Who is to Blame For High Gas Prices?

With only the possibility of John McCain and Barack Obama, I would say that whose to blame for high gasoline prices has been the most played news story across every media network over the last month or two. The national average for gasoline peaked earlier this month around $4.11 per gallon or regular 87 octane and has recently come down to about $4.03 per gallon. This obviously is a stark increase from the price range around ~$2.50 that we had seen during 2006 and 2007. The issue becomes even more important than “just an extra” $2.53 per gallon as our economy and lifestyle are based on the consumption of gasoline for transportation. The biggest question on everyone’s mind is who is to blame and how can we fix the problem? Like many other questions concerning energy, the answer is not nearly as simple as the media would have you believe. Warning: The information you are about to read may be completely foreign to you as none of the 6 major media networks have ever reported truthfully on this topic in the past.

It must be the E&P companies, right?

Not as much as you would think. While it is true that the exploration and production companies have to make some profit, when you look at the numbers the results are not as horrifying as you may have previously thought. Let’s take a look at the profit margins of some of the larger E&P companies (all of the numbers are for the trailing twelve months):

* Apache Corp. APA – 29.95%

* Anadarko Petroleum APC – 3.78%

* EnCana Corp. ECA – 14.77%

* Occidental Petroleum OXY – 29.2%

* Suncor Energy Inc. SU – 17.98%

* Microsoft Corp. MSFT – 29.26%

Now its time to play the which one of the above is not an oil and gas E&P company game? If you guess Microsoft, you probably have a bright future ahead of you and I wish you my sincerest congratulations.

This is only one example, Goldman Sachs GS has a profit margin of 23.68% and Intuitive Surgical ISRG has a profit margin of 24.68%. Many of the energy companies actually have lower profit margins than companies in other sectors. They are not the ones that are charging you too much for the goods you rely on, they are just participating in the free market economy and helping you achieve economic satisfaction more so than most of the other companies in the world.

Well then it has to be refiners?

This is definitely the last person who is causing your wallet to thin. The refiners (excluding the major integrated companies that incorporate refining and marketing activities into their overall business structure) bring the least to the bottom line when compared to the other sub-sector of the energy universe. The problem with the refiners is that since they do not produce the oil, they are reliant on spot market prices for the input of their product. This difference is called the crack spread. The crack spread is the margin refiners make when the take a barrel of crude oil and “crack” it into another form, either gasoline, heating distillate, diesel, or a number of other products. Generally crack spreads are quoted in the 3:2:1 ratio, or 3 barrels of crude are cracked into 2 barrels of gasoline and 1 barrel of heating distillate. Recently the crack spread has been in a state of free fall as highlighted by the stock prices of Valero Energy Corp. VLO, and Tesero Corporation TSO falling more than 45% each while the rest of the energy sector rallied.

Gas station owners, thats it!

Unfortunately for gas station owners, they fall into a similar category as the refiners. They do not produce the gasoline, so their input prices are out of the control. Because there is a high level of competition and a bunch of stingy consumers, they are not able to raise prices as quickly as they would need to in order to maintain historical profit margins. More than 1,000 gasoline stations closed in the United States last year, many of which were actually losing money every time they sold you a gallon of gasoline because of the rate at which gasoline spot prices were rising over the last year and a half. You should expect more gas station closing through 2008 and maybe into 2009. The business has become so unprofitable that Exxon Mobil Corp. XOM has recently announced that they are planning to sell at least 2,500 of their company owned gas stations in the United States during the next year, mostly likely at steep discounts to their worth even 3 months ago.

What about the government?

If you read my article concerning McCain’s Gasoline Tax Holiday you would know that the government sponsored gasoline tax really has little to no effect on the price of gasoline that consumers pay at the pump. The government definitely has an indirect effect on the price of gasoline due to the current drilling policies. If all United States territory was opened, not only would the markets discount this news into the future and lower energy commodity spot prices but the supply that would come online within 2-3 years would cause the price to be pushed downward in the long run. There is also a counter argument that some day we may actually need those reserves for something truly important, not just saving you a few dollars per fill up. That type of ethical issue is one that is difficult to address because facts will not allow either side to be completely “right” or “wrong” no matter how long the topic is argued. I’ll let you make your own decision on that one.

