Thursday, January 29, 2009

It's a Simple Question

Let me pose a story problem:

You live in Washington. Apples are grown in Washington. Lots and lots and lots of apple trees. In fact, Washington is famous for apples. In further fact, you live next door to an apple orchard, and your neighbor, that nice Mr. Jones, will sell them to you for a great price. All you have to do is walk next door, fill your basket, and you're set to go. Nice, fresh apples, great price - sounds pretty good, right?

Would you rather get on a plane and fly to Virginia to buy your apples? They grow apples in Virginia. What's wrong with taking a little plane ride and getting your apples that way?

Well, you have to buy a plane ticket. You spend over three hours on the plane (and that's a direct flight ... if there are layovers, it could take the better part of a day from door to door). You get out to the apple orchard, get your apples, package them to survive the plane ride back, do the actual traveling, and arrive back home with your apples.

Which choice would you make?

I think it's pretty simple. We'd all go next door, wouldn't we?

So can someone please explain to me why we're buying fuel from clear around the world instead of getting it from the state in which we live? If anyone can answer that question for me in as simple of terms as I have asked the question, I would greatly appreciate it.

10 comments:

Weston Elliott said...

You realize this is a 5 lb coffee can full of worms you're opening up, right?

Why are we still using fossil fuels, and paying farmers in the midwest not to grow corn, when you can pour regular, untreated vegetable oil into a diesel truck and it will run just as good as with deisel??? Figure out one, and you'll find the answer to the other....

Karlene said...

I've wondered that myself. I was told that it's because it's too expensive to get to the oil here in UT but that when oil prices rose to a certain point (can't remember, but we hit that point a while ago), then it would be cost effective to get it here. Wonder what excuse they're using now...

RobisonWells said...

Sure, that's easy.

Oil is a commodity that is sold on the world market. As such, all oil, everywhere, costs exactly the same amount. (Which is why you always hear about the price of a barrel of oil. That's the price of any barrel of oil, all across the entire world.)

So, you can't think about buying oil the same way you buy apples--there isn't an oil seller here and an oil seller there, and they try to compete for business. Instead, think of the oil market as a giant bathtub full of oil. When a company buys oil, they buy it from the bathtub--it doesn't matter who put the oil in the bathtub, it all gets mixed around anyway.

That's why we buy oil from a thousand different places; we buy it from whoever can ship it at the time we buy it. If that happens to be an oilfield in Wyoming, then we get it from Wyoming, but if it's Saudi Arabia, it's Saudi Arabia.

(Incidentally, the US is the biggest supplier of oil to the US. Next is Canada and Mexico. Those three countries put together account for about two-thirds of all the oil we use. It's a common misconception that we're getting it all from the Middle East.)

(Also, there's no way to change any of this without nationalizing the American oil industry.)

Cindy Beck said...

Can't help you there. Politics are unexplainable, because there are always deals happening under the table.

Rosehaven Cottage said...

SO true! You've boiled it all down to apples and... well, apples! Love it!

Cindy

Christine Bryant said...

Complete and total insanity. Need I say more?

Christine

Tristi Pinkston said...

I'm not scared of worms. :)

Thanks for the explanation, Rob.

ali said...

Loved your story problem Tristi.

And that was a pretty cool explanation from Rob there ;)

Jennie said...

Most gasoline used in Utah is from domestic oil (largely Wyoming) and refined in Woods Cross and our prices do vary a little from that of other parts of the country, but a factor most people don't consider when they see the price of gasoline is the amount of that price that is due to taxes on gas. Taxes vary greatly from state to state and country to country. People in Europe pay horrendous prices for gasoline, but most of that charge is taxes. Gasoline taxes are a political football since many people, including environmentalists want higher taxes on gasoline in order to reduce consumption. Most people in the West object because we normally travel greater distances between destinations in our big states without the option of mass transit, and the mid-west and west are largely agricultural which requires large amounts of gas. When taxes are increased on gasoline, trucking companies charge more to cover the additional expense, and the price of food and other commodities go up.

Candace E. Salima said...

Oh, I'll answer that question, Tristi. Because the Morons on the liberal left are convinced we're being selfish if we use our own resources, pour money (hundreds of billions of dollars a year) into our economy, create jobs, free us from the bondage our enemies hold us to (buying oil from OPEC, Russia and Venezuela) . . . that's all. Because of them, all that would free us from this economic crisis is out of reach. As I said, morons.

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