Thank you.
Thank you, Mr. McTeague.
I'm going to take the final spot here, as the chair.
We start with the price of gasoline, but the primary determinant of the price of gasoline is the price of crude. It's interesting. Last year the focus was all on the wholesale margins, but the wholesale margins have dropped quite dramatically over the last year; the focus seems to be much more on the price of crude.
Mr. Sprott, you very eloquently described the decline of world conventional crude oil production. You've also described how a lot of the crude oil reserves we have now, like the oil sands, are actually much harder to get at. We have a decrease of supply for the conventional side and a challenge in supply in terms of the oil sands and other reserves. Even those reserves we're discovering in Venezuela are similar to the oil sands in terms of getting it out of the ground, separating it from other natural resources, and then refining it. It costs much more in terms of refining.
We also have an increase in demand. We have some figures on countries like China, going back to 1980. They were consuming about two million barrels a day and now they're above seven million barrels a day. Clearly there's a demand and supply issue. How can we, as legislators, have any idea how much is due to the natural intersection of supply and demand and how much is due to speculation?
It is a funny word, right? Mr. Diwan said we shouldn't say “speculators”, we should say “investors”.
But how much is due to the natural intersection of conventional supplies going down and demand going up, and how much is due to the entrance of what we could call “newer investors” since, say, the 2000 period? Can anyone here accurately predict it? It went up to $137 and came down to about $117. Should it be at $100? Should it be $98? Should it be at $70?