Surges in Energy Prices
If there was ever a sign as to how consumers have been abandoned, check out the recent surges in the prices of gasoline, heating oil, and natural gas. They are more than comparable to the energy price hikes in the Seventies which caused an uproar in the country, prompted Congressional investigations, Justice Department lawsuits demanding refunds, even calls for breaking up the oil giants under the antitrust laws and starting a federal petroleum company.
As if to demonstrate that the oil and gas industry can do whatever it wants to consumers, gasoline prices are approaching $3 a gallon in some states like California and Nevada. Gasoline taxes are not part of this equation. The expanding volume of consumer dollars here are going to the oil industry. Every penny increase in the price of a gallon of gasoline over a year costs consumers $1.4 billion. Every penny!
How is this happening? There is no reduction in supply by the OPEC cartel. The economy is not booming to raise demand. In fact, business energy conservation and the export of energy intensive industries are dampening demand. There is no regulatory excuse for the oil companies to blame, for there is no regulation of prices at all. Aha, it is the tightening of refining capacity, say industry spokespersons.
If that is the excuse, then why have the oil companies been closing down so many refineries over the past twenty years and not building any new ones in their place? The cynical answer is that tightening refinery capacity is the perfect way to jack prices up without being charged with price-fixing by the government.
What government? The Bush Administration is headed by two ex-oil fellows and around Bush and Cheney there are 40 high officials who came from the oil and gas industry. Washington is marinated in oil!
Remember how many times you saw George W. Bush on the national television news pushing his tax cuts for the wealthy with the assertion that the people should be able to keep more of their money? Not surprising is it, that we’ve never heard him say that he wants to help consumers keep more of their money and not be gouged by the oil industry.
Bush’s government is leaving consumers, cab drivers, truckers, and homeowners defenseless. It is doing nothing in a big way. Tens of billions of dollars are being drained away from individuals, families and businesses. The self-selected Mayor of Baghdad is otherwise pre-occupied.
The natural gas price hikes have stunned homeowners in many cities. Here there is no real regulation. Without changes in supply and demand, this winter, some consumers have seen their bills increase 50%. A report in the New York Times cites the American Chemistry Council as estimating the loss of 78,000 jobs because of higher natural gas prices. It would have been worse except that, the Times writes, Ïmany energy-hungry manufacturing industries, like chemical making and metals smelting, have moved to cheaper locations abroad.Ó Others have made their facilities more efficient, which is a rational reaction indeed.
Electricity prices are going up because of the natural gas price increases. Natural gas prices are above $5 per million B.T.U.’s. How quaint were the times about thirty years ago, when companies were making good profits selling natural gas under a regulated price one-tenth of today’s price, now that gas extraction is touted as much more technologically efficient.
If the American people are not going to receive any price relief, how about an explanation, Mr. Bush?