This Administration's Singular Achievement: Making the World Safe For Gluttonous Oil Profits On the Backs of American and World Consumers
It has become clear over the last eight years that the people in this administration are completely out of touch with the staggering impact the quintupling of oil prices has had on the nation's citizenry. Those in the administration live in a different world. Household budgets are not within their purview. Oil barons and oil industry leaders, and oil lobbyists are within their cocktail circuit. Unlike Mom and Pop or those who represent them, oil-producing states have virtual open access to the Oval Office (please see "Hallelujah! Saudi King Abdullah a No-Show at White House State Dinner," 04.03.07). This administration has done virtually nothing to arrest the nation's slide toward becoming an oil patch supplicant. In doing nothing, other than occasional ineffectual lip service, and worse still, supporting policies favorable to oil industry interests, they have made a bad situation far worse. This while the American everyman and woman is left to deal with this policy disaster.
One needn't go too deeply to underline the disconnect. A few examples will do. President Bush in March said, "$4 gas, I hadn't heard of that" (please see "Oil, Iraq Perfidy and $4 Gas? I Hadn't Heard That"). Vice President Cheney kept closeted (under the guise of "executive privilege") the 170-page report of the Vice President's energy task force organized at the outset of this administration -- over a hundred dollars/bbl ago, when oil was still in the mid twenties. The task force was headed by one Andrew Lundquist who has since become a major oil industry lobbyist (please see "Cheney Greets King Abdullah in Saudiland With High Fives as Oil Sails Past $100 per Barrel," 03.27.08).
Then our resident reincarnation of Katrina's hapless "Heckauvajob Brownie," Secretary of Energy Sam Bodman, always ready to accept the deteriorating conditions of the oil market, rose to the occasion at the G-8 summit this weekend bravely proclaiming "there are relatively few things we can do short term." This after years in office as if to beg the question, "what have you done in the long term to prevent this crisis from happening?" Bodman's stance comes in glaring contrast to Australian Prime Minister Kevin Rudd's challenge at the same G-8, stating boldly that the gathering "provides an opportunity to apply the blowtorch to the OPEC organization and it is time that happened." Are you listening Mr. Bodman, or is the language too strong for your oil-patch-conditioned sensibilities?
Then there is Secretary of the Treasury Hank Paulson and his ready nonsensical exculpation of oil price tumult and greed: "If you look at the facts they show that the price of oil is about supply and demand" (please see "Our Secretary of the Treasury Pumps For OPEC," 06.02.08), and not to be outdone, our Chairman of the Federal Reserve is content that we do not have "long lines at gasoline stations" and therefore all is well in the world (please see "Oil's Largest One Day Gain On Record: Thank You Mr. Bernanke," 06.06.08). .
Let me share with you an email letter I received from an acquaintance which speaks eloquently on this issue and its impact on the lives of so many, seemingly unbeknownst to our oligopoly servile leadership, as otherwise they would not have let eight years slip by without a meaningful national energy policy:
In reading your post this morning and the comments that followed -- I wonder if the point may be further made by by a theoretical projection of where we might be in ten years (a family of four making $100K/yr with one in state college, one on the way) if things progress in this manner with little change. In the poor house, I imagine.
I think all of us here in the middle-class America sector get it (and feel it as the $75 one might have saved of a $750/wk paycheck now goes in the tank to get back and forth to work and T-Ball practice), but with so few options, we have to just suck it up and pay the price, right? What else can one do?A little less intellectual, more practical scenario: I know of several families (surprise, surprise in the notoriously affluent corner of CT) sinking under the strain. That $75 used to add up to a small pile of Christmas presents or a weekend in Lake George with the kids....And now, $4.30/gallon=missed mortgage payment....and so the spiral goes....
Too bad there isn't more advice on how to heal the situation--I think the masses would unite if only there were a plan.....FYI: our fuel bill from last May was $5965 for Stone Resource, Inc., this year: $11,324.
Here is an example not on the agenda of the G-8 but a microcosm of what American families are enduring and families throughout the world as well. To repeat, "If only there were a plan..."
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Please re read this story.
He assumes the middleclass income is $39,000 a year.
Maybe in the 1960's today the Middle Class Income is nearly $300,000.00
I know the U.S. Government likes to pay the game where they remove the TOP 5 percent. I found out the remove the top 12% actually to get donw to $ 50,000.00 a year.
