I received an email advocating a boycott of the oil companies. It is a bad idea!! I have done some internet sleuthing and here is my argument that a boycott against the oil companies is a misguided and bad idea! It accomplishes NOTHING to boycott oil producers when they are not the cause of the pain! A boycott is like treating the headache with aspirin while ignoring the brain tumor!! You might get a little relief and feel better for a while but you are still gonna die!
First...Let's consider the price of gasoline. Gas prices in the U.S. are high but really not bad compared to the price of perfume, chicken, soup, laundry detergent or estrogen therapy. In the state of Kansas the "price" of a gallon of gas (at $3.00) includes about 37 cents state tax (12.5 %), in Missouri it is 30 cents (10%). Those are just state taxes. The federal government adds on taxes such as the "Highway Use Tax", currently 18.4 cents per gallon. Some counties and even some cities tack on a few cents more to every gallon. The government, at all levels officially collect over 40 percent of every gallon of gasoline. That is $1.20 cents on every $3 gallon of gasoline. It benefits government, to the tune of billions of dollars in taxes, to keep the price of oil high!
Consider also that all the oil company employees who draw their salary from oil company sales, (i.e. gasoline, fuel oil, jet fuel, and other products such as paint, plastic wrap, medical plastics, cosmetics, etc.) pay their income taxes, sales taxes, airline ticket destination tax, etc., and the governments actually collect even more money on every gallon. That gallon of gas has to include enough money so the employees can pay their share of our exorbitant tax burden! (Aside: There are some people that think the GOVERNMENT should provide universal health care. If you think medical care is expensive now just wait for your tax bill to pay for socialism in medical care!!)
If a gallon of gas is 3 bucks, and the government confiscates $1.20 in taxes on that gallon, it means the oil companies get about a buck eighty ($1.80) for a gallon of gas. Out of that buck eighty, the oil companies pay their employees, independent truck drivers, station owners, medical insurance companies, extortion by the Teamsters/labor unions, refiners, employee retirement funds, research and development, purchase trucks, tanker ships, construct office buildings. To make matters worse they have to purchase crude from America's enemies, OPEC, (Oil Producing and Exporting Countries, Saudi Arabia, Iran, Russia, Venezuela, etc.) The oil companies also have to employee battalions of lawyers just to fend off the zealots at the U.S. Department of Justice. And they also have to make a little profit. Clearly a gallon of gas is a bargain. Here is an interesting graphic from the internet. It displays the tax burden for each state.
If Americans boycott gasoline suppliers, then truck drivers, service station owners, employees of medical insurance companies, gangsters at the Teamsters/labor unions, refiners, administrators and employees of retirement fund companies, R&D scientists, truck manufactures and mechanics, ship builders, and office building construction workers and battalions of corporate lawyers will all be hurt. These are real people, with families...hard working Americans just trying to make a living for their kids. Instead of hurting hard working Americans there must be a better way.
Also the record high price for gasoline was in 1981, as a percentage of income. When gas today reaches a national average of $3 per gallon it will be about the same percentage of your income as in 1981. You must consider purchasing power when making a comparison. (In 1868 manufacturing workers made about $2 per day. That equates to purchasing power of almost $30 PER HOUR NOW!!)
What to do...What to do...
Let's ask a question...Why is the most powerful nation in the world beholden to the thugs of the world for perhaps our most important commodity, next to food? Is there any rational reason that the United States of America should not provide for our own energy needs? We have enough oil stocks in Alaska alone to provide our needs, at current levels, for the next 50 years. We have oil reserves in the Gulf of Mexico, off the coast of Florida, Texas, Oklahoma, Kansas, Nebraska, in California and off shore California, and in New Jersey sufficient for our needs for centuries. So what is the problems? The answer is America has gone insane!! In the mid '60s there were 347 refineries in the U.S. Today there are about 150. There has not been a new refinery built since 1980. That is stupid! The reason for it is absolutely stooooopid!! There are people (me, for example) in this country who are truly concerned about our environment. There are others who say they are environmentalist who really hate anything capitalistic. They use the Environmental Protection Agency and the activist courts to prevent any effort by corporations to expand oil U.S. production. Their goal is not to protect the environment. Their goal is to destroy capitalism. Here is a quote from the web page of the "Earth Liberation Front", "The ELF realizes the profit motive caused and reinforced by the capitalist society is destroying all life on this planet. The only way, at this point in time, to stop that continued destruction of life is to by any means necessary take the profit motive out of killing." (Previous versions of this treatise included a link to this quote on the ELF web page. It appears the ELF has taken the quote down. The FBI classified ELF as "eco-terrorists" in 2001. I'm not going to bother to search their web site. You can do your own homework. The quote is referenced all over the internet.)
