Welcome to today's edition of the Rush 24-7 podcast.
Well, thank you, Johnny Donovan.
Thank you very much.
What a pleasure it is to be back here.
I know, I know you're disappointed that Rush isn't here.
I'm always disappointed when Rush isn't here when I turn it on.
At least he gave you a heads up.
He is on a long-planned day off.
He's not on vacation, but this was long planned, I'm told.
And it still upsets people.
I've read the emails.
People say, how dare you take a day off?
We need you on the front line every day.
Well, he has a day off, and I'm here and happy to be here.
I'm a fellow student here at the Limbaugh Institute for Advanced Conservative Studies, where there is never a final exam, but we are tested every day.
And as a fellow student, I guess I would be merely a teaching assistant.
I'm a teaching assistant with one little caveat, one switch.
I will never go on strike.
I'm a TA that will never go on strike.
And you're right, HR, I'll never get tenure.
I can be fired.
For no reason, even.
There doesn't even have to be a reason.
They can come in and say, Paul, you're fired.
I just hope they don't do it like Donald Trump.
That's all I hope.
That's what I hope.
Well, we have so much to talk about today.
And obviously, we always want you to be a part of it at 1-800-282-2882.
That's the direct line for fellow students here at the Limbaugh Institute for Advanced Conservative Studies.
It's 1-800-282-2882.
The president spoke out today.
The president has gone headlong into the politics of big oil.
And he had to.
He's not getting re-elected.
He doesn't care about that, but he does care about his party, and he cares about how other people are going to be elected or re-elected.
So the president has entered the political fray.
You got Frist, you got Hastard, you got all these guys in here calling for an investigation and price fixing and the profits of the oil industry.
So we're going to hear from the government today.
We're going to hear from big oil.
They've taken out big full-page ads with facts that they say are true that kind of build on their case, which is what you'd expect them to do with their full-page ads.
The pundits will weigh in.
Ben Stein.
I love Ben Stein.
I'll explain later why specifically I love Ben Stein.
There are a lot of reasons.
But Ben Stein has hit some things right on the money, I think, bullseye in some of his explanations of what's going on with the oil industry.
Plus, he has a new book out that nobody has spoken with him about yet.
It's How Successful People Win Using Bunkhouse Logic to Get What You Want in Life.
We will welcome in Massachusetts Governor Mitt Romney.
And he has worked out a deal that included the Heritage Foundation and Senator Ted Kennedy.
Now you've got the Conservative Heritage Foundation and the not conservative Ted Kennedy agreeing to what may be the groundwork for universal health care.
Now, some people are for it, some people are again it.
And we'll hear from both sides, and we'll hear people, and you too will weigh in on our line at 1-800-282-2882 because I want to hear what you have to say.
And of course, somebody after Mitt Romney, somebody from the Heritage Foundation, will explain to us how this universal health care is supposed to work.
So we've got a nice list of guests coming up.
And we had to talk about oil.
There's just no way around it.
Let's face it.
Where you are, the headlines are the same thing.
Where I am, with the television monitors on, it's all oil all the time.
Summer in the city fuels gas pains.
USA Today was today it was the pain and the gain.
Gas prices soar hit records in California.
And if you don't live in California, you don't care, but you know how much it costs for you to pump your gas where you are.
Oil companies expected to report robust earnings today.
That will add fuel to the fire, no pun intended.
Big rage at big oil, Dems, and Republicans demand probe.
Petroleum paranoia.
Senator calls for gasoline price fix probe.
The list goes on and on.
A U.S. population explosion increases demand for oil.
The explanations or excuses are running rampant.
But we all smell blood and we want blood.
And you know why?
I mean, it's simple.
It's very simple.
When I'm standing there filling my car with gasoline and paying three bucks a gallon, I'm thinking of Lee Raymond.
I can't help it.
He may even deserve it.
He retired from ExxonMobil with a $400 million retirement package, and there's all kinds of ways it can be justified.
And it probably is justifiable.
I'm a free market kind of guy.
This guy was the overseer of an amazing turnaround at Exxon and phenomenal profits, $36 billion, et cetera, et cetera, et cetera.
He is to be rewarded in the way our system is set up.
