Monday, May 24, 2004
GAS...AND ONE CANDIDATE IS FULL OF IT
I, like a lot of my fellow South Carolinians, filled up the vehicle a few times over the past couple of weeks. I don't like higher prices any more than most of you do...and 2-dollars a gallon seems like a lot when you're used to paying $1.58. But adjusting for inflation and wage earning power, gasoline today is cheaper than it was 20-years ago...even more.
I think the issue of oil prices is being played like a fiddle by people that know how to emotionally move the citizenry to do their bidding...temporarily distracting them from larger more important issues and causing them pause to consider their message of liberalism.
People are basically stupid and easily led. The ones that don't pay attention, that is. Like the guy who buys a copper wrist-band to help his golf game, or magnets to sleep on to cure his back pain - these people deserve what they get when they purchase their future from a re-designed snake oil salesman.
I've always found it funny that people pay $1.50 for a 20-ounce bottle of water or soda pop and complain about 2-dollar a gallon gasoline. They think nothing of dropping 2-dollars for a 10-cent (real cost) cup of coffee.
Here's the truth about the current gasoline prices:
(From Steven Moore - economist)
Despite the recent surge in prices caused by the Iraq War and the supply cutbacks by the OPEC cartel, oil is still cheap by historical standards. We have to work less today to purchase oil than any other generation had to — which is really the best measure of scarcity. Think gasoline is expensive today? In the 1920s our grandparents paid, in today's wage-adjusted prices, $10 a gallon. In today's prices, oil cost $100 a barrel in 1900. Energy prices have been falling almost continuously (with some notable exceptions, such as the 1970s) ever since man first discovered oil.
In the 1950s, for example, no one thought it was possible to get oil from the bottom of the sea. By 1965 we had the technological capacity to drill 60 feet into the sea bed. Today's rigs can drill more than 10,000 feet down. Moreover, new sources of oil are being discovered. One of the richest oil fields in the Western hemisphere is up in Alaska, at Prudhoe Bay. Geologists recently discovered there is at least twice as much oil in this deposit as originally forecast. No one knows for sure how much oil is available within the Arctic National Wildlife Reserve, but this could amount to one of the most lavish oil deposits in the world — yet the liberals like John Kerry refuse to allow drilling.
"Everything that can be invented has been invented." Charles H. Duell, U.S. Commissioner of Patents, allegedly said that in 1899. I wonder how many people believed the quote in those days - and how many fall for the John Kerry's and other 'chicken littles' doom and gloom?
The South Carolina Democrat Leadership Council came up with an article in support of releasing oil from the Strategic Petroleum Reserve. A silly idea, really. The former President (Bill Clinton in case he lets you forget) actually did this in the year 2000, remember? Yeah, oil prices fell to 28-dollars a barrel from 35-dollars for a total of 3 weeks before they returned to 35-dollars (a savings of 5-cents per gallon for three weeks). By holding off the storing of 8-million barrels over 3-months (as Kerry recommends), that would give the US an additional 100-thousand barrels a day. We use about 8-million barrels a day in the United States. Total price for gasoline would drop by about a penny.
But, thanks to effective leadership by George W Bush - Saudi Arabia is encouraging OPEC to increase production by 2.5-MILLION barrels A DAY.
Think about that the next time you fill up with gas...hot air, mostly.
I, like a lot of my fellow South Carolinians, filled up the vehicle a few times over the past couple of weeks. I don't like higher prices any more than most of you do...and 2-dollars a gallon seems like a lot when you're used to paying $1.58. But adjusting for inflation and wage earning power, gasoline today is cheaper than it was 20-years ago...even more.
I think the issue of oil prices is being played like a fiddle by people that know how to emotionally move the citizenry to do their bidding...temporarily distracting them from larger more important issues and causing them pause to consider their message of liberalism.
People are basically stupid and easily led. The ones that don't pay attention, that is. Like the guy who buys a copper wrist-band to help his golf game, or magnets to sleep on to cure his back pain - these people deserve what they get when they purchase their future from a re-designed snake oil salesman.
I've always found it funny that people pay $1.50 for a 20-ounce bottle of water or soda pop and complain about 2-dollar a gallon gasoline. They think nothing of dropping 2-dollars for a 10-cent (real cost) cup of coffee.
Here's the truth about the current gasoline prices:
(From Steven Moore - economist)
Despite the recent surge in prices caused by the Iraq War and the supply cutbacks by the OPEC cartel, oil is still cheap by historical standards. We have to work less today to purchase oil than any other generation had to — which is really the best measure of scarcity. Think gasoline is expensive today? In the 1920s our grandparents paid, in today's wage-adjusted prices, $10 a gallon. In today's prices, oil cost $100 a barrel in 1900. Energy prices have been falling almost continuously (with some notable exceptions, such as the 1970s) ever since man first discovered oil.
