Rant of the Week: Energy policy, Part I: Letting Dubya and big oil off the hook

Okay, it’s Friday night and I’m putting off my head altering activities to pound out this potentially long and very broad topic about energy policy. I’m taking another look at this on Saturday morning and I want to go camping, so instead of writing one long piece, I think now I’m going to split this topic into two posts. In this post I will try to argue the forces that have raised gas prices are largely beyond our government’s and oil companies’ control. The next post I will rip part the Bush/Republican energy “policy,” which will just make things worse. I’m also looking for a lot of participation on this one, because *gasp* I can’t find many ways to blame the Bush administration or “big oil” for the rising price of energy in America.

As far as I see it, there are up to 3 reasons why gas prices have increased in the last 6 months.

1. Millions of people in the world are pulling themselves into the energy-consuming middle class in countries like India and China. This is increasing global demand, which of course, raises the price of a barrel of oil.
2. The US dollar is very weak, which means we’re paying more for a global resource.
3. There is a lot of “futures” speculation going on.

Folks aren’t arguing about the first two reasons, but there’s some disagreement as to how much futures are contributing. This concept is a bit confusing to me and maybe some of you can enlighten me. Futures are contracts that require delivery of a commodity of specified quality and quantity, at a specified price, on a specified future date. Um okay….so how does this affect prices? Any help from the market experts? I’m also reading that there’s some market manipulation going on that could be affecting prices.

So how can we hold oil companies responsible for high gas prices? Yes, Exxon and their friends are making a bunch of money, and so are their CEOs, while we suffer.
These companies make billions in profits, but they also have very high costs. Exxon made 10% last quarter. That’s a lot, for sure, but Apple, for example, made 15%. So why aren’t we protesting Steve Jobs for heading up an evil corporation that makes too much money? (I do acknowledge that buying an Apple is a luxury and buying gas, for some, is not). Isn’t it a company’s job to make as much money as they can? Don’t they have a responsibility to their share holders to do just that? Why in the hell would I want to own any stock in Exxon (which I surely do in my 401(k)) when they decide to sell gas for less than the market will pay? Of course, if the government decided pull out those billions of dollars in subsidies (or maybe even increase taxes, such as windfall taxes, but I’m undecided on that), I’d be all for it, but it’s not up to the companies to do that.

The one gripe I have with oil companies is that there’s no real competition going on. I can’t drive from the Exxon station to a Shell station and get gas for much less. It seems all the companies increase their prices at the same time, kind like gas stations in Craig or Salmon. These oil companies seem to be colluding to increase prices together. Because competition is not driving down prices, the market just isn’t working the way it should. Please chime in with other reasons we can hold oil companies accountable for high gas prices.

So how is Bush responsible? He has to be, right? There’s no doubt he and Cheney love the oil and gas industry. And there’s no question their corrupt Department of the Interior is making it easier for oil companies to make money by opening up more areas and going very light on restrictions. But specifically, what have the neocons done to raise the price of a barrel of oil? Sure, Bush supports subsides for oil and gas companies, but he doesn’t create these subsides—Congress does. We can also point the finger at Bush for not pushing the development of alternative energy (AE), but creating incentives and requirements to use AE isn’t done by the Executive branch of the government. Again, it’s Congress who has been sitting on their hands. Bush has squandered an opportunity to provide leadership in development of AE, but other than that, I’m having a hard time linking him to high prices.

So here’s your challenge, my fellow Bush-detesting readers. Tell me how oil companies and Bush are responsible for high gas prices. Even if they aren’t responsible for gas prices, the Republicans are taking the worst possible steps to “remedy” the problem. Stay tuned for next week when I won’t be as nice on Dubya.