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Thursday, May 15, 2008

Misplaced Blame

Americans are increasingly enraged about the price of gasoline, and rightly so. Skyrocketing gas prices are beginning to cut into the lifestyle choices to which most of us have become accustomed, forcing drivers to either cut back on driving or ditch their SUVs for small, fuel-efficient autos.

Oil companies and gas stations are easy targets for Americans' rage in the blame game. After all, somebody, somewhere is to blame for this mess. And it just so happens that the oil companies are making excellent profits for their stockholders, which good corporations are supposed to do.

Of course, the mainstream media never reports that the profit margin percentage for companies like Microsoft and Google is much larger than that of the oil companies. In the liberal blame-game, it is always politically correct to blame the oil companies.

But is it fair to blame the oil companies?

Consider some facts. In 1992 the price of a barrel of crude oil was about 15 bucks. By 1998, ten years ago, crude oil cost roughly $25 per barrel.

Within the last 10 years the price of crude on the open market has steadily increased as demand for the commodity has skyrocketed with China and India beginning to use oil increasingly in their growing economies.

That steady increase in the market value of crude reached an unheard-of $127 per barrel this month. That's roughly 100 bucks per barrel higher than in 1998.

Oil companies do not set the price of crude. The open market determines the price based upon investors/speculators. China and India are now using millions of barrels of oil, meaning, of course, that they are now near the top among the countries of the world in the production of 'greenhouse gases.'

Yet the United Nations granted both countries an exemption from its 'mandated' reduction in greenhouse gases.

With these two countries now using as much oil as most any other country in the world, and with our dependence on foreign oil still remaining at a fairly high level, it is no wonder that the markets have created a financial bonanza for crude.

When the oil companies are having to pay 100 bucks per barrel more for crude than they did 10 years ago, is it really a surprise that gasoline prices have skyrocketed when compared to the past?

The solution that many liberals are selling to a gullible public is to place a windfall profits tax on the oil companies. My friends, oil is already taxed at a rate that boggles the mind. For every 8 cents the oil companies make in profits, the federal government alone collects 18 cents in taxes, and that doesn't count state and local taxes.

In short, the federal government is making windfall profits off of the oil company profits.

So, why does the government need or want more?

In addition, the environmentalist nutcases have seen to it that not only are we forbidden from drilling for oil anywhere in the country but that we are blocked from building more nuclear power facilities or new oil refineries. No new refinery has been built in the U.S. for over 30 years.

Thus, if the answer is weaning ourselves off of foreign oil, how can that be done when a few very powerful extremists have tied our hands?

It should be noted that one of the environmentalists' favorite countries, France, is powered almost exclusively by nuclear energy to the tune of at least 80% of its energy needs.

With new technology that makes nuclear energy as safe as any type of energy on the planet outside of solar, there should be no reason why the U.S. should not build more nuclear facilities and shift to that form of energy as quickly as possible. Nuclear power also ranks with solar as the cleanest form of energy available.

But the answer is not 'taking oil company profits' out of the hands of stockholders in order to fund these alternative energy sources. We were ALREADY funding alternative sources until the environmentalist nutcases put a stop to it.

Ted Kennedy will not even allow windmill-generated wind power to be developed on the shoreline of Connecticut and Massachusetts.

Thus, who IS to blame for the current crisis? Look no further than the environmentalist movement, liberals like Ted Kennedy, and countries like China and India. The oil companies and your local gasoline vendor are no more to blame for the rising prices than your grocer is to blame for rising food prices due to the environmentalist insistence that we take crops and turn them into bio-fuel instead of food.


Anonymous said...

As a biologists I am an environmentalist, but after being involved with the environmental movement for many years I have seen the illogical demands liberal environmentalists preach. Liberal environmentalists do not care about the environment. They care about their hate for capitalism.

Liberal environmentalists have pushed me further towards conservativeness. We need a conservative approach towards environmentalism where the free market makes our country dependent and conserve our own natural resources. Taxes need to be lifted on any American company that is working to produce fuel efficient automobiles, factories, power plants, and mining.

We need to give higher tax deductions for mortgages on homes that are inside city limits so the transportation time to work is not excessive. I drive a scooter to work, which is 12 miles round trip. I get 60 mpg.

Most importantly we need to do away with the gasoline tax and remove the federal governments role in road construction. Leave that role to the states. Once a significant amount of fuel efficient automobiles are on the road the federal government will want to increase the gasoline tax. A family that once paid 1 cent per mile they drove in an auto that got 15 mpg will eventually pay $0.25 per mile in a auto that gets 60mpg.

D. Martyn Lloyd-Morgan said...

You make a good argument, particularly with regard to the central role free market capitalism should play, and the limited role government should play.

Free market capitalism can solve ALL of the problems we face with oil dependence.

Interestingly, GM is getting ready, this year or next, to roll out a new auto that is totally electric and that can be driven up to 300 miles on a single charge.

Our older, established companies are doing something about the problem, but they need to do much more. The consumers and the market will drive it.

And I am excited about the new companies that are now up and running that offer innovating solutions in the realm of energy and transportation...

