Oil Prices

Like many others I was shocked the other day to see gas jump up 25 cents in one day. Of course we start writing it off as “increased demand”, something we hear every year at this time. Well it looks like the Republicans also noticed the increase and now are going to use it for their political points:

Republicans believe that rising gas prices are their trump card against a Democratic-sponsored climate change bill.

The GOP is struggling to regain footing after two successive electoral blowouts, but party leaders are relishing an opportunity to debate what they call a “national energy tax.”

The Democrats’ plan of moving a cap-and-trade bill this summer plays into GOP hands because as the cost of gasoline spikes, so does the public’s awareness of energy prices, Republican leadership aides say.

Yes – use outrage at the pump to further a political agenda. This is so Republican of them. But it also makes you wonder if the gas companies won’t play along. Will they keep inflating prices to try and kill environmental legislation? Perhaps a good pre-emptive attack on this will be for Congress to send out a warning shot. Let the gas companies know that they are being closely monitored and any sign of trying to inflate prices will be answered.

Something else this makes me think about is food prices. Last year when we had $4.00+ a gallon prices we saw our food prices skyrocket. Rightfully so they claimed it was from the high price of gas. But since then we seen the price of gas fall more then 1/2, yet the prices at the grocer are still at 2008 levels. So will they use this gas prices increase to jack their prices up again, even though they should still be good from last years increase? I wouldn’t doubt it, and Congress should send the same warning shot to these people also.

A new report has been released by the EIA saying that our demand on oil is decreasing:

U.S. oil consumption is expected to level off with virtually no growth between now and 2030 because of increases in energy efficiency, greater use of renewable fuels and an expected rebound in oil prices, the government said Wednesday.

The Energy Information Administration said overall energy use will continue to increase but at a slower rate than predicted only a year ago.

The agency projected a 3 percent annual increase of renewable energy use, including solar, wind and biofuels such as ethanol.

This is good news, but we still have a lot of work to do.

This also brings me to something I have been thinking about. A lot of environmentalists were happy with gas prices over $4.00 a gallon. They argued that it dropped usage, which of course it did. The problem is that it drops usage in segments of the population it really shouldn’t. Lower income families are cutting back on trips and that. Then if you take families that live miles from anywhere, then instead of cutting back on their gas usage, they cut back on other things – like food or medical treatment.

Oil prices spike as Hurricane Gustav nears Gulf

Every time a hurricane approaches the Gulf, we see oil prices spike. If we open up more off shore drilling, these spikes will send a tidal wave through our economy. With hurricanes become more frequent and stronger, can our economy handle oil prices that will be just as turbulent?

As Hurricane Fay nears landfall, oil prices are rising in fear that it could interrupt operations in the Gulf of Mexico. Kind of ironic this is happening at a time we are debating rather to allow more offshore drilling or not.

Exxon Mobil has biggest profit ever at $11.68B. Don't you feel great for helping them out like that?

That's what we been told for months now, but McCain seems to think differently:

Presumptive Republican nominee John McCain yesterday credited the recent $10-a-barrel drop in the price of oil to President Bush’s lifting of a ban on offshore drilling, an action McCain has been advocating.

Really? So then why didn't Bush lift the ban months ago, instead of letting the American people suffer?

Of course we are talking about John McCain, a man who will say anything to get elected. So what really is behind the oil price drop? Things like a rise in inflation, as well as a slowing U.S. economy. Also demand for oil has dropped to the lowest level since January 2007. These are the factors causing the price drop, not some bullshit Republican position. Nice try on spinning McCain.

Cenk brings up an interesting point (via Cesca):

The oil that comes from that drilling will not be United States property (Republicans aren't suggesting we nationalize the oil companies, are they?). It will be the property of whichever oil company got the rights to that contract. They can then sell it to whoever they like -- and they will. They will sell it on the world market, so the Chinese will have just as much access to the oil that comes out of the coast of Florida as we will.

We don't here the Republicans ever talk about this fact. Once the oil is extracted (if it is), where will it go? People think that they will automatically put it back into the U.S.'s supply, but evidence shows that isn't the case:

While the U.S. oil industry want access to more federal lands to help reduce reliance on foreign suppliers, American-based companies are shipping record amounts of gasoline and diesel fuel to other countries.

A record 1.6 million barrels a day in U.S. refined petroleum products were exported during the first four months of this year, up 33 percent from 1.2 million barrels a day over the same period in 2007. Shipments this February topped 1.8 million barrels a day for the first time during any month, according to final numbers from the Energy Department.

So if the high oil prices are a result of lack of supply, why are we shipping off this supply? Perhaps the oil companies should cut back on the exports to help the people here at home. This is something the GOP never wants to talk about. They don't care if you or me are struggling, as long as their buddies are thriving all is just fine.

Bush is lifting the executive ban on offshore drilling, put in place by his father. Does that mean that gas prices are cheaper now? If you listen to Republicans, they would have you believe that the instant more offshore drilling is allowed that prices will decline. Welcome to their fantasy land!

We all know how dim of news the oil prices are, but what does Asia's new inflation problem have to do with us? Think out sourcing. If inflation is high in Asia then the American companies that decided to ship their manufacturing overseas now have to pay more, not only in transportation from shipping costs, but now for the cost of doing business in Asia.

This global economy is coming back to really bite us in the ass, and it's the people of this country that are paying. I don't really see how it can easily be remedied either.

So he is now tying himself to the regular GOP stance on the wars also. Thanks for telling us the truth for once McBush!

(h/t Aravosis)

I mean we are talking about huge savings at the pump. By 2025, we could see a net savings of $0.02 per gallon!

The median case suggests the effect on gasoline prices in 2025 will be a mere $0.02 a gallon. The immediate effect will be zero as we’ll have to wait a decade to see any oil from ANWR. If this is Bush’s and McCain’s answer to today’s high gasoline prices, it is no answer at all. Menzie closes with this observation:

Yes those Republicans have all the right answers. Hell I bet if we throw in the offshore drilling we could see a savings of even 3 cents!

Now that Bush is drinking the McCain kool-aid of offshore drilling, does that mean we will see our old gas prices tomorrow, if Congress lifted the ban today? Hell no. This is another carrot that the Republicans are dangling in front of the face of Americans.

True Bush is just helping guarantee that those coastal states turn blue this fall. South Carolina would be a great example. One of their key industries is tourism, especially in areas like Myrtle Beach. Let a state like South Carolina see the Republicans pushing action that will hurt that tourism, and they just might turn blue this year.

Exxon to leave the U.S. retail gas business. This is a cure for gas prices. No retailers = no price problem.

John McCain speaking about oil prices:

"I don't think it's going much lower, and it could go higher,"

Really? Not even with Bush/Cheney running things? Not even with the Republican obstructionists in the Senate? So we are stuck with more of the same, and that is being said by the man who is running as a Republican, the party of the same shit we have gone through for 7+ years and watched our nation get destroyed.

It is all but inevitable now. Iran is threatening to cut oil production and that drove oil prices up to almost $127 a barrel today.