Lars Larson on 12 dollar gas

Twelve dollar a gallon gasoline? That’s what somebody’s predicting.

Yesterday, on Capitol Hill, all the senators managed to have a dog and pony show. Dick Durbin up there demanding to know from the oil company executives, “How dare you charge us so much money for gasoline!”

The executives shot it right back to him. “You’re the folks who have been restricting our ability to drill for oil. You shouldn’t be breaking up the oil companies because, at a point like this, America has to compete with other countries for the oil supply.

They actually gave it back to him, saying you’ve got to make sure America can go after its own oil on its own soil and not complain so much about how much OPEC is producing. I was glad to see the executives up there. In some ways, I wish they would have given it back to Congress just a little bit harder than they did.

Fact is $12 a gallon gasoline may arrive and it’s the fault of those who have restricted America’s ability to dig and drill for oil and refine it on our own soil.
“For more Lars click here”

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  • Joanne Rigutto

    There’s also the problem with transporting it from one part of the US to another for refining. I forget what act it is that prevents tankers from transporting like that unless they were built and are registered in the USA?

    Then there is the word demand which will continue to increase as the developing nations continue to industrialize, people become more affluent and movbile. And that mobility isn’t the only thing that will drive demand for oil. The increasing industrialization of agriculture and the increases in international trade are increasing the demand for oil. Even if we did drill in the US and do more refining, what’s to stop a domestic oil company from selling to a foreign buyer for a higher price than we would like to pay domestically? Unless we want to put some kind of restrictions on who they can sell to the oil companies will still sell to the highest bidder.

    The oil issues and everything related to them are something that we’re going to have to deal with, pardon me for stating the obvious, and I don’t know how we’re going to do it without taking a huge hit on the economy. I shudder to think what $12/gallon gas will do to every person in this country, especially if it happened in a short periot of time. I heard one commentator yesterday say that $9 or $10/gallon might be likely at the end of this summer. If that happens we’re up a creek.

    • Anonymous

      There actually used to be refineries in the western portion of the US. Thank you environmentalists

  • Bob Clark

    The American electorate can’t seem to shake the robber barron image of large U.S oil companies (“Big Oil”). Today, “Big Oil” controls only some 20 percent of world oil reserves, effectively muting its ability to control prices. Heck, the U.S oil companies worked to raise oil production in the likes of Russia and Venezuela only to get kicked out of these countries once they got the production onstream. Yet much of the electorate continues to believe big U.S oil companies are behind most of the recent spike in oil prices. Instead, the old political trick played by the likes of Senator Wyden continues to play well. Every time the price of gasoline spikes, it’s round up the usual suspects for a verbal bashing by Wyden and his brethren. Then, it’s look at me I, Senator so and so, attacked big oil and high gasoline prices by verbally raking the rascals over the proverbial coals. Bravo! Bravo! says the sleepy electorate.

    Very sad the electorate is so blind.

    • Joanne Rigutto

      That’s exactly the problem, there are so many factors involved in determining the price of oil and from there the price of gasoline, diesel, and everything else made with oil that bashing the big oil companies not only accomplishes nothing to solve the problem, but it distracts people from the big picture.

      It’s useless self agrandizement from the polititians and others and does nothing to solve the underlying problem, which I don’t think has a real solution anyway….or at least a solution that can be implemented.

      • dean

        Unfortunately we missed the opportunity in the 80s-90s to create a gradually increasing tax on oil to discourage its waste and create funds for investing in research and development of alternatives. We got lulled into thinking we could have cheap oil forever, bought over-sized rigs, over-sized homes on over-sized yards, and allowed a lot of sprawl (not so much in Oregon, but everwhere else).

        Now we have been shaken awake. First response is panic…then maybe anger. Hopefully after that we stop pointing fingers, put ideology aside, and get busy doing what Americans do best: think, invent, adjust, and solve.

  • Fred

    Wow – if gas goes to $10 a gallon this summer we may need the fuel saving tips in that other article on the Catalyst.

  • Anonymous

    I’m shocked!

    dean is recommending increasing taxes as a remedy.

    Followed by suggesting we put ideology aside?

    Wait a minute dean. If we’re going to put idelology aside shouldn’t you put aside raising taxes as a fix for everything?

    • dean

      I didn’t put it forward as a “fix for everything.” Read what I wrote before you spout off.

