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Placing the real blame for high gas prices

By DOUG THOMPSON
March 30, 2012

(AP Photo/Toby Talbot)

Cost seventy-five bucks and change to fill up my Jeep Wrangler the other day.

That’s why the Wrangler says home most days and I ride a Harley-Davidson that gets more than 40 miles to the gallon.

A $15 tank full of premium gas takes me about as far as a $75 ration of regular in the Jeep.

At the breakfast table of the Blue Ridge Restaurant in Floyd, Virginia, the locals don’t talk about foreclosures, jobs or abortion.  They gripe about the cost of gas.

“Can’t afford to go anywhere,” says John Echols, a former executive who moved to the Blue Ridge Mountain community to retire and enjoy life in an area where prices are generally lower than in the city.

“When gas prices go up, the cost of everything rises as well,” Echols told Capitol Hill Blue. “Food prices are up because it costs more to get it to the store.”

Echols says his retirement package has survived the economic downturn, the housing market meltdown and the stock market rollercoaster but he’s not sure it will weather the storm of gas prices.

So who’s to blame?  President Barack Obama? Congress? The oil companies?

“The President can’t do a goddamn thing about gas prices,” he says. “Congress? The folks  can’t tie their shoes without trying them together and tripping over their own feet.  It’s greed, pure and simple.  Greed of the oil companies and greed on those who supply the oil.”

Others at the table nodded as Echols talked.  He left a tip on the table, paid his bill and left the restaurant.

Another at the table asked:  “Who was that guy?”

Said another:  “He moved here five years ago.  Worked up in Washington.”

“For the government?”

“No.  He was a market analyst.”

“For who?”

“Exxon-Mobil”

Some laughed.

Others shook their heads.

In 1980, Marlon Brando played the CEO for an Exxon-style oil company in “The Formula,” a movie based on Steve Shagan‘s novel about discovery of a secret formula for synthetic gas. Brando’s character helped bury the formula to protect the oil companies and their relationship with the oil-producing nations.

In one scene, a vice-president of the oil company argues that they get away with a big hike in gas prices.  Brando’s character nixed the idea, telling him to cut the increase in half.

“You don’t understand, the vice president said.  “Research says we can to the increase and blame the Arabs.”

“You’re missing the point,” Brando replies.  “We are the Arabs.”

19 Responses to Placing the real blame for high gas prices

  1. Keith

    March 30, 2012 at 9:39 am

    Some other factors leading to the high cost of gasoline that most Americans don’t understand is that oil is priced in US Dollars. What’s more, State and local governments have mandated so many different blends of gasoline be produced and marketed in their various jurisdictions that producers are hard pressed to balance their inventories.

    First of all, the US Dollar is TANKING when compared to the currencies of most oil producing countries. Thanks to our federal politicians (who have been spending money like drunken sailors) our currency is increasingly worthless on the world market…for much the same reasons that our credit rating is tanking.

    For example, Canada is the USA’s largest source of “foreign oil”. The USA consumes about 18 Million barrels of oil a day, about 9 Million of which comes from domestic production. However, each day we import about 3-4 Million barrels of oil from Canada to help make up for our own domestic shortfall. The rest comes from other countries.

    Unfortunately for US consumers, right now, the Canadian dollar is actually worth MORE than the US Dollar, which means that the cost difference in the price of oil caused by currency fluctuations between the increasingly worthless US dollar and the Canadian dollar is passed DIRECTLY on to consumers in the form of higher gasoline prices.

    And state and local governments aren’t blameless in all this nonsense either. A good chunk of the cost of a gallon of gasoline includes state and local taxes. In some cases, the amount of federal, state and local taxes combined exceeds the actual cost of the gasoline itself. With state and local governments increasingly bankrupt themselves, they slap higher taxes on the cost of fuel because those revenues are largely hidden.

    What’s more, state governments have mandated that refiners produce (at last count) some 35 different blends of gasoline…some with this or that percentage of Methanol…some without…and some with a whole host of other additives favorable to one special interest or another. Then, there’s the need for refiners to switch between Winter and Summer blends, all of which is (again) usually mandated by state and local law.

    So, when you add all this nonsense up (including the greed of oil speculators I spoke about earlier) it means that producers and suppliers are faced with a myriad of pricing issues, the least of which is producing just enough of this or that blend of gasoline to meet an increasingly uncertain demand. When this or that blend is in short supply in a state, the price naturally goes up.

    So, in that sense, our politicians are VERY MUCH to blame for the high cost of gasoline these days! But most of them are flying below the radar when it comes to taking that blame because most of the pricing factors related to gasoline are largely hidden in federal, state and local law…..not to mention a tanking currency.

  2. griff

    March 30, 2012 at 1:30 pm

    Rape. Plain and simple. Government-endorsed rape.

    America. Land of the meek, home of the slave.

