Tired of price politics

Despite a current overage in supply, U.S. gas prices have risen by almost 34 cents over the past two weeks. According to the Lundburg Survey, that's the second-biggest price jump in the history of the gasoline market. Between August and September 2005, prices jumped 46 cents. Lundburg is an independent petroleum market research company that tracks gas prices at pumps nationwide.

Gas has risen 55 cents per gallon in the past year, despite an oil glut. Why the reverse effect of theoretical supply and pricing? Unrest in crude-rich North Africa and the Middle East spikes speculative fears, say experts. Ironically, the most common benchmark for pricing isn't overseas, but west Texas.

Part of our reliance on foreign crude derives from a decrease in domestic refining capacity, as compared with the 1990s. Before you complain about shipping jobs overseas, consider that a contributor is the decrease in American students who choose engineering as a college major (although lucrative and in high demand). Fewer American engineers to design and run refineries lead to imports and outsourcing.

Domestic events also affect prices. Hurricane Katrina knocked out 25 percent of crude production and about 17 percent of our refining capacity in fall 2005. According to the Federal Energy Information Administration, four elements determine the price consumers pay for gas:

* The price of crude oil (48 percent)

* Taxes (23 percent, over half of which is state taxes)

* Refining costs (17 percent)

* Distribution and marketing costs (12 percent)

Note that demand is not one of the four main factors. While demand took a sharp dip in the early '80s (and a smaller dip in 1991), it has steadily risen since.

The highest price since 1994 was $4.10 in July 2008. The lowest was $1.09 in December 1994. Last week the national average was $3.34; yesterday it ranged from $3.11 (Coeur d'Alene) to $3.45 (Boise) in Idaho.

Time to chuck this and get serious about alternative energy.

Sholeh Patrick is an oil brat and columnist for the Hagadone News Network who's ready for a hybrid. E-mail sholehjo@hotmail.com