Wednesday, February 23, 2011

Too Bad The GOP Filibustered The Windfall Profits Tax Three Years Ago-- Watch Oil Prices Go Through The Roof


As of last November, the single biggest source of petroleum for American consumers was Canada... followed by Mexico and then Saudi Arabia, the same three-- in the same order-- from which we also get most of our crude oil imports. Libya isn't on the list of the 15 biggest exporters to the U.S. of either crude or of petroleum.

And the U.S. actually exports some of the oil it drills for domestically-- Texas, Alaska, California and Louisiana are big producers-- which helps explain, perversely, how even a very temporary shut down of Libya's exports into the global chain will have an impact on the U.S. Worldwide demand is not elastic; it doesn't go up and down with supply, at least not on a dime. So when Libyan supplies to, say, Italy, for whom Libya is like Canada and Mexico, are taken out of the world oil market, Italy needs to get it someplace else, in effect driving up demand... and prices (here). Markets work that way... especially if the powerplayers want them to.

Common wisdom is that crude in this country spiked over 7% yesterday (to $96.48 a barrel) because of violence and instability in the Middle East and in Libya in particular-- with oil traders fretting. But were they-- or were they just cashing in? It was the crazy radicals in the Middle East who drove the price of oil higher and the stock market lower. I got back from Mexico yesterday and had to fill up my car-- thankfully a Prius. Prices seemed t have jumped close to a dollar a gallon and "everyone" says prices are heading to $5.00/gallon. But the gas I bought was bought and refined and resold months ago. Somebody's taking the opportunity to make a very big profit-- and calling it fretting and screaming the sky is falling while raking in a fortune.

Three years ago, "Senate Republicans successfully filibustered 2 energy bills that would have imposed a windfall profits tax and ended $17 billion in tax breaks for oil companies. In one, 47 Democrats and 3 Republicans voted to shut off debate, far fewer than the 60 needed and cloture failed 50-44, without even a single Democrat crossing the aisle, not even Mary Landrieu, Blanche Lincoln or Mark Pryor, normally Big Oil big shills. The other cloture attempt also failed 51-43, although this time Landrieu was sticking up for the oil lobbyists who treat her as well as they treat Republicans. Six Republicans actually crossed the aisle-- this was before the Koch Bros had organized the teabaggers as a potent force for corporatism. At the time, in the middle of the presidential campaign (neither Obama nor McCain was in DC that day and neither voted, in effect canceling out each others' yea and nay) the Christian Science Monitor pointed out that "the issue of which party is doing the most to ease the impact on American families [of record high gasoline prices], is eclipsing all other issues as a top political concern. Lawmakers on both sides of the aisle say they expect such high-profile votes on the issue to continue until the fall election."
"Today, Republicans will have a simple choice: Will they continue to stand with [President] Bush, [Vice President] Cheney, and the modern-day oil barons? Or will they join us on the side of struggling American families who deserve better?" Senate majority leader Harry Reid said before the Tuesday morning vote.

Since Mr. Bush came to office in 2001, gasoline prices have more than doubled and oil companies have made more than half a trillion dollars in profits, Democrats say.

The proposed Consumer-First Energy Act would create a 25 percent windfall profits tax on companies that don't invest in renewable fuels or electricity production. It also would zero out some $17 billion in tax breaks for the oil industry and use the revenue to help consumers by investing in an Energy Independence and Security Trust Fund. The bill aims to curb speculation by hiking up margin requirements for those investing in futures trades and banning traders from using offshore futures markets to evade regulation.

This morning Ed Potosnak, progressive candidate running for the New Jersey House seat currently occupied by oil company shill Leonard Lance (right), told me that "The rising cost of gas at the pumps not only puts a strain on our budgets, but also threatens our recovery from the Bush Recession. When fuel prices rise we often are fed a plausible reason-- lower temperatures are driving up demand, natural disasters, floods, etc... Meanwhile oil companies rake in record profits and their investors too. Enron took advantage of energy markets to drive futures prices higher, costing consumers billions. We can not afford to continue to let this happen. Consumers need protections from the energy market market manipulations that lead to high fuel prices. Without clear rules, and enforcement, our families and businesses will continue to be subject to erratic energy prices driven by greed and recklessness."

And Qaddafi may well wind up making wretched profiteers like the Koch Bros and their cronies tens of millions of dollars. His next move could well be sabotaging Libya's oil industry and sowing chaos. According to a Time reliable source Qaddafi "has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos."
My Libyan source said that Gaddafi has told people around him that he knows he cannot retake Libya with the forces he has. But what he can do is make the rebellious tribes and army officers regret their disloyalty, turning Libya into another Somalia. "I have the money and arms to fight for a long time," Gaddafi reportedly said.

Watch the stoopid:

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