Oil flow from Iraq had been negligible due to over a decade of merciless sanctions imposed by the UN at the behest of the US. Less oil is flowing now from Iraq, than before the invasion. [P.S.: Please remember Bush said before the invasion, the oil pumped out of Iraq would pay for both the war and the reconstruction.]
2. Iran – Unable to make up his mind who to launch an unprovoked attack on next (Syria, N. Korea, or Iran) our fearless leader seems to have settled on Iran. Just as the pretext of WMDs was used—knowing it to be false—for the invasion of Iraq, future capability to produce WMDs are being used as the excuse for going to war with Iran.
Iran has threatened to respond to any US or Israeli attack by setting off a firestorm of reprisal throughout the world, especially the oil production and transportation of the Middle East. They can do it too.
3. Nigeria – Perhaps the only item on the list Bush had no hand in. Nigerian rebels, upset about the lack of money trickling down to the areas the oil is coming from, and the uncompensated pollution of farmlands adjacent to oil pumps, by (mainly Shell Oil) oil companies have taken up arms against these companies and their own toady government. Blowing holes in oil pipelines is a specialty. Of course, instead of spending money to placate the rebels and farmers the oil companies would rather spend more money bribing the government and hiring mercenaries to “protect” the oil.
4. Venezuela and other Latin America nations – Bush cannot seem to stop using the iron fist when it comes to implementing his foreign policy which seems to be world domination. Comply or die. From threatening Latin American country’s democratically elected rulers with assassination, to invasion, economic boycotts, trade sanctions, blockades, etc. if these nations fail to bend to Washington’s demands.
What do all of the above have in common? They supply the VAST majority of the world’s oil. Threaten supply and investors/ purchasers get nervous and the price of the supply goes up.
5. Gasoline Taxes – The federal government adds 18.4¢ for each gallon you pump into your tank. If they really wanted to do something about helping you out they would have repealed this seizure of your income a long time ago. But that would lower the pressure they can bring to bear upon your state in the form of withholding highway funds. This tax takes in over $100 million a day!
6. Devalued dollar – Every dollar you own today is worth a third of what it would buy you in 1970. Just 35 years and the 1970 dollar is worth about 33¢ in purchasing power today.
In 5 short years since Bush took office, the federal “debt” went from a $213 million surplus to a $9 trillion debt. Congress is spending the national credit card by over $2 trillion more debt every year, and shows no sign of stopping the spending spree. Fiscal responsibility has been abandoned by “conservative” Republicans. I guess you finally got to see what they are made of now that they have been in charge of all three branches of government.
Asian and European nations have propped up our currency for decades by buying our bonds. [To continue the analogy, they are the credit card issuers, and our credit rating is falling fast.] After they expressed concern at our nation’s fiscal irresponsibility in the past five years, and worse, then getting a lecture from Bush on how spending, not savings, is the way to prosperity, these nations are divesting themselves of our currency as fast as prudently possible without collapsing the dollars they hold.
And they hold tremendous numbers of our currency, as a result of our purchasing their goods (i.e., the trade deficit). We have recently blocked multiple attempts for large purchases (investments) by them in our nation. So they are left holding all those dollars and wondering what good these dollars are doing them if they cannot buy anything with them in the USA?
Lastly, the oil producing nations, which had standardized on the dollar as the only currency they would accept in exchange for oil, have now started to accept Euros (after threatening to only accept gold) as their preferred or exclusive exchange medium. This means to buy oil we now have to convert our currency to Euros for a fee, rather than charging money to convert other’s currency into dollars.
7. Environmental regulations and prohibitions – “Environmentalists” have prevented oil exploration in the US and just offshore, as well as oil pipelines and refineries from being built for decades. As a result, our known oil supplies are artificially more expensive than foreign oil. So instead of US companies selling US oil to us, keeping US dollars in our nation, we buy our oil, gas and gasoline from foreign sources who pocket our dollars directly or indirectly (as Euros).
8. Government required gasoline formulations – The Congress, acting through the EPA has mandated reformulated gasoline with increased oxygen content, either by adding the highly toxic MTBE (that now contaminates vast areas under EVERY city these fuels have been mandated) or ethanol. Now these mandates are exclusively ethanol, but this adds to the cost of the fuel, and lowers gas mileage, increasing gasoline consumption. Note: Ethanol prices have soared from $2 a gallon in December to $2.77.
9. China, India and peak oil – The USA likes to think we are number one in consumption. This has been true for decades. But China, India and other Asian nations are rapidly becoming developed nations as socialist ideas fall into the scrap heap of history. Embracing capitalism, even statist capitalism such as we have, has raised the economies of these nations to where they compete with us for the world’s limited supply of oil and gas. More competition for limited supply, means higher prices on the supply.
