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For those of us old enough to remember vinyl, the phrase “it’s like a broken record” comes to mind. First the headlines repeat the call from Congress to tax Big Oil and get a piece of those profits. Then the congressional hearings play themselves out on Capitol Hill. The legislators call the CEOs greedy. The CEOs state a case of supply and demand. The meeting is adjourned, and the price of fuel goes up again.
With today’s well-connected research options, it is very easy for us to look back a few years, and when we do, we realize that nothing ever really changes. I think it is safe to say that if Big Oil could put more of its product into the marketplace, it would. This does not hold true, however, for the national oil companies and the producing countries. In addition, something beyond supply and demand seems to be driving these prices. Could it be that some profits are being made in the financial community?
The only way to bring the price down at the pump is to increase the supply of “cheap oil.” In an age when a barrel sells past $130, this would be akin to finding cheap gold, cheap diamonds, cheap copper, cheap steel, cheap uranium. Unfortunately, without a plan to increase American supplies, we will not see any reduction in price. As long as producing countries refuse to let our international oil companies in to produce their resources, we will not see any appreciable relief at the pump. Our government seems to have the same goal as the producing countries: to limit production by taxing the industry.
This month’s cover story, “Déjà Vu All Over Again,” reviews the last few congressional hearings. Compare and contrast the questions and answers, and draw your own conclusions.
Also this month, Matt Simmons looks into how a recent spike in prices was covered by the media and concludes that the pundits should undergo a reality check before they express their “expert” opinions yet again. Keith Meyer assesses the growing appeal of biofuels, stressing that we should save the corn for cooking, not for powering our cars. And Brian K. Tully looks beyond the hype of the high-mileage car to remind us that even the 32-mpg Mini Cooper is a major emitter of noxious fumes.
Our spotlights on North America, Latin America and North Africa focus on activity (or lack thereof) in the Gulf of Mexico, a Mexican gas subsidy that gives drivers some relief at a price to PEMEX, and more reasons to worry about violence in Sudan.
Peak driving season is here; so is hurricane season; so is rising demand in India and China. One way or another, prices are going to react. Perhaps Big Oil’s CEOs should keep their suitcases at the ready for yet another trip to Washington.
You’re going to read a lot of viewpoints in this month’s issue. Why not add yours? I am eager to hear it all – from rant to rave and everything in between. E-mail me at wemreditor@worldenergysource.com. And remember that subscribers to World Energy Monthly Review read the important news first.
Richard R. Loomis
Editor-in-Chief
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