Without Competition, Oil Companies to Suck Money Out of Our Wallets

February 23rd, 2012 by Zachary Shahan

Below are some things to consider if you’re watching, listening to, or reading about Obama’s speech on energy in Miami today. They came to me from the Natural Resources Defense Council (NRDC) by email a few hours ago. Before sharing those insightful comments though, I’ll share a quick comment I sometimes mention when discussing oil prices, a comment made by my Texan grandfather, who was Exxon’s chief excavation geologist for all of the United States except California and Alaska when he retired. That comment it: “We just got spoiled.” This was in reference to Americans’ complacency with cheap gas and our expectation that prices stay where they are, or even go down. Oil production in the U.S. peaked decades ago — nothing’s going to change that. But, on to these great comments by NRDC, which include a lot more important points on this matter:

Our fundamental problem surrounding gas prices in America is a lack of choice. With few exceptions, we must all fill our cars with oil-based gasoline. If we don’t like it, too bad. As long as oil maintains its monopoly on our transportation system, we remain shackled to high gas prices, global instability and an industry that can continue to take record profits because it lacks real competition.
The spike in gas prices we’re seeing now is because of two things: Increased demand from our improving economy and rising tensions with Iran. According to analysis from Wall Street, we can only expect these price spikes to continue.
More drilling in the United States won’t make a difference — not now, not in the future. The United States uses about 25 percent of the world’s oil, but has less than 3 percent of the world’s known oil reserves, according to the U.S. Energy Information Administration. We could drill every drop of oil there is in the United States, but we’d still be dependent on imported oil. We’d still be subject to global oil prices with every gallon we pump.
The number of oil rigs in the United States has quadrupled in the past three years and we’re already producing more oil than we have in nearly a decade. What have gas prices done amid all this additional drilling so far? Continue to rise.
Oil is priced and traded as a global commodity, and foreign governments control about 90 percent of the oil traded globally. The only way to avoid high prices, then, is to quit buying so much oil.
The proposed Keystone XL tar sands pipeline will do nothing to make gas prices lower. Canadian companies want to build the pipeline to the Gulf of Mexico for a reason: to reach global markets, not to bring more oil to the United States. In fact, analysis shows Keystone XL could actually drive up oil prices in some parts of the United States.
As NRDC Executive Director Peter Lehner put in a Miami Herald piece on Thursday, “the simple truth is, we can’t drill our way out of our addiction to oil.”

What America really needs to reduce what we’re spending on gas is more choices — and more efficiency.

Increasing new car mileage standards to 60 miles per gallon by 2025, for instance, will cut our oil usage by more than a million barrels per day — saving the average driver $4,400 over the life of a vehicle.

Investing in public transportation — something Republicans in the House of Representatives are currently trying to kill — will give more people alternatives to the gas pump, while at the same time taking more cars off our gridlocked roads.

Programs that encourage ride sharing, bicycling and walking give Americans more choice too, and send less of our money to oil companies and foreign countries.

The answer to high gas and oil prices isn’t making America more dependent on gas oil.

The real answer is giving Americans more choices in how we move around — and using American ingenuity to do it.

For more details on high gas prices and what we can do about them, see here.

For NRDC Federal Transportation Policy Director Deron Lovaas’ latest blogs on drilling, gas prices and the federal transportation bill, see here.

For NRDC Transportation Program Director Roland Hwang’s blogs on auto efficiency, see here.

