I'm Running Out Of Energy To Post This

By now most people are aware of the most recent transparently political posturing of obama and his administration.

High gasoline prices prompt Justice Department to eye energy industry

Prodded by growing public frustration over sharply rising gasoline prices, the Justice Department on Thursday announced the formation of a team -- the "Oil and Gas Price Fraud Working Group -- tasked with the goal of ensuring consumers are not victims of price gouging.

Attorney General Eric Holder made no secret the move is a direct response to public angst, not to current evidence of any illegal conduct.

While promising official vigilance, the attorney general acknowledged regional differences in gasoline prices, and said, "It is also clear that there are lawful reasons for increases in gas prices, given supply and demand."

"(No) evidence of any illegal misconduct."

"It is also clear that there are lawful reasons for increases in gas prices, given supply and demand."

So why are Holder and his stooges investigating gas prices? "(In) direct response to public angst."

Perhaps they should instead focus on the "lawful reasons for increases in gas prices, given supply and demand."

There are the obvious reasons, such as the obama-mandated moratorium on resuming drilling in the Gulf of Mexico. Not only has this contributed to rising gas prices, it has cost jobs, bankrupted businesses, and reduced government revenue. Another unreported consequence of the obama-ban is that it "affects only American businesses, as other nations such as Brazil and China are still drilling in the Gulf." (Source)

And of course there's the billions of barrels of oil sitting untapped in the Arctic National Wildlife Refuge (ANWR), a 19 million acre region roughly equivalent in size to South Carolina. Opening a single site of around 2000 acres would produce approximately one million barrels of oil daily. That's the same amount we import from Saudi Arabia (Source). It would keep that revenue stream in the U.S., generate government income in the form of taxes, and create jobs.

So why don't we drill baby drill? The only reason I can think of is that obama and the rest of his commie pinko posse want to see America reduced to a socialist Euro-state. And what's the role of the so-called main-stream media in reporting all this?

 

A major, and often overlooked, factor in the supply side of the equation is getting the oil from the source to market. The U.S. currently does not have enough pipelines to move existing supplies of oil, much less any new supply. That's another reason the cost of gasoline is skyrocketing.

Why gas is so expensive, when oil isn't

Gasoline prices have been rising for months and are within striking distance of their 2008 all-time high of $4.11 a gallon. But while oil prices are above $100 a barrel, they're still 24% below their 2008 all-time high.

So why is gasoline so expensive, when oil is so far off its record price?

The answer is that the price of oil Americans see every day has little to do with the price of gasoline at the pump.

Those prices are for a particular type of oil -- West Texas Intermediate (WTI) -- that's stored in Cushing, Okla.

Prices for most other types of oil, which make up the vast majority of oil that refiners use in U.S. gasoline, are much higher than West Texas Intermediate. London's Brent crude, for example, was closer to $124 a barrel on Wednesday.

"It's really a broken benchmark," Tom Kloza, chief oil analyst at the Oil Price Information Service, said of the West Texas price.

The gasoline Americans buy is made not just with U.S. supplies but mainly with oil from around the globe, and that fuel is surging in price.

In the Northeast, a gallon of gas may not contain a single drop of WTI oil.

 Adding to the confusion, in Cushing there's currently an oversupply of crude.

Oil production from Canada's oil sands and North Dakota's Bakken shale formations has surged. Most of this oil is sent to Cushing.

But pipelines out of Cushing to refineries along the Gulf Coast can't handle all the excess oil.

"What is needed is a way to get oil out," Adam Sieminski, chief energy economist at Deutsche Bank, wrote in a recent research note.

Adding to the glut, refineries in the area have been down for maintenance, and the cheap price is giving traders an incentive to store even more oil in Cushing, hoping prices will rise and they can sell it at a profit in the future.

This is speculation, which is the bedrock of the commodities market. It is also practiced with other commodities such as wheat, cotton, sugar, and that all-time favorite, frozen concentrated orange juice. Speculation is not manipulation, despite what obama and his cronies might think. It is not illegal or unethical. It's been around for centuries. 

And finally we come to the profit margin. If gas prices are so high, oil companies must be raking in a fortune, right? At least that's what the lefties would have us believe. Their mind is made up - to hell with the facts.

The difference between what refiners pay for a gallon of oil now and how much a gallon of gas sells for -- excluding taxes -- is about 78 cents, said Rayola Dougher, a senior economic advisor for the American Petroleum Institute.

That's slightly higher than normal, but not terribly so, said Dougher.

So when can we expect to see obama open up drilling in the Gulf and ANWR, and encourage the construction of new pipelines?

The answer to that question is painfully obvious...