Gas prices have skyrocketed in the past few years, but who is to blame? Is it President Obama and the US government, or is it greedy oil tycoons?
So, gas is getting close to $4 a gallon where I live, the highest it has ever been. Four years ago, while running for President, Barrack Obama promised to cut our dependency on fossil fuels by moving toward clean renewable energy. He said it would benefit our economy by dropping gas prices, it would benefit the environment by lowering CO2 emissions, and it would benefit everybody by giving us an alternative and keeping costs down. In theory, he was absolutely correct, however, his theory had no plan for the corporate greed that has ensued over the past decade with the “Big 5” major oil companies.
These organizations are Exxon, Chevron, ConocoPhillips, Royal Dutch Shell (Shell Organization), and BP (British Petroleum). These five companies have created an oligopoly, which is like a monopoly but it is when a few companies dominate a market or business. This allows them to manipulate supply and demand and control prices. Monopolies are unfair and illegal, yet when it comes to certain necessities like oil or electricity, things like utilities that have become requirements in our lives, these laws are sometimes overlooked. Why are they overlooked? The answer may surprise some, but anybody who knows anything about politics knows exactly where I am going.
Lobbyists and special interest groups are a major part of politics. Lobbyists are people with tons of money that donate to a politician’s campaign. In turn, when these politicians are elected to office, they owe these lobbyists and special interest groups favors. In reality, it is not the politicians who decide the laws and the regulations. It is not the politicians who run the country. If we pay attention to the man behind the curtain, we will realize that most, not all people (some are honest, though a very small percentage) who hold public office, including seats as high up as the President, are really just puppets for lobbyists from oil companies, pharmaceutical companies, and big banks. We have seen in the past how tobacco lobbyists, knowing their product was harmful, paid off politicians to keep the laws and regulations against the tobacco industry to a minimum. American oil companies, who have some of the strongest lobbying in the country, have been doing this for at least a century now. They have made it so that their dominance of the oil market is completely legal and accepted.
The last President, George W. Bush, came from a wealthy family that made their money from oil. He has deep roots and a strong sense of loyalty to the big oil companies. He was certainly in the pocket of these companies. That is one reason why we ended up in Iraq. The oil fields that were taken over in Iraq were sold to oil companies like Shell and Exxon, vastly increasing their supply. This increased these companies’ net worth and has allowed them to post record profits, but more about that later.
While I am not a Barrack Obama defender and I did not want him in office in ’08, I will admit he has tried to stay true to his word. In the last four years, we have increased our use of wind and solar energy by eight times, cutting our demand and dependency on oil. One of the key principles in economics is supply and demand. We learn that when a product has less demand, the price should decrease, so what Obama said was true, at least in theory: If we can cut the demand for oil, gas prices should go down. Also, I just said that the “Big 5” have a greater supply of oil than ever before. Going back to supply and demand, if supply of a product increases, price should decrease. Supply and demand is the staple of economics, so why is it not working out right in this case? One word… GREED!
Lobbyists and special interest groups are a major part of politics. Lobbyists are people with tons of money that donate to a politician’s campaign. In turn, when these politicians are elected to office, they owe these lobbyists and special interest groups favors. In reality, it is not the politicians who decide the laws and the regulations. It is not the politicians who run the country. If we pay attention to the man behind the curtain, we will realize that most, not all people (some are honest, though a very small percentage) who hold public office, including seats as high up as the President, are really just puppets for lobbyists from oil companies, pharmaceutical companies, and big banks. We have seen in the past how tobacco lobbyists, knowing their product was harmful, paid off politicians to keep the laws and regulations against the tobacco industry to a minimum. American oil companies, who have some of the strongest lobbying in the country, have been doing this for at least a century now. They have made it so that their dominance of the oil market is completely legal and accepted.
The last President, George W. Bush, came from a wealthy family that made their money from oil. He has deep roots and a strong sense of loyalty to the big oil companies. He was certainly in the pocket of these companies. That is one reason why we ended up in Iraq. The oil fields that were taken over in Iraq were sold to oil companies like Shell and Exxon, vastly increasing their supply. This increased these companies’ net worth and has allowed them to post record profits, but more about that later.
While I am not a Barrack Obama defender and I did not want him in office in ’08, I will admit he has tried to stay true to his word. In the last four years, we have increased our use of wind and solar energy by eight times, cutting our demand and dependency on oil. One of the key principles in economics is supply and demand. We learn that when a product has less demand, the price should decrease, so what Obama said was true, at least in theory: If we can cut the demand for oil, gas prices should go down. Also, I just said that the “Big 5” have a greater supply of oil than ever before. Going back to supply and demand, if supply of a product increases, price should decrease. Supply and demand is the staple of economics, so why is it not working out right in this case? One word… GREED!
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In economics, we learn about the “Invisible Hand” that dictates the ebbs and flows of the market. If you have never taken economics I’m dead serious they call it the “Invisible Hand”. Go ahead, laugh. I did the first time I heard it too. Basically, what it means is that the market will self-regulate. The idea of this invisible hand was introduced way back in 1759 by an economist named Adam Smith. The idea is that society and its choices will guide the market to society’s desired destination. I know, it sounds like a bunch of bull. Well, guess what? It is!
The hand that guides the market is far from invisible. It is large corporations that control the supply of products and services, create demand that is sometimes real, but sometimes false, and control major market prices. In the case of oil, it is the “Big 5” that controls all of these and dictates them to the market. I have already shown an example when I talked about how when demand decreases, prices should also decrease on the market. With gas prices, as demand has gotten lower the prices have risen. Why, you ask?