And boy, was he rewarded.
And I promise you, if the story hadn't just run recently that he got a $400 million retirement package, the story would not be as big as it is right now.
It's always going to be a big story.
I do think that maybe the politicians forget that we do have memories.
We don't have long memories.
I understand that.
But every year at about this time when gas prices go up, there's a call for this kind of an investigation.
You know, the only difference this year is, and I'm not certain why, although there have been a lot of questions I've had about our friends on the Republican side of the aisle, they never jumped in the way they've jumped in this time.
And that's because while they're trying to save us at the pumps, they're trying to save themselves at the polls.
No question about it.
That's it, plain and simple.
Otherwise, you wouldn't see Republicans acting like Democrats.
It's a part of the Democratic playbook to do this sort of thing.
But we're a little bit surprised that the Republicans are doing it and a lot surprised, frankly, that this president is doing it because he hasn't generally played into this sort of thing.
But I guess when Frist and Haster and others in his party come to him and say, you got to look into this stuff, the president says, I do have to look into this stuff.
You're right.
I have to look in to see if there's price fixing.
I have to see if they're doing something that they should not do.
That is the government's responsibility.
He also went on to say, of course, today that it is all of our responsibilities to get off our dependency on oil.
We've talked about that for so long.
Back in the failed practices of Jimmy Carter, where we then had shortages, do you remember sitting in line to buy gas or having to do it every other day?
I can't even remember what it was.
It was some kind of a, what was it, odd even with our license plate?
Or odd even, I guess, with our license plate.
Thanks, Mamon.
That was ridiculous.
But that again was when a president stepped up and got involved in price fixing of the worst kind.
So there's a lot to talk about.
And I know you're angry.
And I don't blame you.
But I don't know that the answer is to go after our energy security because that is one thing that we do have and we'd like to continue it.
And there are people who point out all kinds of things.
You know, you might want to ask the political people making hay in your backyard on this oil issue, why don't they go after something that they really can control?
Because unless they're doing something illegal in the oil business, there's not a lot government can or should do to control prices.
On the other hand, if they're doing something illegal, then they should throw the book at them, you know, as hard as they throw the book at, say, illegal immigrants.
But anyway, the fact of the matter is, you work 30 days to fill your tank and 116 days to pay your taxes.
Tomorrow, tomorrow is Tax Freedom Day, two days later than last year, two days more that you have worked full-time for the government, full-time to pay your taxes, 116 days to pay your taxes, 30 days to fill your tank.
Your representative can do something about the latter, the 116 days to pay your taxes.
There's not a heck of a lot they can do, but say they're on your side and feel your pain on the gas issue.
But be that as it may, we'll get headlong into that with a representative of the government, the president's National Economic Council head, Al Hubbard, is going to be here with us in just a moment.
We will then talk with John Felmy, chief economist, director of the American Petroleum Institute.
We'll get their side of the story, the big oil side of the story, and then various pundits and phone calls like your own, and Ben Stein, who I think we're just going to love.
I've never talked to Ben Stein before.
I've always read his work and enjoyed it very much.
What was his Ben Stein's Money?
He had a television show I saw a couple of Win Ben Stein's Money.
It was a funny show.
It was a great show, and that's when I realized how brilliant he was watching that and reading some of his work.
And I think you'll enjoy his take on this.
He may even talk about McCarthy, you know, the leaker.
I'm not sure.
Because Deep Throat's out there again, he wrote a very cutting, wonderful piece on Deep Throat a year or two ago.
Maybe we'll dig that up too and share that.
And we'll talk about his new book, as I mentioned.
And Massachusetts Governor Mitt Romney, with his universal health care, that some people are totally against.
Wall Street Journal hates it.
They just have written time and time again about it in a negative way.
On the other hand, he did get the Heritage Foundation and Ted Kennedy together to get this thing worked out.
Now, last time I was here, oh, by the way, and I think we can, HR, I think we can do this.
I think HR on the elevator coming up just now, and he said, you know, I don't know how reliable elevator news is.
I'd say about the same as CNN, on the same level.
Riding up in the elevator, you know, in New York, because everybody's so fidgety and they've got to sell advertising on everything in elevators, there are television screens with sometimes cartoons if they haven't had a very successful sales month, or commercials or news or whatever.
