Monday, January 28, 2013

The Gasoline Monopoly

OPEC-America Oil Addiction

John R. Houk
© January 28, 2013

Did you know your car runs on gasoline for a specific reason? That reason is a gasoline monopoly. Cars and trucks are required to be made to burn a petroleum based fuel. I am no scientist so the info I found out about alternative fuels is new to me. This is the info: Did you know that car engines can be made that burns a petroleum based gasoline, ethanol or methanol alternatively or simultaneously? AND according the information I read the car you currently drive can relatively easily rework your engine to burn ethanol and/or methanol?

Why are these questions important? Because if cars are manufactured with engines that operate on more than just petroleum gasoline, the economic power of Organization of the Petroleum Exporting Countries (OPEC) would sliced in which the Western World would no longer have an absolute dependence of foreign oil especially the kind of oil from nations that are taught to hate the USA, Jews and Christians.

The single largest entity impacting the world's oil supplies is the Organization of the Petroleum Exporting Countries (OPEC), a consortium of 13 countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

Together, these 13 nations are responsible for 40 percent of the world's oil production and hold the majority of the world's oil reserves, according to the Energy Information Administration (EIA). [source: EIA]. When OPEC wants to raise the price of crude oil, it simply reduces production. This causes gasoline prices to jump because of the short supply, but also because of the possibility of future reductions. When oil production dips, gas companies get nervous. The mere threat of oil reductions can raise gas prices.

In April 2001, OPEC decided to reduce its collective production by one million barrels per day. This was at the same time that American consumers saw gas prices rise, hitting an average high of $1.71 per gallon on May 14, 2001. (READ THE REST - How Gas Prices Work)

The advocacy of ACT for America alerted me via email about this issue which you can read below.

JRH 1/28/13
Breaking the back of OPEC
A national security imperative

Sent by ACT for America
Sent: Jan 28, 2013 at 12:11 PM

If you follow our email alerts you know that last year we actively supported a bill called The Open Fuel Standard Act. Simply put, this bill would break up the liquid fuel monopoly that now exists. This monopoly guarantees that the only fuel you can buy for your car or truck is gasoline (or, at most, gasoline containing a small percentage of ethanol).

If we are to ever really break the back of the OPEC price-fixing cartel, we must break the gasoline monopoly. The first step is ensuring that cars can actually run on other fuels such as methanol, which can be made from natural gas, coal, even waste such as grass clippings.

Did you know that, with just a few minor alterations to your car, it’s possible to run it on methanol—at a significant savings over the cost of gas?

We encourage you to check out the article below and the
Open Fuel Standard website.

Anne Korin and Gal Luft make a very persuasive argument in their new book, Petropoly, that the most influential free market advocates have always been in favor of one particular use of government: To prevent or break monopolies so free markets and competition could occur.

Many people are in favor of fuel competition but think the Open Fuel Standard is an overreach of government. Korin and Luft's arguments make it clear that nothing could be further from the truth.

Many people believe that the reason other fuels don't compete with gasoline is because they can't — they're too expensive. But this is not so. Ethanol and methanol can both be sold today for less money per mile than gasoline. The only reason people don't use them is because their cars are not warranted to burn them. The engines themselves could burn the fuel. But the cars are warranted to burn one fuel only, regardless of how easy and inexpensive it is to make them capable of burning all three. And that's the only reason fuels are not competing today.

What we have is a virtual monopoly. And since transportation underpins our economy, this monopoly rules our most economically important commodity. What would Nobel Laureate (in Economics) Friedrich August Hayek think should be done about this? He was, as Korin and Luft put it, "One of the greatest economists and political philosophers of the 20th century and the world's leading free market proponent...In 1945, Hayek published his triumphantly successful book The Road to Serfdom, a manifest in defense of markets and competition which made him the darling of conservative parties and leaders all over the world, including Margaret Thatcher."

Hayek said that you can't rigidly stick to rules with regard to free markets, and he named especially laissez-faire as one of those rules you should not be inflexible about. Hayek believed that the government should function as "a counterweight to monopolistic coercion" as Luft and Korin put it. That's exactly what we have in the transportation sector. "Cars that block competing fuels," they write, "are a barrier to the development of a free market in fuels."

Because we don't have any other attractive options for breaking OPEC's monopolistic coercion of our economy, Hayek would probably have wholeheartedly supported the Open Fuel Standard Act.

Another important and influential free market advocate was also a Nobel Laureate in Economics — Milton Friedman. He wrote that "the first and most urgent necessity in the area of government policy is the elimination of those measures which directly support monopoly."

What is something within our borders that directly supports the petroleum monopoly? The petroleum-only vehicle.

What could eliminate that monopoly? The Open Fuel Standard.

Many people are understandably angry at our government's constant interference and meddling in the free market. But freeing markets from a monopoly's dominance of an important commodity is one of the few good reasons our government should intervene. Let's hope this understanding reaches enough people in time.
The Gasoline Monopoly
John R. Houk
© January 28, 2013
Breaking the back of OPEC

ACT for America is an issues advocacy organization dedicated to effectively organizing and mobilizing the most powerful grassroots citizen action network in America, a grassroots network committed to informed and coordinated civic action that will lead to public policies that promote America’s national security and the defense of American democratic values against the assault of radical Islam. We are only as strong as our supporters, and your volunteer and financial support is essential to our success. Thank you for helping us make America safer and more secure.

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