GUESTWORDS: By Karl Grossman
(12/04/2008) This summer, the price of gasoline had in a few short months skyrocketed in the United States to $4.50 a gallon. The oil companies claimed the fault was China and India going car-crazy and guzzling up gas, problems in the Middle East, then it was refinery capacity and, all along, if the ban on drilling in areas on the continental shelf offshore was only lifted, everything would be different.
Filling up a car at 40 or 50 bucks a shot was hurting people financially, and impacting on the national economy. Meanwhile, the oil companies were raking in record, indeed obscene, profits — many tens of billions of dollars. People were getting angrier and angrier thinking that price-rigging was going on.
Then, as suddenly, in the last few months, the price of gas went down and down. Now it’s half the cost a gallon that it was in the summer. The price of a barrel of crude oil has dived — from a high of $147 a barrel in July to, this week, $51 a barrel.
And people are still car-crazy in China and India and problems continue in the Middle East. No new refineries have opened. As to that ban on drilling on the continental shelf offshore, it was lifted by Congress — but, according to the U.S. Energy Information Administration, if drilling starts A.S.A.P., it wouldn’t “have a significant impact on domestic . . . prices before 2030.”
Would you believe? Do you think the oil industry has been manipulating the market, grabbing our money to make windfall profits and is deep in deception?
I’ve thought so for years.
Decades ago I received my first lesson in oil industry honesty — an oxymoron — when I broke the story of the oil industry exploring in the Atlantic. I was a reporter for The Long Island Press, and I got a tip from a fisherman out of Montauk who said he had seen the same sort of vessel as the boats he observed searching for oil when he was a shrimper in the 1940s in the Gulf of Mexico.
I spent the day telephoning oil companies. Public relations people for each said, no, we’re not involved in looking for oil in the Atlantic. I was leaving the office when there was the yell that a PR guy from Gulf was on the phone. He said he checked and, yes, Gulf was involved in searching for oil in the Atlantic — in a “consortium” of 32 oil companies. These included the companies that all day issued flat denials.
Later on, I looked into whether offshore drilling was really as safe as the oil industry claimed. I visited the first rig set up in the Atlantic — off Nova Scotia. Some safe.
“We treat every foot of hole like a potential disaster,” said the Shell executive on the rig, admitting that curtains and booms to contain a spill wouldn’t work in seas over five feet. He spoke highly of the peat moss stockpiled on shore to try to clean up the mess. He noted that there’d be “straw as in the States.”
The President’s Council on Environmental Quality in a report on offshore Atlantic drilling subsequently concluded: “A major spill along the beaches of Cape Cod, Long Island, or the Middle or South Atlantic states could devastate the areas affected . . . the Atlantic [is a] hostile environment for oil and gas operations. Storm and seismic conditions may be more severe than in the North Sea or the Gulf of Mexico.”
That’s why there was that prohibition on drilling on the continental shelf for 26 years — now, as a result of our most recent “oil crisis,” gone.
The price of gas has come down with about as much logic and sense as it went up. One of the best clues to a part of what has happened was a mention in a front-page article in The New York Times on June 14. “Plan Would Lift Saudi Oil Output” was the headline. There in the fourth paragraph was the statement that the Saudis were concerned that “current prices are also making alternative fuels more viable, threatening the long-term prospects of the oil-based economy.”
I’ve seen no mainstream media investigation into the wild gyrations in the price of oil, the Great Gas Rip-Off of 2008.
In her fine new book, “The Tyranny of Oil: The World’s Most Powerful Industry — and What We Must to Do Stop It,” Antonia Juhasz writes: “The masters of the oil industry, the companies known as ‘Big Oil,’ exercise their influence . . . through rapidly and ever-increasing oil and gasoline prices, a lack of viable alternatives, the erosion of democracy, environmental destruction, global warming, violence, and war.”
A full-scale investigation is called for by Congress, although the taking of oil industry campaign contributions by many members make a tough, thorough Congressional probe questionable, and/or by criminal prosecutors (on the federal level, that’ll have to await the Obama administration, considering the intimate links of the Bush administration with the oil industry), and/or through lawsuits or some other mechanisms.
Big Oil in the United States needs to be broken up as it was by the U.S. Supreme Court nearly a century ago after the muckraking of Ida Tarbell, but this time the requirement of competition must hold.
And we need to consider whether the production of petroleum in the U.S. should remain with a bunch of hyper-greedy corporate liars. “Most countries in the world place ownership and control of oil in the hands of the public,” notes “The Tyranny of Oil.”
“Doing so in the United States would simply put us in line with the majority of people on the planet.”