Wait a second, it can’t be my fault can it?

Actually, yes it can. The unfortunate news is that we as consumers are the cause for almost all of the rise in gasoline price. It is not just “us,” it is actually consumers all around the world who are driving up the price. Because crude and gasoline trade on global exchanges, it is not just the United States thats affects the prices, contrary to popular belief. Increased demand from India and China as well as the rest of the developing world is one of the major factors contributing to the price inflation. For example, an American used 25 barrels of oil per year while the Chinese only use 3 barrels per person per year and the Indians only use 1 barrel per person per year. Gasoline prices could become really frightening if the rest of the world would demand even 25% of the consumption that we have grown accustom to over the past century.

Another important factor is worldwide inflation. Inflation rates are growing at historically fast rates around the world. The United States has year-over-year inflation growth of 5% (if you believe the government data which many experts are suggesting you should not), China is over 8%, Russia is over 9%, so on and so forth. With all of this extra money, it is easy to see that a good portion of the price appreciation is do to the fact that people have more nominal dollars to spend, even if each one is worth less and less every day.

Our modern American economy is so heavily based on petroleum products to function that there is only a certain amount of demand that can be destroyed at these low levels of gasoline prices (I know that sounds ridiculous to say, but bear with me). Children have to go to school and adults must go to work, no matter the price of gasoline. Use yourself as an example. Would you quit your current job because of gasoline prices? At what price would you consider quitting your job? At what price would you have no choice but to quit your job? For most of you, these numbers are going to be much higher than the current price of gasoline. Many of you would be shocked to believe that gasoline spending per capita is actually only half of the historical high percentage that was reached during the 1910s and the 1980s. Do not believe for any moment that gasoline prices cannot or will not appreciate from here.

So what can we do? Are we doomed?

We are not doomed. I for one am long on the idea that the United States will be able to innovate and solve this problem. The solution won’t come from the government, but from the free markets. Only time and extreme necessity can drive us closer to the solution, but I assure you that one day it will come. I will discuss the solutions in another later article, but you should not feel as if there is no hope for America because there most certainly is going into our bright future.

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Obama Vs McCain – May the Best Website Win!

With so much of the Internet world focused on these two candidates, I figure I would throw my hat in the ring. Instead of ranting and raving about the issues and which man is right for the job, I’m going to make my determination like any good techie would…by his Website of course! So without further ado, I will attempt to take an unbiased look at these two fine gentlemen’s Websites and may the best Website win!

I will rate them on five different categories, all having to do with aesthetics, usability and their ability to get their message across.

The first category up for grabs is color pollution. This is the ability to use a few (less than three) primary colors to make your Website attractive and vibrant without overdoing it. More than three can be distracting by giving the user too many things to look at. The last thing you want to do is take away from the most important thing on a Website: the content!

So who’s guilty of color pollution?

Well, I wouldn’t say either site is completely guilty, but one falls closer to the edge of color pollution than the other.

McCain’s site has the colors green, blue, yellow, red and white throughout the site. The site really looks busy and it’s hard to know where to look and what the primary message is.

Obama’s site, on the other hand, is very clean and organized. He does a nice job of using blue as his main color of choice with some splashes of red against a white background. Very nice and elegant.

So the winner of the first round is…Obama!

Corey Perlman has been studying Internet marketing for the last ten years. He teaches courses and seminars where he provides small business owners techniques and strategies to dominate the search engines. He also has a book due out in February entitled eBoot Camp! Go to http://www.theebootcamp.com for more information on his seminars and to reserve your copy of his book. You can also visit his blog at http://www.coreyperlman.com

Obama Vs McCain – May the Best Website Win!

