It takes a lot of nerve for Congress to haul in the heads of Big Oil and pretend that greedy oil companies are raping the American consumer with rigged energy prices.
But then again, it is the United States Congress, where veracity struggles for life on a daily basis.
"On April Fool's Day, the biggest joke of all is being played on American families by Big Oil, says Democrat Ed Markey.
Oh? I bet even Ed Markey is versed enough in economics to know the real reasons that gasoline prices are high. But lawmakers also know that playing dumb on the energy issue and spouting the conventional folly about price gouging pays political dividends with an outraged American public looking for a rich businessman to lynch.
Oil profits do sound outrageous. ExxonMobil earned over $40 billion last year. But, as Fortune Magazine points out, "Big Oil makes its money by pumping oil out of the ground, not refining and selling it as gasoline. Of Exxon's mammoth (profits), only a tiny fraction came from making and selling gas in the U.S."
And the idea that Big Oil sets the price for the oil it pumps from the ground is ridiculous. It's set by traders on the New York Mercantile Exchange and other trading floors around the world. It's set by supply and demand, and demand has been increasingly outpacing supply. Hence, the price goes up.
Politicians in Washington and our state capitals have frustrated the growth of domestic supply with regulations and restrictions against new drilling and gasoline refining. I don't necessarily view Alaska's ANWR region as the panacea, but Alaska's North Slope has an estimated 10 billion barrels of oil in the ground, just lying there, doing whatever neglected oil does.
And thanks to politicians, one of the hardest things to do in America is build a new gasoline refinery, so there's no extra capacity in the pipeline when a refinery goes offline due to damage in a hurricane or a fire.
Of course there are other factors in the rise of gasoline prices; the shrinking dollar buys less oil, and instability in places like Iran, Venezuela, Iraq and Nigeria add a so-called "terror premium," goosing prices up even further.
But the bottom line is supply and demand. We can either start pumping more oil, or oil up our bikes, or get off the stuff all together. Because, as things stand now, global demand is only going to increase.