JOSHUA TIME 433

Gas Prices - Commentary]> > > Point of View Task Force> Commentary on Gas Prices by Kerby Anderson> > I want to talk to you for a moment about something that affects> all of us: gas prices. Over the last few weeks, we have seen> all sorts of reactions to rising gas prices. Some politicians> have been scrambling for cover. Other politicians have been> pandering for the vote. The Republican leadership for a time> was talking about giving out a $100 rebate to overset the cost> of gasoline. Fortunately, they discovered after a few days that> this was a really bad idea.> > President Bush ordered his Energy and Justice Departments as> well as the Federal Trade Commission to launch an investigation> into possible price fixing. For those of you with short> memories, we have been here before. Columnist Charles> Krauthammer reminds us that ten years ago (April 29, 1996),> President Clinton ordered his Energy and Justice Departments to> investigate why gas prices reached a shocking $1.27 a gallon.> After a thorough investigation, they found that demand was up> and supply was down.> > When President Bush's bureaucracy finishes its investigation, I> think we can confidently predict they will find two things:> demand is up and supply is down. Why is demand up? That is> simple. Two countries (India and China) are gobbling up energy> at an accelerated rate. As we have talked about on "Point of> View" these two countries (both with populations over 1> billion) are emerging economies and will be using more and more> energy every year. In fact, China is now the #2 oil consumer in> the world.> > So why is supply down? Well, for starters, remember Hurricane> Katrina and Hurricane Rita? We still have not recovered from> the damage of those two hurricanes. Refining capacity is still> not what it was before the hurricanes. Add to this, supply> disruptions in Nigeria and continued fighting in Iraq. More> than half of the petroleum we use comes from just a few> countries (which in order are: Mexico, Canada, Saudi Arabia,> Nigeria, Venezuela, Angola, and Iraq). So you have oil supply> down while demand is up. Sounds like a prescription for higher> prices.> > Of course that hasn't lowered the decibel level from those> ready to criticize President Bush and the oil companies. And I> might be able to take those complaints about gas prices more> seriously if much of the rhetoric wasn't coming from members of> Congress who impose massive restrictions on oil refineries and> refuse to let us drill for oil in Alaska and off our coasts.> > But let's look at some facts that most of the mainstream media> and most politicians don't talk about. Let's start with those> restrictions on oil refineries. As best as I can determine, not> a single new refinery has been built in the U.S. in almost 30> years. That will guarantee a bottleneck in gas supply.> > In addition, we have regulations that require specific gasoline> blends for different cities. Sounds like a nice idea until you> realize what is does to the supply. It injects unnecessary> rigidities into the gasoline supply system. If Kansas City runs> short, you can't just move supply from Dallas. In the end you> get shortages and price spikes. Sound familiar?> > What about fuel alternatives? There has been a lot of talk> about ethanol. It turns out that last year's energy bill> mandates increases in ethanol use. However, these mandates in> the bill actually exceed current U.S. ethanol production. This> is causing gasoline shortages and price spikes.> > So why don't we import ethanol? After all, Brazil produces> ethanol cheaply and we could import it to America. But we don't> and we probably won't because we have an artificially high> 54-cent ethanol tariff. Why is that? It's simple: the Iowa> caucuses. Iowa grows corn and makes ethanol. Iowa also has the> first caucus in the presidential primaries. Essentially,> politics keeps us from importing cheap ethanol.> > Is there any way we can increase supply? Yes, we can use> pin-point exploration of oil-rich wastelands such as ANWR in> Alaska. Congress could agree to allow oil exploration in> one-tenth of one percent of the frozen tundra of the Arctic> National Wildlife Refuge. But so far, certain members of> Congress continue to block these efforts.> > Or how about recovering oil from oil shale? A recent Rand study> of oil shale within the Green River Formation in the west found> that it contains 800 billion barrels of recoverable oil. That> is more than three times the proven reserves in Saudi Arabia.> > Of course we can also develop nuclear energy. This would> provide electricity that can be used to power hybrid cars and> electric cars. Even Patrick Moore, the co-founder of> Greenpeace, admits that "nuclear energy may just be the energy> source that can save our planet from another possible disaster:> catastrophic climate change." But other environmentalists have> blocked nuclear power for years.> > But finally, let's get back to the price of gasoline for a> moment. Here's something the mainstream media won't tell you.> At $75 per barrel, oil is still $12 less than its> inflation-adjusted price in 1981. Shouldn't the media at least> try to put some of this in perspective?> > Instead they talk about record profits and price gouging. But> who makes the most off a gallon of gasoline? Not the oil> companies. The greatest beneficiary is government. At current> prices, the federal government gets more than 18 cents a gallon> in taxes. By contrast, the oil companies get about 9 cents a> gallon.> > But federal taxes are only part of the take. Combined federal,> state, and local taxes on a gallon of gas now average 50 cents> (from a low of 26 cents in Alaska to a high of 60 cents in> California). According to the Tax Foundation, in the last 3> decades, government has collected $1.34 trillion (inflation> adjusted) in gasoline-tax revenues. That is "more than twice> the amount of domestic profits earned by major U.S. oil> companies during the same period."> > Here's another fact that the mainstream media just can't seem> to bring to light. Fuel prices in the U.S. put us at #102 in> the world. That means there are 101 nations where people are> paying more than we do.> > Number one is Uruguay. A gallon of gas there would cost you> $7.38. In the United Kingdom you pay $6.13 a gallon. Because> they pay for gas in pounds per liter, we don't realize how much> more expensive gasoline is in other countries. When we look at> other countries, I think we are getting a deal.> > Of course you could live in countries where gas is cheaper. For> example, the cost of gas in Iran is about 30 cents a gallon.> Let me see the hands of all of you who are ready to move to> Iran. No takers. I'm not surprised.> > Here's my point. In the last few minutes I have probably put a> number of facts on the table that you are hearing for the very> first time. Why haven't you heard this from the mainstream> media? Is it because they don't have the resources? Hardly.> Some of the major media spend more on research staff in a month> than "Point of View" spends on our entire operations in a year.> > This information isn't that hard to find if you begin looking> for it. I found it in a few columns and articles. The bottom> line is simple: you aren't getting the whole story. And if you> aren't getting the whole story about something that affects all> of us (like gas prices) imagine how much other information is> being held back.> > That's why each day here on "Point of View" we are dedicated to> bringing you the best information and the experts on issues so> that you can hear the whole story. And that's why we post> columns, articles, and commentaries on our website, including> this one. So you have the information you need to make an> intelligent decision about the important issues of our day.