Gas Face Winner’s Profile: The U.S. Government
The people have spoken! With 69% of the vote, the U.S. government officially gets the gas face!!!!
The government has encouraged “big oil” in so many ways. Some interesting tidbits include…
Failing to adequately support alternative energy sources with much needed funding. According to Joseph Romm, former Director of the Office of Energy Efficiency and Renewable Energy, “the budget for all energy efficiency and all renewable energy is something like a billion.” BTW, the budget for the Iraq war is about $2.4 billion per week.
Subsidizing oil company activities by bearing the costs of protecting the flow of oil into the U.S. to the public health costs of burning fossil fuels. The government’s payment of these costs amounts to a $4 per gallon subsidy above current gas prices. (Source: International Center for Technology Assessment)
Supporting decreased competition by approving mergers which allowed the five largest U.S. companies to control half of domestic oil production, half of domestic refining capacity and more than half of the retail gasoline market. (Source: Public Citizen)
Refusing to punish bad business practices by oil companies. After the FTC concluded oil companies intentionally held back gasoline supplies as a tactic to maximize profits, Congress took no action. (Source: Public Citizen)
To the government’s credit, some politicians are trying to make changes. But, it should not have taken this much to stir things up.
In February, the House of Representatives passed the Renewable Energy and Energy Conservation Tax Act of 2008 to “provide tax incentives for the production of renewable energy and energy conservation.” The proposed bill would take about $18 billion of tax credits away from oil and gas companies and give them to renewable energy programs.
Today, the Energy Department announced oil shipments to the U.S. Strategic Petroleum Reserve have been cancelled for the second half of this year. Congress voted to halt the deposits, which currently ship approximately 76,000 barrels per day. Just to put things in perspective: the U.S. consumes about 21 million barrels a day.
Baby steps, but steps nonetheless.
Thank you to all who shared your thoughts on this controversial issue. Now that we know more about the problems, let’s make it a point to actively seek and support solutions. :)
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POSTED IN: Commodities, Economy, News, Uncategorized
13 opinions for Gas Face Winner’s Profile: The U.S. Government
Brian
May 20, 2008 at 12:49 pm
Brazil can use sugarcane to produce ethanol at a much cheaper cost than we are currently producing domestically. However, the US government has a tariff on imported ethanol from Brazil, which raises the price substantially, and further protects our farmers. Why do we need to continue to protect our farmers as they reap in the profits from this agricultural boom. It seems so simple. Remove the tariff. Grow more food. And food/ethanol prices will stabilize.
Tom Threlfall
May 20, 2008 at 1:03 pm
I enjoyed learning about the root cause of these high gas prices, but I keep hearing about analysts at Goldman Sachs. These analysts predicted $200 a barrel just last week. Those high predictions have to account for at least a few dollars added to these already outrageous oil/gas prices. So I would like to know more about what effects these analysts have on oil/gas prices. Have you heard anything about this?
Justin Herman
May 20, 2008 at 2:23 pm
Speculation in the oil markets has gone out of control. Less than 10 years ago we could go to the great state of New Jersey and buy gas for under $1 per gallon. We need traders to stop working together and the US needs to create alternatives. With China and India in the picture oil has no place to go but higher. Thirty-Five miles per gallon in the next 5 years, why not 75miles per gallon. The technology is there why doesn’t the government help out new projects. I think the government does not want to help because every time these oil companies make a profit the GOVT gets tax revenue from them + dividends + capital gains…..Govt is making more money than these oil companies from rising oil costs.
Mike
May 20, 2008 at 3:04 pm
I think we should develop and explore cars that don’t need to consume oil, ethanol, or any other more traditional fuels.
Honda has built a new car called the FCX Clarity. It runs completely off of fuel cells. What is even better is the discharge from the car is clean water. The car is sleek looking, drives well, has a top speed that is more than fine for any of us.
There has also been a car built with a magnetic engine. This also needs no traditional fuels.
There are plenty of methods in existence that work and are not fuel based. The government should get rid of some of the unnecessary subsidies it provides and start providing incentives to companies to build truly efficient cars.
