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hen Exxon-Mobil CEO Rex Tillerman left his palatial estate for the office one day a couple of weeks ago he discovered a small pool of oil on the garage floor under his chauffer-driven BMW. As Horace the chauffer pulled out into traffic and headed for the office at Wall and Broad Street, Tillerman quickly called his best futures buyer to give him the good news. "Henry," he said, "guess what?"

"What?" Henry queried.

"I found an oil leak under my car this morning," Tillerman said.

"Really?" Henry replied, his voice becoming excited by the good news. "How large was the leak?"

"Well...not that big," Tillerman admitted reluctantly. "About a teaspoon. Maybe more. Maybe a tablespoon. But, just think this thing through. I'm a pretty rich guyright? So, if my car leaks oil, you've gotta ask how many millions of cars are leaking oiland then, taking that equation to its logical conclusion, ask yourself how many hundreds of millions of quarts of motor oil a day are probably being lost due to engine leaks—and how that's going to affect the price of crude oil in the future's market."

"You're right, boss," Henry replied. "Thanks for the tip. I bid up the price of crude on my Blackberry while you were talking. I bid it up to eighty bucks a barrel And, why not? Since I entered the bid, we'll be able to jack up the price of gasoline at the pump tomorrow. At this rate, gasoline will be at five dollars a gallon in no time flat. Once we hit five bucks at the pumps, even the greedy American consumers will have to take a bus like the rest of the world."

Extreme analogy? Not as extreme as you think. The "bad news" that theoretically started the last oil spike was an announcement last month that the production of ethanol was only about 85% to 90% of that projected by the Energy Information Administration. The oil industry argued that because the ethanol industry did not meet the president's so-called "Advanced Energy Initiative," the shortfall caused the price spike. The oil industry would have us believe that ethanol shortfalls caused the current wave of price spikes that has driven up the price of gasoline nationwide by almost a half dollar, with retail prices at the pump now setting at, or just above, $3.00 per gallon. The average prices nationwide was $2.92 a weel ago.

Now, let's look at that "shortfall." Does logic suggest such a shortfall could genuinely cause a sufficient fear in the oil futures market to send shock waves through the industry? The media thinks so. In fact it's convinced that the price at the pumps jumped because new federal fuel-switching requirements created sporadic nationwide shortages. Media spinmeisters for the oil industry claimed that the new federal requirement mandating that all gasoline contain 10% to 15% ethanol in order to stretch America's fuel reserves was compounded by rising tensions over Iran's nuclear ambitions. Both conspired to drive up the price of crude. Oil prices soared above $75 per barrel on Friday, driving retail gas prices to the $3 per gallon threshold.

America's daily consumption of oil at the end of 2004 (the last complete set of figures) was 20,731,000 barrels of which 9.1 million barrels were refined for gasoline. (Less than 50% of the oil that is refined in the United States is sold at the nation's gas stations. Most is used for industry, yet the consumers—not industry—are blamed for the rapidly escalating price of oil.) To blame an ethanol production shortfall for the latest round of gasoline price spikes borders on stupidity since the Federal Reformulated Fuels Act of 2005—had it successfully sidestepped the hurdles put before it by environmentalists in the US Senate—would have mandated that ethanol production double by 2012, from 3.9 billion to 7.5 billion gallons. At that time—6 years from now—ethanol production would reduce the consumption of oil by 80 thousand barrels per year, or less than 1% of America's gasoline usage. Today, 3.9 billion gallons of ethanol is a mere drop in the consumption bucket. A 10% to 15% drop in ethanol production means a shortfall of 39 to 50 million gallons of auto fuel over a one year period—or 100 to 180 thousand gallons per day. That's less than 1/2 of 1% of the supply. It would barely register a ripple in the gasoline pool, let alone cause a spike severe enough to impact retail prices.

