Oil

Gas prices hit home
This sign is from a gas station about a mile from my home. In my line of work, many hours of driving is necessary. That means my employers have to raise the cost of our services to cover fuel costs. That means less people will use my service and my income suffers. If fuel prices settle and that's a big if, our economy will adjust and we will put the price of gas to the back of our minds once again. But other factors threaten to make our ability to cope much more difficult.

Iranian Influence on our oil market
In the past few weeks since Mahmoud Ahmadinejad started threatening to use Nukes on Israel, our oil prices have mirrored the threats. When he has a news conference and threats fly, oil futures climb. When he has an outdoor concert to celebrate their coming of age, the futures go back up. Now imagine this. America has to defend Israel against Iran and likely Syria, whom Ahmadinejad has pledged to share his new found power with. We could see an OPEC embargo or complete lock out. Many say these nations wouldn't dare, "They depend too much on our money buying their oil." Said a respected colleague of mine. That's when I had to give him a little lesson in....you guessed it, History!




Oil Companies: Born into big profit
Prior to 1960, oil was regulated and solely dependant upon the leadership of entrepreneurs and groups of entrepreneurs. Most of them were Westerners following a Capitalistic way. They exploited the fruits of Democracy and free enterprise markets. Did they make a profit? 'O yeah! Try 65% of all revenue.
There were quite a few 'Big Oil' companies back then, and they did not engage in a Coke and Pepsi style competition, no these companies worked together to insure that Western civilization was fueled to promote industrialized growth, and yes, to make a healthy profit.

Even then, at a price of .31¢ per gallon, some people called for government to step in and take over the money hungry oil companies. People saying this, however, were not Americans, no they were Arab nations. Soon these Nations formed a cartel to organize against Western Civilization. They called it 'the Organization of Petroleum Exporting Countries', OPEC.
Currently OPEC is comprised of eleven nations: The United Arab Emirates,Saudi Arabia, Venezuela, Nigeria, Qatar, Libya, Kuwait, Iraq, Iran, Indonesia and Algeria. See a common theme? Yes they are made up of a vast Arab Majority.

As we grew economically we began to see inflation skyrocket. This was blood in the water for the cartels around the world. The more America needed, the further in debt and in bed with despotic regimes we became. A misguided Nixon in the White House didn't help matters any either. He imposed gas price caps and tapped the strategic oil preserves, and set us up.... for a long hard fall.

The '73 Arab Oil Embargo
On the day of Yom Kippur in 1973, Egypt attacked Israel from the Suez Canal and Syria attacked them at the Golan Heights. It was, as it still is today, imperative that we came to Israel's aid. American and Israeli forces kicked the aggressors far beyond their borders and brought a quick and decisive end to their offensive. So what would be the recourse left to the beaten Arabs? OPEC. Yeah, OPEC decided to raise oil prices to Western nations by more than $9 a barrel. Americans saw their .31¢ gas go to $1.20. The Arab cartel was bent on punishing us for coming to the aid of Israel, but most importantly, they were destined to become as big and wealthy as the Western oil companies.




Dealing with the Aftershocks
America was hit hard by what was being called the 'Arab Oil Embargo'. Daylight savings time was extended to preserve energy. People were limited to ten gallons of gas at a time. Soon Congress passed a bill banning the sale of Gasoline on Sundays, and then they passed a bill allowing for the Trans Alaska (Valdez) pipeline to be built. The new oil venture helped us through the recession and has supplied us with more than 15 Billion Barrels of oil. After our economy wobbled but remained standing, OPEC lifted it's embargo in 1974. We have been on a steady upward economic surge ever since. What can we learn from this? In 1973 America was, for the first time in history, dependant on foreign oil, and as a consequence, dependant on hostile nations for our economic stability. We imported 31% of our oil in the early ' 70s and we are now dependant on imports for 59.8% of our oil needs. The greater our dependence becomes, the more precarious our economic and social situation becomes.



