Friday, 6 June 2008

Our weekly oil woes

It's worth reminding ourselves once a week who's responsible for the rise of oil prices. It's not oil companies, it's the government, who takes more out of each litre than local retailers:

If that pisses you off, then joining in Callum's email campaign is just one small thing you can do for mankind. And it's not just governments taking taxes who are to blame -- that's just the big fat red chunk band above -- it's also governments restricting refinery capacity and restricting new drilling and exploration who have made the blue band fatter than it needs to be, and oil resources lower than they should be.   And why do you think they've done that?  Brian Simpson explains:

    What do oil companies do? They spend hundreds-of-billions of dollars each year exploring for, drilling for, and transporting oil. They also spend vast sums refining oil into gasoline. Without oil companies there would be no gasoline, no plastics for myriad products (including appliances, packaging, and pace makers), no electricity generated with oil, and so on.
    In other words, our standard of living would be drastically lower. 
    What do environmentalists do? They prevent drilling in Alaska and offshore, which leads to less supply and higher prices...
    Environmentalists have also prevented new refineries from being built in the U.S. through lawsuits and regulations, to the point where no new refineries have been built in over thirty years. As a result, refining capacity has actually declined in the last few decades while demand has increased. This has contributed significantly to the high gasoline prices we now experience.
    In short, environmentalists have done everything they can to make oil and gasoline more expensive and our standard of living lower...

It's all a worryingly familiar parallel to New Zealand's own energy woes, isn't it?  And entirely consistent with the explicit misanthropy of modern environmentalism

Meanwhile, on the subject of refineries, the redoubtable Gus van Horn records that a county in South Dakota has approved via referendum the construction of what would be the United States's first new refinery since 1976.  1976! That's the good news.  However, while the large print giveth, the small print notes:

Despite a favorable referendum outcome ... opponents say the refinery has many hurdles to clear before construction begins...
    "There's probably a hundred pressure points that they have to pass through," said Ed Cable of Citizens Opposed to Oil Pollution, which currently has a lawsuit pending against the rezoning decision, Cable said.

Shades of New Zealand's Marsden B non-power station, don't you think, permanently mothballed by ecstatic local Greens.  Think about them this winter as the country struggles to maintain any semblance of a power supply.


  1. PC, the no brainer comparison is to look at the price of diesel knock 1c off it, multiply it by 0.89 (to remove GST) and voila.

    Diesel is subject to less than 1c of tax besides GST - because of road user charges which themselves have always been dedicated to the National Roads Fund in its various guises. Given Road User Charges are generally set at a rate to match the maintenance costs generated by different weight vehicles multiplied by distance, they are fairer.

    You can't argue for abolishing fuel taxes without also saying that people are going to have to pay to use the roads by some other way, that the road owner will need to choose.

  2. Libertyscott

    Your calculations are incorrect. You've neglected to allow for other un-necessary government generated overheads that are built into the retail pump price of diesel.

    There is contribution to PAYE, FBT, provisional tax, terminal tax, ARCIC/ACC, administrative overhead caused by OSH, administrative overhead caused by PAYE and FBT etc., insurances required because of legislation, work practices/product specification made compulsory by regulation and so on. Knock all that crap off and take a look at what the price would be. After that we are still confronted with govt preventing access to much of the natural resources where these fuels are sourced from in the first place.

    Deterioration of roads is proportional to the fifth power of vehicle weight. Privatise the roads and let the owners determine how to fund their maintenance programs and what vehicles/uses they will allow.

    BTW privatise does not mean a sell off to some insider cronies. It means returning the ownership to thise who paid for the creation of the asset- the motorists and the property owners. there are plenty of good ways to do it.



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