What a gas!
Pain at the pump? What they fear is pain at the polls!
27-Apr-06. To listen to the news, the "pain at the pump" is the top story of the day. Such wailing! Such gnashing of teeth! Such rending of garments and tearing of hair! The way people are carrying on, you'd think there were an inalienable right to cheap gasoline, guaranteed by the Constitution. C'mon folks, get a grip!
Agreed: nobody likes to shell out a lot of money to fill the tank. But that's a choice people can make. I don't notice any fewer cars on the road. I don't see any more people in the carpool lane. I still see Hummers and other behemoths driving around town. I still see a lot of empty buses plying their routes. And I still see people lined up at the drive-thru window at Starbucks for a 20-oz Venti Caramel Macchiato for $3.95 — which, by the way, works out to $12.64 per gallon. For that you can get four gallons of gas, even at these prices!
And have a little perspective. Our friends across the northern border in Canada are paying the equivalent of $3.85 per gallon for gasoline. On April 10th, the latest date for which comparable figures are available, gasoline in Europe cost roughly twice as much as in the US.
Source: Department of Energy
That said, it's still a shock to people who thought $2 per gallon was a lot. And they're mad as hell and letting their elected officials in Washington know their displeasure.
Nothing concentrates the mind of a politician like the prospect of being voted out of office, and that's the reality that has smacked the folks in Washington upside the head. According to the latest polls, fewer than one-third of Americans approve of the way George W Bush is doing his job (CNN poll released 4/25/06), and even fewer approve of the way Congress is doing its job. An overwhelming majority believe the country is headed in the wrong direction.
And if gasoline is causing pain, politicians must look like they're doing something to ease the pain. W says he will suspend making deposits to the strategic petroleum reserve, despite having declared a few years ago that it should not be used for political purposes. It sounds good, but the amount of crude pumped into those reserves is so piddling compared to the amount used for gasoline, it is a laughable drop in the bucket. They want to investigate oil company profits. No investigation is needed: when you have a commodity in limited supply, those who have the supply can charge a lot. It's the law of greed and demand. It's what shareholders expect.
It's all a lot of sound and fury, signifying nothing.
ExxonMobil today reported profits for the first quarter of $8,400,000,000 on revenues of $89 billion for the quarter. (That's $1B a day, or $42M an hour.) Folks are upset that XOM gave its outgoing chairman a retirement package worth $400M. Well, duh, that was his job: to make a pile of money for shareholders, and over $8B for three months ain't half bad.
There are really only two ways to reduce the price of gas: increase the supply or use a lot less. Increasing the supply isn't practical, especially in the short term (to a politician, that means by Nov 6). Using a lot less could be accomplished, even in the short term, by conservation or by rationing. Lest anyone get their knickers in a twist over "rationing," it's probably good to point out that rising prices are a form of rationing, albeit a very unfair one. And since gasoline is our biggest use of crude, no solution can avoid using less gasoline, something I wrote about a year ago when W got exercised about energy then.
As usual, there's a good selection of editorial cartoons about the gas price "crisis" (see sidebar).
Update 28-Apr-06 Wish I'd said that— Today's New York Times had an editorial called Pander at the Pump that made some of the same points I did, but in a much more elegant way. And Charles Krauthammer, with whom I usually violently disagree, finally said something I agree with wholeheartedly. (I'm beginning to wonder about myself....)