Letter to the Editor: Gas Prices

Dear Editor,

This should make Americans ask the fundamental question: what is the difference between what a public non-profit utility company provides and what a private for-profit oil company provides? After all, they both sell energy to all United States citizens. The difference is that natural gas and electricity are sold in the form of a public good whereas oil is sold in the form of a private good.

Accordingly, on the grounds of promoting national security, the United States Congress should convert all oil companies to utility companies. This would eliminate the windfall profits and force the oil industry to earn just enough income to cover operating expenses just as natural gas and electric utility companies are required to do.

The resulting drop in gasoline prices would further stimulate the economy and lighten the energy stranglehold upon the United States by the Middle East. It would also eliminate the influence of the oil lobby. In this case, desperate times call for deliberate measures. But as pathetic as the energy policy is in the United States the effort to develop alternative sources of energy won't really be accelerated until the oil dries up and the Saudi's place solar cells all across their desert and then sell us the electricity.Joe Bialek

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JS March 21, 2022, 5:51 pm Nationalizing Private companies is what dictatorships and Communist Nations do. The key to oil at a reasonable price is to trash non essential regulations. Finish the Keystone XL (labor says they can do so in 8 months). We have a neighbor to the North - Alberta Province who has all the oil we need. Better to buy that oil than to buy from Russia, Iran, or Valenzuela - our enemies. How do our elite leaders with so much education do such ignorant policy???

GB March 23, 2022, 12:10 am BINGO!!! John is right. Also, people would be surprised at exactly what the oil companies make for profits. It isn't as much as the Left has lead everyone to believe. Add in the costs of equipment and everything that goes into finding and tapping into that resource, and it becomes even less.
Nothing would bring fuel prices down faster than if our leadership reversed their ignorant energy policies. It doesn't require a great deal of common sense to understand the problem that has made fuel prices double.

GS March 23, 2022, 3:12 pm This is a very interesting conversation reference gas price. As someone who grew up in Vinton but over that last several years has spent a lot of time in the Permian Basin, I must advise that the truth falls far from either of the extremes proposed here. Of course, we won’t manage oil as a utility. It’s counter to anything a reasonable American would accept. On the other hand, if you think regulation and policy are to blame for the abnormal rise in petroleum prices you’re giving too much credit to our government. The economy in oil producing areas like the Permian Basin are unlike any other part of our country. When oil companies were producing more oil in the basin, say 6 or 7 years ago, a CDL could put you on track to a $50 an hour gig driving workers to and from the field. A 9th grade education and limited prison record put you on track to a job rolling pipe for $75 an hour and if you could stand the heat and the smell, you could make twice that an hour out on a rig. Stores and restaurants were lucky to operate at half capacity because they couldn’t compete for decent workers. You waited for hours to be served at a Chili’s or Outback in Odessa or Midland cause only half the dining room was open. So fast forward to today’s workforce environment. The oil producers can’t pay what’s required to get folks to do the work they need; they’d have zero profits. Regulation? Come on you’re kidding yourself if you think the oil field operates within the bounds of regulations on a day-to-day basis. Unless there’s an inspector on site…anything goes. Policy? More like the algorithm embedded in the application that the snot nose Aggie or UT Business school grad runs on his computer in his home office in Houston to see when production cost to price ratios support pulling a rig out of mothballs and bringing a crew off furlough. But again, a very interesting conversation.

JS March 24, 2022, 4:21 pm Mr. Shepard, perhaps you can give us more information on how a barrel of crude is priced on the World market. Being a retired farmer I am familiar with grain commodities.
There are basically three markets, thus: Futures with approx. 7 delivery months/contracts, Basis - difference between futures and local(which basically is transportation cost to Chicago - local demand is also a factor) elevator cash price, - cash price of local elevators.
The futures price is derived by open outcry (used to be before commuters) at the Chicago Board of Trade - mini contracts at the Chicago Mercantile.

I would suspect OPEC is a factor. I do know there is different prices for WTI (West Texas Intermediate) and Brent crude. I had assumed these prices were determined in a similar way as grain futures. Perhaps not. I am also assuming crude prices affect the end price of product from Refining - as there being some 6,000 products derived from Petroleum. Regards,

Opinion : Letter to the Editor: Gas Prices

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