Politics » Politics Feature

The Gadfly Takes On Big Oil



Been to your local highway robber lately? I mean the place where you pull up in your car and the device you operate to dispense the commodity you've come for reaches out and turns you upside down to shake all the money out of your pockets. Yes, I mean your friendly neighborhood gas station.

I was startled when, for the first time ever, I watched as the price on the gas pump approached $50, and even more startled when the pump stopped at that figure because my credit card company, unfamiliar with a fuel purchase (at least by me) that high, had apparently instituted that amount as an arbitrary limit as a way of preventing fraud. Who else would charge a $50 gas purchase on a credit card unless they had stolen it and were using it to fill up more than one tank? I guess I should consider myself lucky since, in some places, the era of the $100 fill-up has arrived . And as if it's not bad enough we're being ripped at the pump, these thieves are now charging us to fill the air in our tires. Shouldn't fifty (or a hundred) bucks entitle you to a bit of free air (especially since keeping tires properly inflated is a major way of increasing gas mileage)? What is going on here?

The price of gasoline is a little like the weather; everyone talks about it, but no one seems to be able to do anything about it. Our elected officials stage "show hearings" from time to time, whenever gas prices result in congressional offices being flooded with complaints from constituents. And at those hearings, as happened last week, our elected officials thump their fists on the table at the fat cats who run the oil companies (many of whom make as much money in a week as most of those incensed legislators make in a year) , and those fat cats say "don't blame us; it's 'the market' that's to blame." They lie through their teeth about how they're doing everything to avoid price increases (even as they amass vast hordes of cash from their obscene profits, and restrict refinery output. And everyone, from the media to our own government, buys into (and worse, mindlessly parrots) the facile excuses "Big Oil" offers for skyrocketing prices, and its outlandish profits, without actually examining how the oil market does (or should) work. We even have a government office that thinks its responsibility is to tell us how much gas is going to go up in a given period, which the oil companies (surprise, surprise) treat as a green light.

So, did you get as big a kick as I did out of our president's feeble attempt recently to cajole the Saudis into increasing oil production to help us in our time of need? Can you imagine the most powerful country in the world having to go, hat in hand (or should I say hand-in-hand), to the terrorist-harboring sheikhs, to beg them for more oil? Especially when our messenger (and his family) are business partners with those sheikhs? Well, if it's any consolation, the Saudis are (hopefully) about to get their comeuppance when (and if) Congress passes the law known, colloquially, as "NOPEC" Then, at least, we can sue the bastards for their anti-competitive behavior. That is, provided the prez doesn't veto the measure, as he's (not surprisingly) promised. Then, of course, there's the move afoot in Congress to cut off arms sales to the Saudis. See, even though they've got us by the scrotum, and aren't reluctant to squeeze from time to time, we still sell them sophisticated weapons systems. Well, two can play that game. No additional oil? No additional weapons. Makes sense to me.

I'm no economist, but I do know that in a truly free market, the price of commodities is based on supply and demand. What's more, Economics 101 teaches us that any business that depends on raw materials is going to see its profits go down when the price of those raw materials goes up. Well, welcome to the wild and woolly oil market. Even though demand for petroleum products has actually been going down recently (and fairly dramatically), that hasn't affected the upward spiral in gas prices. What's more, the higher the cost of the raw material necessary to make gasoline (i.e., oil) has gone, the higher the oil companies' profits have as well. All of this is contrary to conventional economic theory, and can be explained by what we all suspect: the price of oil (and, therefore of its products) is being manipulated.

Let's also, while we're talking about it, put to rest the red herring being used by the oil industry and their handmaidens (mostly Republicans) to divert attention from the real problem. Oil prices, they say, are as volatile as they've been, and the oil companies powerless to do anything about that (other, of course, than raking in the profits from those prices) because (boo-hoo), our legislators are preventing those companies from exploring (and exploiting) the "vast" oil reserves we have right here in our own country. If we could only drill in the Arctic National Wildlife Refuge (ANWR), they say, all our problems would be solved, and it's the fault of crazy tree-huggers who oppose such drilling that we're as dependent on foreign oil as we are. Studies, including a recent one by the Department of Energy (and an earlier one from the same source), show that opening up areas that are currently unavailable for exploration would have a negligible (pennies) effect on the price of oil, and would provide, almost literally, a drop in the bucket (4%) of our needs. So please, let's can the phony "if only we could explore" argument.

So, what are we Americans doing about the way the oil companies are raping us? Why, bending over for more, of course (without benefit, I might add, of any "petroleum" jelly). Oh sure, more people are taking public transportation (good luck trying to do that in Memphis), buying small cars, or telecommuting, but for the most part, we're still acting like sheep being led to the slaughter. Why, I wonder, aren't we storming the ramparts, like they are in Europe. Maybe it's because gas prices in Europe are even more outrageous than they are here (though primarily because of taxes), or because Europeans have already made all the sacrifices they can (and that we haven't) to mitigate the high cost of fuel. Or maybe it's just that we realize how powerless we really are when it comes to getting our government to do anything that actually benefits us. After all, it's no accident that Big Oil spends as much as it does on lobbyists, or that it's consistently among the biggest donors to the campaigns of our legislators, including all three of the candidates in the upcoming general election.

So, the next time you're at your friendly neighborhood gas station, just be glad that the oil companies let you put the nozzle in your gas tank, even if it feels like they're making you put it someplace else.

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