Who Controls the Price of Oil?

July 12, 2011 06:29

“Liberals believe that supplies should be rationed through deliberate higher prices in order to protect the planet”

By Dr. Ileana Johnson Paugh at Canada Free Press


Most people do not understand what drives the price of oil but readily accept the explanation pushed by this administration that it is the unbounded greed of oil companies and their “fat cat owners.”

OPEC should not be able to burden consumers to the same extent now because large oil reserves were discovered in Alaska, North Sea, Canada, and the Gulf of Mexico. However our business-killing EPA regulations and Obama’s seven-year moratorium on drilling in the Gulf do.

According to the Wall Street Journal, Exxon’s margin of profit for both oil and gas ranks #60. There are 59 more profitable industries than the oil industry. Oil and gas firms profit 8 cents per dollar of sales. Pharmaceuticals profit 20 cents and banks profit 18 cents per dollar of sales.

We have not built new refineries in the U.S. in the past 25 years. The last refinery built was in Garyville, Louisiana and it started in 1976. In the mid 1970s, a refinery construction was proposed in Portsmouth, Virginia. The company canceled the project in 1984 after a nine-year court battle with environmentalists. Even if we drilled more, we could not refine the excess supply of crude.

The current administration keeps pushing the euphemism “green energy” although there are no plans in the foreseeable future for such affordable energy. Any hybrid or electric car uses electricity generated with fossil fuels, including the maligned coal, which the president promised to put out of business.

Liberals believe that supplies should be rationed through deliberate higher prices in order to protect the planet from unnecessary pollution. They are not concerned that it would stifle economic growth. Their main concern is how it would affect the re-election of Obama. To prevent a re-election loss, Democrats want to release more strategic reserves into the market in order to keep the gas price lower at the pump and thus please the voters.


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