I’m sure you’ve heard the arguments that the cost of gasoline is controlled by supply-and-demand economics. As the supply dries up, the cost goes up. As demand drops, the price drops. There is definitely an element of truth to this, but there is one other thing that can affect this price artificially—commodities trading. If you think that the price of oil is going to go up in the near future, you can buy it in a sense on the commodities market. This artificially pushes the price of a barrel of oil upwards because that barrel you bought isn’t going to be delivered to a refinery to be turned into gasoline, kerosene, or PVC plastics. Now that it looks like Americans can control their behavior a bit, driving fewer miles, investing in oil at $200 per barrel doesn’t look like such a good idea, and the price of oil dropped dramatically to below $110 per barrel—much more than the 4% drop in miles driven this summer. Now that hurricanes are headed to the gulf region, where oil is drilled, we’re watching oil prices start to go up to over $120 per barrel, and that’s before any drop in oil production. The hurricanes haven’t reached oil production or refining facilities yet. Supply and demand? Nope, commodities trading and speculation that the hurricanes this year might damage oil production or refining. That’s why you’ll be paying more at the pump today.
There are quite a few people out there trying to convince you to let the oil companies start drilling for oil in protected areas to bring that price down further, and make us independent of foreign oil. There are some significant problems with that argument. For example, the areas they are talking about hold only a small fraction of the world’s reserves. There isn’t enough oil in the areas that they are talking about combined to fuel the United States for a year. There is no energy independence to be had from drilling in these areas. And considering that it would be several years before any oil came from these sources, the White House estimates 10 years or more, there will be virtually no change now in the cost of oil from making this decision. We could make a bigger dent in the cost of gasoline by pursuing hybrid, natural gas powered, and electric vehicles for a similar investment, causing less damage to the environment in the process, and helping to make us more competitive in the world market for vehicles. That means more American jobs, folks. T. Boone Pickens the oilman (architect of The Pickens Plan), and Rep. Roscoe Bartlett (R-MD) understand this, and we need to get the word out. Using government funds to drill for oil instead of looking for alternatives is throwing good money after bad.
Also, there is no current biofuel or other alternative to jet fuel. When it costs as much to fuel a fighter plane as it does to buy one in the first place, we’ll be glad we didn’t use up all of our domestic oil reserves. Trust me folks. We can’t invade foreign countries to get their oil for our use if we can’t get there in the first place. So for national security’s sake, we need to keep our domestic reserves safe and off the market. If you support the military, you must be against domestic drilling right now.
There are other urgent national security reasons why we need to cut our consumption of oil. Iran is a major exporter of oil—85% of its income is from oil. According to the U.S. Department of Energy, it is not possible to buy gasoline that is guaranteed to be free of Iranian oil. Even if it were, when you buy gasoline, you are putting an upward pressure on the price of oil that benefits Iran. If you are at all concerned about the Iranian nuclear program building atomic bombs, then you should be concerned that you are directly funding the work on those same weapons that could be used against us every time you fill up your tank.
Saudi Arabia, nominally our ally in the Middle East, at one point created a special account in all Saudi banks called Account 98, and encouraged their people to deposit money into that account. These funds were dispersed to the families of suicide bombers in Israel. In addition, 15 of the 19 hijackers on 9/11 were from Saudi Arabia, as is Osama Bin Laden himself. Al-Qaida was founded in Saudi Arabia as an organization that was against U.S. military bases there. Saudi Arabia gets 90% of its export earnings from oil, so any funds from Saudi Arabian backers of terrorism are pretty much oil based. Considering the Saudi governmental connections to Account 98, that pretty much destroys any argument that the Saudis are not connected to terrorism.
Although Account 98 was closed due to international pressure, other private accounts have been opened for the same purpose since then. In short, Saudi Arabia is the source for much of Al Qaeda's funding.
If you are concerned with the environment, then you are probably concerned about Carbon Dioxide emissions. Every gallon of gas used puts almost 20 pounds of carbon dioxide into the atmosphere. If you’re driving about 12,000 miles per year (a good estimate for most folks) and getting 21MPG on your car, you’re putting out about 11,200 pounds (about 5 tonnes) of carbon dioxide each year from that car alone.
With these reasons, the old question from World War II suddenly becomes relevant again: “Is this trip really necessary?”