Rising Gas Prices – What’s the Fix?

With each uptick of the price of gas, people start clamoring for the government to do something, which has led President Obama to fast-track approval of the XL pipeline from Oklahoma to the Gulf Coast of Texas. The Canadian pipeline originates above Montana, and was halted in the midwest due to serious concerns about the huge aquifer that serves water to many states should the pipeline ever break. Or perhaps I should say, when the pipeline breaks.

There is no doubt the pipeline will break. Pipelines break all the time, and one branch of the XL has already contaminated a large area of Kalamazoo, Michigan in 2010, and effects are still being felt. The chemicals needed to break down this tar-sands oil so it can flow through the pipes can contaminate water and land for generations, making it unsuitable for life.

What people who are pushing to approve this pipeline venture, as well as more domestic drilling, fail to understand is that supply has little to do with current gas prices. The oil companies control pricing, period. They sell crude and refined oil to whatever country pays the most, and if that is Japan or China, that is just fine with Exxon – Mobil.

The U. S. exports 1.5 million barrels of oil a day, so that begs the question, why do we do that and then turn around and import 13 million barrels? Some of the reasons are explained HERE, but the basic reason is that that is the way world commerce works.

I’m not sure that just because this can be explained, that is reason enough to keep doing something that might not be the right something. As Megan McArdle pointed out in a recent article about corporations that keep repeating the same mistakes because they are afraid to change, maybe it is time we, the people and the government, need to make drastic changes in how we deal with energy issues. We cannot bury our heads in the sand and pretend that our reliance on fossil fuels is not a problem. There are children, grandchildren, and great-grandchildren who are counting on us to give them a world they can live in.

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8 thoughts on “Rising Gas Prices – What’s the Fix?”

  1. Maryann,
    There are environmental risks in the pipeline just as there are risks in all human activity. That aquifer is the nation’s largest, so the risks aren’t trivial. But we should be able to manage them for our long-term benefit. In any case, the XL pipeline will have no effect on current gas prices.

    On a personal level, we just bought a Prius C, which has averaged about 50 mpg in the first two weeks.

  2. I’m not so sure that pricing is as simplistic as that, Maryann. I’ve heard varied arguments on this, some being that the decline of our dollar plays a factor, some saying that supply and demand also play a part. My take from all I’ve read and heard is that gas prices are like one tangled piece of yarn that needs to get unknotted without breaking it. Can it be done?

    Morgan Mandel

  3. I’ve considered the Prius, too, Bob, but the hefty price tag has me hesitating.

    You are right, Morgan. This issue of pricing does not have one simple answer, but there is no doubt that the oil companies care more about their bottom line than the environment or the price of gas. And the oil companies are the biggest lobbyists. They put pressure on the politicians to act in favor of the companies. That is a fact that one cannot ignore.

  4. Rather than fast track a pipeline – let’s have a few more holidays. Around here, the traffic is always lighter on holidays.

    Another option would be to start pressuring companies to accept telecommute options. They are there for numerous jobs but often the companies/management just don’t want to learn how to manage that. Boohoo, they won’t see everyone sitting in the depressing bland cubicles.

    Fuel economy – vehicles from 1981 could get 20+ mpg on the highway. Why are we still about the same 30 years later for the majority of vehicles. We all need to pressure the industry to work on that.

  5. Good points, Matt. I agree about the telecommuting. It has proven to be a good way for employees to work, and most of them get a lot more done at home than at the office with so many interruptions.

    As to the reason we don’t have more fuel-efficient vehicles is pressure from the oil companies. They have so much power in business and in government that they can suppress efforts to find ways to get better gas mileage. Years ago Holly Carburetor in Detroit developed a carburetor that would allow cars to get 60 MPG. Somehow that design just faded away without ever being utilized. This was not just a rumor. The information came from an employee of Holly.

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