9:14 AM

It's Time We All Fight Back

When I bought 27W last October, 100LL was hovering a little under four bucks...spendy, yes, but not a price that was unmanageable. But today, I am getting excited over finding $5.25 AvGas, and am willing to tanker fuel at that price to avoid paying the $6.50 it often costs off the truck at many major airports. Add that to the ridiculous prices Soccer moms and trucking companies are paying for regular and diesel, and it does not take a genius to figure out this country's economy is in serious and possibly fatal jeopardy.

Today, Associated Press tells us the problem is only getting worse:

"Oil prices spiked to a new record above $147 a barrel Friday, as rising hostilities between the West and Iran and the potential for attacks on Nigerian oil facilities gave investors reason to rush back into the energy markets."
Yesterday – like millions of Americans – we received an "open" email letter signed by the CEOs of 12 major U.S. airlines, saying the problem lies not with greedy oil terrorists, but in oil speculators who are falsely driving crude oil prices sky high. Here is that letter verbatim:
Open letter from airline CEOs:

Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now.

For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers.

Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.

The nation needs to pull together to reform the oil markets and solve this growing problem. We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com.
At first, I took this with a little grain of salt because it came from ATA member airlines, but today AOPA has fully supported the Stop Oil Speculation effort...which validates it for me. From AOPA:
With avgas prices hovering between $5 and $7 a gallon and auto gas prices double that of a year ago, nearly three-quarters of AOPA members have scaled back their flight time. Looking for any way to assist members in what is becoming an aviation fuel crisis, AOPA joined a new, rapidly growing coalition late this week that is led by the transportation industry to do just that: Stop Oil Speculation Now (S.O.S. Now).
When you go to the SOS site, you see the following:
The Problem - What is causing the high price of fuel? The oil price bubble is unfairly taxing American families and restricting our nation’s economic potential. While everyone is aware that supply and demand constraints contribute to price increases, there’s another force at work that, like gravity, is invisible yet powerful. This force is rampant speculation.
The SOS site offers clear solutions to bring back sanity to oil pricing. If you fly airplanes or drive cars in the United States of America, you have a civic duty as a responsible citizen to go to the SOS site and read EVERYTHING on it. When you have done that, if you are not compelled to write your congressperson and urge them to back legislation to do what SOS is asking, you will lose your right to bitch about high gas prices.

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