The Real Reason for Rising Gas Prices

It is the environmentalists that keep this from happening. We really need to work out some sort of a compromise. We need to do something, this is slowly turning the middle class in to the poor, and poor well they are suffering the most. We really need to start taking care of Americans.

Well that article sounds promising. If that is true then we are in good shape. I think that the government is looking into the future. When the rest of the world is out of oil they think the United States will have enough to last at least until we can come up with a better alternative fuel. I am in a resources geology class in college and our professor is directly involved with the mining industry. He does not believe we have enough oil to last us very long at all. In fact he says our oil production peaked in the 1970's. He said we nedd an alternative fuel soon. In fact he believes that most of us will be driving electric vehicles in the next 10 to 15 years. Also, he stated that the price of gas will continur to rise becasue the world just does not have an adequate supply of oil anymore. I am not sayin he is all correct, but he seems to know what he is talking about. Believe me I hope your article is right, because it is going to be an expensive shift from gas powered to electric powered vehicles.

When I point the following things out, many disagree or even get angry. So, please, to those of you about to vehemently disagree, know this. I'm really not stupid and I have thought this through. What follows is feasible, but not provable. Nor do I insist it is all true, though some of it is fact, I think it is probable the following taken all together explains why oil drilling is restricted here in the USA. Here's why I think we don't do more developement of domestic oil supplies. First, let's have some facts. First fact: Exxon-Mobil, XOM has made record profits during the Iraq war and the oil crisis. The world record profit for any corporation is held by XOM during the rapid run up of oil prices. The other oil companies have mostly done very well, too. This shows restrictions in the oil supply produce more profit for oil companies, not less. Check this out on your own, if you like. More profit goes to oil companies if less than the maximum of oil supply is flowing. When you truely understand the law of supply and demand, and that corporations do not merely pass on only their increased costs, this is obvious. Now, I'm not saying profit is bad. Profits are good. However, in this case, they indicate something. What? We will get to that. Second fact: It is the duty of the board of directors of all public corporations to maximize profits for their shareholders. Obviously, XOM's board of directors is doing an excellant job. I even expect to buy some of their stock later this year. Putting your money with the winning team is what makes sense. Third fact: There exists an optimum rate for the oil to flow in order to just meet demand so as to produce the maximum profit. Anyone with moderate math skills could calculate this rate with access to all the figures of production, sales, and etc of oil in the world. The oil industry does have these figures. Fourth fact: It is the duty of oil company executives to attempt to control oil production so as to produce the most profit for their companies. Given the profits they make, they are doing their duty. Fifth fact: The optimum rate of oil flow for maximum profit is closer to what it was when XOM made its record profit during the Iraq war than it is during times when production is high. High production and supplies equals low profits. Sixth (not a fact): There is a proposed economic law that states anything that can make money, will make money, or even might make money, is or will be done by someone. Seventh (not a fact): It follows from the proposed economic law above that someone in the oil industry covertly funds environmental groups while giving money simutanously to liberal legislators so as to be able to restrict drilling in the USA. Profits are increased if the oil supply is restricted just enough, but not too much. Whether or not someone is actually doing this, we do not know. It is a fact that if someone did the above, it would make money for the oil companies. The question is only, "Is the proposed economic law correct?". This is why, IMHO, oil drilling is restricted in the USA.

We need to vote for the senators and congressmen who will allow the US to drill for oil and build new nuclear power plants. Since the Alaskan Pipeline has been build I have not heard any proof that the Caribou herd has vanished, which was predicted by the Environmental groups. Congress has convinced the people that the oil companies are to blame and will not recognize or admit that they are to blame. We all need to write our elected officials and demand they open up the US oil fields and build new power plants and new Oil Refineries.

No! No! No! This is all president Bush's fault! He lied to get us into Iraq so he could make tons of money on the foreign oil and on the backs of the American people! NOT!!!! But to hear the liberals tell it that is exactly what happened. It doesn't matter that some owl in Alaska might have to move his habitat by a thousand yards and so environmentalists whine and protest and lobby congress and get laws passed that inevitably will put gasoline prices above 5 dollars a gallon! We DON'T need foreign oil, we need to be allowed to drill and pump our own but right along with that I don't believe the big oil conglomerates are telling the whole truth either! If it is so expensive to import foreign oil how can you make profits in the BILLIONS of dollars?

Thanks for the link and information, clrumfelt. You're right. We do need to have more oil drilled in the US and get less from other countries. You're also right that we need to contact our representatives and Congress. If enough people did that, they might sit up and listen. Alas, most people prefer to complain and rarely take action. Look at our voting numbers. Not many even bother to vote. (But they will choose to complain about the person who gets into office. Go figure.)

Many have talked about this for years since even before gas started going up back in the 90's and the fact that we have all this oil sitting here but whenever there has been talk of using it the environmentalists come in and protest. They lobby congress and make huge stinks about how if we drill here we could or might cause environmental damage. Not that it will cause but that it might. As we have seen with reports if something might cause a problem we must not do it then. Congress needs to tell the environmentalists to shut up and to start opening up the oil fields we have here. If they did this they could then tell OPEC we don't need you anymore we are using our own. Even if we couldn't completely stop buying the oil from foreign sources we would have a better negotiation leverage in order to buy it cheaper. Until we are willing to do this though we are stuck with whatever prices we can get it for.

its not right i guess. sometimes we have to suffer for the decisions taken by the politicians. may be due to this the woirld is sufferring a lot.

I already knew about these sources being blocked off for a while now. This is part of the back story the public doesn't know about the war. Bush is profiting off of this somehow. I can't wait until someone else gets into office, maybe they will lift the ban on these sources that we so desperately need.

