It Could Take Months For Prices To Go Down After The Strait Opens - Here's Why

Donald Trump has given Americans the impression that once the Strait of Hormuz is opened the price of oil (and gasoline) will quickly return to pre-war prices. That is simply not true. Here, from CNN, is the truth:

Assuming the strait has truly reopened, a logistical nightmare is about to unfold.

Step one: Clearing the strait’s bottlenecks. That’s going to take a long time, since tankers move about as fast as you can ride a bicycle.

First, the 128 or so tankers stuck in the strait need to clear out, carrying around 160 million barrels of oil with them, according to Capital Economics. That will make way for empty tankers to enter the strait, load up and head back out.

A return to full tanker transit capacity could take up to three months, according to Victoria Grabenwöger, senior oil analyst at Kpler.

Step two: Drawing down stockpiles. Empty ships will first draw oil from the warehouses that have been filled up – because producers had nowhere else to put it.

The good news: Refiners were pragmatic about their storage and never fully filled their stockpiles. That should reduce some of the time it would otherwise take to reboot pumps. But fuller-than-typical inventories will nevertheless delay getting oil production back up to full capacity.

Step three: Restarting production. Middle Eastern oil wells were largely shut off during the war. Turning on production isn’t like flipping a switch. It’s a complex engineering challenge that involves serious physics and labor over up to several weeks.

Production will need to be restarted – slowly – to ensure reservoirs of crude don’t collapse, requiring re-drilling and substantial repairs. Water and gas injected into wells need to be rebalanced, which is a tricky business.

Because wells in the region are large and close to one another, restarting production will require significant coordination across companies and countries to ensure injected water and gas pressure remain consistent across multiple wells.

Step four: Making repairs. A number of refiners, natural gas producers and some oil producers were damaged during the war. Some repairs to the damaged critical infrastructure could take years to complete, oil companies said.

There’s a lot of oil go get back online: 12 million barrels per day of crude output and 3 million barrels of refined petroleum products have been shut across the Middle East – mostly in Saudi Arabia and Iraq, according to Kpler. That’s no easy feat.

All of that assumes the war is over and there are no further disruptions in the strait. And we all know what happens when you assume….

Trump's Dream Of Venezuela Oil Riches May Be Just An Expensive Fantasy

The following is part of a post by economist Paul Krugman: 

During his triumphalist press conference after the abduction of Nicolás Maduro, Trump never used the word “democracy.” He did, however, say “oil” 27 times, declaring, “We’re going to take back the oil that, frankly, we should have taken back a long time ago.”

Even so, whatever it is we’re doing in Venezuela isn’t really a war for oil. It is, instead, a war for oil fantasies. The vast wealth Trump imagines is waiting there to be taken doesn’t exist.

You may have heard that Venezuela has the world’s largest oil reserves — 300 billion barrels. You probably don’t know that Venezuela’s reported oil reserves tripled while Hugo Chavez was president. This increase, from roughly 100 billion to 300 billion barrels, didn’t reflect major new discoveries or exploration. Instead, it reflected the Chavez government’s decision to reclassify the country’s Orinoco Belt heavy oil as “proved” — oil that can be recovered with reasonable certainty under existing economic and operating conditions. (see chart above)

As Torsten Slok of Apollo, who recently made this point, notes, “Much of the oil is extra-heavy, which has low recovery and a high cost to produce.” This suggests that Venezuela’s claims to have immense usable oil reserves were politically motivated hype.

This view is supported by the fact that the huge increase in Venezuela’s reported oil reserves wasn’t followed by a surge in production. On the contrary, Venezuelan oil production soon plunged.

Plunging production was associated with a steady degradation of Venezuela’s oil infrastructure, which would take years and many billions of dollars in investment to restore. Given these costs as well as political instability, major oil companies clearly aren’t enthusiastic about the idea of sinking money into Venezuela.

On Monday Trump suggested that he might reimburse oil companies for investment in the nation he claims — with no basis in reality — to control, reimbursing them for their outlays there. That is, we’ve gone in a matter of days from big talk about huge money-making opportunities to a proposal to, in effect, subsidize oil-industry investments in Venezuela at U.S. taxpayers’ expense. . . .