  • Rupert in Springfield

    Well, the point is high prices will encourage that research into alternative fuels, new drilling etc. The fact that we avoided the traditional liberal method of sinking money down a rat hole through taxes and subsequent government “investment” is a bonus.

    The fact is, government doesn’t “invest”, it spends. On transportation issues, government is hardly a frugal or wise “investor”. As an example, given government performance on “investment” in social security, one would choose another broker there was a choice.

    I think if I was one of those oil company executives getting grilled by congress, I would simply say one thing:

    “$200 million dollars a mile for a choo choo in Portland, now congressman, would you care to explain to me again how we at Shell are screwing people?”

  • Anonymous

    no dean you were only addressing the topic.

    But if we were talking Damascus your ideology would advise raising taxes.

    But if we were talking roads or land use planning and development your ideology would advise raising taxes.

    Schools, parks, libraries, social programs, health care, rail transit,
    etc etc etc, your ideology would advise raising taxes.

    All the while delivering fresh doses of propaganda to justify them and deceive the public on the outcomes.

    Your latest attempt at concern over property value and Damascus voters is the ultimate in hypocrisy. Only when voters get in the way of the central planning does your ilk concoct valuation concerns. Decades of central planning stealing rights and value from countless Oregonians never causes you to figure the far greater billions lost.
    In fact you use other propaganda to cloud and dismiss the losses when others calculate them.

    Your methods were crystal clear with your M37 and M49 bovine excrement.

    The steady flow of that coming from you makes you an enemy of the state. Regardless of your pretenses and convoluted explainations.

    • dean

      I wonder what it feels like to hide behind a bush and throw insults at people. Why don’t you share that feeling with us my anonymous coward.

      Proponents of ballot measures who claim to be looking out for other people’s property values have a minimal responsibility to add and subtract accurately. That those in Damascus failed to do this seems eggregious to me. That they continue to ignore the logical results of their efforts, that their ballot measures will end up costing Damascus property owners far more money than will be saved, still seems of no concern to them (or you). I find this ironic. Over time, Damascus property owners are going to realize what happened, and I would not want to be in the shoes of those who misled them. I just learned of another property appraisal the other day. $100K per acre for a flat 40 acre farm. The owners were apparently shocked. They thought land inside the urban growth boundary would be worth at least double that. Well…it would be if we had an approved plan and the means (fees and charges) to implement it. But no. And not on the near horizon either.

      If you are among the group that has “saved us money,” I can understand why you would continue to fail to identify yourself and choose to throw stones rather than face the reality you helped bring on.

      “Enemy of the state?” How quaint. If I am proposing raising taxes on everything and anything to support “the state,” doesn’t that seem to make me its ally?

      Or are you now defining your cowardly self as “the state?”

  • John in Oregon

    A good step when considering policy going forward is to look to past results. We have seen something like this before.

    Starting with 1975 we had the OPEC oil embargo. Here is the list of Government responses starting with Nixon implemented rationing and then Carter’s follow on “solutions”.

    1] Rationing
    2] Synthetic Fuels Corp
    3] Energy Department
    4] Price controls on domestic oil
    5] Oil import quotas
    6] Windfall Profits Tax

    Just for the record, in just 2 years items 2 through 6 above resulted in the price of oil rocketing from $14 to nearly $40 while domestic and import oil supplies fell sharply. So is the new Washington DC “solution” like the past?

    0] *1975* ——————————– *Today*
    1] Rationing ————————— Cap and Trade
    2] Synthetic Fuels Corp ————— Alternate Green Energy
    3] Energy Department —————- More Clean Regulations
    4] Price controls on domestic oil —– Nationalize the Oil Companies
    5] Oil import quotas —————— Domestic Production Quotas
    6] Windfall Profits Tax —————-Windfall Profits Tax
    7] —————————————Mandated solutions (Ethanol)
    8] —————————————Prohibited solutions (Nuclear, Oil Shale)

    What got us out of the problem? In 1981 when that old actor took office he abolished price controls and rationing. 6 years later the price of oil hit $10.

    In the face of scarcity prices rise and free markets respond by finding alternatives. The rise in price, the profit, is an incentive to find a better way.

