The price of crude oil has gone up because of increased worldwide demand, but that is only part of the story. The price of gasoline has gone up because of a worlwide shortage of refining capacity. The hurricanes in the Gulf did a lot of damage to refineries in the region, further limiting capacity and causing a very large short-term spike in gasoline prices.
The longer-term issue is that we don't have enough refineries to process all the gasoline we want to use. And why don't we have enough refineries? Because they are loud and dirty and no one wants to see them built anywhere near where they live. Are the oil companies doing their best to maximize their profits during this period? Of course! What's a capitalist enterprise supposed to do? But that doesn't mean there is anything nefarious going on. California's energy crisis was manufactured, to be sure, but Enron, Duke and others were in part playing on the same critical weakness in California that plagues the gasoline refining business- a lack of capacity. There are not enough power generating facilities in California, and even more serious, there is a shortage of transmission capacity. Because there are not enough transmission lines, electricity from the north can't make it to the south at peak demand periods. Like the refinery shortage, these a self-inflicted problems. Californians voted against building generating and transmission capacity for two decades, and only since the energy crisis in 2001 have the people in this state given way to allow more capacity to be built. The bottom line on the oil industry is this. If you don't like current prices, sell your pickup truck/SUV/Hummer and buy a Prius/Jetta/Civic, or take the bus. The only way we get out of this bind to change our behavior. For my part, at my new job I'm driving 55 miles a day instead of 20 miles a day, but it still doesn't make economic sense for me to sell my Escape. I figure I'll pay less than $900 (at $2.50/gal) a year extra in gasoline by owning my Escape instead of a Prius or other small car. My car will be paid off in February and it will only be three years old and still under the super-deluxe warranty for another two years. I can pay the extra gas ($80 a month) or I can buy a new car. That's no tough decision for me. >well. If price controls are put on oil, people will keep buying Humvees and >oil companies will have little incentive to drill -- saw that argument this >morning and it makes some sense. Increased demand is = higher prices, this >much is true. On the other hand as you say, this smells all to much like the >fake crisis that Enron put California through, and since many of the players >are the same, it is hard to accept pious capitalist arguments without >cynicism. > I'd like to see an accounting at the very least. If this is going to the >pockets of oil executives -- and after Tyco we really can't say that this is >just too mcu for that -- then for shame. > >Dana > > On 11/7/05, Tony <[EMAIL PROTECTED]> wrote: >> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Find out how CFTicket can increase your company's customer support efficiency by 100% http://www.houseoffusion.com/banners/view.cfm?bannerid=49 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:180381 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