Pawankumar Nathani said...

As regards to state's role in high refined crude oil products, there is no doubt about it. It is same across the world.

Even in India more than 60% of retail prices of petroleum products are composed of taxes...

I would specifically comment about the misplaced blame on India & China.
US consumes about 8 times more crude than India and three times that of China. This is true even when US is just 1/3rd size if India and 1/4th size of China.

Why doesn't anybody look at facts before bashing India & China?

Is prosperity crime? If it is so, what to say about 50 times richer US? they seem to be terrorists of the world by that definition.

Why everybody is just scrambling to find a scapegoat? US does not eve sign Kyoto or agree that GHGs are reason for climate change & at the same time people like Al Gore create documentary telling perils of GHGs and start preaching world..

has nobody heard of proverb "Charity begins at Home"

US does really need to introspect..

D. Martyn Lloyd-Morgan said...

Mr. Nathani,

The problem is not the China or India are to blame for the world's ills but that at present their GROWTH in the use of products that produce greenhouse gases surpass any other nation on earth.

The U.S. is presently attempting solutions, via the free market, that will greatly reduce our dependence on foreign oil and thus, reduce the carbon we put into the atmosphere.

But when the United Nations issued its highly flawed report on global warming, it unfairly proposed tough restrictions on the West while granted a pass to China and India.


I applaud any nation that seeks prosperity, provided it is done through free market capitalism. But if we in the West can increase and sustain our prosperity with technology that replaces oil, then why can't China and India do the same?

Are you saying that the only way India and China can prosper is through oil? If so, then your point only proves that countries, including the U.S., must have oil or sink into economic ruin.

And that will mean oil wars.

I happen to believe that there is a better way.


Pawankumar Nathani said...

My Dear Martyn

The current stand of US in WTO has vindicated that US does not care about anybody else's growth but they are concerned only about their own growth.

As regards to your claim that UN imposed tough sanctions on US could you please give more information on that. I have already stated that US has not signed kyoto and has said that they won't do anything to reduce their GHG emissions.

D. Martyn Lloyd-Morgan said...

Mr. Nathani,

The Kyoto treaty, which the U.S. did not sign, and rightly so, imposes tough restrictions on 'the West,' that is, Western Europe and other industrialized nations that signed the document.

But Kyoto does nothing to restrict the growing hazards of limitless pollution and emissions from nations such as China and India.

If the issue is all about the planet and clean air, then 'growth' should not even be a consideration.

The U.N. has not fairly dealt with the issue--there is one standard for the West and a different standard for developing nations.

If they really wanted to do something about so-called 'climate change,' then the same standard would apply to all.

As far as I can tell, this is precisely why the U.S. refused to sign.

If, as we have been led to believe, the planet is in deep peril, then developing nations no longer have the luxury of polluting to the hilt in the name of economic growth.

Now, if you happen to believe as I do that 'climate change' is much more complicated an issue than we have been led to believe, that forces beyond the control of human beings are responsible for most of it, then the entire argument is moot, for then Kyoto is simply a means to attempt to control industrialized nations. It is not really aboout climate change at all.

This is why I am totally against Kyoto and always have been. I can fully support developing nations in their quest for growth, prosperity, and freedom. This does not mean the U.S. should be limited in our continuing to take care of our own interests as well.

As always, thanks for your thoughtful input.


Pawankumar Nathani said...

My Dear Martyn,

First, Kyoto Protocol does not set emission norms based on how developed one nation is but on the premise, who is contributing how much to the emissions. US & Other developed nations have built their economies on poor and inefficient technologies in the past & when the perils of climate have started taking toll, then they want all of them to take share for the same.

Is it correct? look at the statistics, The per capita emission of developed nations is many times higher than developing nations. by making developing nations pay for the mistakes of the developed nations is completely unfair.

Even Kyoto Protocol calls for reducing emissions below certain limit within a specific timeframe.
After that it proposes to involve the developing nations also. But it gives time for them to get that necessary technology to achieve the needful.

By having a mechanism of buying carbon credits, it indirectly places cost for using inefficient technologies.

Buddy, understand that nobody is against development of any country. The important is the manner how it is done. In a country like India there are still 25% percent of the population who earns less than a dollar a day. Now the cost of climate that too because somebody else made mistakes in past 150 years.. why so? share the cost buddy.

Try to look beyond your own needs. Developed nations have already crossed the boundary having needs, their needs are fulfilled, they are in comfort zone

D. Martyn Lloyd-Morgan said...

And we have done much to share that wealth and comfort with the world. The U.S. sends billions of dollars each year overseas in the form of foreign aid.

In addition, we don't need Kyoto because it's based upon faulty science and a false premise.

Thus, the purchasing of so-called 'carbon credits' is a sham.

Pawankumar Nathani said...

Dear Martyn,

For your kind information, none of the foreign aid is free. All comes with strings attached. So the claim that aid has provided is a sham.

Are you a lawyer? anyways.. lets end this discussion, as it would not lead to any conclusion. Although it was very nice talking to you.

if you have a bit of time do visit my blog too.