Sunday, May 18, 2008

SC6 Takes On the Issues: How to Lower Gas Prices.


Ahhh.... The Good Old Days !!
I've always thought that if you're running for office, the first priority is to 1) Identify the major problems facing your area, and 2) Find Solutions for them. If you can't do both, then stay home and get out of the way. Today, we take on perhaps the most important issue affecting every family - High Gas Prices. The economy isn't bad otherwise, but when you pay ,more to feed your Pinto than to feed yourself, there is a problem...But first, let's review the economic theory - or facts - behind my suggestions...
Time to pull out my degree for once. Lord knows I don't put it to use at work. Oil prices are controlled by supply and demand. Back in the 70's, the problem with gas prices were controlled by supply problems. The trouble today is that we are a more developed planet. China and India are using way more oil than 30 years ago, and even OPEC is having some problems keeping up with it. In addition, the war in Iraq and market speculators are wreaking havoc as well. I said a couple years back - the best way to overcome rising oil prices was to invest in oil, and make your money from the rising prices. I suggested the same thing with corn. Hey, I can't help it if I'm right sometimes....
So, what do we do? Increase supply? Cut use? Sure. There are lots of things we can do to help out. There is no magic bullet to fixing the problem, and the days of $1.00 per gallon gas prices are over for good. The demand globally is just too high. Let's take on some suggestions.....
The Gas Tax Holiday
This isn't politically correct, but I'm with Barack Obama on this one. Cutting 18 cents a gallon for the summer is a gimmick, not a solution, and making the oil companies pay for it will only hurt consumers. Oil companies will charge what they need to charge. So the tax cut will actually make MORE for the oil companies, and any tax levied will be added to the price at the pump. Drop this idea.....
Alternative Fuels
I'm going to adjust my position on this a bit. I have always been a big Ethanol fan, but it is not a singular solution, but it will help the problem. Part of Ethanol's problem is the transporting it - you still have to move it with methods that use gas, so it's still tied to gas prices. Also, the short market on corn has raised the price almost to that of gas. My one suggestion is to continue it, but to end the tax breaks to make it. Ethanol makers are making money, so to subsist it is wasting taxpayers money. The same goes for the oil company breaks, and farmers in certain markets as well. Sounds like another post idea....
Produce More Oil in the US.
Surprise ! Supply and demand, supply and demand folks!! The great liberal experiment of the 70's has left us in the hole we're in now. When you spend more and don't make any more money, eventually , you go broke. Well, we're broke for oil. Time to drill, people..... ANWR - yes. The Gulf of Mexico, including Florida - yes. The coast of South Carolina - yes. Sorry folks, if we use it, we should make some too, otherwise, we are no better than California. I was Isle of Palms 2 wks ago on the beach, and what did I get to look at ?? Shipping tankers. Will an oil platform or two 20 odd miles out really affect tourism? It hasn't hurt Texas, and they're everywhere...
The Strategic Oil Reserve
It's at 97% capacity right now, and the Bush Administration keeps jacking it even higher. And he wonders why no one likes him right now... Putting those reserves on the market will create a higher supply, and excess supply will create lower prices. maybe not permanently, but it will help short term.
Rerouting Airline Schedules
I got this one from the CEO of JetBlue, perhaps the US's best airliner. Even though the airlines are deregulated, the fact is that regionally, some carriers dominate others. This doesn't keep other carriers from trying to break into the market. The problem is that there are 5 carriers flying the same route at 20% capacity, instead of one or two flying at 90-100% capacity. In short, empty planes waste fuel - super expensive jet fuel. This is a great idea, because it is one of those rare demand solutions. I would love Moye's opinion on this one , since he is a frequent flyer.
Develop Synthetic Gas
Syntec, Mobil 1 - ever hear of it? It's synthetic motor oil. Well, if we can develop synthetic oil, why not synthetic gas? Actually, this isn't a new idea. We were all ready to do this 20 years ago..
Yes, America was all set to go forward with an $88 Billion initiative to make sythetic gas. Call it Star Wars for gasoline. What happened? OPEC freaked out, and dropped the price to under $10 a barrel. Just like Star Wars, the appearance of doing something is almost as good as doing something real. However, it does need to be done. If we had stopped thinking short term, we would have had this done 15 years ago....
Get Out of Iraq
I go back and forth on this one all the time. The attacks on the oil supply were what started the initial rise in prices, and the problem steamrolled from there. The key question is - can Iraq exist peacefully and produce the most oil possible without us there? I'm not 100% either way on that one. Terrorists need a place to be terrorists, and Iraq, Afganistan and Pakistan are it right now. A peaceful Iraq is not in their best interest, but it is in ours.....
Are there others? Sure. If you have any suggestions, send them in - the Dems and Republicans in Washington certainly could use the help, because all the indications are that they are clueless, or worse, they don't care. Even if some of these are done, they are not total remedies. High gas prices are here to stay. But , that doesn't mean we can't do some things to limit the pain. Maybe when we get to $4 gas, we'll get off our asses..... or maybe $5, or $6, or...........
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6 comments:

Martha said...

$2.47 for gas?? Hey I'm moving to SC! The Racetrac station in T-town is at $3.68 right now.

Earl Capps said...

Martha - that was a picture from at least a year ago. Don't think it's here and now, because it ain't.

If you double the supply, you still only get prices back to the two buck a gallon mark. With demand in the East continuing to grow, you'll soon be back where you started.

The real answer is to find an alternative power source. Make the internal combustion engine obsolete and irrelevant. Not only would that cut our oil demand in half, but it would provide a viable alternative which would free the West from having to placate oil-rich Third-World dictators.

Perhaps we're looking for the Mr. Fusion machine that Doc fitted on the Delorean at the end of the first Back to the Future?

Mike Reino said...

Yeah, Earl, but we'll still be stuck with the Middle East - even Doc Brown had to deal with the Libyans....

bobby said...

or...get Bush out of office.

harris county texas moye said...

maybe we should just cut back on our wasteful driving a little of course the republicans can ask to drill more oil here and the democrats can same no and still blame bush for the mess. the president cannot do it all.

harris county texas moye said...

of course i did want to say something about the airline deal as i average about 175 plus flights per year to north and south america europe and central america including the islands what we have is supply and demand competition and the american way. the airlines are already positioning themselves such as all the alliance airlines say united and us arways code share or delta and northwest among others. you can buy a us airways ticket or delta and fly all over the world and never once be on one of their planes. only the strong survive.