Friday, April 22, 2011


Gas prices here in Central Florida have jumped up to nearly $4 per gallon in recent weeks.  In our nation's capital, prices are just shy of $5 per gallon - the highest in the nation.  At least the people who got us to this point are the ones feeling the pinch first.  Small comfort, I know - especially since many Capitol Hill denizens probably have their gas tabs picked up by the public.  The increase in prices has been sharp and is not likely to reverse anytime soon.  Our intrepid president, in light of his people's suffering, has called for a task force to research why gas prices have spiked so much and root out fraud in the marketplace.  Now, I'm no energy wonk, but I think I can shed some light on the subject, since our Demagoguer-in-Chief seems so baffled.  We'll call it the Ripley Commission on Oil Demagoguery.

First up are the eeeevil speculators.  Yes, these nameless, faceless demons of the free market really do have a stake in the rising price of gas, but it's not as large as the administration is trying to make out.  Their decisions, contrary to Obama's vague accusations of rampant, willful fraud and abuse, are based in part on actions this administration is taking as well as events elsewhere in the world.  In a nutshell, they are forecasting that the demand for and price of oil will increase in the near future.  They base these forecasts on conditions in oil producing areas such as wars or unrest, world oil supply and levels of resource development among other factors.  The biggest trouble with speculators is that they are only required to put down less than ten percent of the value of the contract, which keeps their risk at an unacceptably low level which in turn encourages them to take more risks.  That needs to change, without doubt.  Implimenting regulations that would increase the down payment to fifty percent would cut down on the number of speculators, resulting in a decrease in demand for oil futures with the eventual result being a more stable market.

But speculators aren't the only problem - if they were, gas prices would not have gone down at all after the big jump the press was so hysterical about in the summer of 2008.  Instead, it dropped from over $4 per gallon to $1.85 the day President Obama was sworn into office.  Did the eeevil Big Oil CEO's suddenly develop a heart upon Obama's inauguration?  No, more likely the speculators figured the anti-war candidate would end the wars in Iraq and Afghanistan, settling the region and thus oil prices.  Gee, that didn't pan out as expected, did it?

Another factor in the increase is the Saudi's decision to decrease supply by 800,000 barrels, citing an oversupplied market.  While it is true that demand has dropped recently due to high prices, a decrease in supply is only going to jack the prices up even higher.  Members of OPEC are quite aware of this and are manipulating the price for two reasons - increased revenue and a chance to put the screws to Americans.  Everybody loves a twofer!

A real driver in the price spike is the unrest in the Middle East.  The problem isn't just the war non-war "kinetic military action" in Libya, although that is a major issue - for Europe.  The ongoing situation in Egypt - the controllers of the Suez Canal - is also cause for concern and contributes to the rise in oil prices.  The canal is the bottleneck through which much of the Middle Eastern oil flows.  Disruptions and unrest around the canal threaten that flow, thus increasing prices.

It's wrong to think that foreign influences are the only reason prices are skyrocketing, no matter how much the administration points the finger elsewhere.  Our domestic policy over the past year has contributed greatly, and underestimating that impact is akin to willful blindness.  In the wake of the Deepwater Horizon disaster in the Gulf of Mexico, the Obama Administration handcuffed domestic production.  His damaging (and unlawful) drilling moratorium has done almost as much to increase prices as the unrest in the Middle East.  If he were to start allowing drilling again in the Gulf - and better yet, open up ANWR - prices would, if not drop, at least stablize, due to speculators seeing a new source of oil being tapped.  And yes, even though it might take a few years to access the oil (although not nearly as long as democrats would have you believe, especially considering how many rigs are sitting idle in the Gulf as we speak), the fact that it is actively being sought would be enough for the speculators to speculate a drop in price in the future.

The fact is, Obama is allowing gas prices to skyrocket to force us into "green" alternatives.  He's admitted before that he is willing to allow prices to "necessarily skyrocket" to get his green agenda implimented - why change now?  The problem with this strategy is that there are no alternatives that are ready for mass consumption.  His snarky comeback about buying a hybrid if you can't afford gas prices was tone deaf and obnoxious.  It's been proven he's not good at math, but even my eleven year old knows that if you can't afford $4 per gallon gas, you sure as hell can't afford to run out and buy a $25,000 Prius.  Not to mention the gentleman he so patronizingly made an example of has ten kids, and I'm pretty sure they won't fit into a Prius. 

When gas prices rose under President Bush, he was demonized in the press who blamed him, claiming it was cronyism at work.  Now we hear barely a peep about presidential culpability, even though the price increases are due, in large part, to Obama's hostile policies towards drilling.  Nope, no bias there!  Move along, move along....That he is creating yet another useless task force to try to figure out why prices are so high is just another transparent attempt to paint himself blameless.

It is becoming more and more obvious that his quest for "change" will continue, no matter how damaging it is to the country and her people.  It is hard to believe that a President of the United States is willfully crippling this country in order to shape it into the quasi-socialist, pseudo-European state he so deeply desires.  The complicit media, ever eager to suck up to their faux messiah, are happy to carry his water and mislead the public.

How desperate are the American people?  Well, Obama's so bad that he makes Donald Trump look like a viable candidate.  Not even Bush managed that.  Obama's redistributionist agenda has been resoundingly rejected, and the people are looking for a leader who will return us to our free market roots and drill, baby, drill.   Even if that leader is an outspoken entrepreneur who has comically bad hair and an ego the size of Manhattan. 

In conclusion, the Ripley Commission on Oil Demagoguery finds that, while events in the Middle East certainly play a part, as do speculators, the Obama Administration shoulders just as much blame.  One might even argue they should shoulder a little more because of their willingness to allow the American people to suffer when a few policy changes could relieve the pressure. The only fraud that needs rooting out is Obama from the White House.  The sad fact is, as long as he is in the White House and Ken Salazar is running the Interior Department, the American people can expect to continue paying through the nose for gas.  The silver lining, though, is that the resulting double dip recession will most likely be the catalyst for their ouster.  God willing.  In the meantime, we can safely speculate that staycations, inflation and higher prices on goods are in our future. 

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