Gas Bags

$3.13 for gas. Whoa. Get the posse rounded up.

Heads should roll, but not the oil company heads. Gas is a commodity and behaves according to the fundamental laws of economics. Shooting the oil companies will not changes this. There are two big reasons the price has increased: the demand is high and the supply is low. The US has made fundamentally stupid choices that have affected each.

1) Demand is High. Okay, China and India are starting to drive up demand, but we have not helped by rejecting alternatives that would ease the demand pressures in the US, primarily making sure not one watt of electricity requires oil to produce. We need to invest in alternatives (nuclear if you ask me) in driving down that part of the demand. But this is a temporary fix, our flawed policies have really focused on lack of supply.

2) Domestic Production of Oil. Open ANWR and the continental shelf for drilling. Start developing the 1 TRILLION barrels of oil field in Colorado (oil shale). Don't like to do that? Then shut the f*** up about high prices.

3) Refining Capacity. Has not increased since the 70s. If 100 billion barrels of oil were available for free, it would not do us any good. We need to add refinery capacity to get it to the pump.

BUT, if we tripled refinery capacity, that would not help. The government requires oxygenates in the gasoline, currently MTBE or ethanol. The tort bar is suing the MTBE manufacturer and the government (bought by the ethanol lobby) refused to help. So now MTBE is out of the picture. But there is not enough ethanol. Ooops. That is wrong, there is plenty of ethanol available from abroad, but there is a very expensive tariff on its import (guess who got that through).

Finally, normally we could take the excess supply from one region and use it in another. (You can see this coming.) BUT, there are 17 different state mandated formulations of gasoline, so you can't simply take the supply from Oklahoma and ship it to Georgia.

Still upset. Well, oil company profits from a gallon of gas run about $0.09-$0.10. Local, state and federal TAXES run $0.45 per gallon.

See the picture that is emerging? By all means, put a bullet in the heads of the CEOs of Exxon and Chevron, just don't be surprised when the price of gas remains the same.

UPDATE: I swear I did not read Charles Krauthammer prior to writing this post.