We had better start paying attention to terrorists!!
The first part of the solution to oil prices WORLDWIDE is to tell the anti-capitalists to shut up and sit down!! But, you scream, "I AM WORRIED ABOUT THE ENVIRONMENT!!" We all are...so ask yourself this question ... Does it make more sense to have our oil taken out of the ground by third world nations, like the Sudan and Venezuela, (that have no technology or concern for the environment) or by the United States, the technology leader of the world? Those who protest U.S. oil production on the basis of the environment are either misguided or are outright fiscal terrorists!!
The second part of the solution is to build more facilities and to upgrade the ones we have! The environmental terrorists have blocked every effort to build new refineries or upgrade existing facilities. They have infiltrated the EPA and intimidated the Congress to require really nutty and impossible rules for upgrading existing facilities. For example, the EPA has implemented clean air regulations that are so stringent that it is prohibitively costly to build new facilities. The retrofit rules require entire existing facilities to meet the standards for new facilities if ANY upgrade work is done on the old facility!! In other words ..... If a gasoline production facility is using dirty 1950s technology to make gasoline and the owners want to upgrade part of the refinery they must bring the ENTIRE facility up to current standards. Sure it can be done, if you, the consumer, wants to pay $35 for a gallon of gasoline. Instead you get all whiny ass and weepy over $3.00. Can't have it both ways people!! While everyone wants a clean environment we also need reasonable oversight.
The Arctic National Wildlife Refuge (ANWR) is almost 20 million acres!! It is larger than 10 states! Most of ANWR is a beautiful, pristine, arctic environment, rich in wildlife and plant life. The Coastal Plains are 1.5 million acres of ANWR, on the North Slope. Essentially, nothing lives there! If you watch TV you would think that the oil companies want to plunder 20 million acres of Alaska! The oil production portion of the coastal plains amount to a just few thousand acres of that!! We are talking about approximately 2,000 acres. The proposed development part of ANWR is less than ONE PERCENT of the refuge. Consider this..If ANWR were the size of a 10’ X 12’ rug, the oil producing part would be the size of a postage stamp!! Here is your link to the ANWR ...
Government over regulation of the industry is the problem. Another example of government gone wild is gasoline blends. Each April the price of gasoline spikes. It happens because refineries are required shut down normal production and begin production based on more crazy government rules about blends. There is a blend for St. Louis, another for Kansas City, Des Moines, Houston, Dallas, LA, DC, Chicago, Atlanta, etc. The oil companies have to guess how much gasoline of each blend to make. They are actually getting pretty good at it. There is a spike in prices twice each year when the oil refineries change blends. The problem is that it takes time to gear up for the blends and if they guess wrong and make too much gasoline for one area and not enough for another, they can't ship the overage to the area that is short!! In other words, they can't sell Houston blend in Kansas City. They can't ship Seattle gas to LA or Atlanta gas to Washington, DC. The unused gas just goes to waste. That costs every consumer at the pump! More silly rules...more bad regulation. The "HATE AMERICA" crowd loves it....
I also wanted to weigh in on the “Obscene Profits” lie being spread in the media. A little internet sleuthing produces some interesting FACTS! First, EXXON/MOBILE made a lot of sales last year, at a 10% profit margin. The oil industry averages 10 – 13 percent. In other words, EXXON made 10 cents for every dollar!! That is damn low. The banking (money) business operates at about 20 percent, Microsoft made 25.7 percent and the drug manufacturers made about 45 percent! Maybe we should all quit using our computers and boycott Viagra! Very few industries operate on lower margins than the oil industry. Put another way, if the oil companies dropped their profit to ZERO on a $3.00 gallon of gas the price would only be about 30 cents lower. If the GOVERNMENT dropped their profit to ZERO on a gallon of gas the price would drop 90+ cents per gallon. People are screaming at the wrong enemy! The oil companies are market driven but the government is not held accountable (for anything!!)
If you, the angry American, really want to do something about high gas prices you should elect men and women who will put in place reasonable regulations. Write your congressman and make them listen!! They like their cushy jobs!! They react to votes and the threat of being ousted. Find out how your congressman votes. If it is not in YOUR best interest, tell 'em so and then turn them out to pasture. Your deliberate vote will do more to stem the tide of high gasoline prices than all the boycotts you can participate in because it ain't the oil companies that are the problem. It is government. The oil companies are market controlled!! Activist judges need to be impeached. Environmental terrorists should sent to prison for a very long time for their criminal activities. VOTE!! That is the third part of the solution! Remember, in America we still get the government we want.
NOTE: The price of gasoline has fluctuated down so some of my readers will poo poo this post as irrelevant. The price of gas will go back up, which will make this rant relevant again.
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