As the saying goes, “you can’t roller-skate in a buffalo herd!”
Truth!
Lately, consumers are caught in an energy stampede. And political leaders, in this country and outside of our borders, all seem to have run for cover.
On the North American domestic front, the supply/demand situation has been re-defined as a “bad to worse situation.”
Despite politically influenced draws from the Strategic Petroleum Reserve (SPR) designed to buffer gasoline prices before the November 8 midterms – U.S. crude oil levels fell in the latest Energy Information Administration report (EIA).
After next Tuesday, the U.S. consumer and we, their energy cousins, may all have a “say it ain’t so Joe!” moment, and prices will just run the pricing red light until it hits the inevitable wall of recession.
A collision seems inevitable.
The political solution being offered by the U.S. administration is to impose a tax on excess profits on the oil companies. If they start that game, then the domestic oil industry in the U.S. will just pull up stakes and move to a more financially friendly neighbourhood.
Right now, the consumer is paying record high prices for diesel and gasoline because demand for fossil fuels has overwhelmed supply. Politicians have sided with who I call, the “environmental evangelistas,” rather than who they should be siding with, the tax paying earth-bound consumers.
The consumer is now paying the prices for the drop off in pipeline approvals and refining capacity. And now, someone in Ottawa or Washington is going to have to explain and solve the problem of diesel fuel being allocated.
Applying a tax on excess profits does not help the supply problem created by those who want to apply the tax.
What they are doing is taxing our patience – and the herd is starting to rumble.
There is no skating away from the problem they have created for all of us.
– Roger McKnight – B.Sc., Senior Petroleum Analyst
Add comment