It's a cruel Crude world!
Buenos Dias Mis Monos Locos!
It seems that everybody is having to deal with that smelly problem of gas! And "no," I'm not talking about the gastronomic byproduct of digestion. Rather, it's the pain we're all feeling when bent over at the local filling station, sticking that fuel nozzle where the sun don't shine. "Cha-ching!"
I remember my pre-license childhood days when I'd roll my parents' Bronco II out of the driveway in the middle of the night and take it for a spin. After a night of freedom and sliding sideways across lawns, I'd fill that bad boy up for $0.85 a gallon. Fast forward 18 years, and I'm pumping at $4.13 a gallon in the DC area. If the natural law of inflation is about 3-4% a year, we should have expected gas to increase from $0.85 a gallon in 1990, to $1.58 a gallon in 2008 (calculating at 3.5% per year). Obviously, that's not the case.
Crude behavior...
So how did gas skyrocket past natural inflation, most notably in the past few years? It's elementary my dear Watson: Crude Oil. You're familiar with the concept of supply and demand, right? If you look at the price of a barrel of crude in 2006 ($66) versus a barrel of crude now ($122), you see a ridiculous increase of 85% in the course of only two years. Although developing countries like China and India are starting to demand more crude, the largest consumers of crude in the world are the citizens of the United States.
Let me be crystal clear; the US produces about 5.1 Billion gallons of crude per day; however, we consume about 20.7 Billion gallons per day. Keeping with the United States' general strategy of consumption beyond our means, we have a deficit of 15.6 billion gallons of crude per day. (http://www.eia.doe.gov/steo) You don't have to be a mathematician to figure out that we must import 75% of our crude! Oh by the way, the billion people in China consume 6%, while the 300 million people in the USA consume 25% of the world’s oil.
Where it's at?
So who holds the keys to future oil production; or in other words, who has the largest reserves? What region could possibly be so important? Well, if you were to add up every ounce of black gold from the USA (2.2%), Russia (5%), Venezuela (6.2%), China (2.6%), and Mexico (1.5%), you would only amount to 17.5%.
Saudi Arabia holds 25.5% of the world's reserves, and if you throw the United Arab Emirates (7.8%), Iran (9.2%), Kuwait (9.5%), and Iraq (11.1%) into the mix; you have about 2/3rds of the world's oil sitting in the Middle East! (http://www.marktaw.com/culture_and_media/politics/GlobalOil.html) Wow, converting third world countries into friendly capitalistic business partners never seemed so smart! Yay freedom!
Solutions Anyone?
If you believe that the USA can become independent from foreign oil, you probably also believe in creationism; and just for the record, both are based upon wishful thinking and lunacy.
If you want to see what the presidential nominees suggest:
BarRock 'em Sock 'em Obama:
(http://www.barackobama.com/issues/energy/)
Johnny "Bring the Pain" McCain:
(http://www.johnmccain.com/Informing/Issues/da151a1c-733a-4dc1-9cd3-f9ca5caba1de.htm)
Preguntas para mis amigos:
What are you thoughts on USA's demand for oil?
Hey, we're producing 10% and consuming 25% of the world's oil; somebody's making mad cash, and it ain't us.
What are you paying to fill up your ride?
How much are you willing to pay before you say "enough is enough!"
Does your perception of our involvement in the Middle East change given that the Middle East holds almost 2/3rds of the world's reserves? Might I remind you that Saudi Arabia produces 11.6% of the world's crude, consumes 1.9%, and is sitting on 25.5% of the world's reserves.
Put down the TPS report and hit us with your mad wisdom!
All right, click the "comments" link below to read the responses of others, as well as share your own responses. "NO" you don't have to be a member of Blogger to put in your $0.02; Just select "Name/URL," type in your name, and post your comments... that's it.... it's as easy as sin!
It seems that everybody is having to deal with that smelly problem of gas! And "no," I'm not talking about the gastronomic byproduct of digestion. Rather, it's the pain we're all feeling when bent over at the local filling station, sticking that fuel nozzle where the sun don't shine. "Cha-ching!"
I remember my pre-license childhood days when I'd roll my parents' Bronco II out of the driveway in the middle of the night and take it for a spin. After a night of freedom and sliding sideways across lawns, I'd fill that bad boy up for $0.85 a gallon. Fast forward 18 years, and I'm pumping at $4.13 a gallon in the DC area. If the natural law of inflation is about 3-4% a year, we should have expected gas to increase from $0.85 a gallon in 1990, to $1.58 a gallon in 2008 (calculating at 3.5% per year). Obviously, that's not the case.
Crude behavior...
So how did gas skyrocket past natural inflation, most notably in the past few years? It's elementary my dear Watson: Crude Oil. You're familiar with the concept of supply and demand, right? If you look at the price of a barrel of crude in 2006 ($66) versus a barrel of crude now ($122), you see a ridiculous increase of 85% in the course of only two years. Although developing countries like China and India are starting to demand more crude, the largest consumers of crude in the world are the citizens of the United States.
