So this has been bothering me for a few weeks now. High gas prices; they just won't go down!!! It seems a majority of Americans have unfortunately
become accustomed to these bloated gas prices. I can't blame them... Benghazi, Boston bombing, West Texas plant explosion, never-ending UFO
disclosure threads, N. Korea, filing taxes... and that's just the past month. No one was paying any attention to gas prices in 2012 because half of
ATS was waiting for the world to end!! So yes, we are easily distracted.
So who is to blame for these gas prices?
The middle east?
National Average Unleaded Gas prices have been at or above $3.50/gal for the last 3 years.
Ridiculous right? Considering the steps taken by the current administration to lower gas prices, one would assume they would go down at some
Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased.
In 2011, U.S. crude oil production reached its highest level in 8 years, increasing by an estimated 110,000 barrels per day over 2010 levels to 5.59
million barrels per day.
Overall, oil imports have been falling since 2005, and net imports as a share of total consumption declined from 57 percent in 2008 to 45 percent in
2011 – the lowest level since 1995.
The Administration has announced the 2012-2017 Offshore Oil and Gas Development Program, which will open more than 75 percent of our potential
offshore oil and gas resources.
... not to mention Phase 1 of the Keystone Pipeline has been in operation since 2010; and Phase 2 has been in operation since February 2011. These
two operational phases of the pipeline are currently delivering up to 590,000 barrels of crude oil every day!
Now check this out -- 2012 U.S. oil consumption was about 20% less than what the trend has been.
We are producing much more, we are consuming much less, we are under a new energy plan... what gives?!?! Well read the content below for your
For the first time since 1995, the U.S. will likely produce more oil than it imports. That’s great for the country’s trade balance, but the
benefits of all that cheap domestic crude still haven’t shown up at the one place it matters most: the gas station. Even as fuel consumption has
fallen to 16 percent below its 2007 peak, gasoline remains about a dollar higher than the average price over the past decade. So far this year,
gasoline prices have risen 11 percent nationwide, to $3.65 a gallon.
Most of the surge in oil production has happened in places such as North Dakota, Wyoming, Colorado, and Oklahoma, far from refining hubs and big
population centers. With competition fierce for limited pipeline capacity, producers have begun moving crude on barges and trains, adding as much as
$17 a barrel to the price of domestic oil. That extra cost eventually makes its way to the price at the pump. Ethanol requirements have backfired. The
idea was to stretch a limited oil supply, cut reliance on imported crude, and make use of abundant corn harvests. But today the ethanol program is
raising costs for refiners even as the price of oil has fallen 10 percent over the last year.
In late 2011 the U.S. quietly surpassed Russia as the largest exporter of such refined products as gasoline and diesel. Exports to Venezuela and
India more than doubled. Without realizing it, U.S. drivers are competing for American-made gasoline with consumers in Latin America and Asia, where
demand is rising. “Americans don’t think about their prices being impacted by a global market,” says Morse. “The American public just thinks
about the rising price at the pump.”
Despite the added costs of transport, U.S. refiners retain a price advantage over their foreign competitors in Europe and Latin America, since
U.S. crude is still cheaper than most foreign benchmark blends. This has led to healthy profits for some of the nation’s largest refiners. Shares of
Marathon Petroleum (MPC) and Phillips 66 (PSX) hit records in January after earnings beat estimates. Now those lucrative margins have come under
pressure as fuel makers run headlong into a biofuel mandate that has become tougher and more expensive to meet.
Let's continue to try to understand why gas prices won't go down...
This year, the law requires U.S. refiners to blend 13.8 billion gallons of ethanol into the fuel they sell to domestic customers. In their
calculations when crafting the bill in 2007, lawmakers assumed gasoline demand would continue to rise and that refiners would need all that ethanol to
make up 10 percent of the fuel sold to motorists. The problem is that U.S. drivers are consuming less, not more, gasoline because they’re driving
fewer miles in increasingly fuel-efficient vehicles. As a result, refiners don’t need all the ethanol the government forces them to buy. To make up
the roughly 400 million gallon difference between the ethanol the industry needs and the amount the government mandates, refiners must buy credits
called Renewable Identification Numbers, or RINs.
The end result is that refiners have an even greater incentive to sell their fuel abroad, where it isn’t subject to U.S. ethanol requirements.
All of this means that while U.S. oil production is forecast to rise this year, much of it will be refined into gasoline or diesel for the new
drivers of Brazil, India, and China. “You have demand growth in every market around the world,” says Schork. “We’d be paying considerably more
than we are if we hadn’t had the runup in prices and the incentive to bring more oil to the market.”
So, we will produce more oil than we import, finally. But since Americans have gone against the predicted trend and have become less oil-dependent as
everyone had wished, now all of the sudden we have prevented "the forces of supply and demand from working efficiently." WHAT!!!???
So, “The U.S. has the most sophisticated network and the most technologically advanced refining system in the world, and it has access to a
tremendous amount of domestically produced crude oil in a country where demand is stagnant at best."... yet it doesn't matter because now we have to
compete with far away countries for OUR OWN OIL!!!
The bottom line is this (which is of no surprise) -- the American people just CAN NOT win. If you guessed oil companies were to blame for high gas
prices.... you were right. They continue to pass costs down to the consumer... costs that are THEIR responsibility to pay, the cost of doing
business. And we all know big oil is untouchable... think Koch brothers, lobbyists, the almighty dollar, the devil.
You are allowed to ask for lube while they bend you over, but make no mistake about it, you're gonna have to pay top dollar for that too!!