Monday, April 21, 2008

Truth Behind Gas Prices

One of the good things about being here in Iraq is that I don't have a vehicle, so I'm not having to buy any gas. As I'm sure ya'll are aware, the MSM is crying every day about the rise in gas prices. Of course they love to blame President Bush and the Iraq war for causing this "crisis", but the truth is quite different.

First, it wasn't until last week that gas prices, when adjusted for inflation, even went higher than the prices in the early 80's. This chart shows the historical prices going back to the 1920's adjusted for inflation and in 1981 the price per gallon was $3.31. It was also over $3 per gallon in the early 20's. It was only in the last couple of weeks that we crossed that record to be at $3.38 this past week. So when you look at the real numbers we are just now approaching the numbers of the 80s, hardly the worst in history.

Second, why the big increase? Certainly the Iraq war and unrest in the Middle East has played a part in it, but there are much bigger culprits. The biggest being we haven't built a new refinery in the US since 1976! So, what happens when you have the same supply (actually the supply has dropped due to reduced capacity due to refineries also not being able to make many of the needed improvements) yet demand continues to increase due to growing populations? That's basic economics, prices will increase.

And who is at fault for no new refineries? You guessed it...liberals and their environmentalist allies. There is no reason with the technology available today that new refineries can't be built and have reasonable regulations to control pollution. Yet, any time a company even proposes a new refinery they are held up in court for decades from lawsuits from the enviro crowds, so they end up abandoning the project.

And let's not forget about taxes which are nearly 12% of the price you pay at the pump. If the Dem controlled Congress truly wanted to help with gas prices they would take McCain's proposal immediately and suspend all federal gas taxes for the summer.

1 comment:

Mike's America said...

If we would just DRILL for the oil we have right here in the U.S. we would be much better off:

And that's a 3 year old chart. The figures keep getting revised UP! But you have to DRILL to get it!

And drilling is SAFE for the environment!