Is there anything as absurd as someone telling us that lower oil prices hurt us all?  I guess those tiny-headed propagandists think they can tell us that down is up and get away with it.  A few of them are out and about with the tale that lower oil prices mean less incentive for researchers to find cheaper renewable fuels, therefore, let’s get those prices back up there in the stratosphere.  Or they tell us that we have to keep prices high so those altruistic oil company executives will have the money with which to ship their oil to people and places that need warmth.  By this line of reasoning higher prices will save millions of lives.  And they finally admit that well, yeah, climate change is real, but their engineers are the ones to fix that issue not climatologists.  In short let’s keep prices high so they can clean up the polluted air they created, so they can stop the melting ice caps they have thawed, and so they can save the lives they are destroying.  

The problem with all those wild assertions is that the oil companies have never shown the slightest inclination to do anything even remotely connected with renewable energy research, with climate change, or even with pollution control.  The small gains made in these areas came about by law changes, by concerned citizens, and by scientists separate from those paid by the oil companies.  Higher oil prices mean higher profits for the oil companies and big drains on our bank accounts.  Period.

Let’s start with this tough question: Which price would you prefer to pay for gasoline at the pump:  $4.00 per gallon, or $1.90 per gallon?  

Next question:  Which utility bill would you prefer this month:  $350 or $140?  

Third question:  Which grocery bill would you prefer for the same groceries:  $250 or $180?

Last question:  Would you give up all the above so Exxon Mobil’s CEO can take home another $500 million in retirement benefits—on top of his $3.5 billion net worth?  Or so the Koch brothers can add $5 or $10 billion dollars more to their $84 billion dollar net worth? And that's enough pocket change to buy--about every election for the next couple of hundred years.

I will grant that oil prices in the $35 to $50 dollar range has meant lower profits to an industry that has amassed huge profits over the last century or so.  Consumers, however, have been stuck with the bill of creating a long list of billionaires within the oil industry ranks of COEs.  And now we are choking on the air we breathe, watching our wildlife do the same with oil spills, while huge iceberg chunks fall into the oceans and raise sea levels higher and higher.

The economic factors behind gasoline prices, for example, come together like a perfect storm for the oil industry.  Here are the reasons:  Gasoline is price inelastic, meaning that we still need it even when the price rises.  That is what our cars run on, and we need our cars for multiple reasons.  That inelasticity is 11:1.  That means the price can go up 110 percent before we will reduce our consumption by 10 percent.  Also, there is only one price for oil, and that is set by world demand, not by US demand.  India and China are the big drivers of demand, but so are the US, Europe, and Japan, hence ever upward pressure on prices.  And then, naturally, we have a big trade deficit with all those other countries—especially China—so we are paying a large chunk of  their oil import bills when we buy all those products that flow in from them.   And then there is OPEC, that international cartel that sets oil production levels for all its member countries with the objective of keeping supply just below world demand, and that drives prices even higher.  US oil companies can push prices even higher by first, refusing to build more refineries that would let them stay up with demand, and second, by not refining more when it is needed most.  Behind all this oil is a nonrenewable resource that is being depleted more and more with each passing day.  Every oil producing nation knows this so there is a race to the finish to squeeze out every drop of profit they can before the wells run dry.  Put all of these factors together, and you have a huge wealth building industry, with so many elements that continually push prices higher and higher.  Even an idiot could run an oil company and make a huge profit. (Did I write something redundant in that sentence)? 

So why has the price of oil come down recently?  The answer is that Karma has interceded on our behalf.  OPEC is pumping like crazy to put the maximum downward pressure on prices.  They want to kill US production, especially in North Dakota and in the emerging shale industry. 

I have no idea how long this war will continue.  But OPEC has a lot of money and a lot of oil.  They are in the driver’s seat.  Go OPEC!

The prudent (and wise) consumer can bypass most of these shenanigans by driving a very fuel efficient vehicle such as a hybrid that delivers 40 mpg and up.  Not me.  My klunker sets in my driveway most of the time.  I drive it about 5,000 or so miles per year.  My gasoline bill is not so high from inactivity, but I sure like this fight between OPEC and its rival producers.  My driver’s license is good until 2022.  So I have my own race to the finish going on for other reasons.