SPEAKING
FREELY How oil consumers are
duped By Bruce A Gorcyca
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please click hereif you are interested in
contributing.
When I tell people
there is more oil in Canada than in Saudi Arabia,
they look at me as if I just fell off a bar stool.
Unfortunately, however, I am quite sober and the
above statement is quite true and, ironically,
sobering.
The world has plenty of oil -
not only in Canada, but Russia, China
and
right in the US as well. In fact, the only
argument among geologists is whether there are 3
trillion or 5 trillion barrels of oil remaining
beneath the ground. The real issue causing all the
grief in the world is refining capacity. Simply
put, over the past 20 years, the world's fuel
consumption has increased almost 35% (thanks
primarily to China, India and other emerging
economies) but refinery and storage capacities
have remained the same, most probably by design.
Ninety percent of the world's oil
refineries are owned by US oil companies and have
been operating at 100% capacity for the past four
to five years.
All market pricing of any
commodity fluctuates according to the laws of
supply and demand, as any first-year business
major is taught. However, if one can artificially
suppress the supply side, pricing can be kept at
record-high levels, especially when the supply is
tightly held by just a few companies.
We
have witnessed exactly this type of price
manipulation in the diamond industry for years.
Despite an overflowing supply of diamonds, mostly
from one or two sources in Africa, only a
pre-determined supply is introduced into the
market every year to keep retail prices inflated.
But the recent introduction of Russian
diamonds into the market will soon disrupt the
clever game plan. Sadly, we do not have the same
situation in the oil industry, where oil
companies, despite billions of US dollars in
record profits, refuse to build a single new
refinery. More refineries equate to more oil on
the market and lower prices at the fuel pumps, and
less profit in their pockets. It's a great scheme.
Many companies, such as Ivanhoe and Hobson
Secondary Oil, have proved beyond any doubt that
they can release vast quantities of crude oil
trapped in rock formations as far as 3,650 meters
below the surface with high-pressure steam
injection. This technology alone would produce
more than a billion barrels of oil a year right in
the US - eliminating transport costs and
dependency on foreign oil. Even the Chinese have
demonstrated how to retrieve a barrel of oil from
a ton of shale cost-effectively. And the Canadians
are successfully extracting more than a million
barrels of oil per day from Alberta's oil sands.
There is plenty of oil - what there is a shortage
of is ethics and the will to reduce profits and
fuel taxes.
Not surprisingly, where
governments administer the oil industry (for
example, Venezuela, Nigeria and Kuwait) the price
of gasoline at the pump is less than 13 US cents a
liter (50 cents per US gallon). This should speak
volumes, but few American consumers are even
listening. Our collective ignorance of this scam
is bliss to oil executives, but costing us all a
fortune every time we fill up. It doesn't have to
be this way.
If US legislators really
wanted to help "we the people", they would mandate
the construction of two new refineries in the
United States. When completed, we Americans would
very quickly see gasoline below $1 a gallon (26
cents a liter, compared with about 80 cents now).
But really, what oil company wants to make less
money?
And what politician wants to
receive fewer campaign contributions rather than
more, or have fewer tax dollars rather than more
(from oil and gas sales) to pay for their many
pork-barrel projects? Indeed, America's oil
"problem" is not at all about oil - it is all
about greed. We were first duped with invisible
"weapons of mass destruction" and now it is the
"critical oil shortage". Wake up, America - we are
all being violated for the profit of a few with a
very sophisticated ruse.
Bruce A
Gorcyca has a bachelor of business
administration degree from Inter American
University (Puerto Rico), is an honorably
discharged military veteran, and is a former
Fortune 500 marketing executive. He is a marketing
and growth consultant.
(Copyright 2006
Bruce A Gorcyca.)
Speaking Freely is
an Asia Times Online feature that allows guest
writers to have their say. Please click hereif you are interested in
contributing.
