Probe this, President Obama
Midwest Voices contributing columnist: Robert Anderson
April 22, 2011
On Thursday, President Obama announced a new justice department probe to determine if the illegal activities of traders and speculators were the cause of spiraling oil and gasoline prices.
The answer is no. Traders know there is little to no global spare oil production capacity and there’s going to be oil wars and trouble in the Mideast. Demand will continue to exceed supply. The result will be higher oil prices. There ya go, Barack. I’ll send you an invoice.
But if you really want to launch some substantive oil related probes, here’s my recommendations:
1) Why has the U.S. government Department of Energy EIA (Energy Information Administration) been in cahoots with major oil, OPEC and the Saudis in putting out these bogus projections that indicated global oil production could grow and grow and grow without any geologic constraints? This just encouraged Americans to over-consume oil and gasoline with reckless abandon. Its why we are in this economy wrenching, energy policy dry hole right now. Sure, the oil producers wanted us to think there aren’t any CO2 climate change risks or limits to growth. We went out and bought all these Hummers and SUVs and now, low and behold, we’re finding out global oil production capacity can’t really grow past 85-88 million barrels a day. The economists were wrong. Many geologists were right. The result is going to be obscene oil profits for major oil and OPEC.
I understand why oil producers spun this yarn but why did the EIA go along with it? Shoot, the EIA had global oil production projections as high as 125 million barrels a day! They even contended the Saudis would be producing as much as 25 million barrels / day! Thats just crazy.
Now that its too late to do anything about it, we’ll all be indentured servants to the oil producers. We sure missed the oil tanker on that one!
2) Now that oil companies are going to be raking in all these gargantuan profits, how come they don’t pay any taxes? I just read ExxonMobil made $19 billion (wow, they sure like these peak oil economics!) and paid in $0 taxes.
It gets even crazier. Did you know oil companies pay zero royalties on much of the offshore oil they extract from Federal leases? It seems legislation has been passed in 1995, and sweetened in 2001, that exempt oil company’s from paying royalties no matter how high the price of oil goes. Here’s the scoop NYT: Bush’s $28 billion giveaway to oil companies. This article is a tad dated. Since oil prices have doubled since this was published in ‘06, the government giveaway to major oil is more like $60 billion now.
Yep. Someone is getting probed all right, and it’s not just the oil market speculators.