Elaine Meinel Supkis
Price of oil can easily top $100 a barrel thanks to the plans to boycott Iran. But banging war drums isn't the only cause of high oil prices. In classic capitalist fashion, the remaking of the mega-monopoly energy giants coincides exactly with the sudden rise in world oil prices. We are back into the Robber Baron Days, only they are Sheikhs and Kings these days as well.
Oliver Morgan and Heather Stewart
Sunday April 30, 2006
The ObserverThe growing international crisis over Iran's nuclear programme could trigger a catastrophic oil price spike, sending crude prices over $100 a barrel, senior Wall Street analysts are warning.
With prices already at around $72 a barrel, such an increase could mean drivers facing prices of 110p a litre on forecourts, according the the Petrol Retailers Association. Last week Lord Browne, chief executive of BP, warned that prices could rise to £1 as he unveiled bumper $5.27bn profits for the first quarter.Shell is also expected to announce close to record numbers next week, with analysts expecting profits around $5.57bn, driven largely by the oil price.
A single political shock could be enough to send oil markets into panic, said Adam Sieminski, senior energy economist at Deutsche Bank in New York. 'If we have one more big problem we are going to have triple-digit oil prices.' Sieminski points to confrontation with Iran, a worsening of the situation in Iraq or a recurrence of devastating hurricanes in the Gulf of Mexico as potential catalysts for a major rise.
Yes siree! A single political shock can make the mega-corporations which own world energy systems even richer! And since they own the President of the USA and are one and the same with many oil pumping nations, forget manipulating oil production to raise prices! All one has to do is insure sufficient political distress and voila! Plutonic plunder!
There can be infinite fun doing this. Of course, Bush and McCain and others can't openly say, "We are sabre rattling in order to make our sponsors filthy rich," so they solemnly swear they are doing this only because they are puppets for Israel. This means the rage and fury over high prices can be shoved off onto various side parties such as Jews or Shi'as.
But a quick glance at my crude chart showing the intersection between energy company mergers and price of energy and is very obvious that once the giant four formed, the last major event being the mega-Exxon/Mobil deal in Dec, 1998, the price has climbed steadily on all forms of energy. World Socialist Web:
By Joe Lopez
15 December 1998The recently-announced merger between major oil companies Exxon and Mobil will create not only the world's biggest oil company but also the largest corporation in terms of revenue. Its combined income for the first nine months of 1998 would have been $119 billion compared to the $115 billion generated by the world's largest corporation, General Motors.
The deal, valued at over $75 billion by analysts, represents the biggest industrial merger in history. It is far larger than the previous record, which also took place in the petro-chemical industry. That union, between British Petroleum and the US-based Amoco, was worth $48.2 billion and created the world's third largest oil producer.
The coming together of Exxon and Mobil will forge a corporation of enormous size. Exxon-Mobil's crude oil production will outstrip that of Nigeria and several other members of the Organization of Petroleum Exporting Countries. Its revenue will be bigger than the gross domestic product of all but 23 countries. It will be the world's largest retailer of gasoline, with about 47,500 stations worldwide and an estimated annual profit of nearly $12 billion.
Our government allowed this to develop because the oil companies own our government. Like the military/industrial complex, they own much of the media or run significant revenues into the media so as to control content. This means they get to call all the shots in our "elections" by hounding their potential critics or misrepresenting the news or in the classic form of activity, ignoring totally anyone who is opposing them. When I was on ABC talking about how to fund solar energy units so home owners can control the production of energy that goes into the system, they were pretty unhappy and I was curtly told, no one would ever want to hear from me again so shut up, Elaine!
Bah. Thus this pitiful blog. It exists as my personal historical record, proof that I was right.
Exxon/Mobil weren't the only ones to merge during that key year when world oil prices seemed unable to budge upwards. Wikipedia:
BP plc (LSE: BP, NYSE: BP, TYO: 5051 ), originally British Petroleum, is a British energy company with headquarters in London, one of the four vertically integrated private sector oil, natural gas, and petrol (gasoline) "Super Majors" in the world, along with Royal Dutch Shell, ExxonMobil, and Total.In August 1998, British Petroleum merged with the American Oil Company (Amoco), forming "BP Amoco". This move was widely viewed as a takeover of Amoco by BP, and was only officially described as a merger for legal reasons (after a single year of joint operations, "Amoco" was dropped from the corporate name). The newly-renamed "bp" became an initialism no longer overtly standing for "British Petroleum". At the same time BP used the punning tagline "Beyond Petroleum" in some advertising campaigns. The step away from "British Petroleum" was in part a reflection of the fact that BP had become a global business and also that the direct identification of the company as British could be a disadvantage in some areas of operation.
