By Jon Christian Ryter
March 22, 2006
Once again the heads of the American oil cartel are raising their hands�but not in surrender. They are taking the oath to testify under the glaring spotlight of the US Senate Judiciary Committee. The last time the oil executives were summoned to the Senate was Nov. 9 when gas prices skyrocketed over $3.00 per gallon. Testifying this time were: Ross Pillari, CEO of BP (formerly BP-Amoco); David J. O'Reilly, CEO of Chevron (formerly Chevron-Texaco which swallowed Gulf Oil; James Mulva, CEO of ConocoPhillips; Rex W. Tillerman, CEO of Exxon-Mobil (the Standard Oil flagship company and tutorial head of the Rockefeller oil "family"); John D. Hofmeister, CEO of Shell Oil (formerly Royal Dutch-Shell); and William R. Klesse, CEO of Valero Energy (formerly Diamond Shamrock).
The simple question the Senate wanted answered was: with an abundance of oil available for refining, and guarantees from our economic allies in the Mideast that they would fill any shortfall created by Iran if the Persians cut off the flow of oil to their friends in an attempt to create shortages that would impact the economies of the United States and the European Union�why is the price of gasoline and other petroleum-based products still rising? Surprising, this time around, none of the oil executives blamed prices on their "peak oil" theories. Nor did they admit that the oil price spike is caused by oil company futures buyers who simply bid up the price of their own product while pretending to be honest brokers who were concerned about shortages created by totalitarian anti-American regimes like Iran and Venezuela, or natural disasters that curbed supply.
In this case, some bright thousand dollar suit in the US Senate�or perhaps a handful of them�decided that the price of crude was rising because the Seven Sisters were merging back into a single entity, and that Standard Oil would reemerge from the ashes of those corporate consolidations. And, they're probably correct. In 1984 US District Court Judge Harold Greene shattered Ma Bell and created seven telephone tyrants where previously only one existed. Over the past 10 years, they are slowing re-consolidating into two or three telecommunications mega-giants. On Aug. 3, 1907 US District Court Judge Kenesaw Mountain Landis ordered Standard Oil broken apart.
At 4:00 p.m. on May 15, 1911, US Supreme Court Chief Justice Edward White confirmed Landis' decision. One oil tyrant became seven oil tyrants�and then, ten. Since the history of John D. Rockefeller, Sr. and Standard Oil is a history of leveraging competition and, because Rockefeller believed oil was a finite resource that would be completely depleted by 1950, he was determined to control both consumption and pricing to make the oil last as long as possible�and cost as much as possible. Spearheading the latest pseudo-assault on the oil industry is Sen. Arlen Specter, chairman of the Senate Antitrust, Competition and Consumer Rights Subcommittee of the Judiciary Committee. Specter told the media the hearings would examine evidence that the recent mergers between Exxon and Mobil, Chevron and Texaco which swallowed Gulf Oil, BP and Amoco, Conoco and Phillips, and Royal Dutch Oil and Shell are responsible for the slowly rising price of oil.
Specter told the assembled oil cartel CEOs that studies done by his committee supported the view that there was a strong correlation between soaring fuel costs, price gouging and other collusive oil company practices and the recent spate of oil corporation consolidations. These firms�a composite of the Seven Sisters�and other members of the international oil cartel drew harsh criticism when Exxon-Mobil announced their 2005 profits�$36.14 billion. Chevron's 4th quarter profits last year were $13 billion. And, while the oil companies were enjoying obscene profits during Hurricanes Katrina and Rita�and as the oil futures brokers employed by the oil industry calmly bid up the price of oil�the American consumer was stiffed at the pump with gasoline prices as high as $3.69 per gallon. Last week the average nationwide price of gasoline at the pump was under $2.40. This week its around $2.50 per gallon. Next week, who knows?
Even when they are testifying before the US Senate, the arrogant oil barons play their nefarious control games saying, "We can't control market forces." But, they do. They founded, financed and used the environmentalist movement to their greedy end, fabricating the notion that there exists man-made, carbon dioxide-induced global warming�and then they legally bribed Congressmen and Senators with campaign contributions to enact the legislationthat was favorable to their core objective of curbing the use of what they term as a nonreplenishable fuel in order to drive up the price of oil and, of course, every consumer product created from it. For close to 150 years, the oil cartel has believed�and preached�that, within the next decade or two, the world would run out of oil.
The doomsday pronouncement is based on the flawed research and fanciful theories of Gulf Oil geophysicist Dr. Marion King Hubbert. Hubbert made his peak oil research public on Feb. 4, 1949. He concluded that the fossil fuel age was about over. In a well-publicized press conference, Hubbert stated with the certainty of a scientist studying hard evidence, that by 1956 the world would have reached "peak oil." His theory was called Hubbert's Peak. He hypothesized that within another decade or two, it would be all gone. In 1956, Hubbert modified his prediction, stating that by 1970 the world would have reached peak oil, and within a decade or two, it would be all gone. In 1971, Hubbert announced that the world would reach peak oil by 2000, and that by 2030 all of the world's known reserves would be depleted.