He is uninformed about why Gas is overpriced as much as $2.50 a gallon.
Oil should be $ 58.00 a barrel but over $130 that outside forces. Furtures traders!!!!1
Granted, Intelligence is not this Administrations Hallmark but I cannot understand why they would be buying and pumping oil into the Strategic Reserve program when oil prices were at an all time high.
Aside from the explanation of abject stupidity, which cannot be dismissed it has occurred to me that they are planning for a crisis. One they know WILL occur.
And that would be the attack on Iran.
When the Strategic Reserve will have to be used.
And $130/barrel oil will look cheap.
HuffPost's Pick
The status quo explainations for the current rise in the Oil market have not been proven. Instead they are merely incomplete rationalizations.
It sounds akin to "aluminum tubes" and "yellow cake from Niger" all over again.
It's Truthy sounding, but not the complete truth.
Yes, demand may be increasing, but the vapid "Demand" argument has been a poorly qualititive. Reductio ad absurdum, IF DEMAND INCREASES BY A CUP OF OIL A DAY, would that explain away oil's rapid increases? No, but the poor quality of reasoning belies an effort at propaganda rather than an effort to get to the real truth of the situation.
Peak Oil, may or may not be true, where is the RIGOROUS PROOF, and does it justify the rapid rate also?
If the Saudis are saying "there is no justification for the current rise in prices," then there are lies for or against the Oil Bulls. There are too many conflicts of interest, and too much greed/money in play, thus there is need for solid evidence and proof, where ever it may lay.
Another point is the billions$ entering oil futures, and its radical transformation into a speculative investment tool. IF this factor is ignored, then the BS detectors should ring loudly, indicating "a cherry picking of facts and a hyping of intelligence."
Combine this with geopolitical factors, unregulated dark markets, as well as the economic harm to the world's poor, -- there is a glaringly need for aggressive oversight, thorough investigation, and rule revisions.
You ask, thankfully so, "Peak Oil, may or may not be true, where is the RIGOROUS PROOF, and does it justify the rapid rate also?
I take it you just want to know more about what is happening. Maybe do your planning for investments, do your budget, decide between electric or gas for that future house, know an automobile's ROI. If you are progressive, you might be asking yourself, "how can i better serve this planet?." It doesn't matter what your rationale is, just that you asked.
No matter our politics, Peak Oil affects all of us.
It is quite simple and there is no requirement for "belief ". On the contrary, it takes great faith to believe the earth has an oily nugate center.
Resources, as most things in life, have limitations. "Peak Oil" documents, statistically and historically, the "disconnect between oil reserves and production".
go to: http://www.theoildrum.com/node/4041 for a primer or go to wikepidia. But, c'mon, ya gotta do the research before you ask for RIGOROUS PROOF.
In answer to your statement - "but the vapid "Demand" argument has been a poorly qualititive."- You will find the comparison of history to present conditions at that same www.oildrum address.
You may not only be fascinated by the discussion and the data, you might want to get on with the things you know are right, but are helpful to yourself at the same time. Everything changes.
Good luck to us all!
One posslble critique of that peak oil data is that the historical charts measuring of oil production reflect the economically viable extraction of geological oil reserves within the context of oil at around 27$/barrel (pre-Bush Jr).
There are other reserves of oil that are available but only become profitable at a higher cost. -- Shale Oil and the Athabasca Oil Sands are notable examples.
There should be a peak of absolute oil availability, but using historical data in the context of cheap oil, to prove peak extraction gives a very skewed account.
The fact that there aren't extremely huge investments in Shale Oil & Oil Sands by Exxon, even though it would be very profitable at currently (hyped/inflated) oil prices, may indicate Exxon itself is not even internally convinced that Oil prices at 130$/barrel is truly justifed. -- And that they see risk of investing in a temporary bubble, if they do make significant bets on oil that costs more to extract.
I recommend "Hubbert's Peak" from Kenneth Deffeyes.
