When I was growing up in the 1960's, we had something called
"gas wars" where service stations, often located across the street
from one another, would engage in price war to attract customers, even if it
was just by a penny, to see who could go the lowest. That ended with OPEC's oil
embargo in 1975.
Today, we're engaged in another "gas war",
but this time it's energy giants who've
partnered up with government versus us---the American consumer. If you've bought gas recently you've no doubt
been stunned by the prices. People drive dozens of miles just to try and save a
few pennies on the gallon.
According to a recent
survey of gas stations, one in five are now charging a minimum of $5.00 a gallon for regular and could reach $7.00 by the
end of Summer in spots. Premium is going for as much as $10.00 a gallon and may
reach $12.00 or higher in some places. By the way, gas prices have increased
63% increase thus far over last year (and yes, Donald Trump was still president
then).
If we listen to the politicians, especially those like
President Biden or Nancy Pelosi, they want to lay the blame at the feet of
Russian President Putin or on China's expansionist foreign policy. A few blame
the volatile stock market, while others say it's our strained energy grid,
Covid, or supply chain. Some want to blame the domestic policies of President
Trump or even on consumers! Anybody but them.
But what's the truth? Who's fault is it that we're paying
$5.00 dollars or more for a gallon of gas? Who is responsible for the war on
the American consumer? After some extensive research, I may have the answer, or
rather, the answers. A lot of other analysts
happen to agree as well. Something as complex as energy production, a slumping
economy, and rising prices aren't likely to have a single cause. As an aside,
while I've numbered the primary causes, they are ranked in no particular order.
1. The war in Ukraine. Some analysts claim
the central reason for the dramatic rise of gas prices is the war in Ukraine by
Russia. Russia is a huge supplier of oil and gas, especially to Europe which
receives around 40% to 60% of its supply from Russia. The countries of Estonia,
Finland, Slovakia, Lithuania and Poland get 75%+ of their energy needs from
Russia.
Germany, Europe's economic engine and the world's fourth
largest economy, gets as much as 70% of its oil and gas from Russia. China, the
second largest economy gets about 20% (China is expected to surpass the U.S. economy
within the next ten years, if not sooner). Even the U.S. gets about 8% from
Russia. Europe gets 45% of its natural gas from Russian fields in West Siberia.
Ironically, every NATO member, whose job is to defend Europe
against Russia are actually dependent on Russian exports. Turkey
gets 45% of its oil and gas from Russia---17% of its oil and 40% of its gas.
Much of Russia's petroleum supply comes from Siberia, which
has been more accessible thanks to a warming climate and melting permafrost,
and increasingly from the Russian Arctic. Russia is also accessing oil and gas from the
Crimea with its vast reserve in the Black and Azov seas.
Nevertheless, Russia's invasion of Ukraine in February of 2022
has caused a disruption of not just oil and gas production, thanks primary to
U.S. lead sanctions and not the war itself. Europe has adopted a partial ban on
Russian oil and gas as well as shipping insurance on oil imports. Whereas Russia is Europe's chief supplier,
Europe is now more reliant on the United States, Middle East, and West Africa
than ever (Turkey previously announced that it would not honor any sanctions
and would continue to import Russian oil and gas). That additional demand has
triggered an increase in price.
2. Covid and the
Quarantine/Breakdown of the Supply System. Covid, which made its appearance
in 2019, has had a devastating affect on the world's economy by bringing
production to a near standstill. Shipments already in route were left severely
backlogged.
However, with the ease of
restrictions, ports and warehouses reopened to 30%+ more traffic but with 28%
fewer workers. It's chaos.
In what has become
known as "The Great Resignation", millions have refused to go back to
work for a variety of reason ranging from refusal to get the mandatory vaccine to
low wages and mistreatment by management.
Many prefer the flex-hours and working from home.
In addition, because of uneven policies applied by the U.S.
government, small businesses were forced to shutter during the pandemic while
large mega-stores were allowed to remain open. The result has been the
permanent closure of thousands of "mom and pop" businesses, which
have traditionally been the backbone of our economy.
