We did it before, why not now?

Hello again everyone. My mind has once again begun to roll. I have been thinking back to the past, and remember something that my local Illinois government had done. Several years ago (approximately 7-8 years ago)the state of Illinois had decided that as gas was creeping over $1.50 per gallon that this would severely hurt the economy. To remedy this Illinois suspended the state taxes on fuel until the price became manageable again. This tax freeze stayed in place for approximately one year. Amazingly enough, our roads were still worked on, we did not run out of funding, and life rolled on with little to no repercussions. The fact that at $1.50 action was taken is great, but what happened?!? With prices now all over the state being well over $3.50 per gallon, where is the urgency we had seen before? We have proven that temporaraly removing taxes could give some releif, without major consequence, and yet with the prices now beeing well over double what it was when we suspended the taxes. Do they actually think that we can now handle paying more than double than what we had been then and not bother to look into a temporary tax break? I know that taxes are needed to cover expenses, however there are alternate ways to collect this revenue. Please let me know if your state is doing anything to help, or if it had done anything in the past, and the results. I like to think that this site is more than just a "venting of frustrations" I would like to get some feed back and ideas that we could all use to try and help our selves in this oil driven time of crisis. Feel free to leave your comments.

Fuel manufactures are still making record profits....

How is it that if oil is so scarce, and the demand is so high that the prices are skyrocketing, but yet the oil companies are making record profit? It seems pretty clear to me that we are being gouged. I remember a few years ago it was announced that the government was launching an investigation into the record profits made by oil companies. What a surprise, years later the investigation vanished without any results and the oil companies are still bringing in profits at a record pace. I believe that it is fairly easy to imagine what happened during that investigation. The fact is the government was not about to stop the flow of money to themselves, with the investigation not only did they see the record profits made, but they also realized the income they were making of of the taxes on the oil companies profit. I guess by now it shouldn't come as any surprise, after all the man currently running our country comes from a family that has been in the business of oil for generations, so how can we expect him to work these companies to a smaller profit to help the economy, when his entire life has been based on making as much as possible with oil. Below is an article from www.UPI.com that touches a little more on the subject of the oil companies and their record money making.
By ROSALIE WESTENSKOW
UPI Correspondent
THE DALLES, Ore., April 3 (UPI) -- As gas prices reach record highs, some policymakers say big oil companies are to blame, but the companies say it's not their fault.

With total profits of $123 billion in 2007 alone, the country's top five oil companies raked in more money last year than ever before. Some members of Congress, including Rep. Edward Markey, D-Mass., think these profit margins have gone too far, considering the dampening effect skyrocketing fuel prices have on the economy.

"American consumers shouldn't have to break the bank to fill the tank," Markey said Tuesday at a hearing in the House Select Committee on Energy Independence and Global Warming. "The American people deserve answers, and it is time for Big Oil to go on record about these record prices."

Lawmakers grilled executives from the biggest U.S. oil companies at Tuesday's hearing. The witnesses asserted their profits don't vary significantly from those in other industries.

"Because of the massive scale of our industry, our profitability in absolute terms is large, particularly in the current up cycle," said J. Stephen Simon, senior vice president for Exxon Mobil Corp. "But in 2007, the oil and gas industry earned, on average, about 8.3 cents per dollar of sales -- near the Dow Jones Industrial Average for major industries of 7.8 cents per dollar of sales."

Other witnesses at the hearing asserted their oil companies play a small role in determining costs, and the blame for high fuel prices lies elsewhere. Currently, foreign countries -- and their state-owned oil companies -- control 94 percent of the world's oil resources, said Peter Robertson, Chevron's vice chairman.

"Chevron ranks 21st in terms of its access to oil and gas resources," he testified at the hearing. "The fact is, (the United States) is part of the world."

A number of factors affect gasoline prices, witnesses said, including increasing worldwide energy demand, geopolitical turmoil and a weaker U.S. dollar. If anything, oil companies are working to decrease costs, Robertson said.

"We're doing our damndest to fix (high prices). … We're spending as much as we can to produce affordable energy for people in this country."

All of the companies represented at the hearing have invested in renewable energy technologies, including Shell Oil Co., which has invested in 11 wind projects in the United States and Europe and sells 400 million gallons of ethanol each year, said John Hofmeister, Shell's president.

"Shell is a leader in the development of advanced biofuels technologies," he said. "Like most energy companies, we are engaged in the race to develop these technologies and fuels and make them commercially viable."

But these investments, and those of other oil companies, fail to impress some U.S. lawmakers. Rep. Jay Inslee, D-Wash., called current investments "pathetically small" and urged oil companies to put substantial dollars toward green technology development.

"You're spending less than half a percent of your gross revenues on green energy," he said to oil company representatives at the hearing. "Are these (renewable technologies) going to come from the oil fairy?"

Select Committee Democrats are requesting domestic oil companies dedicate 10 percent of their profits to developing renewable energy -- approximately the same percent the poorest 20 percent of U.S. families spend out of their total paycheck on gas, said Eben Burnham-Snyder, majority spokesman for the committee.

