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Oil Insanity


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 »  Home  »  Blogs  »  Oil Insanity
Ken Freund

I’ve always been crazy about anything with an engine.

After years of pestering my father, he finally let me drive a car - at nine years of age. At 14 I taught myself to drive stick shifts and then how to ride motorcycles. Later, I also learned to fly and have had my pilot’s license for 22 years. Working on, riding, driving, restoring, photographing and writing about all these wonderful machines has always been my passion. I've been an auto vo-tech and smog test instructor, certified master technician, vehicle inspector, shop foreman, service manager, service director, and shop owner. Over the years I’ve owned about 35 bikes and 50 cars and trucks, a lot of which I wish I had never sold!

 

View all blogs by Ken Freund...
Oil Insanity
By Ken Freund | Published  05/5/2008
Recently angry truckers converged on Washington to stage a noisy protest and demand that Congress provide relief from diesel prices that have soared above $4 a gallon nationwide. The high prices are sucking money out of our wallets and the economy like a huge vacuum cleaner and I’m afraid that it will seriously affect our ability to afford and enjoy the use of our Dodge diesel trucks--or any vehicles. It’s not only driving up the cost of living, but also makes the cost of towing RVs or boats and other recreational pursuits prohibitive.

The presidential candidates have made proposals that include a temporary suspension of federal fuel taxes and halting the filling of the Strategic Petroleum Reserve. These changes won’t significantly address the problem long range.

Suspending the federal fuel tax from Memorial Day to Labor Day was suggested by presidential candidate John McCain and embraced by Hillary Clinton. Drivers would get a paltry 5% break on fuel costs, and it would likely increase demand slightly and the oil market would probably raise our prices to eliminate the reduction. It would also take away about $10 billion in taxes that pay for roads and infrastructure that have to come from someplace. Senator Clinton wants to make it up with a "windfall profits tax" on oil companies, but they claim it would discourage long-term investment.

The Strategic Reserve is supposed to be there if a major disruption of oil supplies occurs, which is quite possible considering the Middle East's volatility. The government adds about 70,000 barrels of oil every day to fill the reserve, which is said to amount to only 0.08% of the oil the world consumes daily, so the market would hardly notice. Some people say we should tap the Arctic National Wildlife Reserve for oil, but I don’t think we should, not only for environmental reasons, but we need to retain domestic reserves in case of war or other national emergencies.

No question that truckers--and all of us--are hurting, but these stopgap solutions fail to address the real reasons for high prices nor do they offer a long-term fix. We have known this problem was coming for a long time. Ever since the first oil embargo in 1973 our “public servants” have been grandstanding about various “solutions” but have produced little in the way of results, often dragging their heels to prevent legislation that might affect their favorite special interests. Now we’re in a hell of a mess.

In the meantime, countries like Brazil (that some folks have looked down upon as being technologically backward) have developed domestic fuel policies that have made them energy self-sufficient. Soaring fuel prices are causing inflationary spirals that are resulting in huge price increases for all products, including food and other necessities. Meanwhile the huge multi-national oil companies are making massive profits and have shown little social conscience.

Yes, I agree we need to conserve energy, develop alternative energy sources and buy more fuel-efficient vehicles, etc., but perhaps we also need to rethink the current model we are using for oil supply. I know this will boggle some minds and some will call me a dirty commie, but what if we declared that the oil that is under our ground is now the property of the people of the United States, and only for the benefit and use of its citizens? Oil could only be sold for what it costs to bring it up and refine it, with a moderate amount built in to pay for exploration and profit, but not marked up to the price the OPEC oil sheiks want to maintain so they can build showcase cities in the desert, golden palaces and buy extravagant private jets. Why do we need to ship money out of our country to multi-national oil companies and speculators even for oil we get here?

Each citizen who is a licensed driver would receive an account accessed by something like a debit card, and you could use that to access your allotment. For example, using round numbers for simplicity, if we have 200 million drivers, and we produce 400 million gallons of fuel per day domestically, each driver gets a daily allotment of two gallons at the U.S. price. Use any amount above the allotment and you pay the “world” price just like before. The higher “world” price for additional fuel would retain the incentive to conserve, while the domestic price would help contain inflation and allow people some reasonably priced fuel to get to work and back home.

