The price of Rice...

I got the following email from my Mother in Law last week, and I thought i might post it, and my response here so anyone reading could enjoy. Lord knows, I don't even know if anyone reads this, but what the fuck, why not right?

Here is a cut/ paste of her email-
The oil price bubble is unfairly taxing American families and restricting our nation's economic potential. I sent a message to Congress asking them to adopt common-sense solutions, and I urge you to take a moment to send a message, too. Congress can dramatically reduce the price of oil and gas, providing immediate relief for businesses and hard working Americans, and your letter will help make our elected officials be more aware how high energy prices are hurting hard working Americans.

so here is my response-

Oil and Gas exist on a free market. Oil companies will charge what the market will bear, and any intervention from Congress to "fix prices" will only have harsh long term consequences for the market, and for the industry.

If Congress price fixes Gas @ 2.50 per gallon- everyone consumes at the rate they can afford @ $2.50. The problem is, oil supplies are a non renewable resource- This means there is a limited supply in the world, and we are burning it off every day. If the price is fixed low, and consumption remains high we will use up the supplies that much faster.

Higher prices mean people will budget their consumption, and the resource will last longer. That is the reason prices are escalating. Less oil available= higher value.

Most people have no concept of what the actual cost per gallon is for an oil company to provide fuel at the pump. There is a lot more to the price of oil than I think people are considering- one of the "costs" of the oil business is exploration (finding new oil reserves), and another significant cost is refining (reducing crude into the various products we use every day- not just Gas, but plastics, hydraulic fluids, coolants for tooling, everything from candles to KY- all contain petroleum based by-products. Transportation is another major expense (moving the product from place to place by ship, by train, by pipeline, and by truck. These expenses consume billions a year from the oil companies "profits", and would suffer if the congress "fixed" fuel prices. This is why they will never regulate the prices.

If you REALLY want to lower the price of gas- use less. Once demand drops, so will the price.

You have a nice shiny bike. Ride it.

OH-

Did you forget?

I am the son of an Oil Executive...