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Getting A Jump On the Next GOP Gasoline Lie

Well, I guess I need to get a jump on the GOP’s next gasoline lie. Since they’ve all got their hair on fire from congressman Akin’s inadvertent spilling of Paul Ryan’s “forcible-rape, legitimate rape or Medicare destruction” beans, it’s high time for the GOP to bring out their favorite erroneous adage that essentially says when gasoline prices go down it’s the “free market” working properly, but when they go up, “It’s Obama’s fault.” Why now? Because it appears that prices will be on the increase for a while. The truth, of course, is that there is almost nothing that the President nor Congress can do about gasoline prices; unless the GOP obstructionists and climate-change deniers get off their butts and make green, renewable energy a priority.

After falling steadily in May and June, gasoline prices have risen 25 cents per gallon in the past month, putting renewed pressure on consumers’ budgets. Prices nationwide are now averaging $3.68 a gallon and have topped $4 in California and Illinois.

Actual Logic Behind Price Increases

The actual reasons prices are on the rise are simple and quite logical. But that most Americans have either no idea, or inaccurate suppositions regarding gasoline prices is mostly due to their own laziness or believing what politicians or FOX “News” tells them to believe. I’m sure any day Wailin’ Palin will be on the airwaves with her usual idiotic “Drill, Baby, Drill” screeching to her wildly cheering fan base of Limbaugh/Beck rejects.

But Patrick DeHaan, senior petroleum analyst at GasBuddy and a U.S. News and World Report contributor, says unexpected shutdowns at two U.S. refineries are primarily responsible for the recent jump in gasoline prices but it is certainly not the only explanation.

The price of crude oil is rising following production outages in South Sudan and the North Sea. Declining output from Iran due to an oil embargo by Western nations has also caused a diminishment in crude inventories, and in turn, refined products.

Then of course, there is our anti-free market, GOP-dictated ethanol subsidies. They’re just like the bribery-induced $4 billion-a-year subsidies to oil companies (which the GOP has blocked even reducing for the last four years), for which we the paying public gets no price-break whatsoever. Fact is, the price of ethanol, a small-government, GOP-mandated, required additive for gasoline sold throughout the U.S., has spiked because of the drought in the Midwest. In fact, it is the worst drought in more than 50 years. That drought has hammered the corn crop used in ethanol production, pushing up corn prices almost 60 percent in the past two months. So not only will the drought drive up food prices, since high fructose corn syrup is used in virtually everything eaten in the U.S., the REQUIRED ethanol additives drives down the efficiency of the gasoline we do buy, thereby causing us to get fewer miles-per-gallon.

Quite a racket, even for the GOP. Mob bosses would be envious of such a scam.

Consequences, We the Public Always Have to Pay the Consequences for GOP Corruption

Consumers normally react to pain at the pump by reducing their spending elsewhere, slowing already sluggish demand for goods and services even more, dragging down what little economic activity the President can muster on his own, and just ahead of the GOP convention. Higher prices give Republican presidential contender Mitt Romney an easy target for attacking Obama; the same one used when gas spiked this spring that will undoubtedly be repeated at the GOP convention next week.

The administration considered countering with releasing supplies from the government’s Strategic Petroleum Reserve late last Thursday, but traders were unmoved and frankly I think the President was correct not to give in to the GOP’s dirty politics.

“The dominant theory is that prices are high and those in political power have to be perceived as doing something to address that,” said Tom Kloza, chief analyst for the Oil Price Information Service. “The other theory is a little scarier. Perhaps they’re getting ready for the structure by which they would release oil if something happens between Iran and Israel in the Middle East.”

But the United States would probably be forced to tap its reserve without much international support, after Maria van der Hoeven, executive director of the International Energy Agency, told Reuters, “There is no reason for a release.” Members of the G-8 notified the IEA in May they were prepared to tap their reserves, but anxiety over a showdown between Israel and a nuclear-ambitious Iran began to ease and so did prices.

