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Ender Endeavor Pioneer100© Member  Joe Quick-Witted Ninja
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A Free Market in Gasoline by Ron Paul - October 31, 2005 Many Americans understandably are upset with the sharp spike in gas prices since Hurricane Katrina hit the gulf coast in August, and are concerned by reports of oil company profits. But we must understand that high oil prices are not the result of an unregulated free market. On the contrary, the oil industry is among the most regulated and most subsidized of U.S. industries. Perhaps we need to ask ourselves whether too much government involvement in the oil markets, rather than too little regulation, has kept the supply of refined gasoline artificially low. Consider Marathon Oil, which operates a refinery in Texas City. Marathon recently announced the construction of new refinery that will bring several hundred thousand barrels of oil online every day- which is exactly what the nation needs. But building a new refinery is a daunting task that requires billions of dollars in capital investment. The process of obtaining federal permits alone can take several years. As a result, we won't see a drop of refined gasoline from the new Marathon facility until 2009. Federal subsidies and regulations are largely responsible for limiting the supply of refined gasoline in this country. The demand for gasoline has risen dramatically in America due to population growth in recent decades, but virtually no new refining capacity has been added. Basic economics tells us that rising demand and a fixed supply will lead to higher prices. No amount of congressional grandstanding about price gouging will change this economic reality. We must increase domestic exploration, drilling, and refining if we hope to maintain reasonable gas prices. We need more competition, which means we need less government. Most Americans agree that the American economy should not be dependent upon Middle East oil. Economist George Reisman, however, explains that our own domestic regulations make us slaves to OPEC: "Today, it is possible once again to bring about a dramatic fall in the price of oil- indeed, one even larger than occurred in the 1980s. And it could begin right away. All that is necessary is to abolish the U.S. government's restrictions on domestic energy production inspired by the environmentalist movement." Reisman also explains how abolishing restrictions on coal production, natural gas production, and nuclear power would further reduce the OPEC stranglehold. By increasing the supply of these other energy sources, demand for oil would decrease and prices would drop. Note that much of the support for unrealistic environmental regulations comes from northeastern politicians and media, who weren't nearly as interested in oil fortunes when the business hit rock bottom in the 1980s. Texas and the gulf coast have always been willing to supply the nation's energy, and it's a bit disingenuous to hear criticism from those who are happy to use oil but don't want refineries in their backyards. Oil is critical, but it is not a magic commodity that somehow is immune from the laws of economics. In fact, it is precisely because oil is so critical to our economy that we must allow the free market to deliver it. Absent government interference in the oil markets, gas prices would rise or fall according to concrete realities affecting supply and demand. High prices would encourage conservation better than any environmental regulations. Entrepreneurs would race to develop viable alternate fuels if gas prices rose too much. Centralized government planning, on the other hand, cannot solve our energy dilemmas. The Nixon-era price controls on gasoline in the 1970s produced nothing but disastrous shortages. By contrast, the Reagan administration's immediate deregulation of the oil industry resulted in an unprecedented boom in oil production and a dramatic reduction in prices. This is the lesson we must remember. What can Congress do to provide Americans with some relief at the pump? First it can suspend federal gas taxes, which would save consumers nearly 20 cents per gallon. In the long term, Congress must pass legislation like HR 4004, which I introduced earlier this month. HR 4004 takes a comprehensive approach by allowing offshore drilling, eliminating regulations that restrict refining, and suspending harmful tax rules that discourage domestic oil production. If we hope to have a stable, affordable supply of gas, we must allow the free market to operate. Attachment: (Downloaded times)
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aknow Original500© Member
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What a pile of BS repealing the gas tax. All the gas I want for $4.10 instead of $4.30!! And later this year probably over $6.00 when the oil companies could afford to sell it for 1/3 of that price? I remember waiting in long lines in 1973, we should have had electric or nuclear cars long ago. And no public transportation here either. We are so behind Europeans. Dr. Steve
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24HourNut Administrator  Body pillows rock!
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aknow wrote: What a pile of BS repealing the gas tax. All the gas I want for $4.10 instead of $4.30!! And later this year probably over $6.00 when the oil companies could afford to sell it for 1/3 of that price? I remember waiting in long lines in 1973, we should have had electric or nuclear cars long ago. And no public transportation here either. The gas tax removal was just one part of his overall proposal, though.
 The best human beings start good new topics and vote on the better posts. |
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Robodoon Original500© Member  God Fearing Patriot
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 And what most people don't understand is that the owners of the finite "Resource" markets, like oil, control the environmental movement of today...in fact they are its fathers. So once again we are offered two sides of the same coin, driven into division ((because the other side must be the evil one.... "because we are the good one" (self says)) so we are taught. God made the world to work, some power hungry folks are playing us on both sides against the middle and we can't be free till they are removed.... and actually they plan to remove us...for real...final solution sort of stuff. Last edited on 01:10 am by Robodoon "...we are part of a secret cabal working against the best interests of the US, ...conspiring with others around the world to build ...-- one world, if you will. If that's the charge, I stand guilty, and I am proud of it." David Rockefeller |
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UsedToRide Original500© Member  ^^^That is LOVE!!^^^
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I read as far as by Ron Paul and then I had seen enough.
Respect some, trust one, fear none ~~Bullet http://www.freeholbrook.com The degree of civilization in a society can be judged by entering its prisons. ~~Dostoyevsky |
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Brian Grand Poobah of Moderation 
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I'm not a big fan of environmentalism myself, but the wholesale elimination of oil regulation would be disastrous environmentally. That would be excessive. Not to mention the fact that it represents very short-term thinking. We need to make the move to more renewable, cleaner forms of energy. In fact, Paul seems to admit this: "High prices would encourage conservation better than any environmental regulations. Entrepreneurs would race to develop viable alternate fuels if gas prices rose too much." Regardless of where you stand on climate change, I think we can all agree that spewing sh*t into the atmosphere like there's no tomorrow isn't a good thing, and that we should try to do less of that, if we can. Giving energy companies carte blanche is going in the wrong direction.
"It's been a long December, and there's reason to believe maybe this year will be better than the last." -- "A Long December", Counting Crows |
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cynicalninja Forum-Blogger© Original500© Member  Happy Heretic
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When you consider that oil is not a renewable resource I don't think making it cheaper is really going to help in the long term. Remember oil is used for a myriad of things not just petrol/gasoline. No oil = no plastic.
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