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#  Pissed at the Pump

March 05 2012

Written by Kay Martin.

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ENERGY DISCONNECT - You see them all over the world. We saw one in Rome but we never saw it in the States because it is now out of production. We are familiar with the small Renault, Citroën, Volkswagen, Fiat, Nissan and many others.

The reason for these funny little cars is the price of gasoline that equates to $10 per gallon here. Hold your hats because maybe more of these funny little cars are heading to the States.

The current administration’s oil policy is really starting to affect us. It is affecting us right where it hurts – the wallet. It is causing turmoil at the pump here in Los Angeles. It is only the beginning.

President Barack Obama’s Secretary of Energy, Stephen Chu, recently uttered the kind of Washington gaffe that consists of telling the truth when it is inconvenient. Chu admitted to a House committee that the administration is not interested in lowering gas prices.

Chu, along with the Obama administration, regards the spike in gas prices as a feature rather than a bug. High gas prices provide an incentive for alternate energy technology, a priority for the White House, and a decrease in reliance on oil for energy.

In fact, in 2008 before he was President Obama’s Energy Secretary, Chu said that: “Somehow, we have to figure out how to boost the price of gasoline to levels in Europe.”

I think Obama and Chu have been successful in figuring it out. Gasoline prices are now double what they were when Obama was inaugurated.

In a speech last week Obama claimed to support all strategies that develop every available source of American Energy. The President went on to say the strategy included oil and gas. (When his lips are moving you know what he’s doing).

Yet, his policies have not shown a willingness to include oil and gas – even though these conventional energy sources are cheaper and more efficient than their alternatives. The only thing these policies do is give us more failed Solyndra's and it is done on your dime.

When asked by Congressman Alan Nunnelee (R-MS) if the overall goal is to get gas prices down so that the American people stop suffering, Sec. Chu said: “No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy.” So once again the President’s speech was full on rhetoric and empty on substance.

The New York Sun reports that the price of gasoline in the states will soon be in line with what Europeans and the world pay.

Translating this price into dollars and cents at the gas pump, one of our forecasters, the chairman of Houston-based Dune Energy, Alan Gaines, sees gas rising to $7-$8 a gallon. The other, a commodities tracker at Weiss Research in Jupiter, Fla., Sean Brodrick, projects a range of $8 to $10 a gallon.

While $7-$10 a gallon would be ground-breaking in America, these prices would not be trend setting internationally. For example, European drivers are already shelling (I know that’s a poor choice of words) out $9 a gallon (which includes a $2-a-gallon tax) and driving those funny little cars.

Early last year, with a barrel of oil trading in the low $50s and gasoline nationally selling in a range of $2.30 to $2.50 a gallon, Mr. Gaines – in an impressive display of crystal ball gazing – accurately predicted oil was $100-bound and that gasoline would follow suit by reaching $4 a gallon.

His latest prediction of $200 oil is open to question, since it would undoubtedly create considerable global economic distress.

While Mr. Gaines thinks there could be a temporary decline in the oil price, he's convinced an overall uptrend is unstoppable. In fact, he thinks his $200 forecast could be conservative, and that perhaps $250 could be reached. His reasoning: a combination of shrinking supply and increasing demand, especially from China, India, and America.

We are facing:

● Turmoil abroad and rising costs at home causing consumers will have to shell (again, poor choice of words) out more at the pump.
● Volatility in the Middle East
●Growing demand from Asia
● Gasoline formulation requirements. Here come the environmentalists.

Fighting the environmentalists and the conservationists is an uphill battle. Neither makes sense especially the view of the conservationists. We have enough reserves to satisfy requirements for hundreds of years.

The environmentalists' and conservationists' actions must cause the Middle East to turn belly-up with laughter. They are pissing everybody off here as well as hurting our economy.

Los Angeles should take the lead in straightening this mess. We can start right here at the intersection of La Cienega Blvd. and Stocker Ave.
 *(Kay Martin is a writer and a contributor to CityWatch. His years of travel and work included tours in Russia, Europe, the Middle East, Africa, Asia, Australia, Hawaii, Latin America, and the Pacific. He can be contacted at kaymartin@hotmail.com.)* –cw

CityWatch
Vol 10 Issue 19
Pub: Mar 6, 2012

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