Today's gas prices are result of the life style everyone lived by and still does.
We grew dependant on a resource that was apart of our every day lives without thinking about the future.
No one entity, goverment, bussines, or otherwise, is to blame for where we are now. Everyone can influence, but not control the prices. The main cause of pricing is indeed supply and demand. People will say that there is enough oil to last 200+ yrs and "Big Oil" is crippling people and making massive profit doing it. Well that may be true that there is still a large ammount of oil left to be tapped and "Big Oil" is indeed making a very large ammount of money. Thats only because oil companies are in the right bussines right now to be making large ammounts of money. Why? Oil right now is in such high demand EVERYWHERE. Its in more of a demand now than at any other point in history. Things like windfall profit tax laws or other "Robin Hood" laws will not change the fact they are making money off a commodity in such high demand. They are making billions, but they are making billions selling alot of something thats in high demand and is getting more expensive everyday.
Countries can influance prices on a global market through massive goverment subsides paid out to help aid thier countries development which increases demand in thier markets.
Think about it, After World War Two how many countries were developed/developing? U.S., Britan, USSR are the only countries I can think of that were still intact after the war ended. And since the war was basicly fought in someone else's back yard the U.S. came out ahead of everybody. We stayed ahead of everyone for a very, very long time. As a result we gave ourselves a booming economy. Since we didn't have to rebuild an infrastructure we could build UP. Our parents/grandparents talk about times when gas was very cheap, but they don't talk about is how many people actualy owned cars. Back in the 1950's-60s only about 7 out of every 10 AMERICANS owned cars. You know, the same americans that were part of the richest most powerfull country on the planet at the time. Yet owning cars was still a LUXURY back then, so what do you think car sales were like anywhere else?
China, Japan, India, well basicly all of Asia, Africa and South America at large didn't have (and some still don't have) a middle class. You had the rich, and then the dirt poor. These places as markets of consumers didn't exist. These countries made money over time by selling cheap labor to foreign manufacturers. As a result the countries that had people that had jobs in a stable economy could afford things cheaply. So yeah things were cheaper when you didn't have to share the resource. Well now said countries are getting a middle class and thanks to said subsidized income, are now growing at a happy bubbly rate. Just look at the posts in the China thread. So many people are getting pissy at China's goverment yet the life for the average chineese citizen seems to be getting better every day. In a country of 1 Billion having 1 million poor only meens 1/1000th of your population is living under the poor braket. China is now what? 1.3 billion now? So everything you hear about "all those poor disavantaged people" is only a small fraction of the population at large. Everyone else is a consumer. Its not just China either much of Aisa is growing.
In the 1980s Japan had an explosion of economic development. A MASSIVE explosion on a scale of people going out and buying works of art at 10x 20x 30x apraised value from auction houses just for the hell of it. Baiscly a lot of people got rich very quickly. Cars, homes, everything you could think of was getting cranked out at massive volumes for a hungry country with massive economic growth. Say wasn't it at about this same time America had a gas shortage? Prices going up at an abnormaly higher rate than the decades before? Huh it all seemed to turn out allright when the Japanesse ecomomy bubble suddenly popped and alot of people got very poor very quickly and thus not everyone could afford to drive cars anymore. O well those two events happening at the same time couldn't possibly meen they were connected? Right? O well gas prices stabalized for the next 11 years so I guess nobody in the U.S. could have cared about forgein affairs....o wait.
Being such a powerfull country with a powerfull economy back then we felt obligated to meddle every affair everywhere. China is under so much criticism for praticing curency exchange rate manipulation and forceably controling markets and such. Well they probably learned it from the U.S. and Britan. Only we didn't lie about doing it, we just did it because we could and there was nothing anyone could do about it.
Anyone hear about project Ajax? It was this great military plan back in the early 1950s targeted at Iran. The Anglo-Iranian Oil Company was a arrangement that left the Anglo half (Britan) with a gold mine and the Iranian half with the shaft. Well the Iran parliment (Iran had a parliment?) elected thier new prime minister the first thing he did was nationalize the AIOC. Britan tried to regain control of the company and the Iran P.M. basicly gave them the finger. Not to be denided, Britan went to the U.S. for help and a joint effort was launched that funneled troops, weapons and anti-goverment propaganda into Iran.
Well the Iran parliment was overthrown and a royal family took its place even tho it was nothing but a puppet that licked western boot and opressed its own people with lots and lots of human rights violations. This of course went on untill about 1979 when a radical antiwestern Islamic military goverment took control. Gee why would oil exporting countries like Iran want to hate the U.S. when all we did was overthrow the only democratically elected goverment that Iran ever had and installed a goverment that only served our intrest? Yet amazingly OPEC countries have little motivation to cut us off at the tap. They did it once and it actualy back-fired on them cause the U.S. still had leverage in the market when they did it. The U.S. does not have that leverage now but cutting the tap off would piss off alot more people who are alot closer to them. We also have a small advantage of other oil exporting countries comming about that are not tied to OPEC. Increasing oil production to the levels demanded from the countries producing is impossible for two reasons,
1. Money, Yes there is a since of greed involved. Your making alot of money selling oil as is right now so why hurry? Well to instantly supply the market with the oil would cause the price to drasticly drop. But would only agravate the demand for oil and pushing the demand for it to a much higher level. Still making your product not affordable anymore isn't a good idea.
