From Behind The Lens
December, 2007
The economy is making me sick, but it isn’t giving me gas.
What the hell is up with the price of oil? Our evidently faithful Christian in the White House asks for regulations that would allow more arsenic in our drinking water, more mercury in our air, more logging in our national forests, more drilling in our national wilderness, more mining in our national parks and continues to hold on to the idea that global warming is just a hypothesis. Republicans pass a bankruptcy bill that all but brings back Dickensian debtor’s prisons, Republicans pass tax cuts that favor the greedy and hurt the needy, Republicans kill the minimum wage, cut health care for the poor, and slash anti-poverty programs. The administration has plundered our treasury giving us a national debt that will put my 10-year-old son in the 48% tax bracket if he is lucky enough to get a job at McDonald’s when he is 16 and have turned our military into a fractioned fighting force who is forced to rely upon private contractors (contractors, who I add, are owned and run by top members of the administration and received their commissions without a proper bidding process) to dig their latrines, pitch their tents, take their garbage out, cook their meals and now I find out even provide security in the war zone!
These Guards for private security firms can typically make between $400 and $600 per day. Guards employed by Blackwater, a high-profile American company that guarded Ambassador Paul Bremer, the former head of the CPA, are paid up to $1000 per day.
Compare this with the pay that our military gets. A private gets paid between $1,528 and $1,824 a month, if they have served between three and four years in the military. American soldiers receive a housing allowance, which depends on where they live. They also get paid a basic allowance for subsistence of $242 a month. However, soldiers in Iraq do not get this, as food is provided. They also receive hazard pay. When the war began was $150 a month. Now, it has been increased to $225 a month. Add it up. A contractor can make between $8,000 and $22,000 per month while an infantry soldier typically makes around $2,200 a month.
You would think with such a warped and self-serving administration in office there would be at least one advantage. We all know that our president worked (when he worked) in the oil industry before running for public office. His dedication to greasing the hands of his fellow cronies is as transparent as the lenses on the Hubble telescope (which the White House has eliminated funding for and directed NASA to focus solely on deorbiting the popular spacecraft at the end of its life). So why can’t we get cheap gas out of this guy?
With Bush’s approval rating hovering at a whopping 25%, you would think he would at least want us to remember him for something positive. I would be willing to utter the statement, “Boy, that Bush was a colossal screw up, but I sure did like the price of gas when he was in office.” But he doesn’t even give me that.
We have retired our V-10 Dodge Pick Up to the back lot, only to be used when we need to pull a heavy load and I am now driving a Subaru Baja to get around. When I looked at the cost of driving the truck, it was cheaper for me to make another car payment every month than pay for the gas for the big truck. I am fine with that. I want to reduce my carbon impact to a little as possible, but when it takes a $15.00 in my pocket to go and fill up the gas can for my lawn mower and it no longer seems silly to pull out the credit card to fill the motorcycle, something is seriously wrong.
Our beloved editor “Wildman” receives accolades at every event he attends because he arrives (no matter what the distance) on his bike. People slap him on the back and say, “Wildman, you ride EVERYWHERE!” Although it is true that the Cycle Source staff, with yours truly as the exception, do ride more than just about any other bikers I know, the truth came out one day when Wildman confided in me, “I ride my bike everywhere because it costs too damn much money to drive anything else to all of these events.”
So, is it going to get better? Not likely. Let’s look back at history to see where we could be going at current prices.
The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station costs and taxes. The prices paid by consumers at the pump reflect these costs, as well as the profits of refiners, marketers, distributors, and retail station owners.
In 2005 the price of crude oil averaged $50.23 per barrel. The average cost for a gallon of gas in 2005 was $2.27 per gallon. The break down in that price per gallon was 9% of the cost was for distribution and marketing ($.20); 19% was for refining costs and profits ($.43); 19% is attributed to taxes ($.43) and 53% of the cost was from the crude oil itself ($1.20).
That was 2005 with a price per barrel of $50.23. Do you know what a barrel of oil is selling for today? Try $98.00 per barrel and experts are anticipating it staying above $100.00 per barrel in at least the first quarter of 2008.
There are 55 gallons in a drum and 42 gallons in a barrel. Originally there were 40 gallons to a barrel however, that was changed in the mid 19th century to give a little extra so consumers wouldn’t feel "cheated". Ha. A little over 23 gallons of gasoline can be refined from a barrel of oil.
So, let’s do the math. At $100.00 per barrel, we are looking at nearly $4.50 a gallon!
Maybe this sad fact will be the salvation of all of those little motorcycle shops fighting to keep their doors open. Maybe Americans will be forced to park their 4 wheel vehicles and find a way to bring their kids home from school on a moped.
What is even more disturbing is that as American consumers increasingly feel the pinch at the pump, oil companies have watched their profits soar. The newest numbers from the second quarter of this year show Exxon Mobil with a 32 percent increase in earnings over this time last year — that’s more than $7.6 billion. BP saw a profit increase of 38 percent, totaling $6.7 billion, while Conoco Phillips — the third largest oil company in the country — recorded a 56 percent increase in profit, more than $3 billion.
Many of these companies long ago bought oil reserves at prices of $10 to $25 a barrel. With prices peaking near the $90 mark, the profit margin has been enormous.
Even more eye-opening is the profit in Saudi Arabia. Saudis are making an average of $208 million more each day since the increase in crude oil prices first began in December 2003.
15 of the 19 highjackers involved in the 9/11 terrorist attacks were Saudi Arabian yet our underpaid military is quagmired in Iraq with Cheny’s overpaid contractors who soon will be the only Americans able to pay for American gas made from the crude oil pumped out of Saudi deserts.
How much oil do we get from the Saudi’s? The top sources of US crude oil imports in 2007 were Canada (1.950 million barrels per day), Saudi Arabia (1.468 million barrels per day), Mexico (1.381 million barrels per day), Nigeria (1.184 million barrels per day), and Venezuela (1.138 million barrels per day). The rest of the top ten sources, in order, were Algeria (0.572 million barrels per day), Iraq (0.520 million barrels per day), Angola (0.400 million barrels per day), Brazil (0.250 million barrels per day), and Ecuador (0.240 million barrels per day).
It’s all coming clear now. Our political, moral, economic, environmental, and military policy is all based in our need to drive. As for me, I am in the market for a bike with a side car so I can actually pick up groceries when I collect my son from school. I know I live in Wisconsin, but without a global initiative to combat global warming, my riding season is about to get a whole lot longer.
And that is how I see it, from behind the lens.
Don’t even bother sending your hate mail to my poor editor, Wildman. You can yell at me directly at colleen@digitalmagicbigshots.com.
