Is there an oil crisis? Yes, and No
June 22nd 2008 18:21
Yes, the world has reached "peak oil." And yes, there are concerns about supply that need to be addressed. And yes, oil prices are higher as a result. But not that high, so to speak. A large part of the high price being paid now is a direct result of market manipulation and Republican policies of nonsense. Regardless of what your favorite right wing mouthpiece might be screeching daily about the need to drill, drill, drill - there is no current supply crisis that justifies the huge price spikes.
Think about this - When there were gas shortages in the 70s there were lines, gas rationing, stations closed for lack of gas, cars and trucks parked because they couldn't get any fuel. Where is any of that now? Can anyone point me to a single sign of shortage, beyond skyrocketing prices? Of course you can't. There is enough supply to meet current needs. Again, not to say that oil production hasn't peaked and supply problems won't manifest themselves. Nor does it diminish the pressing need to move ahead with alternatives to oil, for environmental, supply, and cultural reasons. But supply is not what is behind the huge run ups now.
The blowhard's of the right will say that Democrats are responsible for your high gas prices because they are against drilling in ANWaR and expanding offshore leases. It's a ruse, people. You are being robbed, plain and simple. The oil companies don't need more leases, they need to act on what we have. And I'm sure you've heard the one about refineries. According to the right, no new refineries have been built due to Democrats and environmentalists blocking them. That's a lie, pure and simple. Only one new request for a refinery was put forth between 1975 and 2000, and it was approved. Several requests for expansion and updating of existing refineries were approved also. There could have been more, but oil companies no more want increased capacity than Wal-Mart wants unions.
As for the leases standing unused, Congressman Peter DeFazio, Oregon Democrat, stated the following when speaking about legislation he was introducing.
"For weeks, republicans have been harping on the need to open up additional leases for drilling to lower gas prices and accusing democrats of withholding the needed leases to do that. However, between 1999 and 2007, the number of drilling permits issued for development on public lands has increased by more than 361 percent. Meanwhile, 10,000 of those leases are not being utilized and instead are being stockpiled by profit rich oil companies. The 68 million acres of leased but inactive federal land have the potential to produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day. This legislation would nearly double total U.S. oil production, increase natural gas production by 75 percent, and put an end to oil companies artificially driving up prices by hording leases. It would also cut U.S. oil imports by more than one-third, reducing America's dependence on foreign oil."
Fact is, the oil companies have had the market exactly where they want it to be for the past seven years. A fairly steady but diminishing supply. A lockdown on most new markets. An American government in colusion with them in their quest to lock down supplies and drive up prices. And the added bonus of unregulated and unconscienable futures markets driving prices exponetially higher. It's been estimated that speculation is responsible for as much as a third of the price of oil. Here's an explanation even the most ardent Bush supporter will be able to understand.
Lucy and Billy and Connie and Mack want to corner the lemonade stand market. First, they turn off water supplies in their nieghborhood and then let air out of the tires of cars. They know it's hot and the kids want thirsty people coming to them. In order to ensure they have a lock on the thrist-quenching market they have a cabal of local parents doing everything they can to restrict other drinks. But just selling at one price isn't enough, they want more.
They decide to take turns "betting" on what the future price will be. Selling one to another than back to the same and around again, they rapidly inflate the price of lemons. They soon learn to manipulate their game so they control the price of lemons all over the place, without actually buying anything. The kids get obscenely rich. Sounds simple, but that's essentially what the oil futures market is doing. Running up the price of oil for no other reason that to run it up. Instead of betting what the value will be, they are in fact setting the future price.
If just market forces and supply concerns were dictating the price of oil it would be around 80 dollars a barrel. That reflects price given up to the big losses the dollar has taken as well as the rising demands worldwide. If the dollar had held value during the Bush years, the correct price would be in the 50 dollar range.
Why is the right so dead set against alternatives to oil? The loss of market control. A company can't own the wind or the sun, after all. The profit in alternatives comes mostly in the development and installation, not in continued ownership and manipulation. You will hear them preach "free market," but not if it means individuals are freed from the heavy yoke of the oil economy.
What can individuals do? Stop driving unless you need to and demand leadership seeks alternatives rapidly and completely. The future of environment and our economy demand it. The end of oil is coming, If we would have began decades ago it could have been painless. The longer we wait, the harder it will be. Oil company execs are as complicit in the conspiracy to keep us addicted as the tobacco execs were, and the criminals pushing the futures market are worse. They all need to be held accountable.
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Comment by Jeff Musall
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Comment by Jeff Musall
As for my wife, through a friend.