Crude arguments

The conservative talking point about oil prices:
They are high because the US has not built a new refinery in 30 years and it is all the liberals fault.

The truth:
The raw materials in the manufacturing process for gasoline have increased 242% since 2000. That is a barrel of crude cost $28 in 2000 and now costs $68. The crude oil requirements for the world are 84.38 million barrels a day, while the production of crude is currently 84.12 million barrels per day. The United States is still far better off than most nations in that it generates almost half its required supply of crude oil.

Where the conservative talkers get it wrong, and it is debatable whether they get it wrong because they are misinformed or are hacks for the oil companies, is that they confuse the price at the pump with the price of crude. The conservative is correct in saying that refining more crude into gas would drive prices slightly lower. Currently, according the DOE, US refineries are NOT producing at maximum capacity. The DOE does not elucidate exactly why that is and admits as much saying "crude oil input to refineries is down 300,000 barrels per day compared to the same period a year ago. This while crude oil imports, over the same period, are up over 300,000 barrels per day." Refiners are stock piling crude oil. This is a big reason why prices continue to rise. This is also a reason why energy companies are racking up gigantic profits. I think there may be a good reason why refiners are stockpiling. If the raw material is increasing in wholesale cost, it would pay to buy more now and stockpile it betting that the price in the future will be even higher.

The only thing that will drive prices down is either increased production of crude, refinement of current stockpiles into gasoline, or increased price controls set down in DC. Either way the citizen will pay since increased price controls usually come in the form of a portion of his/her taxes going to artificially lower the pump price by paying Exxon, Chevron, etc. the difference. At any rate the arguments are academic since the rapid industrialization of the 3rd world, particularly in Asia is going to mean that there will be continued upward pressure on the prices of all natural resources not just light sweet crude.

The statistics contained herein come from the Energy Information Administration which is part of The Department of Energy, which is under the control of that hot~headed little green liberal George W. Bush