Making Sense out of Gas Prices

Fire of Liberty
Thomas Sowell has a wonderful column out today that pretty much lays waste to the demagogues in the US Congress and their "grand collusion" conspiracy they keep dishing out. As Sowell duly notes, the folks in Congress can keep on smearing the oil companies that provide the energy that keeps our dynamic economy going if they want to but they should also peer into their own lives and take note of their actions that has led to our current gas crunch(Even if it's minute compared to the Arab Oil Embargo in 73). Just look at what Sowell has to say:

No matter how big American oil companies are, there are other oil companies around the world and the price of oil is determined in international markets. As for investigating Big Oil, that has been done time and again already, with nothing to show for it.

Is it rocket science that, when huge countries like India and China have rapidly growing economies, their demand for oil goes up by leaps and bounds? Is it rocket science that, when demand shoots up but supply doesn't go up as much, prices rise?

Prices are a symptom of an underlying reality. Politicians can seize on the symptom and even pass laws dealing with it, without changing the underlying reality.

Prices are like a thermometer reading. When someone has a fever, it is not going to do any good to put the thermometer in ice water to bring down the reading. If you think the fever is gone, it may not be long before the patient is gone, if you don't do something about what is causing the fever.

Ironically, the people who are making the most noise about the high price of gasoline are the very people who have for years blocked every attempt to increase our own oil supply. They have opposed drilling for oil off the Atlantic coast, off the Pacific coast, or in Alaska. They have prevented the building of any new oil refineries anywhere for decades.

They have fought against the building of hydroelectric dams or nuclear power plants to generate electricity without the use of oil. They love to talk about their own pet "alternative energy sources," without the slightest attention to what these would cost in terms of money, jobs, or our national standard of living.

Even when one of their pet "alternative energy sources" -- windmills -- is proposed to be built near them, suddenly it is not right to spoil their view.

Well done Professor Sowell. I have to say that if the politicians want to help out our energy woes then just free up the oil companies from regulations, restrictions and taxes that prevent them from domestic exploration, drilling and production of oil for gas. The same also goes for the building of new refineries, nuclear plants and other sources of energy. The more we go on ignoring or put off the quest for vast amounts of oil, LNG and the alternative sources like nuclear and ethanol(Cut the tariff on imports) the more we face a energy crunch due to a growing demand of "black gold" in other sections of the world. It'd be nice if more politicians had such a clear view of the rise of gas prices but then again they're politicians who go all populist before the cameras.