2. Its physicly impossible to produce the oil at the current demand level anyways.
Is anyone who complains about the cost of gas aware of how much oil is produced everyday? Its mind boggling the ammount used and thats with every piece of equipment working round the clock right now. You could produce more oil but whith what insfrastructure using what equipment? What we have now can't do it and what we need isn't built.
The supply is there but the demand on it has gotten huge.
We can also thank our free maket place. Did you know that there are investment banks going over seas and bidding up the price of oil thus forcing U.S. buyers to bid more to buy? They are making 20$-30$ proffit per barrel which is amazing concidering the ammount sold and traded on the market. We can partialy thank our own housing market colapsing thanks to the massive ammount of bad credit loans handed out over the years.
The average home in the best housing market has not gained or lost any value over the past 3-5 years, homes in other markets have lost alot of value....thats bad. So people start buying into and investing in things earning money like oil futures. Which has a side effect of making it more valuable in a exchange market. So our own faultering economy is making people like investment banks buy into investments that are earning the most money.
We also simply did not bother to build any effective long term mass transit systems or invest into alternet technologies for transport. 100yrs ago when cars were first invented they were powered by almost anything anyone could think of at the time. Electic cars, hybrid gas/electric cars are not new, these things existed 100yrs ago along with steam powered cars that ran on natural gas. Gas won out since it was cheap and avaible and we could do what ever we wanted. Seeing the Autobahn, Eisenhower thought to build a bigger better highway system for Americans. One to be used by anyone, to go anywhere, to connect the nation. Well it worked great till one car families became two then three car families. How did we respond? Well we didn't think to much on alternet ways of moving people from city to city, we just built bigger highways for more cars. The trans-Texas corridor is a great example. You just need only look at Japan or Germany or France or anyone anywhere with a devolped mass transit system you can see our's is way behind. Granted they have thier flaws and drawbacks but think, What if we had a system in place here? I would love to hop on a highspeed train and Zip from say Houston to Dallas at 300mph or from New York to D.C. or Boston or most anywhere. I guess that short range domestic airline flights basicly don't exist in Europe or at least at the level they do here. You have options.
We are also finaly comming to sobbering reality as a country we are now having to share recources with other countries and need options and choices for transport and entergy needs. Well probably not realizing it anyways just feeling the effects and now are seriously looking into alternet solutions. Things that probably won't work are.
Drilling domesticly for oil. It could work for a while provided we have 20 years to wait for the system of finding, tapping, drilling, transporting and then refining the oil to be built. Everything we have right now to find oil is currently being used in searching for oil and we don't even have enough engineers trained to work them. You know long it took to build the Alaskan pipeline right? Well we would need to build another one that would be even bigger right next to it. Right now refineries in Southeast Texas are spending several billion dollars and taking several years to complete to expand thier refining capacity. Thats great news but they are doing the expansion to just to catch up with the ammount of oil being produced NOW.
Ethanol from plants. Its a good idea on paper, a renewable fuel source grown domesticly. But did we actualy have to use the plants we need for food as the fuel source? Did the person who came up with the idea stop and think, "Wow this is a great idea, I wonder how many plants and acres would be needed to support a country and can this be done with any other plant than ones we eat?" Now there is a small company that won an award for making ethanol from plant sources but they came up with a way to do it using praticaly any plant you can think of. Plants that can grow most anywhere and we actualy try to get rid of. Why didn't anyone else think of that?
Tapping into the U.S. oil reserve. I hear this ALOT "Why don't we just tap into the oil reserves?" "We have oil in the ground in salt domes." "We have 20 years worth of oil." This is a bandaid fix. I remember 10-15 years ago if gas prices jumped 5-10 cents a gallon people would freak out and demand tapping into the reserver to realive pressure in the market. People are right, we have alot of oil in reserve. Just one salt dome has enough room for about 1,000 Yankey stadiums to fit neatly inside with room left over. If you think about it the U.S. started the reserve back when OPEC cut the supply so the nation would not face a crisis in the event supply was suddenly cut off again. We placed roughly 70,000 barrels a day into the reserve every day untill about two months ago. We stopped by an act of congress stating it was driving up prices to keep feeding the reserve with cost of oil constanly on the rise. So we placed roughly 70,000 barrels of oil in reserve a day for about 30 years. Thats alot of oil, untill you think that we consume about 1 million a day now up from 700,000 not to long ago. Reserves are reserves to be used in crisis when we have nothing else. Or at least thats the intention when it was started.
So ya gas prices now are a product of our own doing and are only going to go up. There is good news tho, With prices on the rise devoloping countries will not be able to keep the subsides flowing. Just recently China raised the cost of fuel prices because it getting dammed expensive which reduces the demand for fuel. Other countries will end up doing the same eventualy. If our economy recovers at a decent rate it will slow down the constant buying and selling of oil futures since other investing opotunites will be there. A quicker way would probably be stopping investment banks and the likes from going over seas and bidding up the price of oil.
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