The Real Price of Gas

An article in the WSJ on Tuesday (no link because it’s subscription-only), quotes Milton Copulos, a Reagan energy consultant and these days President of a conservative think-tank called the National Defense Council Foundation (Newt Gingrich is an “advisor”), on what the gasoline we put in our cars really costs.

“We’ve been going round in circles for decades,” says Milton Copulos…. Mr. Copulos has assessed hidden economic and military costs of imported oil. If military spending directly related to protecting oil supplies and other costs were reflected at the pump, he figures, gasoline would cost $5.28 a gallon in the U.S. “We are always looking for a quick fix, but the fundamental problem is we have to wean ourselves off oil,” he contends.Unless this happens, Saudi Arabia will remain the pivot of U.S. energy security. It now creaks under political and other pressures, but Washington has to keep it turning. Mr. Bush recently named James C. Oberwetter, a Texas oil lobbyist and former head of the American Petroleum Institute, as ambassador to the kingdom.

IOW, in order to keep the actual price of our gasoline under $2, we–the taxpayers–subsidize the the oil industry to the tune of $3.50 for every single gallon sold. We are paying $$$BILLIONS$$$ every year to Shell, Exxon, Chevron and all the other domestic oil companies in order to maintain a fictional price at the pumps and their profit-margins. And we don’t even know if Mr Copulos was including the money being spent in Iraq.

Charles Palson of FITE, who sent me this article, writes in his email:

The current gas pump price of gasoline is a fraud, and letting the American public know what the real cost [is]- $5.28/gallon – could have very important consequences.The tax money we pay the government subsidizes the oil companies so they can sell at a cheaper and very unrealistic price. The real price is almost $4 above the present price. The subsidies come in the form of money spent to maintain political stability in oil producing regions of the 3rd world. Political scientists know the nearly infallible forumula of oil + poverty = political instability. In other words, we as a country are stuck shoveling lots of taxpayer money into these countries to make it safe for Big Oil and unsafe for our health and national security. That’s a gigantic subsidy that covers up the real price of gasoline – $5.28/gallon.

Phaedrus, in a new post at No Fear of Freedom titled “Why Did We Go To War With Iraq?”, explains why he keeps coming back to the oil.

Been askin’ myself that question fer a long time now. WMDs were the official reason, but that one’s lookin’ awfully unlikely. To free the Iraqi people? Gimme a break. Peddle that one to the idealistic sob sisters and the suckers (Are ya listenin’, Tommy Friedman?). To fight terrorism? There were a lot better ways to use our resources against terrorism. There’s the Dean theory, that it has sumpin’ to do with Bush and his daddy, but as little as I think of Bush, even I can’t take that seriously.I keep comin’ back ta oil. “Oh,” say the dingers, “that’s stupid. This war cost us more than we’ll ever make from Iraqi oil.” Mebbe. Mebbe not. But who said anything about Iraqi oil?

First, this could well be a war to control the Middle East, in which case we’re talking about, at least, virtual control of the lion’s share of exportable oil in the world.

Second, Iraq has the second largest proven oil reserves in the world. If we control them, we totally undercut OPEC.

And third, how much will oil be worth? World oil production is going to peak relatively soon, if it hasn’t already. The US estimates the peak will come by 2037. That’s probably wildly optimistic. It might be more like 2010, it might have already happened. No one knows for sure, but even 2037 isn’t that far off. It’ll take a couple of years before it’s recognized. Once that happens, world oil prices will start to go up, and they’ll continue to go up and up until we find a cheaper alternative.

Count Iraq and the true price is probably well over $5 and may be more than $6/gal (which is about what the rest of the world pays). As Chuck points out, “It also means that the $2.00/gallon (gasoline equivalent) of the windmill/hydrogen alternative…is so cheap, clean and environmentally friendly, that this off the shelf technology should probably be pushed” instead of sloughed off with token funding while the oil companies receive massive taxpayer support to make sure we stay glued to the oil tit and economic slaves to their profits.

The technology, hydrogen technology in particular, is almost there. We have cheap, clean alternatives to the oil mess right around the corner but the oil-industry-controlled Bush Admin isn’t interested. It prefers wars that will allow oil company profits to continue flowing regardless of the effect on our society and our economy.

Well, you gotta have priorities, I guess.

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