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Financial Times reports “OPEC says oil could hit $200,” up from the record $120 a barrel today. If and when that happens, predicted to be this summer, the $3.50 to $4.00 prices you see at the pumps today will top $5.00 per gallon. When Bill Clinton took office in January 1993, the average retail price of gasoline was $1.06 per gallon. By the time Clinton ran for re-election in 1996, that average per gallon price had become $1.25 per gallon, a 17.9% increase in less than four years.
By the time George W. Bush took office in January 2001, the price of a gallon of gas had become $1.45 – a 36.8% increase in gasoline prices during the first Clinton era. Yet Hillary Clinton says she can solve this problem… and I hope she can, but let’s consider the facts. *** 2001-2006: During the first six Bush years, gasoline prices rose to $2.22 per gallon, a 53.1% increase over six years, during which time the flow of Iraqi oil had stopped after 9/11. Hillary Clinton was a leading US Senator. Can we find any of her senate initiatives to increase domestic exploration, production or refining, which would result in lower prices at the pumps and reduce America’s dependence on foreign crude? 2006-Present: American’s blamed Bush and elected Democrats to turn the tide and from January 2006 to March 2008, the price of gas shot up to $3.25 per gallon, a price now dwarfed by the $3.49 per gallon a month later, in April 2008. In the 14 months since Democrats took control of congress, the price of gasoline has shot up a whopping $1.26 per gallon, marking a record 56.8% increase in just 14 months. So much for turning that rising tide... *** Exploration, Production and Refining: A steady flow of production is required to meet a rising demand for energy. At present, the United States consumes a reported 25.9% of the world’s oil production. But we only produce 10.7% of the world’s oil supply. As a result, we are dependent upon foreign energy productivity, consuming approximately twice the oil we are allowed by law to produce and therefore importing the energy we need to keep the lights on. Environmentalists have all but shut down domestic oil exploration and production for almost 40 years now. They have also outlawed the expansion of refining capacity for the same period, ever since Jimmy Carter was president. Our refineries are running at 98% capacity at all times. Even if we could buy crude at a lower rate, we do not have the refining capacity to meet demand for refined products and deliver a cheaper retail prices at the pumps. *** Despite cutting off America’s ability to explore, produce and refine oil products for 40 years, our current $3.49 price per gallon is still well below that of any member of the European Union. But it won’t be for much longer because the liberal environmentalist energy policies of the last 40 years are coming home to roost. Based upon our current $3.49 per gallon national average * 68% or $2.37 per gallon belongs to the crude producing company (most of them foreign) * 13% or $.45 per gallon goes to TAXES * 11% or $.38 per gallon pays for the cost of distribution and delivery * 8% or $.28 per gallon pays the cost of refining (for those “greedy” U.S. oil companies) *** Now, since gasoline is usually a “loss leader” for the retailer that prays you will walk into their market and buy something at a profit while your gas tank is filling, and the vast majority of oil consumed in this nation is not produced in this nation, American oil companies make most of their earnings from refining. $.28 cents per gallon is not how much they make refining. It represents the TOTAL attributed to the cost of refining, which means, their billions in profits are only a portion of that $.28 per gallon. Since U.S. oil companies, which are owned by U.S. citizens hoping to retire via their 401k and stock investments someday, are taking the smallest cut from the price of a gallon of gasoline, how in the world can it be their fault that the price of gasoline is higher than we like? If they charged nothing at all for refining and therefore, went out of business by making nothing at all, it would only reduce the price at the pump by $.28 per gallon, at least until we ran out of refined product altogether. *** The Only Solution: Balance domestic supply with domestic demand. Explore, produce and refine more domestically… while lifting the wacko environmentalist blocks against all other alternative energy sources and encouraging investment in all the above. --News Analysis by JB Williams
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