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President Obama entered office at a plunge in prices, and it looks like he will be leaving office on another plunge. The gas prices in 2007 into 2008 were at almost $5.00 a gallon in the last year of the Bush administration, and during the campaign year began to plunge.
The reason for those prices was not the lack of oil, it was rampant speculation. Just like the housing boom derivatives market that was also booming at the same time due to rampant speculation.
The reason for the recent plunge in prices was not due to any shortage of oil either. It was a strategic move by Saudi Arabia to de-fund ISIS, the Shiia nations of Iran, Syria and Iraq, who have been hostile toward the Sunni muslims of Saudi Arabia, the AER, and other Sunni nations for hundreds of years, and an attempt to stop Russian oil production, which was flooding the Saudi's oil market dominance in Europe and part of Asia. Simultaneously, the Saudi price plunge struck the rapidly developing oil fields in Nigeria as well.
Of course Canadian/American fracking and other new oil extraction helped the Saudis, but only indirectly, because our own oil has always been a damping force on the market until commodity speculation drives the prices up world-wide.
If thanks are given, it should be to the oilmen of the 1970s, who developed new fields that were already known but left undeveloped. When the Saudis artificially drove the gas prices through the roof in 1994, the prices finally became high enough for the Americans to start drilling again after many years of non-development.
In 1974, just before the Saudi oil embargo, I was paying .37¢ a gallon for high-octane gas, which is no longer available today. By the end of the year, I was paying $1.40 for the same gasoline from the same pump. At the time, I was driving a 1968 GTO that burned gas like crazy.
The gas prices went down to below a dollar a gallon after the embargo was lifted, but never returned again to under .50¢ a gallon. It sank to the level of minimum profitability for both the Saudis and the American producers, and then fluctuated around .68¢ a gallon for the next 7 years or so until it gradually begin to rise throughout the 80s, a few cents at a time.
The fluctuations of that decade and longer were due to price speculation and demand. By the end of the 80s, the price hovered around $1.00 a gallon and stayed there for the following decade.
Demand and speculation gradually drove the prices upward again in the early 2000s as Americans abandoned the smaller fuel-thrifty vehicles of the late 70s and 80s and went back to driving cars and trucks with big engines once more.
And once more, speculation slapped us again with increasingly higher and higher prices as our vehicles ballooned in size and power again. If we as a nation had learned that our enduring love for huge cars and trucks was a love affair with a bad girlfriend the first time around, and stuck to the vehicles of the late 70s, the gigantic speculative spike in gasoline would have never happened in 2006 and 2007.
Compare a 1975 Ford Explorer, always a larger sized truck-based SUV, to one that was made in 2000 to see how large it became due to demand alone. And the 2000 vehicle came with some enormous engines as an option, and by then was not the largest SUV Ford made. The Expedition was even larger. And it wasn't the largest on the market.
We bring on the weather ourselves, then weep when it rains. The only reason why, a decade later, we haven't seen another return to overpowered oversized vehicles is due to Detroit.
Our car industry got slapped hard twice before when they were stuck with thousands of vehicles no one suddenly wanted to buy, and after the second time, which played a part in crippling all of them, the big 3 finally realized they had to make smaller engines more powerful, a much more expensive proposition than making big ones.
They all were never serious about competing in the Asian and European markets before with their base brands, either, but after 2007, they all developed products for the world market, not the American market foremost.
This just goes to show that our domestic oil drillers did play a part in both lowering and raising the cost of gas, but more than either, played a greater part in stabilizing the price swings.
Until commodities speculators were allowed to artificially raise the prices through the roof. They could do it with no penalty or regulation, and they could make billions of dollars doing it, so they did.
We alone have caused a great share of our continuing problems with our oil supply. We have caused the shortages, and we have rescued ourselves from the worst of the spikes, but we have yet to address the fundamental reasons why we always end up paying more for a gallon of gas than we did before every time a spike ends.
I'm no genius, but when my GTO started costing me money that should have been spent on groceries for the kids, I swapped it for a vehicle with a 6 cylinder engine, and I've never owned another V-8 since. I'm now driving a 4 cylinder engined car that costs me less in gas than any of the 6's I drove in the past.
I have nothing against anyone who wants a over-large vehicle with an over-large engine. We are all free to buy anything we want to move us from one place to another. But I grow tired of the sniveling over the prices when the owners of the giants stand at the next pump over and cry the blues as they watch the wheels spin on the pumps.
For many folks, the big ones are a necessity. If you gotta have a big car or truck to make a living, I can understand some of the whining at the gas pump. But if that monster truck is only a toy hauler for other gas burning toys, then a person either needs to find a new way to get thrilled or stop complaining about how much his indulgences are costing.
If a person doesn't truly need the power, size and capacity of the big ones, and are driving one around the block and back, it's their problem. They should have thought about the big hunk like it was a diamond ring. Beautiful, impressive, and a luxury that may be too hard on the pocketbook to afford.
