Libya is ranked 18th on the list of oil producing countries and supplies 2% of the world demand. Saudi Arabia has stated they will increase production to meet the shortfall of Libyan oil. Very little of Libyan oil is imported by America. So the reliable and ever present reason for raising oil prices, lack of supply and high demand, cannot be used for now. Fear is given as the reason.
It is of little surprise to the Best Party that big oil is raising the price of petroleum products on such a flimsy excuse. The American public has a short memory and seems to be quite forgiving when it comes to being screwed over by Wall Street and energy companies. It is just over ten years that Enron manipulated the supply of energy to California which resulted in rolling blackouts and massive profits for Enron. Shouldn't we be getting concerned that the rising price of gas could send America back into a recession and that the main reason for this is price fixing by big oil?
A large amount of oil produced in America comes from the millions of acres that are leased from the Federal Government. Why does oil, produced in America, have to rise to $100. a barrel because of fear in the Mideast? Why do the many chains of gas stations raise their price in unison once an individual oil company says they have a supply problem ? The economist and commodity traders are paraded before us on the financial news channels giving their rational for why prices rise but they never discuss the most obvious one of price fixing.
There are two recent incidents that are most telling about the influence big oil has over the American public. On April 20, 2010 the BP oil rig Deepwater Horizon was lost to an explosion. It resulted in a major loss of supply to BP. This event occurred right before the Summer driving season. We now accept as normal that the price of gas goes up during the Summer months as rationalized by the experts. But in the Summer of 2010 the price at the pump made a small downward movement. On April 19, gasoline was $ 2.86 on September 20. it was $ 2.72 per gallon. This oil spill was a nightmare for Big Oil public relations. The entire industry collectively did not raise the price of gas in the Summer of 2010 in order to appease the American public, a form of reverse price fixing.
During the 2011 State of the Union address Speaker of the House, John Boehner, would politely applaud President Obama's comments. But when the President suggested that the tax credit given to Big Oil be eliminated because they were making record profits Mr. Boehner could not put his hands together. To the Best Party this said it all when it comes to the influence Big Oil has among our politician's.
Over the last decade America has been on a course to become energy efficient. The most significant effort has been the introduction of the hybrid car. Yet when the economist's discuss supply and demand they do not mention the progress America has made in gasoline consumption. In the year 2000 the "US Product Supplied Of Finished Motor Gasoline" * was 3.1 billion barrels in 2010, 3.29 billion barrels were supplied. In eleven years Americas gasoline consumption increased by a little over 6%. On February 28, 2000 the " US Regular ALL Formulated Gasoline Prices Per Gallon" * was $1.421 on February 28, 2011 the price was $3.383 an increase of 138%. How does a 6% increase in consumption justify a 138% increase in price?
Will the economists say no it's not demand, it is supply that is driving prices higher? If this is their rational then why are we exporting gasoline, in the last half of 2010 we exported 5.5 million barrels of gasoline.
The Best Party is a firm believer in capitalism but not in robber baron capitalism. Big Oil and their political allies are on a course to bring America to her knees for the sake of pure greed. For this reason the Best Party would nationalize the holdings of Big Oil that are on land leased from the American government.
The expected outcry of the violation of contracts and the rule of law would be meet with a simple argument. With the stroke of a pen state governments are taking away the contracts and collective bargaining rights of middle class workers. Why can't we borrow the same pen and take away the rights of Big Oil?
Best Party for the Middle Class
* U.S. Energy Information Administration,www.eia.gov