Giovanny Thompson
Professor Kelly
English 120 12:40-2:00
04 December 2012
Gas
Prices in our Community
When
I used to drive back when I used to live in Texas and my needle started to
dwindle on the big E then soon the light would come on, I would become very
angry because I knew how much filling my big truck was going to hurt my pocket.
$3.36 was the price per gallon. Out here that might be pretty darn cheap but
even in my home state you could feel the pinch at the pump. I would ask myself
why gas prices go up and down so much especially at certain point in the year. Here
in Marin gas is well above $3.50 for most of the year, and in the city, I have
seen prices peak at almost $5 a gallon; but why is it so high? Most people want
to blame our president and government because prices soar each year, but is
this really the case? Gas prices are a very complex issue; simple fixes will
not fix the price. Gas prices go up and down throughout the history of the
United States, but voters should not blame the government for not keeping the
lid of gas prices completely. Most of the blame should be placed on Corporations
who want more and more of your money, and natural disasters like hurricanes and
fires that can disrupt the production of oil that can cause price gauging by
oil companies. When it comes to our Government, voters should not believe
everything Politicians say, because they are known for making false promises of
cheaper gas, while undermining the current Government’s policies when it comes
to economic problems like gas prices.
Oil companies are the problem with
the prices. Oil companies want higher
prices because that means a larger profit. With oil companies continuing to
profit receiving tax cuts and subsidies from our own government to try and help
lower the price, the price will never come down. Other factors affect the price,
but these points are the core of the issue.
Daniel J. Weiss and Jackie Weidman from Americanprogress.com
make excellent points on why the blame should be placed on oil companies.
■ the five biggest oil companies
made record profits in 2011 as average annual nationwide gasoline prices hit a
36-year high. Yet these companies also produced less oil.
■ Every 1 cent increase in
gasoline price yields $200 million in profit (on a quarterly basis) for the
largest oil companies.
■ U.S. exports of refined petroleum products
doubled in the last five years.
■ Oil companies are holding thousands of
unexplored or undeveloped leases in federal lands and waters.
■ Oil companies are also closing refineries,
threatening to slash fuel supplies.
■ Big Oil companies will receive $40 billion
in unnecessary tax breaks over the next decade.
■ Wall Street speculators are trading twice as
many oil futures as commercial end users.
With billions of dollars in profit
it is easy to see that oil companies are not in their customer’s best interest.
We elect into office candidates to Congress who are for lower gas prices, but
in turn let off oil companies with unnecessary tax breaks and subsidies. The
blame of higher prices should be placed on us for believing in campaign
rhetoric, congressmen who let oil companies lobby in congress, and greedy
businessmen who want to make higher numbers than the year before. If we can
become more efficient with the production of gas and move toward eventually
having other fuel sources, the price of gas could cost next to nothing. It will
be better for our environment and less of the blame can be placed on our government.
We as voters should do more research into politics when it comes to our
government and oil companies. We should support candidates who can go into
office and change the way we do business with filthy rich corporations and take
into consideration the middle class and lower class families who suffer from
high gas prices.
