The Day Oil First Topped $122/barrel

6May08

NEWS FLASH: The price of NYMEX Crude Future jiggled above $122 today, and, at 11:43AM Hawaii time, sits at $121.91/barrel.

WHAT ABOUT THE GAS TAX HOLIDAY?

John McCain first floated eliminating the 18.4¢/gallon (24.4¢/gal for diesel) tax during the three summer months to win some votes. Hillary Clinton jumped on board and suggested taking the difference through a windfall tax on oil companies. Clearly, Congress cannot do anything, anyway, on such short notice, that most called this pandering. Barack Obama said it was a gimmick and Thomas Friedman of The New York Times entitled his editorial: “Dumb as We Wanna Be.” Friedman essentially said, in reference to McCain and Clinton, “the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away.”

What’s the reality? First of all, if this tax is dropped for the summer, the consumer would be saving 5%....5% on their gas bill. This should be a non-issue! Gasoline increases this amount each week, sometimes.

There was a congresswoman representing Hillary’s position on the Larry King Show last night, and she kind of stumbled by saying that she recently paid $70 to fill her car, and could have used that money for more important bills, or something like that. I should talk to her about my FREE Hydrogen Age. There is a sense in the masses that this gas holiday will now allow them to really travel cheaply.

How much money are we talking about? Actually, something in the range of $10 billion. Wow, that’s a lot of money. The U.S. Department of Energy spent less than this amount for renewable energy R&D over the past decade. Well, Exxon, during this past quarter, made a profit of $10.9 billion, which Wall Street found disappointing. Chevron’s profits only amounted to $5.2 billion, the second best quarter in their 132 year history. (How long has oil been around, anyway? Well Chevron first struck oil in California in 1876. Drake drilled for his Pennsylvania petroleum in 1859.) Remember, these profits are only for January, February and March of 2008.

We generally ignore the simple fact that the price of gasoline in Europe and parts of the Orient is double ours. Cutting the gas tax is going in the wrong direction. We need to add a dollar/gallon and apply this revenue to developing sustainable options. That would provide about $150 billion each year, which would be just about right to do something about Peak Oil and Global Warming.

GOOD NEWS: At 12:10 PM Hawaii time, that same crude future has slipped down to $121.84.