No thanks, my racing days are a distant memory.. I cruise and enjoy listening to the ooohs and ahhhs and answering all the dumb questions.. I was parked at Sonic one day and this teenager kept walking around it and staring ... Finally he said, "Man this is so cool. What is it? A Jaguar?" I couldn't help but laugh. Every once in a while I'll step down on it at a light while pulled up against some kids Honda racer, just enough to rattle the pipes and shake the local business windows a little, then ease away slowly.. They never seem to want to press the issue for some reason.. No, her days as a ground pounder are over.. Now she is a cruise queen..
Every once in a while I'll step down on it at a light while pulled up against some kids Honda racer, just enough to rattle the pipes and shake the local business windows a little, then ease away slowly..
I love those Honda cars, the car I have is 4 door. I'd imagine a lot of them are asking themselves "WTF just happened?" as they watch the taillights.
Then, you can point to specific Obama administration policies that have brought about this gusher of new American oil and natural gas over the last few years? Can't you?
I haven't read the rest of this post yet but I hope he didn't respond because if he did it was some rambling post about Bush, Racism and a smattering of Police brutality... The reason you ask? Every policy Osama has implemented has been directed at destroying Oil and Coal because he is busy pumping billions of our tax dollars into his donors pants.. err ahh I mean pockets.
Oilmen, not the government, returned hundreds of billions of dollars to American consumers. They, not Ivy League experts and Wall Street grandees, kick-started the economy where federal subsidies had failed to. They, not the policies of the Obama administration or the rhetoric of Secretary of State John Kerry, weakened our enemies.
Kind of a silly thank you because the oil industry is not there to lower gas prices for you - that's not their goal. You know, that whole capitalism thing? The companies in the oil industry would prefer gas prices to stay as high as possible because they make the most profit that way. The real reason gas prices are declining are because OPEC decided to push production in an attempt to undercut US producers. OPEC nations can produce and profitably market oil at a much cheaper per-barrel price than the USA, due to the nature of extraction methods required here. You make it sound like American oil companies are "returning hundreds of dollars" to your pocket because they have your best interests in mind...that's naive as it is ridiculous.
Also, all that record oil production...why did it occur under Obama and not under some member of the Bush dynasty? If Obama was stifling oil production so much, we would be at an all-time LOW, not HIGH.
Oh, and by the way, how come this is all occurring without Keystone XL? :roll eyes:
Finally, none of this is "saving" Obama. Things are about the same for him: which is to say, kinda crappy. What this whole situation points out is that conservative ballyhooing over how horrible Obama was for oil production was way overdone.
Kind of a silly thank you, because the oil industry is not there to lower gas prices for you - that's not their goal. You know, the whole capitalism thing? The companies in the oil industry would prefer gas prices to stay as high as possible because they make the most that way. The real reason gas prices are declining are because OPEC decided to push production in an attempt to undercut US producers. OPEC nations can produce and profitably market oil at a much cheaper per-barrel price than the USA, due to the nature of extraction methods required here.
Also, all that record oil production...why did it occur under Obama and not under some member of the Bush dynasty? If Obama was stifling oil production so much, we would be at an all-time LOW, not HIGH.
Oh, and by the way, how come this is all occurring without Keystone XL? :roll eyes:
Oil production is at an all time high, not because of Obama, but rather in spite of Obama. The oil being recovered is on private land that the federal government cannot control. So basically as far as oil goes, Obama and his refusal to allow drilling on federal land has been side stepped.
As far as Keystone XL it is just another means to add to our oil availability. It would also produce a substantial number of jobs both in construction as well as maintenance. Now knowing that you have a degree in Petrochemical economics makes us all feel much better. Oh wait, you don't do you...
That's how a partisan mind works. Who do you think they would credit if the president was from their own party? Yup, you guessed right, they would credit that president. They actually praise Bush for $1.90 gas prices although we had prices that low for about 1 month, and only because the economy had been destroyed. Few months before the collapse gas price was $4.20, which is still the all time record.
Even the Saudis can't keep this up for too long, and they will be forced to manipulate the price again.
Personally I believe US will win this oil war, and the arabs will realize they made a big error.
Bush deserves credit for the 2005 Energy Policy Act that has successfully defanged the EPA with respect to fracking.
Were it not for that legislation intiated by then Vice President Cheney, OPEC could today simply cut production to force the price of oil higher.
Oil production is at an all time high, not because of Obama, but rather in spite of Obama. The oil being recovered is on private land that the federal government cannot control. So basically as far as oil goes, Obama and his refusal to allow drilling on federal land has been side stepped.
As far as Keystone XL it is just another means to add to our oil availability. It would also produce a substantial number of jobs both in construction as well as maintenance. Now knowing that you have a degree in Petrochemical economics makes us all feel much better. Oh wait, you don't do you...
The point is that oil production is doing JUST FINE irrespective of Obama - so why do you conservatives keep incessantly whining about how Obama is getting in the way of it? He's not. Private sector is obviously doing fine, probably better than it did under the conservatives you voted for. So there is no problem with respect to Obama and oil. Obama doesn't determine private oil production or oil market prices. So what's all the kvetching about?
And yes, I've heard those inflated conservative numbers of how Keystone will make 1 million jobs.....no, 10 million jobs.... no 100 MILLION!!! Just keep making up bigger numbers. Keystone may be fine, but the job estimates are getting truly idiotic. I have some beach-front property in Arizona to sell you. Ridiculous...
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