At a deeper level, Trump’s apparent belief that oil in the ground is a precious asset is decades out of date.

Oil prices are low mainly because of increased supply due to fracking, and the potential for more fracking is likely to keep them low for the foreseeable future. The breakeven price of fracked oil — the price at which it’s just profitable to drill a new well — is around $62 a barrel in the most important U.S. producing regions. While global oil prices fluctuate, they tend to return to that breakeven price after a few years.

And $62 a barrel wouldn’t be high enough to make investing in the Orinoco Belt, where the estimated breakeven is more than $80, profitable even if there were no political risks.

In short, Trump’s belief that he has captured a lucrative prize in Venezuela’s oil fields would be an unrealistic fantasy even if he really were in control of a nation that is, in practice, still controlled by the same thugs who controlled it before Maduro was abducted.

Trump Says Wind Energy Is The Most Expensive - That's A LIE!

In his Sunday press conference with the President of the European Union, Donald Trump droned on and on about how bad wind energy is - saying the windmills were ugly and ruined the landscape, while being the most expensive kind of energy.

Of course, he was lying (as usual). As the chart above shows, wind energy is actually the cheapest way to produce energy (legalized cost of electricity per megawatt-hour).

Trump was trying to justify his own actions since taking office in his second term. He has removed tax breaks and subsidies from renewable energy sources, while giving more government help to oil and gas companies. And he is removing EPA regulations on cleaning the environment.

His actions on behalf of his buddies in the oil and gas industry are making the environment worse, making it harder to control global climate change, and making sure consumers have to pay more for electricity than is needed.

The Facts Vs. Trump's Ridiculous Lies

 

The charts are from stevenrattner.com.

Donald Trump has no regard for the truth, and that is evident in his campaign. His campaign is full of lies.

He tells us that he presided over a great economy - much better that the economy under President Biden. Of course, the opposite is true. In both GDP growth and job creation, Trump's numbers trail Biden's - even when the effect of COVID is figured in.

He tells us that his presidency was better formal production. But in every year of his presidency, there was a negative on oil exports (exports minus imports). It is only in the Biden Administration that exports were finally greater than imports.

He tells us that violent crime was low during his term, and has exploded during Biden's term. But violent crime has been lower in every year under Biden than in any year under Trump.

And he wants to blame undocumented immigrants for most crime in the country. But undocumented immigrants commit less crimes than legal immigrants - and far less than U.S.-born citizens.

Republican Party Is Campaigning On Lies

The Republican Party has several issues they are campaigning on for this election. They are telling voters that inflation is out of control, that massive numbers of immigrant are crossing our southern border, that the murder rate is rising, and that oil production is down under this administration.

Unfortunately for them, none of that is true (see the charts above). The rate of inflation has dropped significantly, and some grocery stores are now lowering their prices. The number of immigrants at the southern border has also dropped significantly. The murder rate (and that of other violent crimes) is way down, and no where near record levels. And the amount of bill being produced by the U.S. is at a record level.

The GOP is hoping voters won't check the facts. They are hoping their lies will be believed. Don't let Tham fool you!

Russia - 81% Support Sanctions & 78% Support Banning Oil

 

The results in the chart above are from the Monmouth University Poll -- done between March 10th and 14th of a nationwide sample of 809 adults, with a 3.5 point margin of error.

Americans Support Oil/Gas Sanctions On Russia

 The charts above are from the recent CBS News / YouGov Poll -- done between March 8th and 11th of a nationwide sample of 2,088 adults, with a 2.6 point margin of error. It shows widespread support for banning oil and gas from Russia, even if it means higher gas prices -- and that support crosses all political lines.

U.S. Public Overwhelmingly Supports Ban On Russian Oil

 

The chart above is from a new Quinnipiac University Poll -- done between March 4th and 6th of a nationwide sample of 1,374 adults, with a 2.6 point margin of error.

Gas prices are already very high in the United States, and some thought the public would not support a ban on Russian oil -- which could raise prices even further. But as this poll shows, that is simply not true. At least 71% of American adults say they would support a ban on Russian oil -- even it it caused gas prices to go higher.