On the elevator.
You know how when you get in an elevator, you're kind of afraid to look at anybody.
Well, in New York, it's really true.
You look down at your feet or you look up.
Well, now when you look up, there's actually a television monitor.
And on the television monitor, HR said it just reported, this just into the elevator, that consumer confidence is at a four-year high.
How can that be?
Consumer confidence is at a four-year high.
You can trust it.
You can believe it.
It was just on the elevator.
I think this would be as good a time as any to say, I'm Paul W. Smith, in for Rush Limbaugh.
As we continue here on the Rush Limbaugh Show, 1-800-282-2882, 1-800-282-2882, I'm Paul W. Smith in for Rush Rush with the day off.
He'll be back in the chair tomorrow, as scheduled.
We have Al Hubbard online, head of the President's National Economic Council.
Mr. Hubbard, welcome to the program.
Delighted to be with you, Paul.
Thanks for the kind invitation.
We have just a few questions and want you to maybe help us understand a couple of things.
You know, when the oil prices touched on about $70, $71, $70.85, according to Kevin Hall, who kept a better record than I last August, many experts thought that such high prices, if sustained, would toss the U.S. economy into a recession where it's $75 a barrel.
I haven't heard a word about recession, and you're not going to understand what I'm talking about, but I hopefully our listeners do.
By the elevator news, in fact, we're at a four-year high in consumer confidence as well.
What's going on here?
This economy is very, very strong.
That's what is going on.
And the American people are understanding that.
And there is no question we are all concerned about high gasoline prices and high fuel prices.
And we are particularly concerned because of the impact it has on lower income people and small businesses because they haven't budgeted for this.
But the good news is our economy is very resilient.
It is very flexible.
And it has been able to absorb these high energy prices and continue to grow quite handsomely.
In fact, most economists are projecting first quarter growth this year will be north of 4 percent, maybe as high as 5 percent.
We believe that we will grow in the low threes this year, which means we will be creating more jobs and job entrance, so that low 4.7 percent unemployment rate will continue to drift down.
The bottom line is this economy is remarkably strong, and it is not because of the government, it is because the government has left more money in the hands of the people.
And the American people are very entrepreneurial, they are very hardworking, and the result is this strong economy.
What would you like us to take from the President's speech just a few minutes ago, in fact?
You have gone over this.
Some of this stuff has been a repeat of what he said last week.
What is the most important thing we as Americans should take with what the President had to say?
He went into growing America's energy security, getting off the dependency on oil.
He did mention what you just did.
The economy is growing, and the entrepreneurial spirit is strong, and the economy is growing very fast.
He called for the tax cuts to be permanent.
There were a lot of things.
Do you expect any kind of a pushback on waiving the EPA regulations to relieve the fuel shortages?
What are the most important notes you want us to take from what the President had to say?
Well, I think that the two things that I think are most important when it comes to energy right now is obviously the President is very concerned about high energy prices and high gasoline prices.
And I think you can tell based on his speech today that he is committed to doing everything he can to mitigate, to minimize the impact of the high fuel prices.
But he is also very candid and making it clear that it took us a long time to get into this situation.
We have known that we were becoming too dependent on foreign sources of fuel.
And unfortunately, we haven't done what we should have done.
I mean, 10 years ago, we should have passed ANWAR, and then we would be producing from ANWAR today, and that would represent a million barrels a day of oil.
And there are a number of other things we should have done.
But at the same time, the President wants to make those investments today that are going to pay off to not going to get immediate relief, but in the long run, we are going to sever our addiction to oil.
We are going to achieve energy independence.
And in the meantime, he is going to make certain that the oil companies are not gouging or taking advantage, unfair advantage of the American consumer.
That is why he has directed the chairman of the Federal Trade Commission and the Attorney General to be ever vigilant in making certain that there is no illegal activity, no collusion, no monopolistic pricing in the US.
Just a quick note here.
This has been called for before by people running for office.
It hasn't been called for by the President of the United States in a long while.
It seems to me that when these investigations have happened on a state-by-state or even local basis, there has been very little of that price gouging, price fixing.
