OT - Fuel Prices
- From: "mozark" <swooning@xxxxxxxxx>
- Date: 26 Apr 2006 07:09:03 -0700
The massive rise in fuel prices
What is to be done?
by David Walsh
26 April 2006
The staggering increase in gasoline prices is taking an enormous toll
on working families in the US, whose paychecks are already being eaten
up by a host of other rising costs, from health care, to education, to
housing and food. In the last two weeks alone, prices at the gas pump
have risen nearly 25 cents-to an average of $2.91 per gallon-with
prices exceeding $3.10 in California, New York and other states.
Some 70 percent of US adults recently polled said gas prices-which
are up 31 percent since last year-were causing them financial
hardship. Tens of millions of people in America forced to drive long
distances to work, as well as elderly people on fixed incomes, rural
residents and small business owners are being devastated, and the
crisis could lead to mass layoffs in the airline and trucking
industries and throughout the economy.
Underlying this crisis is the fundamental contradiction between the
development of the productive forces and the social relations of the
capitalist profit system, which finds its starkest expression in the
maintenance of a petroleum-based economy that every day becomes more
incompatible with human needs and life itself.
After warning that Americans must brace for a "tough summer,"
blaming supposed "tight supply" for prices that could reach beyond
$4.00 a gallon in the next several months, President Bush responded to
mounting outrage by announcing a series of largely meaningless measures
Tuesday. These proposals-suspending environmental rules governing
gasoline refiners, halting purchases for the government's emergency
stockpile and giving oil companies more time to pay back previous loans
of crude oil from these reserves-will do little or nothing to ease
prices, while further feeding the profit drive of the energy
conglomerates.
Senate Majority Leader Bill Frist, meanwhile, declared that there is
"no silver bullet" to bring down prices and advised Americans to
tune up their cars and drive more slowly to get better mileage. For
workers who are seeing their real wages slashed by the cost of long
daily commutes, Frist's remarks amount to "Let them eat cake."
While the oil companies and their apologists in Washington have blamed
world crude oil prices and environmental regulations for the price
hikes, the chief cause is profiteering by oil companies, which are
posting record windfalls. Over the last decade, there has been a wave
of mergers and consolidations in the oil industry, allowing a handful
of monopolies to tighten their grip on supplies, manipulate production
levels and drive up prices. The present crisis is the result not of
some natural working out of the laws of the market, but rather of
definite decisions made by corporate executives who have immense
personal interest in the matter.
In the 1990s, oil producers complained of too much refining capacity,
not too little, and an "oversupply" of oil that was driving down
profit margins. The industry responded by shutting down 25 refineries
in the US since 1995 and cutting capacity by 830,000 barrels a day. In
addition, competitors conspired to control the amount of oil and gas on
the market, eliminate independent producers and consolidate control of
supply and pricing in the hands of the oil monopolies.
In 2005, the top five oil companies-Exxon Mobil, BP, Royal Dutch
Shell, Chevron and ConocoPhillips-saw their profits surge to more
than $111 billion. The world's largest oil giant, ExxonMobil, made
$36.1 billion, the highest amount in US corporate history and more
profits than the next four companies on the Fortune 500 list combined.
At $339 billion, its revenues exceeded the gross national products of
Taiwan, Norway and Argentina.
While millions of ordinary people have been squeezed by rising gas
prices, ExxonMobil's top executives and investors have reaped
hundreds of millions in compensation and rising share values. Lee R.
Raymond, who retired in December, received more than $400 million in
his final year at the company. Between 1993 and 2005, Raymond was paid
more than $686 million, or $144,573 for each day he spent leading the
Texas-based company. During this time, Raymond engineered the $81
billion acquisition of Mobil-giving ExxonMobil the capacity to
produce twice as much oil as the country of Kuwait-and wiped out
10,000 jobs.
Raymond's successor, Rex Tillerson, saw his pay raised by 33 percent
last year to $13 million. All told, the top five executives at Exxon
took home more than $130 million in compensation in 2005, own more than
$280 million in restricted stock, and have stock options valued at $113
million. The oil bosses throughout the industry have been similarly
rewarded as oil prices doubled over the last two years.
These corporations and individuals have reaped massive wealth by
exploiting and exacerbating the current crisis. None of them have the
slightest interest in mounting the kind of vast social effort that is
needed not merely to meet current demand, but, more essentially, to
develop alternative safe and sustainable sources of energy.
That the present reliance on petroleum is both unsustainable and a
deadly threat is indisputable. The world's crude oil reserves are
finite and will only disappear all the more rapidly to the extent that
steps are taken to expand production. At the same time, the burning of
these fossil fuels is the central cause of global warming, which-the
Bush administration's suppression of science
notwithstanding-threatens to make Earth uninhabitable.
