• Monthly
  • $25
  • $50
  • $100
  • $other
  • use PayPal

SPRING FUNDRAISER

Is it time for our Spring fundraiser already? If you enjoy what we offer, and have the means, please consider donating. The sooner we reach our modest goal, the faster we can get back to business as (un)usual. Please, stay safe and we’ll see you down the road.
FacebookTwitterRedditEmail

The Gas Gougers

Here we go again. A sudden surge in the price of gasoline and heating oil is followed by reported expressions of frustrated despair by hard-pressed consumers in the midst of silence from the oil companies and abdication of responsibility by the elected and appointed officials of federal and state governments.

The price of gasoline is up by about 50 cents in the past month, according to AAA, making the average gallon go for close to $4 per gallon in many parts of the country. Prices are even higher in California. AAA says that this “is the most expensive we’ve seen gasoline in the dead of winter.”

Every penny increase in the annual price of gasoline takes over $1.6 billion dollars from the pockets of American consumers (Source). That doesn’t even count the higher prices for heating oil homeowners are paying.

There was a time when even a few cents increase in the price of gasoline or natural gas would provoke Congressional investigations, actions by state Attorneys General, and condemnations of the producer countries, the OPEC cartel and Big Oil from presidents and the heads of antitrust divisions of the Justice Department or the Federal Trade Commission. That is, until smooth, smiling Ronald Reagan came to Washington, D.C. with his mantra that “government is not the solution; government is the problem.”

Well, now the multi-layered petroleum cartel has become institutionalized, having “gotten government off its back” and put the New York Mercantile Exchange speculators at the gaming tables.

There seems to be an adequate supply of crude oil in this recessionary global economy. What could be the cause of this latest price spike? The news media offer a spectrum of possible factors – restrictions on exports of Iranian oil imposed by western governments, instability in Syria and elsewhere in the volatile Middle East, oil hungry China, oil speculators on Wall Street and reduced refinery capacity in the U.S.

Each price surge in recent decades seems to have different principal causes. This time it seems to have been precipitated by surging prices of crude – easily manipulated – and in the U.S. the permanent or temporary shutdown for repairs, of too many refineries.

Believe it or not, the U.S. is now a net refined petroleum importer because of the continuing refusal by the industry to rebuild or expand refinery capacity on the very sites where many refineries have been shut down, often in favor of offshore, cheaper installations.

Whenever supply and demand for refined oil products is tight, all it takes is for one or two refineries to suspend operations, other than for repairs, and the prices surge all over the country.

This happened in January to a refinery in California, due to a fire, and most prominently the closure of a key refinery in Port Reading, New Jersey, owned by the Hess company. Five dollars a gallon gas “is a real possibility,” John Kilduff, partner at Again Capital, told Yahoo! Finance, adding “this is partly being driven by the lost refinery capacity of about one million barrels per day…that’s a lot.” (The U.S. consumes about 19 million barrels a day of refined petroleum products.)

So what can our so-called representatives in Washington do about a gouge that has angered almost all conservative and liberal consumers? Well, the Democratically-controlled Senate can start by holding investigatory hearings. The President can speak out more forcefully and indicate he may release some of the government’s crude oil reserves to increase supply.

He can order his Justice Department to at the very least subpoena pertinent oil industry information for starters.

Mr. Obama can forcefully back up Gary Gensler, his appointed, savvy Chairman of the Commodity Futures Trading Commission, who has been trying to rein in excessive speculation that drives up prices and punishes the motoring public.

In 2011 CFTC data showed that massive inflows of speculative money drove up prices. At that time, even Goldman Sachs analyst, David Greely, claimed Wall Street speculation in the futures market was driving up oil prices. Earlier, Rex Tillerson, the head of ExxonMobil, estimated that speculation was responsible for a more than $40 per barrel price increase when oil was just over $100 per barrel. Over the last month crude oil has ranged in price from $93-$120 per barrel.

Admiral Hyman Rickover who, more than 40 years ago, wisely said that there should always be government-owned shipyards to provide a yardstick by which to restrain the high prices and cost overruns being charged by private ship buildings manufacturing the Navy’s ships. That means, in this oil price context, that the government should own and operate some refineries for the armed forces. Any excess capacity could loosen the market with gasoline and heating oil when the corporate interests maneuver tight supplies for which they get immediately rewarded with cold cash.

