Sunday, September 14, 2008

Ike Spike in Gas Prices Avoidable

If only Democrats in Congress would listen!

One day before Hurricane Ike roared ashore in the heart of the U.S. oil and gas producing region in the Gulf of Mexico gas at my local gas station was $3.59 for regular. The next day, the price was $4.19. It's even higher in many places.

Why the sudden change? My state, like many others, is increasingly dependent on refined supplies of gasoline coming from the Texas, Louisiana area whose refineries and oil rigs in the Gulf had to shut down in advance of the storm.

Democrats in Congress have refused to permit any new development of supplies outside of existing areas like the Western Gulf and their environmentalist allies use every legal and legislative tool to block any development of refinery capacity.

And while the damage caused by Ike, like that of Hurrican Katrina, which was a much stronger storm, did not cause widespread oil pollution from damaged rigs or refineries, the damage to the American economy grows with each passing year we fail to address the problem of increasing supply and refinery capacity.

Even as oil and gas prices fell on world markets, the problem in the U.S. grows as Democrats refuse to listen to the voices of the voters.

Oil Falls to Six-Month Low as Refineries Escape Major Damage

By Mark Shenk

Sept. 14 (Bloomberg) -- Crude oil fell to a six-month low in New York and gasoline tumbled amid signs that refineries along the Gulf of Mexico coast will soon resume operations after escaping major damage from Hurricane Ike.

More than 20 percent of the U.S.'s oil refining capacity was shut, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its strategic reserves. New York Mercantile Exchange electronic trading opened early today to allow traders to respond to Ike.

``It looks like we've dodged another bullet,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``The refineries in the Houston area seem to have come out of the storm remarkably intact.''

Crude oil for October delivery fell $2.07, or 2.1 percent, to $99.11 a barrel at 5:10 p.m. on the Nymex. Futures touched $98.46, the lowest since Feb. 26. Prices are up 25 percent from a year ago. Gasoline for October delivery fell 11.33 cents, or 4.1 percent, to $2.6563 a gallon in New York.
The storm idled about 99.6 percent of oil production and 91.9 percent of natural-gas output in the Gulf of Mexico, the U.S. Minerals Management Service said today. Gulf fields produce 1.3 million barrels oil a day, about a quarter of U.S. output, and 7.4 billion cubic feet of gas, 14 percent of the total, government data showed.
One million barrels a day, nearly the entire amount of supply disruped by Ike could be matched by drilling in the 2,000 acre coastal wasteland that is part of the 20 million acre Alaska National Wildlife Refuge. Other coastal drilling and oil shale development inland could minimize supply disruptions from large storms in the Gulf.

But Demcrats refuse to act. They may try and placate critics by tossing a very small bone to a very large dog with permission to drill in one or two places, but that still leaves America dependent on oil from the Gulf region and from the Middle East.

Once again, it's time to trot out the Mike's America production: "Did YOU Vote for High Gas Prices?"

Well, did you?

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