alled to explain to Congress why, when the consumers are being gouged by high gasoline prices, they are experiencing record profits, Lee Raymond, CEO of Exxon-Mobil (the largest of the Seven Sisters and tutorial head of the John D. Rockefeller Standard Oil dynasty), David O'Reilly of Chevron, James Mulva of ConocoPhillips, John Browne of BP-Amoco and Jeroen van der Veer of Royal Dutch Shell, the European oil giant owned by the Rothschild interests, blamed their good fortune on Hurricanes Katrina and Rita and on the Islamic global oil cartel as they pleaded innocent to allegations of price fixing, claiming that gasoline shortages simply increased demand beyond the limited capacity of the oil giants to produce enough gasoline when Katrina and Rita slammed into the Gulf Coast.
When the oil executivesled by Lee Raymond, CEO of Exxon-Mobil entered the joint hearing by the Senate Commerce and Senate Energy Committees in which fully one-third of the Senators attendedthey were greeted by dozens of silent but angry spectators wearing "Expose Exxon" T-shirts. Democratic Senators, led by Barbara Boxer [D-CA] planned a photo op for the oil czars similar to that received by the heads of big tobacco during the tobacco hearings in 1994 when the news media made them look like criminals being led to trial. However, the Republican leadershipheaded by Sen. Pete Domenici [R-NM], who bluntly asked the oil czars: "Are you rigging the price of oil?"refused to let the heads of the five familiesoops, the oil baronsbe paraded before the media like a rogues gallery of criminals, said: "I know the political value of that sort of picture, but I am going to do all I can to make this hearing about substance and not about pictures. Americans have been experiencing painful prices at the pumpswhether you think so or not. They think so. The oil companies owe the American people an explanation." In reality, the oil companies owe the American people a lot more than an explanation. The oil companies owe the American people a refund! In addition, Congress needs to revoke the $14.5 billion in grants given to the oil industry in the recently enacted energy bill.
The oil magnates, who were not sworn in at the insistence of Sen. Ted Stevens [R-AK], chairman of the Senate Commerce Committee, argued that their business was cyclic and that their profits were modest at best compared to their investments in searching for alternative fuels for the day when the oil wells dry up. James Mulva, CEO of ConocoPhillips said his company's $3.8 billion third quarter earnings represented a profit margin of only 7.7%a number in line with other industries if you ignore the dollars. Raymond, the head of Exxon-Mobil agreed with Mulva, stating that the oil industry is "...in line with the average of all US industry. [Their] numbers are huge because the scale of [their] industry is huge...We," he concluded, "invest to run our global operations, to develop future supply, to advance energy-producing and saving technologies, and to meet our obligations to millions of our shareholders." In less polite layman's language what Raymond, who became testy when he was hammered by Boxer and Sen. Byron Dorgan [D-ND] who were demanding simple yes or no answers, was really telling the Senatorswithout speaking the wordswas that Exxon-Mobil and the other major oil giants are no longer wholly American companies who are obligated to answer to the whims of the American consumer. Exxon's primary concern, Raymond evidenced, is to their shareholders who want to see larger dividend checks that comes only from higher prices at the gas pumps.
Raymond, like the other oil barons on the hot seat, was resentful of the fact that Boxer plastered their annual incomes on a chart that showed they pocketed millions in salaries, bonuses and stock options each year. "Working people," she said, "struggle with high gas pricesand your sacrifice, gentlemen, appears to be nothing." Boxer then challenged the oil CEOs to donate their own personal money to help defray the cost of home heating oil for the elderly and those who need low-income heating assistance.
On the other side of the Congress, House Speaker Dennis Hastert called for the oil companies to reinvest their windfall profits into the oil industry infrastructure, in new wells and in new refineries. The Bush Administration echoed that demand. The Democrats demanded that Congress penalize the oil industry with a windfall profits tax. Sen. Frank Lautenberg [D-NJ], one of those demanding the tax, justified his position by saying "...I think [the oil companies] feel relatively immune from criticism." Sen. Ron Wyden [D-OR] said the attitude of the oil executives means the Democrats need to implement a windfall profits taxand rescind the new refinery incentives as well.
This would provide the oil companieswho do not want to see any more refineries builtwith all the reasons they need not to build any moreand the names of those where they could lay the blame come election day. The Democrats, who correctly argued during the hearing that the oil companies deliberately cut back on their refinery capacity in order to increase profits, should be able to see the stupidity of their threats. But seldom do the Democrats use intelligence when they vote, since they vote their special interests just as the Republicans do. Seldom, if ever, does either side vote the interests of the people who lack the funds to fill their campaign coffers with six-digit offerings that theoretically have no strings attached.