Misdirection
Some want you to focus your anger on the oil companies. Others lay the blame squarely on Bush. Some even devise and concoct plans to boycott gas stations and their middle class, average everyday American citizen owners. These neighbors of ours have no control of gas prices. Yet our anger is often directed at them. Email campaigns to boycott companies like Exxon Mobil and others hurt the individual store owners more than it hurts the oil companies.
It's sad, not just for that reason, but because it's not the Oil Companies who deserve to be the receptors of our ire . So who should we focus our attention on? Hold on.... it's coming.

Since OPEC lifted the embargo, the US government has made 1.34 Trillion dollars in taxes from our oil purchases, more than two times as much as all oil companies combined. Everyone threw a fit when they heard that Exxon Mobil had made $36 billion last year. Yet I did not hear many people pointing out that the US Government brought in $54 Billion dollars! Why does congress want to drag Oil company CEOs before a panel to investigate why they made such a large profit while America is hurting. Yet no one asked why Congress appropriated $295 BILLION for a bridge to nowhere in Alaska. Where did that money come from?
Texas, Georgia, Florida and New Jersey paid for that bridge. Public outcry caused the State to backdown and abandon the bridge. Where did the money go? Yeah, you guessed it, Alaska spent it on other pork projects.
If you need more proof that it's our Government's over taxing that is the problem, think on this. Remember how during Hurricane Katrina Arlen Specter called for windfall taxes on Oil Companies. His cohorts McCain and the rest of the Liberals in Congress jumped on the bandwagon. How dare these companies make such a profit when we are in the midst of a crisis! They were jumping up and down and screaming so loudly (thanks to the Mainstream Media) that they drew America's attention off of themselves and threw it at the Oil Companies.
What did we miss? Well, during Katrina we saw gas jump to it's highest average price of all time...$3.06. We now average about $2.90, a difference of sixteen cents. Yet during Katrina, oil was five dollars cheaper than it is now! The oil companies are now paying 7% more for oil, yet they are charging 5% less! The Oil Companies have cut back, yet Congress wants to add even more taxes by penalizing what they call absorbent profits. If gas were three dollars per gallon right now, $1.41 or 47% goes to Saudi Arabia, Nigeria, Venezuela and Iraq. Even Iran, who we do not import from makes $2 million a day from our oil purchases. The federal and state government makes .69¢ or 23% off every gallon. Only .54¢ or 18% goes to the refining process. 12% or .36¢ goes to distribution and marketing. The oil companies rake in a whopping .07¢ per gallon. Exxon Mobil made a 10.6% profit last year. Microsoft hit a 36.8% profit rate and nobody wants to break them up and divide their wealth.....Ummm...Ok maybe that was a bad example. The bottom line is, it's not government's job to penalize nor prop up corporations no matter the size. It is counter to our basic laws of governance.



Socialism rears it's ugly head
When Wal-Mart was founded in 1962 and opened it's doors on a national scale in 1970, people said it was the greatest thing on Earth. It was a department store that provided the widest variety of goods and services ever! Best of all, they were much less expensive than any other in their class. Finally, a store with the best interests of the little guy at heart. Soon the preference paid to Wal-Mart swelled the company to new heights. They bought out national chains like, Mohr-Value, Hutcheson Shoe Company, Grand Central, Woolco and more. By 1997 Wal-Mart surpassed Woolworth on the Dow Jones Ind. Average and broke the record for sales at $105 Billions dollars in a single year. Did they steal from the average citizen? No, they donated more than $100 million dollars to charities every year since 1997. Did they make a deal with shady characters who pose a threat to our national security? No, they simply followed the American dream and achieved greatness through determination and Capitalism! They are vilified by the press and the left wing radicals. How dare they make so much profit! The Government wants to put restrictions on them. States design their zones and laws specifically to preclude Wal-Mart. Yet what is Wal-Mart's answer? They actually appropriated millions of dollars to design a program to teach local mom and pop store owners how to compete with their stores. WHAT !!!! They are paying to teach their competition how to beat them just so they don't look bad! This is absurd and it is, no doubt, Socialism! The government, more-over, the Liberals in it are driving to penalize success. The same people who wax soulful about the concept of genetic evolution, scowl at economic evolution. It must be stopped they scream! We must stifle anything that resembles Capitalism. Disallow excellence and punish success. Redistribute the wealth...... They are making us into sheep! Government has no right to even consider taxing windfall profits of ANY company that operates on this free soil! In times of crisis the government should halt all taxes on Gasoline and all fungible commodities! How's that?
The government who makes more than the company supplying the service, wants to penalize the company, by stealing it's profit and adding it to their own bloated coffers! Now if you want to be mad at someone for Oil prices, look to the US Government and the environmentalists who lobby them. Tell them that using less than 1% of land in ANWAR to bring in 10 billion barrels of oil or more, is not only a pipedream, it needs to become a reality. We haven't built an oil refinery in 30 years. Gasoline upgrades and special blends and such drive up costs tremendously, every time they turn around there is an interruption in production as the transition is underway. I sent out a link to a map like this one to some of my friends.




