AAA and the National Oil Price Information Service are reporting new highs in the average price of regular unleaded gasoline across the country: $3.246 per gallon.
The hardest hit is California, where in Tahoe City the price of unleaded gasoline is more than $3.75 a gallon. One year ago, the average national prices were $2.543 -- and I remember thinking that was too much!
The news is even worse for the trucking industry, where diesel prices rose from yesterday's average of $3.848 a gallon to $3.876 today. While that may not seem like a dramatic rise, it's significant when you consider that just a month ago, the price was $3.364 and a year ago it was $2.737.
So what exactly is going on here? Townhall.com blogger Tom Snyder makes an excellent point in this March 8 post. Snyder contends that the American economy is being held hostage by Democratic leaders in Washington who are bowing to environmental activists and refusing to allow the establishment of more oil refineries stateside. The complaint from environmentalists is that increased petroleum production leads to increased petroleum consumption, which will further erode the ice caps by way of global warming.
Looking at the numbers, however, the rise in domestic gasoline prices (due to a dependence on foreign oil), hasn't caused the average American driver to lower his/her fuel usage. I believe the decline has been less than 1 percent since prices began to steadliy rise four years ago. These same environmentalists have advocted for drivers to buy more hybrid vehicles, but companies who sell hybrid cars aren't stupid. High prices at the pump increase hybrid hype and drive up their prices. Worse, a friend of mine in the auto industry tells me hybrid vehicles are actually more damaging to the environment than their gas-guzzling alternatives because when their batteries decompose they release toxic gases into the atmosphere that are far more harmful than normal car batteries.
The time has come for US leaders to green-light more domestic oil refineries. High gas prices aren't reducing consumption significantly; if anything they're creating more demand for alternative fuel choices and creating a growing sinkhole in the economy. It's simple economics. When there's more supply, there's less demand. When there's less demand, prices go down. The increase in jobs created by more US refineries, the influx of money into the economy and the lower prices at the pump all will turn the economy around. Furthermore, when prices go down at the pump, prices will go down on hybrid vehicles and more people will start buying them.
Democrats have shown an unwillingness to think outside the box and do what's necessary to help the economy and the environment. It's just one more reason to vote for John McCain in November.