- Like a gas station under a blazing summer sun, drivers
are fuming. Gasoline prices topped $2 per gallon across the United States
in late May. Crude oil hit a near record price of $41.72 a barrel at the
close of trading May 24. Rising costs are creating real hardships for millions
of poor and working people who must drive to their jobs or to meet family
- The crisis isn't confined to U.S. shores. Truckers in
California, cab drivers in London and labor unions in Beirut have all staged
protests against rocketing gasoline costs.
- Workers want to know: Who's to blame? And how can the
problem be fixed?
- Democratic presidential candidate John Kerry blames OPEC--the
11 major oil-producing countries of the Middle East, Latin America, Asia
and Africa. He called on President George W. Bush to pressure OPEC to increase
- Bush also blames OPEC, but says the best solution is
to develop more of the known oil reserves under U.S. control. That's Bush-speak
for drilling in protected lands and waters, and for continuing the war
to subjugate Iraq.
- Bush and Kerry claim there's too little oil being pumped.
But is that the real problem?
- No, according to a study released May 12 by the Consumer
Federation of America and the Consumers Union. These groups put the blame
squarely on big oil companies like ExxonMobil, ChevronTexaco, ConocoPhillips
- Since the mid-1990s, mergers have reduced the number
of oil companies from 34 to 15 and the number of oil refinery firms from
15 to seven. Refineries have been closed. As a result, unrefined crude
oil is being held back from the market to artificially inflate prices and
generate huge profits for Big Oil, according to the CFA-CU report.
- "[T]he industry engineered $250 billion of total
price increases since 2000 so it could reap $80 billion in profits. In
turn, the consumer paid the price, to the tune of $1,400 per household,
shouldering the expense of higher gasoline, natural gas and heating oil
charges." (Doylestown Patriot, May 20)
- Tim Hamilton, a petroleum industry consultant, told the
Coldwater, Mich., Daily Reporter that "with companies merging and
refineries shutting down 'we barely have enough refinery capacity to meet
our needs ... They drive the price way up to slow the consumption down
to meet the gas that's available.'
- "He said that results in huge profits for the oil
companies. One consumer group reported last year's 35-percent increase
pumped up oil-company profits by a combined 926 percent.
- "'If you think this year's bad, wait until next
year,' Hamilton said."
- In California, State Senator Joe Dunn announced hearings
on the oil companies' role in driving up prices at the pump, with a special
focus on Shell Oil's plan to close its Bakersfield, Calif., refinery. Dunn
and U.S. Senator Barbara Boxer said they suspect Shell of "intentionally
- "Is there a supply problem? Yes. But there's a supply
problem as a result of a deliberate strategy of the gasoline industry,"
Dunn charged. (Los Angeles Times, May 18)
- Don't blame OPEC
- Since the 1970s, OPEC has been a favorite scapegoat of
politicians trying to promote anti-Arab racism and draw attention away
from U.S. oil industry profits. After all, Big Oil is a major contributor
to both Republicans and Democrats.
- A report published on the BBC's web site May 5, headlined
"Oil soars despite overproduction," revealed that OPEC countries
are already pumping "far above their quotas."
- "OPEC cut production at the beginning of April by
a million barrels per day (bpd) to 23.5 million, after many of its 11 members
complained that the falling dollar outweighed price rises as far as their
revenues were concerned," said the BBC. "But according to the
organization's president, Purnomo Yusgiantoro, about 1.5 million bpd are
still being pumped beyond the quota."
- And on May 24, Saudi Arabia agreed to raise oil production
by another 800,000 barrels per day. Despite this announcement, prices continued
- U.S. oil monopolies limit the amount of refined oil on
the market, knowing that worldwide demand has grown 35 percent since 1991.
The Bush administration is a loyal accomplice in this criminal enterprise.
- Much of the already limited pool of refined petroleum
is being diverted to the U.S. war machine. Iraq sits atop the world's second-largest
known oil reserves. But the tenacious Iraqi resistance has so far prevented
large-scale resumption of drilling and refining under U.S. control. Millions
of barrels must be imported to grease the wheels of the occupation.
- Another 120,000 barrels per day are being diverted to
the U.S. strategic petroleum reserve. In November 2001 Bush ordered that
the reserve, housed in underground salt caverns along the coast of the
Gulf of Mexico, be filled to its maximum capacity of 700 million barrels.
The reserve is at 659.5 million barrels and growing. (French Press Agency,
- In campaign speeches Kerry said Bush should dip into
the strategic petroleum reserve to ease high prices for consumers. Bush
rejected that, claiming it "would put America in a dangerous position
in the war on terror."
- Still, there's nothing to prevent Bush from releasing
some oil later in hopes that a temporary price dip could aid his re-election
- Open the books!
- Blaming the OPEC countries isn't a solution to high oil
and gas prices. Neither is relying on promises by mainstream presidential
candidates. Both Republicans and Democrats are beholden to Big Oil.
- Oil is a vital energy source needed throughout the world.
Yet its refinement and distribution is thoroughly monopolized by a handful
of Western--mainly U.S.--companies, who manipulate the market by creating
artificial crises to boost profits.
- The whole world knows that Big Oil's lust to control
Middle Eastern oil is a key factor in the U.S./British war and occupation
in Iraq. These companies have also worked tirelessly to sabotage the development
of alternative, safe energy sources and undermine environmental protections.
- Should such power remain in the hands of the oil monopolies?
Shouldn't the working class demand control over this vital resource to
benefit all people?
- As a start, labor unions and community organizations
could demand that the oil companies open their books to an independent
- - Reprinted from the June 3, 2004, issue of Workers World
- Copyright Workers World Service: Everyone is permitted
to copy and distribute verbatim copies of this document, but changing it
is not allowed http://www.workers.org/ww/2004/bigoil0603.php