Our leaders have been talking about ending our dependence on foreign oil since at least the early 1970s. But almost 40 years later nothing appreciable has been done. The oil companies still rake in gigantic windfall profits, the Middle East still wields significant economic leverage costing us not only hundreds of billions of dollars but thousands of lives, and consumers continue to drive their gas guzzlers, purchase new ones and otherwise perpetuate a demand for oil that propels the entire process forward.
The unprecedented spikes in oil prices, prompted primarily by profit-mongering speculators, that we’ve seen over the course of the last year or so, brought into bold relief the problems we face. We Americans love to pinch our pennies. Start charging $4 and $5 per gallon, and we’ll start believing that real change is in order. The war in Iraq, for which the only plausible explanation is oil, also helped bring on our alternative energy epiphanies.
Still, all of us are delighted to see the precipitous decline in gas prices of late. It’s well on its way to being under $2 per gallon again. And, while many of us are just enjoying it, asking no questions, many others are asking why. Why are gas prices so low? What happened?
You might hear that demand is down. But it’s hard for me to believe that consumers were demanding more for $4.50 per gallon gas several months ago, than they are $2 per gallon today. The turning of public opinion against oil dependency (albeit at a snail’s pace), as well as the general economic crisis, have probably slowed demand, but not likely to a degree that would justify the shocking decline we are seeing. You might be able to show me a statistic that contradicts this, but I trust third-party statistics about as much as I trust financial statements audited by Ernst & Young.
Oil and gas markets don’t tend to operate according to the laws of supply and demand. They’re not governed by laws. They’re governed by men. An elite few. It’s the quintessential black box. In one corner is the private oil and gas industry. Exxon Mobil CEO, Rex Tillerson, recently statedof his company that "[w]hat we do is largely invisible to the public. They see the nozzle at the pump, and that’s about it." How comforting.
The New York Times ran a pieceyesterday about how Exxon Mobil is refusing to heed the nation’s call for a turn toward alternative energy and breaking our dependency on foreign oil. Instead, the company is seizing on the lower gas prices to justify its hard-headed conviction to make more money for itself while exacerbating our addiction to oil, and thus hurting our country.
"It’s not that we like lower prices, but our competitive advantage is more obvious to people in a low-price environment," says Rex Tillerson, captain of the world's largest and mightiest oil company. "Over the years, there have been many predictions that our industry was in its twilight years, only to be proven wrong," says Mr. Tillerson. Exxon Mobil, the most powerful corporate oil behemoth in the world, has no plans to help rid us of our oil addiction. And no shame either.
You might have seen that Chevron ad with that smooth-as-honey narrator talking about new forms of energy, new frontiers. "Chevron, Human Energy," he preaches. The images and sounds of this commercial really draw one in. It’s really good. But, coming from a company whose core livelihood is oil, oil, and more oil, it’s also a little hard to believe. The ad is a way of getting people to feel more comfortable about purchasing more oil and gas from Chevron because, if all goes all planned, consumers will believe Chevron is wisely investing our gas money in alternative forms of energy. The ad attempts to put a softer face on Chevron in preparation for those record profits it will likely post next quarter.
And then there’s OPEC, the ultimate black box. While one could go on for volumes discussing the mysteries of OPEC, suffice it to say that OPEC basically does whatever it wishes when it comes to setting oil prices and, perhaps even more significantly, the dissemination of "facts" and information about oil.
If OPEC senses that its customers, the oil addicts, are trying to wean themselves off of OPEC’s drug and that plans may be afoot to develop alternative forms of energy, it has at its disposal a few ways to reverse the trend. For example, it can sweeten the deal by having a blowout sale and bringing prices down. Way down. For a little while anyway. Until we forget about the campaign slogans regarding energy independence or put them on the back burner.
Here’s the point: There are some very, very powerful people, companies and countries that have a vested interest in making sure that we continue our addiction to foreign oil. Remember all those dirty, deceptive tricks that John McCain and Sarah Palin pulled to try to win the election? Well the powers-that-be will similarly try every dirty trick in the book to make sure we continue to be dependent on oil, but it will be even worse because Big Oil and their allies have more money than either McCain or the RNC did. A lot more.
Artificially depressing oil prices is not out of the realm of possibility here and in fact, from OPEC's and the industry's perspective, makes a lot of sense.
We can’t get complacent here. Pay no attention to those low gas prices. They’re the propaganda of the status quo. The OPEC’s and Exxon Mobil’s of the world are going to fight energy independence in this country until the bitter end. And then some.
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