Note, this piece was updated, and originally stated the U.S., alone, was responsible for $5.9 trillion in fossil fuels subsidies. The $5.9 trillion, for the year 2020, is a global figure.
Oil
“It appeared that the whole world was one elaborate system, opposed to justice and kindness, and set to making cruelty and pain. And he and his father were part of that system, and must help to maintain it in spite of themselves. Their frail human nature was subjected to a strain greater than it was made for; the fires of greed had been lighted in their hearts, and fanned to a white heat that melted every principle and every law.”
During the 1973 Arab-Israeli War, Arab members of the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo against the United States in retaliation for the U.S. decision to re-supply the Israeli military and to gain leverage in the post-war peace negotiations.
- Oil Embargo, 1973–1974, Office of the Historian
By Gregg Wall (4-2-2022)
Happy Birthday, Jack!
Big Oil & Gas are responsible for a great deal of evil on the planet today. And the fact that Western governments refuse to learn but continue to allow themselves to be dependent upon fossil fuels doesn’t speak well for decades of leaders’ collective wisdom, let alone their morality. In the ‘70s OPEC exercised the cartel’s might and brought the US economy to its knees, inflation soared. (Granted the Saudis had some help from Mr. Nixon’s, ill-timed, decision to take the U.S. off the gold standard.)
Today, OPEC has not dissimilar might, globally, but the US is no longer dependent upon OPEC or the Middle East… instead, the oil majors, a cartel of domestic refineries, and Wall Street are entirely responsible for today’s U.S. energy crisis. Along with a decision made by President Obama, which we shall get to shortly.
To say, that big oil & gas dependence are the sum of all evils is an understatement. America feels obliged to fight all manner of endless wars in the Middle East for the sticky substance, aligning itself with dictatorship after dictatorship, oil major after oil major … whose actions and policies are completely anathema to the principles America, allegedly, stands for.
We can see the result of global dependence upon oil & gas, presently, in the Ukraine. Could Putin fund his war, if the world had steadily moved to renewables, methodically, over the last two decades? The answer is probably not. Oil not only funds repugnant dictatorships, oligarchs, an assortment of human rights violations, endless wars, genocide, assaults upon sovereign nations, the corruption of democracies & the rule of law … but it is now heating up the earth like a convection oven, so that food stocks & humanity itself are both under threat.
In short, oil & gas are a national security disaster waiting to happen. It is happening. The Pentagon is on record. The calamity is here, now, and it’s pounding on the world’s front door.
Can you hear it? I can assure you the bottom half hears decades of American energy policy failure, loud & clear, as consumer price gouging quickly consumes & overruns household budgets.
To get a greater feel for the disaster, mostly made by our entirely fallible U.S. leadership, over the span of decades, currently unfolding before our very eyes … we have to take a look at how the lack of foresight, and greed driven policies (as well as, blind subservience to Big Oil & Gas), placed the U.S. and the current administration into its present predicament.
Yale Environment 360 recently reported that in 2020 alone, the planet subsidized the oil & gas industry, along with coal, to the tune of 5.9 trillion dollars… explicit subsidies are only 8% of that total, with the pollution, tax cuts, contamination, remediation, & destruction of the planet making up 92% of the total costs, currently not accounted for in the price at the pump. Truly, America’s policy of privatized profits, for a privileged few - & socialized losses & expense, for America’s disenfranchised taxpayer - made manifest. Please note, America is the largest producer of fossil fuels, globally, and the number one consumer of oil and gas... it's only when we factor in coal, that China overtakes the U.S. as the number one consumer of fossil fuels, in the aggregate.
Now, take the $5.9 trillion figure - cut it down by twenty-five percent, perhaps by half, for sake of argument (factor in, additionally, America's share of global consumption, toss in some net present value analysis) - and multiply that figure over the span of the last two decades and you get some feel for the awesome power the oil & gas industry holds over the U.S. congress, the presidency, and America’s failed political duopoly. Perhaps, the only other industry with similar power is Wall Street, itself, which is neck deep in fossil fuels financing & investment.