The House has also taken measures to decrease the assistance oil companies receive from the government by passing the Renewable Energy and Energy Conservation Tax Act in late February. The bill, if it becomes law, would repeal the $18 billion in government incentives the oil and gas industry currently receives and transfer that money to renewable technologies.

But doing so would unfairly penalize the industry, said Jeff Eshelman, vice president of public affairs for the Independent Petroleum Association of America, a national trade association for the industry.

"It's a deduction that's given to all American manufacturers," Eshelman told United Press International. "What they're doing is singling out the oil and gas industry and saying everyone else in America gets this but you."

And this will lead to hiked prices, said Tony Cudmore, spokesperson for Exxon Mobil.

"What it amounts to is posing additional taxes on the oil industry and that's not going to assist in providing stable and low energy prices for American consumers," Cudmore told UPI.

If Congress really wants to decrease prices, it will change its own policies of restricting access to U.S. oil resources by allowing drilling in more areas, Eshelman said.

"If oil companies are given the ability to go into federal lands and produce crude oil, that would increase supply," Eshelman told UPI. "The more supply we have on the market, the more stable prices will be."

Allowing oil companies access to these resources -- historically off-limits, primarily for environmental reasons -- could significantly decrease U.S. dependence on foreign oil and, as a result, outside influences on price, Eshelman said.

In fact, if the country's resources were more fully developed, domestic natural gas production could increase by 10 percent and an additional 40 billion barrels of oil could be produced in the next five to 10 years, according to a recent study conducted by the National Petroleum Council, an advisory committee to the secretary of energy.

Some policymakers are pushing to open up more areas for drilling for exactly those reasons, including Rep. John Shadegg, R-Ariz.

"We have thousands of acres (of resources) … and we walk away from that supply at a time when worldwide demand is increasing drastically," Shadegg said Tuesday. "The result is … a spike in energy prices for Americans."

But not everyone believes allowing more oil drilling on U.S. land will lead to decreased prices. Daniel Weiss, senior fellow and director of climate strategy at the Center for American Progress, a left-leaning think tank, said, left to their own devices, Big Oil will always charge big prices.

"It's not in the big oil companies' interest to do anything to decrease prices because as prices rise, so do their profits," he told UPI.

Here are a few more suggestions...

Here is a list of the top six things the government can, should, and won’t do to greatly reduce gas prices and six things that are likely to either have no effect or raise them, but are frequently done anyway. (The following post comes from a recent reply to an online forum.)

Top six ways to reduce gas prices:
1. Eliminate direct and indirect sales taxes on gas. (Road money has to come from somewhere of course, but taxes on gas do not provide an efficient means of paying for them.)
2. Eliminate state and federal regulations regarding contaminants and fuel mixtures.
3. Break up the OPEC monopoly by forcefully privatizing oil production in the Middle East.
4. Eliminate anti-trust regulations, especially against oil and processing companies.
5. Sell federal lands, especially in Alaska.
6. Eliminate emissions regulations on cars.

Top six things the government is likely to do that will raise or not affect gas prices:
1. Fuel-efficient cars, and especially federal subsidies for them. The impact on worldwide oil use is too small to matter, but car manufacturers must pass on extra production costs to consumers.
2. The war in Iraq. Obviously, this has raised, not reduced oil prices, as expected.
3. Government price controls on gas. Socialists who think that market prices are set at the whim oil companies while government prices are set according to some form of bureaucratic omniscience are deluding themselves.
4. Boycotts on gas buying = total economic ignorance not worth a response.
5. Public transportation and car-pooling. This may reduce the cost of transportation for individuals, but it will have little impact on global oil prices. Meanwhile, public transportation is subsidized by higher gas taxes.
6. Government-mandated “clean” energy and electric cars. Where do you think the energy for electric batteries comes from? Magic? Like recycling, if it’s not chosen by the market, it’s more likely to waste, not save energy costs.
-Thank you rationalmind.net for the suggestions.


Right off the bat, I would like to clarify, that I do not fully agree with all of these options, but I am glad to see some serious thought into the right direction. My number one purpose in this site is to get ideas out there that could potentially help in the lowering of fuel costs. If you have any ideas, thoughts or comments, feel free to leave a comment. I welcome the thoughts and ideas of others, and will be more than happy to post them for you.

Hello again everyone, and first off let me say THANK YOU! The response to this blog has been amazing, thank you all for visiting and feel free to leave your own feed back and or thoughts and ideas on the subject, after all we are all in this mess together! (and please click a sponsor to continue this site!) Without your support I wouldn't be here today. -but, back to my rant..

