Who Is to Blame for Falling Gasoline Prices?

Last March, when national gasoline prices averaged around $3.80 a gallon, Mitt Romney, who hopes to be the first Mormon president, announced that it was all President Obama’s fault.

He did.

This is what he said as quoted at CBS News:

“The Republican presidential candidate, speaking in an interview with Fox News, said he ‘absolutely’ believes Mr. Obama is responsible for high gas prices, contending that ‘he has not pursued policies that convince the world that America is going to become energy secure, energy independent.’”

Well guess what. The last time that an American president sought to “become energy secure” was on Apri1 18th, 1977 when then-President Jimmy Carter established the Strategic Petroleum Reserve, established the solar power industry and introduced incentives to insulate your home.

Neither Reagan, Bush-41, Bush-43 nor Bill Clinton had a workable energy policy.

John McCain had one: “Drill, baby, drill.” A take-off on the Detroit riots cry of “Burn, baby, burn.”

But hey, now we are all seeing gasoline prices fall precipitously, aren’t we? And on Memorial Day Weekend no less, typically a time when you see gas prices spike.

What does Mitt Romney have to say about this turn of events? Obama is still president and seems to have presided over a 40 cent per gallon drop in just a couple of weeks. 

Well, let me look it up…wait one…wait one…

Ah.

Crickets.

A Chicken in Every Pot…

Former Governor Huey Long got himself elected to high office by making unsupported promises like "A chicken in every pot and a car in every garage. Most people these days wouldn't swallow that kind of rhetoric any more. But according to what we see in the video below, if we send Michele Bachmann to the White House we will pay less than $2 for a gallon of gas once again.

Now first, I am having trouble with her statistic. On January 20^th, 2009, according to Bachmann, I paid $1.79 for a gallon of gas.  Actually, having checked, I paid less than that but then I live in Texas where the sales tax for gasoline is scandalously low, as is the pavement quality of our roads, something that gasoline tax is supposed to pay for maintenance.

The statistic I really wanted to look up was how much I paid for gasoline the summer of 2008, as we were heading into the finishing stretch of George W. Bush’s presidency, and I found that statistic in the same spreadsheet. I just had to scroll down a little more. On July 21, 2008 I paid $3.92 for a gallon of gas. That number dropped to under $2 after Barack Obama became president.

It’s back up now, largely due to the unrest and rioting in the Middle East. And obscene profits enjoyed by oil speculators.

So I guess my next question is precisely how Michele Bachmann proposes to come through on her pledge, one that her audience seemed to swallow hook, line, and sinker.

Will she privatize the oil industry? Oh, wait, they are already privatized. Will she send the Marines to the Middle East and reinstall all the dictatorships that have toppled or are toppling? Or maybe she’ll invade Venezuela and get rid of that Hugo Chavez. Then take over their oil production.

It has to be something like that. God knows she won’t want to put the oil speculators in prison. Bachmann calls these people "donors."

Where Milk and Honey Flows . . .

In California, they have Hollywood.

They have Disneyland and Universal Studios (the part that didn’t burn).

They have the Sierra Nevada and Big Sur (the part that isn’t burning).

They have the Golden Gate, and the bridge that spans it.

They have all of that, and much, much more.

Including the highest gasoline prices that I have ever witnessed.

Don’t be alarmed, I didn’t pay this price. I had to buy it for a dime more a gallon later on that day because they had the cheapest price between Wasco and Shafter.

Don’t get me started on those names.

The Shape of Things to Come

I was struck this morning at a news item in the Houston Chronicle, that Toyota Motors was temporarily closing its Tundra plant in San Antonio to be retooled and then it will be reopened in a move that “will consolidate all truck production in San Antonio.”

Another plant in Indiana that makes Toyota’s Sequoia truck will be retooled to produce the more fuel-efficient Highlander SUV.

But most strikingly, the same piece announced that Toyota’s hybrid car, the Prius, was to be built in a new plant being built in Mississippi. Currently, the Prius is produced only in Asia.

Times are changing and the Japanese, again, are right on top of it. But Texans, they think, will never give up the love affair that they have with trucks, and maybe that’s true. But I am thinking that at some point their adoration for all things fuel-sucking will give way to a new paradigm.

And the things we see on and along our highways now will be a thing of distant memory. Things like full serve service stations. Things like Winnebago cities in KOA Campgrounds.

The sights and scenes like this photo of rush hour traffic in Houston,

will be replaced with scenes like this, a typical day on a Singapore expressway. Is this photo actually a glimpse into our future?

It’s going to take some time, but we all just better get used to the idea of downsizing and fuel economy now. My guess is the high prices of gasoline in Singapore, currently around 6.35 USD/gallon, is hurting them, but think what that price would do to your family budget getting that big old Tahoe filled? So they are in considerably better shape to handle these prices than we are.