  3. Davld Clark

    March 30, 2012 at 7:35 pm

    As much as I would like to blame the greedy bastards that comprise corporate America on this one, I’ll have to put the blame where it belongs on babies. Dwindling resources and an increasing population can not lead to anything but higher prices. Responable people will not have any more children than they can afford to raise, but whatcha gonna do about the poor dumb bastard that can’t take care of himself but has six kids, and God I feel sorry for those kids. The answer is mass transit but who wants to sit next to people that scare them and smell funny. I always envisioned private cars with a common power source, like bumper cars, or cars that could latch onto a cable for long distance runs. If we can go to moon, we shure as hell can do this. All it takes is a bunch of engineers with a can do attitude and a congress that doesn’t have it’s head up it’s ass.

  4. Davld Clark

    March 30, 2012 at 8:05 pm

    How about M.I.T., if anyone could come up with a mass transit solution that would actually appeal
    people, it would be these boys. I used to work with these guys, com’on, please let me know there are at least a couple of people in the world that don’t have there head where it doesn’t belong.

  5. David

    March 30, 2012 at 10:41 pm

    Where was this greed last year when oil prices were lower? Did the oil companies have non/less greedy executives last year? Did it suddenly pop into their heads one day that they could make more money if they raised the price of gas? Why did no one think of this back when the economy was booming in 2000 and more people could pay?

    The price is high because the threat of war with Iran is high. Last time this happened was when Bush was close to attacking Iran. Prices shot up high then too. When the White House decided not to do it, prices went down. A war with Iran will jeopardize oil supply from that region, and cause a huge price spike. Just the threat is causing the increase in price.

    For the geniuses who keep suggesting mass transit…how do we get to the mass transit station? Are we supposed to drive to it? Or are we going to put stations every couple of blocks so everyone can walk to them?

  6. Davld Clark

    March 31, 2012 at 5:32 am

    Someone will pick you up at your door and give you a ride right after they get through spoon feeding you and wiping your butt. Or, you could ride the dog to the nearest station. Or, there could be mini systems interconnecting with major systems.

  7. Phil

    March 31, 2012 at 3:06 pm

    Folks the price of gas is a frickin mystery. Oil cost 147 per barrel in 2008 and gas prices peaked at about 4.10 per gallon. Here we are 4 years later and barrel prices are nearly 40 bucks lower, but we are paying the same price. What the hell is going on? Back then a 107 per barrel price meant 3.10 or 3.20 gas.

  8. Richard

    March 31, 2012 at 4:02 pm

    S-P-E-C-U-L-A-T-I-O-N in energy futures market.

  9. Davld Clark

    April 1, 2012 at 5:15 pm

    The way oil used to be bought and sold has changed. I haven’t had time to research the change but at time it happened, I had executives in the industry telling me it wasn’t going to work because of delays in the supply chain. Right, now I’m off on anouther contributing factor and that is the earths dwindling resources and the effect of population on those resources. This little planet is not capable of supporting an infinite number of people.

    http://www.pbs.org/wgbh/nova/worldbalance/numb-nf.html

  10. Davld Clark

    April 1, 2012 at 5:32 pm

    There are many factors contributing to high gasoline prices, but it could be better. Gee, could oil companies be influencing our political process to keep prices up? Could they be stopping the the development of alternatives to keep prices up? Ha, ha, ha. Stop it. My sides hurt. I can’t laugh any more. Could congress be corrupt? Ha, ha, ha. No, I can’t take it any more.

  11. Davld Clark

    April 1, 2012 at 5:39 pm

    And oh yeah, speculation is not free trade, it creates false market value rather than fair market value. It comes under the same catagory as monopolizing and hoarding.

  12. Davld Clark

    April 1, 2012 at 5:51 pm

    Since I seem to be getting off on a corrupt congress at the moment, on health care we are ranked something like 37th in the world and these dumb bastards don’t know how to make it better. Well, there are 36 countries that do it better than we do, so why and the hell don’t you ask them?

  13. Davld Clark

    April 1, 2012 at 5:55 pm

    And by the way, Doug, thanks for not dying on me. If it wasn’t for your sorry ass, I wouldn’t have anyone to talk to.

  14. Davld Clark

    April 1, 2012 at 8:43 pm

    At six billion people, we have exceeded the food and water supplies of the planet. They are projecting nine billion for the year 2050. A massive die off is in order. In spite of that hypocites and bigots still piss me off. So what were we talking about?

  15. glennk1949

    April 1, 2012 at 10:11 pm

    Keep buying Hummers and SUV’s ( Stupid Usless Vehicles) folks, but PLEASE STFU up about the price of Gas while your doing it.

  16. woody188

    April 2, 2012 at 11:36 am

    My favorite is the guy that complains about the gas price, then jumps into his Excursion and peels off down the road doing about 85 mph. :roll:

    I CAN drive 55, especially when gas is up so high.

  17. Davld Clark

    April 2, 2012 at 1:44 pm

    Oh yeah, years back there was the 100MPG carburator whose patent was bought by an oil company, put on the shelf and never developed, and its inventor was found dead in a hotel room. Go figure.

  18. Davld Clark

    April 2, 2012 at 3:16 pm

  19. Davld Clark

    April 2, 2012 at 5:00 pm

    See, 100 MPG is no big deal.

    http://100mpgplus.com/index.html