Why is OIL so EXPENSIVE?
Why is the price of oil rising and why is the price of gas more than $3.00 a gallon in many markets? Oil companies have testified before Congress that the prices of oil and gas are out of their control. Normally if someone lies to Congress they get punished. Should these oil companies be punished?
It costs about $20 to produce a barrel of oil. So why are they selling it for $70 a barrel? The answer is easy, it is simply because they can. We all need oil and gas and they know that the government isn't going to do a darn thing about it.
The Republicans are not really that worried about gas prices. They are hoping to use the high prices to gain support for drilling in ANWR and gulf waters. This would add a small amount of oil to our supplies. The bad news is that if they approve drilling in these environmentally sensitive areas, oil companies are just going to sell it for $70 a barrel and get even richer.
Some say that gas prices are up because the U.S. is switching over from BTME to ethanol. There might be some truth to this claim, but it does not justify the current prices we are paying at the pump. The oil industry has waited until the last minute to make the switch. They also have not developed efficient procedures for ethanol supplies. These two failures are just excuses. The oil industry knew in advance that this would lead to higher prices and higher prices make them more money. It is in their best interests to not make the changes efficiently. If the oil industry really wanted to they could develop their own supply chains to make the crossover from BTME to ethanol easier on consumers, but it would cost them some of their record profits. Why would they do that?
If the government wanted to do something to curb oil prices they would have several years ago. They could raise vehicle gas mileage standards. Even just a couple miles per gallon would have a great impact. They could also put restrictions on oil prices. Put a government price cap on oil prices. This would instantly lower gas prices, but would go against their wishes of having oil wells drilling every inch of this country.
They could also mandate alternative fuel vehicles. If the government took away all the incentives that they give to oil companies and put that money into tax breaks for the purchase of hybrid vehicles, they would cost about the same as a regular vehicle.
The bottom line is that the Bush administration let the energy industries shape the countries energy policy. It should be expected that if given these unprecedented opportunities, they will use it to their advantage. We need real change and the Bush administration does not have the guts to initiate real change that will benefit Americans.
It costs about $20 to produce a barrel of oil. So why are they selling it for $70 a barrel? The answer is easy, it is simply because they can. We all need oil and gas and they know that the government isn't going to do a darn thing about it.
The Republicans are not really that worried about gas prices. They are hoping to use the high prices to gain support for drilling in ANWR and gulf waters. This would add a small amount of oil to our supplies. The bad news is that if they approve drilling in these environmentally sensitive areas, oil companies are just going to sell it for $70 a barrel and get even richer.
Some say that gas prices are up because the U.S. is switching over from BTME to ethanol. There might be some truth to this claim, but it does not justify the current prices we are paying at the pump. The oil industry has waited until the last minute to make the switch. They also have not developed efficient procedures for ethanol supplies. These two failures are just excuses. The oil industry knew in advance that this would lead to higher prices and higher prices make them more money. It is in their best interests to not make the changes efficiently. If the oil industry really wanted to they could develop their own supply chains to make the crossover from BTME to ethanol easier on consumers, but it would cost them some of their record profits. Why would they do that?
If the government wanted to do something to curb oil prices they would have several years ago. They could raise vehicle gas mileage standards. Even just a couple miles per gallon would have a great impact. They could also put restrictions on oil prices. Put a government price cap on oil prices. This would instantly lower gas prices, but would go against their wishes of having oil wells drilling every inch of this country.
They could also mandate alternative fuel vehicles. If the government took away all the incentives that they give to oil companies and put that money into tax breaks for the purchase of hybrid vehicles, they would cost about the same as a regular vehicle.
The bottom line is that the Bush administration let the energy industries shape the countries energy policy. It should be expected that if given these unprecedented opportunities, they will use it to their advantage. We need real change and the Bush administration does not have the guts to initiate real change that will benefit Americans.
posted by Superman @ 4/25/2006 11:33:00 AM
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