Majority Of Public Is Opposed To Drilling In The ANWR

One of the things slipped into the new tax law passed by the Republican Congress (and signed by Trump) is a provision that allows drilling for oil in the Arctic National Wildlife Refuge (ANWR) in Alaska. But like the tax law as a whole, a majority of Americans don't like this provision that will allow oil companies to desecrate our public land.

Only 35% think it's OK to drill for oil in the ANWR, while 53% say it's the wrong thing to do. Once again, the Republicans have done something the American people don't want. They claim it's to stop the dependence on foreign oil, but the public would rather see that accomplished by increasing the use of clean and renewable resources.

The chart above uses numbers from a recent Rasmussen Poll -- done on December 26th of a random national sample of 1,000 likely voters, with a 3 point margin of error.

Trump's On Track To Be Worst Environmental President Ever

Since becoming president, Donald Trump has virtually declared war on this country's environment (and on the fight to curb global climate change). He put a man in charge of the Environmental Protection Agency (EPA) that doesn't believe in environmental regulations (and who has sued that agency at least 11 times to have regulations curbing fossil fuel pollution removed). Then he put the head of one of the world's largest oil companies (Exxon) in place as Secretary of State -- assuring that this countries global policies will benefit fossil fuel production.

That wasn't bad enough. He then started issuing executive orders. The first ones nullified a regulation that kept surface mining operations from polluting our rivers and streams, and set aside a rule that would have resulted in fossil fuel producers paying more in royalties to the federal government.

Now he has issued a far more sweeping order. The new order lifts a moratorium on coal leasing, and removes the requirement that federal officials consider the impact on climate change when making decisions. This will increase production and use of coal (the dirtiest of the fossil fuels), and allow all fossil fuels producers to increase production without regard to what that does to the environment or to global climate change.

Trump seems determined to trash the environment for the benefit of his buddies who produce fossil fuels. And his actions send a signal to the rest of the world that the United States has no intention of honoring its agreement to curb actions that increase global climate change.

As the charts below show, the United States is the largest user of energy produced by oil and gas, and is second only to China in energy use from coal. But while China is trying to curb its use of coal, Trump is taking this country in the opposite direction.

One has to ask, why should the rest of the world meet their obligations to curb global climate change? And even if they did meet their obligations, would it matter (since the U.S. is by far the largest user of fossil fuels energy)?

The Trump administration is proving to be a real boon for the oil, gas, and coal industries (and other polluters) -- but it is a real disaster for human being (and the planet they live on).

Oil/Gas Emissions Cause 3/4 Million Child Asthma Attacks

The top map shows the parts of the country experiencing the most emissions from the oil & gas industry. The bottom map shows the incidence of asthma attacks per 10,000 children each year in parts of this country. Note that areas with the most asthma attacks in children generally correlates with the areas with the most oil & gas emissions.

The Clean Air Task Force has published a new study called "Gasping for Breath". It finds that 750,000 asthma attacks occur in this country each year that are attributable to emissions from oil and gas. That number is their prediction for the year 2025 -- but they admit that the sources of those emissions are already in use, so the number is probably valid right now.

There has been a lot of talk about moving away from the use of fossil fuels to stop global climate change, but this report shows that it is not just the planet that's in danger. These fossil fuels are also affecting the health of our children (and many adults). I recommend you read the report, and its rather shocking conclusions.

Here is the report's executive summary:

The oil and gas industry dumps more than 9 million tons of methane and other pollutants like benzene into our air each year. Methane is a greenhouse gas 87 times more potent than carbon dioxide at driving climate change in the near term and the oil and gas industry is now the largest source of methane in the U.S. As we recently described in Fossil Fumes, many of the toxic air pollutants from oil and gas are linked to increased risk of cancer and respiratory disorders. But, air pollutants from the oil and gas supply chain also contribute to the ozone smog pollution that blankets the U.S. in the warmer months. Volatile organic compounds (VOCs) and methane vented and leaked from the oil and gas supply chain and nitrogen oxides(Nix) generated by gas flaring and engines at natural gas facilities react together in the presence of sunlight to form ozone smog. What’s more, methane pollution from oil and gas facilities also worsens climate change, resulting in hotter weather and stagnant air — conditions that make ozone smog levels worse.