With so much of the Internet world focused on these two candidates, I figure I would throw my hat in the ring. Instead of ranting and raving about the issues and which man is right for the job, I’m going to make my determination like any good techie would…by his Website of course! So without further ado, I will attempt to take an unbiased look at these two fine gentlemen’s Websites and may the best Website win!

I will rate them on five different categories, all having to do with aesthetics, usability and their ability to get their message across.

The first category up for grabs is color pollution. This is the ability to use a few (less than three) primary colors to make your Website attractive and vibrant without overdoing it. More than three can be distracting by giving the user too many things to look at. The last thing you want to do is take away from the most important thing on a Website: the content!

So who’s guilty of color pollution?

Well, I wouldn’t say either site is completely guilty, but one falls closer to the edge of color pollution than the other.

McCain’s site has the colors green, blue, yellow, red and white throughout the site. The site really looks busy and it’s hard to know where to look and what the primary message is.

Obama’s site, on the other hand, is very clean and organized. He does a nice job of using blue as his main color of choice with some splashes of red against a white background. Very nice and elegant.

So the winner of the first round is…Obama!

Corey Perlman, http://www.theebootcamp.com/

Diamonds and Oil

Diamonds may be a woman’s best friend but it is not a man’s. The average engagement ring costs over one thousand dollars. Many women will break up a relationship if their lover could not afford the ring. This practice has been going on for over two hundred years since diamond deposits were discovered in South Africa. Diamonds are plentiful and they would cost less than two hundred dollars a carat if the price was not determined by a greedy diamond monopoly. But there is good news on the horizon. A Florida based company has discovered a way to manufacture a perfect diamond for only ten dollars a carat. They will be on the market within six months. They are called: Gemisis Stones.The diamond industry is under threat of going bankrupt because the Gemisis Stone is undetectable from the real diamond. Soon even an unemployed lover will be able to afford an engagement ring.

Fortunately for the users of oil there is no monopoly that controls its cost. The laws of supply and demand determine the price of a barrel of oil, otherwise we would be paying whatever the suppliers demanded. But ever since oil deposits were discovered in the Middle-East radical Arab politicians are trying to control and monopolize its output. The British made sure this would never happen by creating friendly Arab governments in the region. Now the radical Arab politicians are on the warpath again and attempting to create a greater Iran that would own the oil fields. If they are successful Iran would become the richest nation in the world and they alone would decide what the price of oil would be. If that happens most Americans will be riding bicycles instead of cars. No American in his right mind would want his government to allow an oil monopoly to be established in the Middle-East Owned by Anti-American Radicals.

Presidential candidate McCain is a war hardened veteran who has been fighting all his life to protect American interests. He has suffered five years in enemy captivity after being shot down while flying a combat mission. Having him as the leader of our great nation will assure us that Americas superior position in the world will never be compromised. There are voters that would rather ride bicycles then have us battle to keep the oil fields in friendly hands. But most Americans will fight before having to give up their automobiles. That is why McCain will be our next president.

Melvin Polatnick

How to Get Universal Health Care

Hillary Clinton and Barack Obama say they believe in giving Americans universal health care. I don’t believe them. Anyone who takes the time to understand universal health care should conclude that only a simple single payer system will reform the current outrageous system that benefits the insurance and pharmaceutical industries.

The contorted plans from Clinton and Obama are not sufficient reforms. And what John McCain has proposed is sheer nonsense and by itself should cause any conscious American to avoid voting for him.

Fights for health care system reform are centered in Congress, as if legislators will do what they have never done before: achieve true, major and systemic reforms that only serve the public interest, not lobbyists and campaign contributors from business sectors.

Both Clinton and Obama believe that Americans have a moral right to universal health care. If this is correct and if this is what you believe, then achieving universal health care that covers absolutely everyone by making health care affordable to absolutely everyone, as it is in many other nations, requires a different kind of government action. What exactly?

We must expand the Bill of Rights as embodied in the US Constitution to include the right to affordable universal health care. The time has come for the public to conclude that the right to universal health care is as important and necessary as the right to free speech and all the other beloved constitutional rights. Common sense says that health care is a right, not a privilege.