We need to take back our country from the special interests and big campaign contributors or we’re not going to have a middle class soon. What do you think should be done?
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  • Comment #1 (Posted by Jesse Johnson)

    Obviously this bogus ethanol deal isn't working, look at the price of food, price of feed for cattle, pork, poultry producers, it's ridiculous. YES WE DO NEED TO DRILL IN ANWAR! It makes a footprint the size of an airport in an area the size of North Carolina. We can and will be environmentally friendly in doing it. SO DO IT! We have had a 30 year moratorium on drilling on the continental shelf off our shores, we need to lift that ban and start drilling. Any conservation we do will be eaten up by expanding economies in China and India, the simple fact is WE NEED MORE OIL! START DRILLING!
     
  • Comment #2 (Posted by Ben B.)

    I think this is a great idea, nationalizing the petroleum, but only if there are very specific controls put in place stating exactly WHO sets the price, WHO controls production, and who gets contracts to refine, extract, drill, etc. We can't have any more foxes guarding the hen coop. We don't need politicians controlled by big business to be calling the shots in a nationalized oil company. We DO need to drill in Alaska, ASAP to alleviate the problems of supply, with intentions of stopping extraction as soon as the oil companies are seized from private hands under iminent domain. THis would keep us from using oil reserves too quickly, as Ken Freund implies. IN the meantime, all available resources would be used to withdraw form Iraq, stop the trillion dollar hemorrage, and pour that money into alternative energy development like fuel from H20, fusion power, solar,etc. Some of those Iraq trillions would also be used to sign an agreement that would secure billions of barrels of free crude from Iraq for at least 50 years in exchange for free liberation of them from Saddam. Oh, and lastly, there should be public trials trying the oil magnates for treason for willfully subverting the economic and security interests of the United States by embroiling us in an illegal war, and deliberately profit taking at insane levels while the U.S. economy is nosediving. THe trial would include many members of the current administration including the President and Vice President. The proceedings would also provide the death penalty for those found guilty, with possible life imprisonment under maximum security in exchange for freely divulging the repressed alternative and high efficiency power sources seized, stolen, or bought from individuals over the past century that would allow vehicles to get 50-100 mpg from existing platforms and propulsion systems.
     
  • Comment #3 (Posted by Mike Frost)

    Could you explain to me what exactly the enviornmental concerns are when drilling for oil in alaska? Take our country back from special interest, kind of like the sierra club. Money is being shipped out of our country because special interest groups, like you seem to be advocating for, are preventing use from taping into and refining our own product. Every year we are prevented from drilling for oil in our own country and building refineries by huge special interest groups that pay off politicians (not my opinion, just my wording) and people like you spew their garbage out and make everyone think that making a caribou walk around a pipeline is a national disaster. I'm guessing that a bird hitting a wind generator is great cause for alarm also. Nationalize oil, when did the government cost effectively ever fix anything?
     
  • Comment #4 (Posted by BEN MICHEL)

    I hope the goverment gets on the winfall that all oil copines has made and make them sell the gas at a large drop in price.That is price fixing
     
  • Comment #5 (Posted by JJ)

    It is all about, who is making the most money. I would like to know who is responsible for the increase in fuels prices. Besides our shrinking dollar, who is it that is profiting. I want names, companies. I understand profit margins and what the market will bare, but this is effecting us all in a very negative way.
    It is time for all of us, US citizens, to wake up and demand accountability of our representatives in governtment. What are we paying all the BIG BUCKS for.
     
  • Comment #6 (Posted by mkoles)

    The government is incapable of managing anything other than an argument.We have the ability to be energy independant.We have over twohundred years worth of coal which could be made into diesel fuel.Another thing,if we announced that we will start drilling in our own country that would also help lower current oil prices. Prices are out of control because of speculators bidding on future oil supplies and demand.Also if France can generate 70% of their electricity with nuclear power why can't we.There are plenty of options if we didn't let the special interest groups sway the same politicians that you want to put in charge.Let,s face it they,ve screwed things up enough.
     
