When gas sky rocketed to $4 a gallon, what did we hear from the GOP:
- Drill Baby Drill! and
- We need more refineries. Democrats keep us from building more refineries.Democrats keep us from building more refineries.
It was so clear -- we were way behind in oil production versus expected demand, so oil had to go way, way up in price and our poor tiny overworked refineries in the U.S. just couldn't refine enough gasoline for us to get by.
But wait! As of today the entire world economy has collapsed. People are driving billions of fewer miles than expected. And oil is at $38.69 a barrel as I write this. Yet gas hasn't plummeted to $1 a gallon or even maintained its price at about $1.70 a gallon, despite this being the dead of winter. Instead, as oil has declined, gas prices have increased. Um, why?
Well, per this article: http://www.dailyfinance.com/... there is plenty of refining capability.
The problem is that even when we have all of that excess oil, the refiners will refuse to refine it into gasoline unless gas prices are at a certain level.
The most recent weekly petroleum report [pdf] by the U.S. Energy Information Agency indicated that U.S. refineries operated at 82.4% of capacity for the week ended February 13, 2009, compared to 85.5% for the same period a year ago.
In other words, about 20% of the infrastructure used to make gasoline is not being used. Add that to relatively constant gasoline supply and the unique gasoline blends required for selected markets (such as California) and the result is a pop in gasoline prices over the past two months -- despite the fact that the price of crude oil remained relatively stable in the $35-$50 range.
O.......K........ So I would assume that people more informed about the oil industry than I already knew this -- that we could start pumping millions of barrels of crude out of Yellowstone and the Grand Canyon tomorrow and the refiners would simply refuse to refine it if it meant too big of a drop in gas prices for the public.
Resulting analysis:
- We can drill for and find as much oil as we want, it means nothing if we can't refine it into gasoline.
- If we have high prices, the refineries will boost their production to make sure they gouge us while gas is $4.
- If we have a ton of oil and oil prices drop, the refineries will cut production to keep prices artificially high so we don't see a fair price at the pump.
So this is the industry the GOP wants to help? One that will, even in times of economic emergency, artificially inflate the public's cost for a necessary product? We should help these people get access to more oil? We should help them build more refineries? So.......what? They can operate those refineries at 65% of capacity to make sure we pay what they want us to pay for gasoline?
And one final fork in the eye for consumers -- another great quote from the article:
Still, even with the 25-30 cent pop in prices in the past two months, consumers should keep in mind gasoline prices are still relatively low. Prices are $1.16 per gallon lower than they were in February 2008, according to Lundberg Survey data, CNN reported, and they're way below the plus-$4 per gallon record-highs set in the summer of 2008.
Wow. The oil industry would make a great girlfriend or boyfriend, huh? "Sure, I still use your ATM card every couple-a days without your permission, but remember a year ago when I stole about $4,000 from you? Or in the summer of 2008 where I stole so much that I almost bankrupted you? You got to remember that it is a lot better NOW than back then!"
Good lord.