In a post last week I pointed out that "Big Oil" has little to do with the high cost of gas at the pump, netting only about 9.4% profit on their investment overall, or approximately 37 cents out of the $4 per gallon many of us are now paying.
The Wall Steet Journal addressed the situation in a piece yesterday that should be required reading as we approach elections this November.
Blame Congress for High Oil Prices
Gasoline prices are through the roof and Americans are angry. Someone must be to blame and the obvious villain is 'Big Oil' with its alleged ability to gouge consumers and achieve unconscionable, 'windfall' profits. Congress is in a vile mood, and has dragged oil industry executives before its committees for show trials, issuing predictable threats of punishment, e.g. a 'windfall profits tax.'
But if there is a villain in all of this, it is Congress itself. That venerable body has made it impossible for U.S. producers of crude oil to tap significant domestic reserves of oil and gas, and it has foreclosed economically viable alternative sources of energy in favor of unfeasible alternatives such as wind and solar. In addition, Congress has slapped substantial taxes on gasoline. Indeed, as oil industry executives reiterated in their appearance before the Senate Judiciary Committee on May 21, 15% of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits.
Drill here. Drill now. Pay less.