Back in early August in Richmond
California at 6:15pm, a Chevron Oil refinery went up in flames. Although nobody
was killed, toxins and hazardous fumes filled the sky. People were told to stay
in their homes and employees working at tolls on the Richmond-San Rafael Bridge
were told to stay inside. This disaster had a negative effect on gas prices in
the surrounding community especially in Marin. But was it solely the reason
behind gas price spikes? With high gasoline standards and different seasonal
blends of gas that have to be switched out in California, the production of gas
is limited to only a few oil companies. They can leave higher prices on gas and
take full advantage of the situation concerning natural disasters or accidents:
The Chevron refinery in Richmond (across
the bay from San Francisco) has a normal capacity
of 243,000 barrels per day, or 8.5% of the total petroleum products supplied to
Petroleum Administration for
Defense District 5, of which California is a part. The supply of special reformulated gasoline that California
uses is produced by just a handful
of companies, with Chevron alone controlling more than 20 percent of the market. In certain circumstances, price-gouging
might be quite profitable. ‘It’s not a crazy
notion,’ Borenstein notes, ‘it’s just extremely difficult to prove and, even
then, not a violation of any
law.’ (Plumer 1)
It is not the storm, earthquake or oil spill that pushes the price
of gas up; it is in the control of the oil companies. Even in some
circumstances where the price of gas should go up because of the disruption of
the production of oil, prices can go down. Natural disasters keep drivers off
roads which mean less people are buying gas. If people go prolonged periods of
not buying as much gas as they did before, the market price of gas goes down. On
the East Coast hurricane Sandy hit New York and New Jersey fairly hard. A large
number of gas stations in the New York, New Jersey area lost power and lost the
ability to sell gas:
That has taken
between 1 and 2 million barrels per day of gasoline consumption offline, Ash said. Before the storm, people in the two
states used about 8.6 million barrels of gasoline
per day. The reduced East Coast demand also has created a glut of Midwest and Gulf oil, keeping prices lower in those
regions. (Colman 1)
The price of gas is an extremely complex issue, and simple fixes cannot
solve the problem. Gas prices, at times, do not follow the same rules as
regular Economics of supply and demand. There are way too many factors that
push the price up and down that it is mind boggling, but Oil companies will
always find ways around obstacles to get to our pockets. Trying to keep control
of gas is like trying to tame a blindfolded bull in a china shop that’s paint
red while a thunderstorm looms outside threating to set the bull off. As long
as we are consuming this good and making the greedy rich richer, it will never
be stable or predictable.
During every
election year politicians boast a presidential term that will be filled with a
booming economy, a decrease in the national debt and that America will be on
top once again. Every candidate knows that he probably can’t achieve all this
in four short years but people still buy into what the candidate is selling.
All these ploys that candidates tell voters are empty promises that are meant to
get votes, and not to help out the consumer.
During the 2011 primaries for the Republican Party, Newt Gingrich and
Michelle Bachman made campaign promises of $2.00-$2.50 gas if elected. Is this
realistic? No. Their plan was to open up drilling even at the cost of harming
the environment because more oil production will obviously lessen the price of
gas:
For one, the U.S. under Obama is already
producing more oil than it did before he took office. Thanks in part to new
shale oil deposits, the U.S. produces a million and a half barrels of oil more
today than it did in 2005 — yet during that same time period, gas has gone from
about $2 a gallon to $3.50, with large spikes in between. And even if we opened
up everything to drilling, it wouldn’t make much difference at the pump. A 2009
study by the U.S. Energy Information Administration found that opening up drilling
areas off the East Coast, West Coast and the western coast of Florida would
yield 500,000 extra barrels of oil a day by 2030. That might sound like a lot —
except the world consumes 89 million barrels of oil a day, and by then will
almost surely be using much more. (Walsh 1)
Doing your research is the best thing a voter in our community can
do because we should know who is in our best interest when it comes our money.
Believing in false promises will almost certainly raise our gas prices because
we put into office those who cannot be trusted and who will more than likely
become easily swayed by lobbying oil companies in order to get re-elected. When
we give power to the greedy rich we put down ourselves. I believe that many
voters do not realize this until it is too late and then tend to place blame on
$4.00 gas on the wrong people. Although, some politicians like President
Obama’s have put forth legislation that encourages growth, such as a stimulus
package to a solar power company, Solyndra:
This failed alternative energy company was gilded
by President Obama’s glow. But with $527 million from taxpayers it filed for
bankruptcy just two years after being handed a loan guarantee from the
Department of Energy. Like taxpayers, most creditors—including the IRS—are out
of luck. The shuttered energy concern has only $71 million to stretch across
more than $900 million in unpaid debts. ( wood 1)
Although this failed, this
shows that Government only has limited options when it comes to trying to drop
the price of gas:
Over the longer
term, there are really only two things the government can do to help contain
oil prices and the cost of the fuels made from oil. First, it can encourage oil
companies to produce more oil. The second thing it can do is to promote more
efficiency and cut the growth in demand.“…our government is batting .500. The
Energy Policy Act of 2005 — the "energy bill" that took Congress and
the White House four years to produce — provides billions of dollars in tax
breaks and subsidies to oil companies to drill more oil. (And it’s not as if
the oil companies are hurting for cash at the moment.). (Schoen 1)
When the government can only
encourage growth but not really have a direct influence on oil prices, there is
not much else that can be done. Moving toward other options in energy
especially renewable energy cuts out the need for the greedy oil companies that
sell you a product that will power everything that you need throughout the rest
of your life like your car.
