Govt Gas Prices
May 16, 2011 by staff
Gas Prices, Gas is expensive and seems to move in one direction – upwards. People are crazy companies that depend on oil are struggling, and everyone wants the action before the pump prices in the local successes and 5 a gallon.
And action is what they’re getting from Congress. On Thursday, the House passed the last of the three bills to expand and accelerate offshore drilling. The Senate is preparing to consider bills relating to energy this week.
But in all of this action, an important point must be made: None of the bills have little or no effect on gas prices, at least in the short term.
Economists, energyanlysts and even some lawmakers admit that the draft bill to expand drilling in the East and West coasts and the Gulf of Mexico that the Republican House passed in the last two weeks would have virtually no impact on the world price of oil. The same can be said of the proposals of Democratic Senate plans to consider this week to strip tax subsidies to major oil companies and another five to stimulate local production.
The reason is basic economics. Oil demand worldwide is increasing while supply is not keeping pace. Throw in the political turmoil in the Middle East, which adds a “fear premium” and 10 to each barrel and soon you have a cost of gas and 4 per gallon or more. Then add in the fact that the cost of getting oil from the soil varies greatly depending on whether it is Saudi Arabia (less expensive) or the tar sands in Canada (very expensive) and large fluctuations are warranted, according to Analysts, for the day price is linked to the most expensive method.
All this means that the price of oil is both fluid and volatile.
“The good has no intrinsic value,” said Ruchir Kadakia, head of Global Oil Fundamentals IHS Cambridge Energy Research Associates.
“It is worth only what you and I think he said, which is another way of saying the price is determined by the market, based on complex global variables include the realities of unstable regions, the premiums and a strong economy dose of psychology and speculation.
These are not conditions for the legislation but have not stopped a daily parade of press events and new proposals.
President Obama joined the discussion in his Saturday radio address, highlighting efforts to punish the manipulators to raise the price of gas. He also pledged to increase production and eliminate subsidies for oil companies. “These are investments worth making investments -. We will save money, reduce our dependence on foreign oil and protect the health and safety of our planet”
Members of the delegation of Oregon have their preferred energy solutions, too, but it is also unlikely to make a difference in the short term.
Rep. Peter DeFazio has been pushing the Obama administration to write stricter rules governing oil speculation. Speculation, DeFazio said, adding ay 20 to a barrel of oil and 60 cents at the pump.
If speculators leaving the oil futures trading and it was said, no one “in the world who are missing, except the people selling Mercedes-Benz in New York or 14 million Park Avenue apartment.”
The Commodity Futures Trading Commission is in the process of developing standards, but has not said when they will be ready.
The representative Earl Blumenauer is trying to get traction in the legislation introduced last week to extend tax credits for individuals and employers to make it easier for travelers coming to work by bicycle, walking, carpooling, or using public transport.
In the Senate, Senators Jeff Merkley, D-Ore., And Lamar Alexander, R-Tenn., Are pushing legislation they expect the demand will launch electric vehicles.
The bill would create “communities of deployment” throughout the country to build infrastructure like charging stations for electric vehicles. Merkley, who hopes Oregon will host one of the centers, believes that areas that build support for electric vehicles, easing concerns that consumers may have.
Rep. Greg Walden, R Lone delegation signed a letter to EPA Administrator, Lisa Jackson, demanding the agency completed a study that could rationalize the number of fuel blends required in the country. Eliminating the need to “boutique fuels” for many could reduce the volatility of prices in some areas.
Walden also joined the Republican team HEAT, which means defenders House Energy Action Team to increase domestic production.
“The fact is we’re looking to lose good jobs in our community if we can do something about the rising cost of energy in this country,” Walden said when the effort was announced.
The probability that any efforts will be successful is questionable. At least, it will take weeks and possibly months for legislation to move when the cameras are highly partisan.
That leaves a frustrated DeFazio, the longest serving member of the Oregon delegation, citing the story when asked how his colleagues in both parties are likely to respond.
“They are counting on the usual to happen”, he said. “Prices will peak around Memorial Day and then begin to decline and people will forget him.”
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