The Gas Price Map
If you look at the map above and then scroll down and look at this map....



You'll see that they are similar. The East and West coasts along with other regions are definitively Liberal Democrat states. These are the states and areas that vote for Democrats, and they are the areas that are most hobbled by environmental regulations and over reaching taxes! The cheaper counties are in the 'fly over states', you know, the 'Bible Belt'. Is it any wonder that San Diego maintains the lead in the highest annual gas price percentage? Socialism and Capitalism cannot live in the same house! These policies restrict us from drilling off the coast of California, the Gulf of Mexico and else where. Yet Mexico has built their economy on it. China and other countries are debating drilling in the Gulf of Mexico. Yet we sit here on the other side of this Liberal fence staring longingly at a Gulf we have joint claim to, being fed off of by other countries. It's a known fact, off shore pipeline drilling is safer from water contamination than tankers who burn more fuel, to bring it here. Yet we sit here on this side of the fence, scratching our head. The funny thing is, Oil is deposited on the ocean floor and squirts out continuously, Just one single eruption in 1991 sent more than one hundred and seventy-six million, five hundred thousand cubic feet of ash and pyroclastic debris flying in the air for the better part of 12 miles away from the mouth of Mount Pinatubo. That's just one of the hundreds of volcanoes that erupt time and time again. Each time throwing more pollution into the atmosphere than man could cause with industry and cars in 10 years. Another case in point, the environmentalists say we are draining the world of it's precious fosil fuel 'oil. They claim we are producing 'Peak Oil' or the last of the oil on the Earth. It's all down hill from here. We will have drained the Earth of it's massive amounts of Oil that it could only make once and then it's oil maker dilly got broke.... We Westerners are monsters, I tell ya. Well, that is complete and utter 'Barbara Strisand'. Check here and here to see that debunked. You must also read about how the Earth is replenishing it's oil supply. Many scientists are backing studies that show that Oil is NOT a fossil fuel but a reciprocal commodity much like trees!




Alternative Fuels vs. Oil
One of the avenues we will likely take to remedy the mess we are in is alternative fuel. To me switching to Ethanol from corn or any fuel crop runs a high risk that we will ruin vast amounts of our soil for other crops. Bio Diesel has yet to sell me completely due to it's, as of yet, inability to produce a high enough octane, on it's own, to fuel larger vehicles at sustainable speeds. Hydrogen is the same as Bio deisel, not enough umfh. Others have their promises but none come without drawbacks.
To many of us alternative fuels sound great but most (besides biodeisel and ethanol) will just take too long to switch over from our current system. When we do transition, according to leading economists, it will only be a matter of 8 years before the new fuel will cost the same as gasoline today. I've come to believe that the answer is not alternative fuels, but alternative laws, alternative taxes and alternative supply. Canada, Colorado and other places are sitting on shale oil deposits that could help to fuel our economy for five hundred years. Of the 1.6 trillion barrels of shale oil known to exist on Earth; 1.2 trillion is right here in the USA ! We are only just around the corner from developing the equipment to extract it at half the price of offshore drilling. It is a widely acknowledged fact that there is more oil in the Gulf of Mexico than there is in Saudi Arabia! All we need to do in order to continue growing and prospering in this great country, is to become self reliant again and loose ourselves of these Liberal politicians and their pet lobbyists. Shake up Washington and begin investigations in to why they need more than 1 Trillion dollars out of our pockets. Where did all that money go, why not reduce the rate when we are hurting? That's the hearing I want to see!