We all understand that OPEC, the middle east oil supply consortium, has considerable influence over the price of our gasoline/diesel fuels. Along with that factor is the old law of supply and demand. But, there are also other factors at play in the gasoline price. No, it isn’t the oil companies making obscene profits. Actually, the oil companies make only about a 4% profit, or 10 cents on a $2.50 gallon of gas. That hardly puts them in a greed category as is often played up by some politicians and media.
The federal government however makes, through taxes, 18.4 cents on a gallon of gas and 24.4 cents on a gallon of diesel fuel. That of course was supposed to go to repair and maintain the roads and bridges. Well, that money went the same way as our FICA trust money. Then we must also factor in the state and local cut by taxation. The average being 26.5 cents for gas and 27.2 cents for a gallon of diesel. How has all that worked out for the roads and bridges in your area? Actually some elected officials are trying to whip up support for raising the federal tax rate on fuel while the price of gas is still low. Their theory is that the public won’t object as much as when the price is at or over $4/gallon.
Then a few years ago we started hearing a lot more about how our burning fossil fuels was wrecking the air quality by emitting greenhouse gasses and that in turn was warming the planet and would ultimately destroy the earth. So some officials decided to save us from ourselves and forced the addition of ethanol into our gasoline.
Now it is interesting to note that ethanol, no matter the source produces 30% less energy than gasoline. Therefore our cars, trucks, and buses lose 3% in mileage when our fuel is 10% ethanol and 90% gasoline.
To make the cheese even more binding, as the adage goes, in 2008 the DOE produced a paper proving that the production of ethanol actually causes an increase in greenhouse gases over burning plain gasoline. That paper showed that planting, watering, fertilizing, harvesting, and processing plant material into burnable ethanol was actually detrimental to the atmosphere.
So, tell me again why we are being forced to use ethanol? Oh, yes, I remember. Because the farmers in the Midwest can now raise 300% more corn with a guaranteed market. (Then to we can’t ignore the fact that the fool in the oval office has said that global warming is the biggest threat to the US. Gee, I would have guessed it was ISIS, et. al.)