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Oil, High Prices And Learing To Live Without It

America is addicted to oil even though we know it’s a finite commodity that causes massive environmental problems in every step of it’s production. Furthermore our dependance on it is a threat to our national security since our own supplies are nearly exhausted and the largest reserves are a long way away and/or in the hands of unstable governments that have to repress their people in order to maintain power. In yesterdays post we explored America’s impirealistic polices in the middle east and their parallels to other failed empires with William Astore and Noam Chomsky. At the root of the power of these depots have is the oil
under the ground they control. We accept and encourage these “stable” regimes because  we need the  secure supplies they provide.

Today we take a look at the price of oil because as we all know there’s a lot more to it than just supply and demand. The price of oil has become another game that speculators who have nothing to do with the industry or the people who use it’s products. These professional gamblers are responsible for a large part of the high prices we pay. Don’t believe me? Would you believe the chairman of Exxon Rex Tillerson ? Well here we present a story from the McClatchy papers about high gas prices and Mr. Tillerson’s senate testimony on them.

Speculation Explains More about Oil Prices Than Anything Else

by Kevin G. Hall and Robert A. Rankin

     “That’s not the conventional explanation, but it’s the one the facts point to. Usually analysts say today’s high prices stem simply from “supply and demand.” They mean demand for oil and gas is rising and supplies aren’t keeping up, so people bid up their price. But global and U.S. supplies are plentiful and demand is stable, so that’s not it.

Then the analysts say it’s because the market’s afraid Middle East turmoil will interrupt oil supplies, so nervous buyers are
bidding up prices to ensure they lock in a contract for oil now, just in case it’s scarce later. There’s probably some truth to that, but after five months of turmoil, there’s been no significant impact on Middle East oil supplies, even as prices have see-sawed, so that’s not credible either.”

To read the entire post click here.

By an interesting coincidence I came across Mr. Tillerson’s name in the news a second time last week. He was invited to deliver a commencement address at Worcester Polytechnic Institute in Worcester, MA. This invitation was not popular with that choice and after some protest a second speaker was added. Richard Heinberg, senior fellow of Post Carbon Institute  was invited to delver an alternative speech. And as you can imagine from the name of his organization that’s just what he did. Alternet published his address and we will share it with you.

Vision: Building a World That Can Run Without Fossil Fuels Will Be the Challenge of Our Lifetimes

“ExxonMobil is inviting you to take your place in a fossil-fueled 21st  century. But I would argue that Exxon’s vision of the future is actually just a forward projection from our collective rear-view mirror. Despite its high-tech gadgetry, the oil industry is a relic of the days of the Beverly Hillbillies. The fossil-fueled sitcom of a world that we all find ourselves still trapped within may on the surface appear to be characterized by smiley-faced happy  motoring, but at its core it is monstrous and grotesque. It is a zombie energy economy.

Of course, we all use petroleum and natural gas in countless ways and on a daily basis. These are amazing substances—they are energy-dense and chemically useful, and they yield enormous economic benefit. America started out with vast reserves of oil and gas, and they helped make our nation the richest and most powerful in the world.

But oil and gas are finite resources, so it was clear from the start that, as we extracted and burned them, we were in effect stealing from the future. In the early days, the quantities of these fuels available seemed so enormous that depletion posed only a theoretical limit to consumption. We knew we would eventually empty the tanks of Earth’s hydrocarbon reserves, but that was a problem for our great-great-grandkids to worry about. Yet U.S. oil production has been declining since 1970, even with huge discoveries in Alaska and the Gulf of Mexico. Other countries are also seeing falling rates of discovery and extraction, and world crude oil production has been flat-lined for the past six  years, even as oil prices have soared. According to the International Energy Agency, world crude oil production peaked in 2006 and will taper off from now on.

To read the entire speech click here.

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