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Say What?

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A little history on the price of gasoline

If you are really upset about the price of gasoline read on.

The story begins right after WWII when Eisenhower was a two term President. In case you have forgotten, Ike was the then 4 star and later 5 star General who led the Allies in their invasion of Europe. Hitler, as a nationalistic leader, had convinced the German people that what they really wanted was change and he was the man to give them just that. Anyway we won, as you all know, and Ike became a natural to lead his country into the post-war years.

During his time the Saudis were shipping crude oil to the U.S. for $3.50 a barrel. That price was low enough to cause most U.S. wells to be plugged. American producers knew from their own experience they could not compete with $3.50 oil and they said so. Between wartime refinery capacity and the post-war euphoria, demand for petroleum products expanded. Supplies were so plentiful the oil companies couldn’t build enough service stations. I know because I was part of the effort.

Now we all know that no one wants to buy gasoline. Having to refuel cars or boats or airplanes is sort of like eating, except there isn’t much satisfaction in a full tank. Between an extreme inconvenience and an always affordable price, demand grew daily. Outsourcing to Mexico, China, the Far East and sewing machines in Latin America wasn’t on the radar screen. Commuting was something they did back East on the subway or in Chicago on the ell.

In other words, our $3.50 oil economy was a far cry from what it is now a half-century later.

Then there were no snowmobiles or ATVs and boating was described in Yachting magazine.

Suburbia was in the works with only a slight concern about the cost of coming and going. How much time was involved was the greater importance.

But things were changing. The good life here started costing more than it had plus the fact there were more people participating. The cost of manufacturing started driving production facilities overseas and slowly but surely those economies began doing what we had been doing. We had one factor these so-called emerging economies didn’t, and that was time to contemplate what we were doing. Plus, a whole bunch of guys working hard to provide their kids with all the things they missed.

The resulting many-faceted environmental movement clamped down on many features of our post-war economy that had made the United States a powerhouse. At the cost of some of our independence we began importing more oil and drilling for less. And what do you know? The price of importing oil began to go up. Other countries began finding their own oil. The net affect is that what we took for granted began to slowly disappear to the benefit of some other country.

That other producing countries emerged is, overall, a good thing because as things got better over there, the demand in their countries started rising. If it didn’t, the oil revenues suddenly became the stuff dictators are made of. Greed became unavoidable and we contributed to it because one thing kept growing here and that was demand. But then, it was doing the same the world over. Globalization had been born and it would not be contained. As the godfather to rising economies elsewhere, we enjoyed cheaper stuff but not for long. The day of reckoning finally came.

Someone once said “There is no free lunch.” Technologies aside, all those bargain prices for both staples and goodies come at a price. Four-dollar-a-gallon gasoline takes some of the joy out of shopping. But worse yet is the threat that it could cost more.

So there are some politicians who are dying hard on this subject. Rather than acknowledging that banning drilling and not being supportive of an increase in refining capacity has given us this pain at the pump, they think that increased taxes will produce more oil. That is so stupid it is beyond belief.

We need to restrain ourselves. Get real about the situation and encourage those who know best to get on with it. It is not likely we will ever be independent of foreign oil. But we can do what common sense dictates and that is to control demand and increase our own production to the point we are threat-proof. As it now stands those foreign producers love us, somewhat like the Colombian drug lords, because we are all hooked and aside from a lot of bitching we are only being verbal about the situation. We are part of the problem and obviously a part of the solution.

PS: If you are price conscious.... Diet Snapple is $10.32 per gallon, Gatorade is only $10.17. The favorite night time cold remedy is $178.13 if you buy a gallon. Scope is just $84.48. If you argue that those products are not bought in quantity how about Evian water for $21.19? (I know it doesn’t apply, but printer ink comes to $5,200 a gallon.) The one thing all these products have in common is that you don’t have to drill holes in the ground to find them!

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Paul Rechnitzer Paul Rechnitzer Transplanted 30 years ago, Paul is a retiree from the oil business who knows no other place he would rather live and breathe local history.

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