  • Comment #7 (Posted by JW)

    Nationalize oil, no! Tell enviro nuts to go jump and drill for oil ever where possible. And yes all new oil can only be used here, good old USA. Build a bunch of nuclear power plants, oil refineries, coal gasification plants and anything else our country needs that the enviro nuts have been blocking (solar power, wind power, wave power, hydro power). If people don't want them in their back yard then build them on military bases, it is a mater of national security! We need power and energy not to return to the cave man days.
     
  • Comment #8 (Posted by Jack Rathert)

    I like your idea of a two tier price system for licensed drivers. It has good possibilities.

    You are wrong on ANWR drilling. It should at least be drilled enough, at least 3 more wells, so the amount of oil in place can be determined. That has not happened yet as only one hole has been drilled in 1982 and one hole does not define an oilfield. The possibility exists that there is no oil there. We need to know for national inventory purposes.

    Otherwise...........good article.
     
  • Comment #9 (Posted by Jack Rathert)

    I recently returned from the Casa Grande, Az. area after spending the winter there. On I-10 and I -8 I observed hundreds of semi trucks roaring down the freeways at 80 mph carrying gravel, wood, fuel tankers etc. Why do they have to drive that fast with such non vital goods. Why can't the freighting system be converted more to trains?? A truck hauls a ton of freight 50 miles per gallon of fuel. A train haul a ton of freight 257 miles/per gallon of fuel. There is an obvious fuel savings that we arfe overlooking.
     
  • Comment #10 (Posted by Bill Stephens)

    I was in jr. high during the oil embargo and my science teacher told us we did not have an energy crisis but we did have a was an energy dilemma. We have more energy than we can use if we just learn how to tap into it.

    Someday we will run out of oil that is a fact so in the mean time alternatives to oil need to be explored and developed while using the existing oil deposits so that a transition can be made. But those in charge do not seem to get the big picture and so far polices are wrecking the economy.

    I don’t like paying the price we have to pay for diesel or gas and it is a shame that a fuel that less costly to produce is more expensive than the highest grade of gas. This country use to be know for its ability to innovate it way out of a problem but seems to forgotten our past.

    I work in the power industry and don’t want to see power plants closed or new plants not given permits because someone does not want it there back yard, but still wants to turn on there lights at any given moment and have the lights come on. A portfolio of different power production needs to installed, wind, nuclear, fossil, and any other source just as other industrialized western countries have to reduce or eliminate there dependences on other countries for energy. I don’t think people get how many wind turbines it takes to replace one fossil or nuke plant. The scale is so vast right now the wind turbines being installed are 1.5 MW but larger are being designed, a large fossil turbine can be up to about 1000 MWs and most nuke turbines are about 1000 up to 1400 MWs.

    The government cant manage anything when it comes to money so they need to say out of nationalizing our resources. The free market should be able to explore and work out the best ways to use alternative energy sources. The ethanol fiasco is a case in point of the government’s failure in mandating a green fuel which it is not. We looked at green suv for the wife and we amazed that the green fuel suvs are either out of our budget or get the same or worse mileage than a gas suv. So we got her a Suburban with the variable displacement 6.0 L which I am sure can get better mileage if she is able to drive it on the highway at a constant speed.

     
  • Comment #11 (Posted by Bob Bickett)

    I'd like to put my two cents in.

    They say the reason for the price of oil is becasue of world wide demand. They say China and India have increased their demands over the years because of their economic growth. Gee I wonder how they did that. We all know how they have gained economicly and its because we (THE USA) have sent so many manufacturing jobs to China and Tech. Support and Telemarketing jobs to India. So if we brought the jobs back to the States I don't believe they would have as much need for oil as they have now.

    But then as I watch cars and trucks fly past me doing 75-80 mph, I tell my wife that evidently fuel prices aren't high enough yet.
     
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