Another disadvantage of the high price of oil is that when there is a concentration of wealth, there is a disproportionate amount of power. When the Standard Oil Company was broken up at the turn of the century, it marked the beginning of the breakup of monopolies by Pres. Roosevelt. The concentration of resources controlled by one group also represented a concentration of power. Today, this is most visible in the form of the Organization of the Petroleum Exporting Countries (OPEC). This group acts as a cartel to control the production of oil throughout the world. In this fashion it controls a source of energy for those that do not produce oil, or have sufficient production for their country's needs. Again, through the concentration of wealth, this body, benevolent or not, has attained a measure of power. The DeBeers cartel is another example of how a group can keep the price of a product artificially high by controlling the production of that product.
As alternative fuels are developed, those that harness or produce those resources begin to amass their own measure of power. It is possible that these alternative fuels producers could supercede the oil producers, if they are able to concentrate their power. Unfortunately, the oil producers already have the means to distribute fuels to the public and could hardly be supplanted for their ability to deliver the alternative products as well.
The socialistic response would be to tax the large concentration of power and redistribute that resource (read wealth) to those that are less endowed. Interestingly enough, many of the labor unions in the United States, have as part of their by-laws specific language stating that their purpose is to redistribute wealth to the poor and the downtrodden. I have never known a labor union to reach out to those that can't pay union dues....but I digress.
History has proven, time-and-again, that empires do not last forever. They come and they go, and as one disappears, another rises. The AT&Ts of the world have produced AT&T Wireless, and the Standard Oils (SOHIO) have produced ChevronTexacoUSA, Inc., etc. We may someday be running our vehicles on coconuts, and the fuels power would be amassed in more tropical climes as opposed to the desert moguls of today....Power and the amassing of wealth, seem to go hand-in-hand. Or maybe this transigence of power is only a fleeting thing. Maybe there is a greater, altruistic, egalitarian source of power. It will all depend on whom you put your trust. As for me and my house...this is Just an Observation.
Saturday, April 26, 2008
Friday, April 18, 2008
What is All the Hub-bub on Fuel Prices?
As gasoline prices approach $4.00 per gallon, it is interesting to see all the globalists bark about how the profiteers are gouging the public. First, crude oil prices have risen, not just because of fuel usage, but it is used in many other products, such as nylons, plastics, coatings, vinyls, etc. Reflect on how much a part of our lives oil hase become. There are many growing and emerging economies that have increased the demand for oil, as well as fuel for power generation. How much of our digital age is powered by electricity, and how much of that electricity is generated by petroleum products, or by-products...but back to gasoline. In the state of California we have local area "Air Quality Management" districts who are charged with keeping our air quality at livable levels. They have recently legislated stricter controls that will require refineries to spend more money to upgrade their manufacturing processes and....guess how they are going to pay for it....Out of their "excessive" profits?....Silly, they are going to raise prices! Most likely that will also require the special California fuel formula that is not made by out-of-state companies, so the supply will be limited even further. California experienced this a few years ago, and gasoline prices spiked.
There are there reasons for the current high prices (See How Stuff Works) , but three of the current compelling explanations are as follows:
(1) OPEC has not expanded capacity much since 1979.
(2) Non-OPEC is nearing it's long-term production peak (we're running out).
(3) China is booming (India, too).
The China reason is evident especially since they have contracted with Cuba to drill off-shore of that island-nation (90 miles from Key West, FL). Plan to see more offshore platforms from Miami.
Now it is time to discuss the most sacred of all american cows....the environment (brought forward by the NIMBYs), and I think that the comparison is pretty dead-on. We have so much in the way of resources that are available to this nation, but are held off at an arms distance, because of a questionable, somewhat religious observation (environmentalism). Offshore drilling (California & the Gulf of Mexico), new refineries, drilling at ANWR (Alaska) and at other places has not been allowed in the U.S.A. for over 40-years. It is time to start looking at our long-range strategic vulnerability. If for any reason, we are cut off from the oil that we import from terrorist-rich areas, the country would be in a panic. The Iraq debate would seem like an afternoon tea in comparison.
An additional item that doesn't get discussed is the taxes that the governments (State, Local, & Federal) impose on gasoline. It would be sufficient if it was limited to cents/gallon, but some are in percentages, so that when the price of gasoline goes up, so does the tax collected. Has anyone called for a repeal of the Government-gouging? California gasoline has up to $.75 per gallon in various taxes. This is also a "regressive" tax (liberalese for "the rich aren't getting enough wealth re-distributed"), because the less income you have, the more you are adversely affected. I don't think that the oil companies are making THAT much profit.
Yes, this is a complex issue, but it is made more complex because of all the different self-interests, we have lost the big-picture. I would think that all the self-flogging that we see from the left about how we should be paying $5.00/gallon, is pure nonsense. The common sense approach tells us that we should look after our own needs first, try to preserve our economy, our people, all the meanwhile trying to work out a long-term solution to keep the looneys from having a strategic control of the world market. Which brings us back to the beginning.....is it really a global strategy to complain about profiteering from higher international oil prices, when it is a free global market that is causing the profits to rise? Doesn't government controls fly in the face of global unity, the way tariffs prevent free trade. It seems to me to be a bit of a dichotemy....but this is Just An Observation.
There are there reasons for the current high prices (See How Stuff Works) , but three of the current compelling explanations are as follows:
(1) OPEC has not expanded capacity much since 1979.
(2) Non-OPEC is nearing it's long-term production peak (we're running out).
(3) China is booming (India, too).
The China reason is evident especially since they have contracted with Cuba to drill off-shore of that island-nation (90 miles from Key West, FL). Plan to see more offshore platforms from Miami.
Now it is time to discuss the most sacred of all american cows....the environment (brought forward by the NIMBYs), and I think that the comparison is pretty dead-on. We have so much in the way of resources that are available to this nation, but are held off at an arms distance, because of a questionable, somewhat religious observation (environmentalism). Offshore drilling (California & the Gulf of Mexico), new refineries, drilling at ANWR (Alaska) and at other places has not been allowed in the U.S.A. for over 40-years. It is time to start looking at our long-range strategic vulnerability. If for any reason, we are cut off from the oil that we import from terrorist-rich areas, the country would be in a panic. The Iraq debate would seem like an afternoon tea in comparison.
An additional item that doesn't get discussed is the taxes that the governments (State, Local, & Federal) impose on gasoline. It would be sufficient if it was limited to cents/gallon, but some are in percentages, so that when the price of gasoline goes up, so does the tax collected. Has anyone called for a repeal of the Government-gouging? California gasoline has up to $.75 per gallon in various taxes. This is also a "regressive" tax (liberalese for "the rich aren't getting enough wealth re-distributed"), because the less income you have, the more you are adversely affected. I don't think that the oil companies are making THAT much profit.
Yes, this is a complex issue, but it is made more complex because of all the different self-interests, we have lost the big-picture. I would think that all the self-flogging that we see from the left about how we should be paying $5.00/gallon, is pure nonsense. The common sense approach tells us that we should look after our own needs first, try to preserve our economy, our people, all the meanwhile trying to work out a long-term solution to keep the looneys from having a strategic control of the world market. Which brings us back to the beginning.....is it really a global strategy to complain about profiteering from higher international oil prices, when it is a free global market that is causing the profits to rise? Doesn't government controls fly in the face of global unity, the way tariffs prevent free trade. It seems to me to be a bit of a dichotemy....but this is Just An Observation.
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