As I look at the price of oil at this moment, it’s at $142.95, and I’m remembering the old days, just last year, when I was speculating about when a barrel of crude oil might reach $90 per barrel. The cost of oil is now half again as much as it was back then. Sigh.
The Republicans in Congress, looking to distract people from looking at the obvious causes of the fossil fuel frenzy, say that the problem is all supply. Don’t conserve, they say. It’s not the profiteering of the oil companies that’s too blame, they say. It has nothing to do with the poor economic planning and international chaos coming out of the Bush White House, they say. Irresponsible commodities speculation has nothing to do with it, they say.
The Republicans in Congress say that the high price of gasoline is all the fault of the Democrats, who have controlled Congress for just a year and a half. They say that if the Democrats would just do something to encourage oil drilling on public lands, the price of gasoline would plummet.
The odd thing is that the Democrats actually did propose legislation to encourage oil drilling on public lands last week – and almost all the Republicans voted against it. The legislation won a majority of the votes, but because of procedural issues, it needed to get two-thirds of the vote, and so it didn’t pass.
The bill was the Responsible Federal Oil and Gas Lease Act (H.R.6251), which would have forbidden the granting of new leases on public land to oil companies that aren’t using the leases they currently have to actually drill for oil. Thus, the legislation would have forced the slack oil companies to become more efficient, and increase the supply of domestic oil, giving some downward pressure on gasoline prices.
Why would an oil company get a lease to drill oil on public lands and then not drill for oil on that land? It’s for the same reason cyber squatters will buy up a domain name they think will be hot, but not develop any web site for it. They’re trying to profit from market manipulation, rather than through work.
The big oil corporations are fat and lazy. They want their record-breaking profits to go higher and higher every year, but they don’t want to go to the effort of drilling for more oil in order to achieve those profits. So, what they do instead is artificially drive down supply.
They buy up available leases for oil drilling on public lands, and then refuse to drill. Because they’ve got the leases, nobody else can drill that oil either. So, the oil stays off the market, the oil companies pay a very small fee, and the price of oil shoots through the roof, enabling the squatter corporations to make more money from the oil that they were already drilling.
The Responsible Federal Oil and Gas Lease Act sought to put an end to this economically vampiric practice, and that’s why the Republicans in Congress almost all voted against the bill. They don’t really care about high gasoline prices. They’re just out to protect Big Oil.
By the way, I don’t think that more drilling is actually a good idea. We need to learn to conserve energy through changes in lifestyle and improved efficiency in our technology. We need to find cleaner ways of gathering energy as well.
However, I do think that when the government does lease public land, that public land ought not to be used as a tool to drive up inflation so that corporations can gain power at the expense of the rest of us. Besides, the oil companies do plan to drill on that leased land, but only once their other sources dry up.
The lack of drilling on already-leased public lands is being used by Republicans as a justification for opening up public-owned wilderness areas like the Arctic National Wildlife Refuge and environmentally precarious locations on our nation’s coastlines for additional oil leasing. Don’t be fooled into thinking that the opening of these new leases would result in a quick surge of crude oil onto the market. Once again, oil companies will sit on their new leases, not drilling, and not preparing to drill, in a new generation of market manipulation.
The Responsible Federal Oil and Gas Lease Act did a good job of exposing the hypocrisy of the Republicans in Congress. However, a better and more honest maneuver would be to revoke the oil drilling leases on public lands that oil companies have purchased but not used to drill. Revoke those leases, and then don’t open them back up.
What the oil companies are doing for profit, the American government needs to do for the good of the nation. I’ve been shocked and outraged at high gasoline prices and the economic damage that they’ve caused.
However, the Responsible Federal Oil and Gas Lease Act reminds me that the big oil companies won’t have the power to drive the price of fossil fuels up unless we, the American people, cooperate with them. Our wasteful habits are as much to blame for the surge in gasoline prices as the land squatting of energy corporations.
We can drive down the cost of gasoline, and thwart the plan of the oil corporations to make record profits without actually earning them. The power we have is to use less gasoline.
The corrupt corporate squatting strategy depends fundamentally upon our greed for cheap energy. Give up that greed, and we win. Keep burning oil as if there is no energy crisis, and we’ll be contributing to inflation as much as Big Oil.
As if to prove that a low oil supply is not causing the huge increase in price, two weeks ago, when Saudi Arabia announced that they would increase production by 200,000 barrels a day starting in July, the market responded by INCREASING the price on oil.
Yep, speculation has been a problem factor in the “oil crisis” (for us, not Big Oil). Yeah, just wait til winter and you get your fuel oil bill and gas is near $5 a gallon. We’re heading for a really bad situation and Washington just keeps doing whatever the corporate lobbyists dictate. “Our” government doesn’t work and it doesn’t look as if it can be repaired. Democracy was such a good idea until capitalism took over. Now it’s corruption as usual (like the rest of the world).