More Opinion by The Springboard

THE UPRISING OF THE AMERICAN PARTY "Clearly the voters are engaged right now, at least for sure on the republican side, and what they have concluded is that the republican party has not done their job. Thus, Donald Trump gets their vote."

Friday, March 7, 2008

THE GRINCH RUNS EXXON?

Once again we learn that the price for a barrel of oil has reached an all-time high, and tension continues to mount over the ever-rising cost of a gallon of gas. There are many experts who say we'll see $4 a gallon this summer, and although that prediction has been around for a couple of years without actually becoming reality, we're now closer to that mark than ever before. It's not so crazy an idea anymore, and we may just even get there this time around.

But my problem has more to do with the belief many Americans have that the oil companies are evil entities hell-bent on raping us of our hard-earned cash at the pumps. Make no doubt about it, I've got a few words to utter under my breath as well as I pump away my spendable cash. They aren't very nice and I surely can't repeat them here. But like most Americans doing the complaining, I drive a gas-guzzling vehicle much bigger than I need just to get to work every day. In my case it's a Ford Explorer Sport Trac that gets about 17 miles to a gallon on a good day.

The point here is that we, as Americans, are addicted to oil. We're also addicted to our SUVs, pickups, the family minivan and the crossover vehicles that each have a role in our dependence on the stuff. Frankly, I work hard. My truck is my toy. I don't want to give it up. That decision means I'll have to pay whatever the cost will be to fill the tank.

Being Americans, we also like to buy things. Lots of things. In fact, as a nation we consume more stuff per capita than any other nation in the world. All of these consumer goods have to get to your local stores for you to buy them, and most of them arrive onto the shelves by way of the nation's highways, sucking yet more of the precious black gold from the world's fast depleting oil deposits.

The fact is we need oil, and the oil companies have it to give to us. Of course they are making money. That's what they are supposed to do. Companies are supposed to generate profits for their owners. We can't blame them for doing that just because we don't like the price. Simply put, the markets are driven by supply and demand. It's economics 1o1. How much we'll ultimately pay is determined by how bad we want it, how much we can get, and how fast it can be brought to the market.

At the end of the day we determine the price of a gallon of gas. We are the makers of the market. If we want lower prices at the pumps we'll have to make sacrifices. We'll have to change our habits. Until then the oil companies, like any company, will simply follow our demand. Despite rising prices of oil, our rates of consumption for oil have not waned a bit.

2 comments:

Tilu said...

Regarding your point of oil markets being driven by supply and demand, unfortunately it is no longer that simple. Oil has entered into the speculation market and the prices are being affected by stock market trading and all the fluctuations that brings with it.

Jim Bauer said...

I'll concede to the market influences with regard to oil. Obviously they are going to have some impact on the ultimate price we pay at the pump. But one of the speculative issues that affects the price is how much is available and how much is needed. Supply and demand still plays a role.