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Aggregating Energy Since 2006

Gas too expensive...and it's someone elses fault

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An unsurprising survey was released today that shows that most American's think that gasoline is too expensive. On top of that, they think that it is because of price gouging by the oil companies. As has been commented in the past, the open market trading of oil and gasoline with a number of different players makes the presence of a conspiracy to control prices (otherwise known as a cartel) difficult to manage. The difficulty of OPEC to keep group profits up by keeping renegades from reaping the benefits of lower prices illustrates this well. Ben Stein (yes, of Ferris Bueller fame but now of Yahoo), comments that

“Oil is a world commodity like tin or copper or rubber or coffee,” Stein says in a recent Yahoo Finance article. “The price is set by traders anticipating supply and demand."

 Still, the article is wholly apologetic of an industry that is pulling in incredible profits while the country is feeling the pinch from increased energy prices. The profits are used for little more than lining the pockets of a few majority owners and for increasing the company's ability to continue to make huge profits (including lobbying against legislation aimed at easing our appetite for their products).

“The problem is that if we keep punishing the companies that in good faith give us the energy we need to power our lives at market prices…eventually, they’ll go away,” Stein continues. “Or they won’t have the ability to do their jobs as well because of all the restrictions we’ve put on them.”

In closing, the press release places a call to look at those who are really to blame for the high prices because the poor oil companies have no role,

"...someone had better redirect the American public’s anger toward the deserving parties..."

What is surely an effort by those very oil companies to deflect blame neglects to name any better causes for the high prices. While they likely intend to blame politicians for not giving them the freedom to do what they want with little restriction from those pesky environmental regulations and lease agreements they have unintentionally hit on a root source of, the consumer. In a market system, the demand is the other side of the price equation...the more there is the higher the price. Rather than waste the precious resource we should use it judiciously. Increased auto efficiency is a part of the picture but only a part. We also need to have dramatic increases in R&D and role-out of technologies and lifestyle changes in order to greatly reduce our consumption of liquid transportation fuels.  Hmmmm......maybe they are isn't the oil companies' fault but ours for not going far enough to stop buying so much from them.