soapbox: How To Lower Gas Prices!

How To Lower Gas Prices!

rev.07.19.2008

Added, 07.02.2008...Everything said here makes TOTAL SENSE.

Added, 06.26.2008: Stop Blaming The Oil Companies! Here's another article, from FORTUNE Magazine, May 18, 2006: 3:36 PM EDT.... !

Excerpt:

"Of course, just because oil companies are benefiting from the price boom, that doesn't mean they're causing it. The truth is, there is little they can do to immediately lower worldwide prices. They can hardly be expected to sell their product for less than buyers (like China) are willing to pay. And even if they did, the impact would likely be fleeting.

As van der Veer points out, his company accounts for just 3 percent of global oil production. The five supermajors - Exxon, BP, Shell, Chevron (Research), and Total (Research) - together account for only 13 percent of the 84 million barrels of oil the world consumes each day. By contrast, the state-dominated oil industries of Russia, Kuwait, Saudi Arabia, and Venezuela account for 30 percent.

"This isn't passing the buck," says van der Veer. "We're a small player in the global pond."

But it is also true that decisions Big Oil made years ago haunt the global market. Many of today's supply problems actually stem from the low prices we remember so fondly from the 1990s. Between the end of the first Gulf War and Sept. 11, 2001, oil prices averaged $20.75 a barrel.

Not only did that encourage demand in China and other emerging markets, says consultant Peter Schwartz of the Monitor Group, it also caused the supermajors to cut back on spending to develop new fields. "We're paying the price now for cheap gasoline a decade ago," says Schwartz.

Even today oil executives are reluctant to empty their coffers for new development, fearing that prices will trend lower in the future and hammer their margins. Yet that thinking serves only to increase the likelihood that supply will stay tight. It is also a train of thought financial players are keenly aware of - and more than willing to exploit."

Thanks, Pelosi and crew, for helping the oil executives feel that way...
There's nothing like the fear of "windfall profits tax" to put a chill on 'em.

Added, 06.20.2008: Stop Blaming The Oil Companies! Here are two articles [One and Two] which clearly show why you're blaming the wrong folks. Stop it!

Added, 06.01.2008 Just listen to the first two minutes of this video!

Added, 05.29.2008 Look here for something that makes sense! The answers are not complex!

Added, 05.24.2008.

It's way simpler than you'd expect, but the solution must come from a source very different than the one you'd guess...

I read recently that the optimal price for a barrel of oil is as follows: $100, $100, $100, $10, $100, $100, $100.

Read it again, more carefully... The producers of oil all around the world hate competition. If they want to discourage competition, all they have to do is periodically increase output or lower the selling price.

Why? Think about it:

If the price of oil suddenly dips, every customer around the world is ecstatic. Every competitive producer around the world has a fit! Why?

Because if the price of oil drops, they can't justify to their shareholders or Boards of Directors any possible investments in anything: research, development, prospecting, drilling rigs, storage facilities... nothing! Because the suddenly-low price of oil makes future investments look stupid.

Would you start a new company if your biggest competitor dropped their prices by a large amount? No way! It would throw all of your business plans and forecasts into the dust bin.

But there is another solution, with a win-win for consumer countries:

Announce plans to increase domestic supplies. As simple as that.

The US Congress... both Houses... must immediately announce that they are considering bills to once again make offshore drilling legal. Put in all of the ecological protections you want, but make every square mile of the US coastal waters drillable. Do the same for ANWR and the polar regions off Alaska.

Yes, it would take five or ten years to bring that oil to market, but in the meantime, all of the OPEC countries would have a flag waving in their faces, saying, "The higher you raise prices, the better off we'll be when our own oil comes on-line."

I hereby forecast that the oil futures market will drop, then level off. I wish I had the money to guarantee it to you... But if you don't try it, you'll never know.

Now, are there any people in our state and federal Houses and Senates with the nerve to give this a try? You could be heros or continue with the abysmal ratings most of the electorate gives you today. It's your choice. Want to move forward? Then choose: the gas or the brakes? It's that simple. If you think about it.