Wednesday, May 19, 2004

Bunnie is shocked at the high gas prices this country is experiencing. I know what you are asking. "Oh Dan the Geologist, who knows all things petroleum, why are we punished with high gas prices?"

Listen closely grasshopper, as I will explain all. It is a simple matter of supply and demand. There is too much demand and not enough supply.

"But how did this happem?"

Simple, grasshopper: government.

"The government?"

Yes grasshopper. The governemt has environmental rules so tight that no new refineries have been built in this country for over 20 years. Add to that that refineries had to close and new blends of gasoline mandated by law that are more expensive to make, and you get a supply shortage. Refineries are pumping out as much gasoline as they can and they do not have time to build up their stocks for winter gasoline. Winter gasoline shall be pricey as well.

"But cannot refineries overseas make gasoline?"

Yes grasshopper, but they are not built to make the blends of gasoline the EPA mandates.

"So what is the solution master?"

Relax the rules some to make building a refinery more attractive. Allow refineries to be built. That, grasshopper, will solve the problem.

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