    So does taxing fuel prices high work. The EU has been taxing fuel high for nearly 15 years. If this worked we would see viable alternatives. And what do we see from the EU? Nada no new solutions. We do see the out location of major EU industrial capacity. All the tax did was eliminate the incentive and divert the profit to the Government coffers to be spent. No profit, no incentive to find a better way

    Note 7 and 8 above. Those are new. Congress stepping in to choose the technological winners and losers. As tho only those 535 people have the knowledge and wisdom to choose what is right and proper.

  • Anonymous

    Oh, dean

    In your comments, you have described yourself as a “landscape architect”. While I’m fully aware of the fluidity of your positions thanks to OC, I’m struck by the fact that, while you decry and insult anonymous contributors here, you don’t seem to be registered with the state as either a “Landscape Contracting Business or a Landscape Construction Professional”.

    I’m sure that this is simply an oversight or clerical error; though the Oregon Business Registry similarly has no current listing for any business with your name associated with it – that is, if one ignores the phony non-profit scam you and Tami ran for a few years a decade or so ago

    Maybe remaining anonymous is a good idea; especially if you have something to hide, tool.

    • dean

      John…using a GDP to oil consumption comparison, the European Union has a 2.5 to 1 ratio while the US has 1.6 to 1. That suggests that the European policy of high tax on oil has “worked” at least in the sense that it has made their economies and lifestyles less dependent on oil. As for alternatives, they have the same problem we do. No one has yet come up with a viable substitute for oil, particularly its use in transportation. My bet is the plug-in hybrid electric vehicle will become the main bridge (with respect to personal transport) to whatever future emerges.

      Your reading of history under Reagan is creative. Could the answer be that the high price of oil during the 70s resulted in conservation measures (i.e. CAFE, Japanese small car imports,) AND increased production in the North Sea, Mexico, Nigeria, and Venezuela that resulted in a glut that drove the price of oil back down? Weren’t price controls and rationing started and abandoned during the Nixon years?

      Anonymous coward…I don’t “decry and insult” anyone unless they choose to throw mud at me from behind the rock they occasionally crawl out from under. Be a man, or a woman, or whatever hybrid you are.

      Landscape “architects” don’t register as landscape “contractors” unless we are in the building end of the trade moron. Is this really how you want to spend your search engine time?

      “Phony non-profit scam?” Whatever dude. Invest in a life.

      • John in Oregon

        > *John…using a GDP to oil consumption comparison, the European Union has a 2.5 to 1 ratio while the US has 1.6 to 1. That suggests that the European policy of high tax on oil has “worked” at least in the sense that it has made their economies and lifestyles less dependent on oil.*

        I wont quibble with your figures. Nor would I that European policy caused something to happen. Looking at your figures its very clear that European policy became a de facto rationing system. That’s fine if that was the intent. Within free markets rising prices encourage new production and innovation. The European policy did neither of those. And the EU is out locating industrial capacity.

        > *Could the answer be that the high price of oil during the 70s resulted in conservation measures (i.e. CAFE, Japanese small car imports,) AND increased production in the North Sea, Mexico, Nigeria, and Venezuela that resulted in a glut that drove the price of oil back down? Weren’t price controls and rationing started and abandoned during the Nixon years?*

        Carter didn’t cause the initial problem. The OPEC embargo was 73-74. The Nixon “fixes” stayed in place through 81. Oil was flat around $14 from 74 to 79. It was the production price controls, combined with allocation controls, import restrictions, and windfall profits tax that caused the rise between 79 and 81. With no incentive US production stayed flat.

        US production shot up after 81 when Reagan ended production price controls. In 1982 OPEC cut prices due to lost market share so Mexico (following OPEC pricing), Nigeria, and Venezuela are not a factor here. North Sea coming on line had some impact. In 85 the Saudis linked to the spot market to pursue the oil target price around $35. IE they wanted to keep oil high but not high enough to encourage new production or inovation.

        Remember also there is a delay of around 12 – 15 years for CAFÉ to have any impact. Longer when CAFÉ drives up new vehicle prices.

        > *My bet is the plug-in hybrid electric vehicle will become the main bridge*

        Could be. The limiting factor is battery efficiency (currently only fair), raw materials to build batteries, and the new power generation needed.

      • Anonymous

        “Landscape “architects” don’t register as landscape “contractors” unless we are in the building end of the trade moron.”

        “…the trade moron…”?

        I love it!

        Freudian, methinks!

