Shock and Oil

Wednesday, June 25, 2008

Rummaging through old articles from The Post, my wife came upon Teresa Wyszomierski's "Where Cheap Gas Takes Us; the Threat Abroad in That Bargain Fill-Up" [Outlook, March 7, 1999].

Nostradamus had nothing on this woman.

She wrote: "With gasoline prices at less than a dollar a gallon -- an all-time low -- it's getting easy for Americans to fill up their gas-guzzling Pathfinders or Tahoes without a twinge of worry. But the same low fuel prices have also set two trends in motion overseas that could prove disastrous for the economy of the Middle East, the fortunes of Western oil companies and, ultimately, the pocketbooks of those same American consumers."

First, Ms. Wyszomierski warned, because of cheap gas, Americans faced the danger of becoming overly dependent on Middle East oil. Second, she said, the low price of Middle East oil was causing economic instability in that region, sparking scattered social unrest and raising the risk of attacks on oil installations -- which would leave America vulnerable to oil-supply disruptions.

I suggest that The Post reprint this piece, in light of all that has transpired since it was published, with particular attention to how the Bush administration defied all the logic contained in the piece, to the detriment of all of us.

HOWARD SCHMITT

Pittsburgh

·

The June 23 front-page story "Houston's Pipelines of Prosperity" touched on the extent to which new American jobs are directly and indirectly created by the domestic oil and gas industry but neglected to fully explore how high oil prices are harming refiners and petrochemical producers. The reality is not as pretty as it has been portrayed.

Our businesses, large and small, buy oil to produce fuels and petrochemicals that are the building blocks of everything from plastics to clothing to medicine to computers. High oil prices increase our costs, which is why refining margins have declined over the past two quarters, with some companies even taking losses.

Refiners are, indeed, massively expanding capacity at existing facilities, but that's been ongoing, equivalent in size, on the aggregate, to one new large-scale refinery each year. Expansions, upgrades, environmental modifications and new efficiencies are where billions of dollars in profits are reinvested every year.

CHARLES T. DREVNA

President

National Petrochemical

and Refiners Association

Washington