The price of oil has its factors. The price of gasoline has its own set. The two are not as directly connected as is sometimes presumed. They do not track with each other directly.
There is a common set of factors the influence price of gasoline and crude oil. A large part of that set is political. That means that the price is a social choice about what should be bought. An example of this is described in an IDB editorial Plugging Up The Pipeline.
There hasn’t been a new oil refinery built in the U.S. since 1976, in part because of actions like those of the NRDC. The environmental lobby, which went off the rails decades ago, has resisted almost every attempt to create more energy from fossil fuels.
This is countered by those opposing new facilities asserting that there is no need for them; that the supply of gasoline is keeping up with demand without new facilities. That is a shallow and circular argument.
America has so far paid a small price for the radical environmentalism that grew out of a rational movement in the 1960s. The costs will eventually be deeply painful, though, if lawmakers and the courts continue to give these groups license to shut down needed energy advancements.
This ideology has been sitting on the lid of human yearning, a desire of the little people for a more comfortable life. So far its cost has been no big deal and easily hidden in the noise of daily life. The recent burst in commodity prices and cost of fuel may make it more visible for what it is.
T. Boone Pickens’ latest energy plan is an indicator of this visibility even though it is just a rehash of old ideas and wishful thinking.
Soon enough reality will become too much to ignore. Energy, power, fuel, and our dependence upon them have no simple solutions but will require a balance in technologies and in the financial, economic, and environmental costs that we choose to pay for a lifestyle we prefer.