Liberally Conservative

"Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children's children what it was once like in the United States where men were free....... ~Ronald Reagan~

Sunday, April 30, 2006

Gas Pains - Cause and Effect

The politicians on both sides of the isle joined in the donkey parade, touting gas rebates, rollback on tax incentives, oil company investigations, windfall profits taxing. Ho-Hum, it's an election year and the political hypocrites are in full swing.
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Government, and the inept politicians who legislation are, in part, the cause and effect of high gas prices. Big goverment will always spur big costs to consumers.
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Democrats have vetoed opening even a tiny portion of the Arctic National Wildlife Refuge in Alaska to oil and gas production. If there is as much oil as the U.S. Geological Survey estimates, this would increase America's proven domestic oil reserves by about 50%.
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In 1995 the Republican Congress passed an ANWR production bill, which Bill Clinton vetoed because he said it could be five to 10 years before the oil would be produced. We would have that oil today if Mr. Clinton had signed that bill.
xxx Democrats have also voted against producing oil from the Outer Continental Shelf, where there are more supplies by some estimates than in Saudi Arabia. In the 1970's the environmentalists and their followers in Democratically controlled Congress even protested building the Alaska pipeline, which today supplies nearly one million barrels of oil a day. When the U.S. imposed a windfall profits tax in 1980, prices rose to an inflation-adjusted range even higher than today, and domestic production fell. As for claims of "gouging," the price of gasoline at the pump in the U.S. has risen 25% less than the rise in the global price of crude oil since 2003, according to Wall Street economist Michael Darda.
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Fact Sheet:
  • China's demand for oil grew 41% over the past four years, while total world demand grew by about 8%.
  • Refiners are starting to mix more fuel with ethanol instead of MTBE, an additive that is blamed for causing groundwater pollution. Ethanol tends to be more expensive than MTBE. This is mandated by congressional legislation.
  • Since the 1990s, the FTC has engaged in multiple gas-price investigations, but it has yet to find a case of price manipulation. The last major investigation, which was in 2001 after gasoline in the Midwest was priced at about 30% more than the national average, found that the high prices were primarily a product of refinery production problems, pipeline disruptions, low inventories and high crude prices.
  • Congress passed an energy bill that included as much as $5 billion in tax breaks for oil companies. The Congressional Joint Committee on Taxation estimates oil companies will receive at least $10 billion in total tax breaks over the next five years.
  • In 2001, the average U.S. family drove about 5,700 miles commuting to and from work, up from about 4,900 in 1990. Commuting made up the largest share of total vehicle miles traveled in 2001. Social and recreational travel made up the largest share in 1990.
  • An average American spends about 14 hours a year mowing the lawn, compared with about 375 hours driving. An average lawn mower uses about four gallons of gasoline a year. An average American driver uses about 500 gallons of gasoline a year.
  • As gas prices increase, many gas stations also report an increase in gas theft. Gas theft costs gas stations an estimated $237 million in 2004 -- about one of every 1,100 fill-ups -- up from well under $200 million in 2003.

The rhetoric and blame game over fuel cost demonstrates a complete lack of responsibility by elected offiicials. Opportunities to enhance energy self-sufficiency has been around for decades but U.S. citizens have been paid lip service by politicians.

Citizens have voted for many politicians for years without challenging them to do better. Do we go to the polls ignorant of the activities and voting records of career politico's? American consumers are at fault for their poor habits too. We want what we want, driving gas guzzling cars, buying our children cars and failing to demand more efficient vehicles and effective mass transportation alternatives.

Bloated government and selfish consumer habits are as much to blame for current gas prices as world markets and the growing demand for oil in China and India. Change is difficult but we should demand more from ourselves and more from elected officials.

Source of Data: The Wall Street Journal

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