Community

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First of all, the people who made the claim, "Iraq is all about oil", should now retract that statement as being bogus because, now that we "could" control all of that country's oil, it's obviously not the case. In addition, the oil-for-food program, it is now known, was used and abused, not by the USA, but by the United Nations, France, Russia, and Iraq itself. (No wonder they were against the war.)

Another popular misconception leads people to "blame" the Saudis in particular, or the middle east in general. This is misdirected blame. Did you know that the USA imports more oil from Canada and Mexico than from EVERY middle east country COMBINED, and that only 17 percent of USA oil imports come from Saudi Arabia? Almost 50 percent of all USA oil imports come from three countries, Canada, Mexico, and Venezuela.

See link:

http://www.eia.doe.gov/neic/rankings/crudebycountry.htm )

In order to get a realistic answer to your question, one should avoid the normal clich?s, such as "it's all about greed", "those greedy oil companies", and so on. Don't fall into those traps. Those kinds of sentiments are planted only to entice hard feelings, for whatever reasons, among an unknowing and unsuspecting populace.

And there's no merit whatsoever to that Exxon and Mobile email thing that's circulating.

See this link:

http://www.snopes.com/inboxer/petition/gasout.htm

I think in order to find the accurate cause of any problem, and to pursue avenues to successfully solve the problem, a person should take all emotions out of the equation. Blaming the "greedy oil companies" is an emotional response, and it will only serve to cloud the issue and make the solution to a problem even more elusive.

Also, don't let "statistics" mislead you either. Consider these:

On one hand - The USA is the world's largest energy consumer.

On the other hand - The USA is the world's largest energy producer.

On one hand - The US is the world?s major oil consumer, with a per capita consumption of 28 barrels a year, as compared to only 2 barrels a year for each Chinese citizen.

On the other hand - China is now the world's second largest oil consumer, and is expected to consume over 5 million barrels a day in 2004.

On one hand - The United States is estimated to be consuming an average of about 19.9 MMBD (million barrels a day) of oil in 2003, up from 19.8 MMBD in 2002, an increase of less than one-half of one percent.

On the other hand - China has increased oil consumption by 20 percent since 2002. Moreover, China is expected to consume 12MMBD by 2025, an increase of well over 100 percent

(Keep in mind that the USA produces 8 MMBD of crude itself, so we import "only" 60 percent of what we use.)

Having said all that, the answer to your question is simply supply and demand. Why are they limiting the supply, you might ask? Well, they're not. Actually, the world's oil supply has risen over the past year. Demand, however, has risen at an even higher rate, and the increase in consumption by the USA is insignificant compared to other countries.

Some food for thought:

The refineries in the USA (converting from crude to gasoline) are operating at 100% capacity.

What determines the price of a gallon of gasoline?

43% - The price of crude oil.
32% - Federal, State, and local taxes.
13% - Distribution, marketing and retail dealer costs and profits.
12% - Refining costs and profits. (This component varies from region to region due to the different formulations required in different parts of the country.)

Historically, ever since 1985, March through May, we have always seen an increase in the price of gasoline. Many refineries shift from winter production, which includes the process of making gasoline cleaner burning for the winter months, to summer production. Additives are included in winter production to comply with cleaner burning regulations.

A simple way to answer the question, why are gasoline prices higher?

Because supply has increased, but demand has increased at an even higher rate, and expenses for the production have also increased.

What can we do about it? About all we can do (as consumers) is to consume less. This will, in theory, bring the price down and keep our individual total gasoline cost from rising, maybe breaking even, and maybe even bring it down.

As Max stated, the cost of energy has risen mainly because demand is out-pacing supply.

Further, the ONLY way to reduce the per unit cost of energy is for EVERYONE to use LESS!!!

As to boycotts, unless you can boycott ALL stations served by a specific refinery, all the boycott will do is hurt the independent retailer who operates the station.

Now, there are other factors at play here.

Over the past few years, most new power plants that have been built run on natural gas.
This has contributed to price increases for natural gas and some shift from natural gas to other fuels.

The general trend toward consolidation and energy trading also causes the price to rise.
(Max, name me 1 merger that has resulted in lower prices and higher employment)

Then, the energy producers have not been able to get all of the policy changes they expected when George W. Bush was elected President.

Restricting supply and raising prices will "soften" the American people and Congress to support the changes they want:

Reduce environmental impact rules for new refineries.

Reduce or eliminate ethanol based fuels.

Reduce or eliminate "regional" blends of gasoline.

Open more federal and off-shore areas for exploration. (think Alaska)

The oil in Iraq has not come into significant play yet as the infrastructure was in much worse shape than anticipated.
The recently announced OPEC production limits are based on the assumption that oil will start flowing out of Iraq.

It does not matter where the crude oil comes from. The cost is based on the world market price.

The "best" thing that individuals can do is to drive "smart"!
On my drive to work, I figure I use at least 25% less fuel than my fellow commuters.
How?
I don't race to the next red light. I pace myself so that I get to the line of traffic just after the light changes to green and traffic starts moving.

I arrive at work at an "off-peek" time so traffic and delays are at a minimum.

Next, I use different routes at different times of the day based on how much time I spend waiting for traffic. While my drive time is longer on the slower route, my fuel use is less than on the faster route since I am not setting for 2 light cycles at each traffic light.

Finally, I am getting back in shape so that I can use my bicycle as much as practical.

Chas