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February 10, 2012
Lisa M. Krieger: Man with defibrillator demands access to his own heart's information
David G. Savage: Why activists may not be in a hurry to have High Court rule on alternative marriage
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Kimberly Palmer: How to actually enjoy -- relaxing, financially -- your vacation
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Menachem Wecker: Though Controversial, LL.M.'s Can Lead to Specialized Legal Jobs
The Kosher Gourmet byDana Velden: Going to the bother of making soup? You know it better be good. This CREAM OF TOMATO SOUP certainly is! And it's a cinch to make, too (Includes techinques and serving secrets)
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Frank J. Gaffney, Jr.: Caught off-guard? President's Super Bowl interview with Matt Lauer gives those who need a reason not to vote for him, a darn good one
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February 6, 2012
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Jeffrey Fleishman: In newly democratic Egypt, tens of democracy activists jailed, to stand trial; their groups are 'threatening the stability of the homeland'
Julie Deardorff : Researchers say antioxidants may not be that effective and could do more harm than good
Mark Clayton: How did Anonymous hackers eavesdrop on FBI and Scotland Yard?
February 3, 2012
Edmund Sanders : Israeli official says Iran is creating missile that could reach East Coast of US
Victoria Kim: Immigrant-smuggling ring used black drivers to avoid racial profiling
February 2, 2012
Jim Carney: Wrong number call may have saved her life
Reza Kahlili : Ex-CIA spy in Iran's Revolutionary Guard: What Obama doesn't grasp about striking deals with Tehran
Tina Susman: For woodchuck rescuer, every day is Groundhog Day
February 1, 2012
Brian Bennett: US officials see increasing threat of domestic attack from Iran
Emily Brandon: How to Take Advantage of New 401(k) Fee Disclosures
January 31, 2012
January 30, 2012
Paul Richter and Ramin Mostaghim: Misreading Teheran's limits -- deadly and economically devastating as they may be -- is a risk administration, Europe seem willing to take
Suzanne Bohan: Warning: Nap-deprived tots missing more than sleep, study finds
Meg Handley: Banks Revamping Rewards Programs to Woo Customers
January 27, 2012
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Yochonon Donn: In liberal New York City, fervently-Orthodox Jews may soon be getting a district to call their own
Jeannine Stein: An inflated ego and thinking you're 'all that' doesn't just make others sick of you, it can make you ill
Katy Hopkins: New budget rules may affect how much money you get for college
January 26, 2012
Ed Koch: To the New York Times, calling for the murder of Jews by those capable of having their incitement taken seriously isn't news
Jeannine Stein: Mental illness struck one in five U.S. adults in 2010: Report
January 25, 2012
Richard Simon: House passes two bills endorsing the use of religious symbols at military memorials
Fred Weir: Putin: Multiethnic Russia cannot survive as a US-style 'melting pot'; must find its own way
Susan Johnston: 5 Sneaky Coupon Strategies Consumers Should Watch Out For
January 24, 2012
Carol Clark: The price of your soul: How your brain decides whether to 'sell out'
Caroline B. Glick: America lost most in 'Arab Spring'. Sadly, many voters still don't grasp the extent
Warren Richey: Drug criminal scores win in GPS ruling from conservative-leaning high court
Erika Bolstad: Black conservatives gather to talk about gaining strength
January 23, 2012
Melissa Dribben: Jewish voters to play a key role in Florida's Republican primary
Jordan Rau: In quest to grow, Catholic hospital system will announce this morning its break from church
Ali Safi: U.S. envoy gives Taliban terms for peace talks
January 19, 2012
January 18, 2012
January 17, 2012
Frank J. Gaffney Jr.: No-kidding red lines: U.S. response to an Iranian nuke may be bluster, but Israel's won't be
David G. Savage: They sued their principals after slandering them online --- now the cases are headed to the Supreme Court
David Francis: Where to Invest in 2012: With stocks expected to rebound, opportunity abounds for investors
January 13, 2012
Ben Lynfield: Israeli lawmakers move to annex Jewish Judea, one museum at a time
Alexia Elejalde-Ruiz: Thriving through touch: Gentle massage helps older people with low mobility improve in mind and body
January 12, 2012
Warren Richey: Landmark Supreme Court ruling a 'resounding win' for religious groups
Warren Richey: Supreme Court says no to new rule on eyewitness testimony
John Fauber : Statins found to raise diabetes risk in postmenopausal women
Katy Hopkins : Consider This Before You Pay for an Online Degree
The Kosher Gourmet by Joseph Erdos: This mushroom and barley soup has an intense -- almost nutty -- flavor that mixes robust with Middle East. It has creaminess without cream
January 11, 2012
Shari Roan: Millions of atrial fibrillation sufferers at risk for devastating, but preventable, stroke
Tom Hussain: Pakistan -- recipient of more than $21 billion in civilian and military aid -- speeds pursuit of Iranian pipeline, defying US
David G. Savage: High court signals it won't be loosening TV's 'indecency' rules
Stephen Ceasar: Oklahoma's Islamic law amendment can't go into effect, court rules
January 10, 2012
Reza Kahlili: From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard
Karen Kaplan: Study: Nicotine replacement products ineffective when used in real-life situations
January 9, 2012
Michael Doyle: Put through legal hell over dream home, couple fought back hard --- all the way to Supreme Court
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Jewish World Review
April 5, 2007
/ 17 Nissan, 5767
The real reason for soaring gas prices
By
George Will
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http://www.JewishWorldReview.com |
THEY COME with metronomic regularity, these media stories about "soaring" gasoline prices and the causes thereof, news stories which always identify the same two culprits, supply and demand. The stories always give various reasons why supplies are tight more often, why prices include a risk premium based on fears that supplies might become tight or why demand is higher than it "should" be, given supposedly high prices.
