why high gas prices (Journal 6)

People are worried about the high prices of gas. Gas prices have reached record high according to AAA's Fuel Gauge Index which measures gas prices around the nation. Gas prices in 2001 cost just 1.53. Today the price of the gas per galon is about 3.60 per galon. The refining capacity, the supply and demand, and the lack of politics of energy are some of the the causes of the high prices in gas.

One of the most important factors in the cost of refining is the process of transforming oil into gasoline. Even if the oil were cheap its transformation is quite expensive. Existing refineries in the U.S that produce gasoline and other oil-products in the 90 percent plus range of their capacity, and it causes the lack of oil production. There is a big demand of oil and refineries cannot stock up this demand. One solution is opening new refineries, but not new refineries have been built in the U.S for over 32 years because these are subject to environmental restrictions.

The second factor is the supply and demand. China, India, Indonesia, and other third world countries are using more oil because their middle class population is growing, so they demand a large amount of oil. Americans also are consuming more gasoline today than a years before. Moreover, high demand from growing countries is keeping oil prices high. The world economy has been growing rapidly as a result, oil demand has been increasing faster, and it causes high prices in gas.

Finally, the lack of politics of energy is other factor that causes high prices in oil. Politics of energy need to be reformed in order to regulate alternative energy, for example, the exploration of new areas where government can drill oil, the building of nuclear power plants, and other kind of alternative energy. The politics of energy in force do not allow drilled oil in new areas where it is known oil exists. At the same time, the law in force contains environmental regulations that restrict built nuclear power plants. The U.S has not built a single nuclear plant in the last 12 years because of the restrictions in law.

In conclusion, the refining capacity, the supply and demand, and the lack of politics of energy are three important factors which determinate high prices of gas. The world has changed, and it needs to adapt new discoveries about alternative energy. The U.S needs to build new refineries, nuclear power plants, and it is urgent to reform the law in force which has environmental restrictions that do not allow working in finding alternative energy.