Gas prices are soaring once again in the U.S., much to the chagrin of the millions of drivers who find their automobiles to be the only reliable mode of getting around their city or town.
Examining some of the scapegoats used to explain this latest drag on the American economy can make one laugh (if not cry) hysterically, for reasons that can seem silly or maddening.
For example, having found pools of oil beneath the ground right here in the U.S., the country finds itself exporting more oil than being used on the homefront.
Reportedly, any oil extracted within or near U.S. territory— be it off shore, the Arctic Reserve, or a national park—is sold to the highest bidder in the global marketplace. Much of it never reaches gas stations across the country. We still import vast quantities from Canada and the Middle East and are at the mercy of OPEC prices.
There is political instability in the Middle East, specifically the controversy over Iran developing nuclear weapons. Israel has made it known that it is willing to go it alone if they feel compelled to attack Iran to disable its nuclear program.
In April 2011, fears about unrest in Libya and Egypt sent oil prices up to $113 a barrel. But the very next month, as oil prices dropped, gas prices still stayed high. The reason given at that time was the refinery closures due to the Mississippi River floods.
Speculation is another scapegoat for high gas prices, as oil prices are set by commodities traders who buy and sell futures contracts on the exchanges. These traders can create a self-fulfilling prophecy by bidding up oil futures prices.
On top of the high costs of fuel are a variety of taxes which amount to 19 percent of gas prices. Since oil is traded based on the American dollar, the 40 percent decline in the dollar in the last six years puts upward pressure on oil prices.
Reportedly, there’s not much that President Obama can do other than release oil from the Strategic Petroleum Reserve and try to limit the ability of oil “speculators” to drive up the price of oil in futures markets.
So far, both of these options have been used. Thirty million barrels from the reserve were released in June 2011 and last October, the Commodity Futures Trading Commission (CFTC) voted to curb trading in a host of commodities—including in oil—in an attempt to use position caps to mute wild price swings.
And still, as a former third-party candidate for mayor and governor might say, the gas prices are too damn high.
There seems to be no excuse good enough—nor government action effective enough—to lower the cost of oil in this country. This is causing food and clothing prices to skyrocket, as increased fuel costs for shipping companies is ultimately being passed down to all consumers.
Most Americans are dependent on their automobiles for mobility. Public transportation is sorely lacking, and alternative energy plans limp along every years. Calls for reducing the use of oil have become nothing more than empty campaign promises.
What a great start it would be to reducing our use of oil if we can summon the political and popular will to revamp our public transportation system. If we had new and improved transit lines, more Americans would leave their cars at home, less oil would be used—and then gas prices will come down.
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