The Real Story Behind High Oil Prices

I’m getting tired of the knuckleheads on Capitol Hill wasting time parading oil executives into hearing rooms to pummel them over profits every week rather than actually solving the problem. Isn’t this still America? Aren’t we still a capitalist nation? A quick lesson on the purpose of a business: to make money. Yes, it’s that simple. The purpose is no greater or less than that. We should be cheering their profits.

Let’s say I were to grant you that a corporation could make “too much” money (I won’t, but let’s say I did). The oil industry has a profit margin well below the average of all industries. The reason for the huge profits in absolute numbers is simply the fact that it is the largest industry in the world. It would be like Joe’s Bar & Grill complaining that Applebee’s makes too much in comparison.

Anyway, let’s move on. Let’s take a look at what the mental midgets in Washington have done to address the issue of high oil prices:

  • They have made ANWR off limits to drilling
  • They forbid drilling off of the Florida and California coasts
  • They will not allow leases for drilling in the Gulf while China and Venezuela have signed leases
  • They are shutting down oil fields in Colorado
  • They won’t allow shale oil field development in some Western states
  • The EPA just added polar bear to the protected list even though their numbers have increased substantially. Oh yeah, and the polar bears are in the same area where we need to drill for oil.
  • They passed legislation allowing us to sue OPEC–I’m sure that won’t piss them off and cause them to cut off our oil.
  • There have been rumblings of a windfall profits tax (even though I pointed out earlier that they are below average in their profit margins). Trust me, increasing a company’s expenses, will not lead to lower prices.
  • All 3 presidential candidates have promised to pass cap and trade legislation (to fight the phantom global warming problem). The EPA estimates that this will increase the price of gasoline by $1.50 per gallon–other say it could be more like $5.00 per gallon.
  • They have not allowed the construction of a new refinery in over 30 years.
  • They will not allow the deployment of coal-to-oil technology. We are the Saudi Arabia of coal and could be energy independent with this technology.
  • They won’t reduce the federal gas tax–not even for the summer.

And they’re asking the oil executives why prices are so high? Stop the political grandstanding and provide real solutions folks.

6 Responses to “The Real Story Behind High Oil Prices”

  1. drew Says:

    real problem is the goddamn speculators and hedgefunds. Do more homework. Speculators of oil should be removed from the gene pool. 3 years ago diesel was 1.50 a gallon. I bought a diesel pickup for the longevity and the better than gas fuel mileage. News is now saying gas could cost more than 6.00 a gallon by the 4th of july. That will be a 1.50 increase in less than a month. I hope all speculators burn in hell. Of course our current president does nothing about it and everyone is aware of his connections to halliburton. It should be a crime to screwup the economy and the security and wellbeing of this country and its citizens.
    One thing that would help would be to LOWER the speed limit back to 55 or 60. My 7000# truck gets 28 miles per gallon @55, but I become a menace to traffic when driving that slow.

  2. Mike Says:

    If half the items Bryan listed were implemented or reversed, those awful speculators would bail. Prices would drop and they would be speculating about something else to piss you off. A no brainer, so no homework required.

    And if it was a crime to screw up our economy we would need to throw just about every member of congress in jail (that would include ALL the Democrats).

  3. Brian Says:

    What is it about greed, cronyism and corruption that you seem to not get? All of it I’d guess. Your ideologies ignore the whole of human history. Power corrupts and absolute power corrupts absolutely. It sounds simplistic; but is one of the more accurate proverbs ever spoken.
    To argue methods and specifics is not productive. There will always be a new method and new strategy. It is the whole purpose of those in power to perpetuate their power and elevate themselves to royalty within this bastardized ideal we call Democracy.
    By the way, what about Capitalism is so sweetly accepted?
    It may be that Capitalism is a workable system; I’d like to see it practiced and then perhaps we’d all see. Instead we have this pervasive and increasingly bold practice of cronyism.
    If you want to bark the stellar benefits or Capitalism; perhaps you should help us rid the government of the blatant corruption that runs rampant.
    You are either benefitting directly from the corruption or so twisted with despite and self importance that you can not see beyond your own arrogant, simple, opinions.
    The powerful will always prey upon the masses.
    The apathy, laziness and ignorance of the American people are the textbook recipe that bakes the cake of oppression.
    Yes, Democrats are corrupt and Republicans are corrupt. The tragedy is that those that would seek power tend to be corrupt. The system of checks and balances has broken down utterly and it is the fault of the American people that has allowed this. We get what we have ignored.
    I don’t know all the arguments; I don’t know all the policies and workings of speculators and lobbyists; but when I see rampant corruption; I don’t call it government I call it human nature.

  4. Sean Says:

    Brian you are right on the money. There are 2 kinds of people that do not understand what you say is true those who benefit and those who are ignorant. The Oil prices are exactly where those who are in power want them. They want the dumb American people to suffer so that we will scream to drill and when we do prices will drop a little but not for long because that oil will be sold on the open market and yes increased supply will lower the price. So then why would they want this and in they I mean ” dems and republicans” they are in it together because they already all make money off the foriegn oil but they will make a bigger percent off our domestic oil. So they will get richer, the prices will drop for a while until the average American isnt pissed enough to do anything and then they will slowly creep back up. They make two parties and act like they dont get along as a smoke screen while they rape this country slowly so not to make people actually do something and they laugh at how easy it is to fool us all. Its a smoke screen. This country was founded because of taxes and look how slowly they crept it up started a penny now its over 50 percent of all our money in one way or another goes to them. The Sad thing is the average american is either to dumb, or lazy to do anything and when they can affect change they are added to the club to shut them up..

  5. will Says:

    shut up and eat your hamburger you fat lazy bum.

  6. Bryan Says:

    Will, thanks for your intelligent analysis.

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