Well, that's right.
I mean, economists will tell you that the oil industry is a very, very competitive industry.
At the same time, we want to make certain that there are no markets where companies are taking advantage of A short supply situation and behaving illegally, either colluding with their other competitors or using monopolistic pricing power.
We want to ensure that the free market is, in fact, working.
And by the way, the President's calling on the Attorney General, calling on the Chairman of the FTC, who are in turn asking the Attorney Generals of the States to, again, to do the same thing to make certain there's no price gouging going on.
But this is something that is ongoing.
The Chairman of the Federal Trade Commission has a study that's been going on that she's going to be reporting in the next several weeks.
So, you know, fortunately, we haven't discovered any colluding activity going on, but we will remain ever vigilant to make sure that there's none going on.
Before we let you go, the President did say there are too many localized fuel blends, boutique fuels.
Is that something he can snap his fingers and do away with?
And also, he said that we haven't had a new refinery built on our soil in like 30 years.
Can he also snap his fingers, get rid of the tough regulations and all the stuff that the companies have to go through to open a refinery?
Unfortunately, he can't snap his fingers and do either.
You know, our system requires that Congress pass legislation, and the President called on Congress to make it possible for refineries to get their permitting within a year.
Because, you know, we need our refineries to expand.
We have a shortage of refinery capacity, and we need them to expand, and we'd love to see new refineries being built.
And the good news is that there's actually a million and a half barrels of oil on the drawing board of new refinery capacity.
With respect to boutique fuels, that is very inefficient.
The President has asked Administrator Johnson to call the governors together to work on reducing the number of boutique fuels.
So, you know, it will be a much more efficient way of delivering our gasoline, and the result will be a lower price.
But again, that can't happen without the involvement of Congress, without the involvement of the states.
But the President is showing his leadership to make that happen.
Mr. Hubbard, thank you for joining us.
Thank you, sir.
I do appreciate it very much, sir.
Al Hubbard is the head of the President's National Economic Council, now under great security and probably from a secret location.
In this next half hour, besides taking your phone calls, we will hear from John Felmy, chief economist and director of the American Petroleum Institute.
That's right.
We will actually speak to someone from Big Oil.
The bad guys in this whole story.
As I say, under great security.
And I don't even know.
H.R., do you even know where he is?
Complete secrecy.
He's not on the elevator, is he?
Getting all of his news from the elevator?
I'm told that that, by the way, is the Captivate Network, which pretty much says it all.
Although it does remind me of a good book called Captivating, but that's another story.
And we'll continue other stories here on the Rush Limbaugh program.
I'm Paul W. Smith.
Thanks, Johnny Donovan.
And we're going to get to some of your calls.
You've been kindly standing by.
I appreciate that.
You know the number.
It's 1-800-282-2882.
1-800-282-2882, the Rush Limbaugh program.
And we went from Al Hubbard, the President's spokesperson, if you will, to now John Felmy, Chief Economist and Director of the American Petroleum Institute Statistics Department.
And John, welcome to the program.
To some, you may be considered the enemy.
It's an emotional issue when you stand at the pump and you pay that kind of money for gasoline that you have to pay.
And then you think of the Exxon chairman, Lee Raymond, retiring, $400 million retirement package.
Whether he deserved it or not doesn't matter.
It's an emotional issue, and people, as you know, are angry, and it's become very politicized.
And so we wanted to get your side of the story.
You have full-page ads out in many newspapers around the country.
That generally means either A, you're really in trouble, B, you believe that your true story isn't getting told, which probably is closer to the reality here, and that you have some things that you want to say to at least mitigate some of the anger and feelings.
And some of our listeners will probably be angry.
I would suspect many more of them are, in a sense, on your side.
Good to have you with us, John, with that lengthy introduction.
Well, thank you very much.
I very much appreciate coming on, and I want to thank you all because of the Limbaugh show, you've probably extended my life some because you lower my blood pressure.
So I appreciate it and honor to be here.
You're right.
I mean, it is an emotional issue.
And the fundamental problem we face is one of lack of information.
Most consumers, well, everybody in the world knows the price of gasoline, but nobody knows what goes into the price of gasoline.