First, let’s start with fear. Owners of large oil companies see that we are inventing new technology that is making us less dependent on oil. This creates fear, because stock holders will see that too, and eventually pull out. They cannot afford a loss in profit or a loss in revenue from stocks, so to keep profits up with less demand, they either need to find cheaper ways of production or raise prices. They chose to raise prices.
Next, let’s talk about the history here. There have been numerous inventions and innovations over the past century, most even patented, which would have long since decreased our dependency on fossil fuel. Most of these inventions, until recently, were suppressed by oil and automotive companies. They even bought patents for some of these technologies from the creators and still hold them. They have never released these ideas though, because even though they would benefit everybody else, they would be less profitable than keeping us hooked on oil. Chevron has had possession of a new battery that could have changed things long before they actually started allowing production of vehicles that use them. The NiMH, which is used in hybrid vehicles and is much better than any other battery in any car, has been around since the’80s. Chevron has had the patent since 2001, but they have been accused of “squelching” the battery because it would cause competition with gasoline sales. This can’t be true, right? Well, you ever hear of Nikola Tesla? I know this sounds like a crazy conspiracy theory, but if you know me you know that’s not my style. I offer you the chance to check some of these out for yourself and then tell me what you think.
The hand that guides the market is far from invisible. It is large corporations that control the supply of products and services, create demand that is sometimes real, but sometimes false, and control major market prices. In the case of oil, it is the “Big 5” that controls all of these and dictates them to the market. I have already shown an example when I talked about how when demand decreases, prices should also decrease on the market. With gas prices, as demand has gotten lower the prices have risen. Why, you ask?
First, let’s start with fear. Owners of large oil companies see that we are inventing new technology that is making us less dependent on oil. This creates fear, because stock holders will see that too, and eventually pull out. They cannot afford a loss in profit or a loss in revenue from stocks, so to keep profits up with less demand, they either need to find cheaper ways of production or raise prices. They chose to raise prices.
Next, let’s talk about the history here. There have been numerous inventions and innovations over the past century, most even patented, which would have long since decreased our dependency on fossil fuel. Most of these inventions, until recently, were suppressed by oil and automotive companies. They even bought patents for some of these technologies from the creators and still hold them. They have never released these ideas though, because even though they would benefit everybody else, they would be less profitable than keeping us hooked on oil. Chevron has had possession of a new battery that could have changed things long before they actually started allowing production of vehicles that use them. The NiMH, which is used in hybrid vehicles and is much better than any other battery in any car, has been around since the’80s. Chevron has had the patent since 2001, but they have been accused of “squelching” the battery because it would cause competition with gasoline sales. This can’t be true, right? Well, you ever hear of Nikola Tesla? I know this sounds like a crazy conspiracy theory, but if you know me you know that’s not my style. I offer you the chance to check some of these out for yourself and then tell me what you think.
Did you ever ask yourself “How come, in a time of recession like this, oil companies are producing record profits”? In 2011, the “Big 5” claimed over $101 Billion in profits. Did you know that the top 5 greatest annual profits EVER recorded in history all belong to the same company, Exxon Mobil? The rest of the top 20 greatest annual profits are littered with other oil companies. How, when everybody is struggling, do these companies make so much money? Suppressing innovations is only part of a much bigger problem. I think Lobbying is the main problem.
One major factor is that the owners of the “Big 5” oil companies are all lobbyists with “investments” in the Republican Party. Why would they lower gas prices when a democrat is in office when they know full well that high gas prices will hurt his chances of reelection? This way, they can not only increase profits, but at the same time they can try to push Obama out of office and get somebody in who will support their policies and increase our dependence on their product. They claimed more subsidies (money or tax breaks given to corporations by the government; i.e. government assistance; see: Welfare) during the Bush era than ever before, and hope to see that happen again if Romney is elected. Now tell me one thing: Do companies that are pulling in record profits really need government assistance? I swear I just heard everybody reading this collectively yell “NO!!!”
One major factor is that the owners of the “Big 5” oil companies are all lobbyists with “investments” in the Republican Party. Why would they lower gas prices when a democrat is in office when they know full well that high gas prices will hurt his chances of reelection? This way, they can not only increase profits, but at the same time they can try to push Obama out of office and get somebody in who will support their policies and increase our dependence on their product. They claimed more subsidies (money or tax breaks given to corporations by the government; i.e. government assistance; see: Welfare) during the Bush era than ever before, and hope to see that happen again if Romney is elected. Now tell me one thing: Do companies that are pulling in record profits really need government assistance? I swear I just heard everybody reading this collectively yell “NO!!!”
There is new research being done on new forms of clean, renewable energy. These new energy ideas include wave and tidal energy, using the natural processes of the Earth to draw energy. We have already done this effectively with hydroelectricity. The Hoover Dam is a good example of this, bringing power to thousands. Wind and solar power are more prevalent than ever. We are now taking the necessary steps to release ourselves from the dependence on oil.
I am not trying to defend Barrack Obama here. He made promises that were far too big for him to keep with the mess we were already in. He should be held accountable for his failed campaign promises. I’m not telling you to vote for Obama as I see just as many faults with him as I do with Mitt Romney (just as many, but Romney’s faults are much bigger issues). Maybe he is partly to blame for some of the problems Americans face today. But one thing I cannot blame on Barrack Obama is the cost of gas.
I am not trying to defend Barrack Obama here. He made promises that were far too big for him to keep with the mess we were already in. He should be held accountable for his failed campaign promises. I’m not telling you to vote for Obama as I see just as many faults with him as I do with Mitt Romney (just as many, but Romney’s faults are much bigger issues). Maybe he is partly to blame for some of the problems Americans face today. But one thing I cannot blame on Barrack Obama is the cost of gas.
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