In the 1950s, for example, no one thought it was possible to get oil from the bottom of the sea. By 1965 we had the technological capacity to drill 60 feet into the sea bed. Today's rigs can drill more than 10,000 feet down. Moreover, new sources of oil are being discovered. One of the richest oil fields in the Western hemisphere is up in Alaska, at Prudhoe Bay. Geologists recently discovered there is at least twice as much oil in this deposit as originally forecast. No one knows for sure how much oil is available within the Arctic National Wildlife Reserve, but this could amount to one of the most lavish oil deposits in the world — yet the liberals like John Kerry refuse to allow drilling.
"Everything that can be invented has been invented." Charles H. Duell, U.S. Commissioner of Patents, allegedly said that in 1899. I wonder how many people believed the quote in those days - and how many fall for the John Kerry's and other 'chicken littles' doom and gloom?
The South Carolina Democrat Leadership Council came up with an article in support of releasing oil from the Strategic Petroleum Reserve. A silly idea, really. The former President (Bill Clinton in case he lets you forget) actually did this in the year 2000, remember? Yeah, oil prices fell to 28-dollars a barrel from 35-dollars for a total of 3 weeks before they returned to 35-dollars (a savings of 5-cents per gallon for three weeks). By holding off the storing of 8-million barrels over 3-months (as Kerry recommends), that would give the US an additional 100-thousand barrels a day. We use about 8-million barrels a day in the United States. Total price for gasoline would drop by about a penny.
But, thanks to effective leadership by George W Bush - Saudi Arabia is encouraging OPEC to increase production by 2.5-MILLION barrels A DAY.
Think about that the next time you fill up with gas...hot air, mostly.
Comments:
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Greg,
Maybe you'll read this and then comment on it tomorrow:
http://www.cato.org/dailys/05-21-04-2.html
"...The SPR was intended to enhance our ability to deal with embargoes. But everyone who knows anything about the oil market knows that embargoes are meaningless gestures. That's because oil producers cannot ultimately dictate where their oil goes once it leaves their shores...the world is really just one market."
"...In short, we don't need the SPR and, in a perfect world, we'd sell off the oil here and now, and then shut the whole thing down. Oil prices would spiral downward, gasoline prices would drop, and taxpayers would receive a windfall from the sale of 650 million barrels of oil during a time of record high prices. Insurance against future price spikes (if you want it) would be up to you.
Alas, that's probably not going to happen. So what do we do with this 650-million-barrel rainy-day fund when the rainy day we're saving it for is probably never going to come? Well, we could define a rainy day downward and use it for times like the present..."
"...In 2000, President Clinton authorized a similar plan, but withdrawals were limited to one million barrels per day over 30 days. The program was under political rather than market control. Even so, world crude prices dropped from $34 to $30.50 over a two-week period in late September and early October 2000.
In a perfect world, governments wouldn't meddle in energy markets. But the world isn't perfect and SPR exists. Political control of the inventory adds to the uncertainty and risk in crude oil markets. Allowing the market to determine how the inventory would be used would be better."
Post a Comment
Maybe you'll read this and then comment on it tomorrow:
http://www.cato.org/dailys/05-21-04-2.html
"...The SPR was intended to enhance our ability to deal with embargoes. But everyone who knows anything about the oil market knows that embargoes are meaningless gestures. That's because oil producers cannot ultimately dictate where their oil goes once it leaves their shores...the world is really just one market."
"...In short, we don't need the SPR and, in a perfect world, we'd sell off the oil here and now, and then shut the whole thing down. Oil prices would spiral downward, gasoline prices would drop, and taxpayers would receive a windfall from the sale of 650 million barrels of oil during a time of record high prices. Insurance against future price spikes (if you want it) would be up to you.
Alas, that's probably not going to happen. So what do we do with this 650-million-barrel rainy-day fund when the rainy day we're saving it for is probably never going to come? Well, we could define a rainy day downward and use it for times like the present..."
"...In 2000, President Clinton authorized a similar plan, but withdrawals were limited to one million barrels per day over 30 days. The program was under political rather than market control. Even so, world crude prices dropped from $34 to $30.50 over a two-week period in late September and early October 2000.
In a perfect world, governments wouldn't meddle in energy markets. But the world isn't perfect and SPR exists. Political control of the inventory adds to the uncertainty and risk in crude oil markets. Allowing the market to determine how the inventory would be used would be better."
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