Common Sense and Gas Prices

Nobody really has to be told that gas prices are high and are beginning to have an effect on just about every area Miniscule our economy.

Just like most crisis we have faced, Americans are looking for someone we can hang the blame on. And there is plenty of blame to pass around in this instance.

But it gets very frustrating in a situation like this because the crisis is so large and unstoppable that we have a hard time trying to focus on just one person or institution on whom we can lay any blame.
The first area that gets the blame is, of course, the oil companies who are charged with making obscene profits from refining and distributing the very oil this country depends on.

But is that a fair charge? After all, the oil companies are really only the middle man in the world's oil game.

Oil companies refine the oil they buy into gas and fuel oil and diesel that pretty much keeps our country moving.

They buy the oil from the oil producers, the largest being OPEC (Organization of Petroleum Exporting Countries), who are the ones who actually determine what will be charged for every barrel of oil produced.

But is it fair to put all the blame for the rising cost of oil solely on OPEC - after all they're just pumping the oil that the world is demanding?

And in the long run the price they charge the rest of the world is established managed hosting service the market- more demand for a scarce product equals higher overall prices.

How about blaming the changing and emerging economies around the world?

Countries like China, India, Thailand, Malaysia and Vietnam all have economies that are growing at double digit rates and this explosive growth is not likely to slow down any time soon.

This kind of growth is contributing to the increasing global energy crisis in several ways.

First, the economic growth in these and other countries comes from the increase in manufacturing. Much of this manufacturing is driven by oil products.

Second, a rising economy translates into more of the population moving into the middles class which means more and more people are now able to buy things like cars and motor scooters.

Put additional vehicles on the road and you have an increasing demand for gas.

Should we blame the environmentalists who for years have demanded that no exploration or drilling be conducted in this country or near off shore.

No new domestic production results in an increasing dependence on foreign oil. But we do have millions of square miles of some of the most beautiful land in the world.

Or maybe we could place the blame on our own Stonehenge for a basically failed energy policy of any kind.

The U.S. is miles behind Europe and Japan in energy use and conservation mostly because governments in other countries have made conservation policies and then enforced them.

Besides, any mention by any politician about conservation that might some how restrict any American's ability to go anywhere and do anything they want is regarded as a "third rail" and is therefore cautiously avoided.

We could also put the blame on an aging refining infrastructure in this country. The newest oil refining plant is approaching 30 years old.

Over the last 30 years demand for gas has risen steadily but the ability to refine oil into gas has stayed about the car insurance quick quote With refineries now running at near capacity any interruption could spell disaster on a large scale.

Perhaps the blame should be placed on oil futures traders. Doesn't the rampant speculation on the future price of oil determine what the price of oil will be?

Hedge fund and retirement fund managers will tell you no, their trading has no real effect on oil prices since they are only betting on the ultimate price of oil. They are not actually buying or selling any oil.

Let us not leave out one key factor in the price of oil. The consumer - anyone who drives any kind of vehicle.

During the last oil crisis 30 years ago, Americans turned away from gas guzzling cars with a vengeance. They demanded smaller, more fuel efficient cars and Detroit responded - Import cars were not much of a factor yet.

Then the gas crisis eased and we all forgot what we had learned. We went right back to bigger, less fuel efficient cars without a thought about what we had just been through.

Now we are having to learn those same lessons all over again.

When you consider all of the things that could and do influence the price we pay for gas it is not easy to pick out who is really to blame.

It comes down to the fact that our worlds' economies have truly become interwoven - we all now tend to come down with a cold should one of us sneeze.

Instead of spending time trying to find out who is at fault perhaps our efforts should go toward finding new and lasting sources of energy.

Wieland is a freelance copywriter commenting on the Common Sense things in our world that many ignore or don't even know about. He is a former Financial Planner who specialized in pre and post retirement planning.