More recently, in our catalogue of leadership failures, we have to go back to the Obama Administration. It was POTUS Obama, who reversed four decades of American energy policy, by allowing the export of American energy independence offshore. At the time, and despite the rhetoric, so as to ensure -- not lower prices for Americans and the US economy -- but the commodification of U.S. energy liberty by Wall St, further speculation, and so as to enrich the fossil fuels behemoths and congressional stock portfolios. The folly of that decision, to listen to the U.S. oil & gas majors and export U.S. energy independence offshore, is being seen in real time by Americans, as they pay record prices at the pump.
This wouldn’t be the last time that American leaders listened to the fossil fuels industry & Wall St. to the complete detriment of the American people.
The news this week was that POTUS Biden will release a million barrels of oil per day from the SPR (the Strategic Petroleum Reserve), which goes back to, you guessed it, the ‘70s and the Nixon administration. The release of SPR oil could be a major event and reverse Biden’s, seemingly, ever declining approval rating. However, like most things, the devil is in the details. If his prior November SPR release is any example, Biden, appears, to be merely releasing the oil into the current system, driven by Big Oil supply manipulation and Wall St speculation (which may absorb the million barrels and, possibly, treat it to all manner of supply acrobatics). We don’t know. And the administration and MSM are, remarkably, reticent on exactly how the additional fuel will help the American people. For all the talk from Biden about the deleterious impact of monopolies and cartels on inflation and the U.S. economy (and on this, he is correct)… the president also has been remarkably apathetic and quiet on actually enforcing antitrust and taking on the highly malign forces of American oligarchy, cartel, & monopoly.
It's with some irony then, that another recent leader, POTUS Trump, under directions of the fossil fuels industry, considered elimination of the SPR… which would have put the American economy under the forbearance & mercy of entirely evil Big Oil and Wall St. boardrooms and C-suites. That’s right, the oil industry, as recently as 2017, advocated eliminating the SPR. Essentially, exposing the throat of the American people (already fighting for survival, under the crushing weight of failed neoliberalism) to the cruelty, failure, & greed that dictates U.S. energy policy.
Fortunately, cooler heads prevailed and when there was a glut of oil, as the U.S. became the number one oil & gas producer in the world… the Trump administration made plans to fill up the SPR. Essentially, plans (they were never carried out) to backstop markets, Big Oil & Gas, and greed, once again, with yet more corporate welfare. Yet another example of a TBTF industry coming to the U.S. government for endless government aid & bailouts. Instead, what did the industry and OPEC do, they cut supply (which, along with Wall St speculation, sent fuel prices to nearly double the pre-pandemic price per barrel). The deliberate oil supply cuts had the dual effect of allowing OPEC, the oil majors, and Wall St to cash in… while fueling an inflation narrative that Biden had little role in instigating (but nevertheless, will be held accountable for). The failure that is America’s monopoly economy, and the dominance of fossil fuels w/in the economy, spans decades and both political parties are to blame.
Lost in all this is the Green New Deal, which, along with Biden’s more progressive commitments to the American people, has suddenly vanished. Biden is true to his word, but apparently, only to American oligarchs, monopolies, Wall St., and billionaire donors. Per Candidate Biden, nothing will change… clearly, a man of his word, but only to a privileged few.
At the risk of being redundant, I’m just scratching the surface on an industry that is systematically destroying the planet, jacking food prices into oblivion, along with Wall St. is responsible for consumer price gouging, and funds wars & tyrants from around the globe. Big Oil & Gas profits, also, usurp American democracy, the various branches of government & public policy. Leaving this and future generations of Americans to deal with a dying planet and the fallout, as their federal government fails them.
One can talk and write about these things until one is blue in the face, and many have… and yet, it appears to have no bearing, whatsoever, on America’s failed business and political leadership. A leadership that, often, has no reservations whatsoever about playing up an inflation narrative, as cover for greed and monopolistic price gouging. For as long as we let fossil fuels, greed, and Wall St govern the nation and its economy, Americans will continue to face a malevolent force, entirely inimical to their interests, and a collision course with an existential threat.
Until America wakes up and installs a green energy grid, there will be no respite, no mercy, from the gun Big Oil and Wall Street holds to the nation’s head. And what is true in America appears to be equally true throughout many Western economies and governments.
Copyright JM Hamilton Publishing 2022
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