Why The High Gas Prices?

Many Americans received a surprise over the past few weeks when the price of gas rose up to 50% increase in places. Since we have a national economy, the price of gas is directly linked to nearly every aspect of our economy through transportation costs. When gas prices go up, so does the cost of everything else. In many cases, the cost of transporting goods can exceed the price of the goods themselves. For example, it costs Blue Moose Films $1.59 to manufacture each DVD, and $1.75 to get it from the factory to the consumer. This excludes the cost of packaging, which has its own transportation costs, and of course the cost producing the movie itself, an even higher energy-to-product cost ratio. As the price of gas goes up, so does the cost of transportation, and therefore, the price of everything we buy.

Third world countries are less affected by transportation costs because they tend to have more local economies, while the costs of exporting resources are covered by the first world users. Other such ‘civilized’ countries have invested large percentages of their transportation budgets on mass transit which allows them to ship much greater quantities of goods and people for much less energy and expense. This is important to their economies, because despite the rise in U.S. gas prices, they still failed to reach the prices paid by most of the rest of the world. (i.e. $4.00/gal in Canada and over $5.00/gal in Europe)

In the past, the U.S. has responded to climbing gas prices by lowering speed limits, stock piling oil resources, and releasing these resources in order to lower gas prices. This is not being done now. The steep rise in gas prices has little to do with an actual shortage, and a great deal to do with the speculation and manipulation of oil company stock prices. When this was attempted near the end of President Clinton’s first term, he released some of the countries oil reserves, and the prices started to come back down.

There is a very good reason why the U.S. does not release oil stockpiles now or invest in mass transit or promote alternative fuels as it promised to do with the Kyoto Protocol. (Which they still have not signed onto) Namely, the current administration and its primary backers are in the oil business and are busy making yet another fortune at the expense of the American populous.

Halliburton, the major oil company formerly headed by Cheney, received the lion’s share of Iraq reconstruction contracts and oil exploitation rights. It has done little to improve conditions in Iraq while diverting all this money to its own coffers. In the film Internationally Speaking, Medea Benjamin, who spent a good deal of time in Iraq talking to the people both before and after the invasion, stated that following the first Gulf War the Iraqis restored basic services almost immediately and rebuilt their country despite being isolated from the world by U.N. imposed sanctions.

In contrast, Haliburton, despite its billions of U.S. tax payer dollars and Iraqi oil resources, has failed to restore basic services to the Iraqi people. Is this the kind of company and administration the U.S. should be relying on for its Energy needs?

Periodically, Congress allocates large amounts of money for research into alternatives to fossil fuels. The money is invariably received by the auto industry, which has a vested interest in fossil fuels. The results produced, if any, are negligible. The electric hybrid came out of Japan where it was available a decade before word of it reached the American consumer. This is still happening today where Toyota’s Hybrid Minivan has been available in Japan for seven years! The date of release here in the states keeps getting pushed back; it’s currently slated for 2007. On the other hand, groups of self -funded hippies across the nation are producing fantastic results with Diesel fuel made from fast food deep fryer waste (biodiesel) and electricity from the sun and wind, the costs of which are quickly becoming competitive.