While Congress and Bush administration officials have been working to complete a bailout plan and stem the financial contagion on Wall Street, a different kind of economic crisis emerged across the South this week: A severe, hurricane-related gasoline shortage has curtailed trucking from Atlanta to Asheville, N.C., and created a wave of panic buying among motorists. The return of gas lines has largely flown under the radar of politicians who are usually keenly attuned, because their constituents are, to what's going on at the pump. But more of the Capitol gang should be paying attention to this. That's because nationwide our gasoline inventory is shockingly low. Liquidity must be restored soon to this market, or we could be facing a crippling run on the gasoline bank. And if you think Americans are outraged about Wall Street, wait until their Main Street grocery store doesn't get the bread and milk delivery for a week or two. The scenes over the past several days in places like Nashville, Tenn., Anniston, Ala., and western North Carolina looked like file footage from 1979 - with bags over empty gas pumps and quarter-mile long lines of cars waiting to fill up at stations that hadn't run out. AAA reported that drivers were so desperate that they were following tankers to gas stations to ensure a fill-up.
What's going on? The immediate answer is that the double whammy of Hurricanes Gustav and Ike, which swept through the Gulf of Mexico earlier this month, caused much of the Gulf's oil drilling and refinery production to be shut down. In particular Ike, which hit refinery-rich Southeastern Texas on Sept. 13, caused massive power outages in the Galveston and Houston areas.
As of this week, more than a dozen refineries around Texas City and Port Arthur were not operating at full capacity and, according to the Department of Energy, six refineries, with a combined capacity of 1.6 million barrels a day, were still not running at all.
But while the current shortages can be traced directly to the two hurricanes, the severity of the problem points out a bigger issue: The U.S. has been operating for a while with razor-thin spare gasoline capacity.
In its most recent Weekly Oil Data Review, Barclays Capital pointed out that the U.S. gasoline inventory has reached its lowest level since August 1967, when demand was a little more than half its current level of 9.3 million barrels a day. At 178.7 million barrels, inventories are 21.6 million barrels below their five-year average.
Senators removed a key obstacle Saturday to passage of a spending bill that combines help for Gulf Coast disaster victims and loans for automakers with record spending for the Pentagon.
The $630 billion-plus measure would end a quarter-century ban on oil drilling off the Atlantic and Pacific coasts, handing Republicans and important victory.
The legislation also would provide money to keep the government running past the current budget year, which ends Tuesday, and keep domestic agencies at current levels until March, effectively punting their budgets to the next president and Congress.
An 83-12 vote on a procedural motion set a final vote for Saturday afternoon. The bill then would go to President Bush, who was expected to sign it despite some reservations.
After hard lobbying, automakers won up to $25 billion in low-interest loans to help them develop technologies and retool factories to meet new standards for cleaner, more fuel-efficient cars.
The stopgap measure to keep the government in business was needed because the budget process broke down this year. Agencies would be funded through March 6 or until their regular budgets pass.
The measure is dominated by $488 billion for the Pentagon, $40 billion for the Homeland Security Department and $73 billion for veterans' programs and military base construction projects — amounting to about 60 percent of the budget work Congress must pass each year.
The budget legislation is the result of months of wrangling between Democrats who control Congress and the lame-duck Bush administration and its allies on Capitol Hill. The administration won approval of the defense budget while Democrats wrested concessions from the White House to obtain $23 billion in disaster aid and $5.1 billion for heating subsidies for the poor.
Smaller spending increases would gear up the Census Bureau for the 2010 count, boost spending for Pell college grants to avoid shortfalls, and fix problems in the Women, Infants and Children program, which delivers healthy foods to the poor.
The legislation also contains 2,322 pet projects totaling $6.6 billion, according to Taxpayers for Common Sense, a watchdog group. That included 2,025 in the defense portion alone that cost a total of $4.9 billion.
Under the radar of the 700 billion dollar Wall Street bailout and the Presidential debates are gas shortages, auto makers bailout, GI Bill increases and good ole pork barrel spending, to the billion dollar tune. History has shown that Congress and Presidential administrations like to pass controversial legislation under the cover of night or some other pressing national issue. In the auto makers bailout, lobbyists win and taxpayers lose. As I see it, auto makers can re-tool their factories for more energy efficient cars with the bank loans and easy credit the Fed is flooding the economy with. At a time when America is fighting two major occupational wars and threatening war with Iran and Russia, increases in the GI educational funding could wait. America desperately needs an anti-war and fiscally conservative Congress and President, in my opinion. Does that sound like Barack Obama or John McCain? Think Ralph Nader!
Source : Ap
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