Monday, March 25, 2013

Big Oil and their BIG prices!!

           Hello good citizens and patriots and hello to those who have viewed this blog from OCONUS. I appreciate the interest and please...feel free to comment and add to the discussion. I haven't blogged in a while and I apologize for my absence. It's been youth hockey tournament season and and with a few weekends off in a row, the little ones have my attention. Oil instead of guns this week. Guns are still a hot topic and as the debate grows, I will come back with more on one of my favorite pastimes.
           There is a lot of stagnation on the forefront of gun legislation as the states and the federal government hash out their ideas for bills behind closed doors. As it stands now, anti-SAFE act momentum is growing in NY and it is my hope and anticipation that lawsuits in addition to reluctant and confused law enforcement agencies and county government opposition will strike down this anti-second amendment atrocity. We have had at least one arrest due to SAFE act violation in NY, a war vet no less. Today it was reported that the portion of the SAFE act regarding magazine capacity has been put on hold "indefinitely". In regard to the federal bill, Sen Reid has taken the Assault Weapons Ban portion off the table in the coming gun legislation due to overwhelming doubt that it will get through the house. See... he's not so stupid as he looks. More on that as it develops and I'll give my summary when the proverbial shit hits the fan....either for them or for us.

                                           Now on to the sticky subject of Oil.....

         Oil production in this country will now exceed the amount of oil we import. This is the first time this has happened since 1995. Wait....what?!?!? "It happened before" you ask!! Well then, why the hell are we bothering to use OPEC oil in the first place? Good question. A better question....why the hell do export most of that oil?? Yes...we export most of the oil we produce. So in essence the ships carrying refined fuel...yes we even do all the work of refining it first...from the US heading to Japan, South Korea, China and Taiwan and the ships carrying crude oil here from the Middle East, pass each other in the ocean!! I don't own a business or hold a business degree so I will not pretend to know how one works...but a wise man once said..."wtf?"
         Oil is responsible for many of our economic woes here in the US and also in many countries around the world. Especially those with Christian governments. One only needs to cross reference global oil prices with governments supportive of, or wholly run by, Islamic law. Google it. If you think the US has high fuel prices due only to high fuel consumption you're living in the dark. The individuals that make up OPEC and it's policy making entity do not subscribe to the time honored law of supply and demand. They are a monopoly. They do not care about the environment or the polar ice caps or the lonely stranded polar bears that are set adrift because of global warming. They are not our friends nor do they wish to be in the slightest and they are not the pure of heart. They are loyal only to money and in part Islam. Oil companies get the blame but OPEC sets the price world wide. The truth is the oil companies have nothing to do with the cost of oil and they couldn't lower it if they tried. They just so happen to be the experts in getting it out of the ground and turned into that stuff that makes your car go vroom. If you were the only mechanic in town would you fix everyone's car for free? No you wouldn't...but I digress.
         Manufacturers will include the cost to ship their products into the cost of the product itself...that is why some regions have drastically different prices. When the cost to ship goes up..remember Frieghtliners and locomotive use diesel engines...the manufacture has no choice but to pass the added cost burden onto the consumer. This is necessary for them to maintain a profit. They can not and will not stay in business if they don't make money....and there is nothing wrong with that, it's called capitalism. Profit is all to often associated with greed or the idea that the evil corporations are fleecing the American consumer. It's ok to make money at's essential to our way of life actually.
       If you have been in a grocery store in the last two to three years you will have noticed that prices have gone up some cases they've doubled. This is fuel costs being passed on to you. The next time you see a trucker filling up his rig ask him how much it just cost will be four figures I assure you.
        So back to those ships passing in the night. Why would we take the time to pull oil out of the ground and refine it into fuels only to load it on a ship and send it to another country...and at the same time pay another country to ship their crude oil to us?  Would farmer Smith grow hay and ship it to the Johnson farm only to turn around and buy hay for his own cows, at a substantial price increase I might add, from the Stevens farm? No!! No he wouldn't ...and if you asked him to do that he would look at you funny and promptly tell you to vacate his premises. This is not good business practice. It screams of corruption and back room favors. If someone could convince me of it's wisdom either economic or even political I would greatly appreciate it.
       Most of the sources available online reporting global oil prices suggest that gas prices are high because crude oil prices are high. Crude oil prices are affected by world events. Weather can be one of those events, but the big ones are usually civil unrest, terrorism, or US disapproval of tyrannical governments. Namely Iran with it's threats to wiping Israel off the planet and it's growing hate of terrible things like freedom, women talking in public, internet and other such evil. Unrest in Yemen, Lebanon and Sinai can also have huge effects on oil prices. The US may not get any of it's oil from these places but our gas prices soar every time Saheed  pisses off Mahmoud.
       US Oil companies are not bound by any laws or common sense when it comes to who they sell the fuel to. It's a global market and they have the right to profit on it. I do not suggest or condone the idea of the government putting their grimy hands in the mix either. Common sense would dictate that if US based oil companies exhibited some patriotism and some solidarity and turned away the ships bringing crude oil form OPEC sources and relied on our own oil production we could solve a whole hell of a lot of our foreign policy headaches! We could set our own prices and I would venture to guess the oil companies would still make a ton of cash!
       Pollution? Well I don't exactly subscribe to the man made global warming concept. I think it's a little presumptive to think we have that much of an influence on mother nature. I believe that the Earth goes through ups and downs all on it's own and we are merely along for the ride. I think we are just progressing OUT of the last ice age. When we progress INTO the next one will we take credit for that to? Will we say recycling worked ....hooray!!! The EPA saved us!!! We probably will say those things actually....
       That being said I do believe in pollution and I know fossil fuels pollute. I am also a huge proponent of technology and it's advances. I realize that something needs to evolve and the technology behind internal combustion is dated and it's only natural that it evolves into something else. Actually I can't wait to see what it is and I hope I'm still young enough to enjoy it. In reality, I probably won't see it. My kids may not even see it. We're not there yet. If we had the answer right now, and big oil wasn't able to buy it out of existence, it would take years to perfect and implement into society. You know the deal...only the rich could afford the first incarnations then there's the countless failures associated with new technology until the bugs can be worked out. Then there's the hundreds of software updates and patches, manufacturing improvements. After the copy writes are sorted out and sold to the highest bidder the cost would probably come down to a somewhat crippling cost for the average income. Then there's the reformatting of the entire US municipal and industrial infrastructure....that should be quick right? A couple months maybe? Wind and solar energy are to inefficient and costly. They are just not there yet. If they evolve to something viable as an energy source it won't be soon and it won't be in time. I don't believe they alone can solve our energy problems...obviously they can not run our cars. Batteries are toxic and dangerous. LiPo batteries (lithium -polymer) for instance are a very powerful and technologically advanced battery but they can easily, and often do, explode if over charged and are ruined if drawn down below 3 volts per cell.
         The quicker we get out from under OPEC's thumb the better. Oil is still the answer for now and new technology and more efficient use of fossil fuels will help us in the interim as we evolve to a new power source. Total obsolescence of fossil fuel is still to far away at this point. We can achieve a lot if we become self sufficient, both in economic and political stability.