That was my introduction on Peak Oil
and for all the other books I've read on the subject...,
i think it's the best of the bunch
also..., like earlier comment
check out the oil drum
Here is what they are doing!
they churn the furtures and increase the price several times before filling the order.
http://www.rsi-ireland.com/documents/DarkPoolsVol2.pdf
IT IS AMERICAN HEDGE FUNDS FROM INVESTING FROM OFFSHORE THRU ELECTRONIC INVESTMENTS IN THE FURTURES MARKETS THAT DOUBLE OR TRIPLE THE PRICE (CHURN)
AS THEY TRANSFER THE FURTURES CONTRACTS BETWEEN FUNDS!!!!!!!!
IT IS ILLEGAL THAT IS WHY THEY MOVED OFFSHORE!!!!!!
A clueless president and avaricious Neocons who profited from an illegal war = Bend Over America.Hillary was a soulmate of the Neocons,but Obama will hopefully purge these bastards.Afew show trials would go down nicely.Then hopefully off to Gitmo where they can sample their humane torture methods and give us a Consumers Report on the experience.
There are three steps that could be taken today. I ask why aren't they being taken today?
Here is the link http://www.mcclatchydc.com/227/story/40360.html
another article that fails to mention:
PEAK OIL
PEAK OIL
PEAK OIL
PEAK OIL
PEAK OIL
PEAK OIL
bush is not guilty of geologic problems
JUST POLITICAL PROBLEMS AND
WASTING 7 YEARS DOING NOTHING ABOUT IT.
PEAK OIL CRAP!!
HERE IS THE CAUSE: THANK TOM DELAY FOR THIS!
http://www.boston.com/news/globe/editorial_opinion/oped/articles/2007/07/17/how_traders_gamble_with_your_energy_dollars/
HERE IS THE EFFECT: AS IF $5.00 GAS IS NOT ENOUGH
http://www.rsi-ireland.com/documents/DarkPoolsVol2.pdf
I saw an interview of T. Boone Pickens, the oilman's oilman, about a month ago. He predicted that oil would go beyond $150/bbl in 2008. He had no idea where the near-term price plateau would be but he saw nothing on the horizon that would restrain prices. He had a plan to partially deal with this crises and make money.
Picken's plan goes something like this. Gas and diesel fuel is going to go very high so alternatives will be needed in the short term. So he is taking his profits from oil speculation to build the largest wind farm in the world in west Texas. This move will allow electric companies in the region to retire the natural gas turbines they use for peak electricity production. This and a general abundance of natural gas will make it cost-effective to use liquified natural as a fuel for trucks, buses, etc. (Converting a diesel engine to run on lng is pretty easy. In fact, they can simultaneously in the same engine. LNG also burns cleaner than diesel fuel.)
But, Pickens went on the say, this is only a short term remedy and longer-term fixes are necessary. Those require some kind of energy policy leadership from Washington, which Pickens said (with several explatives) has been missing for decades.
We are only entering the very beginning of a huge and drastic change for our entire species. We have two choices we can be the animals that we really are and continue to kill each other over the last drops of this limited natural resource or we can rise above all of our expectations and truly be the smartest creatures on earth and figure a way out of this mess.
Up to now we have more than proven to ourselves to be dumb animals continually reacting to forces that are out of our control instead of using our ingenuity and intelligence to stop repeating the same mistakes over and over. If gas dropped to two bucks a gallon tomorrow the Hummer plant would begin production of the Hummer 4 on wednesday. Am example of how stupid we truly are.
No where have any of us seen any presidentail candidate propose anything of merit to ween ourselves off foreign oil. No tax credits, no initiatives, no funding, no desire, no nothing. We should be preparing our children for a future without oil, thats what parents do in the animal world they prepare and protect the future generations ensuring that there will be future generations But not us, we do not like sacrifice, the greed gene is preventing us from doing what every chickadee knows to do and it is truly pathetic.
Bravo, j4 we'll ween from oil just after we ween from alcohol" THE DRINKING KIND"!!!!!flbgbt
Odd. I thought OPEC more or less controlled the price of crude. Thanks for the enlightened "facts".
As you already gathered the author is not interested in facts. He's making excuses and placing blame on the Bush Administration since many Americans are finally starting to question why the Democrats will not allow us to drill for American oil off of the Continental Shelf and ANWR.
Both the Dems and Bush have called for the Saudi's to pump an additional 1mm barrels per day to stabilize prices. The Saudi's have refused. This 1mm barrel per day increase could be easily met with additional drilling in ANWR.
