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Terminal (Error?) Energy Price Gouging

D’Amor – © August 12, 2005 – Dedicated to Public Domain

    For years now, I’ve been pondering what event will finally precipitate the “snowball” effect collapse of the economy of the United States and most of the rest of the world. “Peak Oil” has been one of them, and it now appears quite likely that fuel costs, not “terrorism” will trigger economic collapse.

    Today, oil and gasoline prices have again hit an all time high. Since the price of fuel impacts almost every aspect of life in the United States, not only are the costs of all goods and many services dependent on highway transportation rising, but the increasing cost of gasoline negatively impacts net spendable income for all other purposes. If this continues, soon most Americans will barely be able to afford the necessities of life, much less all of the non-essential “consumer” goods that many have been buying. Note that “consumer” debt is hitting record highs daily.

    Since real wages as well as availability of good paying jobs have been declining for over twenty years for the “working” class, if fuel costs remain at present levels or increase, they may well accelerate the collapse of the economy of the United States.

    Since I worked in the petroleum industry for a number of years in the late 60’s and 70’s as an engineer, I know that there has never really been a shortage of oil. Many if not most producing wells are produced at a fraction of the optimal quantities, and many explored and verified fields have never been tapped. Because of U.S. Government taxes, fees and regulations, as well as relatively high labor costs, importation of oil has simply been far more profitable than producing oil domestically. The “Oil” cartel has also been “fixing” fuel prices for decades. The industrial revolutions in China, India and other nations will however create a shortage in the near future.

    The few remaining major oil companies have bought out all of the small producers who once kept prices down in local markets, and are now buying out each other. They all work in concert to keep oil prices and their profits high by manipulating the “cost” of oil and gas. This has gone on for many years and is nothing new. Those who run these companies certainly cannot be idiots, and yet it is obvious that the present price gouging will have huge economic repercussions in the very near future. Note that Bush Family and Dick Cheney both own huge petroleum industry assets.

    The astounding observable fact that virtually no practical alternatives to fossil fuel seem to have been devised or invented in the past hundred years seems unbelievable on its face. I have first hand knowledge of one subversion by the oil industry of a heavily funded operation to explore and produce geothermal energy. This would have provided very low cost and high capacity electricity, which would have replaced fossil fuel powered electric utility systems. Thus, I can easily imagine that the oil industry has spared no expense to make sure that absolutely no one has been able to implement any energy source that might curtail their sales of fossil fuel and their huge profits.

    The above facts, along with record government spending, debt, unfunded liabilities, the huge trade deficits and wars of empire clearly indicate a high probability that one or both of the following scenarios is presently taking place;

(1) Those in control of the Government and corporations of the United States have been so blinded by their greed that they are unwittingly allowing it to destroy the economy and themselves. This idea is reinforced by decades of “Peter Principle”¹ management, and the current speculation (not earnings) based stock markets, as well as their current and past wars of conquest.

(2) Those evil and venal people who control the government and business are purposely destroying the economy of the United States in order to achieve their nightmare of a “New World Order” wherein a very few lord it over billions of their virtual slaves. I believe that this one will fail because the plans of the rich and stupid did not anticipate the meteoric rise of China as both an economic and military power that they can not even influence, much less control. The effects of decades of such governance will none the less certainly result in the collapse of the U.S. economy.

    In any case, if those responsible for the present economic situation are not stopped very soon, a worldwide devastating depression is inevitable. This assuming that global war doesn’t destroy us all first. Frankly, I see little hope for mankind.

Notes:

¹The original Peter Principle states that in a hierarchically structured administration, people tend to be promoted up to their "level of complete incompetence"