Oil prices are still rolling on and on, and we all see that it is going to get a lot worse before it gets any better. I like to think that I am an open minded about things, and I am certainly for advancements in all aspects of life, but how is it that the US can spend 16+ billion dollars per year to look for water on Mars while the economy is heading to the tiolet? Don't get all riled up yet, I am all for both exploration, as well as the advancements me have made in technology due to their efforts, but at what point do you take a step back and look into the present? We are spending literally billions of dollars yearly to find the next big extra terrestrial wonder. I am all for the exploration, but doesn't that sound like a "luxury item" to you? Call me crazy but if you are unemployed, have no income, and only have X amount of money to last, do you: A)buy your moneys worth in lotto tickets B)invest it C)save it and stretch it as far as it goes? -Now, we will all have different beliefs on this one ,but I think it is safe to say that the that no one out there is picking A, unless you are an elected official possibly. How is it that the US is essentially choosing A? Our government is spending billions of dollars to solve the big what ifs. Is there no reason we can't scale back that expense to say... 1-2 billion a year for "essential" projects? That would leave literally over 10 billion dollars to research alternate energies, suspend taxes on gasoline/diesel sales, or anything for this matter. It has now been well established that our economy simply can not afford $3+ per gallon gasoline, and here we are marching ahead looking right at 4 and possibly 5 dollar per gallon fuel costs. Who is to say that we change can't focus our efforts closer to home, instead of water on Mars? We have created a solar panel that has been able to power an electric robot for years on the Martian surface, without a refuel, or "battery change". Why is it we can't run a commuter vehicle on earth in the same way? Just reallocate our spending and research to the now and here, not the then and when. All I am saying is, use the knowledge we have and the money in front of us properly! Let's face it, the oil situation is bad, but we could certainly handle it better.

We can't make enough, yet we make it to store...

Well folks, it looks like logic strikes again! (Yes I am being quite sarcastic.) I am sure that by now nearly every one has heard the tale of how we can not produce enough oil to meet our current demand. I am also sure that everyone has heard of our national oil reserve. The amazing thing is, that these two entities actually co-exist! It is a proven fact that while we are unable to produce enough oil for our current consumption, our government is still producing it for the reserves. Correct me if I am wrong, but aren't reserves set aside for just such an emergency? Aren't we supposed to use reserves in the event of running out, or not having enough? OK, lets take a step back. I will give the government the benefit of the doubt, maybe we aren't in that serious of an oil crunch yet. We may not be in bad enough shape to tap into the reserve, but we certainly can't keep up with the current demand. Wouldn't it make more sense to continue keeping our reserves, but stop adding to them? This way it puts more oil into circulation for the public, and keeps our reserves "on reserve". This is simply one "no brainer" approach to getting more oil into the nations use. Oil effects nearly every aspect of life for the "American lifestyle",and as it's cost rises it causes many other goods and services to go up in price as well. The only thing that is not going up are the wages that the average American is earning. With the cost of living going up and wages staying the same, and in some cases going down, is it any wonder our economy is in the shape it is? I don't know what to tell you, other than having an oil tycoon in the White House, where did we go wrong?

The snowball has begun to roll...

It seems today that no matter where you go, there is always something being said about the high price of fuel. Many of us out there simply cringe while watching the dollars roll higher and higher as we squeeze that handle to refill our vehicles. The immediate problem is obvious, as anyone with a lengthy commute will tell you, if you have a long drive (20 miles plus)for a "middle class income" job or less, you can expect to spend easily half or more of a weeks paycheck simply to get to work for the month. Just in getting started, it is obvious to see the direct impact, but let us step back and look at the bigger picture.Fuel costs effect much more than the apparent, out-of-pocket expense for filling our cars. Our entire country is effected. Just look at groceries for one example. This one example is effected in many many ways. Starting at the farm, the costs of fuel means more expense in raising the food, farmers need diesel for their tractors to plant the crops, then more fuel is used in the tractors to harvest the crops, this is just the first step in the "grocery" process. Farmers then have to get the crops to market. This brings us to having to fuel up semi trucks to get the crops to where they need to be. We have just grown the crop, and delivered it, and have already been beat up three times by the oil prices, and still do not even have a usable "grocery" product yet. In the interest of keeping this short for our readers, we will skip the processing stage, but rest assured we have used more of that wonderful costly oil in the processing of the crop. We now have a finished product, but we still need to get it to the stores so that we, the end user can purchase it. Once again, it must be shipped there, often by semi truck. We now have groceries that are rising dramatically in cost, simply because: it costs the farms more to produce them, it costs more to process it, and costs more to deliver it to your grocer's shelves!Now that we have a higher grocery cost, this effects the retail aspect, and employment aspect. Stores do the best they can to keep prices low to encourage sale of more product, but as their expense increases to get the product, they have to make some changes. These changes do not end with the obvious price increase. We have mentioned that they don't want to increase the prices, so they now have to look into lowering overhead. Common sense will tell us that stores will not stop using things such as heating or air conditioning, or turn lights out when customers are no longer in said aisle to save money. What they will do and have begun doing is, lower the hiring wage for newer employees, and switching to more part time employees instead of full time employees so that they can cut the cost of full time benefits, such as health insurance.You now can see the tip of the iceberg of the problem growing. Our basic expenses are growing, our wages are shrinking, and our dollar is weakening. Congratulations, we have now created a complete vicious cycle. -thank you, Mr."oil man" Bush.