by John M. Curtis
(310) 204-8700

Copyright August 4, 2008
All Rights Reserved.

s Sen. John McCain and Sen. Barack Obama battle for the hearts-and-minds of voters, the U.S. oil industry and traders on Wall Street and the New York Mercantile Exchange get a free pass. With the best of intentions, McCain and Obama offer competing proposals for weaning the nation off its fossil fuel dependency, accepting the premise (a) the world is running out of oil and (b) fossil fuel pollution causes global warming. Neither premise has yet to be proven but if you don't believe former Vice President Al Gore or Texas oilman T. Boone Pickens, you're a dummy for remaining skeptical. McCain and Obama, too, took the Cool Aid about the scarcity and harmful effects of fossil fuels. Neither wants the public to know about recent oil discoveries off Brazil's Atlantic coast. Gore and Pickens focus most reservations on U.S. dependency on foreign oil.

      No one knows with certainty whether the planet is running out of oil or whether fossil fuels cause global warming. Alaska's Arctic National Wildlife Refuge, where an estimated 25% of the U.S. petroleum remains untapped, opens heated debate. ANWR has become this year's political football, where both McCain and Obama ignore the stranglehold big oil has on the U.S. economy. Neither candidate seems willing to deal with the complexity of petro-politics, where energy companies contribute mightily to presidential campaigns. It's no accident ExxonMobil and ChevronTexaco posted their biggest quarterly earnings in their companies' history. Both candidates prefer to follow Gore's paradigm that oil is the bane of the economy. In reality, greedy oil companies and their Wall Street friends—not foreign oil—are responsible for spiraling prices and harming the economy.

      Spiraling oil prices, manipulated by the oil industry and Wall Street, have driven the economy into a ditch. Today's inflation report for July at .8%, excluding food and energy, gives Federal Reserve Board Chariman Ben S. Bernanke something to think about when his Open Market Committee meets Aug. 4. Bernanke been caught between a rock-and-a-hard place, trying to control inflation by keeping rates low and, at the same time, keeping the economy from plunging into recession. Artificially low interest rates have devalued the U.S. dollar, a contributing factor in the spiraling oil prices. President George W. Bush and Vice President Dick Cheney have given the oil industry the green light to fleece the country. Neither Bush nor Cheney have asked the oil industry to take less profits for the good of the economy. On their watch, oil prices have more than doubled, leaving other industries in shambles.

      Most countries in Europe, Asia, Africa and Latin America have nationalized oil industries to stabilize prices. When traded like stocks or commodities, traders bid prices into the stratosphere to maximize profits. White House officials sat idly by while oil companies escalated prices and drove business and consumers into the poor house. Where's the balance when one industry takes advantage of virtually all other businesses? Since the speculators began bidding up the oil prices last year, the price per barrel doubled, together with its refined products. Gasoline, diesel and jet-fuel have more than doubled, causing motorists, truckers and airlines to run in the red. Only the oil industry remains immune to price-gouging and manipulation. Yet presidential candidates focus only on blaming Mideast oil producers, promising unrealistic plans to rid the nation of fossil fuels.

      Since Brazil's national oil company Petrobras announced a potentially 33 billion barrel discovery off the coast, the find has been kept out of the news. Brazil has long converted to sugarcane-based ethanol, leaving then new oil discovery pure gravy for the Brazilian economy. “You're talking about a reserve the size of total U.S. reserves,” said Tim Evans, an oil analyst with New York's Citigroup, Inc. Finds like this are unwanted news for oil industry executives, busy promoting “peak oil theory,” that world demand out paces production. While touting alternative energy, neither presidential candidate addresses the adverse consequences to agriculture-based energy companies, like sugarcane or corn-based ethanol. Ethanol production and use produces less carbon dioxide but depletes vital food sources and water, during a time of scarcity, drought and rising food prices.

      Entrepreneurs like Gore and T. Boone Pickens see opportunity in alternative fuel industries, including wind, solar, ethanol and even nuclear power. Unlike fossil fuels or natural gas, they're far less efficient in generating energy. “We have to get the country off the $700 billion a year it spends on foreign oil,” said Pickens, adding, “it's a killer and is going to cause our economy great problems,” blaming spiraling prices on “foreign” oil. In reality, oil companies don't care where they get the oil as long as it's cheap. Whether extracted it from ANWR or off the coasts, oil companies charge customers the going rates determined by Wall Street. Instead of diverting attention to renewable energy sources, politicians would be well-advised to first take on Wall Street and the mighty oil industry. A few common sense changes could deflate oil prices and ease fears about global scarcity.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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