Letter: Finding truths about oil prices

Wednesday, August 13, 2008 | 10:08 a.m. CDT; updated 2:13 p.m. CDT, Wednesday, August 13, 2008

This letter has been changed to reflect that Louis J. Anesi's hometown is Centralia, not Columbia.

President Bush and a few in Congress want to drill off-shore and in Alaska for oil. It would take eight to 10 years before it would effect the price at the pumps, as there has been no new refineries built. Therefore, this raw oil would probably go overseas instead of helping to lower price at the pump. Our oil companies are not even drilling on the thousands of areas they are already leasing, even though they are receiving subsides and tax write-offs for this purpose. Why would they want to produce more oil and lower their price? By controlling the supply they can keep up the price. The Bush Administration and many in congress have oil stock. Why would they want to pass a good energy bill and lower the value of their stock? This effort to drill for more oil is only a cover-up! Does anyone actually check to see if our oil companies are actually trying to produce more oil in the fields they are drilling? What Congress should do is to tax their windfall profits, and bring anti-trust laws against them to break them up and thereby restore competition which is necessary to obtain efficiency and fair prices. They won't do this unless we demand it. It's up to us. I feel Obama will try to do this if he has enough support from us. I feel McCain would make permanent Bush's tax cuts for the wealthy as the Republicans believe in helping those at the top and this would work down to the bottom. If this is true, why is our economy in such a mess? The Democrats believe in helping those at the bottom - the working man, who will have more money to spend; which will create more jobs thereby helping all. You do the math and vote accordingly! Your vote will determine if our economy will improve or get worse.


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John Schultz August 13, 2008 | 11:40 a.m.

Some comments:

1. Oil companies are working the leases they currently have - it takes time and money to determine if each specific area has enough oil to make it worthwhile to extract.
2. There is no proof that any oil drilled for the US would go to overseas markets. Depletion of existing fields in the US would make it likely that new oil found in the currently off-limit areas would simply make up for that shortfall, as well as the increased demand from a presumably-larger population.
3. Windfall profits taxes are a short-sighted solution to a non-existent problem. When the Carter administration passed such a law, oil production went down. Oil companies do not set the price that is paid for oil, futures markets do that. The reason they have such large profits is that consumers buy a heck of a lot of gas. The profit margin figures I have seen show that the federal and state governments make more on a gallon of gas due to taxes than the oil companies profit. There are other industries with higher profit margins, will Obama also tax them into compliance with some sort of "realistic" profit levels?

(Report Comment)
Mark Foecking August 13, 2008 | 12:46 p.m.

Our economy will improve or get worse largely independently of who we elect. Our economic problems are mainly caused by loose credit, as well as a supply constrained run-up in the price of oil.

High oil prices induce oil companies to drill and produce where they might not have before. They also stimulate alternatives, as well as more efficient use of the oil we already produce.

Oil companies have done an excellent job at bringing the American consumer all the fuel they need, at a fair price. Breaking up the oil majors would mean fewer resources to explore and produce marginal fields. These actions are a sure way to shortages in the future - if you think high prices are destructive to the economy, wait until we get shortages.


(Report Comment)
Ray Shapiro August 13, 2008 | 3:25 p.m.

There's an interesting article from 3/16/05 on the msnbc web under "OPEC says it has lost control of oil prices!" (It was $56 a barrel back then.)
A more recent article "Why oil prices are so high?" under The New Nation website brings us up to date. After reading these two articles, I am convinced that neither McCain or Obama are presenting the full truth. I will go with the
candidate that will create incentives for alternative technologies to stimulate jobs and cash flow for Americans. This means Hydrogen powered cars, battery powered cars, recycled-cooking oil diesel buses, wind turbines, solar on roof construction, non-feed agricultural bio-fuels and maybe nuclear plants and clean coal if we can do it safely and minimize pollution. Back in the 70's a young Ralph Nader and the "Mother Earth" magazine were so far ahead of their time that main-stream America did not value or heed their messages regarding our future energy dilemma. It's now biting at our butts and the politicians are still not getting it right.
I need to go now and put air in my car tires and use my credit card to fuel up my Lear Jet so that I can attend the Olympics in China.

(Report Comment)
Ray Shapiro August 13, 2008 | 3:55 p.m.

Oh, by the way, check out the Pickensplan website.

(Report Comment)
Mark Foecking August 13, 2008 | 3:57 p.m.

Neither McCain nor Obama know the full truth - Bush is far more informed on oil supply issues than either one of them.

Let fuel prices rise. Don't do anything about them. That will have a much greater long term effect (conservation, efficiency, and alternatives) than stopgap measures designed to prop up the status quo (and get votes).


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