For the past twenty plus years, Americans have been told that gas prices at the pump continue to rise because we have to import most of our oil from other countries. Being the trusting and gullible people we are, we believed them until more recently.
Over the past ten years, prices at the pumps have hit record highs. Again they tried to tell us it was because of the price of oil overseas. When the public started to wise up, they changed their story to the political volatility in the Middle East and speculative buying of oil. At the same time, the major oil companies were reporting record profits and that only served to infuriate the American public.
Today, we learned that for the first time since 1949, that fuels (gasoline, diesel and jet fuel) have become countries number one export? That’s right, we are now exporting more oil than we are importing. And yet we are still being told that the price of oil overseas and the volatility of the Middle East continue to control the prices at the pump.
You would think that if we were producing that much oil in the United States that we would keep it here in our own country, but that’s not the case. There is nothing official that requires US oil companies to supply US needs first. As it turns out, it is more profitable for US oil companies to sell their fuels to other countries than it is to sell it to US consumers.
The price of gasoline and the increased concern for the environment has led auto makers to start producing more gas efficient cars and trucks. This has supposedly reduced the demand on domestic oil. At the same time the oil refineries have contracted while international demand has increased. Due to the laws of supply and demand, it becomes more profitable for the oil companies to sell overseas, causing US oil supplies to drop which in turn causes domestic prices at the pump to increase.
So as you hear reports about the need for the Keystone XL pipeline, along with the processes of extracting oil from oil sands and fracking to get oil from shale, ask yourself how much of this oil will remain here in the US and how much of it is going to other countries. Will these increase oil supplies serve to make the US less dependent on foreign oil or will they only serve to increase the profits of the big oil companies?
And believe it or not, many energy experts say that if the companies are forced to keep more of the domestic oil here in the US that it would actually increase prices at the pump rather than bring them down. Concerning the future prices at the pumps, one expert said that refiners are satisfied with the demand and export balance and that the prices in 2012 are all going to depend on the price of crude oil prices since the US demand is still declining and the refined supply seems adequate, at least to the oil companies.