When inhaled, ozone smog can impair lung function, trigger asthma attacks, and aggravate diseases such as bronchitis and emphysema, in some cases leading to premature death. Children, the elderly, and people with existing respiratory conditions are thermostat risk from ozone smog pollution, which can drive them to stay indoors in the warmer months when smog levels are highest, robbing children of their summers and others of their ability to work and recreate out of doors. However, the health impacts associated with ozone smog produced by pollution solely from the oil and gas industry have never before been quantified.

For the first time, this report, based on independent analysis by a researcher at Colorado State University, quantifies the national health impacts in the U.S. from ozone smog produced by the pollution from the oil and gas industry. The analysis describes the contribution of these emissions to ozone season ozone levels in 2025 and quantifies health effects of ozone smog from this industry.

Ozone smog that results from oil and gas industry pollution poses a real threat to children who suffer from asthma.

• * Nationally, there are more than 750,000 summertime asthma attacks in children under the age of 18 due to ozone smog resulting from oil and gas pollution.
  
• * Each summer, there are more than 2,000 asthma-related emergency room visits and over 600 respiratory related hospital admissions nationally due to ozone smog resulting from oil and gas pollution.
  
  Ozone smog that results from oil and gas industry pollution has a real impact on many Americans’ daily lives.
  

• * Children miss 500,000 days of school each year due to ozone smog resulting from oil and gas pollution.
  
• * Each year, adults must deal with 1.5 million person-days when they are forced to rest or reduce activity due to high ozone smog levels resulting from oil and gas pollution.
  
  Air pollution from oil and gas facilities can have a significant impact on public health–even in areas far from oil and gas production. Once emitted, air pollution from oil and gas facilities travels far downwind, contributing to elevated ozone levels and affecting people in all of the lower 48 states. 
  

Americans Say Alternative Energy Sources Are The Answer

These charts give me a little hope for the future. While many politicians are still bowing down to the oil and gas companies (having been bought off), it seems the American people are smarter than that. A record high percentage (73%) of the public now thinks we should be trying to solve our energy problems by emphasizing alternative sources of energy, while only 21% think the answer is more drilling for fossil fuels.

The real surprise for me was that this is also the opinion of 51% of Republicans. This is the first time since Gallup has been asking this that the GOP has a majority agreeing with the rest of America.

These charts are from a new Gallup Poll -- done between March 2nd and 6th of a random national sample of 504 adults, with a 6 point margin of error.

Argument For Keystone XL Pipeline Rests On GOP Lies

There has been a debate over whether the Keystone XL pipeline should be built or not for months now. That pipeline would bring Canadian tar sands oil to the United States gulf coast. Republican leaders in Congress have said that would be one of the first things they do since they now control both houses of Congress -- pass a bill forcing the building of that pipeline.

Sadly, a majority of Americans seem to want the pipeline built. They have accepted the Republican argument that the pipeline would be good for this country. But that argument is built on three big lies -- that the pipeline would create 42,000 new jobs, that the pipeline would help lower American dependence on foreign oil, and that the pipeline would be safe. None of those things are true.

Republicans like to quote a government study that said the pipeline would create 42,000 jobs. But that's not what the study showed (and they know it). That study said building the pipeline would buoy that many jobs that already exist, but would produce only 35 new permanent jobs (a fact the GOP conveniently leaves out). The pipeline is not a job creator, and never was meant to be.

As for the argument that the pipeline will reduce America's dependence on foreign oil -- that is just laughable. The oil destined to be carried by the pipeline is foreign oil (from Canada), and is meant to be sold overseas (primarily in Asia).

That brings us to the final argument -- that the Keystone XL pipeline will somehow be magically better than all other pipelines, and will not be a danger to our environment (including the largest aquifer in this country (see image above). That is just a sick joke. There is nothing about this pipeline that makes it better than other pipelines. In fact, it might be worse since the oil it carries is more toxic to the environment and is harder to clean up. Pipeline leaks are not rare in this country, but are almost a daily occurrence -- and there is no reason to believe this new pipeline will be any better.

The White House has said the president will veto any bill coming out of Congress to force the building of the pipeline. I hope that is true. This pipeline makes no economic sense (except to Big Oil), and could well be an environmental disaster.

Who Benefits From Building The Keystone XL Pipeline ?

