Wednesday, February 29, 2012

Why are gas prices on the rise?

Why are gas prices on the rise...AGAIN
Well because it’s that time of year...again.  Winter is starting to thaw and we are all looking forward to spring and summer, unfortunately the oil industry is looking forward to spring and summer as well.  During the warmer months oil demand and oil consumption rises leading to higher prices, but it’s not that simple.  In fact when it comes to any GLOBAL market nothing is ever simple.  So, why exactly are gas prices going up this year?  There are numerous factors which go into creating our gas prices, but a few weigh more heavily on the market than others.   

What IS behind the rise of gas/oil prices:
The Arab Spring/Tensions with Iran: "Whether is Libya, Egypt or Iran, which is locked in a bitter dispute with the West over its nuclear program, Iran exports 2.2 million barrels of oil a day, mostly to Asia…More importantly, Iran sits astride the Narrow Strait of Hormuz, through which one fifth of all the world's oil production passes."
Growing demand: "Chinese growth is particularly important as it is driving its oil consumption growth...Chinese growth, along with growth from other developing counties, means the world is expected to use more oil in 2012 than it ever has -- over 90 million barrels a day, according to EIA."

Speculators: "Gasoline investor interest is even greater, according to Tom Kloza, chief oil analyst at the Oil Price Information Service. Kloza said there is now $12 billion in fund money -- the most ever -- betting on a higher price for the benchmark U.S. gasoline contract."
Refineries: "Several refineries along the U.S. East Coast have recently closed. The refineries closed because, ironically, they weren't making any money...They were older refineries that could only process the type of light, sweet crude currently being imported from Europe -- the type of oil that is very expensive."
What IS NOT behind the rise of gas/oil prices:

OPEC production decisions: "The cartel is actually producing more oil than is required to meet demand."
Non-OPEC production: "A rise in oil output from the Untied States, Brazil and elsewhere is balancing out production declines in Mexico, Russia and other countries. "
Weather: "A warm winter in the United States balanced out a particularly cold one in Europe."
Inventories: "This is oil stored in tank farms at refineries and other places. The amount of oil here is generally at average or above average levels."
The dollar: "A falling dollar tends to boost oil prices, but the dollar has actually gained against the euro in the last two months."(Sorry Sen. Rand Paul the experts say otherwise...

Listen you are going to hear a lot of things in the coming weeks and months about rising gas prices from politicians seeking nominations (cough...Newt Gingrich) or reelection in 2012.  However be cautious, as “House” my favorite TV doctor says…“everybody lies”...  It is an election year those involved will be looking to score cheap political points by assigning blame or making promises…even if the blame is unwarranted or they can’t deliver on those promises later. 
If you want a fact that might make your head explode here you go…America’s #1 EXPORT IS GAS.  Yep, that’s right the same country who IMPORTS more gas/oil than any other country on planet earth also EXPORTS gas/oil more than anything else. How can this possibly make sense?  Well when you mix in the weak economy and lowering demand from Americans having more fuel efficient cars/trucks domestic oil companies have shipped more oil from our domestic refineries overseas into the global market. Why do oil companies do this?  Why! In the global market oil companies can make more money selling gas/oil to countries with increasing demand and increasing consumption.  Basically this time the "free market" is biting us in the  However its not all bad (to find the silver lining) any gas/oil shipped from America into the global market will lower the price of gas/oil overall, it just wont help us out AS MUCH AS if it were kept here at home.  
The bottom line is this….The oil market is GLOBAL and while there are some things we can do, there are a number of factors that are simply out of America’s control.  So given the reality of global economics and its impact on gas/oil prices, what do you think America should be doing to lower gas prices? 

Monday, February 20, 2012

Obama-care, birth control and Catholics…Oh My!

Obama-care, birth control and Catholics…Oh My!
Before we get into the HHS ruling itself let’s understand first that President Obama’s proposal is NOT new, groundbreaking, or radical.  Despite how Republican Presidential candidates (cough...Rick Santorum) or Fox News want to spin it, this regulation is nothing new.  To back up that claim let’s get some perceptive on how exactly this rule fits in with other similar laws from around the United States.  A majority of states,28 states to be exact, already have similar laws that require contraceptives to be included in prescription drug insurance coverage.  Eight states have laws which do NOT have ANY exceptions for churches or other PRIMARILY religious institutions. 