10. Middle East unrest, Kicking the Islamic hornet’s nest – A hundred years ago, oil interests (predominantly British Petroleum) set up puppet governments in the oil rich Middle East. Regrettably, these tribal families ruled not only ruthlessly and with the help of foreign troops including our own troops and sailors, and later air force, but they did little more with their vast earnings than spend it lavishly on themselves.
No real investment in developing the infrastructure of their nations has occurred (some exceptions). These families had no interest in using the money to grow new money through expanding business interests (grow their own nation’s economy for a future when the domestic oil supply was dwindling).
The majority of the population knows they have been screwed out of any claim to the oil wealth of their nation. They resent foreign control of their country. And they resent the buffoons sat upon the throne by the imperious West. The bill has become overdue, and restless natives have figured out that there are vastly more of them than all our weapons and men can handle. When the Middle East explodes, we will lose. The oil supply will be disrupted in the short term. But oil has no value, unless it is sold. So these nations will resume selling.
So what is our government going to do to reduce the price of your gasoline? Short answer: Nothing. Long answer: “Show their compassion and that they are doing something” even if it results in no real reduction in gasoline prices. As they have always done. Because it gets them re-elected to the golden trough that is your labor.
They could eliminate the federal tax on gasoline. They won’t.
They could pull our troops out of the Middle East. They won’t.
They could stop interfering in the Latin American nation’s. They won’t.
They could encourage more energy development within our borders. They won’t.
Oh, they will announce some program to develop these resources, as they have announced numerous such programs in the past. But like those programs, other than ensuring former Congressmen and their staff of future employment, the programs will bear no fruit.
This should sound familiar, as it is the same crap trundled out whenever gasoline shoots up in price, the government plan announced so far:
1. More domestic oil production. Never going to happen
2. Ease clean air rules if they interfere in gasoline. EPA will only do it on a case by case basis, meaning never as cities refuse to go through the arduous paperwork to justify, and by the time any approval is forthcoming the inspiring crisis will have passed.
3. The government would not take 10 million barrels of oil out of the market for the U.S. emergency reserve as had been planned. Meaningless small amounts according to petroleum market experts.
4. Pursue any collusion or price gouging and directed the Justice Department to help states pursue allegations that "gas prices have been unfairly manipulated." Price gouging. Yes, the price stations charge when the price of what they purchased in gasoline in the ground is greatly exceeded by the price they charge. Of course, since they cannot buy on credit, and must meet the price charged for the next shipment their prices are justified … but, government can so readily point the finger of blame at some honest businessman who is ensuring your supply of gasoline rather than its own responsible corpse. A few bits of innocent meat will be vilified by the various governments to satiate the gullible mob.
5. Break up oil company “monopolies.” Monopolies can only exist if government creates and protects them. There are plenty of oil companies. Another smokescreen to shift the blame from government to businesses.
6. Repeal $2 billion in oil industry tax breaks over 10 years. Won’t happen. Oil companies bribed Congressmen too much to let this go. And it is only $200 million a year. Trickle, trickle.
7. Windfall profits tax on oil companies. Who is to say what is too much profit? If government eliminates the profit they eliminate the incentive to supply you with gasoline. More importantly, in a tax it is government that keeps the loot, not you.
8. A 60-day "holiday" from the 18.4 cent a gallon federal gasoline tax. Yeah, that will happen. How about a permanent elimination?
9. Encouraging more infrastructure development and exploration. See #1.
10. Incentives for fuel-efficient vehicles. Bush urged Congress to expand tax credits for people who buy hybrid and clean-diesel vehicles. Car companies might like it. But no one seems to want these hybrid vehicles, beyond the current market. I guess they finally figured out the actual mileage wasn’t as good as the EPA claimed (liars), and the cost of replacing the batteries in 5 years exceeded the savings in gasoline purchases by two fold. [Of course as gasoline goes up this difference will diminish.]
11. Number 11 hasn’t been mentioned yet, but some greenie will remember soon enough: Ride public subsidized transportation (buses, trolleys). Heck government employees often get 100% subsidized (read free) public transportation by their taxpayers – suckers!]
12. Another greenie pie in the sky: Develop alternative forms of energy (fuel). Yeah, like they haven’t been sucking your income for decades doing that. See employment for Congressional lackeys above.
13. Form our own cartel: Oil Buyers of the World, that would set the acceptable price for a barrel of oil from OPEC. $35 a barrel seems reasonable. Of course if China is willing to pay $70, who are they going to sell to? Hint: You brain trusts better start peddling.
"Families are gripped by the fear of the rising gas prices," said Sen. Barbara Mikulski (D-MD). Yes they are. Fear of how they are going to afford the next tankful? Where the money will come from? Where the family vacation will go this summer? Fear. Exactly where you want them.