Many letters to the editor about the oil industry have been filled with conspiracy theories and opinions stated as facts. The most blatant of these need to be addressed in a more thoughtful and factual manner.
Oil prices are set world wide by the worlds markets, not by the oil companies. Oil companies get whatever the world oil market offers them. Obviously, if they could set the price, the price would never be low, but prices have been low many times. How soon we ignore that fact.
A letter writer stated, When we conserve, they sell it overseas. No, they sell it wherever theyll make the most profit, just like all businessmen do in all industries. It amazes me how many people think there is a U. S. price for oil. There is not. It is a world commodity. The closest anyone can come to blaming something for high oil prices is OPEC, and in particular, Saudi Arabia. They reduce production when they feel prices are too low and raise production if they feel a lower world price is in their best interest. Please, instead of blaming big oil here in the United States (that has no control over prices), write OPEC and Saudi Arabia scathing letters for all of us.
Along with the world price of oil, many other issues contribute to higher gasoline prices. For example federal, state and local taxes are also major factors. Supply and demand influence gasoline prices; the supply is determined by the number of refineries producing gasoline. Moreover, transportation costs, the number of retailers, and the level of competition impact the cost. All of these issues, and many more, factor into the price of gasoline.
Also, it seems many people believe the president of the U. S. can control gasoline prices. Our presidents are intelligent men. Does anyone really believe if they could lower the price of gasoline for voters they would refuse? Do people believe they would purposely alienate voters and damage our economy?
One recent letter to the editor writer stated, There are only a few large oil companies. The fact is there are hundreds, all in competition with each other. And they are all over the world. In fact, PetroChina is now the largest in the world, just ahead of ExxonMobil (with only about 7 percent of the worlds production).
A Cortez Journal reader opined of the oil industry, Its called a monopoly and Its all controlled by the oil companies. The same can be said for car companies. There are far fewer large car companies than oil companies. They make all of the cars and control the prices. Lets say the same for farmers; they grow the food and control the prices. Same for steel companies they make all of the steel and control the prices. Coal companies do the same thing. Why dont I see letters to the editor complaining about them and their monopolies? See how this twisted logic works? If you look at things in a preconceived and opinionated way, you can say every industry makes something and controls the price. But we all know thats not how it works at all.
A writer stated, Refineries are being shut down, dismantled and sold, mostly to China. Sold to China? Our refineries are being shipped over there? Really? Id like to see a photo of that ship. Please, give us a specific example. If this is true, I suspect it was an old, out-of-date refinery dismantled and shipped over as scrap metal because the monopolistic steel companies here are paying less for the scrap and they can sell it to the Chinese for more profit. If big oil is making so much profit on gasoline, why would they shut down and dismantle their capacity to make more? Using this writers logic, big oil would be shutting them all down but one, sending them to China, and then charging us even more for gasoline.
One writer wrote, Im for small government ... (snip) ... but, the amount of profit they (the oil companies) make should be legislated. Really? How would that work? Can our government legislate how much profit all of the worlds oil companies can make, or just the few here in the United States? How long do you think any oil companies would remain in the United States if that happened? Theyd all quickly move overseas.
The Senate hasnt been able to legislate a budget in three years. Our government has, however, legislated us into trillions of dollars in debt. Is this the same government that should be telling us how much to pay for gasoline?
If you want an immediate shortage of something, set the price artificially low. If you want an immediate surplus, set the price artificially high. The government tried this with natural gas and we had a terrible shortage about 30 years ago, and it gave up legislating the price of natural gas. Sure, it was cheap, but you couldnt get any. If we want a shortage of gasoline, let the government legislate it at an artificially low price.
I wonder how many ranchers would be in favor of the government setting the price of beef lower than it is now because meat prices are deemed by many to be too high? After all, again using one writers logic, the production is all controlled by ranchers and they set the prices.
A writer stated, Our government should be getting royalties on every barrel produced on federal leases. Guess what, thats exactly what happens, and our government is very particular about getting its fair share.
We all want lower fuel costs, independent of world politics, which we know plays a large part in prices. It is illogical to buy oil from countries that dont like us. Using domestic sources for fuel and transportation would increase our national security and reduce oil embargo threats to blackmail us or high oil prices to damage our economy. With natural gas prices the lowest they have been in years, one solution would be to increase the number of natural gas-powered vehicles. If our cars and trucks ran on electricity and natural gas, the U. S. would produce, and could buy from Canada and Mexico, plenty of oil for all of our other uses.
Rick Corbitt is a retired geophysicist living in Montezuma County.