The oil industry statement that oil prices initially spiked because of the shortfall in ethanol is a total sham. The oil industry uses any excuse from hangnails to a brief afternoon rain shower to manipulate the futures market. But what amazes me most is that the American public—and whatever presidential administration is in the White House—can't put two-and-two together and ask why it is that [a] the oil industry is allowed to bid up the prices of their own product, or [b] when the futures market bids up the price of oil for the next quarter, or the next year, why it is that the price of gasoline at the pump spikes the following day? The Congress of the United States has an obligation to the taxpayers—not the fat cats who fill their campaign coffers—to make sure we are not being gouged by greedy oil companies—or gas station operators or owners. Since they have no actual cost increases on the oil they have in their holding tanks, neither the oil companies nor the gas stations that sell the refined oil product, should be allowed to arbitrarily raise their prices in anticipation of a price increase somewhere down the supply chain that theoretically will not occur for three to six months. Fearmongering only works today when the catalyst that triggers that fear exists. The oil industry counts on that to justify the price increases they want to implement without anyone being able to accuse them of price fixing or gouging.

The first shoe dropped early last week when oil passed $70 per barrel on the announcement that rebels in Nigeria were attacking oil pipelines in the African nation. The second shoe dropped with speculation about heightened diplomatic tensions between the United States and Iran. Neither problem impacted current oil supply levels. Nor would either threaten the availability of crude oil in the immediate future since Saudi Arabia and the UAE have agreed to make up any shortfalls resulting from actions taken by the governments or dissidents in either nation. The price of oil is skyrocketing because the oil giants need it to skyrocket. The oil cartel needs to go after deep oil. Deep oil is found below basalt in the mantle where oil is created. Drilling through granite and basalt to reach it is an expensive proposition. The Russians know that because they've been doing it since 1967. The oil cartel knows that for that type of drilling to be profitable, oil needs to be at $100 barrel. But that's only because the oil cartel is used to gouging the consumers. Their quarterly earnings statements prove that.

The media aside, it really doesn't matter how many shoes "drop" since the subtle "thud" of the shoes hitting the ground aren't the reason for high oil prices—or its negative impact on the stock market or, for that matter, for the escalating price of gold.

First, oil coming from decayed dinosaurs is a myth. Second, peak oil is a myth. Third, the world is not running out of oil although the planet is not replenishing it as fast as man can use it. Fourth, the oil industry knows all this since Yukos Oil proved it. Yukos Oil, Russia's oil monopoly, proved that oil gravitates to the surface of the planet from the hot magma where its created. Oil seeps upwards through the strata of granite and basalt to the mantra where it is trapped in oil pools. The Soviets have published over 200 papers on deep oil. Most of those papers have never been widely distributed in the west simply because hard intelligence that contradicts the views of the Seven Sisters doesn't set well at 120 Broadway. And, views that don't set well at 120 Broadway likewise don't set well up the street at 26 Broad St. What Standard Oil doesn't like generally does not set well with the investment bankers at JP Morgan & Company and those views don't set well at the Stock Exchange.

Although the Seven Sisters know that oil is not really a fossil fuel created by decaying dinosaurs; and they also know that oil is self-replenishing. They also know that deep oil production is much more costly than drilling shallow oil wells where the oil is pooled within the Earth's crust rather than its mantra. But, they also know that oil does not replenish itself as fast as we use it.

Big oil, and the wealthy transnational free market capitalists and communist industrialists and bankers who control the global oil cartel are the driving force behind the emerging one-world economy and a quasi-democratic one-world political system—a view their oil partners in the Middle East don't share. But big oil needs the oil sheiks since the flow rates of the Gulf oil fields in Iraq and Saudi Arabia replenish faster than any oil reservoirs anywhere else in the world. It is estimated that the Gulf oil fields will continue forever even though the sheiks are seeing flow slowdowns of between 20% to 30%. (The slowdown is not the result of diminishing oil reserves but contaminants in the crude that increase friction and slowdown the flow. Inevitably, the initial flow rate will slowly decline—a fact known to every oilman in the business—but that slowdown is not indicative that the well is running out of oil.)

