As a nation the United States is addicted to oil. According to the US Department of Energy (DOE) we consume an average of 20 million barrels of oil each and every day and at the going rate of $100 per barrel that works out to about $2 billion a day just in crude oil alone. That includes all petroleum based products like home heating oil, diesel fuel for trucks and kerosene for aircraft. Oil is also a main ingredient in many products like plastics and things like tires and chemicals. Figured most prominently however in those 20 million barrels of oil are the 200 million or so gallons of gasoline that we use every single day, mostly in our cars.

Is The Record High Price of Gasoline Due to Collusion and Dirty Dealing?
Some people would say yes, absolutely, and they make some good points but I think that it’s very complicated and also it depends a lot on how you look at it. The cost of a gallon of gasoline at your local station is controlled by many factors, including some that are dubious and in many cases very difficult to trace or pin down. Including but not limited to refining costs, transportation, marketing, profit and federal, state and local taxes. One inescapable fact however is that approximately 50 percent of the cost of every gallon of gas can be traced directly back to the cost of crude oil. The World’s Crude Oil Production is heavily influenced by a group of 12 countries collectively known as The Organization of Petroleum Exporting Countries or OPEC. These 12 countries together as a group control 40% of the world’s oil production and they do as much as they can to control the price of all of the world’s oil by simply limiting their production and shipments as they see fit and as the supply plummets the price goes up. They look at the overall world supply and then decide how much oil to produce and make available. The industrialized fuel using world simply cannot dictate how or why sovereign nations conduct their businesses in the way that they do. Believe it or not more than one of these nations is actually family owned. The other inescapable fact is that the value of oil has historically been based on the US dollar and for various reasons the dollar is trading very weak in world FOREX markets, almost creating a perfect storm for record high gas prices. If next summer sees a series of powerful Gulf of Mexico hurricanes the sky may be the only limit to US gas prices.

What About The US Strategic Petroleum Reserve
The United States is the fourth largest producer of crude oil in the world and to some people it is unclear if we produce too little oil for our own domestic consumption or whether the nation as a whole limits production to conserve our own reserves, as unlikely as this might seem. In reality however after the Arab Oil Embargo of the 70’s the US Federal Government created the Strategic Petroleum Reserve. The federal government maintains storage facilities that hold between 600 million and one billion barrels of strategic oil in case of a crisis. This reserve would ostensibly be able to run the country for about 60 days. That way we wouldn’t have to hang a large closed sign across New York Harbor in case of a sudden world oil embargo. The government has in times of crisis loaned a portion of this reserve to individual oil companies to bolster nationwide production and supply and uses the SPR mainly as a supply side buffer.

Are High Oil Prices Actually A Good Thing?
We as Americans certainly don’t pay the most for gasoline. Some European drivers are paying nearly $7.00 a gallon and if you happen to live in Venezuela you can get a gallon for less than a quarter. It would be a safe bet to assume that a British driver is doing everything that he can to conserve while the Venezuelan probably couldn’t care less about how much gas he uses. High prices cause people to conserve and stay out of their cars and that’s not a bad thing. Maybe we can make whatever we have left last a little while, and while we may eventually run out of oil we will never run out of energy, we just need to become a little more creative and where there’s a will there’s going to be a way.

Maybe The Industrialized World Should Start The Organization of Fuel Using Countries
The acronym would sum it up very nicely, would it not?