Tuesday, October 7, 2008
OIl & Profits
Its definitely true that people making a run at the pumps really fucks up the "just in time" gas delivery system we have in the US. AND that the media is at fault for making a big deal about a shortage, when it hadn't even happened yet. Also true that we have a lot of people wasting gas everyday with their SUVs stuck in traffic. Especially those dumbasses who bought a Hummer thinking George Bush was going to protect the gas prices with his mighty middle eastern policies. I wonder, though, why we don't have any gas in storage somewhere, just in case a REAL emergency happens. Although this hurricane is one of the largest natural disasters in American History, Some people want the media and the "dumbass cockgobblers" to be at fault for it. I wonder what it would take for them to admit that we had a true emergency - Nuclear holocaust? Anyway - It seems to me that the lack of a plan to keep a couple of days storage of gasoline is really the culprit here (I'm sure the DOD has some stored up somewhere). Most other countries keep a gas storage (and that's how Canada and England were able to send us some on such short notice). Only reason I can think of that we don't have the storage for an emergency is so that the producers of gasoline can get a bonus off of our suffering. Another thing I learned about gas prices is that they are not purely set by market forces. Rather, the energy companies decide what to sell it for, based on what they think people will pay - that's why it goes up in the summer, because they know people will be traveling more (basically, the gas companies raise the prices at a time when we will be buying the most - this doubles their profits because we are buying more gas and buying it at a higher cost). It's also what drives up the cost of oil barrels in the summer> - this 'anticipated' consumer demand means that the companies who sell> oil to the gas producers can get paid more because the gas producers are> charging me more at the pump. And, speaking of economics, the energy companies base their strategies for growth and maintenance on a price of $25 per barrel of oil. In other words, they can pay their overhead, and still make a profit based on a price of $25 per barrel of oil (which would put gas back down to about $1.29 a gallon). So, when oil goes up past that (because of some corporate perception of consumer demand for gasoline or plastics), they are just> making more profits. Basically, this means that there have been increased profits for the energy people for many decades. This phenomenon is so well known and documented that it even has a name - "windfall profits". In fact, back in the Reagan administration, congress levied a tax on these "windfall profits" to help pay our way out of the recession. This tax lasted for 3 years. It is one of the few taxes that actually came to an end and was not renewed. Hmmm, wonder why that is? Wonder why we didn't use that money to set up a gasoline storage system? Or a mass transit system? Or a R&D effort to reduce our dependency on oil? Don't get me wrong, I think profits are great, as long as everyone can afford to pay in. If we are that rich and stupid, then why shouldn't someone make money off of it? But, when people who make minimum wage can't buy gas, it seems to me that a company (or consortium of companies in this case) who makes its profits off of the good fortune of America's great wealth and thriving market system should do the right thing, lower their prices and make less profits (this will never happen). Raising the minimum wage is not the answer - all this does is force the economy to pay for unnecessarily inflated prices of oil products. It seems to me that a company making 10 billion in profits could stand to make 9 billion in profits so we don't have to take action through the government (of any sort) to make sure that even the poorest among us can get to work and have milk in plastic bottles. I am pretty sure that the oil used for gasoline refining is a different type than the type used for making plastics. I think its idiotic to go drilling for more oil when we have plenty of alternative energy sources. There's no need to increase supply to make the prices of oil go down (in fact, this will make prices go up in the long run because it will continue our dependency on oil). What we need to do is decrease the energy consortium's profit margin and get it back in line with the real demand of our country. The general masses (anywhere around the> world) do not benefit form the price of oil being so high. Only the select few who control the flow of oil get any benefit. Why do you think they hate Hugo Chavez so much? This guy is making a killing off of selling oil to the US (where the corporations have inflated the price of oil to the ridiculous) and using that profit to sell oil to other countries at a price they can afford. Modern civilization depends on oil it is in everything we do. That's one of the big reasons why places like Cuba, Colombia, etc. don't have modern civilization - they can't afford oil and no-one with oil is willing to share.