Rising Gas Prices - What's the Fix?

With each uptick of the price of gas, people start clamoring for the government to do something, which has led President Obama to fast-track approval of the XL pipeline from Oklahoma to the Gulf Coast of Texas. The Canadian pipeline originates above Montana, and was halted in the midwest due to serious concerns about the huge aquifer that serves water to many states should the pipeline ever break. Or perhaps I should say, when the pipeline breaks.

There is no doubt the pipeline will break. Pipelines break all the time, and one branch of the XL has already contaminated a large area of Kalamazoo, Michigan in 2010, and effects are still being felt. The chemicals needed to break down this tar-sands oil so it can flow through the pipes can contaminate water and land for generations, making it unsuitable for life.

What people who are pushing to approve this pipeline venture, as well as more domestic drilling, fail to understand is that supply has little to do with current gas prices. The oil companies control pricing, period. They sell crude and refined oil to whatever country pays the most, and if that is Japan or China, that is just fine with Exxon - Mobil.

The U. S. exports 1.5 million barrels of oil a day, so that begs the question, why do we do that and then turn around and import 13 million barrels? Some of the reasons are explained HERE, but the basic reason is that that is the way world commerce works.

I'm not sure that just because this can be explained, that is reason enough to keep doing something that might not be the right something. As Megan McArdle pointed out in a recent article about corporations that keep repeating the same mistakes because they are afraid to change, maybe it is time we, the people and the government, need to make drastic changes in how we deal with energy issues. We cannot bury our heads in the sand and pretend that our reliance on fossil fuels is not a problem. There are children, grandchildren, and great-grandchildren who are counting on us to give them a world they can live in.

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Sock it To the Consumer

I heard on the news today that one of the large oil refineries is going to cut production because the cost of oil is more than the price of gasoline, so they cannot continue to produce until the price of gasoline goes back up.

Excuse me. This is the same oil refinery that six months ago had record profits. Why can't they suck this shortfall up like the rest of us do when we face hard times?

No, their response is to make sure they get more money and hold the consumer hostage.

Is anybody ever going to get the fact that we simply cannot survive if the economy continues to be driven the same way it has in recent history? We can't just be focused on our own bottom line without regard to the impact on other businesses and other people. And we can't continue to just keep throwing more money at the problem and inflating the paper economy even more.

We have to put money where it will do some good. Like into the marketplace and into individual pockets to stimulate retail sales.

Instead of corporations being bailed out or going into bankruptcy, why not ask the highest paid people to forgo their salary for a year. Certainly those who make millions every year have enough in the back to live for a year without the salary. And that money could go toward keeping the company afloat.

And instead of the government increasing the deficit to find money to help people through this crisis, why not a hold on all top-level government pay for a year? And streamline administration to save millions in man hours and redundancy.

Okay, rant over. I feel marginally better. That is until next week when the price of gas jumps for Holiday travel....