Here in America we need a Tennessee Valley Authority type of plant to really tell us who is to blame and what is the true cost of fuel.
BS
European protests are sparked in part by the fact they cannot pass on costs to customers due to price controls on them....
Our local papers ran a moronic letter to editor suggesting we bomb the Saudi's to get more oil. Can someone explain how that works?
Fact remains. The "true" cost of oil is probably much higher than it is now because the cost should include the environmental damage, perhaps even the global warming if you are a true believer.
The finger point should be poking our own chest. We've abandoned CAFE regulation by allowing SUVs exemptions. We are sucking oil at ever higher rates barely slowing our take even in the face of $4 gas. The average weight and gas milage of a car is down from 20 years ago. China is willing to buy any surplus oil in the world.
Meanwhile our extraordinarily stupid congress wants to pass a windfall profits tax. First, it does not "TAX OIL COMPANY PROFITS" . The WPT taxes crude oil at the well head, meaning the royalty owners who have no means to offset this tax pay the full freight. Ditto for domestic small companies that do most of the drilling. The international oil companies, OTOH, can deduct the WPT from taxes paid overseas. So, they simply renegotiate the "deal" with the foreign country so that that countries share of the oil is shown as a "tax" not as a royalty interest. Under regulation in 1979 Carter cut the price paid to domestic crude oil. The result was the closing of many marginal wells because lifting costs exceeed the price paid. "New" oil was allowed to fetch top dollar. This resulted in the premature abandonment of many wells which will never be opened again.
The oil companies profits are a non issue. No one is wanting a windfall tax on Apple because the IPOD was a success. They made billions there, too. The large international companies no longer explore for oil. Small domestic drillers do. State oil companies do. And we cannot dictate to any nation what price they should charge.
BTW, PetroBras (Brazilian state oil company) is investing along with a Japanese firm in Shale Oil in Utah. Where are the majors? On the sidelines because they got burnt before by Shale oil. The majors are so incompetent they cannot even drill here.
Fuel prices should be high. That is the only cure for high energy cost..High prices. No alternative fuel will "make it" in the face of $18 a bbl crude.
Today, offshore oil from the U. S. has a lifting cost approaching $50 per barrel.
The Fed bears much blame too. They have weakened our dollar to near the point of no return. With the suggestion that interest rates may have to increase, our nation will surely fall into a moderate to deep recession. And the precipitious drop in the interest rates last year and this spring were a huge mistake. We are now paying for it with raging inflation.