Moreover, the pursuit of this finite resource has given rise to the
catastrophic growth of militarism. It is the principal cause of the
criminal US war in Iraq, which has claimed the lives of hundreds of
thousands of Iraqis and those of more than 2,500 US troops. It likewise
drives the open preparations for a new war against Iran as well as
plans for a military confrontation with China, whose expanding economy
makes it a competitor for control of global energy supplies.
The rising gas prices have prompted politicians-Democrats and
Republicans alike-to call for investigations into price gouging and,
in some cases, even to seek legislation to impose a "windfall profit
tax" on the oil companies. Not a thing will come out of this
posturing, which is strictly for public consumption.
Big Oil has long exerted enormous influence over both political parties
in Washington, but the level of political control it commands today
dwarfs what it possessed in the era of John D. Rockefeller and his
Standard Oil at the turn of the twentieth century. With two former
Texas oilmen in the White House and the votes of senators and
congressmen lubricated with hundreds of millions of dollars in campaign
contributions and lobbying efforts directed toward both parties, Big
Oil has nothing to fear. Both Democratic and Republican administrations
have provided the oil companies with massive subsidies and tax breaks,
lifted environmental and safety regulations, and provided the US
military as a virtual private army to guard the companies' oilfields
and pipelines throughout the globe.
ExxonMobil's ex-CEO Raymond, a close ally of the Bush administration,
helped formulate policy regarding drilling in the Artic National
Wildlife Refuge and opposing any measures to reduce global warming. In
2001, the company was a key participant in Vice President Cheney's
Energy Task Force, which discussed, among other things, the oil fields
of Iraq and the danger that, after the end of UN sanctions, the
country's largely untapped reserves might fall into the hands of
Russian, Chinese or French competitors, instead of the US or British
oil companies.
Last March, the Senate Judiciary Committee held a public hearing to
supposedly "investigate" price gouging by the oil companies. Again,
Democratic politicians pontificated about "corporate greed" and
wagged their fingers at the oil chiefs who testified. In his remarks,
Rex Tillerson, the new CEO of ExxonMobil, scoffed at the impotent
gestures, reminding the Senators, "I suspect people on this committee
benefited from our success last year." The lifelong oilman knew of
what he spoke: among the wealthy Senators assembled on the committee
was Arizona Republican Jon Kyl, a large Exxon shareholder who has long
championed the industry's interests.
Under conditions in which the living standards of hundreds of millions
of working people in the United States are being driven down by the
soaring price of fuel, immediate action must be taken to bring the cost
of fuel under control.
At the same time, the larger task of developing alternative energy
sources and confronting the mounting threat posed by global warming
cannot be postponed.
Neither a short-term answer to the present crisis over gas prices, nor
the longer-term solution to replacing an unsustainable petroleum-based
economy is possible outside of a direct assault on the capitalist
profit system and the powerful social, financial and political
interests that are behind the policies of Big Oil.
The exploitation of this crisis in the interests of corporate profits
and the private accumulation of wealth must be halted. The actions of
Big Oil must be approached objectively for what they are: criminal,
anti-social behavior. Criminal investigations must be initiated into
the practices of the giant oil companies, including the auditing of the
personal accounts of all leading executives. The massive profits
recorded by the oil companies during the past year as well as the
obscene multimillion-dollar compensation packages paid out to
executives must be expropriated and placed in a publicly controlled
fund.
These short-term measures must be combined with a fundamental change in
the financial structure and organization of the energy industry. The
American people and, in fact, the people of the world are being held
hostage to the profit interests of vast energy conglomerates that
threaten the globe with declining living standards, environmental
destruction and war. It is necessary to break this stranglehold
nationalizing the energy conglomerates-that is, converting
ExxonMobil, Chevron, ConocoPhillips, etc., into publicly owned and
democratically controlled utilities.
This would begin to make available the financial resources that are
needed for launching an internationally coordinated,
multitrillion-dollar effort to develop alternative energy sources and
confront the danger posed to the environment and mankind's future.
In opposition to the deliberate "fixing" of the market to enrich
the wealthy elite, the exploration, development and use of energy
supplies must be guided by a rational international plan that is
publicly debated and democratically approved by the working class. This
plan must meet the needs of the world's people for low-cost,
environmentally safe and renewable energy.
In their efforts to secure vast profits, the energy monopolies and the
auto industry have long conspired to prevent the development of
reliable public transportation, and, in the past have dismantled
existing transit systems. A rational plan for energy use must include
the pouring of billions of dollars into urban mass transit and
light-rail systems, as well as developing fuel-efficient vehicles.
These ideas are not utopian but absolutely necessary for the future of
humanity. They require, however, that working people assert that their
rights-to a decent standard of living, secure jobs, a clean
environment and a future free from war-take precedence over the
profits and property rights of the America's ruling elite.
.
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