The discussion about Windfall Profits Taxes should scare all of us to death. There is a bill in congress to establish a reasonable profit commission that will decide what is reasonable and cap profits above that. This is for all industries, not just oil. Maybe even Hollywood. We are moving toward a socialist republic like a runaway train. Two candidates for president advocate the government take profits from oil companies and have the government develop alternative fuels with the money. Your government, the one that can’t run the post office, wants to discourage oil companies from investing in the US and encourage them to move their business elsewhere at at time when we need their expertise more than ever. Mexico is trying to get the same oil companies to come back and help the government owned and operated oil company find new oil. The Mexican Oil Company, Pemex, is years behind the oil industry in technology and capability to find and produce oil. The Saudi’s are doing the same thing. We want to hang out a no trespassing sign to them, a bigger one than the one we have now.
The oil industry has developed the most efficient infrastructure for delivering cheap fuel to Americans that exists anywhere. With the band aided refineries and the ports, terminals, pipelines, barges, and retail outlets, gasoline, jet fuel, and diesel can move from the Gulf Coast refineries to New York for 3-4 cents transportation cost. Ethanol can’t move through this system. Hence, that same trip would be by transport truck and would cost 50 cents a gallon. Many alternative fuels would be similar. The government, Bill Clinton being the biggest violator, has the oil industry trying to supply us with hydrocarbon fuels with both hands and one leg tied behind them. In the 80’s when we tried a windfall profits tax on the oil industry we saw domestic production go down 6% and imports up 17%. Most of the big oil companies are now foreign owned. If we follow this, the rest will probably follow.
If there is a option for non-renewable fuel should $120 crude bring it out? Today, Goldman Sachs says it will be $200 in the near future, will that do it?
Mrs. Obama says that we must have a country where we can assure everyone has a piece of the pie and to do that someone else must give up a part of their piece. A capitalist would try to make the pie bigger.
Do we want to have a country with bigger and bigger government? Do we want a country where government runs everything with more and more regulations and restrictions? Do we want to follow the failures of countries that have tried galloping socialism and found it didn’t work?
In January and February I warned you about $4 gasoline being an inescapable reality this summer. I’m not a prophet, I just did the math. Now, I’m raising that to $5. It’s our fault and our problem to solve. Today, I heard a democratic congressman interviewed and he said the high gasoline prices are due to refiners cutting back production. Even he can’t believe that. If he does, he is totally incompetent and should be asked to go back and tend to his failing law practice. Either our elected officials are unhitched from reality, incapable of understanding economics 101, or they are pathological liars. It’s probably a little of each. Do you want anyone in any level of government who can’t understand the fact that the supply of crude oil is falling and the demand is rising. That causes prices to go up. We are 65% dependent on this world market. Companies like Exxon-Mobil find and sell oil all over the world. Yes, they made $10 billion dollars last quarter, but they did pay $30 billion in taxes. Will making that $33 billion give us more oil and lower prices? Who can make that connection?
Remember Easter Island where they cut down the trees to make rope to pull the statues of tributes to their leaders where the leaders wanted them displayed. Unfortunately, the trees provided the only source of food. They all starved. We need to tell our leaders as politely as possible that we are not buying the blame placing. Washington is totally responsible for the high gasoline prices and only Washington can fix it. And, it needs to happen fast. It may be too late to save our economy. I’m not into tributes to the incompetent leaders we have today.
Bill,
Hi, it’s Gary Wolf. I finally had a chance to check out your blog. I like it. I’ve been keeping up with my end of the bargain by paying attention to all the issues and concerns that we talked about. It’s getting scary to hear how our leaders or incoming leaders want to handle the problems at hand. I got to go, but I’ll be back with more comments pertaining to your topics next time. Thanks for caring about the "Grandchildren".
Bill,
Hi, it’s Gary Wolf. I finally had a chance to check out your blog. I like it. I’ve been keeping up with my end of the bargain by paying attention to all the issues and concerns that we talked about. It’s getting scary to hear how our leaders or incoming leaders want to handle the problems at hand. I got to go, but I’ll be back with more comments pertaining to your topics next time. Thanks for caring about the "Grandchildren".
Bill- Our mutual friend Gary Wolf referred me to your blog. Nice to see some reasoned ideas backed up by experience regarding our energy situation. Have you read Robert Bryce’s book? Not perfect but right on the money on a number of things including the Ethanol fiasco.
Enjoy the summer and we’ll see you in the weight room next year.
Hi George and Gary. Nice to hear from both of you. George, I haven’t read Bryce’s book, but I did order it from Amazon. Gary, keep George in shape.
Bill