as much profit as possible...so they sell it on the world market, where demand from countries like India and China are driving up the prices. Too many dollars chasing too few barrels of oil.
So what should be done? The answer is to drive up the supply, which will lower the price. Time to send the rigs to Alaska, off the shores of the United States and anywhere else we can drill for crude. There is plenty of oil in the ground....the problem is the leftist environmentalist moonbats won't let people drill for it.
The next step is to start pulling permits for oil refineries...the places where oil is turned into gasoline. There hasn't been a new one built in 30 years, thanks to the environmentalists. New refineries could also refine some of the cheaper, rougher crude...which would also bring down prices. But nobody wants a refinery in their back yard, right? Too bad.
We'll hear a lot about conservation, electric cars, and other alternative fuel sources. That's all well and good....and advances in technology do need to be pursued to reduce our reliance on fossil fuels, but the bottom line is this. For the foreseeable future, cars need gasoline, trucks need diesel fuel, homes need heating oil and airplanes need jet fuel.
In the meantime, if we do nothing, the price of oil will continue to stay high, the oil companies will get richer and politicians will start talking about things like price controls, which never work and result in shortages.
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