US Puppet State Dances on OPEC's Strings

Where have our benighted energy policies of the last eight years left us? On our knees--begging OPEC to please, pretty please, open the spigots and pump more oil so we can ease the pressure on our sputtering economy.

FedEx delivered a Friday afternoon bomb, announcing its second business shortfall of the quarter, a direct result of 1) soaring oil prices, and 2) a weak economy. Meanwhile, the NYT reports that, finally, now that oil has closed at a new record of $126, up 31% this year alone, OPEC is finally considering boosting production. But only if they can figure out a way to do so without killing the goose that is laying their golden eggs--$100+ oil prices.

Eventually, OPEC will open the taps and oil prices will recede--a bit, for a while. But our dependence on a small group of countries whose interests are often diametrically opposed to ours will continue, and as long as it does, they'll hold the fate of our economy in their hands.

Time to drill in the Alaskan National Wildlife Refuge? No. Time to cut us gas-subsidy checks? No. Time to work on a tax and consumption policy that encourages less oil usage and more investment in alternative, renewable energy.

Our private sector can solve this problem, as long as our government gives it the incentive to do so.

Alternatively, we can just beg.

See Also: Lehman Brothers Invents a New Way To Say, "You're Fired"

Comments

[newshawk14]

The author mentions the last eight years, but it was Jimmy Carter who started us on the road to
energy independence, only to see his program wrecked by Reagan and the later Bushes, who
invited the oil producers to once again take a firm grip. I might point out that Henry Kissinger was
one of architects of OPEC, who wanted higher oil prices, so that the Shah of Iran could afford all
the nifty weapons systems we were selling him. That's also the basis of the bad blood between
the US and Iran.

[Independent_voter]

Perhaps it's time to start pricing American food exports in barrels of oil rather than dwindling dollars.

[LouisPWu]

Everytime I see someone with a huge SUV filling his/her tank while frowning and grumbling, I grin at them. If they have a Bush/Cheney sticker on the SUV I laugh out loud.

[mydogshakespeare]

The writing has been on the wall since 1973 Oil Embargo. Political Leadership was unwilling to take the country in another direction, particularly since vested oil interest were busy lining their pockets. Ordinary citizens never wanted to give up their cars anyway, that is why so many of us just keep pumping and paying; rarely acting on our own complaints.

[elcojonu]

Bottom line: we'll keep chasing our tail until we start making strong moves away from a Petroleum- Based Economy.
I'll happen this century, it has to, it's called progress.

[randyjet]

I am tired of people lying about the oil shortage or blaming OPEC for the price rise. The FACT is that demand for oil worldwide is up by 2% and supplies are up by 2.5% with projections to be an increase in supply worldwide of 4% in the third quarter. Obama and Bush not only refuse to see any problem, but both are in favor of higher oil prices. They BOTH advocate taking oil OFF the market and putting it into the SPR. Why should OPEC increase production when there is enough oil already and the US just keeps taking more oil OFF the market?
THERE IS NO OIL SHORTAGE! There is a huge oil speculation boom. If any person doubts that just look at what happened when Goldman Sachs said it could go to $200/bbl. The price for oil futures jumped $2/bbl instantly. THAT is NOT anything but speculation. There was no sudden shutdown of oil anywhere in the world. Obama thinks that he can do nothing when he knows FULL well, all that has to be done is to open the SPR as Clinton has said, and the price of oil will CRASH! Of course, Obama and Bush do NOT want that to happen.

[tea in the harbor]

It's not just the oil shortage that is imaginary, it is our need for it! If the American people, or at least the homeowners, were to take out home improvement loans for $5-10 thousand and retrofit their homes with currently available alternative wind and solar systems, their energy bills and the power to of OPEC blackmail all of us would disappear! The power companies would even, under current law, be required to buy the excess power and therefore pay for their own replacement!
We the People can end this crap as soon as we choose! A spike in alternative system use would have a very rapid effect on speculation, would support the start of a new American industry, and would create a business model that would rid us permanently of the parasitic oil and utility industry. If you want to end the war on terrorism, help clean up the environment, and help create a few million American jobs, and get rid of your electric bill forever, do the research for your locality and hit the bank! Windmills and solar arrays are the most Patriotic thing you can do!

