Gas Prices April 23, 2006Posted by June in Around the World, Artist Thinker Articles, Bureaucracy, Communism, Liberalism, Politics, Socialism.
I hear people griping about the price of gas these days. True, the price is high; but that's what happens when hurricanes shut down oil refineries, when environmentalists require specific blends of gas, when inflation goes up, when OPEC raises the price of crude oil, when supply goes down and demand (such as the increase for demand in China and India) goes up, etc.
There's all this talk about windfall profits and how we should steal from oil companies to satisfy our own envy and greed. "But the oil companies deserve it! They purposely raise the price of gas because they know we need it!" is the cry. Well, where was that kind of talk only a few years ago when my father was worrying about whether or not he would have a job the next day, when the price of gas dropped to such low levels that companies could no longer keep paying their workers and began laying people off by the thousands and companies were shutting down one after another? Why didn't the evil oil companies or that one single person who controls the price of gas just simply raise the prices? Are they stupid or something? Did they suddenly get a philanthropic stirring in their hearts?
See how stupid that sounds? Supply and demand — that's the biggest factor in the current jump in price. If everyone collectively stops using so much fuel, stops going on those extra drives, carpools, walks when possible, etc. the price will fall back down.
One thing we could do to help lower the cost of oil even on average years when supply hasn't been cut down by a shortage of oil refineries or that special mandatory blend of gas is replacing the other blend and when the increase in demand caused by summer driving sprees isn't in effect is the one thing that these very same people who cry out about the prices refuse to allow, which is to allow for drilling in Alaska. Allowing American companies to get oil from our own country would lessen our dependence on foreign oil, most notably OPEC oil, which all too often comes from countries that have it in for the US. This would allow American companies to have access to cheaper crude oil, which will in turn force OPEC to lower its prices to compete and maintain their market.
"What about alternative fuels?" You might ask. Well, if such a thing exists or is even on the horizon, then why aren't you buying the cars that will allow for those fuels? If that's really an alternative right now or even in the near future, then it's the consumers' fault for not moving to those fuels, not the oil companies'. Capitalism accommodates the consumer. If there's a demand and if it's conceivable, you can bet it will be there. If you really want alternative fuels, start demanding it and start buying it. Don't start blaming other people when you, inevitably, don't because those new cars and fuels are more expensive, as I've been hearing about the alternative fuels that are being tested right now such as ethanol.
Oil is used for things other than gas, too. I definitely haven't heard of an alternative for those products. So oil will be around for a very long time, even if a viable alternative fuel shows up.
One thing that would really help would, probably, be if someone can find a cheaper way to make oil in an artificial manner. I've heard of these machines that allow for the synthesis of oil from shale; but I heard that it ends up being more expensive than bringing it up from the ground. I have a hard time understanding that since the things I've heard my dad in the past talk about how he gets oil from the ground are extremely complicated and expensive. (He once had to run off to deal with an oil rig that had dropped a 3 million dollar piece into the ocean. They never did recover it… That was only one piece of one oil rig.) These machines must be hard to operate and expensive to make.
Still, in the end, it is the consumer, OPEC, inflation, and these environmental regulations that determine the price, not oil companies. If you want a lower price, the immediate solution is to conserve your gas. Another thing that can be done is to get rid of environmental regulations. We can also decrease dependence on foreign oil by drilling in Alaska or more drilling in the Gulf of Mexico as Mexico is doing. The final uncertain alternative is to discover new fuels.