The news seems preoccupied with the price of oil, particularly gasoline at the pumps. The consumer is freaking out and for good reason.

At the same time, we are told that the United States has the most robust supply of oil on the planet. There is no oil or gasoline shortage in the United States. If that is so, why are gasoline prices at the pumps so high?

Gasoline prices at the pump are high because the United States pays a world price for its oil. In other words, we do not pay for oil based upon what it cost to produce and refine in the United States. Consumers pay gasoline prices based upon the world market price for oil. How does that make sense?

In the United States, we do not pay for anything based upon a unified world price.  Even for sneakers, most of which are made overseas anyway, there is no one unified set monopolistic price for sneakers. That is true of automobiles and anything else which is made both in the United States and overseas.

“The dominate role in world affairs played by the United States in this century is due largely to its virtual cornucopia of natural resource.” The Energy Crisis and Oil Imports. Energy in the United States was so plentiful that many states individually restricted the amount of coal and oil that could be brought forth from the earth.  Those who mine the ground for coal and drilled for oil received a depletion allowance. This was in effect a tax credit for the emerging energy business at the beginning of the 20th Century. The depletion allowance deduction encouraged natural resource exploration.

The United States realized even before World War I that dependency on foreign oil would be a disaster, especially in war time. Oil was and still is the blood that powers the war machine.

The concept of the “triple alliance of oil power” was first introduced to the nomenclature of the oil industry in 1973. The “triple alliance” consists of “a set of professional contacts, friendships between the federal bureaucracy, pressure groups, and........

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