The Politics of Oil: The Discourse Must Change
Apr 28, 2006 Brainwaves, In The News, Politics
(OK, so the post comes a day late, and a dollar short. But it’s a common theme — keep reading.)
Both President George W. Bush and Congressional leaders of both parties have been, seemingly rather late in the game, joined in the debate on high gasoline prices. There seems to be a little bit of a problem, though: Both sides seem to be going after the oil refineries and gasoline manufacturers.
Yeah, they’re the first people we tend to yell at when prices go up. Pretty sad, really, when they’re just doing what anyone else would do to make money in their business.
The truth is, the gasoline companies aren’t the problem. The source of high gas prices lies in simple economics, in supply and demand. Organizations who are selling crude oil — a necessary component to make gasoline — have a limited amount of oil to make available. Many people want it — the US, Europe, China, and India, just to name a very few. So, the price goes up. That price increase is reflected in the eventual product: that 87-octane you put in your car yesterday. The prices we pay now aren’t gouging. At least, not yet. They’re simply market price when supply is low and demand is high.
There are a lot of other factors, and a lot of possible solutions. But a certainty of this particular moment has been eloquently captured by the editors of The Oil Drum: artificially messing with the price of gasoline instead of looking for other long-term solutions isn’t going to work.
