Nahh, I really do think it is simply supply/demand. If the prices were artificially created and there was indeed excess supply in the system, as in past years, an OPEC member would start cheating and then they'd all open the spigots and prices would come back down.
Nonetheless, there's no doubt "the energy boys" would love a Republican White House and Congress. Bubba's energy policy for the last eight years can be summed up in one sentence: "Hello, King Fahd? Hey this is Bill, send more oil our way." This time though, King Fahd told Bubba there's no additional oil to ship.
In addition, the current stock market environment that Bubba is always so anxious to take full credit for has inadvertantly had a lot to do with the supply side of the equation. While dot.crap and other gaseous tech stocks have been going wild over the last 5-6 years, the only way energy companies (up until the last 6 months, of course) could get their stocks to rise was through mergers and takeovers. Mergers and takeovers, by the way, that were given the green light by the current administration's F.T.C., which makes Algore's whining about high gas prices being "the big oil companies' fault," his own fault. That begs the question, "who allowed the big companies to get bigger and who allowed the competition to merge with each other?" But I digress... Anyhow, the lesson learned by oil companies was that it was cheaper to buy existing production than to drill. New E&P programs weren't sexy to the 28-year-old analysts and fund managers (you know, the guys who had to have their diapers changed in the April selloff)...if you were an oil co. CEO and wanted to keep your job, you cut expenditures instead of boning up on new properties. Here in New Orleans, we used to be one of the main regional E&P centers in the U.S. But in the last 5-10 years, every major has pulled out, "consolidating" their operations in Houston, which is easy-speak for "we're not going to spend so much on E&P." Let's face it, Wall Street dictates to these guys how to run their business and drilling for oil isn't sexy. Plus, the analysts make their investment banking department happy when they push mergers over internal growth.
Same thing goes for refining capacity. When was the last time you saw a major build a brand new refinery in the U.S.? Why? Because CEO's were told it'd be in the shareholders' best interest to do a share buyback instead of building new, more efficient refineries. The "word" is, even if crude supplies did bump up, it'd be a non-event for gas prices because there is no extra capacity downstream.
The bottom line is this is something we've got to drill our way out of. To do that, there's gotta be economic incentives...either stable high prices or enhanced tax credits on drilling. That's why Algore is f*cked--he goes around alienating these oil guys, when actually they represent his only chance to placate his constituency of soccer moms driving around in SUVs. No incentives to institute new E&P programs (drilling tax credits, etc.)? Fine, no soup for you--get used to paying $2 a gallon for gas.
Oh, or there's Algore's "plan," which is to emphasize alternative fuels...geez, how many times do we have to go down this road before the dipsh*ts figure it out? I remember solar panel companies acting dot-bomb frenzy-like back in the late 70's/early 80's...yeah, if I remember the bubblicious story correctly, these solar panels would make it so that in 10 years no one would ever use fossil fuels to heat their house again. Hehe, kinda like how we used to hear how Scamazon was going to put WalMart and Target out of business, ho ho ho! And what was it, 5 or 6 years ago, wasn't it Algore and his pals who were telling us we'd all be driving electric cars by the year 2000? Cripes, I just went to the gas station today...again, I had to laugh when some of my less-intelligent broker buddies were pushing electric car concept stocks onto their sucker clients...f*ckin' clowns never learn. P.T. Barnum could've made a fortune hawking "alternative energy" concept stocks the last 20 years. |