You know, nobody knows that, you know, crude oil was $75 a barrel on Friday, and that works out to $1.79 a gallon almost.
And they pay taxes, nationwide average of $0.46, $18 federal and the rest state.
And they have no idea that we've changed the fuel this year because of environmental regulations to lower the sulfur content and to change from MTBE, which is an additive, to ethanol because of state bans and a variety of challenges we face.
And so they don't know all these things happening.
And so it gives an opportunity to politicians to try to exploit that lack of understanding.
And they surely have.
Well, they certainly have, and it's easy.
What's different this time around is there are as many, seemingly as many Republicans as Democrats that are quote-unquote exploiting this.
And that's got to be a little annoying and a little frustrating because you need somebody out there to at least see your side of the story.
Earlier, I had mentioned on my morning program that one of your ads was very helpful in that you were showing how many cents per dollar of sales you actually get.
Where banks are getting 17.7 cents of every dollar, or pharmaceuticals, 16.7 cents.
You guys, at least in this ad, oil and natural gas, about 5.9 cents.
That's correct.
That's the five-year average.
Now, it improved last year.
We did have a higher rate that it was about 8.5%, but it was still below these other industries.
And it, you know, we think is a fair rate of return, but you've got to accurately state it because we've heard that a lot of consumers, half of them, probably think that we make 30% profit rate, and even more think that it's as much as 80%.
So we're just trying to set the record straight in terms of what the facts are versus the rhetoric.
Well, another fact, for example, is that the oil companies have paid more than $2.2 trillion in taxes over the past 25 years.
That's adjusted for inflation, and that's more than three times what the oil companies have earned in profits during the same period, which is, again, I say, if you work 30 days to fill your tank and 116 days to pay your taxes...
and since politicians can do very little about the commodities market because it's not controlled by the United States anymore, it's controlled all over the world.
We ought to be holding our politicians their feet to the fire to do something about something they can do something about, which are the taxes.
I think we certainly need to work with the Congress.
We need to, you know, instead of just pointing fingers the way it's been happening for years, of course, but let's really address what will help consumers.
And, you know, you've heard all these calls for investigations.
And, of course, it's the duty of politicians to look out for their constituents.
But we've been investigated dozens of times, been exonerated every time.
But every time somebody calls for an investigation, it's a stain on the industry for no good reason.
Go ahead.
If all of this, if I'm to accept everything you've said, and I am accepting everything you've said so far, it does still bring up the question that people throw at me, and that is, well, that being said, okay, they don't make a lot more on each dollar.
In fact, they make much less than many other industries.
And their profits are not up as high as many other industries, et cetera, et cetera.
How come their profits are so high if you're not making that much more on every gallon of gasoline sold?
Why does Exxon make $36 billion in such a good year?
There are several reasons.
First of all, the companies have increased their earnings because of mergers.
They've been able to merge, like ExxonMobil, those two companies, and dramatically cut their costs.
But the average person believes they did that to cut our availability of gas from other people and to cut competition, which is what has driven prices up, they think.
And that's what our industry opponents will regularly charge, but it simply is not true.
I mean, just because you have fewer competitors does not mean you don't have as fierce a competition.
After all, the most concentrated industry on earth is microprocessors, and they're probably the most competitive, where you just have Intel and advanced micro devices, and they try to rip each other's throats out over competition.
So there's plenty of competition, but what we do need is scale for these size of companies to be able to span the globe, find oil in two miles of water off Nigeria, ship it, refine it, and market to consumers.
And you need to have scale to be cost-effective to do that.
We've also had, of course, record or near-record sales.
As demand increases, sales go up.
And so if you have record sales, if you manage your business properly, your earnings can go up.
And finally, if you were fortunate enough here in this country to be producing oil and gas, which is about a third of what we consume, then you actually did much better last year because of the high prices.
So it's a combination of all those factors.
And yes, margins for some refiners did go up, some, but they're still, you know, the average refiner is still not a very profitable business.
So it's all these factors come together for the earnings.
Let's go to our callers now.
John Feldman is with us, and we're taking your call at 1-800-282-2882, the Rush Limbaugh Show.
I'm Paul W. Smith in for Rush.
