Wednesday, May 07, 2008

oil futures close @ $123....

In general I don't comment much on politics but I would consider this rant bike related.


Maybe some one out there can help me understand how suspending the gas tax for the summer will help anyone other than those involved with oil production.


I am the first to admit I am not that bright but even I understand that we live in a global market that is ruled by supply and demand. The current demand for oil is what sets the market value, the demand is high thus the price has increased to keep that demand in check with what the world can supply. The world can only produce so many billion barrels/day and although we Americans have been consuming at will for years the rest of the world is starting to catch up, just wait until everyone in China and India have 2 cars.

If the federal government were to suspend the gas tax for the summer as some current presidential candidates are proposing it seems to me that one of 2 things would happen. Either the oil companies would raise prices so that demand would meet what they can supply and they continue get market value for their product or consumption will increase beyond what can be supplied and prices will be forced up. Either way the oil producers are the only ones that gain and even our poor government losses out on some precious tax dollars which will either need to be made up somewhere else, borrowed from China, or not invested into more sustainable energy. All this and we just become more inslaved to foreign oil.

The bottom line is we can only blame ourselves for high gas prices and the only way to drive the price down (other than blowing up and taking over Venezulea and the entire Middle East) is to decrease our fuel consumption. Now I am not trying to point fingers because I am to blame as much as anyone. I live up a canyon that adds a little extra drive time for Rosie and the kids, I drive to races on the weekends, and I don't have a push lawnmower. But, you will also never hear me complain and I am trying to make a little difference by riding my bike for transportation, using a motorcycle when the bike is not practical, and keeping the outside lights off at night.

I know its small patato's but what else can you do. If they want to suspend a tax, how about property?

Hopefully this price crunch, which likely is the tip of the iceburg will help us live more responsible, at least I hope it helps me!

5 Comments:

Blogger MtbAllDay said...

Apparently in addition to the oil companies, some feel it will help them get elected.

FWIW, I don't believe supply and demand is driving oil prices right now (at least, not in the traditional sense) -- I think prices are floating on a bubble created when the housing/credit markets collapsed and investors fled from stock to commodities such as gold and oil. For better or worse, I'm guessing oil prices will come back down late summer or so.

9:40 PM

 
Blogger Bart G said...

that may be true for this little crunch I have no idea but prices have been rising for years and no one can tell me global demand has not influenced the market value.

Then again I am no economist and not even that bright!
cheers

8:10 AM

 
Blogger ag said...

dude i admire your commuting- good work. driving actually has a very small impact compared to flying which is by far the worst thing we can do. so saddle up the element and drive to races.

i agree about the taxes- in europe they pay upwards of $8 a gallon and close to a third of that is taxes imposed so people don't drive as much.

9:37 AM

 
Blogger Epic Adam said...

At some point the price is going to get so high that people simply won't be able to afford to fill the car with gas. What that point is I have no idea. But for me, it is already getting there.

11:55 AM

 
Blogger MtbAllDay said...

Agreed. I really only meant for this little crunch.

Of course how one figures it makes a difference, but after adjusted for inflation, the trend on gasoline prices is interesting:
http://www.inflationdata.com/inflation/images/charts/Oil/Gasoline_inflation_chart.htm

Anyway, I hope people ride to work in Salt Lake just to help our air -- for our local problem, cars actually are a large contributor to the pollution problem.

9:50 PM

 

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