Thursday, May 24, 2007

Gastro congressional disorder

While they're hard at not-work not-proposing a plan for dealing with Iraq, our new reps in the House have passed legislation to distract us with a useless investigation into gas prices.

The bill is sponsored by the dramatic Bart Stupak, D-Mich.
The bill's sponsor, Rep. Bart Stupak, D-Mich., said the legislation would help stop "the truly outrageous prices we are seeing at the gas pump," The Detroit News reported.

"Today, every member has a choice," said Stupak. "Side with big oil or side with the consumers who are being ripped off at the gas pump."
The "us v. them" black and white view point makes for good copy and emotional rhetoric. But like the legislation itself, is merely a distraction.

First of all, the prices aren't "outrageous."

A diagram in the June issue of Wired Magazine shows that "even when prices hit near-record levels in the US, American drivers get off cheap compared to European motorists."

Londoners, for example, were paying $6.65 and gallon for petrol when the article was written. Parisians pony up $6.52 a gallon, and Romans forfeit $5.62 to fly around in their Fiats.

What seems to be getting stuck in Stupak's craw is that companies are making money from selling gasoline. Can you imagine!?! A corporation profiting from doing business! The impudence! The shear audacity!

Look, the reason petroleum companies are charging more for gasoline is because they can, because consumers are paying for it. There are signs that we (consumers) may be reaching our limit, but I still see hundreds of people commuting to work in SUVs and giant pickups with nobody but the driver inside.

Americans don't really care about the price of gas. Not yet. Sure we may grumble. And Stupak and other politicians will try to score political points off that grumbling.

But the way to beat high gas prices is to change our behavior. When we really start to care, we'll buy more efficient vehicles and use more public transportation or maybe ride a bike once in a while.

A congressional investigation sure as hell won't do any good. I suspect Stupak knows this. This looks more and more like a wedge issue. A way for Stupak and Co. to make a meaningless gesture and then point to political enemies as being "in favor of big oil and against the little man."

So tedious.

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  1. What?

    Something is worth what people are willing to pay for it? And not a cent more or less?

    I'm shocked! Shocked!

    I'm now going to retire and put on my anti-gravity boots.


  2. Randall, have a great time out west. I envy you you're vacation.

  3. OK, explain this to me.

    Quick Trip has thousands of gallons of gasoline in their underground tanks. This gasoline was refined months ago from oil bought months before that. The profit margin on that product was defined a long time ago.

    But if the price of crude does the price of the already refined, bought and purchased gas sitting in the ground and ready to pump.

    When the price of crude drops, does the price of gas drop immediately? Not so much. There seems to be an incredible lag between the drop in oil prices and the eventual drop in gas prices.

    Plus, every year we hear the same bullshit. "We have a lot of refineries down for maintenance as we switch over to the summer blends, so we are having trouble keeping up with demand."

    Bull. Fucking. Shit.

    Are the Big Oil Companies the only corporations on the planet who are incapable of projecting consumer demand and making accomodations to meet that demand?

    No. They are playing us like a cheap fucking fiddle because they know the current administration won't give them any reprimands more severe than a wink and a nod.

    BTW, your comparison of prices between us and Europe are absolutely correct.

    Know what they pay for a gallon of gas in Kuwait? $0.78. Yep. Seventy eight cents a gallon. I seem to recall us saving their asses from an invading army a few years back. How about they ship some of that cheap ass gas over here in gratitude for still being alive and free?

    BTW, in Venezuela under Hugo Chavez, it's just 0.12 a gallon. Twelve cents. That means that filling up the average 15 gallon tank would cost...$1.80. Less than 2 bucks.

    What did you pay last time you filled up?

  4. XO- I'd say the short answer to your question is that you're understimating the demand. I drove by the QT at I-435 and Roe this morning and of the 26 or so pumps, there were only about six that didn't have cars parked filling up on "expensive" gas.

    This same scenario is happening all over the city, in every city in the country, not to mention China and India.

    So if people are willing to keep paying $3-$4 a gallon, why not charge that? It's basically the same reason that Starbucks can charge $18 a gallon for coffee.

    Now don't get me wrong. I'm not saying people should pay so much for gas. Quite the opposite. We should stop using so much gas. Stop driving solo in our SUV two blocks to the grocery store. Buy vehicles that get more than 10 miles to the gallon. Maybe go ahead and build a mass transit gondola from OP to Downtown.

    Let's not let the politicians distract us from the real issue.

  5. "So if people are willing to keep paying $3-$4 a gallon, why not charge that? It's basically the same reason that Starbucks can charge $18 a gallon for coffee."

    Because, my friend, no one will lose their job or their home if they can't drink Starbucks coffee. They'll just drink cheaper coffee or none at all.

    We don't have that luxury with gas, do we? It's all the same price, all the time. A penny here, a penny there, but it all seems to rise and fall together. Doesn't matter where the oil comes from, who refines it, whose process is more efficient, whose profit margin is greater. No, when it hits the pumps, it is in lock fucking step. There is no "shopping around".

    It's not a matter of people being "willing to pay" $3-$4 a gallon. It's a matter of not having any choice.

    Switching to hybrids, alternative fuels, switch-grass ethanol, and yes, even gondoloas, are all lofty, long term goals. And I support them all (except the gondola thing).

    But for the average American, today, who is living paycheck-to-paycheck with no savings, no buffer and no safety net, just struggling to make ends meet, a huge spike in gas prices can be the last straw that send them spiraling into oblivion.

    Most Americans aren't in a position to say "Well shit, honey. Gas jumped up to $3.00 a gallon. Guess it's time to trade in that 1972 Pinto that my uncle gave me so I could get back and forth to work to feed my family for a brand spanking new, shiny electric car. Be looking at 6 years worth of car payments I can't afford and an electric bill for recharging the car that will be at least us much as what I was paying for gas, but what the fuck? So we have to live in a tent and eat grass. Big deal! At least I'll be doing my bit to save the planet."

    People have to be able to get back and forth to work. If you can't afford to keep gas in your car, you will lose your job. Lose your job, lose your house. Lose your house, lose your dignity your family, all hope and quite possibly your life.

    People shouldn't have to decide "Do I fatten the oil companies pockets, or do I feed my family?"

    "Do I fatten the oil companies pockets, or do I buy the prescription drugs that keep my son alive?"

    "Do I fatten the oil companies pockets and keep my job, or do I just say fuck it, get fired, go on welfare, move into public housing, get food stamps and become someone elses problem?"

    These are real choices that real Americans have to make every day.

    I say cap gas prices at $1.00 a gallon. Let the oil companies find ways to reduce operating expenses, increase efficiency and find cheaper crude sources by forcing them to find a way to continue making a profit knowing that they can't charge a single penny more than $1.00 a gallon at the pump.

    Since there doesn't seem to be any competition in the free market, lets just impose a little competition and see if that doesn't change their arrogant fucking attitudes.

  6. The only affect artificial price caps will have it to induce oil companies to stop selling gas in the US.

    Unliess you live in Communist China (and really, not even there anymore) a business won't stay in business if it can't make a decent profit margin.

    Force the companies to sell for $1 a gallon, and they'll just transfer they're sales overseas, where they can charge the market price.

    Then the working stiffs you mention won't even be able to take the bus to work because there won't be any gas for public transportation.


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