I remember years ago Bush was pushing for them to start drilling for oil in Alaska but the liberals and environmentalists shot it down hard. To many people fail to realize how deep in the hole we are because of all the environmental crap we deal with. California got so crippled by environmentalists that they were importing energy from states like Texas and Arizona. Eventually that led to their governor being fired before his term was up. Just look at California when you wonder what happens when environmentalists get their way. It's the most expensive state to live in, with high costs of power, and at one point environmentalists even managed to shut of irrigation water for farmers because they didn't want the water to come from lakes with sucker fish in them. Environmentalists really need to be reigned in sometimes.

While I do believe that we need more domestic drilling to get us out from under the thumb of OPEC, that will not solve our current problem with gas prices. There is not a supply problem. In fact, last month a coalition of countries petitioned OPEC to increase its level of oil production. They flatly refused, not because they wanted to impose their will on us, but because they are currently producing more oil than current demand warrants. (despite what our rather naive media would tell us) It is also NOT president Bush controlling oil prices to secure his retirement. That idea is foolish. He is a republican president with a democratic majority in congress. So he does not have the ability to manipulate the price of gas nor is it in his best interest to do so. We need to stop blaming Bush for everything and find real solutions to real problems. The reason gas prices are so high is due to oil speculation pure and simple. Let me use redyellowblackdogs fact format. (Thanks redyellowblackdog!) FACT The New York Mercantile Exchange (NYMEX)controls the investment in oil. They set the margin. The margin is simply the a "good faith" deposit that is supposed to be based on the volatility and price of the commodity. Right now you can buy/control 1000 barrels of crude oil for only $3375. Depending on the day, you would be controlling $67,000 worth of oil for only a $3375 investment. With the current trend in oil prices, any investor worth his salt would be shoveling money into oil. (These examples are taken from an article and are using old numbers for the price of oil. The math is still valid. www.foxnews.com/story/0,2933,166038,00.html ) FACT The price of crude oil has doubled in recent times, the NYMEX has only raised the margin once, and only by a token amount. They should have raised it more significantly to deter the widespread speculation that we are experiencing today. FACT Neither the president, the oil producers, the oil refineries or the gas stations benefit from high gas/oil prices. Some would argue that the oil producers benefit and they do in some ways, but they are producing more oil than is being sold. they are sitting on inventories longer than they would like. As any business person can tell you, old inventories cost you money. Yes, they are making more per barrel, but they only get paid on what is sold, not what is drilled. Don't get me wrong they are not hurting by any means, but they would rather sell at a lower cost and move more oil than be in the current situation and have demand diminish. FACT Yes, the oil companies benefit as is attested by their record profits. What I would like to do is to remove the restrictions against building new refineries and domestic drilling. We could literally force the oil companies to invest in those things by reminding them of their record profits. If we drilled more domestically and had newer more efficient refineries, the cost of gas would be reduced as well. But the biggest winners are the oil speculators. Imagine you invest $3375 for the controlling interest in 1000 barrels of oil. And you bought it when a barrel of crude cost $105. Oil is now trading at $117 per barrel. You would have made $12,000 on an investment of $3375. That's a 356% return on your investment! So one of the things that we have to do is to get the NYMEX to raise the margins on crude oil and raise them significantly. If investors have to come to the table with more of their own money to invest, they will invest less in it. And if they invest less in it, the futures that they are trading become worth less and will sell for less. The only other alternative is for this investment bubble to pop like the tech bubble did. The problem with that is that we don't know what the consequences of that will be.

We have a little joke in our house. When the prices on gas rise we say that Bush must be getting ready for retirement. Just big corporate's way to make more money off us. They could have changed all of our cars to electric but of course that would have been bad for business.

Sure..there are domestic oil reserves all around the USA...but we do not have the time to develop them. I will take years to avoid the bureaucratc red tape and the years to develop the fields. We may cry aboit our politicians...we can blame them..but the fact remains...we simple donot have time/ Anthings get worst in emerging nantions ...forget about cars, who simple doot have enought to feed themselves. Again...arab producing contries keep on purchasing new jets for their " thousand " of princess and high rollers " and aston martins for their gardeners and tising gas prices just keep going up...it is a real world, a real problem...and we most find real solutions..on time

Yea that is all true. There is another reason I can think of and that is President Bush. Me and my boyfriend were talking and we both agreed that since this is his last year in office oil prices will sky rocket. Mainly so he can make more money off of it without having to give a real reason why it's so high. We all know how he is so into his "oil" down in Texas. I think we need to depend more on USA oil resources than foreign too. Sure we have ethanol for e85 capable vehicles. Most vehicles are not e85 however. Corn has gone up a lot too not saving a bunch of money on the corn oil produced for gas purposes. It used to big a bigger difference in the 2 prices and now they're practically the same.

Extracting oil from the ground is incredibly destructive to the area. I can understand why people wouldn't want oil extraction going on in their own backyards. Conservation is the key. There is enough oil in existing reserves if people would stop wasting it.

Finally, someone out there feels the same as I do. This Discussion hits the nail on the head. Everything we have here seems to be going overseas and we have nothing left. Could you imagine how many jobs would become available if we drilled our own oil. It seems however, that our economy and government are only going to get worse. They don't care about Americans or whether or not we have food to eat.

It is likely that by raising the cost of fuel to consumers in North America, at least, the suppliers are driving us towards greener vehicles. This will, in turn, reduce our consumption, which will then require higher prices to maintain corporate profits. In this way, three goals are accomplished. The first of these is a somewhat greener world. The second is a guarantee of longer high profit-taking life for the oil companies and their oil reserves. Lastly, the consumer stays happy because he gets to use fuel in his vehicle for many more years, albeit at greater cost. I suppose this could be seen as a win-win-win situation. I guess it's all good. Am I missing something here?