And Dan is in Worcester, Mass, and checking in.
Hello, Dan.
Hi, Paul.
Hey, I'm pretty angry about the situation, but I'm not angry at the Exxons of the world or any other companies.
I'm at our conservative leadership in Congress and the Senate.
And it's for two years.
Wait a minute.
Wait a minute.
What conservative leadership in the Congress and Senate?
That's a great question, but we really don't have time.
I don't think they go down there.
Probably not, yeah.
But as you were saying, Dan.
Okay, two things.
Number one is that we're not doing anything to blow open doors to new resources of oil.
Not just ANWAR, but there's a competing theory of oil that says it's not the product of fossil fuels, but it's a byproduct of the crust, and that oil fields will actually fill up again.
So we're not drilling new sources.
And the conservatives really should be pushing for this.
If you want an investigation, find out why we're pit-bull locked on the fossil fuel theory.
The second thing is, if we're not going to do anything about new oil supplies, then what we need to do is set a strategic national or national strategic initiative to say in 10 years we will be off 90% of our dependency and offer tax credit,
significant tax credits to get the infrastructure in place for fuel cells, get rid of the ridiculous regulations on natural gas so that we have an alternative fuel in-house.
We've got self-combusting Muslims around the world and Chinese that are driving up the price of this stuff.
Neither one of them are our buddies.
So what we need to do is put ourselves in a position to flip the bird to the rest of the world and say we can take care of ourselves.
All right, Dan, let's find out what John Felmie has to say about that.
John?
Well, you know, the, I guess, theory of oil is one that, of course, is debated intensely.
And unfortunately, we lost the chief debater of the viewpoint that Dan is talking about, and that was Thomas Gold, where he said that, you know, it is the chemical processes within the earth that cause continual generation of oil, and it is not a fossil fuel in that sense.
And so, you know, it's very interesting.
I mean, they found oil where there's no reason to believe it was fossil-oriented.
So I remain open to more convincing on it.
I think I probably come down more on it is the conventional view of it.
But, you know, it is interesting.
What about in terms of dependency?
I mean, there's no question that you could make major investments that could improve efficiency, could get other fuels coming in, and we strongly support that.
You know, what's called the cellulosic ethanol approach, as the President has touted repeatedly, really is, in a sense, a kind of a holy grail, because if we can turn waste into fuel, that is really very, very good.
But we've got a lot of technological challenges to go through to make it commercial.
We can do it now, but it's very, very expensive.
Before we take a break, let's go to Livonia, Michigan, my backyard.
And Paul is here on the Rush Limbaugh Show.
Hello, Paul.
Hi, Paul W. Hi.
My question is, how are speculators setting the price on the commodities market?
Could it be just like one group, renegade group, just bidding up the price that's making the You've got a lot of financial speculation in oil contracts.
That has to add to the price volatility.
Well, it can in the short run.
I mean, you have the NYMEX as the main exchange on which prices are determined.
You've got buyers and sellers of all different types.
They're, you know, things from like refiners buying oil to producers selling oil to banks to all manner of financial intermediaries, such as these hedge funds that they've talked about.
They can move the price one way or another, depending on perceptions and the markets and so on, for a short period of time.
But, you know, in the case of a lot of these financial participants, they don't take delivery of oil.
So if they buy it and drive up price, eventually they've got to sell.
And the question is, then what happens with price that way?
So it is possible there may be some volatility.
The New York Mercantile Exchange and the Commodities Futures Trading Commission, which regulates the NYMEX, however, indicates that they don't feel it is these funds are causing this, that it's more important that they're adding liquidity to the market, which, of course, can lower volatility.
That's in some studies they've done.
So I'd say, suffice to say, there's a lot of allegations, but I think we need more study to really get a sense of what really is going on.
Back to your calls with John Felmy, chief economist for the American Petroleum Institute at 1-800-282-2882 on the Rush Limbaugh Show.
I'm Paul W. Smith.
The Rush Limbaugh Show.
Paul W. In for Rush.
And very quickly with John Felmy so we can get some quick callers in.
I'm going to ask a quick question.
You give me a quick answer because people always say this to me.