ANWR drilling wont effect our economy for at least 15 years! Its a non issue. The oil powers that be know there is going to be a different direction starting soon, and they are manipulating and milking every Penney they can get before that change happens. They are scum. More threatening and harmful than any terrorist cell currently siting our country.
Right, because the people trying to SAVE our planet is whats wrong with this country. Are you serious? Environmental groups acknoledge that what we do to the planet affects everyone and we should be careful. If we keep up this rape of the environment, our great-granchildren will be the ones paying the price.
Please get a clue. Drilling in ANWR would not produce any oil for at least a decade. We need to find an alternative to gas. Now. Period.
Actually, cómmodity sepculators have a tremendous impact, and this the republicans are responsible for.
Trillions of dollars are flooding into commodity markets. This is made possible by allowing speculators to borrow heavily to finance their purchases. Loosening of margin requirements are a direct consequence of republican (small r intentional) deregulation.
Also, the dollar going into the shitter has been a major contributor to the rise in oil prices. And responsibility for this lies squarely on the shoulders of bush. Run massive deficits while giving massive tax breaks to the rich, and allow the fed to pump out dollars like there was no tommorow to fuel a real estate bubble. The US economy has been one big ponzi scheme, rigged to avoid an inevitable recession that would have caused the electorate to turn against bush and the republicans.
We have outsourced our industrial base, and the only people making money are the ones taking fees and commissions from churning as many financial transactions as possible, such as mortgages and commodity purchases.
Bush says History will vindicate him in his quest to secure Democracy for Iraq...he says nothing about vindication for the useless two terms he has served. Look back over his Presidency and you will find he has not only done absolutely nothing for this Country but he has accomplished what no other President before him has done. Created the greatest debt in our Nations history, lost much of our credibility around the world, an economy and it seems everything else is in decline, instead of leadership substituted distrust and incompetence for this White House, achieved one of the lowest approval ratings of any President, managed to secure two terms with no resulting benefit to the American people, possibly spent more time off than time on as a working President, at the end of his Presidency will leave this Nation in the worse shape in its history from which it may never fully recover...and we will live for sometime in the nightmare of his Iraq War and the world will be forever changed by it. . We are where we are today as a Nation because of the gross neglect of important issues, policy changes and programs that should have been acted on by this administration and were not. History will show that these last 8 years may have been the defining moment in this Nations decline. That will be the Bush legacy!!
Actually, Raymond, this ISN'T "new."
Marie Antoinette put it this way: "let them eat cake."
Although the French press made short-work of this comment (thereby costing Mme. Antoinette her pretty little head), the Queen actually had no intention to be cruel. She was merely clueless.
You see, Mme. Antoinette had been born into the rarefied world of high-privilege. She had utterly no idea what it meant to be "hungry." If there was no Bread, then it must have meant that the baker had screwed-up. But there was always Bread, and there was always Cake, so the Queen merely intended to be gracious: if there was no Bread, then by all means let them eat Cake.
The starving plebeians failed to comprehend ...
As Gen. Dwight D. Eisenhower accurately predicted, our government is now dominated by the scions of an entire generation of people whose families grew fat upon Oil and War. Even to this day, those families profit hugely by fomenting ancestral rivalries among Middle Eastern nations ... and then selling weapons to BOTH sides.
These families have established their positions very carefully, and they consider themselves to be... "unimpeachable."
Ahem...
Nice!!
When the British put their navy on oil rather than coal, they bought up Kuwait. Churchill knew that the future of war and finance was in oil. The encouragement to use trucks rather than railroads and the urban planning of the United States encourage commuting from suburbs using oil and gasoline. We have no rapid transit systems to speak of. I feel the noose tightening around our necks by the financial oligarchy who own and control the food and oil cartels. Big Daddy Warbucks works with the oil cartels. Nobody can convince me that this was an accident. Supply can be manipulated to increase prices without increasing cost. Monopolies can manipulate both supply and demand and politicians.
You are absolutely right "outnow".The world is,and continues to be run by a select few of "International-Banker's",and "Corporate-Elite." This has been the situation,since the end of the first-world -war.There is plenty of "documented-evidence" to support such a conclusion, if, "one" is ready to-do the "proper" research and study.So in closing,"You are not crazy,or a crackpot."! Let's "ALL-PRAY,"that more of the "brain-washed" masses wake-up,to what "You" and many other's already know!
