John Feehery: Speaking Engagements

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Enjoy Low Gas Prices While You Can

Posted on December 2, 2014
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"Gas-pump-Indiana-USA". Licensed under Public domain via Wikimedia Commons.



At my local Exxon Station, gas prices haven’t gone down much.

But that’s not that surprising.  D.C. has really high taxes and it’s a full-service station and it doesn’t have much competition.

I go there on occasion because I usually wait until the last possible moment to fill the tank, and sometimes, they are the closest place to get fuel before the car runs out of gas.

Plus, I like the guy who owns the place and the guys who fill up my tank.

I would imagine that I am an outlier when it comes to gas prices.  Unlike most of my friends who live in the suburbs, I don’t drive that much and I only fill up my tank every couple of weeks.

But most Americans drive a lot and so when gas prices go down and go down fast, it’s like a mini-little tax cut.

Presidents don’t get the credit when gas prices fall, but they do get the blame when prices increase sharply.

Usually, prices spike at the beginning of the summer, when more drivers take to the roads and when refiners are forced through government regulation to change up the blends of fuels available to consumers.

I was reading an excellent article about the history of gas prices written by the Godfather of Petroleum, Daniel Yergin.

Price volatility has been a pretty consistent feature in the oil marketplace, because despite the big talk of the oil industry, it is not a pure open and free market.

Politics plays a profound role in the price of a gallon of gas.

Because the oil marketplace spans the globe and so many oil reserves happen to be in places where petrodollars pervert the political systems, American consumers are at the mercy not of the free market, but of a group of undesirable dictators.

Think about who has the oil (outside of us):  Russia, Venezuela, Saudi Arabia, Iran, Nigeria, Iraq, etc.

Can you think of a bigger group of folks who have a profound dislike of us and our way of life?

And yet, we are tied to them each time we get into our cars.

Now the fracking thing has given us greater control of our oil destiny, theoretically.

We now produce more here than at any time in America for the last 30 years.

But don’t think our friends in the rest of the oil producing world haven’t noticed.  And you know what they are doing now?

They are cutting prices.  They are cutting prices for a strategic reason.  They want to put our small domestic manufacturers out of business.

And they want to put American companies out of business because they want to control the marketplace.

That’s why OPEC decided to not cut production despite the fact that we now have a glut of oil.  And OPEC can keep the spigots going because they can absorb the losses because they don’t have market economies back home.

They don’t have to play by the rules of supply and demand.

So, enjoy your gas tax rebate for the short term, because once the Saudis put the Americans out of business, prices will probably go up again.

In the meantime, we should think about ending the oil addiction if for no other reason than because we should be getting sick and tired of being yanked around my Petrodollar Princes.

We can only control our own destiny when we have our own sources of energy that are not tied to their fortunes.

And wouldn’t it be wonderful knowing that whatever alternative we come up with doesn’t line the pockets of Vladimir Putin, the guy who replaced Chavez in Venezuela, or the Sheiks of Arabia?