Boring But True

The most recent data available actually suggests a routine rationale for the rising gas costs: demand usually peaks during summer vacation season. U.S. stockpiles have dropped to their lowest level in four months, while daily usage of oil has jumped by 7.7 percent over the last month, the Department of Energy said last week. All of that has occurred amid an increase in domestic oil production and a multi-year decrease in demand.

Unfortunately, there’s been the logistical obstacle of getting domestic oil drilled from the heartland out to coastal refineries, in addition to a fire at a Chevron refinery in California and a dozen smaller issues that have recently driven up futures prices. None of which are related to the April boogeyman-Keystone XL.

The drought running amok across most of the Midwest has yet to make much of an impact as well, since ethanol continues to be cheaper than the gasoline with which it is mixed. And the decreased efficiency just makes it stupid and crooked, not necessarily relevant to prices rising now.

“This is much ado about normal,” Kloza said. “It is not the beginning of the march to $4, $4.50, $5 a gallon, and some of the other nonsense that’s out there.” If the normal seasonal pattern holds, gas prices should tumble after Labor Day. But that’s an “if” with a whole host of asterisks. So don’t fall for the typical GOP rhetoric that is sure to come.

However, for the sake of conjecture, any one of the following could produce huge spikes:

1.A man-made disaster (i.e., operator error and any resulting calamity as a result )
2.More refinery outages due to old age or poor maintenance procedures
3.Hurricanes in the Gulf of Mexico
4.Tensions escalating with Iran to a point that halts oil production

Any or all could be wildcards for one of the election’s major pocketbook issues.

Also to remember, gas prices play differently across the country, since states such as California and New York that are expected to be easy wins for Obama are among the places where costs consistently remain the highest. Gas in the swing states of Florida and Virginia has crept upward over the last month to plateau just below the national average, while Ohio jaggedly peaked around $3.87 a gallon at the start of the August and then rolled back down to $3.72, according to GasBuddy.com.

The last time gasoline approached these levels, Romney (never one to remain calm in a crisis apparently), demanded Obama fire three of his cabinet members and lift restrictions to drilling offshore and on public land. Gas reached a high this year of $3.94 a gallon in April, about 17 cents shy of the all-time record set in July, 2008; ironically during a GOP administration under the “steady” hand of George W. Bush, ex-oilman extraordinaire.

That increase largely occurred as refiners switched to a summer gasoline blend (briefly squeezing supplies) and hostilities with Iran risked pinching off shipments from the Middle East. It was extremely embarrassing when GWB went begging with hat-in-hand to the Saudis to increase production and they flatly turned him down. President Obama responded by resurrecting a dormant task force looking at futures market manipulation, in addition to calling to end tax breaks for oil producers.

“Anyone who tells us we can drill our way out of this problem doesn’t know what they’re talking about, or isn’t telling you the truth,” he said during a March speech in New Hampshire. Public pressure eventually faded on gas prices as prices plunged back toward the $3.40 range.

While not much can be done about the drought, something can be done about U.S. refineries.

“We should look at the oversight of these facilities,” says DeHaan. “They constantly seem to be breaking down.”The refining situation leads to massive increases in prices virtually every spring…that will continue until we tackle this refining issue,” he notes.

Of course the real blow to Obama and the economy could be more indirect. When Americans fork over more money for gasoline, they have less for other purchases of food, clothing, gadgets, and entertainment. With the economy growing at a 1.75 percent pace this year, any further slowdown and the recovery takes more punches to the gut.

Gasoline prices have certainly not been enough to push the economy into a recession, but it certainly does not help going into November.

And you can be sure that with “legitimate rape” Akins/Paul Ryan, “Kill Granny’s Medicare” Paul Ryan, and Romney being, well, whoever he needs to be while telling whatever lie he needs to tell based on his current geographic travel stop, rising gasoline would be a blessing for Romney sent from Kolob . Kolob being the heavenly body nearest to the throne of God according to Mormonism where all good Mormons retire to their own planet.

Kolob is also the inspiration for the fictional planet Kobol, home of the Cylon machine-people within the Battlestar Galactica universe, created by Glen A. Larson…also Mormon.

Huh. Romney, a Cylon, bent on enslaving the commoners of the human race. Nahhhhh. He does walk funny though.

Source HG


 

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