It's not just here in the U.S. that demand has risen. It's up all over the world. Prices have also risen due to some recent problems at U.S. refineries. Correct me if I'm wrong, but wasn't there a huge fire at a major Houston refinery recently? After that happened, oil speculators and investors got nervous, and prices started to rise.
And I've posted this before, but just as a reminder, I'll do so again. Here are some reasons why gas prices have risen:
1. There is a higher demand for gas in the U.S. American consumers are using more gas this year than they have in many previous years, even with the high prices. Especially with the War on Terror. More people are driving than flying.
2. Environmental regulations lower the supply base of gasoline available to consumers. Oil refineries have to switch production at certain times of the year to boutique gas blends for specific geographical regions. This means that if there is a shortage driving prices up in one-region supplies can't be shipped in from another region to meet demand ... wrong blend.
3. Environmental activists have also cause us to be more dependent on foreign oil by not allowing domestic drilling in ANWAR and off U.S. shores and in the Gulf of Mexico.
4. We have about one-half the number of oil refineries in the United States that we had 30 years ago. The last time a new refinery opened for business was in 1976. Environmentalists have also prevented new oil refineries from being constructed.
5. There is an unexpected high demand for petroleum in China. Some think that China may be buying huge supplies to build a strategic reserve.
6. Strong demand for oil in Asia is one reason for higher crude prices in recent months, although analysts also said that aggressive bets by large commodity speculators have contributed to the recent run-up in oil markets. Much of the attention on Asian oil supplies is related to the fast-growing economies of China and India. Sales of diesel fuel in India, which account for about 40 percent of the oil sold in that country, soared 10 percent in February 2005 from the same month a year earlier; automobile sales in India grew 31 percent in the last year. India's oil imports are forecast to continue to climb as its economy grows 8 percent this year.
7. Saudi Arabia has cut production. There is speculation that Saudi Arabia is recognizing that its reserves of crude oil are running out. Saudi production may never again reach previous highs.
Do you want to see the price of crude oil, and thus the price of gas at the pump, dive for the floor overnight? Just let the Congress go ahead and authorize the exploration in ANWR. The Oil Sheiks will immediately lower their prices in order to forestall a rapid implementation of any exploration or oil recovery that could cut into their market share.
Did you know that the small section of the Alaskan National Wildlife Refuge where some want to drill for oil was actually set-aside for that specific purpose when ANWR was established? All we're talking about here is drilling for oil on a section ... a very small section ... of ANWR that was designated for oil exploration from the very beginning!
By the way ... do you know just how much of ANWR would be affected by the drilling? Here's an illustration. Take a look at a chair sitting on a nine foot by twelve-foot rug. The rug represents the total size of ANWR. Now, look at the space on that rug occupied by just one leg of that chair. Just one leg. That's the representative area of ANWR that would be disturbed by the drilling.