        Golly! I guess we should have all known you don’t actually DO anything – how could we have missed that obvious point? I’m certain that, if required by law, you’d have “paid your dues” and be current with your registration. Silly of me to assume that you’d need to do that. I should have known that you’re a productive member of society only in the abstract. Isn’t there a business license required in the bustling ‘burb of Damascus? If not, how did you and your wannabe bureaucrats miss that opportunity? Perhaps you can conjure up another “domestic non-profit, public benefit with members” (snort!). We’ll be amused to see if your next tax dodge passes unnoticed. The time it takes to check out your BS is de minimis thanks to Billy B’s website. What’s wrong with a little research on a site for which OUR tax dollars have paid?

        Odd that you’d have such a visceral reaction to being called out, though – in future, try to confine your remarks to the points raised and not use such coarse terms as “moron” – with or without the proper punctuation. We’d like to keep it civil here, dude.

  • veiledorchid

    Saturday, May 24, 2008
    Mark Steyn: Your car can’t run on Congress’ hot air
    MARK STEYN
    MARK STEYN
    Syndicated columnist
    Comments 15 | Recommend 36

    I was watching the Big Oil execs testifying before Congress. That was my first mistake. If memory serves, there was lesbian mud wrestling over on Channel 137, and on the whole that’s less rigged. Rep. Debbie Wasserman Schultz knew the routine: “I can’t say that there is evidence that you are manipulating the price, but I believe that you probably are. So prove to me that you are not.”

    Had I been in the hapless oil man’s expensive shoes, I’d have answered, “Hey, you first. I can’t say that there is evidence that you’re sleeping with barnyard animals, but I believe that you probably are. So prove to me that you are not. Whatever happened to the presumption of innocence and prima facie evidence, lady? Do I have to file a U.N. complaint in Geneva that the House of Representatives is in breach of the Universal Declaration of Human Rights?”

    But that’s why I don’t get asked to testify before Congress. So instead the Big Oil guy oozed as oleaginous as his product before the grand panjandrums of the House Subcommittee on Televised Posturing, and then they went off and passed 324-82 the so-called NOPEC bill. The NOPEC bill is, in effect, a suit against OPEC, which, if I recall correctly, stands for the Oil Price-Exploiting Club. “No War For Oil!,” as the bumper stickers say. But a massive suit for oil – now that’s the American way.

    “It shall be illegal and a violation of this Act,” declared the House of Representatives, “to limit the production or distribution of oil, natural gas, or any other petroleum product … or to otherwise take any action in restraint of trade for oil, natural gas or any petroleum product when such action, combination, or collective action has a direct, substantial, and reasonably foreseeable effect on the market, supply, price or distribution of oil, natural gas or other petroleum product in the United States.”

    Er, OK. But, before we start suing distant sheikhs in exotic lands for violating the NOPEC act, why don’t we start by suing Congress? After all, who “limits the production or distribution of oil” right here in the United States by declaring that there’ll be no drilling in the Gulf of Florida or the Arctic National Mosquito Refuge? As Rep. Wasserman Schultz herself told Neil Cavuto on Fox News, “We can’t drill our way out of this problem.”

    Well, maybe not. But maybe we could drill our way back to $3.25 a gallon. More to the point, if the House of Representatives has now declared it “illegal” for the government of Saudi Arabia to restrict oil production, why is it still legal for the government of the United States to restrict oil production? In fact, the government of the United States restricts pretty much every form of energy production other than the bizarre fetish du jour of federally mandated ethanol production.

    Nuclear energy?

    Whoa, no, remember Three Mile Island? (OK, nobody does, but kids and anyone under late middle age, you can look it up in your grandparents’ school books.)

    Coal?

    Whoa, no, man, there go our carbon credits.

    OK, how about if we all go back to the Atchison, Topeka and the Santa Fe, and start criss-crossing the country on wood-fired trains?

    Are you nuts? Think of the clear-cutting. We can’t have logging in environmentally sensitive areas such as forests.

    Rep. Wasserman Schultz believes in “alternative energy,” which means not nuclear (like the French) but solar and wind power. At the moment, solar energy accounts for approximately 0.1 percent of U.S. electricity production, most of which is for devices that heat swimming pools. So if there was a tenfold increase in swimming pool construction you might be able to get it up to 1 percent, but the only way all those homeowners would be able to afford to build their new swimming pools is through the kinds of economic activity that depend on oil, gas and other forms of federally prohibited energy.

