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Tuesday, March 18, 2008

Big Oil Spill

Much is being made of the price of oil today, tomorrow and next month. However, little is being reported about “WHY” oil is so expensive. Reporters, pundits and pinheads alike would have us believe that oil company executives in Secret Societies or on encrypted satellite conference calls are colluding, manipulating and escalating the price of crude oil. This is the popular misconception conveyed, not disputed, explained or corrected, even by Big Oil. The silent truth is deafening.

Well folks, the truth is far more brutal. Commodities brokers, foreign investors, hedge funds managers, even pension funds are making plays against inflation and the falling dollar to bid up the price of oil, not oil companies. But you are never going to hear this on the 6 o’clock news. In fact the reason for obscene oil prices is us, you and me, not Big Oil.

For decades, however, the major player in the cost of gasoline has been the Environmental Movement, who took a page right out of the timber industry playbook, suing an entire industry into submission. Through lawsuits, Environmentalists discovered they could force all of America to hang pollution control devices on their vehicles, just to clean up the smog in the L.A. basin. Embolden with early successes, they began similar lawsuits to stop, not only oil refineries, but nuclear power plants as well, the most logical replacement for fossil fuel energy. Today, anybody with a third grade education knows that vast oil reserves are being discovered around the world, but control of those reserves and the limiting of refining capacity and storage is major cause of $100 oil.

This is not to mean that oil companies don’t try to control the price of oil, they do. However, their control is generally limited to exploration, monopolization of oil leases, production of crude, or distribution, not the price, which is set by the market and profiteers.

To put this so the Looney Left can understand it, if there is only a 10 day supply of oil at $100 dollars a barrel, why in the world would an oil company want to increase production and sell the same oil for $50 per barrel? Ergo, by way of their lawsuits preventing more refineries being built, Environmentalists are far more responsible for the price of gas than any oil company. It’s really basic economics.

You see folks, it is us to blame for the price of gas, not Big Oil. If we weren’t squandering oil like drunken sailors squandering their paychecks; if we would allow development of refining and storage capacity and if we would make prudent strides to develop other sources of energy to compensate for our gorging on cheaper fossil fuels, the price of oil would drop precipitously under market forces.

And if you want to know why gas is so high, or who benefits from the high gas prices, you will never find it on the nightly news or in your local newspaper. That would be information deemed too lofty for the common viewer, considered to have a mentality of a 14 year old.

So, while that sinks in, you might try to get your head around this. In California oil companies make about 7cents per gallon of gas, while State and Federal governments milk almost 30 cents out of every gallon we pump. It is really up to you to figure out where the rest goes.

So the reality of $100 oil is ugly. It stymies the economy, plunders financial resources, paralyzes all on low fixed incomes and stifles productivity and entrepreneurship. However, not until the “butt ugly” truth of WHY we are in this situation is finally realized, will America point the finger of blame squarely where it belongs, on those whose job it is to give us the WHO, WHAT, WHY, and WHERE.

But hey, I could be wrong. I’m just a Dumbplumber.

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