(This image of the Koch brothers is from the website mediamatters.org.)

The Republican right-wingers have been loudly beating the drum in support of building the Keystone XL pipeline. Their argument is that the pipeline will benefit the people of the United States -- by creating new jobs and by lowering the amount of oil the United States would need to import. Is that argument true?

Let's first take the jobs argument. While it's true that a few thousand jobs would be created to build the pipeline, those are only temporary jobs. The State Department has admitted that only about 35 permanent jobs would result from building the pipeline. In short, the job creation argument is a false one -- and even if you add the few temporary jobs to the extremely small amount of permanent jobs, it would not significantly affect the unemployment crisis in this country.

But even though the pipeline won't create jobs, it would be beneficial if it significantly lowered the amount of foreign oil the United States needed to import. Unfortunately, that is a bogus argument also. First, the oil flowing through the pipeline would be foreign oil, and not oil that originated in this country. The oil would come from Canada. Even if we set that aside, recognizing that Canada is a much friendlier nation than much of our other imported oil comes from, the argument still doesn't hold water.

The amount of oil that would flow through the pipeline is only a tiny fraction of the oil this country imports, and would not significantly reduce America's consumption of foreign oil -- even if all of that oil stayed in this country. But it's not going to stay in the United States. The companies receiving and refining that oil have refused to promise to keep it in the United States, and they refused because they intend to ship most (or all) of it to other countries (where they can get a higher price).

So the pipeline will not create a significant number of new jobs, and it will not significantly reduce American dependence on foreign oil. Add to this the fact that the pipeline is environmentally dangerous (since pipeline leaks are not rare, but a common occurrence that happens almost daily in this country), and it's easy to see that the people of the United States will NOT be benefitted by the building of the pipeline.

So who will the pipeline benefit? It turns out that the biggest supporters of right-wing policies and candidates (to the tune of hundreds of millions of dollars) -- the Koch brothers -- would be the only Americans (outside of the big oil refiners on the Gulf Coast) to benefit. That's because the Koch brothers, through a subsidiary of Koch Industries, holds leases on at least 1.1 million acres of the tar sands oil in Canada. The pipeline would give them a much cheaper and easier way to get that oil to a refinery (so it can be refined and then sold overseas).

This shouldn't really surprise anyone. The Koch brothers fill the campaign coffers of right-wing candidates, and those candidates pay them back by campaigning for a pipeline that will fatten the already bulging bank accounts of the Koch brothers. It's exactly the kind of quid pro quo politics that shouldn't exist in a democracy. But then right-wingers aren't too enamored with democracy anyway -- much preferring a plutocracy that would benefit their rich friends.

Stop The Pipeline

Exxon Won't Have To Pay For Clean-Up

The picture above shows a tiny portion of the oil spill in Arkansas. It is from a pipeline owned and operated by Exxon -- and that company admits that thousands of barrels of oil were released from the broken pipeline before it was discovered and shut down. Now this city (Mayflower, Arkansas) faces a difficult clean-up (and the realization that the ecology of their area will be negatively affected). And guess who won't be paying for any part of that clean-up -- that's right, the Exxon Mobil corporation.

Years ago a fund was created to pay for oil spills. It is called the Oil Spill Liability Trust Fund (and it is badly needed since at least 54,000 barrels of pipeline oil was dumped into the environment in 364 separate incidents last year).  But according to Oil Change International:

“The great irony of this tragic spill in Arkansas is that the transport of tar sands oil through pipelines in the US is exempt from payments into the Oil Spill Liability Trust Fund. Exxon, like all companies shipping toxic tar sands, doesn’t have to pay into the fund that will cover most of the clean up costs for the pipeline’s inevitable spills.”

That's because, in their infinite wisdom, the U.S. Congress let the oil companies talk them into passing a law that exempts those who ship this kind of crude oil (called diluted bitumen) from having to pay the 8 cents a barrel fee the fund requires. That's because they were able to get this particular kind of crude as not being defined as oil. And it is not the kind of crude oil that can be gotten by drilling a well. Instead, it is scooped from the ground as a solid, and chemicals are added to make it a liquid that will flow through the pipeline. That liquid is much like a thin asphalt, and is actually dirtier than the crude coming out of a drilled well.