This was part of a wave of mergers that were openly encouraged by interested parties who happened to have sufficient pull on political levers to make this happen. As always, when monopolies form, it is way easier to collude on prices since it takes only six or seven individuals working with four or five countries to pull off this sort of trick.
Now, suddenly, fuel economy standards are all the rage. Speaking in Biloxi, Miss., on Thursday, President Bush said he would like Congress to "give me a capacity to raise CAFE standards on automobiles." Actually the president apparently does have the capacity to raise fuel economy standards, but only, according to the White House, in a manner that is economically inefficient and risks making cars more dangerous. The administration did, it is true, rewrite the fuel economy standards for light trucks (albeit by less than 3 miles per gallon between now and 2011) and did ask Congress back in 2002 for the authority to reform the current law. But Congress didn't respond, and the president didn't push. Put simply, the issue has been nobody's priority.
Bush has to pretend to want fuel standards. Of course, the marketplace is doing this already. Alas, it is doing it in a stupid way, of course. Namely, they are upping MPG of super-gas guzzlers so they get slightly better milage for the rich but there are no real gas misers out there at the lower end of the scale, I know because I have driven gas misers all my long life starting with my first VW back in the sixties.
Now the transportation secretary has written to congressional leaders, asking again for a legislative change, and a House committee has decided to hold hearings. In the context of other suggestions floating around the Hill, these are positive developments. Consider the alternatives: Republicans proposed this week to compensate for high prices with a $100 rebate for every taxpaying American, just about enough for two tanks of gas in an average sport-utility vehicle. Democrats and Republicans alike meanwhile spoke of suspending the 18.4-cent tax on gas for 60 days, which would cost at least $6 billion and have no impact on the underlying problem. Members of both parties supported various forms of penalties for oil companies that, while perhaps satisfying for consumers, don't exactly herald a long-term solution to what the president has called America's oil addiction.
Of course, cutting taxes is the all purpose solution except we are witnessing a $600+billion deficit this year if one includes the Social Security funds as "tax funds". What the GOP wants to do is hand over all tax revenues to the oil companies and replace them with IOUs to China which aggravates our situation no end in sight. Of course, with all the yelling about being over budget as well as the crusty desire to inflict the full pain of Darwinian capitalism on the masses is roiling the rancid ranks of the right wing. Mercury News:
Republicans also proposed several initiatives popular with their base of supporters, such as opening the Arctic National Wildlife Refuge to oil drilling. But those ideas were overshadowed - at least for many conservatives - by the uncharacteristic zeal of many GOP leaders to turn the government against big oil."It just embarrasses me that Republicans are leading the effort, and it's just pure election-year politics," said Rush Limbaugh, the influential conservative talk-show host.
"Oil hit $75 a barrel recently and apparently transformed the Republicans into Democrats," commentator R. Emmett Tyrrell Jr. said in The American Spectator, a conservative periodical.
Tyrrell warned that the GOP gas-price response could further depress conservatives who already were frustrated by such affronts from Washington as President Bush's nomination of the thinly qualified Harriet Miers to the Supreme Court, soaring federal spending and the government's inability to stop illegal immigration.
"Republicans have continued to forsake their principles. Yet what do they expect to get for this abandonment," Tyrrell fumed. "Owing to their excessive spending, there already is fear that the Republican vote will stay at home this autumn. Now with the Republicans adopting the economic illiteracy of the Democrats, there is even more pressure for the Republicans to stay home."
This is delicious insanity. Every conservative Republican that I know is furious about the high oil prices except for those that own oil stocks or oil wells. Indeed, this is the crux of the matter. The Republicans who get DC's collective ears are all very, yes, totally insanely happy with high oil prices and want to keep this gravy train rolling or else. Of course, they are also killing the GOP and I would say, "MORE! MORE!" Keep up the pressure, dudes! It will be quite pleasant to see the GOP die a flaming death.
But they still control huge swaths of the media and a lot of other things and the oil kings and sheikhs are all pouring into the USA, buying key industries, putting us all in a stranglehold which we caused ourselves because we wanted to drive huge gas guzzlers and live in huge houses far from our jobs. And now, our doomsday is coming. And no one will save us but ourselves.
If I remember correctly, BP originally stood for BAHREIN Petrol, so we have come full circle.
Posted by: Big Al | April 30, 2006 at 07:11 PM
Posted by: Elaine Meinel Supkis | April 30, 2006 at 09:36 PM