"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.