Fuming About Gas Prices

Kevin L. Mayer, co-news editor

Throughout your lifetime, there will be influences on you that can be controlled, and other influences that are beyond your control.

Once you move out on your own, you will decide and set your own living standards, but will have no control over inflation. The rising cost of living has forced people to begin to cut back and become cautious about how they spend money. You can notice the public’s hesitation on spending in the drop of travel and movie ticket sales.

Recent events have created a catastrophe of unforeseen circumstances that may require more monetary cutbacks. Since the gas crisis of the 1970s and 1980s, Americans have become increasingly aware and appalled by the concept of extreme gasoline prices, and it is about to get worse.

If you have not heard, the worst natural disaster to ever hit the United States landed in the Gulf Coast region at the end of August. The disaster was named Katrina, a category 5 hurricane that left countless people homeless and unknown dead or missing. It will result in more than $200 billion to clean up New Orleans alone. Besides the heartbreaking stories from citizens in New Orleans, as well as those in Louisiana, Mississippi and Alabama, the United States still faces an unforeseen dilemma regarding oil and gas prices.

Before you can buy diesel fuel or gasoline, the crude oil must first go through a refinery. The refinery takes this oil and “refines” it to make many products. One barrel (50-55 gallons) of crude oil produces 19-20 gallons of gasoline.

Here is the dilemma: 25 percent of the oil producing and refining capabilities of the United States were located in the Gulf Coast region. I said were because many of those assets in the Gulf Coast have been transplanted by the hurricane. While watching a cable news channel recently, I witnessed an oil platform crushed like a can and stuck beneath a bridge. This region was able to produce close to two million barrels of crude oil per day, but production has been slowed since the storm. This natural disaster by no means will help lower gas prices. Actually, it will more than likely create recession-triggering prices at the pump.

While we may complain about the price of gas, we forget that our rates are among the lowest in the world. The United States pays the same price per barrel as every other nation. Our government just does not tax gasoline as high as other countries. Though our price for gas is among the lowest, all major oil producing countries pay less than $1 dollar per gallon.

There has been a short drop recently in prices due to the release of the Strategic Petroleum Reserve by our government. The Strategic Petroleum Reserve is designed to support our country in the case of a complete oil shortage or cut-off. The current amount of reserve before the recent release was 645 million barrels of crude oil. On average the U.S. used 20 million barrels of oil a day in 2004, 45 percent of which was used as gasoline.

By releasing some of the reserves, prices at the pump will remain steady until the amount released runs out. It is the lack of domestic oil drilling and refinery capabilities that will contribute to the increase in gas prices.

The United States has not built a new oil refinery for almost 40 years. I believe it is time to begin building them again. The Energy Bill passed by Congress in July is a step in the right direction. That Bill includes increasing ethanol use and other renewable fuels. It also calls for new conservation measures and removes unnecessary regulations that can tie the industry’s hands. With all the current environmental and residential standards, we should be able to build a pollution-free, state-of-the-art refinery.

Congress must pass the Refinery Revitalization Act. Since we have so few refineries to produce gasoline, close to 20 percent of what you pay at the pump goes toward refining, while 20-25 percent of the price of gas goes toward federal and state taxes. The real kicker is that close to 50 percent, and sometimes more, of what you pay at the pump is a result of the price of crude oil.

Americans have a tendency to want the best of both worlds. We want the government to help us with everything, but we almost refuse to share in the effort. We have no one to blame for the gas prices but ourselves. Though we may look at the price and complain, we have become complacent. Just like the smoker who knows smoking is bad for him or her, but still continues to smoke, we are frustrated and concerned about gasoline, but little to no action is ever taken by the public.

Every year, a plan is developed to force the oil companies to choke on the oil by consumers agreeing NOT to buy gasoline on a certain day. This year, many groups have decided to make it different. Since it is difficult to ask people not to fill up with gas on a single day, this year’s boycott campaign is issued for every Sunday.

So from now until Christmas, do not get gas on Sundays. Theoretically, if this is accomplished, and people follow through, the price of gasoline should diminish slightly. Unfortunately this is not an immediate or long term fix to gas prices, but this could eliminate stress on the industry, and allow for some relief.

Besides, it is time for Americans to be a little more productive. Instead of just complaining about something, identify the problem, create a solution, and follow through. Whether you join in the boycott or not, everyone needs to realize and understand the gasoline situation in this country.

You have the choice of what type of vehicle you drive. It is up to you if you purchase gasoline or not. It is up to you if you voice your opinion to local politicians or media outlets. Your voice deserves to be counted and heard.