 Side note:

Photo: NATO Review Magazine
      Many people credit Ronald Reagan with the fall of the Soviet Union. I loved President Reagan so it pains me to say otherwise but this is my theory on the fall of the USSR. During the 1970 oil crisis in this country we were again the victim of a tantrum thrown by OPEC. In an effort to avoid another crisis propagated by OPEC  the idea of drilling and becoming self sufficient was proposed, this prompted OPEC to drop oil prices to a point that made drilling here unnecessary. This was OPEC manipulating oil prices to keep us at their bosom.
       Russia's chief export at that time was oil and natural gas. In 1979 they went to war with Afghanistan, a Muslim country, the war lasted until 1989 covering all of President Reagan's two terms in office. This is why he received credit for the USSR's demise. The war was very taxing on the Soviet economy and we did help the Afghans in their effort. When OPEC lowered their prices ...from over $80 down to $20 and lower per barrel, this effected the price of Soviet oil and gas to a point that their already stressed economy could not survive. The Soviets pulled out of Afghanistan in 1989 and soon after the USSR collapsed....oil prices started going up.
       The US relies on foreign oil instead of relying on it's own so global prices have the opposite affect. Higher prices would cripple our economy much like lower prices crippled the oil producing Soviet economy. In 2003 we went to war with a Muslim country and wouldn't you know it oil went up and fuel prices more than doubled.....crippling our economy.