You now have a picture of the oil industry as it really is. There is no oil crisis. There are no global oil shortages. There is, however, a massive gasoline crisis thanks to the Seven Sisters and their environmentalist allies who believe that "fossil fuels" are destroying the world when in fact the increased levels of carbon dioxide in the world provide the increased crop yields that is now feeding the world. If carbon dioxide is dramatically reduced as the environmentalists who believe its the cause of global warming insist it needs to be, crop yields would be dramatically reduced, the amount of arable farmland in the world would shrink, and global starvation would increase dramatically. Global warming is a fact because global warming is a cyclic event. Whether man was here or not, global warming and global cooling would occur. If there was not a single internal combustion engine, nor one ounce of carbon emissions, global warming—to some degree or another—would still occur.

The gasoline crisis exists because John D. Rockefeller, Sr. learned early on his path to becoming the single wealthiest man in the world that when you were determined to control the oil industry it didn't matter how much oil was pumped from the ground, it only mattered how much of it was refined. Until its refined, crude oil has no commercial value. Standard Oil, which controlled 85% of the world's oil output by 1885, was not an oil driller. Standard Oil was an oil refinery. Until US District Court Judge Kenesaw Mountain Landis used the Sherman Antitrust Act of 1896 to break up Standard Oil on Aug. 3, 1907, Rockefeller—who was the most hated man in America—simply undercut his competition until they went bankrupt. He bought their assets and absorbed whatever parts of the companies added value to Standard Oil. In most cases, Rockefeller simply boarded up the buildings since his core objective in buying them was to eliminate what he viewed as an excessive glut of refineries. In the equation of supply and demand, Standard Oil made sure that demand always exceeded the supply. As long as demand exceeds supply and regardless how many barrels of oil are waiting to be refined, the price of oil—and conversely, the price of gasoline at the pump—will continue to rise.

When the US Supreme Court confirmed Landis' breakup of Standard Oil on March 15, 1911, the US Justice Department made it clear to Standard Oil and the Seven Sisters (as the spun-off oil companies were labeled by the media) that Standard Oil's anti-competitive heavy-handedness would no longer be tolerated. Through the first half of the 20th century the American oil cartel devised the master scheme that would allow them to eliminate their competition without fingers being pointed at them. And, they spent the second half of the 20th century—and billions of dollars—bringing their plan to fruition. They succeeded beyond their wildest dreams during the co-presidency of Bill and Hillary Clinton thanks in large part to the environmental vice president, Al Gore.

When the US Supreme Court completed the breakup of Standard Oil on Mar. 15, 1911, the oil giant and the Seven Sisters appeared to have gotten the message—price-fixing and running competition out of business simply would not be allowed. Market forces would prevail, and prices would be determined by the basic laws of supply and demand. The Seven Sisters got the message because it was, after all, their message. When you control supply, you control demand.

Artificially choking off supply by crushing the competition, however, would likely be construed by the free enterprise watchdogs as a restraint of trade rather than a free exercise of entrepreneurialism by those with the financial muscle to overwhelm their competitors. The Seven Sisters had to find a way to entice the government to not only crush their independent competition in the oil and natural gas drilling and refining business, but to prevent new competitors from entering either the drilling or refining arenas in the United States. That was the problem facing Standard Oil in the 1950s and 60s. They solved the problem by funding a new industry and hiring the lobbyists to muscle their demands through Congress.

The 1960s saw the birth of the radical environmental movement through the exploitation of a myth—global warming caused by a population explosion that threatened the existence of human life on Earth. No one questioned the funding that brought into existence radical environmentalist organizations like Greenpeace, the Nature's Conservancy, the Sierra Club, the World Wildlife Fund, the Wilderness Society, the Environmental Defense Fund, and the Earth Island Institute and scores of lesser known radical groups like Earth First!. All of the mainstream environmentalists had one thing in commontheir source of funding. Where the radical, violent, fringe environmentalists received most of their funding from socialist organizations and foundations, the mainstream environmentalists received their initial funding from the world's oil giants and the foundations of the international industrialists and bankers.