Of course, as history has already proven, oil is a renewable resource, and in 2030, Hubbert's surrogate (since Hubbert died in 1989) will claim that the world has reached "peak," and that by 2050 or 2060, all known reserves of oil would be gone. When Hubbert made his "corrective" prediction on his estimate of how much oil was left in the Earth in 1956 and 1971, most geophysicists�those not working for an oil industry that required a finite oil source to justify "law of supply and demand" price increases�scoffed at Hubbert's predictions, and the claims of the oil industry that oil, like coal, was a fossil fuel.
If oil and coal originated from decayed plantlife and dinosaurs�and was not "manufactured" deep in the bowels of Earth as some sort of planetary lubricant�as the oil industry claims, then it would be safe to assume that oil is finite, and that at some point in time, we are going to run out of it. The assumptions are based on the fact that oil and coal are carbon-based materials as are plants, trees�and dinosaurs. In reality, as any geologists or geophysicist knows�or should know�carbon is the spinal column of all life on Earth. Complex carbon molecules that bonded with other elements�especially oxygen, hydrogen and nitrogen�make up all lifeforms known to man.
There would be no life on Earth without carbon since carbon is essential�all living organisms require it. Since no lifeform�contemporary or extinct�has ever been observed that is not carbon-based, it is assumed by astrobiologists that in the event life is discovered elsewhere in the universe it will also be carbon-based. That being so, how can oil industry geophysicists�and contemporary school teachers�argue that oil is fossil residue and, as such, not only is it finite, but this time, Hubbert's 1971 estimates on the amount of oil left in the Earth are correct and that peak oil has occurred? It would certainly justify the the rapidly escalating prices.
However, what the Senate Antitrust, Competition and Consumer Rights Subcommittee is contemplating�fining the oil industry for price gouging does nothing to aid the consumer. It helps the US Treasury, and social agencies that give income tax heating credits to the elderly and the poor, and gasoline credits to the mass transit industry, but the middle class consumer will still bear the brunt not only of the higher gasoline prices because the oil industry artificially created the shortages by curbing independently-owned oil refineries in order to limit the volume of gasoline and home heating oil available in order to justify inflating the retail prices of these consumer products.
Congress needs to enact legislation that opens ANWR to independent drilling companies who are not connected to, or funded by, the major oil companies and, through that legislation, can never be owned or controlled by them. This would allow independent oil drillers�exclusively�to open ANWR and drill producing wells and fill the TransCanadian oil pipeline with American oil. It is interesting that when oil was discovered along the North Slope below Prudhoe Bay, just below the Arctic Circle, BP-Amoco and Exxon-Mobil bought every almost every lease from the native Gwich'in Eskimos. Instead of sinking wells, the oil barons sat on the leases until their friends in Congress were able to enact the Arctic National Wildlife Refuge National Park legislation that banned drilling in ANWR to protect the porcupine caribou�the food staple of the Gwich'in Eskimos.
Legislation to protect the American consumer from the oil barons should mandate that 100% of the oil drilled by the independent companies in ANWR be sold exclusively to independently-owned gas stations in the United States. Second, the legislation should offer tax incentives (offset by fines against the major oil companies for price gouging) to independent refineries that are exempt them from all EPA atmospheric carbon dioxide regulations since those regulations were orchestrated by the major brand oil companies to force the independent refineries out of business. The independent refineries would be required by law to sell only to independent retailers.
The law would further mandate an crude oil price ceiling of $50 per barrel�with no mandated minimum prices. What this would do�immediately�would be to force the oil barons to dramatically cut the price of crude and increase refinery production. At the same time the major oil companies would be forced to reopen the refineries they forced out of business in the 1980s and 1990s or risk losing all of their American retail outlets. This would have the affect of breaking the global oil cartel's grip on pricing and return oil to the free enterprise marketplace.
Chairman Specter is correct that legislative action is desperately needed to solve the oil crisis in America. But his plan will simply compound the problem by adding a new cost to be borne by middle class taxpayers. The solution I propose will immediately impact the oil futures market. It will free up more refined oil products, and bring the price of crude down to $55 per barrel as the oil barons attempt to head-off a subsidized industry in America that will break the back of the oil cartel. Whether or not anything happens is entirely up to you�the American consumer. If you raise your voice in Washington today, tomorrow, the next day, next week, next month...more loudly each day, it will happen�and it will happen quickly.
Telephone your Congressman and Senators every day. Fax them. Email them. You must remind your Congressman and Senators (who are up for election in November) if this legislation is not law by Memorial Day, their jobs will be bittersweet memories in November. AND THEN DO IT! If you think you can't afford it, think again. You can't afford not to do it. Your Congressmen and Senators can add. They keep a tally on every issue that could cost them an election. Make your voice count because you will be the beneficiary of your effort.
� 2006 Jon C. Ryter - All Rights
Order Jon Ryter's book "Whatever Happened to America?"
Jon Christian Ryter is the pseudonym of a former newspaper reporter with the Parkersburg, WV Sentinel. He authored a syndicated newspaper column, Answers From The Bible, from the mid-1970s until 1985. Answers From The Bible was read weekly in many suburban markets in the United States.
Today, Jon is an advertising executive with the Washington Times. His website, www.jonchristianryter.com has helped him establish a network of mid-to senior-level Washington insiders who now provide him with a steady stream of material for use both in his books and in the investigative reports that are found on his website.