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Ouch! America’s Chronic Gas Pains

Updated: Mar 25

By John Rolfe / Red Hook, N.Y.


High prices come and go and this gas shall pass as well
High prices come and go and this gas shall pass as well

When gas prices hit record highs in the U.S. last week, Americans were well into their customary moaning and groaning about “pain at the pump.” Never mind that in the best of times, Europeans generally pay much higher prices than we do, or that World War III is brewing in Ukraine. We are too busy indignantly seeking a scapegoat.


As usual, it is the President.


Donald Trump and the GOP should thank their lucky stars that they aren’t in power right now or the unfair blame would be on their heads. Most Americans are woefully ignorant about how the price of oil and gas is determined, so political parties continually make hay off of hideous geopolitical-economic situations like the one we’re in now.


In the interests of enlightenment, here’s a little primer on oil prices from the U.S. Energy Information Administration (EIA)



I encourage you to read it. It lays bare the utter nonsense politicians and media talking heads always spew when your fuel tab rises.


Basically, anything that affects the supply of crude oil and refined petroleum products — war, weather, demand, labor and shipping costs, deliberate production targets (higher or lower in order to regulate prices) set by producers such as the OPEC countries (which control 71% of the world’s crude reserves) — will affect what gasoline, heating oil and other commodities cost you.


News Flash: Crude oil is a commodity bought and sold by various entities (companies, traders, etc.) with an eye to future profit, not to supply you with cheap gasoline and heating fuel.


According to the EIA, “Crude oil and petroleum product prices are the result of thousands of transactions taking place simultaneously around the world at all levels of the supply chain, from the crude oil producer to the individual consumer. Oil markets are essentially a global auction — the highest bidder will win the available supply.”


Throw in global supply chain disruptions caused by the pandemic and the labor shortage it has created, and you have a recipe for the pain we are feeling now, even without a war in Eastern Europe.


But decade after decade, millions of Americans set themselves up for a pummeling at the pump by flocking to gas-guzzling vehicles when fuel prices are low. (Remember the Humvee craze?) Trump sure looks like a stable genius now after calling on auto makers to lower fuel efficiency standards in 2020, doesn’t he? It doesn’t seem to occur to some people that with better gas mileage, you can actually go farther on a tank of gas, so you are actually paying less.


We also pay little or no heed to how much we actually drive. We’ll make several trips to the store for eggs or milk or chips instead of one weekly trek for everything we need, and we hate doing sensible things like carpooling. No, we’d rather take to the road on our own whenever the whim strikes. It’s our birthright as Americans, right?


The author (above) is glad that he drives an economy car
The author (above) is glad that he drives an economy car

Look, I’m just a crusty old scold who drives a sporty red 2012 Ford Fiesta midlife crisis car with 130,000 miles on the odometer. It has a stick shift and gets 39 miles per gallon. Granted it’s barely the size of a Matchbox car, but I mainly use it to drive my carcass to and from work. It’s perfect for its purpose and I don’t feel I need a second mortgage every time I go to fill it up, even now.


Neither does my wife, who drives a light green 2017 Subaru Forester (30 mpg). Anything bigger for either of us would be a waste of space. And when I look at an SUV, what I see is mostly wasted space taken up by a big thirsty engine. Same with pickup trucks, which are apparently mainly used to fly huge Trump and F**k Biden flags.


Biden is naturally taking a public opinion beating for finally nixing the Keystone XL Pipeline (a move that merely eliminated a supply artery for Canadian tar sands crude oil en route to Texas refineries and the global market) and curbing environmentally unfriendly fracking and offshore drilling. (Hey, who needs clean water at a time like this?)


It’s amazing how many people refuse to recognize or acknowledge that the pandemic (not Biden or Trump) lowered demand for gas because people stayed home more. Low demand (not Biden or Trump) made the supply go up, which made prices come down. When demand went back up because people started to travel more, the supply was still low (OPEC is intentionally trying to keep it low) and that (not Biden) made prices go up.


That’s what you call your law of supply and demand.


As the EIA notes, “It takes time to develop new supply sources or to vary production, and when prices rise, switching to other fuels or increasing equipment fuel efficiency in the near term is challenging for consumers to do. These conditions may require a large price change to rebalance physical supply and demand.”


Most people can’t or refuse to wrap their minds around that concept. “Well, American oil companies should pump more oil and make more gas and sell it cheaper here!” is the kneejerk demand.


We can drill, baby, drill but the oil won't necessarily be sold in the USA
We can drill, baby, drill but the oil won't necessarily be sold in the U.S.A.

News Flash: American oil companies are capitalist enterprises that sell their products on the global market. As economist and conservative/libertarian icon Milton Friedman asserts, corporations have no moral obligation to help their countries. Their main goal and obligation is to maximize profits for their shareholders. That’s why big oil companies are charging $5+ a gallon now for products they produced from crude that was bought much more cheaply weeks ago.


Surely Republicans aren’t suggesting that our government order these companies to sell us cheap gas or that the oil industry be nationalized. Egads, that would be socialism, wouldn’t it?


Surely those who feel that being required to wear a mask during a pandemic is the height of tyranny will staunchly object to corporations being required to sell their products here for much less than they can get elsewhere, right?


Of course, the sooner mankind weens itself off costly petro poison, the better off we and the planet will be. Then again, the green that matters most to humans is money. So fork over more dough and be glad that you’re doing your patriotic duty by making your piggy bank squeal for the greater glory of the fossil-fuel industry and the free market.


 







John Rolfe is a former senior editor for Sports Illustrated for Kids, a longtime columnist for the Poughkeepsie Journal/USA Today Network, and author of The Goose in the Bathroom: Stirring Tales of Family Life. His school bus drivin’ blog “Hellions, Mayhem and Brake Failure” is parked on his website Celestialchuckle.com (https://celestialchuckle.com) with the meter running.




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