Although most Covid restrictions have been dropped, millions
of jobs remain empty. There are currently 11.4 million job openings. Shelves
are still empty, and shortages are still commonplace. Many businesses have
reduced hours, close early, raised wages and prices (which are picked up by the
consumer), and even offered same day pay as an enticement.
To make matters worse, the supply chain is dependent on over-the-road
truck drivers, many of whom are independent. However, the cost of owning one's
own rig has skyrocketed; everything from the cost of insurance to the cost of
diesel fuel, which has gone from an average of $2.39 a gallon in May 2020 to
$5.57 in May 2022 (which increased $2.00 since the first of the year). In
addition, shippers try to get by with paying less per diem or less per load and
faster turnarounds, making it tougher to make a living.
AAA has reported that this summer 81% of those surveyed plan
to travel this summer. 18% by air and 39.2% by car (this was before the price
increases). This would add to the demand for gas, which will again drive up prices,
especially around the usual tourist destinations.
According to the U.S. Department of Transportation's Bureau
of Transportation Statistics, the cost of jet fuel has jumped in price, marking
an eight year high already this year. This
affects everything from the price of a ticket to the cost of shipping a
package. That doesn't include a shortage of pilots or mechanics.
3. The Cancellation
of the Keystone Pipeline.
You hear
politicians make promises all the time about what they're going to do on their first
day in office. Well, Joe Biden was one of the very few to live up to his
promise, which was to cancel the Keystone Pipeline Project.
Simultaneously, he sent a message to "whomever it
concerns"--- there will be no new pipelines anywhere. Biden has also stopped the sale of leases to
permit drilling on federal lands or allowing any new offshore drilling (and
yes, that includes Alaska and Texas).
Biden recently quipped on the late night show "Jimmy
Kimmel Live" (June 8, 2022), that oil producers are refusing to increase
demand. That's a lie, even by political standards. Biden's energy plan is very simple. It's to force American's
away from fossil fuels no matter the cost we have to bear. By reducing supply,
he is by default triggering a rise in the price of gas and oil.
4. Breaking Our
Fossil Fuel Habit. House Democrats have also made it clear that they will
prohibit bank loans to any new or expansion of fossil fuels production. Biden's
plan is to force American's away from fossil fuels by making it more expensive
for Americans to drive unless, of course, they are willing to switch to all
electric/battery or hybrid vehicles. For
most Americans, that means taking out a loan and going deeper into debt, which
the majority of Americans can't afford to do (or simply unable to do).
Biden's Secretary of the Interior, Debbie Haaland, still
insists that gas prices aren't high (perhaps she means by what they're going to
be by the end of the year). Electric cars (aka "EV" for electric vehicles) get about 200 miles to the charge and much less
during cold weather according to Consumer Reports, who also point out that
charging stations are still rather rare (about 10,000 nationwide compared to
about 145,000 gas stations), 1/4 aren't working at any given time.
As an aside, this 200 miles per charge is not "city"
driving and it's about half the distance of the average gas consuming car,
meaning we get half the mileage. While currently many of these recharging
stations are free, it's anticipated that most, if not all, will carry some sort
of fee as more come online. The FTC has stated that the rising prices are the
result of decreasing supply and little else.
Additionally, in order to produce these "electric
stations" which electric cars needs, there has to be an increase in coal
and other fossil fuel production, which has to be converted into electricity.
So, please tell me how that benefits the environment? How does that reduce our
consumption of oil, coal, and natural gas? Finally, these same utility
companies which are making billions in profits are the ones all set to cash in
on this supposed transition of our energy consumption.
5. Good Old Fashion
Greed. Despite the war in the Ukraine, inflation, Covid and quarantine, a
broken supply system, a reduction in oil and gas production, energy companies
are raking in the profits thank you very much. Chevron has seen a $6.3 million
profit in the last quarter and is up $1.4 billion dollars over last year. Dutch
Shell reaped a $9 billion profit while BP racked up $6.2 billion so far. Exxon
Mobil reported a profit of $5.48 billion, which is double over last year.
