THE BLOG

The Gouging Starts At The Oil Well

04/19/2006 10:54 am ET | Updated May 25, 2011

One of the great misnomers distorting today's energy debate is the misconception that the price gouging at the pump is a key cause for today's high gasoline prices. Now, pump-gouging may indeed be a factor, but it pales by comparison to the gouging that's going on at the well which has caused prices to catapult over the last years. It is the OPEC cartel and their oil industry cronies ratcheting up and manipulating the price of crude that lies behind the astronomical price of gas. The lack of focus on this issue is a ringing victory for the oil-patch propaganda machine that has brainwashed our leaders into looking (and posing) at the point of pain rather than confronting the real problem.

As example, Senator Charles Schumer of New York, standing in front of a gas station surrounded by the assembled press and television cameras, loudly calls for an investigation into gasoline price gouging. The gas station attendant, his boss, the station's supplier, and the refinery producing the gasoline are at fault by implication -- this on a day when crude oil prices touch new highs. I believe Senator Schumer would have better served his constituents if he had held his press conference in front of an oil well. That would send a signal that he is truly serious about finding the key culprits behind the current gas-price saga.

The price of crude (which makes up more than 60 percent of the price of gasoline) has doubled in the last two years. Through a series of manipulated price hikes and phony production constraints orchestrated by the OPEC cartel and abetted by big oil companies and the lobbyists and politicians that serve them. These players have persuaded us and lulled our government into accepting and repeating the fiction that crude prices are out of our control and dictated by free market forces. And the media has for the most part accepted this as gospel without a critical nor questioning eye.

Those who have followed my entries here ("The Price of Oil Being Pushed Ever Higher By Manipulating Oil Futures Trading" 4/05/06; "Taxing Oil Monopoly Profits" 3/14/06; "OPEC Agonistes" 1/29/06) know that I view the oil patch mantra of market-set prices with great skepticism. Now if only Senator Schumer and his colleagues would look at the big picture and the big players in this oncoming train wreck, instead of always focusing on the obvious photo op.