"It's deja vu all over again!" -- Yogi Berra
A memory of the 70's recently came back to me, and no, it wasn't of John Travolta whipping his white leisure suit jacket off, spinning it around his head and tossing it aside as he danced away in bellbottoms and platform shoes in a disco.
On a local radio program, two newsmen were recently discussing the current energy debacle. One cited sources claiming oil to go up to over $200 per barrel and the price at the pump to rise to ten bucks a gallon within a time frame of only 2-3 years. His partner regaled how a friend of his does routing for oil tankers at sea. The newsman said he asked his friend, sarcastically, I take it, how much oil was idly floating out there on the ocean in those tankers. His friend replied so many that it is difficult for him to find space for them all. He referred to the scene as a parking lot. Any bells ringing in your heads yet, folks?
This prompted me to do a little perusing. What I learned from my investigative snooping is that indeed, curiosity can kill the cat, and maybe in this case, also "the Wrenn." What I stumbled upon almost gave me what Fred Sanford used to call "the big one."
According to an investigative report by Senator Ron Wyden (D-OR), dated June 14, 2001, and entitled, "The Oil Industry, Gas Supply And Refinery Capacity: More Than Meets The Eye," Senator Wyden cited how several of the petroleum companies have actually colluded in deliberately and needlessly reducing supply to increase demand, and in turn, prices, and thus, profits.
Bear in mind that this report is from 2001, but Wyden cited that since 1995, 24 refinery closings in 11 states since 1995 have cut back production of 830,000 barrels of oil per day. In short, US oil companies are doing to us now what OPEC did to us back in the 70's. It's a synthetically created shortage, engineered to boost profits. By the way, disco was grossly overrated.
I feel used. Yes, good old, red, white and blue conservative capitalist me defended oil companies about a year or so ago, when news reports revealed they were making something like 95% profits per quarter. I reasoned that the oil companies have a right to prosper like any other business entity, and that they also invest much time, money and resources into research and development, a long term and risky endeavor that can easily create either windfalls or crashes. And of course, when was the last time we ever built a new refinery in this country, or for that matter, a nuclear power plant? I believe that was during the 70's, too. Groovy.
The environmentalists bristle at nuclear energy, yet now fossil fuels are taboo. It didn't take long to see that burning up our food supply to manufacture ethanol was a great experiment that failed, although some slow learners, particularly in government, haven't quite grasped that lesson yet. So what are we to do? Windmills were once the rage for all of about 5 minutes, until somebody wanted to park a few in Teddy "NIMBY" Kennedy's backyard.
The radical greenies and global warming taletellers show us deceiving pictures of supposedly trapped polar bears, floating haplessly away on broken pieces of ice (because they want to be there and can swim up to 60 miles if they didn't), and pictures of endangered wildlife that does not exist where potential oil drilling sites are planned. Our technology is cleaner now, but the greenies want it all their way, and even when we capitulate and comply, they just move back the markers of the end zone and decry, "Not yet good enough." I once attended a lecture given by a Sergeant from the New Hampshire State Police, who headed that agency's Road Rage Enforcement Unit. The savvy Sarge sagely noted that it's not real smart to challenge what already appears to be an unreasonable person. Ditto with dealing what Rush Limbaugh rightfully dubs, "Environmental Whackos."
Yet even more oil has been recently found in North Dakota. We have oil in the ANWAR of Alaska, off the California, Gulf and Florida coasts, and even under our national parks, but the greeenies won't have anything to do with it. Meanwhile, China and Cuba are having a field day drilling off our Florida coast, as the US is odd man out, and I doubt the Chinese and Cubans are anywhere as clean or careful as we would be, if the situation were rightly reversed.
Even the allegedly endangered Alaskan caribou have now prospered from the pipeline there, because they congregate around it for warmth, much to the chagrin of those all-knowing and nay-saying meany-greenies.
Only a liberal would forsake humans, the top shelf of the food chain, for the benefit of animals. Like it or not, we still need to keep our homes warm, including many elderly and indigent citizens, living in the frigid Northeast and Midwest, and on fixed incomes. We also need to get to work every day, and yes, sorry liberals, but our military thrives on petroleum, too. As a matter of fact, much of the current increased demand has been because of China's massive expansion of its military, and just what do you suppose propels their tanks, trucks, and planes and ships?
OK, so there is ample blame on both sides. Corporate oil companies have clearly been gouging us. Commodities speculation is also a big contributor to this problem, but even if we ended such speculation in our markets, other countries will continue the practice, so that is a moot issue. And now, in case you haven't noticed, there are fewer oil companies. Competition in the retail petroleum market is diminishing as it is within the bumbling abomination we call the airline industry. When you only have 3 choices instead of 6 choices, and all 3 choices are colluding to gouge you, I draw the line on promoting "the free market." What is so free about it when gouged consumers are at the merciless mercy of pseudo-monopolies and have nowhere else to turn? And of course, let is not forget that what the individual gas station retailer in your neighborhood makes on one gallon of sold gas, regardless of what you paid for it, can be totaled in pennies, a few coins at most, so cut that poor schmuck some slack the next time you feel like taking it out on him. He's stuck in the middle just like you and I, and he also most likely has a family to feed at home, too. Heaven forbid anyone take the government to task for the excessive and even redundant taxation embedded in a gallon of gas that trickles its way back into the ever fattening coffers of local, state and federal government. Yes, we have a virtual buffet table of blame in front of us for this ever-growing and dire situation.
P.J. O'Rourke once said that government left to its own devices is about as dangerous as two teenage boys with a bottle of whiskey and a set of car keys. True enough, but corporate America has also proven it cannot be trusted for very long without supervision. It just never fails. It seems that whenever government intervenes into business, with regulations, price controls, etc.. the outcome is eventually counterproductive, if not harmful. The long-term damage is actually worse than the short-term fix. And corporations, left to their own unchecked greed, inevitably revert back to their more seemly side, first historically observed by our young nation with the so-called robber barons of the Gilded Age. So neither the private nor public sector can be trusted, for reasons of either corruption or ineptitude. So what is the answer?
I have often bristled at "moderate" proposals for solutions, but I see no other way out of this mess. As any seasoned cop will tell you, in a domestic dispute, there are three versions of the story: his, hers, and the truth, which is usually somewhere in the middle, with some components taken from each of the other two versions. Given our current conundrum, I can't help but believe that our only hope is also a middle ground type approach, curtailing monopolizing corporate interests, but at the same time, limiting the depth at which government can intrude. I am all for market correction, but in our current energy crisis, and I do believe it is an energy crisis, this may be one of the final nails driven into the coffin of a rapidly diminishing middle class, of which yours truly is a member. I see little time for proper and independent market correction, and given the antics of the oil companies and the stranglehold the few of them have colluded in foisting upon us, I also see no motivation on their part to change.
Maybe we do need (better) alternative fuel sources, and I am all for conservation, but conservation without a fuel supply of some kind is like cutting your budget with no revenue coming in; it'll keep you afloat for a while longer, but your demise is still not far away. Even despite our lack of building of oil refineries, it now appears that maybe we have enough capacity after all, or at least, more than we were previously led to believe exists. The robber baron days created a new set of laws regarding monopolies. Some heads of some of these oil execs need to roll, and preferably into criminal court. But then there is the problem of the stockholders in oil companies, and there are many of them. What about their interests in the free market, especially now, in our already precarious economy?
Suddenly, my mood ring is flashing different colors like a rainbow made out of strobe lights. Pardon me while I go seek my pet rock for some much needed solace.
Disco on.
Doug Wrenn
