Gas prices, and other dumb questions

Gas prices are going up. Oil prices are going down. I feel that we are all being screwed. The excuses in the news media are pretty thin: a shortage of refinery capacity in the USA should merely lessen the demand for Canadian oil. A shortage of refinery capacity in Canada was, imho, engineered by the companies because they can forecast how much gas we are going to burn: they can predict economies, climates, and social choices.

Even more annoying, the oil prices quoted aren’t strictly oil prices: they are the prices of oil futures, which are supposed to be used by those needing to get or sell oil to manage future price risk. In fact they are mostly used by traders to make a profit out of panic and other sources of market volatility. I am reminded that a very large fraction of commodity contracts get washed, ie they don’t actually get delivered.

Even more annoying, companies like EXXON are making record profits.

So, now for today’s dumb questions:

  • Why did the government back out of PetroCanada? By having a presence in the fuel market, it had a chance to influence that market and reduce gouging.
  • Why do oil companies get interesting tax breaks?
  • Why do we not charge higher royalties for extraction, especially of oil, and especially of tar sands oil?

I am reminded that at one time the Province of Ontario ran a Savings Office to have a presence in the banking / trust company business at the retail and small business level. The province eventually shut the operation down, thereby taking away one lever of control on that business sector.

So, the final dumb question:

Is there a reasonable list of functions that are so central to all our daily lives that the government should run, control, or regulate them? I suggest the following:

  • Energy. Gasoline, natural gas, electricity, diesel, hydro, wind power, photoelectric.
  • Energy distribution
  • Airports
  • Roads
  • Health care. Universal cross-country qualification and coverage.
  • Education. Standard tests throughout high school.
  • Education. Scholarships for the exceptionally bright. Cheap loans for everyone.
  • Banking

There must be others. Housing, for example, but that sounds to socialist to successfully ask for. If all homes were built at the same price regardless of location, the building industry might stop buying up farmland, perhaps even stop lobbying to rezone green space.

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