Democrats turn up he…
As we’ll see, this just means they’re yelling louder.
WASHINGTON (Reuters) – U.S. Senate Democrats turned up the heat on the White House on Friday to act in the face of record-high U.S gasoline pump prices.
The same day, the Senate Energy Committee set a September 8 hearing on what’s behind the prices, which hit a record $2.55 a gallon this week.
Those prices could come down were we not so dependent on OPEC for oil. There’s that relatively small area in ANWR that would help.
Lawmakers admit there is no short-term fix to pain at the pump, but are nervous about political fall-out. Gasoline prices are sure to be a hot topic when Congress returns from its recess next month.
Well, if we’d started drilling in ANWR when it was first suggested, we’d be well on our way to easing things.
Senate Minority Leader Harry Reid on Friday said the Bush administration should require U.S. oil companies to disclose their fuel pricing policies and production costs.
In a letter to the White House, Reid also said the Federal Trade Commission should investigate instances where a state’s retail prices rise 20 percent in any given week “to determine if the price of gasoline is being artificially manipulated.”
There ya’ go! Produce a government report, and prices should drop. But seriously, I wonder if Senator Reid has been watching the price of oil or not. And I wonder if Senator Reid has been paying attention to his own government.
Past FTC probes into U.S. oil company pricing policies have found no sign of abuse.
“This one has already being done,” White House spokesman Trent Duffy said. “The FTC and the Justice Department have been keenly watching for this type of activity for the past two years.”
Duffy also said that Democrats’ attempts to prevent oil drilling in the Alaska’s Arctic National Wildlife Refuge, or ANWR, have kept supplies tight.
“Commonsense steps we’ve tried to take, like increasing domestic oil production by allowing drilling in a small portion of ANWR, have been blocked by Democrats for years,” Duffy said.
Precisely! However, the Democrats have their own solution; “artificially manipulate” the price.
Separately, Democratic Sen. Bill Nelson of Florida said the White House should ask oil companies for a voluntary, temporarily freeze on prices that they charge gasoline distributors.
Duffy said that price controls in any form are “terribly toxic to the economy” but added he had not seen the specific proposal.
Sen. Nelson, your minority leader would be proud. Anyone with a knowledge of economics, however, might have something else to say about that.
And how much does that $2.50 gallon of gas cost the oil companies?
The American Petroleum Institute, the biggest industry lobbyist, said U.S. oil companies are not benefiting unduly from high energy prices, and said that global crude oil shortages and oil prices near $70 a barrel are to blame.
It costs about $2 a gallon for U.S. refiners to turn crude oil into gasoline before transportation and distribution costs are added, said John Felmy, an API economist.
That’s $2 plus distribution plus state & federal taxes charged at the pump. Remember that when news organizations cry about the profits being made by oil companies. If you make a 10% profit on your product, and if the price goes up, your 10% markup now brings in more actual dollars, but it’s still only 10% greater than your costs. Should I use the government to force you to lower your margin at higher prices?
Or let’s ask the question a different way; is a 10% profit fair? If you think it is, then what if I told you that oil companies generally run a 7% profit margin? And yet Democrats and the press (redundancy, I know) only tell the public about the actual dollar amounts. If they reported the margin percentage just as often, they’d of course lose that as a propaganda tool against the “evil” oil companies. I have my own arguments with oil companies (rising costs seem to be reflected in the final price much faster than dropping costs do), but their overall profits aren’t the place to look for relief from high gas prices.
The answers are conservation (I’m working from home today) and reducing our dependence on foreign oil. Deal with economic problems in an economic way, not artificially.
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