_RaT_ said:
Sorry Scesnick, I don't have any sympathy. It was your choice to live where you live and who you work for. I learned back in 1976 that fuel prices will always increase so prepare accordingly. They will continue above $3 a gallon and at some future date will hit $4, $5.... Paint will cost more, food, insurance, taxes will be higher. Tell this story to the rest of the world and you won't get an ounce of sympathy. The worlds changing like it or not. Most of our oil comes from outside the US and that is where we loose control. We are addicted to it and are just now beginning to understand just what that means. Opening up more oil sources in the US will not drastically reduce the cost of gas but will help control the wild fluctuations we see in the daily per barrel price of oil. Yep, the good old days are gone but that does not mean the future is bad...
As usual, there is always more to each side of a story. Let's look at power, gas companies and other "monopolies" that are regulated by some sort of PUC (state public utilities commision). If these commisions didn't somewhat regulate prices, the Enron scenario from the early 2000's would have blown up even more and our electric prices would be sky high. Yes, the prices have gone up, but they are regulated and the rise is controlled.
In the Enron case, the price gains were illegal and artificial and lots of people lost a lot of money in the form of higher energy prices, investors that saw their stock become worthless and employees that lost their jobs and lost a large part of their life savings.
With oil the situation is similar, however, a large cartel - OPEC - controls a lot of the world oil production and can dictate output to give them a price that they like - to some degree. With world consumption at an all time high and a few trouble spots around the world, the price shoots up, however, the costs don't shoot up. Let's look at the oil the companies are pumping from government lands. They still pay the same $/gallon royalty to uncle sam, no matter what the price of oil is. I am not 100% on actual $ amount the oil companies are paying, but here is a link to an article that tries to shed some light on this:
http://www.nytimes.com/2006/02/14/business/14oil.html?ex=1297573200&en=87dc413fa6add582&ei=5088&partner=rssnyt&emc=r
There are lots more articles out there, just google them.
Back to the original point, there are not any alternatives (at least not viable right now) to our situation, however, some regulation will have to eventually happen unless we want to go into a period of stagflation as everything you buy is transported by trucks that use oil (diesel) to bring the products to market. That cost will get passed onto the consumer, that will not be able to buy other goods as the essentials (food, clothing, shelter & energy) will consume most of their disposable income. This will cause a shrinking economy if you take out the food and energy sectors, combine that with rising interest rates as we currently have and we are in stagflation.
This could be the same scenario as in the 70's or early 80's (don't you love when history repeats itself).
I think a lot of the public outcry is that oil companies are paying uncle sam the same amount of every barrel pumped but charging the consumer market prices and "profiting" the difference. Combine that with shoddy maintenance (look at BP) that causes breakdowns and a rise in prices and you can see the consumer being up in arms about this.
I am by no ways an economist and I also didn't stay at a Holiday Inn Express last night, however, I find it difficult to simply look at the 2 view points (bad/greedy oil companies vs. good for stock holder oil companies). The solution is ?????? (to be determined), however, the long term fix is reduced consumption, however, that could be decades away.
Derek
