It seems to me that besides all sorts of Arab oil people making money, we're as or more guilty. Last I heard about 2/3rds of all the oil we use comes from inside the U.S. I don't know the structures of those who own the wells vs those who refine and distribute the products, but I do know that the overwhelming majority of those wells could be profitably run at somewhere around $25 a barrel or less.
What would happen to worldwide oil prices if we simply capped how much domestic produces can charge, or to put it another way, put a limit on their profits. At $50 or $75 a barrel the American producers would be doing just fine, there profits would be high, though perhaps not the records of the past few quarters, there would be plenty of money left over for development of new sites, and the average price we pay for gas, diesel, etc would come down by nearly a third. Still quite high, but low enough to be tolerable and not dramatically fuel inflation.
I think this would actually change the situation in world markets and prices would come down there as well. As I understand it, prices in the major oil producers like Saudi Arabia for a gallon of gas are less than a dollar, clearly they're not making their people pay what others are forced to pay. We may, or may not be able to affect the price of oil in the rest of the world, but a fair price could be set for the oil coming from American wells. I frankly don't believe that any of our producers would be hurting if they were pumping at $50 a barrel, but if there was no threat to producers for withholding production I suspect some would shut down wells and opt to buy more oil overseas at higher prices, there would need to be penalties for such actions.
I know such actions strike at our capitalistic economics, but the reality is it's gotten out of control. Our greatest capitalists, the CEO's and BOD's have never seen a bonus they didn't think could be further enhanced. Our politicians deregulate industries saying competition will lower prices and walk away as prices go through the roof.
We pay tens to hundreds of times as much for drugs, or gasoline, then the prices available elsewhere, but in a free economy we're told we can't buy them elsewhere, or there's no vehicle available for us to do so. I'm sure if tanker trucks could bring in gas from Mexico, less than 150 miles from me, all sorts of people would line up to fill the tank at Mexican prices including applicable taxes and a healthy profit for the driver and trucking company. Friends of mine with big cruising powerboats with thousand of gallons of capacity have tried to get tanker trucks to fill them, but cannot do it locally. Some cruise to Mexico where they alway fill up prior to returning here.
I don't know the price of fuel in Iraq, but I suspect that world prices mean nothing there either. In spite of all the billions we've put in there, I'm sure we're paying market price for anything imported from there, while the Iraquis are paying pennies. I'm sure the same can be said for Iran, whether they're producing oil there or not.
I know oil is a diminishing asset, but those who produce it still should have some limits placed on how much they can profit. While it's a diminishing asset, it's also an asset the producers had absolutely nothing to do with when it comes to how it was originally produced. Today if we go to work on it we can create fuels from almost anything organic that's wasted, we don't need to use the corn, we can use the husks, stalks, grass clippings, etc if we really want to, nearly everything will ultimately ferment to some form of alcohol which can be a fuel. I suspect with a little work we could create something very close to gas as we know it from wastes that currently are buried or disposed of at sea, including sewage.
It's time for the U.S. to turn things around, we can turn waste into fuel, fuel into profits, and we can sell and spread the technology that does it all over the world. Equally importantly, in doing it we can create fuel that far cleaner than gas and work to reduce global warming without giving up cars, etc.
I also believe global warming can be cured, but not by eliminating carbon dioxide, but rather by increasing the earths ability to process it. In short we need to make nearly dormant areas of our oceans into plankton farms by artificially bringing the nutrients from near the bottom to the surface, I call it artificial upwelling. I know this is fooling with mother nature, but in a positive way, you can't tell me that all our pollution isn't fooling with mother nature in a negative way.
Gary |
