Lawmakers To Blame For Rising Gas Prices

Published: May 7, 2008

"Sticker shock" used to refer to the anxiety induced by having to commit to paying tens of thousands of dollars for a new vehicle. Indeed, next to purchasing a home, vehicles are one of the biggest purchases many people make.

Lately, however, a greater sense of anxiety - or dread, rather - comes every time we pull up to the gas pump. And the effect has spread from the pumps to the grocery store shelves, if you hadn't noticed.

If I hadn't picked up on that myself, my wife, Michele, surely would have made me aware of it. She has an uncanny capacity to keep a running tally of price increases on most of the items we typically buy.

Bread, milk and eggs have been her biggest pet peeves lately. She managed to find milk at $3.69 a gallon this past week, although lately it has been hovering near $4. Bread, particularly the rye or pumpernickel we typically consume, has been going for $3.29 a loaf. A year ago, to the best of my wife's recollection, the per-loaf price was about $1.59.

Eggs have been rising in price, too. It seems that not long ago they cost $1.29 a dozen, but after church on a recent Sunday, Evelyn Hamilton, who has lived in Brandon probably longer than anyone I know, complained about a recent purchase for her grandchild's breakfast.

"Guess what I paid for a dozen eggs?" she said. "Two dollars and sixty-nine cents!"

And I bet the hens haven't gotten a raise.

The increase in food costs can be attributed, at least in part, to fuel prices. Everything on store shelves gets there via petroleum-run transportation. Crops are planted and harvested using petroleum-powered equipment. Increased transportation costs and rising prices to run farm equipment mean increased costs to consumers - you and me.

Back to the pumps. As of last week, regular unleaded cost about $3.48 a gallon at cheaper stations. A year ago, the same gas cost about $2.82, according to the Florida Department of Agriculture. Three years ago, the per-barrel price of crude oil was in the mid-$50 range. Last year, it was in the mid-$60s. Lately, it's about $120.

Someone is making money off of this gouging of the American consumer. It isn't the gas station owners. They're responding to the increasing cost of doing business and passing it along to purchasers.

Some blame price increases on the big oil companies that used to purchase oil under market prices set by the Organization of Petroleum Exporting Countries. In the 1980s, however, OPEC lost control of pricing to the petroleum market.

Now, futures traders and speculators - buyers and sellers of oil - determine supply and demand through sophisticated mathematical methods and computer models, discerning production and consumption outlooks and political and economic factors that could affect the market. Bidding drives crude oil prices up or down, lately up and up and up.

Perhaps you have noticed the "corn cob" tags on gas pumps proclaiming that the gasoline you're pumping into your car contains no more than 10 percent ethanol, presumably as a means of replacing a portion of the gasoline we use. But has this biofuel resulted in a drop in oil imports?

How costly has been the diversion of corn from food purposes to a dubious role in the fuel industry? Is this a wise use of our resources? Department of Agriculture chief economist Joseph Glauber projects that 4.1 billion bushels of corn, 31 percent of the U.S. crop, will be committed to ethanol production during this year and in 2009.

"Abusing our precious croplands to grow corn for an energy-inefficient process that yields low-grade automobile fuel amounts to unsustainable, subsidized food burning," said David Pimentel, a Cornell University professor who served as chairman of a Department of Energy panel that investigated the practical aspects of ethanol production.

Speaking of subsidies, on top of the gas taxes that American consumers are paying, we're on the hook to pay subsidies to farmers and ethanol processors.

So here we are, with increasing indications of a worldwide food shortage, and we're burning our food and paying for the privilege. Meanwhile, vast oil deposits in places such as Alaska, North Dakota and off Florida's coast remain untapped.

U.S. Rep. Kathy Castor of Tampa recently filed legislation that would permanently block oil and gas drilling within 125 miles of Florida's coastline.

Apparently, the congresswoman isn't bothered by a threat by Venezuela's leftist president, Hugo Chavez, to cut the United States off from Venezuela's considerable oil reserves, or that Cuba is allowing communist China to drill for oil in the Florida Straits, almost within sight of Key West.

The rationale behind Castor's legislation, presumably, is to protect our picture-postcard beaches for the sake of the tourism industry.

So while communist governments are gaining power, economically and otherwise, and food supplies run short, I guess it's the decision of Castor and those like her to allow the U.S. economy to languish and dig us further into a hole.

You, me and the rest of America's consumers will just have to watch our gasoline prices approach $4 a gallon and our food prices skyrocket, while we have enough of our own petroleum resources to tell other countries to choke on their oil.

Valrico resident Frank Shannon can be contacted at (813)546-2282 or FXShannon@aol.com.