It seems like Clinton is attempting to get AlGore elected by risking national security. To them, I guess, that G.W.Bush is as big a threat to our nation as any rougue nation with a few second hand nukes sitting around.
I think it is shameful that they are taking such a risk for political gains.
IIRC, the NPR was created to give us enough oil to run the military and whatever civilian support they need until the military can secure an area where we can continue to get oil from and we start receiving it. Is this correct or was is created just as a risky scheme to get AlGore elected?
I do not believe election year posturing counts as a crisis to draw down the SPR. However, the SPR can be used for reasons other than to supply the military. It’s there to stabilize prices in the event of an emergency like the oil crisis of the 70’s (which is what spurred its creation).
What we are seeing today are normal price fluctuations. OPEC is attempting to control prices but it’s gotten out of their hands. They don’t want to see the ridiculously low prices of 1-2 years ago but they don’t want prices rising out of control either. When that happens people get frugal and energy conscious and down the road OPEC will take a hit. Like any business they prefer stability. Unfortunately every oil producing nation in OPEC is already running at capacity except for Saudi Arabia (a few others might have wiggle room as well but not much). Given this state of affairs OPEC cannot really increase production to lower prices.
So, the release of reserves from the SPR currently suggested by Clinton and Gore will do almost nothing to oil prices. The release is too small to have much effect and only a very temporary one at that. Gore just wants to look good to the average Joe as trying cough to help them out and is compromising national security a little bit in the process.
Of course, the real answer is for Americans to realize that gas SHOULD cost more than it does (i.e. more than a bottle of water…we enjoy some of the lowest fuel prices in the world). Perhaps the yuppie appetite for SUV’s SHOULD hit the owners in the pocketbook. In the meantime some kind of credit could be extended to those who are too poor to buy heating oil/gas for their homes to get them through the winter.
Just because fuel is lower priced here then the rest of the world doesn’t mean it’s underpriced. I think low fuel price has helped out nation remain competive in the world market. Most other nations have developed w/o cars and as such have adapted to being competive w/o. The US have develpoed in a way that demands personal mobility to keep up our standard of living and it would be a serious ‘hit’ if we restricted that by high prices IMHO.
{quote] Perhaps the yuppie appetite for SUV’s SHOULD hit the owners in the pocketbook. In the meantime some kind of credit could be extended to those who are too poor to buy heating oil/gas for their homes to get them through the winter.
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I thought that was already being done. When I go to the gas station to buy gas (big suprize there) I pay about $0.50 / gallon in taxes. If I buy kerosene, there appears to be no tax on that and a warning that this is not to be used as auto fuel because there is no tax. I agree (to some degree) that people’s heating bill should get a break before gas for their car maybe a compromise is to subsidise what you want (heating oil and natural gas) with taxes on an activity you would like to reduce (auto fuel).
A couple of points here. Firstly, the price of gasoline on the wholesale market is no different in Europe than in the US, what makes the price at the pump so high here is the tax that governments levy. These taxes are to encourage people to use less petrol, thus helping the environment and making the countries less dependant on oil supply. Whether either of these two strategies has worked is a matter of debate.
Secondly, the oil released from the strategic reserves has changed the price of oil, a barrel was bid at $37pb on the Nymex before the announcement, and now it is under $32pb. Further, the impact of this is definately of national importance. Movements in the price of oil corrolate very closely with 5y Treasury yields. Recently the price of oil has shot up; as oil is a major driver of inflation the question has been if the price of oil was going to come down or the Fed was going to hike interest rates. The market has seen the Fed as having come to the end of the interest rate cycle for the time being, raising rates now would certainly impact the economy negatively, and all that has been avoided by releasing a few barrels of oil from a reserve that many have thought was too large anyway. The effect on the presidential race of releasing the oil is only secondary to keeping inflation in check and interest rates stable.
I don’t believe that. I believe the European governments tax fuel so much because they can. There hasn’t been a time in recent memory over there that fuel has been considered “reasonable” in price (I am going from my own knowledge and memory here). It is a bloating cash cow, nothing more, nothing less. If the taxes fell substantially on “petrol”, most, if any, governements wouldn’t be able to make budget anymore. That to me sounds like they are relying on the revenue now, and not trying to encourage “less” use of petroleum.
Once again, just my .02c, and I am more likely than not wrong
And we wouldn’t want that, would we? To be sure, European governments have too much in the way costly government programs and should cut some of them, but in lieu of that, you gotta admit a tax on gasoline is a pretty good policy. If you want to pay less tax, then use less gas, which is a good thing. In a country which relies on high income taxes for revenue, to lower your taxes you have to work less and earn less, which is a bad thing.
I didn’t say or mean to imply that making budget because of fuel taxes was good/bad. I was mearly trying to state that the reasons that they were saying they tax fuel (to lower the nations reliance on petroluem) were more likely than not false. It is a convienent cash cow, since consumers are “forced” to purchase it. (IE - If you own a vehicle, you feed it)
Like it or not, the release of some of the SPR did force fuel prices to level off–in anticipation of the announcement, actually. (According to some talking head on network television this weekend.)
I remember my father fulminating about the SPR a long, long time ago. I don’t know where he got his facts, but I recall him saying that the salt caverns leaked, and that the caverns’ capacity was measured from the floor up even though the bottom six feet of each giant cavern was tainted and the extraction pumps didn’t extend that far down. Anyone know more about this, or is my father just a raving lunatic?
what’s the point in quoting someone’s entire message right after them?
England has the highest petrol prices in Europe (and the world probably) because of the enormous taxes they put on it. Petrol will soon become more than £1 a litre here, so I think you are being a bit tight complaining about tax in the US.
I reply with a quote out of habit. I hope I don’t offend anyone with that glarring error.
We are not complaining/discussing prices in the US, we are discussing prices/taxes in Europe. I think, or would hope that everyone here knows that Canada/US have amongst the lowest prices in the first world. If you read the recent posts, you will see mentions of European taxes, not the US.