Yesterday, I filled up the family car for $2.95 per gallon, the first time gasoline has dropped below $3.00 around here since November 2010. Today, I noticed the futures price of petroleum in the New York Stock Exchange had fallen to $85.00 per gallon; it has not been that low for a long, long time.
The futures price is of interest because it tends to confirm the opinion of some experts that prices at the pump in the
U.S. will stay relatively low or
continue to fall in the near future. Why have we arrived in this happy
1. Federal rules requiring auto producers to build machines that get more miles per gallon are paying off. The builders complied by designing vehicles in all categories that are more fuel efficient. And the American public is buying more small cars and more electric and hybrid vehicles in all sizes.
2. Fracking and improvements in more conventional extraction methods have combined to glut the American market with gas and crude oil. No matter what economic theories you subscribe to, that tends to keep prices down. But fracking needs firm controls to prevent environmental disasters, and we would be wise not to change policies to encourage more use of the technique.
3. For a variety of reasons, Americans generally have been driving fewer miles in recent years, which contributes to the favorable supply situation.
Low oil and gas prices reverberate positively through our economy. Consumers have more cash to buy goods of all kinds. That demand then can be met through lower manufacturing and transportation costs. That kind of demand also creates jobs in many sectors. It is the sort of prosperity we should embrace.
But some people are just too greedy to allow us to stand prosperity. Those are the guys who control the big oil companies.
We have been protected to some extent from their avarice for 40 years. In 1973, several Arab nations put an embargo on oil exports, sending prices soaring world-wide and creating shortages in the
government responded in several ways, one of which was a ban (with some
exceptions) on exporting crude oil produced here.
The idea was to break our dependence on foreign crude oil and stabilize the domestic market for refined products. It has been a long haul, but success seems imminent. It should be pointed out that the ban does not include export of gas, which can be liquefied and shipped overseas, or products from oil refineries.
Surprise: the American Petroleum Institute is leading a lobbying campaign asking the Administration to circumvent the ban by introducing more exceptions and the Congress to revoke it entirely with legislation. Some refineries that profit from the ban are mounting a counter campaign.
Genius is not necessary to know that no matter how technology advances oil and gas are nonrenewable resources. We eventually will run out of them. We are working to replace oil and gas with solar and wind power, but the conversion will take a long time. It makes no sense not to conserve our nonrenewable resources as much as possible.
Please, Mr. President and Members of Congress, let us stand prosperity. Resist the petroleum lobby, and act in the national interest. Keep the ban on crude oil exports in place, and delete some exceptions from it as well.