Countdown: What's REALLY behind high gas prices...and why McCain is a liar

This is the best report I've seen on the subject of "market speculation" regarding oil prices...as well as John McCain's ties to it.



1) But wait, I thought it was the "environmentalists" fault because their regulations wouldn't let us build enough refineries?

Oil Refiners See Profits Sink As Consumption Falls

However much the companies would like to raise gasoline prices enough to pass along the full increases in oil, analysts say they have been unable to do it. Oil prices doubled in the past year, while wholesale gasoline prices rose a mere 39 percent.

“Refiners are having a terrible time,” said Lawrence J. Goldstein, an economist at the Energy Policy Research Foundation...

Their answer? Cut down on refining.

...The rising oil prices have led to a sharp drop in refining profit margins, or the difference between the cost of oil and the cost of gasoline. These margins, at $12.45 a barrel on average, are 60 percent below their year-ago level, and in the lower half of their five-year range, according to a report by UBS.

In response to falling gasoline demand and rising costs, refiners have cut their production rates. Refining utilization rates, for example, slumped to a low of 81.4 percent in the second week of April, compared with 90.4 percent at the same time last year. Earlier this month, refineries were running at 85 percent of their capacity.

2) We need to drill for more oil...open up those offshore areas like McCain and Bush are suggesting.

Wrong...for example, ANWR sure wouldn't have made a difference. According to The Energy Information Administration, which is "the Energy Department's independent analytical arm":

...if Congress had cleared Bush's ANWR drilling plan the oil would have been available to refiners in 2011, but only at a small volume of 40,000 barrels a day -- a drop in the bucket compared with the 20.6 million barrels the U.S. consumes daily.

At peak production, ANWR could have potentially added 780,000 barrels a day to U.S. crude oil output by 2020, according to the EIA.

Nor would it have made a difference with foreign oil:

The extra supplies would have cut dependence on foreign oil, but only slightly. With ANWR crude, imports would have met 60 percent of U.S. oil demand in 2020, down from 62 percent without the refuge's supplies.

But McCain has now changed his tune and is heading down that dead-end drilling route:

Sen. John McCain plans to call Tuesday for lifting the ban that prevents offshore oil and gas drilling along much of the U.S. coastline — but would give states like Florida veto power over opening up their shores.

McCain, who plans to unveil his proposal in detail Tuesday, said Monday that lifting the decades-old moratorium should be a "very high priority'' with gasoline prices soaring. He said that allowing states to explore for gas and oil "and perhaps providing additional incentives for states to permit exploration off their coasts … would be very helpful in the short term in resolving our energy crisis.''

So 5 to 12 years is the short-term to him?

Back in January, he felt a little differently about drilling in Florida:

As far as ANWR is concerned, I don’t want to drill in the Grand Canyon, and I don’t want to drill in the Everglades. This is one of the most pristine and beautiful parts of the world.

I guess not so much now.