The Tease of Things I Don't Need

Just another feelgood political move?

Florida Attorney General Charlie Crist has issued subpoenas to eight major oil companies concerning gasoline prices. A spokesperson for the oil lobby, as noted in the article, mentions roughly 30 other investigations of this nature that have been undertaken since gasoline prices were deregulated in the 1970s, and how none of them have uncovered wrongdoing. It remains to be seen if this is a simple statement of fact, or if, as Handsome suggested, it's a matter of tax revenues and convenience.

I'd mentioned the gas prices just a little less than two weeks ago, as prices crept closer to the $2/gal mark. I hope this investigation has some pointed cause and effect analysis. As noted before, the prices seem to move up sharply on any news of increase at the crude oil end, yet when prices move down at the crude end we're reminded that we're buying gas made from the more expensive oil, bought months earlier. By this reasoning, given the recent crude oil price hikes, does it mean that we're looking at far more expensive gasoline (locally, the best price I've seen is $2.07/gal as of this morning) in the next six months?

That the price of oil is seen as being tied to uncertainties in the Middle East is undeniable, though whether the Bush Administration's military adventures in the region are curing or exacerbating those uncertainties a topic of heated debate.

Exxon-Mobil CE Lee R. Raymond claims that they're making roughly 5 cents per gallon out of what we're paying at the pump. However, Exxon-Mobil has just enjoyed another record earnings year, at $21.5 billion. Also worth noting is that Raymond claimed $74 billion in profits over the past 5 years, which minus the recent 21.5 means that the average of the prior 4 years was just over $13.1 billion, so we're looking at some substantial gains over the past 5 years.

Another item mentioned, and one that I was aware was coming nearly a decade ago, is the rise of China as a commercial production and consumer center. Their days of being content with a bicycle and a copy of Mao's little red book are long behind them, and they want everything most US citizens want.

Some of the closer to home solutions being mentioned range from temporarily cutting state and federal taxes on gasoline, and temporarily suspending EPA regulations that are mandating specialized gasoline blends for given regions. At the state level these suggestions are largely being dismissed due to their projected impact on projects (predominantly roadwork) traditionally funded by those taxes.

While it's from the Republican Policy Committee, here's a pdf attempting an overview of the dynamics of the situation. It's no surprise that their emphasis shifts towards blaming the EPA, citing the cleaner-burning fuels mandated in some regions as a primary, controllable cause. While there's certainly some truth to it, it's typical that there's an attempt to denigrate and demonize these fuels (and the regulators mandating them) by referring to them as "boutique fuels." That this is part of a campaign to decry cleaner-burning fuels yet another elitist, Liberal policy - expensive puffery that can't be afforeded - is evident. The attempt will be to waive the EPA regulations and open the door to other, less-regulated fuel production, rather than to bring up the quality of those other producers' products. But, I've digressed.

Finally, for a related, but almost amusing change of pace, here's someone running for Congress who's proposing an increase in gasoline taxes. The aim - to help wean the nation off oil - has its point in theory and the long term, and there's no denying it's a gutsy move, but I don't know that it's going to win him any votes, especially this year.