Increasing oil prices image via shutterstock

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Tags: Congress, Democrats, gas prices, NRDC, Obama, oil drilling, oil prices, price of oil, quickies, Republicans

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

kafantaris

Iran is in a serious dilemma. On the one hand it wants to show the world all it’s got and put it at ease, while on the other hand it fears that such show ‘n tell will give its enemies a roadmap to bomb it.
Saddam Hussein faced a similar dilemma ten years ago. Though he wanted the world to know he had nothing to hide, he also wanted to bluff his archenemy Iran into believing Iraq still had WMD.
Bluffing did not go well for Saddam, and it might not go well for Ahmadinejad.
But since the price tag for ridding Saddam proved high, we ought to reflect what we are asking of Iran now. On the eve of a threatened attack, we are asking it to take us to the depths of its arsenal and show us all it’s got.
Such great expectations are a sign we have been talking to our friends too long and are in need of a broader perspective. Exactly when was the last time we asked Pakistan, India, China or Russia to show us their arsenal?
“But those countries are not advocating the destruction of Israel.”
True, but Israel is not a thorn on their side either.
Surely, however, we can see beyond the hyperboles and figure out their underlying purpose. Or have we forgotten that not all Iranians are thrilled with Ahmadinejad?
He sure hasn’t.
Nor has he forgotten that that his countrymen hate Israel even more. So he tells them that Israel will be wiped from the face of the earth. Expectantly, this nonsense unites them against a common enemy. It even becomes a diversion from the misery and isolation brought on by his anachronistic regime.
Quite clever work by Ahmadinejad — and not a rial spent or a bullet fired.
So why are we letting the crazy talk about destroying Israel get us all worked-up — to the point of turning the world topsy-turvy again.
Can we not plainly see the machinations of an unpopular regime trying to hold on to power?
- Bob_Wallace
  
  I share some of your analysis. Saddam lied about WMDs in order to keep other companies/external enemies at bay.
  
  The Iranian leadership is worried about internal problems and is creating external enemies in an attempt to minimize internal opposition.
  
  I really doubt that the leaders of any of these countries give a flying fig about Israel. But Israel is a great tool for keeping the religious crazies excited and they, in turn, keep the reformers quietened.
  
  We’ve got to drastically cut our oil use. The Middle East is likely to be in turmoil for the next several years. People are not going to tolerate the sorts of governments they’ve had in the past and their first attempt at self government is not guaranteed to be satisfactory. Oil is a tool that they will likely use to gain advantage with other countries.
  
  We don’t need to be one of those other countries.
http://cleantechnica.com/ Zachary Shahan

Thanks
Ty

which is why the keystone pipeline is such a bad deal for American consumers. We get all the risk and oil gets all the benefits.
- SteveEV
  
  The keystone risk includes the responsibility for any spills along the route. The IRS ruled that that oil is not subject to fees for an emergency response fund usually associated with oil pipelines. The local communities get that task while the oil is on its way overseas and the profit goes to Canada. I am all for supporting our northern neighbor but not if it poisons our kids.
Pingback: Obama: “the American People Aren’t Stupid” (on “Drill, Baby, Drill” Strategy) - CleanTechnica
Bob_Wallace

The Nissan Leaf uses 0.35 kWh of electricity per mile.

At $0.08/kWh one can drive a Leaf a mile for 2.8 cents.

In order to drive a 40MPG gasmobile for 2.8 cents per mile you’d have to be able to buy your gas for $1.12/gallon.

Can we just get on with the transition away from oil? Let the oil companies suck air….
Tinfoil

“Investing in public transportation – something Republicans in the House of Representatives are currently trying to kill – will give more people alternatives to the gas pump, while at the same time taking more cars off our gridlocked roads.

Programs that encourage ride sharing, bicycling and walking give Americans more choice too, and send less of our money to oil companies and foreign countries.”

There is one major change that Congress and the states can legislate that will have an immediate impact on consumption and, therefore, fuel prices… telecommuting. Most white collar workers only need a phone and computer to work – why not mandate that they must work from home 3 days each week? Developers, accountants, salespeople, marketers, etc could all do their jobs from anywhere. Think about the implications…
- rommel43
  
  I dont think you could effectively mandate that let alone get it passed by alot of the libertarians and republicans
  - SteveEV
    
    We don’t need to mandate anything. The IRS already has provisions to encourage work from home. Make it more well known and easier to claim. Gas prices will take care of the rest. Make more bike routes available too.