Let me be crystal clear; the US produces about 5.1 Billion gallons of crude per day; however, we consume about 20.7 Billion gallons per day. Keeping with the United States' general strategy of consumption beyond our means, we have a deficit of 15.6 billion gallons of crude per day. (http://www.eia.doe.gov/steo) You don't have to be a mathematician to figure out that we must import 75% of our crude! Oh by the way, the billion people in China consume 6%, while the 300 million people in the USA consume 25% of the world’s oil.
Where it's at?
So who holds the keys to future oil production; or in other words, who has the largest reserves? What region could possibly be so important? Well, if you were to add up every ounce of black gold from the USA (2.2%), Russia (5%), Venezuela (6.2%), China (2.6%), and Mexico (1.5%), you would only amount to 17.5%.
Saudi Arabia holds 25.5% of the world's reserves, and if you throw the United Arab Emirates (7.8%), Iran (9.2%), Kuwait (9.5%), and Iraq (11.1%) into the mix; you have about 2/3rds of the world's oil sitting in the Middle East! (http://www.marktaw.com/culture_and_media/politics/GlobalOil.html) Wow, converting third world countries into friendly capitalistic business partners never seemed so smart! Yay freedom!
Solutions Anyone?
If you believe that the USA can become independent from foreign oil, you probably also believe in creationism; and just for the record, both are based upon wishful thinking and lunacy.
If you want to see what the presidential nominees suggest:
BarRock 'em Sock 'em Obama:
(http://www.barackobama.com/issues/energy/)
Johnny "Bring the Pain" McCain:
(http://www.johnmccain.com/Informing/Issues/da151a1c-733a-4dc1-9cd3-f9ca5caba1de.htm)
Preguntas para mis amigos:
What are you thoughts on USA's demand for oil?
Hey, we're producing 10% and consuming 25% of the world's oil; somebody's making mad cash, and it ain't us.
What are you paying to fill up your ride?
How much are you willing to pay before you say "enough is enough!"
Does your perception of our involvement in the Middle East change given that the Middle East holds almost 2/3rds of the world's reserves? Might I remind you that Saudi Arabia produces 11.6% of the world's crude, consumes 1.9%, and is sitting on 25.5% of the world's reserves.
Put down the TPS report and hit us with your mad wisdom!
All right, click the "comments" link below to read the responses of others, as well as share your own responses. "NO" you don't have to be a member of Blogger to put in your $0.02; Just select "Name/URL," type in your name, and post your comments... that's it.... it's as easy as sin!
posted by Don the "Head Chimp" at
10:58 AM
3 Comments:
1. I think that the oil should be cheaper for us. We use much more oil than other countries so we should be give a bulk discount. Think about it... I can go to the local store and get five ounces of mayo for $5.00 or I can go to Costco and get Seventy Seven pounds of mayo for $25.00. That’s less than the first one. If you don't believe me you can do the math. This is basic economics people, Supply and Demand. We demand so much oil that we should be supplied with it cheaper. That’s pretty basic. Also, it bothers me when other countries think they should get oil when we are paying so much for it. I mean, what gives them the right!?!
2. Call me old fashioned, but I still use dollars. I'm sorry if that means that some Arabian robber baron might have to go to the bank to get them exchanged to Rupees, or camel ears, or whatever they use for currency over there these days. Like many of you reading this, I was raised on a motto: E Pluribus Unum, which for those of you who don't know is ancient American for These Colors Don't Run. So like the motto goes, I will not run. I will drive, and I won't let something as petty as the price of gas stop me from exercising my fundamental, constitutional right to do so.
3. Don, you need to get your facts straight. Saudi Arabia produces 11.6% of the world’s crude old? It is pretty much common knowledge that they produce closer to 11.8%. Now, you usually do a pretty good job with these things, but you clearly dropped the ball on this one. You shouldn't expect us to write in answers to your questions when you can't even do the proper leg work or fact checking when setting them up. Attention to detali, Don. It's not just important for dairy farmers. Remember that when your writing the next blog.
- mdbm
By
Anonymous, at 5:13 PM
Dan,
I can always count on you to help me "keep it real."
One note of interest: crude oil is globally priced in Dollars; not camel ears, rupees, or chickens. I mean, I told you about that time I was banned from the Shell for trying to pay for gas with Gypsy Tears!
Although, I'm wondering if the Saudis would be interested in your bulk discount idea? I think we just need to pretend that we don't want the oil, and then maybe they'll think that they have to lower the price to get us interested in it again. I'm all for haggling, but I think they'll call our bluff...
By
Don the "Head Chimp", at 10:25 PM
Here's what I think: We have to export something to the middle east. Anything. Let's jack up the price and make an even trade.
Before you all call me a silly, silly girl - it makes cents. Get it?
By
Anonymous, at 10:44 PM
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