The government calls these organizations which are primarily religious institutions “religious employers”.  So what is a “religious employer”?  Actually, the law has four criteria for what constitutes a “religious employer", if an organization does not meet ALL of these criteria, that are listed below,  it is not classified as a "religious employer."
-          Is a nonprofit organization
-          Has the inculcation of religious values as its purpose
-          Primarily employs persons who share its religious tenets 
-          Primarily serves persons who share its religious tenets
Now, President Obama’s proposal would exempt churches and some parochial schools from having to provide contraception coverage because LEGALLY they meet all four criteria and are viewed “religious employers”.  Unfortunately some hospitals and some universities will not be exempt because they do not meet the LEGAL standard for a “religious employer", this is where the debate is currently focused.  However Catholic institutions such as DePaul University and Georgetown along with numerous others around the nation are already required to include contraception with their insurance coverage, remember as I stated before there are 8 states which provide NO exemptions at all.
Furthermore the organizations that do not meet the criteria for a “religious employer” are not being required to DO anything themselves, besides providing  the insurance coverage to their employees which then enables the employee to make the choice for themselves on contraception.  No one is being forced to prescribe contraception or take contraceptives.  The hospitals are NOT required to provide the contraceptives themselves, and they are NOT being told they have to administer these contraceptives that they morally disagree with.  The federal government is simply saying that if they, as the employer, are offering  a prescription drug insurance package that they must cover contraceptive care.  Women do have a legal right to contraception coverage IF the provided health plan covers prescription drugs and devices. 
…“In 2000, the Equal Employment Opportunity Commission (EEOC) ruled that employers may not discriminate against women in their health insurance plans by denying benefits for prescription contraceptives, if they provide benefits for drugs, devices and services used to prevent other medical conditions. This decision was reinforced by a federal court decision, Erickson v. The Bartell Company, in June 2001…The EEOC decision was issued in response to complaints filed by two women who claimed that their employers discriminated against them by not providing health insurance coverage for prescription contraceptives. The EEOC held that these plans discriminated on the basis of sex and pregnancy, in violation of Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act.”

Also, lets keep in mind that 2012 is an election year.  Republicans and Democrats are searching for anything they can twist, use, or manipulate into an issue so they can gin-up support.  Republicans are trying to use this issue,they are trying to frame it around the idea that religious freedom is being attacked in hopes it will ramp up the socially conservative base.  Think I am nuts? Remember those 28 states that already have similar contraception coverage rules, some of those had strong bi-partisan support and were signed into law by Republican Governors. In 2006, Republican Gov. Mitt Romney (now Republican Presidential Candidate) signed a healthcare overhaul that kept in place a contraceptive mandate signed by his Republican predecessor. Did that create a media firestorm?  In 2005, then Republican Gov. of Arkansas Mike Huckabee (who would later go on to run for President himself) signed a contraception coverage law which did exempt “religious employers”.  Where was the Fox News outrage then?  In 2000, when Iowa became one of the first states to enact a contraceptive coverage mandate, the Republican legislature overwhelmingly backed the bill, which has no exemption for “religious employers” of any kind.  My point is contraception insurance coverage was not a “hot button” issue until election year politics falsely framed the debate around the 1st Amendment, and then tried to make the Catholic Church a victim of an Obama war on religion.  (Check out the link for more examples of Republicans supporting contraception mandates.)

Do not be a prisoner of the moment.  Issues that come up are rarely the best, worst, most, least, or unprecedented.  Hyperbole has run amuck in American society for a long time and our political scene is no exception.  I know there are aspects of this debate I didn’t highlight, like the cost savings that contraception can help with, but I wasn’t trying to evaluate every possible angle of this saga I just wanted to bring some context to the debate.  

So now that you have SOME perspective on the “Contraception Controversy” have your views changed at all? What do you think...comment below


Updated 4/28/12:
(Watch link)
Emily Herx, a 32 year old woman from Fort Wayne, is suing the Diocese of Fort Wayne-South Bend for discrimination.  Mrs. Herx is claiming that her termination from St. Vincent de Paul School is due to her receiving in vitro fertilization treatments, a procedure which the Catholic Church believes is an “intrinsic evil.”  The school denies the claim of discrimination and has stated it “has clear policies requiring that teachers in its schools must, as a condition of employment, have a knowledge and respect for the Catholic faith and abide by the tenets of the Catholic Church.” That doesn't exactly sound like a denial of the facts to me but ok......

Unless the facts of this case change this law suit may ultimately whined up in the Supreme Court.  Because despite recent court rulings on SIMILAIR cases, there is not a defined legal precedent for a case such as this as the attorney explain in the video link. 

This one may be a case we are all watching…