Hey, how come when I go to the gas station and oil just went up to $75 a barrel, they raised their price on the pump when we all know they didn't pay that price for the gas that's already in the ground at their gas station?
How come that price goes up so quickly when that gas in the ground didn't cost them that amount?
The simple answer is what the convenience store folks have said, and it's called replacement cost.
These guys tend to be small businessmen who have limited cash flow, and what happens is they look around and see the price is going up, and if they don't charge what the market price is, no matter what's in their tanks, they may not have the cash to buy the next tank.
And then Chris in San Antonio has a follow-up question very similar, and I want you to be able to ask it.
Chris, welcome to the Rush Limbaugh Show.
How are y'all doing?
Good.
Part of my question is, how come it comes down so slow?
If it jumps up $1 a barrel today, it'll raise up $0.10 tomorrow.
But if it drops the day after $5 a barrel, how come it comes down like every penny, every couple of days?
It's not near as fast.
Sometimes that happens, sometimes it doesn't.
A couple things.
First of all, consumers, even if it came down perfectly symmetrically, consumers generally don't notice it.
They have a visceral reaction to the prices going up and not coming down.
Also, there has been some economic study that indicates that to the extent it does for those events, it could be because the consumers don't discipline the marketplace as much as they do on the way down as on the way up.
So, for example, they see the prices down and they don't search out as much.
So, they don't enforce a kind of a discipline on it.
And that's a theory from an economist at a university here.
So, it's a whole range of things.
But the other thing is, if prices went up because crude went up, then you have to look at what happened to crude.
So, you've got to have those relationships put together.
Thanks for the call, Chris.
Let's go to Steve and Fort Myers Flora.
Steve, welcome in.
Your question or comment for John Felmy.
Well, hey, John, I just have a quick question.
How are you doing today?
I'm good.
Good.
As far as your R ⁇ D, your research and development, are you spending money on alternative fuels or energy resources other than oil?
Yes, we are.
Of course, the bulk of what we're spending our R ⁇ D on is in what we call frontier fuels, things like shale oils and heavy oils, where there's a vast amount of oil that we can bring to bear, you know, a trillion barrels of shale oil.
But we're also spending on things like cellulosic ethanol, I mentioned.
We're spending on R ⁇ D for energy-efficient technology breakthroughs.
We're spending on wind, solar, geothermal, and methane hydrates, which are an enormous potential source of energy.
So we're spending on all of these.
But, of course, we've got to keep the fuel flowing to consumers, so we're spending more there.
A lot of talk about coal, and coal is in abundance in these United States, and different theories have come around over the years of how coal could be used, again, as a primary fuel.
What do you say about that, John?
Well, coal can, of course, be used as a primary fuel for power generation.
It's 53% of our source of electricity.
But you can also liquefy it.
That's what the Nazis do.
The Nazis do it, too.
That keeps getting brought up lately.
And it keeps improving in terms of the technology and the cost.
And so the Department of Energy, for example, has a fairly large amount of projected coal-to-liquids source of energy over the next 20 years.
So it's growing in terms of its potential use and its use as an automobile fuel.
All the people investigating now your industry, are they going to find price gouging?
Well, I can't speak for the 169,000 gasoline stations around the country, but most of those are businessmen who are really just reacting to the markets and what they pay for gasoline.
So we've seen a handful of cases post-Katrina and Rita.
I can't foresee what actually will happen.
But the key thing is the industry has been investigated dozens of times.
And we've been exonerated every time.
And we'll just have to see.
The one thing about this investigation that the president has gone for, though, is that because it is with 50 states Attorney General, I mean, this appears to be a massive investigation.
So the cost implications for both the government and industry are potentially very large.
It'd be interesting to follow.
John Felmy, thanks for being with us.
We appreciate it.
My pleasure and mega ditto's.
John Felmy, Chief Economist Director of the American Petroleum Institute.
As we continue on the Rush Limbaugh Show, I'm Paul W. Smith.
I have always liked Ben Stein.
You see him talking about finance on Fox TV News every week.
He had Ben Stein's money spending his money.
He writes for Barron's Wall Street Journal.
He has captured my attention on his take on what an oil company is anyway.
And celebrate one of his great teachers, C. Lowell Harris.