FacebookTwitterGoogle+RedditEmail

War Tax at the Gas Pump

by JEFF KLEIN

It’s hard to miss the higher cost of gas every time we fill up our cars these days, but the News Media doesn’t do a very good job of explaining why.  There isn’t any mystery, though, if you read the financial press and oil industry sources: We’re paying extra for gas because of rising tensions in the Middle East and especially the scare over a possible US or Israeli attack on Iran. In effect, we’re paying a “war tax” at the gas pump, and the cost will only get higher unless we put aside the talk of war and get down to serious diplomacy to settle the differences in the region.

Here’s what the Wall Street Journal had to say recently, under the headline Oil Rise Imperils Budding Recovery: 

Rising oil prices are emerging once again as a threat to the U.S. economic recovery just as it appears to be gaining momentum. Oil prices have climbed sharply in recent weeks as mounting tension with Iran has raised the threat of a disruption in global supplies. On Wednesday, oil futures on the New York Mercantile Exchange rose $1.06 to $101.80 a barrel on reports that Iran had cut off sales to six European countries in response to the European Union’s newly stepped-up sanctions.

The world market price for oil is headed upward of $110 a barrel, which could translate into $4 gasoline before too long.  If an actual war breaks out, we could soon be remembering the current price at the pump as “cheap gas”.

But what about “Drill Baby Drill” to lower the price of gas – as the Republicans demand?  Political rhetoric aside, the reality is that there is a world market price for petroleum which cannot be significantly lowered by marginal increases in US supply.  International oil prices are rising even as US oil production has increased during the past decade.  Do you think US suppliers are going to sell us domestically-produced oil at a discount lower than the world market price?  Keep dreaming.  That’s just not the way the oil companies do business.

For example, after the US Arctic oil fields were developed and the TransAlaska pipeline came into service – despite serious environmental objections – large amounts of Alaskan oil were exported rather than sold in the lower 48 states.  Between 1996 and 2004 almost a 100 million barrels of Alaska crude were shipped to Japan, Taiwan, Korea and China.  Direct export of North Slope oil was eventually banned by Congress, but refined petroleum products – gasoline, heating oil, jet fuel – continue to be shipped abroad from refineries in Alaska and the lower 48.  Today Gulf Coast refineries find it more profitable to sell gasoline to Latin America instead of shipping it to the East Coast, where the law would require them to use US-flagged tankers with American crews. The US is now a net exporter of refined petroleum products, even as the rising price of gas continues to put a strain on struggling families with no alternative means of transportation.

But an even higher war tax on gas is not inevitable.  Diplomacy with Iran could still diffuse the conflict before the unthinkable happens.  Despite all the alarmist and warmongering rhetoric, especially from Republican presidential candidates, we are not facing an imminent nuclear threat from Iran.  US intelligence agencies are unanimous in judging that Iran does not have an active nuclear weapons program at this time.  In fact, the Iranians – like all the other countries in the Middle East except Israel – have signed the Nuclear Non-Proliferation Treaty and they have the right under its safeguards to produce low-enriched uranium for power plants and medical research.  All of Iran’s nuclear materials are under real-time inspection by the International Atomic Energy Agency. The only nuclear weapons in the Middle East right now are the hundreds of warheads belonging to the US and Israel.

Despite this reality – and in the face of opinion polls showing Americans prefer a diplomatic solution to the Iran issue rather than a military conflict – some politicians seem determined to drive us into yet another Middle East war.  Ironically, the very same politicians who are trying to make a partisan issue out of the price of gas are the ones who are pressing for policies to sharpen the regional tensions that have caused them to rise.

After the bitter experience of Iraq and Afghanistan, we should have learned enough to demand a peaceful way out of this conflict.  If we fail, a new war could have unpredictable and catastrophic results throughout the region. Of course, in that case, $5 gas might be the least of our problems.

Jeff Klein is a retired local union president active with Dorchester People for Peace (info@dotpeace.org)

More articles by:

Jeff Klein is a writer and speaker on Middle East issues who travels frequently to the region.  An earlier version of this piece, with illustrations, can be found in his occasional blog: “At a Slight Angle to the Universe.” He can be reached at jjk123@comcast.net.

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
June 23, 2017
Friday - Sunday
Jeffrey St. Clair
Democrats in the Dead Zone
Gary Leupp
Trump, Qatar and the Danger of Total Confusion
Andrew Levine
The “Democracies” We Deserve
Jeffrey St. Clair - Joshua Frank
The FBI’s “Operation Backfire” and the Case of Briana Waters
Rob Urie
Cannibal Corpse
Joseph G. Ramsey
Savage Calculations: On the Exoneration of Philando Castile’s Killer
John Wight
Trump’s Attack on Cuba
Dave Lindorff
We Need a Mass Movement to Demand Radical Progressive Change
Brian Cloughley
Moving Closer to Doom
David Rosen
The Sex Offender: the 21st Century Witch
John Feffer
All Signs Point to Trump’s Coming War With Iran
Jennifer L. Lieberman
What’s Really New About the Gig Economy?
Pete Dolack
Analyzing the Failures of Syriza
Vijay Prashad
The Russian Nexus
Mike Whitney
Putin Tries to Avoid a Wider War With the US
Gregory Barrett
“Realpolitik” in Berlin: Merkel Fawns Over Kissinger
Louis Yako
The Road to Understanding Syria Goes Through Iraq
Graham Peebles
Grenfell Tower: A Disaster Waiting to Happen
Ezra Rosser
The Poverty State of Mind and the State’s Obligations to the Poor
Ron Jacobs
Andrew Jackson and the American Psyche
Pepe Escobar
Fear and Loathing on the Afghan Silk Road
Andre Vltchek
Why I Reject Western Courts and Justice
Lawrence Davidson
On Hidden Cultural Corruptors
Christopher Brauchli
The Routinization of Mass Shootings in America
Missy Comley Beattie
The Poor Need Not Apply
Martin Billheimer
White Man’s Country and the Iron Room
Joseph Natoli
What to Wonder Now
Tom Clifford
Hong Kong: the Chinese Meant Business
Thomas Knapp
The Castile Doctrine: Cops Without Consequences
Nyla Ali Khan
Borders Versus Memory
Binoy Kampmark
Death on the Road: Memory in Tim Winton’s Shrine
Tony McKenna
The Oily Politics of Unity: Owen Smith as Northern Ireland Shadow Secretary
Nizar Visram
If North Korea Didn’t Exist US Would Create It
John Carroll Md
At St. Catherine’s Hospital, Cite Soleil, Haiti
Kenneth Surin
Brief Impressions of the Singaporean Conjucture
Paul C. Bermanzohn
Trump: the Birth of the Hero
Jill Richardson
Trump on Cuba: If Obama Did It, It’s Bad
Olivia Alperstein
Our President’s Word Wars
REZA FIYOUZAT
Useless Idiots or Useful Collaborators?
Clark T. Scott
Parallel in Significance
Louis Proyect
Hitler and the Lone Wolf Assassin
Julian Vigo
Theresa May Can’t Win for Losing
Richard Klin
Prog Rock: Pomp and Circumstance
Charles R. Larson
Review: Malin Persson Giolito’s “Quicksand”
David Yearsley
RIP: Pomp and Circumstance
FacebookTwitterGoogle+RedditEmail