That's right, I said that big Oil is not the problem here. It is the Senators and Representatives who have caused the following problems
Mandatory Reformulation of Gasoline during the Summer Driving Months: This more than anything, is a huge factor in the jump before, during, and after Memorial Day Weekend, as the Oil Companies are forced to shut down their refineries, reformulate the gasoline to match with current summer formula laws, and then start them back up. During this time, they take major losses as they try to make up for the loss through rushed production of fuel.
Ban on Refinery Construction: Since 1976, there has not been a single new Refinery built in the United States. With demand for Gasoline from the Middle East increasing (The United States refines Light Sweet Crude into Unleaded Gasoline for the Middle East due to a lack of refineries in the home countries of that oil.), Other refineries shutting down (100 since the 1980's), and problems in the currently operating ones (Rodents chewing on wires, fires, breakdowns, etc.) the price of Oil is forced up in case of losses.
Distance of Oil Refineries from Points of Distribution: Due to Environmental Laws, in the United States, Oil Refineries are often located far from Urban Zones. This means increased amounts of overhead for transportation from the ports in Saudi Arabia and Kuwait to the Ports in Texas and Lousianna, increased rail transport from the ports to the refineries, and finally, increased rail and shipping costs to get them from the Refinery to the gas station. The longer the logistics route, the more money that is spent on Logistics, and thus, the higher the price of the gasoline when it reaches you at the pump.
Lack of Intensive Drilling in the United States: Though you may see the pumps in the Mid West in the middle of a field, or the oil Derricks out in the gulf, much of the Crude Oil lies untapped. Throughout the Mid West, Pacific Northwest, Deep South, and Alaska, there are large reserves of Crude Oil that could power the United States for Decades to come. By drilling in these locations, we would be able to reduce the logistics overhead of getting the oil to the refineries, and pull the US out from the Shadow of the Organization of petroleum Exporting Countries. This would lower prices, reduce the number of American Oil tankers passing through the Straights of Malacca and near the Somali Coast (Both hotspots of Piracy, that drive up the overhead again by forcing Oil Companies to hire Private Military Contractors to help defend their ships), and help to cut off our reliance on Foreign Oil, while freeing up Middle Eastern Oil for China and India, further cutting costs across the board.
Ethanol Contents: As the Lawmakers on Capitol Hill increase the amount of Ethanol mandated in Gasoline Blends that produces two things. First: Less effecient gasoline. Ethanol will always reduce the efficiency, due to it's habit of reducing mileage by a fifth. This will increase demand for Gasoline and thus further drive up prices. Second: As the demand for gasoline increases, so does the price of Ethanol, which makes the overhead rise again for the Oil Companies, which they pass on too you, the consumer.
Note that these do not include things like the Splitting of Palestine, the Lebanese Civil War, Iran's incessant Saber Rattling, past strikes against Oil Refineries and Shipping Ports, Continued Threats against the Refineries and Ports, Hurricanes, Hostile Governments using Oil Prices as a Defensive Weapon (I'm looking at you Iran and Venezuela), Disputes between Russia and the Ukraine over Oil Derricks and Supplies along the border, Earthquakes, worries of Peak Oil Production, Inefficiency of Current Mining Technologies (Leaves about a third of the Oil in the ground), Market Speculation in the Commodities Markets over Oil Futures, The failure of Canada to properly mine their Tar Sands for "Heavy Oil" Deposits, Lack of new wells in the OPEC nations, Turbulence and Civil Unrest in Venezuela, the Media's constant talking up of increasing oil prices, and much much more.
The best thing we can do is wean ourselves off of Crude Oil in all its forms, be it Natural Gas, Plastics, Gasoline, Fertilizer, Diesel, Kerosene, Jet Fuel, Asphalt, Rubber, and much else. Synthetics for these that do not require Petroleum are being researched, and proccess is coming along. Until then, keep recycling your plastics and rubbers. Because otherwise, you will only help further push up oil prices.
Wednesday, May 21, 2008
Big Oil is NOT too Blame
Labels:
Big Government,
Big Oil,
Ethanol,
Gas Formulation,
Oil Dirlling,
Piracy,
Refineries
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment