PART 1 of 3
By Jon Christian Ryter
June 4, 2008
As America feels the growing pain at the pump they need to realize that it is not going to get better—ever...unless we follow the world's lead, nationalize the oil industry, freeze oil prices, and send the oil pimps packing.
If you pull into a gas station in Islamic Iran, the price at the pump is 40¢ a gallon. In Saudi Arabia—where King Abdullah, the closest Bush-43 Muslim ally in the Mideast said "Sorry, fellah," when President George W. Bush asked him to increase the oil flow to bring down the global price of a barrel of oil, the price of gasoline at the pump is 45¢. The Libyans pay 50¢ a gallon at the pump. In Swaziland, if you have a car, you're only paying 54¢ a gallon. Muslim Qatar charges their citizens 73¢ a gallon at the pump. Bahrain charges their Islamic citizens 81¢ gallon. In Egypt, Muslim motorists pay 89¢ a gallon and Kuwait, whose nation was returned to them by President George H.W. Bush and the US military in 1990, charges their citizens 90¢ a gallon. America's biggest threat in the western hemisphere, Venezuelan dictator Hugo Chavez, charges his people 12¢ a gallon for gasoline. The price at the pump down the road from my home this morning (May 29, 2008) was $3.99 for self-serve unleaded. In cities where the State taxes are higher than where I live, American consumers are paying over $4.00 a gallon at the pump. It's time we got rid of the oil pimps from the Seven Sisters and nationalized oil production as they do all of the nations of the world except the United States and the European Union.
Because gasoline prices impact how voters perceive their Congressmen and Senators, the Democrats want to make sure the voters blame Republicans for high gas prices and not them. When oil hit $135 per barrel the Democratic-controlled Senate Judiciary Committee and the House Select Committee on Energy Independence subpoenaed the heads of Seven Sisters oil conglomerate and Royal Dutch Shell: John Hofmeister of Shell, Stephen Simon of Exxon-Mobil (the Standard Oil flagship), Peter J. Robertson of Chevron, John Lowe of ConocoPhillips, and Robert Malone of BP for a photo op grillfest that both committees (and the participants from the Seven Sisters) knew would accomplish absolutely nothing because the Seven Sisters, which controlled 85% of the world's oil supply only three decades ago now controls less than 7% of it.
But the purpose of the hearings was not to get lower gasoline prices, but to score points with the voters by embarrassing the heads of the world's largest gasoline retailers by exposing their exorbitant pay scales, and to demand that the oil pimps bring the price of the harlot—gasoline—back into the realm of 20th century reasonableness even though the world is now living in the 21st century and America is no longer the gas king of the world.
Democratic senators and congressmen pretended they are not in the pockets of the Seven Sisters as they grilled five of the highest paid businessmen in America about how much money they earn, stupidly suggesting by their sarcasm in the hearings that gasoline has reached the $4.00 gallon threshold in the United States because these guys earn from $7 to $32.7 million a year (when the stock options are included). The charade served only as comic relief as everyone pretended there was some sort of meaningful substance in the hearings as Senate Democrats threatened them with a windfall profits tax (that will immediately be passed on to US consumers in the form of even higher prices),
Before taking off the kid gloves, the Senate decided to dance around the ring and spar with the oil whores of Wall & Broad to see just how strong their left jabs were going to be. Senate Judiciary Committee Chairman Patrick Leahy started the charade, asking ConocoPhillips chairman John Lowe what his annual compensation was. Leahy began by asking Lowe if his annual compensation was over $100 thousand. In reality, his weekly paycheck (including stock options) was $31,923.00. Lowe let Leahy play his game for a few minutes and conceded that his salary—not his total compensation—was in the $12 million neighborhood. In reality, Lowe lives in an even better neighborhood since his compensation package last year was more like $16.5 million when his stock options were included. Peter J. Robertson, the head of Chevron, the second largest facet of the Seven Sisters, called himself a "regular guy." He earned $28.4 million last year—that translates into over $54.6 thousand per week. Yeah, he's a regular guy all right. How much to the "regular guys" you know earn a week?
But both Lowe and Robertson live in the middle class suburbs compared to Stephen Simon, the tutorial kingpin of the Standard Oil empire and the head of Exxon-Mobil. Simon's compensation package last year was $32.7 million. Simon earns just a hair under $63 thousand a week. Most working class Americans would feel they are pretty middle class if they earn $63 thousand a year—counting the incomes of both spouses.