[randyjet]

I have already checked into solar and it runs over $20,000 for a partial power system. The quickest way to relieve the oil speculation is for the government to release the oil from the SPR and indicate it will fight the oil speculators. That is something that Obama and Bush refuse to do. Thus there is no reason for me to vote for Obama since on the most important things, he is Bush lite. At least McCain thinks that there is a problem with high oil prices while Obama thinks that they are OK. Obama's health care plans are not universal and will leave me out and McCain's is similar to Obamas. So why vote for Obama when he has no difference on these topics?

[freshnotbitter]

I visited my local Toyota dealership yesterday to see about ordering a Prius. (My Honda Civic is 10 years old).

They could not sell me a Prius. They don't have any. They can't even take orders for a Prius.

There are cars out there that get 70 mi to a gallon but we are not allowed to buy them. I tried.

Here is how I see the problem. All the Liliputians in Liliput own a big eater called Gulliver whom they keep in their garage. All Liliputians love their Guilliver. The way they see it, they are going broke because the food producers are demanding too much money for the 100 hams and 1000 bags of wheat they have to buy every day to feed Gulliver. Hell Arious, mayor of Lilliput has come up with the idea of having a holliday just before election time where nobody has to pay a tax on the first 90 hams. After the election the holiday would be over but the Honorable Hell Arious will tax the food suppliers' excess profits that they have been making every day since Gulliver came to town.

Hey, maybe I'll write a book.

[KillTheMessenger]

There are plenty of alternatives out there. The cheapest one is ride sharing. Gets twice the gas mileage because there are only half as many cars on the road.

[freshnotbitter]

In other word, we can't make a gas efficient car. We should ride on the bus like a third world country 'cause American just don't know how to do anything any more.

Sorry. I just can't accept that.

During WWII this country launched Lilberty ships at a rate of 1 per day. Today the Navy shipbuilders probably want a decade to build one ship if they can manage to make one at all. I understand they have started outsourcing that job too.

This is getting ridiculous. While we slide into 3rd world status we are all asked to explain ourselves for not wearing a flag in our lapel, as if we lived in some filthy, pathetic, ignorant, 3rd world hovel.

[tea in the harbor]

If we wait for the government to address the energy problem, they will, after dragging their feet for as long as possible to ensure oil company profits, create a system that will allow another monopoly to control our resources. Wind and solar technology are already advanced to the point of being fiscally viable! Do the research An alternitive system designed to about 50% over expected use will force the utilities to make your payments for you under the current buy-back regulations. These systems would also eliminate the possibility of brown or blackouts, neutralize potential targets for terrorists,(power plants) and help with global warming! We don't need a damned thing from Uncle Sam! He can remain the incompetent fool he is and probably always will be!
The experts say citizens feel like they're not helping the war on terrorism, well here it is folks, our energy independance will break their bank! Alternative energy will preserve not only our environment, but our freedom! Windmills, solar panels, and photo-voltiac arrays should be the new symbol of patriotism!

[kavan]

If only we had spent all the money wasted on the Iraq debacle on alternative energy research & implementation instead we'd be free of the petroleum industry completely.

[UnbiasView]

Or maybe we just could have started drilling for our own oil, we have pleanty of it.

This oil crisis is self induced by Washington.

[tea in the harbor]

Oil is the problem, not the solution!

[likeicare]

" . . . begging OPEC to pump more oil . . . "? Really? Is that what you REALLY believe, Mr. B.?

Look, Big Oil controls ALL the oil on the planet, first of all, and secondly, pumping more oil will do absolutely zilch to supply, as no refineries have been built in the US in over 30 years -- and it's refineries that make gasoline -- duhhh.

Big Oil learned its lessons well from the DeBeers diamond family -- control/restrict the supply, and you control the demand.

Diamonds would be flooding the markets, if the DeBeers monopoly on them didn't control how many are released for sale each year. When a product is seen as being scarce or rare, and it's in demand (even if an artificial demand is created, like with diamonds), then the controlling interest(s) can charge whatever the market will bear.

You don't have to be a rocket scientist to figure it out -- just a skeptic.

[liberalghost]

Oh, come on. For the last 40 years rethugs have labeled as "anti-American" and/or "commie" every environmentalist or politician who warned about our dangerous dependence on oil, even foreign oil. In 2000, Cheney declared it the god-given right of Americans to drive SUVs, even 8 mpg SUVs. The "Hummer" anyone?

When gasoline finally hits ***$6***** a gallon, rethugs will declare it the fault of democrats protecting ANWR. "If we just raped ANWR," they'll be saying, "we'd have all the oil we need." And the voters will begin to believe it.

