Pain at the Pump: Here Are Some Reasons Why

“Under my plan… energy prices would necessarily skyrocket.”
– Barack Obama, 2008

Obama and the Dems keep blocking efforts to drill for our own resources and the construction of the Keystone pipeline, while vilifying the petroleum companies as ”big, evil, greedy creatures destroying the planet”, and wasting billions of taxpayer dollars on his  eco scams.

But by gawd, the idiot will loan Brazil $2 Billion to drill their own.

Other factors:

From U.S. News and World Report.

Volatility in the Middle East. If it isn’t Egypt, it’s Libya, and if it isn’t Libya, it’s Iran. After several countries imposed sanctions over Iran’s nuclear program, the fifth largest oil producer in 2010 halted shipments to some European nations, putting more pressure on oil supply and causing crude prices to spike. Since crude oil prices make up nearly 70 percent of the ultimate cost of a gallon of gas, even tiny disruptions to supply can cause a spike in prices when consumers fill their gas tanks.

All the more reason to get out from under the OPEC ragheads.

Growing demand from Asia.  The Department of Energy reported that the United States became a net exporter of oil for the first time since 1949 last year. But if we have all this “extra” oil to be exporting, why are prices at home still going up?
A lot of it has to do with demand for gasoline, which has been declining in the United States for the last 10 years, while shooting up by leaps and bounds in places such as Asia and South America. As demand has tapered of here due to more fuel-efficient vehicles and, more recently, the weak economy, oil companies have had to broaden the scope of potential markets–bad news for American consumers.
“Oil companies that have increased their exports overseas essentially are depleting the U.S. supply [and] in doing so it’s creating an artificially higher price for American consumers,” Laskoski says. “When consumer demand is weak [in the United States], it’s a very attractive option to export and get those healthier profit margins.”
That trend isn’t likely to change with a burgeoning middle class in Asian economic powerhouses such as China. According to the EIA, Asia surpassed North America as the largest petroleum-consuming region in 2008, gobbling up 25 million barrels a day in 2010.

Demand also goes down when the price becomes less affordable. 

Gasoline formulation requirements. Although crude oil prices account for the lion’s share of what consumers pay at the pump, the process of refining crude oil and making the right formulations to produce gasoline costs money–about 7 percent of the price Americans pay per gallon.
Prices head even higher going into the summer months because refiners have to transition from a winter blend–required by law between Oct. 1 and April 30–to a more eco-friendly–but more expensive–summer blend.
[The summer blend] has additional additives that add to the cost of producing the product,” Laskoski says. “Not only do the refineries have to go through the process of ramping up production for it, but they’re doing this at a time of year when consumer demand is starting to increase. This is one of the key reasons why the United States sees this cyclical up and down trend every year.”
Specific state requirements can tack on even more expense for refiners and ultimately consumers.

Taxes: If you take a look around the country, gas prices aren’t uniform. A lot of the variation has to do with supply lines and transport, but a chunk of it has to do with varying state and local taxes. As government budgets have been strapped in the wake of the recession, some states and cities have looked to gasoline taxes to bridge budget shortfalls.

A major factor that the article doesn’t mention are speculators, who gamble on the futures markets to line their own pockets. And as Ed Wallace explains in Business Week, they are being enabled by the Federal Reserve:

The problem starts with Ben Bernanke, no matter how many of his Fed presidents claim they are not to blame for the high price of oil. The fact is that when you flood the market with far too much liquidity at virtually no interest, funny things happen in commodities and equities. It was true in the 1920s, it was true in the last decade, and it’s still true today.

While there’s wailing and gnashing of teeth by eco-nuts and leftwing moonbats determined to put U.S. oil production out of business, other countries on every major continent continue to drill.

Oppressive taxes and regulations, the hostility of big government towards drilling for American oil, speculators, and foot-dragging on the part of the bureaucracy to open the markets to feasible energy sources, has created a sewer of mismanagement and corruption that chokes the life out of the economy and our wallets.

1 thought on “Pain at the Pump: Here Are Some Reasons Why”

Leave a Comment

Your email address will not be published. Required fields are marked *

Social Media Auto Publish Powered By :
Wordpress Social Share Plugin powered by Ultimatelysocial