The recent surge in oil pushed gasoline and other fuel prices higher as well. Average heating oil and diesel prices are expected to increase year-over-year for the first time since 2008, and the Oil Price Information Service said gasoline prices may hit a national average of $3 per gallon before Christmas day.
In the 1970's we were asked to be charged with a small Tax increment to build the Alaska pipe line. Most voted to allow it. The selling point was that our nation would be able to supply most of our own energy for the next 120 or so years. It did put a bunch of people to work granted, but our extra taxes paid for most of the project.
What most people don't know is the oil coming out of Alaska is called sweet crude. What that mean is that it has a small amount of sulfur in it as compared to oil coming from Mexico or such and the price is much higher because it takes less refinement. Remember that this line belongs to the people of the nation.
Some how in the late 80's or early 90's a deal was cut with BP to take control of our line and now runs it and has taken most of the profit. In the interim there have been numerous major leaks and a bunch of equipment failures.
The logic seems to be if you have less demand, then raise the price and also raise the tax. The Fed did that last month. What bugs me is the cost of diesel and bunker fuels. The nation uses these fuels to transport most of our goods across the country. Just a few years back the diesel price ran along at about $0.50 to $0.75 gal and Gas ran for $1.75 to $2.00 gal.
The FERC (Federal Energy Regulatory Commission) Did a special investigation in the 1980's that predicted all of what is happening today. Their report also included a method of raising the tax (supposedly to be reinvested into our infrastructure. That is how it was sold to the public).The reinvestment never happened. Instead of repairing the roads and bridges (over 4,000 bridges should be condemned right now ) the money went to the FED slush funds.
Diesel and bunker fuel are the least refined and more abundant than pump gas. The automotive industry has been tasked with building better engines for economy. Yes we are up to 32 mpg on some models, but some cars, like a friend of mine's old 1980 240 Volvo diesel, got 42 mpg uphill or down. What happened ??
The refinement processes have been optimized thus lowering the cost of production in the past 30 years. The profit margin has raised and production cost has been lowered for the producers. Wonder why the price gets lower when Election time comes around and gets higher when we have a few days off on holidays?
Oh yeah, and how about the electric car. This puts another producer in control of our lives to bow down to. Electricity has to be produced somehow. Hydro-dams? Solar or wind power? These are great ideas, but far too few to make a difference. Gas or coal plants? Nukes? Where do you put the by-product? I'm sure the government can find plenty of Indian reservations to contaminate for the next 10,000 years.
Hy-breed cars are cool because they use the best of both worlds right now. But I'm sure the all electric nut's will scream bloody murder when they start getting $1,000 electric bills.
We should go back to regulating the energy industry again. Deregulation was the biggest mistake of all time next to NAFTA...
Now, in related news: A California man found a small oil stain on his driveway. The major oil speculators declared a world-wide shortage and raised prices again.
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