Gas pricing: The reality

As we suffer from much higher gas prices at the pump, many unfounded rumors swirl around as to how the price of auto gas at the pump is established. Basically, it is simply the Law of Supply and Demand.

Crude oil, irrespective of where it comes from, is a global commodity and, as such, is traded across the global commodity market -- just like wheat, corn, or cattle futures. The global market price for crude oil is based on the amount of crude oil that is up out of the ground and in transit by sea, by 18-wheelers, in the pipelines, in storage tanks, and at the oil refineries.


Based on fairly accurate knowledge of how much crude oil is up out of the ground, the world price for crude oil is established. When the supply goes down, the price goes up. When the supply increases, the price goes down.

The radical environmentalists spread the rumor that the U.S. exports oil to other countries and, therefore, does not need to increase its domestic oil production. Actually, the U.S. is a net importer of crude oil. In short: we import far more crude oil than we are producing.

Nevertheless, we do export a small amount of “refined” oil products to other countries. Here’s why: Our oil refineries are designed to produce far more unleaded gasoline than diesel fuel. So, the reason diesel fuel is so much higher in price now than auto gas is because the supply of diesel fuel is so limited compared to the supply of unleaded auto gas. Higher diesel-fuel prices translate to higher prices for food and for all consumer goods.

While we do export a small amount of auto gas and other refined-oil products to Mexico and Canada, we do so in exchange for more diesel fuel for our trucking fleets and for other consumers of diesel fuel.

Due to the radical environmentalists, we have not built a new oil refinery in this country in 40 years. If the Obama Administration would allow them, new refineries would be designed to produce as much diesel fuel as auto gas. Unfortunately, to reconfigure our current refineries would be prohibitively expensive.

As for our abundant coal reserves, in 2008, Candidate Obama told ABC News that he plans to tax our coal-powered plants into bankruptcy and use the taxes collected to develop alternative energy sources.

Another rumor: Big Oil gets big tax breaks. According to the Congressional Budget Office, the tax preferences for all fossil-fuels amount to $2.5 billion per year, enough to run the U.S. government for about six hours. Renewable energy gets 68-percent of the tax breaks, fossil-fuels 15-percent, and nuclear energy four-percent. Twelve percent goes to energy efficiency incentives like Mr. Obama’s favorite $50.00 light bulbs, Solyndra solar that gave $370,000 in bonuses to 20 executives and went bankrupt, and the $250,000 per car subsidies for the failed Chevy Volt.

CONTINUED:
http://www.central-view.com/past.asp?number=1614

American Thinker: The EPA's Mess with Texas

American Thinker: The EPA's Mess with Texas

IMPORTANT READ!

"The EPA is moving to restrict Texas' ability to continue as the largest production base for natural gas in the nation. As the largest consumer and producer of natural gas, Texas provides an important alternative in energy production to the conventional fossil fuels of coal and oil. Those fuels have fallen into dire regulatory restrictions that Vice President Biden suggested should eventually lead to the end of coal production in the United States. Natural gas has emerged as an important transitional fuel to the green economy. Despite this, the Obama administration is moving to limit this component of Texas' economic boom."

Congressman Walter Jones is asking for an investigation into whether the Federal Reserve's money printing is driving up prices for commodities, including crude oil and gasoline.
CONTRIBUTIONS BY LYNN BONNER AND ROB CHRISTENSEN

Congressman Walter Jones is asking for an investigation into whether the Federal Reserve's money printing is driving up prices for commodities, including crude oil and gasoline.

The Farmville Republican has sent a letter to U.S. Rep. Ron Paul of Texas, the incoming chairman of the House Domestic Monetary Policy Subcommittee, asking him to look at the connection between the printing of money and rising prices.

"Working people in Eastern North Carolina are being squeezed at the gas pump and the grocery store as they struggle to make ends meet in a world in which their salaries have no chance of keeping up with Mr. Bernanke's printing presses," Jones said. "The Federal Reserve must be held accountable for the damage it is creating."

Ben Bernanke, who grew up in Dillon, S.C., is chairman of the Federal Reserve.

http://www.newsobserver.com/2011/01/16/923137/jones-wants-a-probe-of-us-money.html#ixzz1BDVvOwwP