After all, what good are our current constitutional rights if you are ill or dying prematurely because of a lack of good health insurance? Certainly the pursuit of happiness cannot be successful when individuals are suffering from poor health because of inadequate health care.

Why would sensible, caring Americans be against a constitutional right to universal health care? Are there people who would stand up and publicly condemn the right of all Americans to have first rate health care? The only ones I can imagine doing this are those now benefiting financially from the current unjust system, those blocking necessary congressional actions.

What Obama and Clinton should explicitly and loudly advocate is a constitutional amendment that makes universal health care a nonnegotiable right of all Americans.

Why has no member of Congress submitted legislation to get Congress to propose such an amendment for ratification by the states? Clearly, the only rational answer are the many business interests that have corrupted Congress and that benefit from the current system. The Constitution provides an alternative.

Article V provides an option never used in the entire history of the US, because Congress has refused to obey the Constitution and respect state requests. The Article V convention option was put in the Constitution because the Founders and Framers believed that one day Americans would lose trust and confidence in the federal government. With 81 percent of Americans believing the nation is on the wrong track and with so many millions of Americans lacking good health insurance and care, that day has surely arrived. And with abysmally low levels of confidence in Congress and the president, an Article V convention – a temporary fourth branch of the federal government – is clearly the right path to obtaining a universal health care amendment. A convention of state delegates could debate such an amendment and if they agreed to propose it, then the standard ratification by three-quarters of the states would still be necessary.

Yes, this would probably take a few years. But it would be worth it. The prospect of Congress, even with Clinton or Obama as president, achieving universal health care without business-friendly loopholes faster than the amendment approach is not good. The process of pursuing such an amendment, moreover, would help keep pressure on Congress to do the right thing.

If this sounds reasonable and necessary, then learn the truth about the Article V option at http://www.foavc.org and start talking up a universal health care amendment that Hillary and Obama should support.

[Contact Joel S. Hirschhorn through http://www.delusionaldemocracy.com – he is a co-founder of Friends of the Article V Convention.]

Election 2008 Media Coverage Is Quite Peculiar

For the last several months the presidential election coverage has been like a meal at a neighborhood restaurant – a main course of Barack Obama with a side order of Hillary Clinton and just a touch of John McCain for seasoning.

It seems that Obama’s face is plastered everywhere, Clinton’s message pops up a little less often and McCain’s presence has all but been forgotten.

When I speculate as to why the coverage is playing out as it is, I’d have to say McCain has been placed on the back burner a bit primarily because the Republican race is simply not “sexy” enough. McCain has the nomination wrapped up and visually represents what the presidency has looked like forever, not really exciting when it comes to selling papers and getting ratings.

On the other hand, the Obama/Clinton thing is practically orgasmic. Neither candidate is in clear control and being part African American and a woman respectively, both are something different to talk about.

The funny thing is, absolutely none of this has anything to do with qualifications.

Ultimately, the brutal battle of mud slinging between the two Democrats vying for their party’s nod could work on of two ways.

1. Either Barack of Hillary will get so much play in the media that they will have a sizable advantage over McCain going into the general election.

2. McCain will save his funding for when it counts, fly under the radar and make a strong move once all the dirt has been brought out on the winner of the Democratic nomination.

So, either this will bring more attention to the eventually victor between Obama and Clinton, or it will lead to a certain level of disgust with the Democratic candidate and a victory by McCain.

Of course, this all remains to be seen. And, at the very least, it should be interesting.

Jason Greiner

Politics And The Economy

The most crucial question in the minds of many Americans and people around the world today is: Who will be the Democratic Nominee for President of the United States this election year? Will it be Illinois Senator Obama, or will it be New York Senator and former First Lady Clinton? Whosoever it is, history is about to be made as Americans are gearing up to elect either the first woman President, or the first African American President of the United States of America.