When he was grilling Robertson, Senate Majority Whip Richard Durbin took offense at the "regular person" comment and shaking his head, said Robertson's remarks were unconscionable, asking him, "Where is the corporate conscience here?" Robertson remarked that the Seven Sisters were investing all they could in alternative energy sources. (A report sent to the Senate by the House Select Committee on Energy Independence showing the lack of interest on the part of the oil industry to create alternative energy sources. The report noted that Exxon-Mobil made net profits of $40 billion last year. What do they do with the money? They bought back $31.8 billion of stock and paid their shareholders dividends of $7.6 billion. They also paid their top 5 executives $76 million. Roughly $10 million was spent on renewable energy research and development.)
But then, why not? While the oil industry has been spinning the myth that we are past peak oil (and that's why we have to pay more for each barrel of oil), they know that [a] oil is replenished by the Earth and [b] they are not about to create viable alternate sources of energy to compete with, and drive down the price of, oil. Privately the oil industry understands precisely why oil reached $135 a barrel. And, they know, in the beginning, there was only one person in the world to blame. His name was John D. Rockefeller, Sr. When you look at the oil whores around the world, Old John was, without a doubt, the king oil pimp since he figured out that when too much oil was pumped from the ground, the prices drop. To keep the price of oil artificially high, Rockefeller figured out that all he had to do to control the price of oil was to own the spigot. In two decades Rockefeller's Standard Oil Company controlled 85% of all of the oil that was refined in the United States. By 1890 he controlled 85% of the refineries in the world. He was the king oil pimp in the world and the world knew it and despised him.
In 1911 the US government used the Sherman Antitrust Act of 1896 to breakup Standard Oil—but allowed Rockefeller to retain control of each of the breakup companies: Esso (which became Exxon), Mobil (which was originally Standard Oil of New York), Amoco (which was originally Standard Oil of Indiana), Chevron (which was originally Standard Oil of California), Atlantic (which split, becoming both Atlantic Richfield and Sun Oil, which morphed into Sunoco), Continental Oil (another California Standard Oil subsidiary that morphed into Conoco), and Standard Oil of New Jersey. The seventh "sister" was not an oil company. It was a petro-phramaceutical company that was working to create consumer products from the oil sludge left when the kerosene was extracted from the oil. The company was Chesebrough-Pond. Ultimately the Seven Sisters would expand into ten, then, to compete in the global marketplace, began to contract, becoming what is now called "the supermarjors." The supermajors needed economic muscle to compete with the state-owned national giant oil companies whose oil fields previously belonged to them. Most of the Seven Sisters and Royal Dutch Shell oil fields in the third world were nationalized between 1949 and 1973, weakening and ultimately destroying the monopolistic global control of oil by the oil pimps since 1880. Nationalization continues as rising despots in the emerging nations realize that oil means more than wealth—it means global power.
In 2006 Venezuelan dictator Hugo Chavez nationalized oil fields belonging to Citgo, Exxon-Mobil, Conoco-Phillips, Chevron, Total SA, BP, Statoil, Lukoil, Occidental and all other privately-owned oil companies in his country. (Since Venezuela was the majority shareholder in Citgo, Citgo became Chavez's personal oil company. Bolivia nationalized foreign oil companies within its territory within weeks of the Venezuelan action.
In 2007, shortly after the Venezuelan courts rubber-stamped Chavez's heavy-handed seizure, Vladimir Putin nationalized Gazprom and Lukoil. The United States and the western bloc industrialized nations have the misfortune of being forced to buy oil from nations unfriendly to US policy. Without those nations—which include all of the oil-producing Muslim nations in the world, Russia, China, Columbia and Mexico. If the United States stopped buying oil from our economic and political enemies, we would have a 2.8 million barrel daily shortfall, which amounts to 25% of this country's oil consumption.
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In the chart, below, oil reserves are shown in millions of barrels and gas reserves are shown in billions of cubic feet. The total reserves, combining both oil and gas reserves, are computed in "oil equivalent" barrels (indicated in millions of barrels). For example, the oil reserves for Iran are 136,000 million barrels. Natural gas reserves are depicted at 974 billion cubic feet, and the adjusted equivalent in barrels is 302,496 million barrels. For part two click below.
© 2008 Jon C. Ryter - All Rights Reserved
[Read "Whatever Happened to America?"]