CONGRESS: DON'T INTERFERE WITH OIL AND GAS...PLEASE!
May 31, 2007
Congress could take concrete steps to help consumers at the pump by removing roadblocks to new oil production, reducing restraints on refining capacity, and improving the investment climate, says H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis.
Congress bears far more blame than private oil companies for high gas prices, explains Burnett:
- While oil companies' overall profits are large, at about 9 cents per dollar of revenue, their profit margins are much lower than many industries including banking, pharmaceuticals, computers and many household goods.
- The oil industry has been repeatedly investigated by multiple agencies at the request of both Democratic and Republican Congresses, and Democratic and Republican administrations, but it's never been found to be guilty of colluding or price fixing.
- This is no surprise, since even the largest private oil company in the world owns less than 3 percent of the oil that it delivers to the market each day.
- World oil prices are not set by big oil companies in the United States, but rather by supply and demand conditions in the market, as often manipulated by state-run oil companies -- who own most of world's oil -- in OPEC and Russia.
- Even in the face of congressional hostility and forced nationalization of foreign-owned oil and gas deposits, the industry has done its best to increase oil reserves -- the number of oil and gas wells operating in the United States has tripled since 2000.
By contrast, rather than helping consumers, Congress's actions have reduced the available supply of gasoline and made us more dependent on foreign oil, says Burnett.
Source: H. Sterling Burnett, "Pelase Stay Off of the Gas," Washington Times, May 31, 2007.
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