Put in the larger, more relevant context:
> Largest concentration of wealth in world history
DNotice.org has an article on NORAD’s mission before 9/11. It cites actual articles (with two from the government; one American, the other Canadian) published before 9/11 that show that General Richard Myers, Chairman of the Joint Chiefs of Staff, lied to the 9/11 Commission when he said NORAD was “looking outward”. Pass this article on. Not even David Ray Griffin has provided this type of documentation proving that NORAD monitored AND controlled American (and Canadian) airspace on and before 9/11.
Where was Hitler born? At Versailles. Where did the oil crisis begin? When America turned it's back on the loathsome poilicies of Jimmy Carter, such as conservation , and were hoodwinked into thinking an average B-rated actor form Hollywood with below average intelligence but a nice smile and cheery demeanor could signal an end to America's energy probelem, we condemed our children to a tragic day of reckoining. And here it is.
Unfortunately, we didn't conserve and we didn't drill, so we have the worst of both worlds.
You summed up the situation completely in just 16 words. You did a better job than the author of this column.
Mr. Learsy you should be ashamed of yourself. As someone who know the physical and derivative side as well as you it's disgusting to see you passing your partisan views off as facts.
By all means, eviscerate this adminstration - but stop passing off incorrect data. Americans are scrambling to be educated on energy, largely ignored for years. To fill their heads with nonsense is unethical. To make the NYMEX exchange somehow responsible for pricing action is akin to yelling at a supermarket cashier over the price of milk. Screaming like a petulant child at OPEC is naive and transparently racist. Our inability to place blame where it belongs, on our shoulders as consumers, is astounding.
Why not point out that the price action over the last few weeks was short covering. Meaning the "manipulative" specs were caught short. Meaning they were betting price would drop. Meaning they were *wrong* and had to cover those positions. How can manipulators be wrong?
Why not use your pulpit to explain how options market for crude always trade skewed towards the calls, meaning premium has always been placed on the security of having supply?
Why not explain that when demand equals supply, which even the most senile observer agrees exists now, the marginal barrel (not production costs) dictates price?
There is an important/thoughtful discussion to be had regarding energy policy, but while blowhards use fear as an entry point to spew personal vitriol under the guise of 'expertise', we will never have it.
Wow! Very well said. I am ashamed to be an American watching them all behave like spoiled little children. Like one blogger said to me once "Why is our oil under their sand?" It truly boggles the mind that nationally syndicated respected columnits propagate this garbage. My hats off to you sir!
Nice straw man argument. I take it you had a long position in Enron and defended them too?
You are completely ignoring the largest cause of the disconnected-from-reality rise in the FUTURES price of oil, the Sovereign Wealth Funds owned and controlled by OPEC countries (Saudi Arabia, Kuwait, and Dubai are the largest.)
These funds buy up massive quantities of oil FUTURES to create paper-shortages in oil (they don't really exist, they just APPEAR to exist in the future) and thus drive up the price in the futures across the board (pun intended) for the oil that these same countries WILL pump in the future.
None of these types of funds existed in commodities markets until about 5 years ago.
It is estimated that nearly 50% of the price of oil futures is caused by this manipulation.
It is true that many suckers who came into the market late are getting taken to the cleaners, but this does not excuse the lack of regulation that allows a producer to buy up futures in their OWN PRODUCT and create shortages in the market to drive up the price.
This is the exactly the problem. Individuals like this, (Khaaann), take a poor understanding of a basic economic theory and abysmal empirical knowledge of how the market actually trades and formulate an unbending opinion based on it.
Your comments re: SWFs are innacurate. They do not represent even close to the majority of open interest on the futures markets. Dubai, for example, has very little investment in derivatives trading, preferring to invest in real assets like real estate. Saudi has even less. Your attempt to create a bogeyman is transparent and pathetic.
Be careful of accusing one of 'straw man' tactics when they hold a much firmer grasp of the facts than yourself.
Oh, I almost forgot....
Why would Dubai, an emirate that has very little crude production left, seek to increase the price of oil?
Dubai economy is 90% diversified out of crude. They are a net user/importer of energy.
Again, you are free to formulate an opinion - but not free to formulate facts.
Absolutely. Thanks.
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