So Exxon has not paid a single penny into the OSLT Fund for the sludge they are sending through that pipeline (and which has now spilled into the Arkansas landscape). And guess what, the companies that want to ship this same kind of dirty crude through the proposed XL pipeline won't have to pay into that fund either -- and that pipeline will pump nine times as much as the Arkansas pipeline does (which means of course, that it poses nine times the ecological danger to the environment).

This spill should serve as a warning to Americans -- that the XL pipeline should NOT be built. And the law exempting oil companies from having to pay into the OSLT Fund when they ship this noxious crude through our country should be repealed. It simply doesn't make sense.

Arkansas Spill Highlights Pipeline Danger

The right-wing Republicans in Congress have once again sold out to corporate interests -- this time to the Big Oil corporations. They are pressuring the president to approve construction of the XL Pipeline, which would cut right through the heart of America (running from the tar sands oil pits of Canada to the Gulf Coast refineries of Texas). They say that pipeline would be a real boon for this country -- creating jobs and lessening the country's dependence on foreign oil. Unfortunately, neither is true.

The numer of jobs the pipeline would create are mostly only temporary. Less than 200 permanent jobs would be created. That's an insignificant amount, considering the amount of jobs this country needs (and the Republicans have blocked in Congress).

And the idea that the pipeline would reduce the dependence on foreign oil is ludicrous. The oil being pumped through the pipeline IS foreign oil (since it is being built solely for the transporting of Canadian oil). In addition, the finished product after it is refined is destined to be shipped to foreign countries (mostly Asia). It will not stay in this country.

And then their is the way land is being procured for that pipeline. The government is backing an obvious misuse of eminent domain laws. Those laws were designed to let the government get property for the public good. But there is no public good in the building of this pipeline. The only entities being helped are giant oil companies -- the Canadian companies who will put their oil in it, and the American companies who will receive that oil to refine it. In other words, private property is being seized through eminent domain for the financial benefit of private corporations -- a clear violation of private property rights (which the Republicans claim to support).

But perhaps the best reason for stopping the pipeline from being built is to protect the environment. The pipeline will cut through the middle of this country -- crossing many thousands of acres of valuable farmland. Every acre of that land is in danger of being polluted with the very dirty Canadian oil. Proponents of the pipeline has shrugged off any danger to the environment, but a pipeline break just this last week in Arkansas (carrying the same kind of Canadian oil) shows this is a real danger.

That pipeline broke (see pictures above) and, before anyone realized it had happened, thousands of gallons of oil polluted the area near Mayflower, Arkansas. The authorities are not letting the general public near the spill, but the pictures above were taken by people living near the spill. And this was just a small pipeline, carrying about 90,000 barrels of crude per day. The XL Pipeline will carry about 800,000 barrels per day -- making a break much more serious than the one in Arkansas.

As the Arkansas break shows, we are not talking about whether a break can occur with the XL Pipeline -- only when and where such a break will occur. That monstrosity should not be built!

An Environmental Mistake

It's good to finally see someone in the mainstream media finally taking a sensible position on the building of the Keystone XL Pipeline. That pipeline is an environmental boondoggle that should never be finished. It will transport some of the dirtiest oil in the world through the heart of this country, creating an unnecessary risk to the environment of several states. In addition, eminent domain is being used by the government to take the land from private citizens and give it to a private corporation (for the benefit of that corporation, not the public).

The right-wing Republicans would like Americans to think the pipeline is a big job creator and will help to reduce this country's reliance on imported oil. Neither of those are true. Less than 200 permanent jobs will be created by the pipeline. And that dirty oil (tar sands oil) is coming from another country, to be refined in this country, and then shipped abroad. It will do absolutely nothing to reduce America's reliance on foreign oil.

This is just another example of a huge corporation using the power of our government to fatten their own bank account. And right now, it looks like they may get away with it. We need to urge the president to stop the building of the pipeline.

Willard Still Lying About Gas Prices

(Cartoon was found at the blog called brotherpeacemaker.)

