- Posted March 14, 2011 by
New Orleans, Louisiana
This iReport is part of an assignment:
Gas prices where you live
Stay Stupid America, Oil Companies Love You that Way!!!
- Jareen, CNN iReport producer
2008 and 2011
America will never be really free if we continue to rely on oil from other nations. The U.S. is the 3rd largest producer of crude oil in the world (Only Saudi Arabia and Russia produce more oil than we do), and we are by far the largest consumer of oil, using 25% of the world’s consumption every day. Therefore, the U.S. is the largest oil market in the world and American’s actions help determine world oil prices. As oil and gas prices continue another steady climb, lots of stories are written concluding that the increase in oil and gas prices are due to supply and demand with the only solution being an increase in domestic supply or reducing domestic demand…pure and simple.
However, this is not the whole story…
One of the first things to consider is “who exactly determines oil prices”? It sure isn’t OPEC. The international cartel isn’t what it used to be, as 75 percent of America’s oil comes from non-OPEC sources. Today, oil prices are determined on international exchanges based on what traders are willing to pay. And who are the people trading oil and setting the price? Managers of hedge funds, investment banks, and others out to make a quick buck speculating on the price of oil. I believe market speculations are to blame. The trading markets that set oil prices are severely under-regulated opening the door to Enron style manipulation of crude markets. In fact, there is a strong chance such manipulation may be occurring right now. While they’re making money, the rest of us are paying for it at the pump.
Another consideration to examine is the relationship between the record profits enjoyed by U.S. oil companies and the higher prices for consumers. The last time oil went up to $150 a barrel, the oil companies in the US were making 50 billion a quarter in profit. When Big Oil reports record profits, they take the stance “We couldn’t help it, we don’t set the price of oil, oil prices are set by international markets”. Is it possible that ExxonMobil and other U.S. oil companies are making part of their profits off price gouging? It is possible that, just like Enron constricted supply in California by ordering power plants offline in order to create supply shortages to jack prices up, U.S. oil companies are keeping supplies offline and waiting to release those supplies when prices rise enough to make it worth their while? It is easy to see a positive correlation between U.S. oil company’s profits and spiking oil prices.
The Republican position on energy is the same as it was in the late 1970’s when President Jimmy Carter tried to wean Americans off our addition to oil. Drill more, drill everywhere, just drill baby drill. They don’t care about safety or the environment. They don’t care about skyrocketing prices, as the rich can afford $75 - $100 to fill up their tank. That’s chump change for them. What Republicans do care about is ensuring Big Oil continues to get Big Tax Breaks. But even if we “allow” drilling, this does not mean major oil companies will then drill with ferocity sufficient to make a difference. They won't do anything to hurt their all time record profits they are enjoying now. Oil companies already have unused leases on millions of acres of public land which they haven’t even begun to drill on. As it stands, the Obama administration has issued 37 new permits for wells in shallow water and recently approved two new permits for deep water drilling as companies come into compliance with new safety and environmental rules. Companies must put in place common-sense standards like proving they can actually contain an underwater spill. Personally, I don’t believe that is too much to ask. Being from New Orleans, LA, I can attest to the devestating effects of the recent BP oil spill on our environment. How quickly Americans forget...
But is more domestic drilling the answer? Even if the U.S. drilled for 95% of its oil consumption, “the market speculators” would still set the price. I believe oil pumped within the USA needs to have controls put on it-such as how much it can be sold for to US citizens and how it can be used, I mean, it is OUR LAND right? What about a law that forces US oil drillers to accept $50 a barrel, regardless of the market? If it is “OUR” oil why should we be exposed to a worldwide market when we are the third largest producer of oil in the world?
I believe investing in cleaner alternatives that create jobs and reduces our dependence on oil will do much more to provide relief from high gas prices. The Obama administration is giving transportation money to states like FL and WI for infrastructure improvement and fast-rail construction. This would also translate into new jobs. Yet Republican Governor Walker, in Wisconsin, turned down the money as did Florida. Luckily the new Florida governor is reconsidering his decision to turn the money down. Obama is investing in clean energy industries to help fuel new companies, generate new jobs, and reduce our dependence on foreign oil and raising gas prices.
The real answer seems to be driving less and converting gasoline engines to some sort of natural gas solution, which we have in abundance. Oil companies are not reinvesting their profits into the things that will benefit motorist. Why should they? They’re making billions…
I am amazed at America’s outcry to raising gas prices. In 2008, prices here in New Orleans were over $4.00 a gallon. That was less than 2 years ago. As the Presidential campaigns went into full swing, the price of gas suddenly declined and Americans returned to their gluttonous ways. I am not opposed to more expensive gas as in European countries where gas is $9/gallon. Very few people drive SUV’s, and in Germany people drive smaller cars or use public transport. It would be the easiest way of fixing America. In exchange for high gas prices, this will provide new infrastructure and jobs to build better transportation choices for the American people. If only everyone knew that gas prices are artificially low in this country due to tax subsidies. Too bad Americans don’t believe in building or improving public transportation or commuter rails.
The way I see it, the “speculators”, controlling oil prices, are on a runaway bus and the driver is terminal. Someone with a driver's license needs to be driving the bus...The free market is wonderful, but some items need a control point. Our politicians are either too stupid, too lazy, or they are in the pockets of Big Oil to create incentives to move away from an oil economy. But we’ve already been down this road during the GWB Great Recession. I don’t like reruns…one Great Recession is enough.
Opinions differ as to the cause of the enormous price increases. Are the traditional supply and demand forces still operational? Are “speculators” artificially driving up the price? What’s your opinion?
Peace Out America!!!
I am outraged that Obama is encouraging Brazil to drill for oil. The U.S. will provide the technology and do the drilling. Then turn it over to the Brazilians. Obama then agrees to be their best customer when it comes time for the Brazilians to sell their oil...
What is this Obama? You are only increasing our dependence on oil from other countries. What happened to cleaner energy? If you are pro drilling, then do it here in the U.S. and create jobs for Americans!!!! This is a total slap in the face to Americans who are out of work.
Obama, I campaigned for you. I am deeply saddened and disappointed by your actions in Brazil. Completely hypocritical and against all that you claimed during your run for the presidency.
Einstein's definition of insanity: to keep repeating the same thing over & over again expecting to have a different outcome....
peace out America