Editor, Manteca Bulletin,
After reading (Obama – not even Bush – to blame for oil prices) by Stephen Breacain, on Feb. 25, in response to an earlier letter headlined “Gas prices go up, up & up on Obama’s watch” by Frank Aquila, I thought enough facts were listed by Breacain to put the issue to rest, (Facts that were nowhere to be found in the Aquila letter) but then today yet another letter on the same subject appeared (“Contends Obama is blocking oil drilling”) by Amy Sullivan. Sullivan, as is her usual stance, dismally goes through great lengths, to pretend the letter without facts should be selected over the letter with actual facts. Why? Because the fact-starved letter was written by her mentor, Frank Aquila, whom she lavishly and unstintingly bestows great praise as he “..articulately showed Democrats are blocking all forms of energy production.” I assume by “articulately” she means without supporting facts and by “..all forms of energy” she means Oil.
Now, one more time, a fact: United States oil production is at an eight-year high. The number of drilling rigs has quadrupled since Obama took office.
She further claims we would be “free from the (oil) speculators if we were to drill for our own oil here.” Really? Here is another fact: Oil is a world commodity, like gold or silver, as a result the price goes up and down based on the market value of that commodity. Who sets the price on that commodity? When you want to know the price of any of these world commodities, where do you look – Mervyns, Costco or J.C Penney? No, you look at the stock market. And who or what drives the price of these commodities? The “who” are future speculators. The “what” is the world market based on world events that may affect those commodities. Right now oil futures are being affected mainly by the situation in Iran. Speculators are now betting on higher oil prices for that reason. There is no shortage of oil due to not enough drilling; there is no oil shortage-period.
Does Amy or Frank really believe that if, say, Shell Oil would produce more oil (which it sells on the open market, including to themselves) do you really think Shell Oil would sell their oil to themselves cheaper than they could sell it on the world market? Why do you think American oil companies sell oil on the world market at all? Profit, of course, that for the top five oil companies reached an all time high of $137 billion. Now you may ask yourself, how did they make such profits? Remember, American oil companies sell their oil to themselves at world prices. Obviously the oil didn’t cost as much to produce as the oil they imported but they still sell their own oil to themselves at the same price as the imported oil. So they get to increase the price of gasoline to match the world market of oil. Presto…instant oil/gas profits, lots of them.
Oh, one more fact, when Steven Chu made the remark of supporting U.S gas prices to match European prices; he was not yet a member of the not-yet-in-existence Obama administration. Do you really think a President would call for higher gas prices in an election year? Get real…
Feb. 28, 2012