Wilder by Far

A look at life with the Wilder family. Updated most weekends and some vacation days. You can contact me at movingnorth@gmail.com..

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Location: United States

Saturday, April 29, 2006

"The Oilers moved to Tennessee where there is no oil. The Jazz moved to Salt Lake City where they don't allow music." - Baseketball

Not made up. This is an actual sign on the Pipeline.

The high price of oil has drawn a lot of attention recently, and the bad guys have been painted as, well, the oil companies. They’re also often chosen as the bad guys in movies and on TV.

In order to defend them, it’s time for a comparison between an Oil Producer and our beloved Paris Hilton:

Oil Producer:

Paris Hilton:

Moves oil thousands of miles for pennies

Pays $500 a bottle for champagne

Produces millions of barrels of oil a day

Produces bad video, worse television

Hates Nichole Ritchie

Hates Nichole Ritchie

Is the subject of Congressional inquiry

Is the subject of Congressional web searches

Worked for it

Was born rich

Plows profit into exploration and production

Plows family profit into bacchanalian excess

Explores for oil in places where vowels have not yet been discovered

Cannot spell “France”

Is infamous because they produce a needed commodity

Is famous because she’s famous. And nekkid a lot.

Yet, I see no inquiry, no screaming mobs in the streets demanding Paris Hilton’s head on a pike. Or even on a salmon.

Anyhow, one part that I cannot fathom is why people are against the oil producers making a profit. The only two things that they can do with this profit are:
Give it to the owners, or,
Spend it on producing more oil.

If the oil producers give it to the owners, they buy nice things or invest it. They don’t keep it in a box. This keeps the economy zooming. Not a bad thing.

If they spend it on producing more oil and are able to expand the supply of oil, then the price of oil drops again, and Pez dispensers are once again free for the taking.

Alaska sees the result of this. You cannot drive by the railyard in Fairbanks and not see the miles of steel pipe ready to be loaded on trucks and shipped to the North Slope so more oil can be produced. You cannot help but know someone who spends weeks at a time on the Slope trying to get oil produced, or someone who works at Alyeska (the Pipeline) who works to pump it down to the Lower 48. We see the economics of the oil industry, and see how it works to efficiently bring massive quantities of energy to the US at (normally) low prices.

Right now the price of oil is high because the US is competing with the rest of the world for the stuff. The price isn’t set in a secret office somewhere; people buying oil on an open market set it. You also set it. If the price of fuel is too high, you’ll ride a bike, take public transport, take a walk, combine your trips, or drive more economically. This lowers demand, and thus the price. I don’t need to tell you to do this, since you do it already – that’s the beauty of economics.

I vaguely recall (I was young) gas lines in the 1970’s. That was when the price of fuel was capped. When that happened, there wasn’t enough fuel to go around. Allowing prices to rise lowers demand, and ensures supply to consumers, and produces profits that result eventually in increased capacity and lower prices.

I know that the industry is far from perfect, but these are the guys and gals that are doing their darnedest to put energy into your car, into jets, and plastic into the I-Pods and Pez dispensers that we use on a daily basis. And they never put, ahem, those kinds of videos on the Internet.


Blogger Al said...

Excellent comparison!

I agree. We should be picking on the bad guys in other places, like Iran, Iraq, North Korea, etc. There are plenty of bad guys to hate. Congress should know better, but they always say things people want to hear. Supply and demand.

By the way, how low do prices have to get for Pez dispenser to be free?

4:09 PM  
Blogger Duck Hunter said...

supply and demand. sometimes people forget how that works. Sometimes the government forgets how that works.

So, do you guys get a break on gas? How much you payin', John? And it better not be TOO cheap!

7:27 PM  
Blogger Woofwoof said...

On TV, a guy pumping gas at a gas station was complaining about the outrageous price of oil. He was also driving a humongous Yukon SUV. Must have cost him a mortgage and a half to fill up that monster-mobile.

And stop making fun of, ahem, those kinds of videos on the Internet.

8:20 AM  
Blogger Joann said...

Nuclear power is the answer--the problem is that those on the left do not know the question.

2:45 PM  
Blogger John said...

Supply of silly words is never short in Congress. Demand for change is also never lacking.

Pez shouldn't be a treat, it should be a right. Hopefully, a "Pez Rights Act of 2006" will soon show up. I think $10 a barrel would do it.

The posted price is $2.84 the last time I looked. If you show your Alaska driver's license, they put money back into your credit card, though.

We're learning to bathe in gas, since it's still cheaper then Evian. Which is "Naive" spelled backwards . . .

That's funny.

Hey, not so much those videos, just Paris. Who would want to see her??? Ugh. Actually, who hasn't?

Nice point, but I think there are those on the left who would prefer that (except for them) that we people would just stop cluttering up their planet. With Pez dispensers, no doubt.

8:28 PM  

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