Let there be no misunderstanding, the Democratic ticket will be Obama-Clinton, or Clinton-Obama. The Democratic Political Strategists would be silly and simply idiotic not to have this ticket to defeat the smooth, seasoned and polished Senator John McCain this November. Let us hope that these two Candidates (Obama-Clinton) will put their egos, self interests or personal aggrandizement aside and embrace what seemed to be a well needed shift in the political culture and socialization in the United States. The mandate of the people has spoken across this Nation. There is no doubt that the American people are ready to embrace change. What is most noble of our democracy is the fact that America’s laws and its people are an evolutionary process and one that is base on necessity. We are always trying to be better. What a country! With a Constitution just over 200 years old, the American people have demonstrated that the color of a man’s skin or one’s gender is of no more significance. What a breath of fresh air to see this young and brilliant African American and woman running for the White House. However, the question still remains, will it happen?

Let us not get carried away by celebrating any victory for the Democrats too fast. We still have those closet racists who still believe in this 21st Century that one’s pigmentation is a factor. How they will vote, we do not know. Then again, we have the black pessimists who still utter words like: “America is not ready for a black President.” How silly. We have the Hispanics who can be very unpredictable. We have the older voters who are set in their ways and generally make up the majority of our voting population. However, with a surge of young voters, will it make a difference in November? Can Obama-Clinton or Clinton-Obama pull it off this fall?

One thing for sure, the American people are galvanized by this shaky economy, anti war sentiments in Iraq, lack of healthcare, high gas prices at the pump, etc. People are losing their homes and jobs across this Nation in the millions. Those that seek the American dream through diligence are fed up and lost faith in their government. We have seen our noble Veterans begging in the streets and middle class jobs outsourced overseas. It is time to take care of the American people. Let us take care of home first then help where we can in the world after. We cannot afford to boast in our arrogance that we are the greatest Nation on the planet, yet we cannot provide basic healthcare and decent jobs to our citizens. We cannot afford to cast a blind eye to the world however. Let me remind those with short term memories what took place in Germany many years ago. We turned a blind eye to some disgruntled and ignorant folks in Germany at that time called the Brown Shirts. They became a formidable force known as the Nazis under Adolph Hitler that led to the destruction of over 5 million of our Jewish brothers and sisters lives. So while we should take care of America first, we must keep an eye on the world so that something as horrible as this will not repeat itself anywhere again on this planet.

As for Senator John McCain, the Republican Nominee for President of the United States, his service to this Great Republic is first class, invaluable and second to none. I applaud him wholeheartedly for his service to this Nation. I admire his impeccable character and the fact that he is not the conventional politician. He is a “straight shooter.” Senator McCain will say the same thing to people in 10 different rooms. You can rest assured that what he says in Room number 1 will be consistent throughout Room number 10. I like that about him. No one can ever question the veracity of Senator McCain’s words. Undoubtedly, he is the best qualified for Commander in Chief. However, timing might be a factor for this great American Hero. Senator McCain will have to unequivocally convince the American people that he will revitalize the economy, provide healthcare, deal with this immigration issue, create jobs and restore the middle class in order to win this election…straight up. While many Americans are concern about the war on terror and those that want to kill us for our freedom, the American people are crying out for jobs, healthcare, and to save their homes. Owning a home is the core tenet of the American dream. We must restore the American people and promulgate laws that prohibit corrupt banks, mortgage companies, brokers, etc., from taking the American people for a ride.

Come this November, invoke your constitutional rights and vote. Remember that many of your ancestors died for that privilege. Go into that polling booth and vote your conscience. One thing for sure, whether it be Obama, McCain or Clinton, the American people are ready to sacrifice and work with our duly elected President. May God continue to bless the United States of America.

Patrick Pearce is Founder, President and CEO for Southeastern Development & Consulting Group, Inc., a Florida Corporation.

Patrick Pearce earned his BA degree from the City University of New York and his law degree (JD) from Hofstra University School of Law in Hempstead, New York.

Patrick Pearce works as a Consulting and In House Attorney with various Law Firms and Government Offices.
Website: http://www.sdcg1.com
Blogs: http://legalconsulting.wordpress.com