The Greening of T. Boone Pickens

Known for his famous acquisition attempts of the 80’s, former corporate raider and greenmailer T. Boone Pickens is now the picture of an environmental warrior. A billionaire three times over, Pickens is now leading the charge for clean renewable energy.

His $10 billion project in the Texas panhandle, in and around Pampa, Texas, is purported to be the largest wind energy project ever proposed.

On CNN, Pickens had this to say about wind power last May:

“Wind power is ... clean, it's renewable. It's everything you want. And it's a stable supply of energy. It's unbelievable that we have not done more with wind.”

As much as I like this idea, there’s something about Pickens that enrages me. Recall that this is the guy who forced massive amounts of expense and loss of jobs as he moved to take over several major oil companies in the ‘80’s. So I am not going to give him a pass on everything he says. Wind power, while an exceedingly good idea, and definitely the way to go, is definitely not a "stable supply of energy".

Sometimes the wind dies down.

Not in the “wind corridor” that stretches through the middle of the continent, you say? Yes, even in the wind corridor. Recall this story from midwinter when cold calm air settled on a majority of Texas, stilling the wind turbine blades everywhere. This tripped the alarms at the Texas grid, and power was cut to several industrial sites to avoid rolling blackouts across the state.

Don’t get me wrong, I like wind power and the benefits it brings vis-à-vis deterrence of global warming, I just have a problem when something like this gets over sold, something that T. Boone Pickens is very good at. Wind power, yes, but it is definitely not a 100% solution.

Which is why Pickens is also for taking America off of its dependence on petroleum in its transportation infrastructure.

He goes further. By sending wind-generated power into the grid, power stations that use natural gas to generate the steam that drives their power-generating turbines could switch off the flow in their natural gas supply lines. Natural gas, then could supplant petroleum as the nation’s number one transportation fuel.

“Fueling these plants with wind power would then free up the natural gas historically used to power them, and would mean that natural gas could replace foreign oil as fuel for motor vehicles.”

Well now that’s pretty shrewd. Oil prices have skyrocketed due to speculation and war in the Middle East. Not so natural gas, which remains at a fairly steady price. Yes, natural gas prices have gone up in the past year, but not by nearly the amount that oil and refined products have.

I would hate to own an oil company right now that didn’t have a lot of oil reserves, but tons and tons of gas reserves. To stabilize costs, power companies contract for natural gas supply with long term set prices. So owning lots of natural gas reserves gets you a nice steady supply of income, but locks you out of the fun stuff like they have in oil speculation.

Mesa Petroleum, T. Boone Pickens’ company, has by far more gas reserves than it has petroleum acreage. Mesa Petroleum is one of the nations largest natural gas producers, it seems.

So it’s a win-win for T. Boone, and America goes green by sending more of its long green to Pickens.

Now that’s entrepreneurship.

Energy Remedies: The Parties Show Their Strategies

What a surprise. John McCain’s latest remedy to ease the pain at the pump for American consumers, just proposed, is to have a “federal gas tax holiday” for the summer. The feds take 18.5 cents from the purchase price of every gallon of gasoline that you buy. So it seems clear to McCain that the best way to provide a boost to our sagging economy is to let Americans save somewhere between $2.22 and $4.62 every time they buy a tank of gasoline (tank volumes between 12 and 25 gallons).

Wow. That’ll do it, don’t you think? For me, this works out to a net savings of $13.32 cents this summer. No, I don’t plan on driving anywhere out of the ordinary, and yes my transportation costs are lower than most here in Texas because I am one of the few in this state that doesn’t drive an SUV (Sucks Up Volatiles).

It is amazing what passes for economic stimulation among Republicans. Cutting taxes at such a rate so as to be virtually ineffective, while at the same time letting energy companies collect scandalous, no, pornographic revenues for their raw and refined products.

McCain’s plan is a perfect example of Republican fixes. Doling out dribs and drabs of cash to people. Amounts that cannot make a significant difference in their lives or economies, while on the other hand, severely degrading our country’s ability to build and maintain its transportation infrastructure. What does McCain think the gas taxes pay for? Does another bridge have to fall into a river before he gets it?

A barrel of oil today hit a high of over $115 per barrel. This is the same oil that cost an energy company $12 to lift out of the ground. Profits are more than obscene.

Enter the Democratic plan. Remove all of the tax supports that have been given by Congress to the energy companies. Federal supports for oil and gas exploration, production or research is like paying bankers extra cash to compensate them when they have to find new places to store their money.

Indeed, their profits have become so obscene that both Obama and Clinton have called for a windfall profit tax on petroleum. That is, when profits start to tip the scale towards obscene, the oil companies don’t get to keep that.

What you will hear from the energy companies then is that this will remove any incentive to explore for, drill and develop new reserves. Stock will go down. Reserves will hit the skids.

Right.

At even 60 dollars a barrel these companies are making so much money that they literally have the same problem finding a place to put it all. A problem that commonly plagues cocaine dealers.

Yeah, the other substance that Americans have been addicted to.