I’m normally a fan of Fox News host Bill O’Reilly, but he is not a fan of oil companies. This is where he loses me.
It’s not that I’m a big fan of oil companies, or any particular company, really, except maybe Apple (can we get the new iPad already?). I rarely think about companies, let alone whole industries. But Bill does.
I don’t know O’Reilly’s politics, mostly because he’s all over the place. But his anger toward oil companies is misdirected and he ultimately misleads his audience.
Last week, Bill did one of his “Talking Points Memos” on high gas prices, blaming oil companies for the price at the pump. He opened up by paraphrasing Lou Dobbs, saying, “…because of the mild winter, there is plenty of oil and gas in the U.S.A. So supply and demand here should dictate lower prices. But of course, they are not lower. They are much higher because the oil companies are shipping their products overseas. Measured in dollars, oil products are now America's largest export worth $88 billion a year to the oil companies.”
That sounds great, and seems logical – more gasoline around means there should be lower prices, supply and demand. Only it isn’t that simple.
Were gasoline not manufactured, but pulled out of the ground ready to go, it would make sense. It would also make sense if for an iPad to cost $20 if they grew on trees and Apple simply picked them. Unfortunately on both accounts, it doesn’t work that way.
An iPad must be manufactured from countless parts, and the materials to make those parts cost money. Similarly, gasoline has to be refined from oil, and oil, particularly right now, is very expensive. And it’s costing more every day.
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In other words, the amount of gasoline has no impact on the price at the pump. The cost of oil does. In fact, crude oil accounts for about 80 percent of the cost of fuels. As oil prices rise, gasoline prices rise. As gasoline prices rise, demand for gasoline drops, particularly in a sluggish economy. That’s why we have gasoline to export to the rest of the world, not some black helicopter conspiracy to drive up prices at the pump.
What O’Reilly doesn’t tell his audience is that exporting refined oil products is actually a good thing for our economy. When American manufacturers, like oil refiners, export their products, they create and sustain good-paying jobs, lower America’s trade deficit, and increase revenues for our Federal Treasury.
To be clear, refiners will only manufacture as much fuel as they can sell. They can’t store millions of gallons of gasoline that no one in the U.S. wants to buy. So if fuel exports are banned and taxed heavily, as O’Reilly suggests, refiners will manufacture less fuel. That could lead to refinery closures and worker layoffs.
If our federal government is serious about lowering gasoline prices, it should first start by eliminating EPA’s overreaching regulations on refiners, which make it more costly to manufacture fuels. We must also support policies that drive down the cost of oil. The only way for that to happen is to increase the supply of oil AND the stability of that supply.
O’Reilly and Democrats would have you believe that in addition to colluding oil companies, the price of oil is high because of “Wall Street speculators,” traders on the commodities market. They seem to think “speculators” are able to manipulate the price of oil. Commodities traders take large risks, and it’s called “risk” for a reason. Were they able to control the price of oil they’d be called something beside “speculators.”
But O’Reilly and Democrats need a boogeyman.
O’Reilly needs it because he fancies himself the champion of “the folks,” average Americans who he seems to think can’t figure things out for themselves.
Democrats need it to distract from the fact that high gasoline prices are something they’ve wanted and advocated for years. They’d prefer we’d have gotten to $5 per gallon gas through high taxes, rather than unrest in the Middle East, but this is where they want them to be.
President Obama wants high gas prices to drive consumers Americans to embrace alternate “green” sources of energy. The only problem with his plan is there is no “green” alternative readily available now to counteract high gas prices. The only result of his anti-domestic energy plan (denying new drilling permits, killing the Keystone XL pipeline, etc.) is to harm the wallets of all Americans, particularly low income Americans, those he claims to want to help.
But the President doesn’t seem to mind that. Instead of working to lower gasoline prices, he’s working to distract people, to shift the blame to Democrat’s boogeyman and Republicans while insulating himself. Bill O’Reilly and his irrational, illogical crusade against “big oil” is helping him in that quest.
If O’Reilly truly were interested in informing people as to why prices at the pump are high, he’d put his emotions aside, look past the oil companies, boogeymen and political spin and take a look at what’s really going on. When it comes to “big oil,” he hasn’t done it in the past, so there’s little reason to think he’ll do so now. But we can always hope.
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