    So, instead, Congress hauls Big Oil execs in for the dinner-theatre version of a Soviet show trial and then passes irrelevant poseur legislation like the NOPEC bill. The NOPEC bill is really the NO PECS bill – a waste of photocopier paper passed by what C.S. Lewis called “men without chests.”

    The New Yorker ran a big piece the other day called “The Fall Of Conservatism.” Indeed. This November isn’t going to be pleasant for those of us of a right-wing bent. Many conservative voices in the media say: This is the way it is, get used to it. Voters want the government to “fix” health care and “fix” gas prices and “fix” the environment and, if all you’re offering is the virtues of small government, you too sound small – and mean and uncaring about the real issues in real people’s real lives. Standing athwart history yelling “Stop!” was a cute line from William F. Buckley, but it’s not a practical position for a political party that wishes to stay in business. “The fact of change is the great fact of human life,” writes my National Review colleague David Frum in “Comeback,” his thoughtful critique of the conservative movement.

    Frum is right. Change is a constant. You’re a big railroad baron,and things are going swell, and then someone invents the horseless carriage and a big metal bird that holds hundreds of people and you never saw it coming – because you thought you were in the train business rather than in the transportation business. That kind of change is the great exhilarating rhythm of American life.

    But government “change,” Obama change, NOPEC change is nothing to do with that. In fact, it obstructs real dynamic change. On energy, on environmentalism, on health care, government “change” generally does nothing more than set in motion the next crisis that the next change-peddling pol has to pledge to address.

    So we complain about $4-a-gallon gas, and our leaders respond with showboating legislation like NOPEC and feel-good environmental regulatory overkill like putting the polar bear on the endangered-species list, while ensuring that we’ll continue to bankroll every radical mosque and madrassah on the planet. In Britain, new “green taxes” do nothing to “save” the planet, but they are estimated to cost the average family about $6,000 a year. That’s change you can believe in.

    ©MARK STEYN

  • Anonymous

    dean dean dean

    There yo go again mascarading as a real estate expert. Your pathetic land valuations are self serving nonsense. There are countless parcels inside the UGB awaiting some distant future planning before the realize the greater vlauations you think come simply wiht the UGB inclusion.
    However there are far more parcels sitting immediately adjacent to and near the UGB that are prohibited from many uses resulting in property value stagnation for decades.

    I have land inside, outside and inside expansions. Your BS is simpleton anectodal nonsense.
    Shut up.

    You really do make me sick. Your phony use of property value concern in this issue flies in the face of all you stand for.
    Your socialist confiscatory planning regime completely ignores land vlaue and property rights yet now you find injustice from your neighbors voting to stop the regime’s approach.

    Your stunt with this

    …….”Enemy of the state?” How quaint. If I am proposing raising taxes on everything and anything to support “the state,” doesn’t that seem to make me its ally? “……….

    Reveals that you view the government as the state.

    By the “State” I was referring to the people of the State of Oregon.

    As for my remaining “Anonymous” it is just like you to mistakenly presume it is cowardess that is my motivation.

    • dean

      Yes…that is exactly what I presume. And others should as well.

      Now you speak for “the people” of Oregon? That is a hoot. You must be a Democrat.

    • cc

      “cowardess”???

      Is that the feminine of *cowardice*?

  • Anonymous

    nice try dean, but that’s just more of your usual fabrication, distortion and strawman nonsense. And here you even create comedy for yourself.
    You own little world.

  • BetsyO

    OK. Are the oil companies enjoying record profits, or are they not? Do they receive large tax breaks and subsidies from taxpayers, or do they not?

    Sheesh. Where’s the fiscal conservative in the room?

  • Delia Lopez

    Anyone given any thought to Liquefied Natural gas? Using it to run cars is more than 50% less polluting than petroleum, costs 55% less has been used around the world for decades, we have the distribution infrastructure already in place. https://www.dlopezforcongress.com/Position6.htm also drilling and refineries in the USA would create jobs. Course if we could drill and refine our oil… what we need is to follow the Constitution, where it says the Federal Gov. gets a little 10 square mile land area. All the lands located in any state should belong to that state and the people of the state should determine what is done there, and how the income is spent. Take the money and control back from the fed. The federal government should not subsidize anything, per the 10th amendment to the constitution.
    Dee

    Delia Lopez
    US Congressional Candidate Oregon #3
    http://www.dlopezforcongress.com
    [email protected]