Willard Mitt Romney (aka Wall Street Willie) continues to tell lies in an effort to pin some kind of blame on President Obama for the economy (which is actually slowly improving). This time it's one he has told before -- several times. He wants voters to believe that the high gas prices are the fault of President Obama. He knows this is not true, and this time he is called on it by a conservative business-oriented site -- Bloomberg Businessweek. Here is some of what Matthew Philips had to say on that website:

Energy markets are as complex as any in the world. But complexity makes for bad campaign messaging. So Romney has reverted to a simplistic message that more oil production will lead directly to lower gasoline prices. If only it were that easy.

The U.S. is currently producing 6.6 million barrels of crude oil daily, compared with 5 million when Obama took office. The last time the U.S. was pumping this much oil was in May 1995, when the national average cost of a gallon of regular gasoline was $1.17. Today, it’s $3.81. The difference is the price of a barrel of oil. In 1995, a barrel of oil was $19. Today, it is around $92.

According to the U.S. Energy Information Administration, the cost of crude oil makes up 64 percent of the price of gasoline, and refining is 18 percent. Depending on where the oil is coming from, the refiners that produce your gasoline pay different prices. For example, the cheapest gasoline prices right now are in the middle of the country. (Heat map here.) The reason is that refiners there have easy access to all the cheap, domestic crude being drilled in such places as Texas and Oklahoma and Kansas. Most of that crude istrapped, however, and can’t efficiently reach markets on the coasts.

Meanwhile, the places with the highest gasoline prices—California, Oregon, most of New England—are stuck buying gasoline that has been refined from more expensive imported oil, rather than the cheap stuff coming from the middle of the U.S. A barrel of foreign oil priced against the Brent benchmark that gets shipped over from West Africa or the North Sea is currently $20 a barrel more expensive than domestic crude priced against West Texas Intermediate.

High gasoline prices aren’t a production problem; they’re a logistics problem. The U.S. is currently undergoing the biggest recalibration of its pipeline infrastructure since many of those pipes were laid 50 years ago. But here’s the thing: Building more pipes won’t necessarily bring down the price of gasoline. If anything, it’ll make it more expensive on the whole. Once all that cheap domestic crude starts to find more markets, its price will rise, not fall. A commodity that has access to more markets, and thus more demand, will eventually become more valuable.

In the next decade, the U.S. will continue to become more energy independent. That’s a function of higher domestic production but also due to gains in efficiency. That doesn’t mean, though, that the nation will get to a point where it, and Canada, operate in a closed loop, in which we use only what we make, with nothing going out and nothing coming in.

That’s not only a fantasy; it’s also bad policy. Whether it’s natural gas or coal or oil, energy is global, and therefore so are its prices. To say otherwise is to suggest closing markets and limiting global trade. That’s called protectionism. Which, last I checked, isn’t in the Republican tool kit.

Corporate Thuggery In Texas

The picture above shows actress Daryl Hannah and 78 year-old great-grandmother Eleanor Fairchild. They are trying to stop the corporate bulldozers of TransCanada from clearing a path for the southern portion of the Keystone pipeline across Fairchild's land. Ms. Fairchild had refused to sell any of her land to TransCanada, so they just took it by claiming the right of eminent domain. Both Ms. Hannah and Ms. Fairchild were arrested.

They are not the only one who have been arrested trying to stop the pipeline. Several other protesters have also been arrested, and even some reporters (who were just trying to cover the event) have been arrested. The corporation does not want anyone to see or report on their high-handed and thuggish actions.

Personally, I don't think this corporation (which is not even a U.S. corporation) should have the right to steal a citizens land. Eminent domain is supposed to be used for the public good -- to build something like a highway, that is for the good of and will be used by everyone. That is not the case here. The only real beneficiaries of the pipeline are the giant oil companies (and the politicians they are paying off).

I know they are claiming this is for the public good (because the public will benefit from the oil flowing through the pipeline), but that's ridiculous. If that was true, then any corporation should have the right of eminent domain because the product they want to build or sell will be bought by the public (and therefore is for the public good). If TransCanada is allowed to do this, then Texas obviously needs some new and stricter guidelines for the use of eminent domain. It is just wrong to use eminent domain to fill the bank accounts of giant corporations.

If you'd like to read more about this grievous miscarriage of justice (and I hope you do), then you can go to the website called Planetsave.