Their job? To protest sufficiently loud enough to grab the media headlines. The environmentalists goal was to raise the specter of global warming, convince the people of the world that global warming is a threat and then successfully lobby Congress to ban all carbon fuel emissions. Wait a minutewhy would the oil cartel fund an advocacy industry to lobby for the banning of carbon dioxide emissions? Because the environmentalists were created to fight the fight the oil cartel could not legally wage—to financially weaken and destroy the independent oil industry, particularly the independent oil refiners. Partnering with the oil cartel was America's Fortune 500 companies who spent 60 years watching their bottom lines shrink even as their industries grew from national corporations to behemoth transnational giants. Americans, whose affluence provided them with a lifestyle unequaled anywhere else in the world, had everything. But, because they did, America had become a replacement market, new fad items notwithstanding. By jumping on the global warming band wagon, as Bill Clinton signed NAFTA into law, he also signed the UN Convention on Climate Change and the UN Convention on Biological Diversity. Both covenants had been flatly rejected by the Bush-41 Administration at the UN Rio Summit as the product of voodoo science.

In 1995 radical environmentalists Vice President Al Gore and former Senator Timothy Wirth [D-CO], a Clinton Administration Undersecretary of State for Global Affairs, were the key authors of the Convention on Climate Change, drafted at Kyoto, Japan. The document became known as the Kyoto Protocol. It was the instrument that was to make American manufacturers blameless when they were "forced" to move their factories from the United States to the third world nations in order to minimize global warming and protect the planet.

Somehow I've never been able to understand how carbon dioxide emissions in the United States cause global warming, but carbon dioxide emissions in China, Pakistan, India and Mexico do not. The oil cartel now had a vested partner in their war on global warming. In their search for the consumers of the 21st century, the transnationalist industrialists, bankers and merchant barons of the world needed to find first generation consumers who needed the products they had to sell. Those consumers—the human capital of the 21st century—were found in the third world. All that was required for them to become actual consumers were jobs. Our jobs.

The trick was to have Congress create a tariff-free swinging door that would allow 15 million jobs a year to leave the United States and the products those jobs—at greatly reduced wages with little or no fringe benefits—created to return to the stores and shops in the most affluent nation in the world without tariffs that would make them too expensive for the American consumers to buy. The Houdini part of this stunt was to find a way for Congress to accomplish that feat without being fired by the voters. An ecological alliance with big oil offered the solution. Signing on to the tenets of the Kyoto Protocol were the nation's worst environmental offenders—Union Carbide, E.I. DuPont, Exxon-Mobil, Dow Chemical, Monsanto, Ashland Oil, and scores of others who became among the first to move their industrial plants and assembly line facilities to the third world.

To environmentalists like Al Gore, Kyoto was about protecting the planet from the people living on it. To the labor unions who were tricked by big business into what they thought would be power-sharing the global economy—and who are now fighting it—its about keeping what jobs are left—and providing American union jobs to illegal aliens. To the politicians who lie about the threat of global warming, its about getting re-elected. To the transnational corporations it's about expanding their bottom line and keeping small competitors from becoming larger ones. And, to the oil cartel, is simply business as usual. They must keep anyone who is not part of the cartel from building oil refineries anywhere in the world because the secret to $100 per barrel oil isn't having enough oil to refine, it's limiting how much refined oil products reach the consumers who need it and will always pay more to get it when there is not enough to go around.

Global warming, like peak oil, is a myth created and promoted by the merchant princes of the world to shift the economic might of the industrialized world to the third world where tomorrow's consumers—70% of the world's population—live in order to provide the incomes they will need to buy the goods and services that will be made available to them. Ecoalarmists in the federal bureaucracy and in Congress, support the latest voodoo statistics provided by the liberal environmental think tanks who claim that the Earth's average temperature could rise by as much as 16 degrees during this century because of increased carbon dioxide or other so-called greenhouse gas emissions. Clearly, temperature increases of 16 degrees over a sustained period of time would be catastrophic and, as the ecoalarmists fear, the potential for serious coastal flooding not only in North America but Europe would be a reality. The State of Florida would be reduced to a series of small islands that would link Tallahassee with Key West.