Were Obama to direct some of his bully pulpit heat on those members of Congress who are marinated in oil, he might find more support from Capitol Hill for all these initiatives.

So call the switchboard at the White House comment line (202-456-1111) and tell the president that you are fed up and determined to drive less, carpool and walk more where possible, but that he, the president, must be more aggressive in taking on the staggeringly profitable and tax-favored big oil companies.

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. Hopeless is also available in a Kindle edition.

 

More articles by:

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

May 27, 2020
Ipek S. Burnett
The Irony of American Freedom 
Paul Street
Life in Hell: Online Teaching
Vijay Prashad
Why Iran’s Fuel Tankers for Venezuela Are Sending Shudders Through Washington
Lawrence Davidson
National Values: Reality or Propaganda?
Ramzy Baroud
Why Does Israel Celebrate Its Terrorists: Ben Uliel and the Murder of the Dawabsheh Family
Sam Pizzigati
The Inefficient and Incredibly Lucrative Coronavirus Vaccine Race
Mark Ashwill
Vietnam Criticized for Its First-Round Victory Over COVID-19
David Rovics
A Note from the Ministry of Staple Guns
Binoy Kampmark
One Rule for Me and Another for Everyone Else: The Cummings Coronavirus Factor
Nino Pagliccia
Canada’s Seat at the UN Security Council May be Coveted But is Far From a Sure Bet
Erik Molvar
Should Federal Public Lands be Prioritized for Renewable Energy Development?
R. G. Davis
Fascism: Is it Too Extreme a Label?
Gene Glickman
A Comradely Letter: What’s a Progressive to Do?
Jonathan Power
The Attacks on China Must Stop
John Kendall Hawkins
The Asian Pivot
May 26, 2020
Melvin Goodman
Trump Administration and the Washington Post: Picking Fights Together
John Kendall Hawkins
The Gods of Small Things
Patrick Cockburn
Governments are Using COVID-19 Crisis to Crush Free Speech
George Wuerthner
Greatest Good is to Preserve Forest Carbon
Thomas Klikauer – Nadine Campbell
The Covid-19 Conspiracies of German Neo-Nazis
Henry Giroux
Criminogenic Politics as a Form of Psychosis in the Age of Trump
John G. Russell
TRUMP-20: The Other Pandemic
John Feffer
Trump’s “Uncreative Destruction” of the US/China Relationship
John Laforge
First US Citizen Convicted for Protests at Nuclear Weapons Base in Germany
Ralph Nader
Donald Trump, Resign Now for America’s Sake: This is No Time for a Dangerous, Law-breaking, Bungling, Ignorant Ship Captain
James Fortin – Jeff Mackler
Killer Capitalism’s COVID-19 Back-to-Work Imperative
Binoy Kampmark
Patterns of Compromise: The EasyJet Data Breach
Howard Lisnoff
If a Covid-19 Vaccine is Discovered, It Will be a Boon to Military Recruiters
David Mattson
Grizzly Bears are Dying and That’s a Fact
Thomas Knapp
The Banality of Evil, COVID-19 Edition
May 25, 2020
Marshall Auerback
If the Federal Government Won’t Fund the States’ Emergency Needs, There is Another Solution
Michael Uhl
A Memory Fragment of the Vietnam War
Anthony Pahnke – Jim Goodman
Make a Resilient, Localized Food System Part of the Next Stimulus
Barrie Gilbert
The Mismanagement of Wildlife in Utah Continues to be Irrational and a National Embarrassment.
Dean Baker
The Sure Way to End Concerns About China’s “Theft” of a Vaccine: Make it Open
Thom Hartmann
The Next Death Wave from Coronavirus Will Be the Poor, Rural and White
Phil Knight
Killer Impact
Paul Cantor
Memorial Day 2020 and the Coronavirus
Laura Flanders
A Memorial Day For Lies?
Gary Macfarlane – Mike Garrity
Grizzlies, Lynx, Bull Trout and Elk on the Chopping Block for Trump’s Idaho Clearcuts
Cesar Chelala
Challenges of the Evolving Coronavirus Pandemic
Luciana Tellez-Chavez
This Year’s Forest Fire Season Could Be Even Deadlier
Thomas Hon Wing Polin
Beijing Acts on Hong Kong
George Wuerthner
Saving the Lionhead Wilderness
Elliot Sperber
Holy Beaver
FacebookTwitterRedditEmail