Since that time, oil has dropped over $34 a barrel to $113 - that's 23%. This substantial drop has produced only yawns by Big Media, which has barely mentioned it. (A stock market drop that big would be headline material.) Also, few media outlets have connected that price-drop to Mr. Bush's Executive Order - signed July 14 - opening offshore areas to drilling. Most attribute the dip to "reduced demand" or "unexpected supply".
Mrs. Pelosi calls GOP demands for more drilling the "war-dance of the handmaidens of Big Oil". She has consistently denied that more drilling will lower gas prices. I have to admit that she's at least partly right, because oil's mini-crash has not quite reached the pump. Premium gas has slid down to $4.00. But is 30¢ all we get for a 23% drop in oil? The disparity prompted me to make some calculations about the numerical relationship between oil prices and gas prices at the pump.
We all pay a Federal tax of 18.4¢ per gallon. In Virginia we also pay 17.5¢ in state tax, plus another 2% tax within the Northern Virginia Transportation District. So on gas selling for $4.30, our gas-taxes total about 45¢ a gallon. The non-tax portion is $3.85.
If the gas refining, shipping and retailing (not the tax) costs $3.85 a gallon when oil costs $147 a barrel, then we're paying about 2.6¢ a gallon for each $1 per barrel of oil. (These costs may not be linear; this is an estimate.)
For months we saw pump prices march smartly upward, while oil was increasing in price. We got used to a few more cents per gallon every day. It was rare for the price to stay unchanged - even rarer for it to fall.
So as oil has gone down $34 a barrel over the last month, one would have thought a reduction at the pump of over 80¢ a gallon - i.e., 2.6¢ for each $1 per barrel - would follow. But one would have been wrong. Something doesn't add up. (Perhaps it's some kind of New Math.)
I suspect that this reduction will show up at the pump very slowly - if at all. Maybe wholesalers and gas station managers figure that customers were used to paying the higher prices, so why not delay the reduction to make some extra money. During the run-up in oil, our neighborhood station sometimes changed its prices twice in the same day - always upward. Premium gas should be down to at least $3.50 a gallon, now, but it hasn't happened. What's going on?
Ask your local gas station manager why gas is still so high. You'll probably get hand-waving about how their costs have risen because of higher gas prices. (Oh, no kidding?) Economists say that swiftly inflating prices always include a dash of fraud - particularly on the excruciatingly slow price-retreat that follows the inflation. I doubt if this is any exception.
One common result of past oil-price spikes was increased gasoline taxes. Legislators correctly saw that consumers would hardly notice the increased tax, once prices started going down, so they carefully timed tax increases to kick in on the price-retreat. Watch for this in your own state.
In my state of Virginia, two Democratic governors in a row have tried to roll Northern Virginians for additional gas or sales taxes to generate "additional" funds for roads. My fellow citizens have seen through this scam, knowing that our counties' share of regular highway funds would simply dwindle to offset the new revenue - leaving us pretty much where we currently are. We would pay the extra tax, but other counties would divide up the extra revenue. Politicians play these games. Eternal vigilance is required to avoid being fleeced.
Americans haven't raised enough hell about oil prices and supplies - nor have we applied enough heat to deserving political backsides. Congress blowing town for a five-week recess - while legislation that could crash the oil market languished on the table - was one of the most amazing, in-your-face political spectacles of modern times. Democratic House Speaker Nancy Pelosi believes voters are too stupid to connect her party to high gas prices, which have doubled since Democrats took over the Congress. That's why she was confident that doing nothing about oil supplies (and gas prices) would be perfectly safe, politically. Wouldn't it be fun to surprise her in November by booting her from the Speaker's chair? I hear her book isn't selling very well, either.
Since she abruptly adjourned Congress, Mrs. Pelosi has been on a weeks-long tour to hawk her self-aggrandizing book of advice to girls and young women, Know Your Power. By August 7 - a week into the book-signing blitz - Mrs. Pelosi didn't exactly have writer's cramp. She had sold just 2737 copies of a book that has been panned by bloggers and literary critics.
One blog-reviewer called it "...a total waste of time and money. You'd get more enjoyment tossing the money out the window of a car at 60 mph and watching it flutter in the wind rather than be tortured by the vacuous content of this work. Worst of the worst books I have ever read."
Other reviewers were even more blunt: "If this book doesn't wake up Americans about the shallowness of the people in power, nothing will. Read this and tell me how it's possible this person could wield the political power she does. Might be time to migrate to New Zealand."
Also: "This book was extremely helpful. I am serious - it makes a good door stop. It could also be placed underneath your AC when it's not evenly aligned."
And finally - "Her book is a failure because people can see right through her. She is motivated purely by self interests, has no concern for the public good, is arrogant, and, in the case of the recent up or down vote on energy, has shown that she stands by her party and NOT the people... who want and need relief from oil prices... Nancy is simply all about Nancy, and always has been. Her book, like her, is a combination of fantasy, self praise and arrogance gone wild."
If a reconvened Congress (in September) is hot to "investigate" something, let them look into why a significant drop in the price of oil on international markets has translated into a paltry decrease in gas prices at the pump. There's something fishy, and it's not in Denmark.
Of course, the real "stinking fish" in the hall closet is a major political party that would do the country harm just to gain political advantage. That should be beyond the pale for voters. If we keep this gang of poltroons, varlets and brigands in power, we'll deserve the $6, $7 or $8 a gallon we're going to pay for gas under their retarded policies.
Maybe Mrs. Pelosi is right - we're too stupid to pin the rap for this on those truly responsible. Maybe her book will actually start selling. But she can't keep Congress adjourned indefinitely. If Congress defies her and votes to drill for oil offshore and in the ANWR, the oil market will crash, and Mrs. Pelosi will crash with it. Then maybe she can launch an investigation into the vast right-wing conspiracy that's keeping her book from selling.
"Round up the usual suspects..."