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Breaking: Real Answers to High Gas Prices

March 23, 2012

Concerned about the economic ramifications of rising gas prices? Tempted to forget all about the BP spill in the Gulf and jump on board the “drill here, drill now” bandwagon (as 65% of Americans already have)?

The thing is that a) it will take a long time to get new drilling up and running; b) oil drilled in the US doesn’t stay in the US – like all oil, it is sold on an international market; and c) even if we drilled in every county and every state in the nation, we’ll never eliminate a need for foreign oil.

Frustrating, isn’t it? But do I have good news for you! The answer to lowering your gasoline expenses is actually quite simple: use less.

How? Here are a few ideas:

  • Use alternative modes of transportation (rail transit, buses, bicycling – even walking!)
    • Don’t have some of these options where you live? Then pay attention and support mass transit projects.
  • Work closer to home; better yet, telecommute
  • Replace your gas guzzler with a newer, more fuel-efficient vehicle

And it’s not all about pricey hybrids and electric cars, either. Today’s vehicle fleets are significantly more efficient than even just a few years ago. This is due to something many of you may have heard bad things about: government regulation. In this case, fuel efficiency standards enforced by the Department of Transportation and the EPA. If we can just stay on the path of increasing efficiency standards, asking more of our industry, not less, then we can expect to see this trend continue indefinitely. (Unless, of course, Big Oil and their lackeys in the GOP get their way…)

But here’s a question for you: why is it that as Americans are consuming less oil and driving fewer miles, thus lowering domestic demand for oil – the prices at the pump are nonetheless sky-rocketing? President Obama says it’s due to unrest in the Middle East. Meh. Sure, that’s some of it. Republicans say it’s because of government barriers to domestic drilling. Bzzt. Wrong. We’re drilling more than any time since 2003 – and doesn’t Econ 101 teach us that decreasing demand and increasing supply should lower prices?

So what could it be? Speculation.

Speculation on oil futures — by big banks such as Goldman Sachs, JPMorgan Chase and others — contributes to the rising cost. “They make money if the price zooms up,” Cenk says. In 2011, the average American household paid $600 more out of pocket as a result of that speculation. “It isn’t supply and demand. It isn’t the free market. It’s because these guys are playing with the market — so that they can make more money. They have got to love what is happening with Iran.”

“Ah, man!”, you say, “the big banks again? Didn’t we fix that?” (Just kidding. Of course you didn’t say that, because you know better. )
Yet again, I have good news: something can be done. But I warn that some of you may not like the answer: government regulation.
More than 100 Democrats urged House appropriators Friday to fully fund the Commodity Futures Trading Commission (CFTC), arguing the agency’s work is necessary to curb excessive market speculation that they say is driving up oil and gasoline prices.Without adequate resources, the CFTC may not be able to implement rules established under the 2010 financial reform law that require limits on speculative trading in energy futures markets, the House Democrats said. (The Hill)
And there you have it: 3 easy steps to relief at the pump.
  1. Use less, as individuals, by using alternative and/or more fuel efficient transportation options
  2. Expand fuel efficiency standards (through government regulation)
  3. Curb oil speculation (through government regulation)

You’d think that considering the solutions, right wingers might decide to pipe down about gas prices, no?

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