Entry: Lowering Gas Prices Wednesday, May 14, 2008
Like most people, I get a lot of email offering me solutions to problems (some of which I may not even have.) Not too long ago, I received an email promising me an answer to high gas prices. Instead of the usual "let's scare the oil companies by not buying gas on a certain day," this one contained a plan to scare oil companies by not buying gas from one particular company for the rest of the year. Despite the fact that emails like this have been circling the internet for a decade or more, they just keep getting forwarded from one person to another with the best of intentions. This time -- somewhat uncharacteristically -- I hit "reply all" and wrote the following response:
Oil companies make less than a dime's worth of profit per gallon of gas, considering that the money you pay at the pump goes to a) state taxes (averaging 28.6 cents per gallon), b) federal taxes (18.4 cents per gallon), then c) exploration by oil companies and d) research and development by oil companies. Not buying gas would only slow research, development and exploration for new energy sources... and that won't lower the price of gas by a single penny. Most companies, contrary to the common Liberal portrayal, are not evil entities bent on sucking out your last cent... they provide goods you demand, and charge a price for their service. If they don't profit, they go out of business, and then who will sell you the products you want? There are, however, more pragmatic ways to go about lowering gas and oil prices. There are no "magic bullets;" no cheap and easy solutions -- only realistic alternatives to attacking those eeevil oil companies.
Four "easy" steps to lower gas and oil prices:
1. Build more refineries. We have plenty of oil, but have not been allowed to build a new refinery since the 70's. The ones we do have are operating at full capacity. We can't make gas fast enough to meet the demand, hence the high gas prices. At least get rid of the ridiculous "blend" requirements that prevent us from moving gas supplies from one state to another, or buying it cheap from countries that refine a surplus.
3. Build more nuclear power plants. If you're really concerned over the price of oil and gas, the best solution is to use another, more efficient power source.