[SamEllison]

"a tax and consumption policy"
Guess which word Grover Norquist doesn't like?

[liberalghost]

"Policy". In his small mind: "From that, all evil flows." Norquist is an anarchist in a suit and tie, sans balls.

[1will]

The energy situation we are in now did not just occur over the last 8 years. NOTHING was done about our reliance on foriegn oil during the Clinton years. While prices remained low for oil during the 1990's even while demand grew and grew these low prices had nothing to do with who was in the White House. Russia had to pump oil year round to keep it's new wells and pipe lines from freezing. Saudi Arabia pumped every barrel of oil it could to help pay for the Gulf War and Kuwait needed every petro dollar it could get to rebuild from the Iraqi invasion. Unlike today, China actually exported oil in the 1990's before they started having double digit growth year after year. Demand was lower and production was high.
When Bush toppled Sadamn he took away the Boogie Man. Iran pumped barrel after barrel to help pay for a modern army that could resist Sadamn. Kuwait and Saudi Arabia did the same although they could count on US support in case of war. Today there is no one in the middle east that fears an invasion from a war mongering Iraq so they don't need the USA offering assurances of protection. Saudi Arabia can snub it's nose at the US.
Only cutting demand will bring down prices.

[freshnotbitter]

The price is not coming down, other than on a temproary basis in response to inventory, because there are BILLIONS of new consumers in the world.

The numbers are overwhelming if you spend any time at all digesting them.

World production of oil is 80 million barrels per day and the USA consumes 25 million barrels per day.


If India and China alone consumed as much as we do per capita, then we would need over 250 million barrels per day of production. ANWAR is said to have a production of 1 million per day. Where are the other 169 million barrels per day production we will need??

If you talk to CEO's of Chevron, BP, Shell they will tell you that we have to look for alternative energy sources because world demand for oil is going to overwhelm us. A free market allocates a scarce commodity by using the price mechanism and that is what is happening today and that is why the price is going up.

If every high school student were given numerical exercises of the type I have just suggested here, then they would be educated consumers in short order and our government would act because the citizens would demand action rather than suggesting there is some kind of conspiracy afoot.

[randyjet]

It is hard to believe this crap. The FACT is that worldwide demand has increased 2% over last year and supply has increased 2.5% for the last quarter and the supply in the third quarter it will increase by 4%. It is STUPID to say that China and India will use the amount of oil at the same rate as the US NOW. You must be an economist. As a retired oil man, I like to deal in FACTS,not future baseless speculation. There is NO oil shortage nor lack of oil supply. The rise is ALL speculation as the CEO of Exxon said under oath. Even common sense escapes Obama. He sees that Goldman Sachs says oil will go to $200/bbl, and the price jumps another $2/bbl with NO disruption! THAT is speculation and is NOT caused by the oil companies, but by BUSH and Obama supporting his taking oil OFF the market and putting in the SPR.
This is the same scam old Joe Kennedy did in the 1920s and made him millions. Go to the Star-Telegram.com/ed_wallace and read the article Thank You Bubble Boys for the facts.

[1will]

We can drill in other places other than ANWR. There is oil in the Gulf Of Mexico and off of the coast of CA that we are not allowed to touch. There is enough Shale Oil in the Western states to replace our foreign oil imports.
Why don't we use Shale Oil? Well, it's expensive but the price of Crude Oil is high enough that Shale Oil is now affordable. There is one catch, you release CO2 when converting this coal into oil. The Cult Of Global Warming will not allow this.

[liberalghost]

Nothing during the Clinton years? Remember the gas tax increase that helped rethugs takeover Congress in 1994? Am I wrong but I recall Gore recommending a $.50 increase in gas taxes to pay for research and public transportation?

We could add a 10% tax on every barrel of oil pumped or imported to pay for public transportation and new energy. The tax price would be fixed when applied so tax revenues don't fall if the market price drops but does go up whenever there a price increase. We also need a national business zoning policy that forces businesses to cluster within cities so bus service is more more rational.

I recall in the fifties, when we didn't have malls every twenty miles, people in the brand-new suburbs would take the bus into the downtown shopping district to shop. And stores offered a UPS-type package delivery when you couldn't carry everything home on the bus.

[1will]

It was the Republican ideas that got them elected in 1994. I doubt anyone worried much about a $.10 gas tax when gasoline was $.90 per gallon. The Republicans took over Congress with ideas of Welfare Reform and a balanced budget.
Al Gore recommending a $.50 increase in gas taxes did nothing. It never passed. It never got any serious consideration even when the Dems had the House and Senate.
I stand by my statement that nothing was done during the Clinton years to help cut our demand for foreign oil. Bill Clinton's basic energy policy was, "Wheeeee.....cheap gas!!!"

