Yep! Oil is getting cheaper as Ron Scarbro noted in one of his rants in a local newspaper. But the added three words makes it sound like it might be a bad thing to tax gas. There's no denying that Scarbro has a point of view, but maybe there are other considerations than the narrow construct that he creates.
Yes there was an oil problem back in the 1970's. We had been guzzling oil like it was going out of style and our own local production was over the hill, so we were importing upwards of 70% by some sources from places like Saudi Arabia. As always, things were tense in the Middle East, and when it dawned on the Saudis and others who were selling oil on market that we were importing so much and oil was a limited commodity, they initiated what was known as the “Embargo' whereby they said they would sell oil to us at a price they decided. They became known as the “ Organization of Petroleum Exporting Countries (OPEC)” and in less than a year, oil / gas prices increased by over 40%. Oil imports suffered staggering declines; “daily shipments of oil from the Middle East dropped from 1.2 million barrels to a scant 19,000 barrels,” according to the Gale Encyclopedia of U.S. Economic History, 1999.
By the way, all this occurred during the waning years that Nixon was President and continued on into the Presidency of Gerald Ford. And it was Dick Nixon who signed the Emergency Highway Energy Conservation Act, on January 2, 1974.
“Oil companies started raising the price of oil to the stratosphere” Mr. Scarbro writes.
Of course they did. In the spirit of capitalism, and in response to that great law, “Supply and Demand. One could hardly have expected less.
“The money flowed in and governments were happy,” continues Scarbro.
Yes, that's partly true though I'm not entirely sure about the U.S. government. More likely we were less than happy. This was a time leaders called for energy conservation; who can forget Jimmy Carter in a warm sweater giving the nation a pep talk.
“All they had to do was to continue convincing the world there was a shortage of oil,” writes Mr. Scarbro.
And apparently they [the oil companies] were masters of deceit because with few exceptions, we have had few times when the world felt that it had enough oil. And yet the rich oil barons (obviously aided by unscrupulous governments, kingdoms, fiefdoms and downright outlaws) continued to charge and charge for the oil they pumped from below ground.
Scarbro celebrates and says that for us, the falling price of gas and oil is good news; airline tickets should come down soon, he says. I say, don't hold your breath or you'll burst your britches. Airlines know how to play the game. It's the economic two step, and governments the world over are feeling awkward in part because the dance masters are often the leaders of government and choose the music we to which we dance.
Car dealerships are already bracing for the rush to own the newest Humongo car or truck that can pass anything on the highway but a gas station. But here is the real kicker, Mr. Scarbro; the “glut” as you call it, is only temporary. When the Chinas and Indias and the Japans and Germanys restart their economic engines again, the glut will be sucked up like a shorty beer at a biker rally.
We've been discovering oil all over the place:Venezuela, the north slope of Alaska, Mexico, the North Sea, the Gulf of Vietnam, the tar sands of Canada, and last but not least, in the fracking rocks beneath Oklahoma, Texas, California and North Dakota. But it won't last; we all know that oil is a limited commodity, and every wildcatter will tell you it's getting harder and harder to find and harvest.
Mr. Scarbro laments the fact that the Obama Administration wants to add a $10 per barrel tax on oil which would add 25 cents to a gallon of gas. I get the dislike of a tax. I hate taxes, too. But here's the thing. Ever since Eisenhower hatched the grand idea of the interstate highway system and we got the damn thing built, we've used the gas tax as a way to expand the highway system and keep it in good repair. A two lane highway isn't good enough for us – we want four, six, eight lanes and more. We've paved the country from Canada to the Gulf and from Washington D.C. to Tacoma, Washington. And we have to get there (where ever that is) fast. That means, we need to keep our highways, and bridges in tip top condition for our No-Doz truckers and our cell phone addicted speed freaks.
Did you know that Americans drove 3.1 trillion miles last year according to DOT? Did you know that potholes cost Americans $3 billion last year according to AAA? Hundreds of bridges in the state of MN are in need of repair or have we forgotten that a major bridge fell into the Mississippi less than ten years ago. And we still have not dealt with all the suspect bridges in the state. I suspect an equal number are in need of repair in your home state of Georgia, Mr. Scarbro.
Mr. Scarbro mocks the green movement: “Cleaner air. Cleaner environment. Cleaner everything ad nauseum.”
Perhaps Mr. Scarbro would enjoy it more if he lived in Atlanta, Georgia rather than on St. Simons Island. Atlanta, along with its many positive attributes, is one of America's most toxic cities with 21,000 tons hazardous environmental waste dumped in the city. That, in addition to a serious chemical and atmospheric problem qualifies it as toxic. Could Atlanta benefit from cleaner air, less pollution and a better transportation system?
And for a final assault on intelligence Scarbro says he would rather pay $1.50 for gas “... than sit by while our government sends billions to foreign countries.” Welcome to MN – gas is $1.59 having risen 30 cents over the last week. But Uncle Sam didn't get all of that 30 cents, most of it went over seas to buy that 42 gallon barrel from the OPEC.
“Let's let the market decide what the price of oil should be and governments and oil companies stay out of it,” Scarbro writes.
How assinine! If you would have stopped with governments staying out of oil pricing, that would have been one thing. But oil companies make their money processing oil and selling the products of oil. It's what they do. If they stopped doing it they wouldn't be oil companies. Perhaps Scarbro thinks that the grocer down the street can go out and get the oil, process it and fill the tank with gas.
We had some students from New York who visited Becker back in the 1980's. We took them to a dairy farm outside of town and several of the students got quite a surprise when then learned that the working end of a cow was how milk was produced. A few of them admitted they never stopped to think how milk was produced or brought to the store. I can forgive the students; they were young, naieve, and perhaps preoccupied with other matters. But there is no excuse for Mr. Scarbro's ignorance. Then again, perhaps he's been out sniffing gas tanks and is a bit discombobulated.
There's not much to say about me. Like all human being I am more oxymoron than I am anything else.
If you are wondering about the picture, it was taken on a cruise on the island of Martinique. I just had to try one of those big Cuban cigars to see what all the fuss was about. To judge by this $10 cigar, Havanas are over rated.