Ashley Guthmann
May 20, 2008 at 3:04 pm
The government’s encouragement of big oil is putting companies out of business. Jevic Transportation, a trucking company in my hometown of Mt. Laurel, NJ, is going bankrupt due to mainly the high cost of diesel fuel. Over 1,000 employees lost their jobs. Now in addition to paying more at the gas pumps and more for products that are going up in price due to higher shipping costs, people are losing their jobs because of increasing gas prices.
Jeff Mitchell
May 21, 2008 at 10:06 am
While there is no arguing that gas prices have grown out of control, it is largely due to the middle east realizing their reserves are finite and they can’t rely on this revenue source forever. It only makes sense from OPEC’s stance to reduce production to the most efficient level and let prices naturally rise. With that being said, alternative fuel sources must be sought out and the government needs to invest more in synthetic and alternative fuel sources. The income saved will only lead to consumption in other areas of the economy and will help the country combat a looming recession.
Milton
May 22, 2008 at 2:30 pm
I agree that the U.S. Government should get the Gas Face. Our economy is terrible and it is essential that everyone votes this November. CHANGE ‘08! I also saw this blog getting love on http://www.eflifestlye.com. Seems like a larger audience is appreciating talkstocktrading.com
Mike Novak
May 22, 2008 at 5:39 pm
I think the US Government has deserved to get the Gas Face. Instead of subsidizing oil companies, they should help out companies who specialize in green technologies. Our country is certaintly headed in the direction of needing to use alternative sources of energy, and we need the government to be on board in order to be a catalyst for change.
Stephen Ciliberto
May 22, 2008 at 7:37 pm
In a capitalistic society (aka ours) the governments ONLY responsibility is to make sure there is fair competition. If gas prices rise, it is because it is an inelastic good which we will buy no matter how high the price goes. All you Bush-haters out there would love to blame republicans for everything. In fact it doesn’t matter who is in power because the gas companies will always make money.
Complaining won’t change anything. If people really wanted to end America’s dependency on oil, they would simply start using a bike.
Hybrid cars are not efficient yet. They are a bad investment. The premium for such cars up front is greater than the money saved at the pump.
Is the goverment responsible for car companies not using the most efficient technology? NO!
This isn’t Britian or the USSR the companies can produce their vehicles and sell them because cars are and will continue to be a item that every american needs and wants.
Stephen Ciliberto
May 22, 2008 at 7:40 pm
In summary, I should get the gas face. And so should evey other American that drives, because we are all equally guilty.
I personally am going to continue to use my car to get from point a to point b.
If there are people out there who won’t, then hats off to you.
The government, big oil, the gas stations are all scape goats because we are the consumers giving into their demands.
Kevin Connelly
May 22, 2008 at 11:16 pm
Everyone blames the government for the fact that we do not have an alternative solution for energy, but the truth is you have to let the research take its course. We can’t automatically be not dependent on oil, it has to be a gradual implementation of a system that will work. Currently we do not have a alternative solution that is flawless, but eventually it will happen. It will also be way before there is an immediate danger of running out of oil. In my opinion, everyone needs to stop blaming the government and just wait for the scientists to do their research.
profsilver
May 23, 2008 at 9:36 am
Thanks for the input everyone! I think all of the players have been deserving of the gas face at some point. The government won the vote but that opinion extends way beyond the current administration. Our issues with oil started way before Bush. Anyway, gas has simply been too cheap and accessible to us for so long that we have yet to demand alternative sources. Hybrids don’t payback quick enough for most people and the boom of SUVs probably hasn’t encouraged automakers to push green cars. I agree with many of you that we have to be personally accountable and change our habits or stop complaining. I had a finance internship with a solar power company and wish that more people would open up to new technology. Will follow up next week with some info on the speculators.
Samantha Vauthier
May 24, 2008 at 5:13 pm
I thnk the governement should be doing more to find renewable resources. There are lots of renewable resource ideas out there and they’re not getting the effort put into them to get them moving. The government is just starting to get bills and what not going, but they should have started awhile ago. Like years ago, at the latest when they were predicting that oil was going to hit $100 a barrel.
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