I believe Congress should slap the Seven Sisters with a massive windfall profits tax. However, my view what to do with the windfall profit taxes assessed to the oil barons would differ considerably from the views of the Democrats who want to give those proceeds to the poor in the form of heating subsidies or commuting subsidies in order to keep the poor shackled to the Democratic voting booth.
Christ rightfully told us the poor will always be with us. It doesn't matter what you do for the poor, or how many free meals-on-wheels you throw at them, they will still be poor and in need of a free meal. Poverty is a generational problem in America. Instead of throwing that money away for a free meal today and a Democratic vote in November, I'd like to see those windfall profits used to create a failsafe mechanism that will prevent, by law, $60 per barrel oil in the United States.
It's clear that the oil barons are not going to do anything to drive the price of oil back down to a benchmark rate of $30 to $40 since they are convinced we have reached Hubbert's Peak, and by 2010 we will be pumping oil at about the same rate as 1980meaning we will be able to pump only about 70% of the oil we need to keep the wheels of the world's growing economy turning. Therefore, the Bush Administration must do something radical to protect the American economy and, by extension, the industrialized world.
My radical idea will eliminate our dependency on Arab oil. Of course, if the oil barons are correct and oil is a finite substance, and we are on the downward curve of the Hubbert's Peak, there will be a ton of cars on the side of the road, out of gas, long about 2030.
I believe Congress should sock it to 'em (the oil companies) that use a phony ploythe future's marketto drive up the price of oil with every half-baked crisis that comes down the pike or up the Gulf. I believe the windfall profits gasoline tax should be 125% of the gross sales (not net profits) over the pre-crisis prices. The fundswhich will not be subject to any tax write-offswill be collected immediately to prevent the oil company from investing the profits even for their short term 72-hour loan value to any bank. The money will be given, as grants, to independent, privately owned S-corporation oil wildcatters to renovate and reopen closed refineries and drill new wells on existing oil lands or on oil leases provided by the government. I would recommend that the Bush Administration seize, under the national emergency to our economy that now exists, all unused oil leases possessed by any existing oil company in the continental United States that are not actively being exploited and developed. Those leases would be transferred to the government-financed, privately-owned independent refineriesproviding the independent oil companies exercised those leases immediately.
This would prevent the practice of stockpiling crude oil by the transnational oil giants as they slow down production to drive up the price of gasoline. Manipulating the law of supply and demand is not free enterpriseit's a form of economic totalitarianism. Under my plan, the government could turn on the spigot any time the oil market heated up, flooding the nation not with crude oil but with ready-to-use gasoline, jet fuel and home heating oil, reducing the inflated demand and returning sanity to the market.
After the joint Senatorial Committee hearing, the oil executives pointed out to their GOP allies the futility of the Democrats plans, and the need of the Republicans to stop them from implementing a windfall profit tax. The oil barons told their allies in the Senate to remember the windfall profits tax of the 1980s. It backfired and led to less US oil production. Even before the Iron Curtain fell, the oil barons were doing business with both Russia and China. The amount of money invested by the Seven Sisters in Central and South America paralleled the decline of money being invested by US oil companies in the United States. The transnational giants are not intimidated by the US government. The elected bureaucrats in the government, however, were intimidated by them even as they paraded before the TV cameras and chided the oil giants for their million dollar salaries and stock options worth hundreds of millions more. Everyone knew the act before the TV cameras was just for show. And everyone knew that next spring, all of the politicians would come to them, hats in hand, looking for their election year campaign pledge.
Six days before Hurricane Katrina, OPEC announced that it was considering solutions to the soaring prices of gasoline which they said, was completely unjustified. Sheik Ahmed Fahd Al Sabah, the Kuwaiti energy minister told the Gulf Daily News of Bahrain that "...[w]e are becoming increasingly concerned at the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market. Oil resources are plentiful and supplies are plentiful. OPEC has been producing more than its agreed output by 1.5 million barrels per day in the three quarters of 2005." The oil minister said the world inventory of crude oil exceeded their 7-year average, and that the additional capacity OPEC agreed to pump early next year meant there would be enough oil in the market to meet all demands.
