A significant amount of speculation has been put forth regarding the identity of those involved in running up the price of fuel in this country. In fact, it has gained the attention of headline seekers, who will no doubt hold meetings and conferences to explore the back-room dealing that brought us to this point in our country's fuel-price history.
Let me put it to rest right now so we can get on with our lives: I am the one responsible for where the cost of fuel is today, and I'll be responsible for prices in the coming months. I take no pride in my ability to set pump prices, but somebody's got to do it. Let me tell you how I got us where we are today.
To begin with, I bought a car with a below-average fuel economy rating and drove more miles this year than I did last year. I did it because I wanted to, not because I had to. I also spent more time on my boat. And I can tell you that I have no plans to cut back on running that gas-guzzling 125-hp. outboard at full throttle.
As if that weren't enough, I bought a second motorcycle — just for the fun of it. Then I expanded my business, which meant I had to buy more durable goods to support it, most of which use petroleum in one form or another.
I did this with the full knowledge that refining capacity had taken a sharp hit last fall. In addition, I knew that worldwide production of cheap crude was over — and that any new crude sources were gong to be more expensive to develop.
At the same time, I voted to restrict supply by requiring the production of more than 100 types of fuel for distribution in specific areas where I felt the need to control the quality of emissions. I didn't even bother to find out whether we could really get by with just 10 or 12 different types instead.
I will admit, however, that I had some help in getting us to these record-high levels at the pump. The first source of aid was my fellow Americans — shoulder to shoulder, seat belt to seat belt, I might add. I probably could not have done it without you.
I was concerned after Hurricanes Katrina and Rita hit because you started to cut back on your use of gasoline as prices headed north. It was a scary eight-week period. But I've been able to breathe easier since your demand for fuel in recent months has been stronger than ever. So I doubt you will let me down in the future.
The second source was one that responded to my demand for higher employment. With more employees, companies have produced more, which I naively estimate will increase the demand for fuel. Even though industry in general uses less fuel per dollar of output than it did a decade ago, the total amount required means that it needs more fuel to sustain growth. We can stop that use of fuel — but we'd also have to lose some jobs in the process.
Finally, I received help from the sharks of price movement, aka the speculators. These hardy souls will bet on the fact that prices move in only one direction — up. Until, of course, they are eaten by their own.
Since I don't trade energy futures for a living, I must rely on the experts who talk to me each evening, some of whom actually seem to know what they're talking about. Among the more knowledgeable, there appears to be a sense that the underlying supply-and-demand clearing price for crude oil is probably in the mid-$60-per-barrel range. If that's the case, then the feeding frenzy should begin in the coming months, putting speculators on the endangered species list.
Wait…I feel the need to reformulate all gasoline and remove virtually all sulfur from diesel fuel. That should help reduce prices soon.