[KillTheMessenger]

Sadly, cutting demand will not reduce prices, either. After reaching peak production and after the initial plateau (which will probably last until 2010-2012), oil flow available on the free market will quickly erode. Conservative estimates range from 2-4% annual reduction, which is about as much as the developed world can hope to reduce demand by modernizing fleets and improve efficiency. The difference between the decrease in oil production and the improvement in efficiency has to be made up by market adjustments, i.e. prices will stay high or increase until a sufficient number of consumers is priced out of the market (i.e. have become people who ride buses and trains).

Politics has only marginal influence in any of this. It's all geology and economics.

[randyjet]

The peak oil crap has been going on since the 1920s and it has been proved WRONG. There is probably some ulitmate limit to the worlds oil supply a century or two down the road. The FACT is that all the stats on the peak oil ONLY affect the EASILY recoverable oil. There is enough oil in the oil shale deposits to meet the needs of the US at current rates for ONE HUNDRED YEARS. The break even point for that is $35/bbl. There are thousands of capped oil wells sitting idle in Texas that have not been uncapped because there is NO oil shortage. It will not pay the oil companies to uncap them since there is NO need for them.
The FACT is that it is oil speculation which is driving the price rise. It also shows how elitist Obama is and that it is of no concern to him that only ordinary folks will be affected, and the well off will drive no matter what. It will not affect his supporters, just the working class.

[castlerider]

The same way this country, its media, and its politicians used the oil embargo to characterize Jimmy Carter as a failed president , (when actually it only lasted a short time, correcting itself within months)
Will be the same way we will all remember Bush. Only he obviously really is a failed leader because of his blind arrogance, obstinance and corrupt leadership which has actually caused the death of thousands, the compromising of our laws and regulations, and destruction of our economy..

Opec has stated that after 2008, oil prices will begin to ease. Can anyone else read between the lines here? We are being punished for electing this idiot. So hard to accept, in so many ways. Makes one want to kick their ass, but what will that do, except drive prices higher.
Like having a neighbor who had their yard run over and the windows all busted, and now you have to pay for it. All because of an irresponsible drunk little brother... Or a stupid chimp.

[MajorKong]

The oil embargo happened during Richard Nixon's term.

The gas lines you remember from 1979 were caused by the outbreak of the Iran-Iraq war.

[KillTheMessenger]

Can you please name a credible OPEC source for that pricing statement? OPEC does not set prices. Consumers do. If they are willing to pay $4/gallon at the pump, prices will stay above $120/gallon. Once they stop buying and nobody does the buying in China for them, prices will ease. So when are American consumers going to stop buying at $4/gallon? After 2008? I don't think so. I would bet they will gladly pay $5/gallon in 2009.

[castlerider]

It was on CNN today.
They mentioned that IRAN , the 2nd largest opec member, mentioned this at an OPEC consortium. Look it up.
They might have had a contrived reason to say such a thing, but it's obvious that our foriegn policy is absolutely a worthless nightmare carrying about the value of used toilet paper.
Bush and his policies are absolutely an underlying reason why the world has us at such dramatic and ridiculous odds. Antone who doesn't see that, doesn't have a clue, and is as hopeless as this foriegn policy.

[Bobotheclown]

There has been a general awareness of this deepening energy problem since WWII. Yet during this time administrations from both political parties have evaded the problem in favor of more immediate political diversions. Mr. Bush, in a recent press conference, responded to a question about what he planned to do about the oil crisis with the retort: "Nothing. I don't have a magic wand."

Any country, including ours, has the capacity to make fundamental changes in energy policy if it has the political will to do so. In our democracy, that will must be shared among a majority that includes people and organizations that are currently reaping huge rewards from the status quo. If they withhold their political support in numbers sufficient to prevent a political quorum then the process of change will be blocked. That is the situation that we find our democracy in at this time. We have tilted so far towards the blocking process that representatives from the oil industry have actually been elected President and Vice-President, locking in the energy status quo for a generation.

The answer is not magic, or logic, or education. The answer, ultimately, is pain. The New Deal appeared when middle class pain reached a level unimaginable since the middle ages and produced a unified political will to find answers. We will beg until we bleed, and then we will look for answers.