Gas prices not entirely fault of GOP leadership
Blame for oil prices can be put on Democrats and corporations also

Mike's Politically Right

By Michael Culver

DEMOCRATS ARE ON the warpath, and they’re using rising gas prices as the weapon of choice to castrate Republican campaigns as political races heat up across the nation.

Democrats are systematically and strategically pointing out the shortcomings of the Republican party’s inability to control the market forces that are driving gas prices higher and higher as they yell “shortages.”

They are also quick to point out, Republicans were shortsighted and lacked adequate planning to cope with supply shortages in the aftermath of the gulf coast hurricanes.

And when you dig into your pocket for the $40 it takes to fill your gas tank, it is easy to place blame on those Republican leaders who are closest to the front line of the war being fought at the pumps.

But the Democrats are on a slippery slope. Let’s see if this sounds familiar.

When you were a kid did you get blamed for what your brother or sister did? Yeah. Well, me too. And that’s exactly what’s happening to the Republican Party right now.

For example, let’s take the so-called “gas shortage” and figure out who is actually responsible for the mess. If memory serves me correctly, in 1999 Bill Clinton and the Democratic Party were in charge. And in 1999 a merger between Exxon and Mobile oil companies made Exxon Mobil Corporation the world’s third largest oil production company in the world.

In November 1999 Lee Raymond and Lou Noto, chairmen and chief executive officers of Exxon and Mobil said, “This merger will enhance our ability to be an effective global competitor in a volatile world economy and in an industry that is more and more competitive.”

All the while, Lee Raymond the chairman and chief executive officer of Exxon Mobil Corp., averaged $144,573 for each day of the 13 years of his contract, and earned $400 million for the final year of his contract. Furthermore, during the 2005 oil “shortage,” Exxon Mobil Corp reported $100 billion in sales, and $36.13 billion in profits. This is a record for a U.S. corporation.

This highly paid executive was in charge of a company that decided not to rebuild vital infrastructures necessary to decrease dependence on foreign oil. This decision was not politically motivated it was based on the capitalistic objective of supply and demand. Or was it? Remember it was a Democratic presidency that opened the door to a merger that all but eliminated fair competition in the U.S. oil market.

There is another factor involved in the price increase Democrats are leaving out of the picture they are painting.

The “shortages” Democrats are screaming about aren’t because of a true oil supply shortage. They are seasonal changes mandated by law’s created in states that dictate a cleaner burning fuel in certain states, including California.

These states have enacted laws that force oil companies to switch from gas that has an additive, MTBE (methyltertiarybutylether), an additive found to contaminate ground water, to a cleaner burning fuel with ethanol additives.

The problem is ethanol absorbs water and can’t be transported by pipelines. It has to be transported by truck or rail from the Midwest where it is produced. Existing supplies have to be exhausted before these supplies can be made available.

Therefore, the oil industry is in the process of emptying existing supplies of gas and replacing them with the cleaner burning ethanol fuel. The switch is expected to be completed by May, and gas prices are expected to fall when this transition is finished.

Be sure to e-mail your comments on oil and gas prices to [email protected]. I will choose up to two statements that best describe the views of the readers and present these comments in next week’s issue.

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