Today, as the price of a gallon of regular ($2.70 nationally on Monday) "soars" almost to where it was (measured in constant dollars) in 1982, the "news" is: "Drivers Offer a Collective Ho-Hum as Gasoline Prices Soar" (The New York Times, last Friday). People are not changing their behavior because the real, inflation-adjusted cost of that behavior has not changed significantly, and neither has the cost of the commodity in question, relative to disposable income.
The next wave of stories about "soaring" gas prices will predictably trigger some politicians' indignation about oil companies' profits. The day after Exxon Mobil's announcement that it earned $39.5 billion in 2006, Hillary Clinton said: "I want to take those profits, and I want to put them into a strategic energy fund that will begin to fund alternative smart energy, alternatives and technologies that will begin to actually move us toward the direction of independence." Clinton's "take" reveals her confiscatory itch. Her clunky "toward the direction of" suggests that she actually knows that independence is as chimeric a goal as Soviet grain production goals were.
President Bush proposes reducing gasoline usage 20 percent in 10 years. Perhaps: After the oil shocks of the late 1970s, gasoline consumption fell 12 percent and did not again reach 1978 levels until 1993.
This decline was produced by an abrupt and substantial increase in the price of gasoline, which no politician, least of all the President, is proposing. And we actually could get lower prices because the President and various presidential candidates have become such enthusiasts for federal subsidies for ethanol and other alternative fuels.
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If these fuels threaten seriously to dampen demand for oil, the Saudis might increase production enough to drive down oil prices, in order to make investments investors beware in alternative fuels even more uneconomic than they already are.
In the 20 years from 1987 to 2006, Exxon Mobil invested more ($279 billion) than it earned ($266 billion). Five weeks after the company announced its 2006 earnings, it said it will invest $60 billion in oil and gas projects over the next three years. It will, unless a President Clinton and a Democratic-controlled Congress "take" Big Oil's profits, which are much smaller than Big Government's revenue from gasoline consumption.
Oil companies make about 13 cents on a gallon of gas. Government makes much more. The federal tax is 18.4 cents per gallon. Mrs. Clinton's New York collects 42.4 cents a gallon. Forty-nine states all but Alaska make more than the oil companies do on every gallon.
In 1979 President Jimmy Carter, an early practitioner of the Oh, woe! School of Planetary Analysis (today Al Gore is the dean of that school), said that oil wells were "drying up all over the world." Not exactly.
In 1971, according to M.A. Adelman, an MIT economist, non-OPEC countries had remaining proven reserves of 200 billion barrels. After the next 33 years of global economic growth, Adelman says, those countries had produced 460 billion barrels and had 209 billion remaining. As for OPEC countries, in 1971 they had 412 billion in proven reserves; by 2004 they had produced 307 billion and had 819 billion remaining.
Note the adjective "proven." In 1930, U.S. proven reserves were 13 billion barrels. Then we fought a global war, fueled the largest, most sustained economic expansion in human history, and achieved today's electricity-powered "information economy." Today, America's proven reserves are about 30 billion barrels not counting the perhaps 15 billion in the field discovered last year in deep water 175 miles off Louisiana's coast.
America produces about one-quarter of the 20.6 million barrels of oil it uses a day. Unfortunately, just as liberals love employees but not employers, they want energy independence but do not want to drill in the "pristine" (read: desolate) Arctic National Wildlife Refuge (potential yield: 10.4 billion barrels) and are reluctant to countenance drilling offshore.
Well, then, what can be done immediately about the gasoline "crisis" du jour? Americans could save 1.2 billion of the 130 billion gallons of gasoline they use a year if they would properly inflate their tires.
And they might do that if ever "soaring" prices actually make gasoline unusually expensive.
Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
George Will's latest book is "With a Happy Eye but: America and the World, 1997-2002" to purchase a copy, click here. Comment on this column by clicking here.
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