Oil
companies and politicians who work with lobbyist are not in the voter’s best
interest. We have to stand up to government and make a statement to not support
subsidies and tax breaks to already billionaire companies. Oil companies have
shown they will take advantage of any opportunity like a natural disaster or
lure a politician all for the cause of making more money. They need to focus on
lowering the price of gas while government needs to come up with plans to curve
our addiction to oil. Voters should blame oil companies for higher gas prices
not government. Government does not want to become richer because the
government is in place to serve, protect, and allow us to live happy lives the
way we want. Energy is a necessity in living here on our planet and when we are
constantly being taken advantage of or ignored we often do not know who’s to
blame but our government. It is up to
oil companies to come clean and for us to stop feeding the greedy if we want
the price of gas to lower. Even at the end of the day prices will probably go
up three cents while I write this paper then drop two cents tomorrow.
Works Cited
"Obama Wanted Higher Gasoline
Prices?" FactCheckorg. Annenberg Public Policy Center, 23 Mar.
2012. Web. 18 Dec. 2012.
<http://www.factcheck.org/2012/03/obama-wanted-higher-gasoline-prices/>.
Colman, Zack. "Hurricane Sandy to
Drive Gas Prcies Lower through Election Day, Rest of 2012." The Hill.
N.p., 01 Nov. 2012. Web. 16 Dec. 2012.
<http://thehill.com/blogs/e2-wire/e2-wire/265411-sandy-to-drive-gas-prices-lower-through-end-of-year>.
Walsh, Bryan. "Why Michele Bachmann’s $2-a-Gallon Gas Promise
Is a Fantasy." Science
Space Why Michele Bachmanns 2aGallon Gas Promise Is a Fantasy Comments.
N.p., 18 Aug. 2011. Web. 16 Dec. 2012.
<http://science.time.com/2011/08/18/why-michele-bachmanns-2-a-gallon-gas-promise-is-a-fantasy/>.Wood,
Robert W. "Fallen Solyndra Won Bankruptcy Battle But Faces Tax War." Forbes.
Forbes Magazine, 06 Nov. 2012. Web. 15 Dec. 2012.
<http://www.forbes.com/sites/robertwood/2012/11/06/fallen-solyndra-won-bankruptcy-battle-but-faces-tax-war/>.
Plumer,
Brad “Why California gas prices are going Haywire” Washington post, 8 Oct.
2012, Web. 5 Nov. 2012 < http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/08/why-gasoline-prices-are-going-haywire-in-california/
>.
Fong, Jocelyn. "Drilling won't lower
gas prices." AMASS 16.4 (2012): 14+. Expanded Academic ASAP.
Web. 15 Nov. 2012. < http://ezproxy.marin.edu:2107/ps/i.do?id=GALE%7CA294369962&v=2.1&u=kent75086&it=r&p=EAIM&sw=w
Weeks,
Jennifer. "U.S. Oil Dependence." CQ Researcher 22 June 2012: 549-72.
Web. 15 Nov. 2012. < http://library.cqpress.com/cqresearcher/cqresrre2012062200
>.
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