(Michael Patomson) – With gasoline prices approaching record levels, our current president is facing criticism and Americans are looking for answers. Just like every president has done since Jimmy Carter, this administration is attempting to shift blame toward “speculators” and oil company profits in order to gain political cover. Here are some things to keep in mind when these discussions arise:
- Oil companies will soon be reporting profits that will be characterized as record level profits. Oil company monies that are dedicated for exploration and new drilling cannot be used because of Obama’s anti-drilling moratorium/permitorium. These monies then show up as profit because the companies are forbidden to use them. The oil companies are not “gouging” anyone, they are being forced by the government to transform their operational logistics, and it shows up erroneously on the balance sheets as “profits.” This will damage our supply in the upcoming years, yet, where do these profits go? They go to the shareholders. Tens of millions of Americans have shares in these oil companies as part of their 401k and other savings and retirement plans. Tens of millions of working Americans are the shareholders of the oil companies. The “speculators” are actually the investors running your retirement plans.
- A typical service station will profit only 2-3 cents per gallon of gas. The federal government profits 18.3 cents per gallon of gas from every service station in America every day of the year.
- We give $400 billion in federal subsidies to the oil companies in the form of tax breaks. These “subsidies” are given as incentives to most corporations, not just oil companies. For this administration to single out and end those incentives for only oil companies would amount to a $400 billion tax increase to oil companies. Do you think this will lower gas prices? The less taxes the oil companies pay, the lower the price of gas and the more the American shareholders get to keep. This is another political “tax the rich” scam. The only ones getting taxed would be the one pumping gas and those that have retirement and savings plans.
- Who are the “big oil” companies? Over 9 million Americans work in the oil industry. This number would be much higher if it were not for a drilling moratorium and EPA regulations that are keeping us from using our own oil. We have the largest reserves of usable energy on earth, and we are cutting off our nose to spite our faces by not aggressively bringing them to market. We literally have hundreds of years of oil, natural gas and coal that can provide inexpensive domestic energy with absolutely no foreign dependency.
- You hear from the environmental progressives that we are “addicted” to oil. Addictions are things that control has been surrendered from. We are not addicted to oil. The choice to use our abundant natural resources of coal and oil has been one of the most brilliant and productive intentional policies since before the industrial revolution. It is what feeds our national productive capabilities, and it is, along with hard work and ingenuity, what made America the superpower that it is.
- Oil prices are directly glued to the value of the dollar. Since Henry Kissinger made agreements with OPEC to base the price of oil on the dollar in return for them loaning us money in the form of buying treasuries, any country that buys oil has to buy dollars first to pay for it. As the federal reserve prints money, the value of the dollar plummets. When the value of our dollar plummets, OPEC raises prices to compensate. If there are twice as many dollars out there, they are worth half as much. If our dollar is worth half as much, OPEC merely doubles the price per barrel to make up for it. The printing of dollars and the massive 5 trillion dollar spending binge this administration has been on is the direct cause of the price you are paying at the pump.
- Supply and demand have little to do with the price at the pump. OPEC has recently scaled back production because there is an increased supply right now. It is our federal government that is the cause of the current energy policy, or lack thereof, that is causing every good and service to cost more. Most of this administration and the progressives are also heavily invested in “green energy” technology and they have a vested interest in seeing gas and oil prices “necessarily skyrocket,” in Obama’s own words. They know wind and solar are decades away from even remotely starting to make sense, so instead of waiting for that technology to become low cost, they are intentionally driving the cost of our staple energy sources to make wind, electric and solar look comparatively affordable.
We have all the resources we need to last the next 500 years. I’m sure that is plenty of time to experiment with “green” technology. Natural gas, oil and coal are cleaner than they have ever been, getting cleaner and are readily available. While this president takes his turn in looking for political cover by falsely blaming oil companies and “speculators,” his administration is ducking for the blame that lies directly in their lap.
(Michael Patomson is an organizer of The 912 Project in Western Iowa and Nebraska and lives in Council Bluffs, Iowa.)