I can't really blame my fellow Houstonians for venting when they fill up their tanks. Gasoline prices in this country are certainly not as high as other industrialized countries, but their swift ascent in recent months has been a bit mind-boggling. And of course the aftermath of Hurricane Katrina further exposed the strains in our refining and transportation infrastructures, adding salt to a growing energy wound.
What's surprising to me, though, is the attitude that it's all the fault of the Bush Administration and Big Oil . Even my daughter thought that prices were high because oil companies were greedy, as if on a whim they could suddenly say, "Hey, we feel like getting richer this week - let's gouge the American public!" Others, as discussed in a recent column in E&P, seem to think that the president has it within his power to somehow tell the oil industry to start behaving and lower those pesky prices.
Some are under the impression that high prices are due to a shortage of oil and gas, not a shortage of refining and transportation capacity. While oil and gas is getting a bit harder to find and a lot more expensive to produce, there's still plenty of it. But you can't dump a gallon of crude or a couple of unprocessed Mcfs into your gas tank.
It's not just in Houston that these misconceptions persist. A friend of mine in New York told me that he'd overheard a woman on a train blame Bush and the oil companies for the failure of emergency crews to respond quickly enough to the needs of the hurricane victims. "We should just blow up their refineries," she said (as if Katrina hadn't done a good enough job of that already). He couldn't help but point out that, if she thought gas prices were high now, she would be greatly surprised by the impact of such a stupid "solution."
Another suggestion being blogged is the one that proposes boycotting refineries that buy Middle Eastern oil. That one should ensure that domestic gas prices will peak somewhere north of champagne.
Why are people so uninformed about this situation? I must say that I don't see the oil industry doing much to dispel these misconceptions. Most of the press releases that find their way into the local paper tell of companies crowing about another record quarter. Yes, their shareholders need to know that their investments are well-placed. But without any other news finding its way to the general populace, it's pretty easy to understand why they think the oil industry is benefiting at everyone else's expense.
They don't know that a new refinery hasn't been built in this country in almost 30 years, or that the refineries that were operating before Katrina were blowing and going at full capacity, often on decades-old equipment prone to unplanned outages. They don't know that until recently refining margins were so low that the last thing a company might consider was building a new one. They don't know that crude supplies in this country don't necessarily support the construction of a bunch of new refineries. And they don't know that finding a site that's near a pipeline, near a port and not in anybody's backyard is virtually impossible in the United States today.
I challenge the industry to get the word out about what's really going on here. It's a pretty simple supply and demand imbalance. It's bigger cars that get worse mileage, greater distances to drive, more congestion, and a populace with its collective head in the sand when it comes to conservation. And when they just don't get it, our image suffers even further.

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