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Are Oil Prices Driven by Capitalism... Or Something Else? - RF Cafe Forums

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Kirt Blattenberger
 Post subject: Are Oil Prices Driven by Capitalism... Or Something Else?
Posted: Wed Jun 11, 2008 2:06 pm 
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Joined: Sun Aug 03, 2003 2:02 pm
Posts: 878
Location: Erie, PA

Anyone who knows me knows that I am no friend of big government. However, I do believe that government serves several important functions, including those mandated by the Constitution like a judiciary system and national defense against enemies foreign/domestic, as well as civil services like fire fighting, consumer safety, environmental preservation, etc. He/she would also know that I am conservative in the majority of my viewpoints.

That stated, I must say that I vehemently take issue with the strategy adopted by leading conservative talk show hosts and writers when discussing high gas prices (Michael Savage being the one notable exception). They unabashedly take the side of the oil companies’ obscenely high profits, pointing out that the companies make “only” 4 cents per gallon profit while the government takes 18 cents per gallon for “doing nothing.” The argument is that the oil companies do all the work to procure and process the oil, while the government does nothing for its take. The fact is that if it were not for the transportation infrastructure built, maintained, and protected by the government with the gas tax money, the oil in all its end form products (gasoline, heating oil, diesel, rubber, etc.) would be useless because the products would not be efficiently deliverable– if at all.

An exhaustive documenting of gross waste and mismanagement on the part of the government in execution of its responsibilities would fill volumes; the outright fraud committed by siphoning off gas tax money for unrelated pet projects is probably the biggest example. So, I’m not taking the side of the government – I’m just doing an honest assessment.

Politicians, ever willing to exploit an opportunity for class envy and pitting one group against another, proposed a windfall profits tax on oil companies to punish them for the high prices. The problem with that approach is that it does not lower the cost of gasoline for consumers – it just puts more of our hard-earned money in the coffers of the greedy politicians for their pet projects. Capitalism is a great system, and I whole-heartedly support and benefit from it, but in the case of oil – a commodity – supply and demand cost relationships are dictated by futurists and not the “real” world. Instead, maybe the oil companies should have to live under the same rules as public utilities whereby a commission of community residents and local officials must agree on the need for price increases to consumers. That reported 4-cent-per-gallon profit is after perks and endless write-offs for every type of qualifying expense; it's the part of earnings that investors are allowed to share. If the oil companies have to live within a budget, their habits will change.

It is no secret that there is a relatively small, very politically active portion of the population (foreign and domestic) that is loving the high gas/oil prices because it has caused consumption among some groups to decrease – although not by a whole lot. Products still need to be transported to market, and people need to get to the market to buy the products. Obviously, though, overall consumption increases every quarter because assuming the profit margin stays the same (4 cents/gallon), the record earnings reported every quarter means more of the product must be being consumed.

Some people who read this will be tempted to respond with the mantra about letting the marketplace set prices, but the average consumer has practically nothing to do with the current price of a gallon of gasoline or home heating oil. We are at the mercy (or lack thereof) of the professional traders and manipulation by mega corporations and governments. What we are witnessing, IMHO, is a huge transfer of wealth from the upper lower class and all ranges of the middle class to sultans, corrupt government officials, world organization heads, large market traders, and the upper echelon of huge corporations.

My preference would be to exploit our own massive untapped proven reserves of oil fields and oil shale deposits, and begin building nuclear power facilities. Technologies are already developed to safely extract and transport the products. It is outrageous that we have allowed ourselves to become so dependent on foreign energy supplies that we are now at the mercy of even our sworn enemies for providing us the resources we need to keep the country’s economy and overall sense of well-being in good shape.

If that is the way the world is allowed to work, then maybe that’s our collective destiny. Just don’t call it capitalism.

- Kirt Blattenberger :smt024
RF Cafe Progenitor & Webmaster

Kirt Blattenberger
 Post subject: Report on Available Shale Oil - by the perky Katie Couric
Posted: Tue Jul 01, 2008 12:43 pm 
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Joined: Sun Aug 03, 2003 2:02 pm
Posts: 878
Location: Erie, PA

With crude oil prices topping $143/bbl today, and the king (yep, they still have kings) of Saudi Arabia telling us, "Consumer countries have to adapt to the prices and the mechanisms of the market," it looks like we are going to be screwed for a long, long time if something is not done immediately to get the price of oil down.

It is no secret that the reason prices have been allowed to skyrocket is to force a behavior adjustment for the sake of "manmade" global warming. It does not matter to the extremists whether the unintended (probably intended) consequence is the tanking of the country's economy in the process. They have successfully prevented the tapping of vast reserves on American soil for both crude oil and shale oil. According to the news reel below, the available oil from shale deposits alone are measured in the trillions of barrels, and could surpass the oil in the Middle East. They have prevented the building of new refineries to the extent that we actually buy a lot of processed petroleum products like gasoline.


Now that prices are so high and citizens have finally begun demanding that the Congress do something about the situation (I seem to remember the current crop promising to lower gas prices - $2/gal in 2006 - if put back into power), the mantra we hear is that even if we start today, it would be 10 years before the first drop of gasoline was delivered. That 10 year figure is only valid if all the litigation time to fight back the extremists is factored in. Industry experts say that 2 years is more like it if given an unimpeded path to completion. This is the country that built the mightiest navy on Earth within two years from the time the Japanese decimated the Pacific fleet at Pearl Harbor, so don't tell me we couldn't bring massive extraction and processing capabilities online within a couple years. Just the threat of actually doing it would cause a panic in the oil futures market, but we need to do more than threat. We must follow through and gain complete independence. When in the world are we allowing ourselves to be held hostage by a handful of countries who hate us and would prefer that we be decimated? Why in the world are our elected officials encouraging this?

You cannot pin this situation on the Republicans any more (no, I am NOT a Republican) by accusing them of being the oil barons. Check the records dude, there are as many or more Ds as there are Rs invested in the oil situation. Remember that Al Gore's father made the family fortune on Occidental Oil. How about Rockefeller? You know about Richard Cheney working for Big Oil because the Old Media inundates you with it while never mentioning "their guys." It is time for a revolution against ALL the haughty fools in Congress and demand that roadblocks be removed for allowing our companies to extract, process, and distribute our own oil. There is absolutely no validity to the notion that Americans deserve to suffer for being citizens of a great nation. We out-produce every other country in the world. We are the main force in feeding, educating, and caring for indigent peoples al over the world. That is not a criticism of other countries or other their citizens, just an indisputable fact by any measure. Our economy and well-being depends on affordable energy, and we are feeling the effects.

Please, if you are an American, contact your congressmen and senators today and demand that they get out of the way of our becoming energy independent.

- Kirt Blattenberger :smt024
RF Cafe Progenitor & Webmaster

Posted  11/12/2012
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