The sheik insisted there was no shortage, and that there was more than enough oil in the pipeline to meet demands throughout the winter and into 2006. The Arabs appeared to be at a loss why, when they opened the spigot to free up enough oil to cover the demands of the world throughout the entire winter of 2006-07, that prices continued to soar. In their mind, supply adequately covered demand—and, on top of everything else, the global demand for oil had fallen. Reduced consumer demand worldwide caused by increased prices at the pumps, cut gasoline consumption dramatically and should have caused the price of crude to drop below the $60 threshold. It did not.
It did not, simply because the price of gasoline has nothing to do with the volume of oil being pumped from the ground (unless there simply isn't enough oil being farmed and the storage tanks at the refineries around the world are empty). In the world today there is no shortage, There is an oil glut that is so severe that Saudi Arabia, which had increased oil production in the summer at the request of the Bush Administration, was forced to cut back simply because the world's storage facilities are all full and there is no place to store the oil being pumped from the ground.
For the first time ever, a presidentGeorge W. Bushaddressed the reason why gasoline prices are skyrocketing in the aftermath of Katrina and Rita. And for the first time ever, an American president honestly explained to the American people how to reverse the trend. Build oil refineriesquickly. In a press conference on Tuesday, Oct. 4, the president explained how to reduce the price of gasoline, home heating oil and jet fuel. Build refineries. Unfortunately, the American people are listening to the environmentalists who are funded by the oil giants who have a vested interest in curbing oil consumption, and not the Bush Administration, which was telling them the truth.
While this was not the argument the oil company executives gave to Congress, the oil giants believe that oila carbon fuel (they wrongfully speculate was derived from algae, the rotting carcasses of dinosaurs, decaying primordial plant and animal life from the Carboniferous Period or from trillions of microscopic diatoms [organisms in the primeval seas about the size of a pinhead])will attain peak (the level at which the oil on Earth is 50% depleted) somewhere between 2010 and 2030, and for that reason, they are justified in driving up the price of oil in order in order to conserve it. In reality, as reported in the Proceedings of the National Academy of Sciences last year, oil is not a fossil fuel. It is continuously being created by a process deep in the Earth, raising the question: peak oil or deep oil? Scientist theorize today that the organic material scientists initially found suggested oil came from living things, may simply have been waste matter from microbial organisms that feed on hydrocarbons deep within the planet. This debris simply flows upward, mixing with other abiotic materials as they interact with the limestone and iron oxide (the process by which methane is created). Dudley Herschbach, a Baird Research Professor of Science and the recipient of the 1986 Nobel Prize for chemistry conducted the original experiments to prove how methane is created in the Earth, said that new findings corroborate that many of the Earth's oil reservoirs refill as they're pumped out. Herschbach said his observations support the view that petroleum may be continually generated. Herschbach urged caution to the oil gluttons saying that "...[e]ven if we convinced ourselves that a lot of hydrocarbons are formed that way, we don't yet know how long it takes for it to percolate up and fill the reservoirs." If the views of Herschbach and 19th century Russian chemist Dmitri Mendeleev, astrophysicist Thomas Gold and physicists like Michael Gordin are true then once again, the Rockefeller wisdomwhich has steadfastly maintained that oil is a nonreplenishable fossil fuelis once again, flawed.
Geologists who ascribe to the "peak oil" theory (also called Hubbert's Peak after Shell geologist Dr. Marion King Hubbert) who, in the late 1950s, calculated that, based on known global reserves, the oil wells in the non-OPEC countries would dry up between 2010 to 2015, and the oil reserves in the OPEC nations would begin to dry up around 2030.
Using fear tactics, the oil giants soberly hypothesized that if their theories are even remotely accurate, OPEC could control all of the viable oil reserves in the world by 2030and could demand any price they wanted for black gold. (What the oil giants also fail to mention, or talk about in mixed company (oil companies vs consumers), is that the largest oil reserves in the worldenough oil to supply the world for 150 to 300 yearslies at the bottom of the China Sea. They also fail to note that those oil reserves have been claimstaked by the People's Republic of China.
An IPO between China and Standard Oil which formed the largest oil cartel ever imagined by man, will tap into what is believed to be the largest subterranean oil field in the worldeven larger than those discovered under the Arctic ice cap in the 1980s and 1990s. The oil under the sparsely inhabited, frozen skin of ANWR that Bush targeted for exploration would serve 100% of the energy needs of the United States for 30 years. It was this oil that House Minority Leader Nancy Pelosi falsely claimed would reduce the cost of gasoline at the pumps by a penny a gallon. If all of the North Slopethe area known as the Arctic National Wildlife Refugewas opened for drilling, those wells could serve almost all of America's internal needs for a century if the oil companies were correct in their assumption that oil is a finite commodity, which it is not.