One of most powerful economic impacts of Category 5 Hurricane Katrina is the dramatic rise in gasoline prices at the pump. Estimates from the US Energy Department's short-term energy outlook released this week, said the average retail price of regular gasoline jumped by 45.9 cents to a record 3.069 USD a gallon last week. This is on top of a dollar increase in the last year or so.
The New Orleans area has a very large oil industry, both refining and exploration. Today, much of it is incapacitated, and it may take several months to repair all the damage. This lost refinery capacity is critical to maintaining our gas supplies. At present, the United States is facing a vital lack of oil refining capacity. Prior to hurricane Katrina, we were at roughly 96% of gasoline producing capacity, with 10% more being imported. Hurricane Katrina has wiped out the 4% cushion we had in production.
There is a rapidly growing anger at the gasoline prices consumers are spending in these post-Katrina times. Americans' pocketbooks are being strained to the limit. Real wages have declined in recent years. Many high-paying jobs have been outsourced to China and India. Illegal Mexican immigrants have flooded the skilled trades job market and are willing to work for a fraction of what American citizens were being paid. Health care costs have skyrocketed for years. Topping it off, local government services have been severely cut because of the War on Extreme Islamic Religion.
Hurricane Katrina is the proverbial straw that broke the camel's back.
Popular TV spin master Bill O'Reilly has suggested that oil companies be forced to nationalize 20% of their profits. Mr O'Reilly said, "Just call me Fidel on this."
Referring to communism as a solution to hurricane Katrina, O'Reilly revealed the salaries of the CEOs from Exxon-Mobil and others as if to shame them into lowering the price of gas. Mr O'Reilly is also proposing that consumers boycott gas on Sunday. O'Reilly and the Fox news network have always been crucified as right wing conservatives by the media leftist of the world. Mr. O'Reilly’s supercilious endorsement of commrade Joseph Stalin's economic policies seems to indicate otherwise.
Congress is currently investigating the issue of price gouging. Many state and local governments are also trying to pressure the energy industry into lowering their prices contrary to global market forces. The government even has a website to locate cheap gas. The question being overlooked by public officials and flamboyant celebrities is the actual cause of the price increases: the lack of supply.
Article comments
1 - Temple Stark
THe rest was all over the place it seems.
So i'll focus on this :::
>>Coal can be turned into oil through a process that is being used in Canada to harvest oil from tar sands.
What does that mean. Thank you. Temple
2 - John Bil
It means coal can be processed into synthetic oil.
3 - john
Coal-to-oil and oil sands-to-oil are totally different processes. Not to mention the fact that there are a number of different coal-to-oil processes: Bergius, Fischer-Tropsch, etc.
4 - E. Illgen
why don't we hear more about the coal to oil process. there is 172 tons of engineering data at Texas A&M recovered from the Germans after WW II, Sasol, a south africa company has been producing oil from coal for many years. Other countries are contracting them for plants while the US is doing little. Why hasn't John Rich in Gilberton Pa. been able to get his coal to oil plant into production?? Do we need to reinvent the wheel?????
5 - Dave Nalle
Doesn't the conversion of coal to oil end up producing a product which costs even more than crude oil does right now?
And don't forget coal is also a limited natural resource, so it's not any kind of long term answer.
Dave
6 - John Bil
Not when oil is $60 to $100/ a barrel. Plus what is cost to economy sending billions to other countries for oil?
7 - John Bil
Plus what is the cost to our economy sending billions to other countries for oil?
8 - John Bil
In regards to post#5, there is plenty of coal. Some say over 200 years worth. While this may not be 100% accurate, there is an enormous amount of coal in the US.
9 - Mark
Nationalize all U.S. oil supplies now! Rockefellers and Bush have bleed us too long already.
10 - Dave Nalle
John, isn't it more efficient - enormously so - to confinue using that coal to fuel powerplants rather than converting it to oil which produces waste and reduction of product and has additional costs which make it impractical? Why process it into something else when it has a needed use as it is. Makes no sense at all.
Biodiesel is a much more sensible alternative to oil dependence.
Oh, and Mark. You're a nut.
Dave
11 - Ivan
Please do not post such idiotic statements like " the last refinery was built while Johnson was a president".
I worked on the few in last 30 years and that is way past Johnson.
And as far as oil prices?
Like the girl said on the Jay Leno's show: "you gave the blind man the keys to your car and now you holler that he wrecked yor car?"
He is not to blame. He can't help it.
He did not lie on his resume like FEMA's Brown. He did not have to. It was pretty obvious in debates how much is available upstairs. If the only qualification requirements nowadays is "who is your daddy", we gonna be in the trouble for long, long time. So to all you people that elected him: now you harvesting what you have seeded. I say: "just bring it on", so all these imbecils across the country will wake up and see what they choose for themselves! And one for Mrs. Barbara:
Please do not tell us not to critisize your son. If he wants to export democracy to a culture that does not want one at the cost of our own people, than he should let us to use our freedom of speach here at home!!
12 - John Bil
That info was from congress, while technically it might be incorrect, the point that it's been decades is 100% accurate. Prove me wrong, I would very much appreciate any information can provide: i.e. links not just statements.
13 - John Bil
BTW Ivan, working at someplace doesn't mean you’re an expert. Making French fries at McDonalds doesn't make you qualified to run the company.