Oil companies are seeing profits that they haven't seen in
over a decade. Various public watchdog groups such as Public Citizen and
BailoutWatch, has documented $56 billion in new buyback authorizations since
last October as compared to a "mere" $11 billion for the previous
nine month period. In fact, the top energy producers made $100 billion dollars
just in the first quarter of 2022.
Meanwhile heating oil and gas, along with utilities are
expected to skyrocket; all of which driving up inflation (heating oil is
expected to double in price over last year) Utilities will increase between 8%
and 23% over 2021 (Kentucky is expected to see a 14% increase while Indiana
will see a 9% increase for instance). How does that make you feel? Good?
6. The Blind Shuffle.
The "blind shuffle" was a old carnie dice game using a single dice
which got its start back in the days of Vaudeville. Without going into details,
it operated similar to the old shell game but involved a single dice. No matter
what dice you picked, you lost. That's what's happening to the American Public.
We're being played. No matter who we elect, we lose.
Biden is genuinely unconcerned with the growing inflation
and paying more for less. He's equally oblivious to rising gas prices. His aim
is forcing Americans into deeper debt by buying electric cars (while the ruling
elite go about their business in gas guzzling and polluting private airplanes, and big limos).
Why should Biden and the ruling Oligarchy be concerned? He uses Trump, Republicans, climate change,
Covid, the quarantine and the ruptured supply chain as excuses that the media
sprinkles about like glitter. Meanwhile, the oil and gas companies are making
obscene profits, along with the ruling class, which includes Congress and Wall
Street, who are rolling in it too.
7. Conclusion (or the
"Let Them Eat Cake" Scenario). I'm sure anyone who ever took a
European History class knows the story of Marie Antoinette, the Queen of
France. For those in need of a quick
refresher, the year was 1793. The peasants throughout France were revolting
thanks to poverty, rising prices, unfair laws, the lack of decent food, no jobs,
and substandard housing.
Marie Antoinette, like the elites of her time (including
clergy) were totally oblivious to the plight of the peasants. When asked what the peasants should do, she
said "Let them eat cake" (actually it was "brioche", a
expensive sweet roll), which she thought was still available and affordable. It
wasn't.
That remark, which led to her beheading along with her
hubby, King Louis XVI, and most of the elites, seemed to sum up the revolution.
Ever since it has served as indicator of the elite's insolence and haughty distain
towards the working class. Sometimes, it's not so good to be king...or queen.
The rising gas and oil prices are by design. It's being
engineered. President Biden has all but said as much. The same for inflation.
Biden is trying to force the American People off of fossil fuel, and at the
same time, further into debt by purchasing electric cars (the average American
family is
already in debt to the tune of
around $155,500).
Who benefits?
The oil and gas companies, who are already making billions
in profits, will make even more since they're responsible for producing the
electricity needed to "fuel" the charging stations which they'll
supply and/or own, which means more coal and fuel. Auto manufacturers like Elon Musk's "Tesla" benefit. Electric cars are expected to be at least a $350 billion dollar business (of the top 30 EV producers, half are headquartered in California, followed by Massachusetts, Colorado, and New York). The
banks benefit thanks to low interest government loans and increased consumer
debt. Who loses? You do. So do I.
Those unable to afford an electric car will either have to
pay sickeningly high gas prices, curtail travel, or depend on public
transportation, which you can bet will be all electric. Meanwhile, utility
rates will skyrocket, forcing Americans
onto "managed use" plans. "What's that?" you ask. Those are
monitoring devices which are attached to your meter. They regulate and control
your usage of electricity.
Expect the same thing will happen to water usage (did you
know that in some locations, it's illegal to own a rain barrel? Yelp. It affects
what they can charge for "runoff fees"). It's also illegal in some places
to use a well for drinking purposes or have a septic tank? The water company
doesn't make money.
In addition, you'll be responsible for them extending the
appropriate lines to your property plus paying a connection fee! As for solar and wind panels, while they
generally work, don't look for earning an "buyback" fees from the
utility companies. That's all a thing of the past. This is how we get permanently trapped in the
Corporatocracy's web, whether we like it or not. Welcome to the machine.
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