However, the simple truth is (and most truths are simple realities), the National Oceanic and Atmospheric Administration, the Department of Energy and the National Science Foundation joined with Duke University researchers to study the question of whether or not 13% of the nations scientists (the number of scientists who jumped on the global warming band wagon) are blowing smoke at us. After an exhaustive study, the NOAA-Duke study showed the chances that Earth's temperatures will rise even by 11 degrees is only about 5%. These estimates fall in line with all previous studies done by reputable government agencies not being paid by the oil cartel or the "ecology-sensitive" business barons who are hurriedly building their factories in human capital-rich third world countries with 60% or greater unemployment.

Most previous studies were done by environmental advocacy groups or liberal academicians (whose universities are funded with grants not only from the oil cartel and the industrialists who will benefit most from global warming) but from some of the largest environmentalist advocacy groups themselves. In a global warming study released recently by the University of Toronto, a researcher warmed that fully one-fourth of the planet's plants and animals would be extinct by 2050 because of rising temperatures—even though increased carbon dioxide means an increase in plant stimulation, increased rain in formerly arid land, and increased crop yields.

Oregon State University issued a paper last year in which its author linked future "societal disruptions"—race riots—to global warming. Harvard University warned Congress in 2004 that global warming had doomed the planet to what the author called "climatic shocks and surprises." Asked what these surprises would entail, the author of the report didn't know. I guess that's what makes them surprises. The Carnegie Institute noted that the atrium affect of the northern forests in the northeastern United States and Canada would have such an insulating character that the forests alone would raise the Earth's temperatures by at least 6 degrees.

Former vice president Al Gore and his former chief-of-staff, Roy Neel (now a well-heeled Democratic consultant) just finished a 94-minute ecoalarmist documentary called "An Inconvenient Truth" that will be aired in movie theaters in May. In the film, Gore calls global warming a "planetary emergency." It is not. It is ecoalarmist fearmongering plain and simple.

Anti-green environmental groups—as well as the government agencies mentioned above—have tracked the world's average monthly temperatures since 1979, when NASA satellite record-keeping began. NASA temperature tracking is important because it provides real-time data. It's not a weather forecast, nor is it a whimsical guess. It's the hard data of what is happening to our world as it happens. The data harvested by NASA is being ignored by the greens since that information discredits those who argue that an ecological Armageddon awaits the world in the not to distant future unless the people stop consuming oil, coal or burning wood.

Global satellite measurements are made from a series of orbiting platforms that record the average temperatures in various atmospheric layers. Temperature levels at 5,000 feet and 28,000 feet are taken by weather balloons which feed the data to the satellite which, in turn, feeds the data back to NASA. These measurements are accurate to within 0.001 degrees centigrade, and provide climatologists with uniform data for the entire globe. It is far more accurate and therefore, more reliable, data than any earth measurements—or the wild guesses of doomsday pundits.

NASA's global temperature tracking since 1979 reveals typical weather anomalies—unseasonable hot summers or cold winters, or cool summers and warm winters. Overall, NASA's data since 1979 clearly and irrefutably shows no sustained planetary warming. During 1998 when Al Gore defended the Kyoto Protocol because America's 1998 El Nino winter hinted that global warming was fact we needed to get used to, the global temperature departure was -0.094 degrees. Not only was there no global warming, the Earth was actually cooler by a fraction of one degree.

Just don't misunderstand me. Global temperature departures—up and down—are cyclic. They happen. Minor fluctuations in the average temperature departures occur in conjunction with solar activity. Major fluctuations occur every 20 or 30 years or a half century to a century. At the risk of sounding repetitious, global warming is a myth. So is peak oil. You are paying more per gallon for gasoline because you chose to believe the myth. If you didn't believe the myth, you would understand the oil cartel was ripping you off and Congress is doing nothing to protect you. If you didn't believe the myth, you would be angry—and you would be raising Hell with your Congressman and Senators, reminding them that they are coming up for election in November. And you would tell them that if they don't rein in the gift horses that are filling their campaign war chests with financial fodder, they will be out of work come November.

Okay, now you know the whole truth behind the increase in oil prices. What are YOU going to do about it?

 

 

 

 

Just Say No
Copyright © 2009 Jon Christian Ryter.
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