posted on Oct, 11 2012 @ 03:38 AM
Psst...Oil companies do not pay the price per barrel that is on the stock market.
Oil companies buy oil in contracts, generally a six month deal of X amount of barrels for X per barrel. The daily fluctuations in stock prices (driven
mostly by traders and speculators) does reflect the daily (and at times hourly) prices at the pump.
There are solutions on how to effectively combat the stock market prices that the government could take, but they are by no means politically
advantageous. Alternative fuels hold only so much promise even if the technology was up to speed to be used as a true replacement. Because the amount
of per gallon usage in the US per day means that we cannot use something so rare and magical as unicorn farts to power our needs. The cost of
conversion (if we had a massive herd of unicorns that dined on nothing but soup beans and cornbread) would be a long and expensive process to the
consumers. There are more than 17 million cars registered in Ohio alone the last I checked and that was a few years ago.
For example, let's look at the Chevy Volt. Admittedly this is a not ready for prime time replacement as it only reduces fuel consumption by roughly
one gallon per day based on its fuel rating. For a commuter, personally it would be a roll of the dice as to if the gasoline generator would have to
kick in because my daily commute is 40 miles back and forth to work of mixed city and highway driving with some hills. But for sake of argument let's
say I could drive it on just the daily charge. And we will ignore the added cost to the electric bill for charging it up every night. I would save 12
gallons per week versus the Mustang that I drive now. At $4 a gallon (simple math) I would save $48 per week or $2496 per year. $39,145 MSRP means
that Volt better last 16 years for me to break even with the price of gas for 166,400 of traveling back and forth to work. And again, I do have to
keep gas in it and do have to use gas from time to time (so it doesn't go stale in the tank) and I still have the cost of electricity in there. So
breaking even may mean 20 years and 250,000 miles of service out of a car that just might be discontinued for not being ready for prime time. I am
sure (without doing the math) that I would be money ahead on a Chevy Cruze for $18,000. And even more money ahead with the Mustang as there is nothing
wrong with it and it has less than 46,000 miles on it despite being 8 years old. Yeah, I bought it used with ultra low mileage. And at 21 mpg on
average of mixed city/highway, gas is not killing me, although I would like to see it come way back down to reduce living expenses.
Subsidization, takes many forms. Foreign aid to OPEC nations is but one form that few consider. The price per barrel would skyrocket if those
countries had to take part of their oil profits to cover the loss of foreign aid that the US gives in dollars, food and goods each year. The off topic
mention of it to US farmers is so farmers remain in business rather than face a deflation of their crop at harvest versus the general stagnation that
they have faced for years and years. Profitability (meaning being able to stay in business period) for a farmer means making not only enough to cover
the fuel, maintenance, equipment replacement loans, crop insurance and seed for this year but to make headway towards next year's crop as well as
paying taxes, living expenses, bills and so on for both business and personal. Farmers face far more financial pressures than your average Wall St.
investment banker. And people don't starve if the banker quits.
I mentioned non-politically advantageous solutions. Dictate to OPEC what the US will pay per barrel and inform them that is all we will pay while at
the same time cutting off aid until that price is met. Uncap oil wells here in the US (there is 500 years worth of oil here at current usage) to make
up for the loss of OPEC oil. At the same time inform auto makers that cars need to run on both diesel and biodiesel, be fuel efficient and will be
100% converted in 25 years time--the days of the gasoline engine will be over. Inform farmers that the back 40 will have a new cash crop of a
biodiesel plant whose refining process is to crush the seeds and run the oil through a paper filter to catch the dirt and hulls of the seeds before
putting it in the tank. (And yes, T&C's prevent mention of this industrial version of that plant because too many spoil it by talking about the other