“The oil is ours”

The people in the US are hearting from oil prices. Consumers are not only paying a lot more at the pump, but also paying more for every thing else they buy. The local, state, and federal governments as well as businesses and the industrial sector are feeling the negative effect of the oil price hike. The oil prices have either a negative or positive effect on the whole economy. First, let us explore the oil problem, look at the facts, examine the causes, and propose an effective and proven-to work solution. Second, we will take a general idea about our staled economy, and the way it should be fixed.

Facts

According to the WORLD FACTBOOK (CIA publication), and the U.S Energy Information Administration, the U.S consumes 18,690,000 bbl/day (barrel/day) of crude oil. Which makes us the largest oil consumer in the world. The second largest consumer in the world is the European Union with the total of 13,680,000 bbl/day. The third is China with the total of 8,200,000 bbl/day. The U.S is ranked third in the world, in terms of oil production, 2009 estimate according to the above sources. The largest oil producer in the world was Russia with 9,932,000.bbl/day. The second was Saudi Arabia with 9,764,000 bbl/day. The third was the U.S with 9,056,000 bbl/day.  

According to the U.S Energy Information Administration, we import oil from more than fifteen countries, the top five countries accounts for 72% of our imports. Canada is the largest oil exporter to the U.S, exporting in 2010 total of 1,972,000 bbl/day. The second is Mexico with a total of 1,140,000 bbl/day. The third is Saudi Arabia with a total of 1,080,000 bbl/day. The fourth is Nigeria with the total of 986,000 bbl/day. The fifth is Venezuela with total of 912,000 bbl/day. In a nutshell the sources of the oil we consume in the U.S is 49% U.S oil, 10.6% Canadian oil, 6% Mexican oil, 5.7% Saudi oil, 5.3% Nigerian oil, 4.8% Venezuelan oil, and 18.6% from more than 10 other countries.

The Cause

GREED plain and simple in the name of capitalism, I mean oil companies and Wall Street greed. Generally speaking, the price of goods and services are determined by the supply and demand curves. Oil, as any other commodity, was valued based on the same principles, until the turn of this Century. Speculators came to the picture; they buy and sell as much oil as possible, on paper, to make a quick and easy profit. The barrel of crude oil is being traded many times among the speculators before it reaches the refinery. According to the Department Of Energy (DOE), the price per barrel of crude oil increased from $31.61 in July 2004 to $137.11 in July 2008. DOE also reported that the national average price for a gallon of a regular unleaded gas in the U.S grew from $1.93 to $4.09 for the same period. The big five oil companies in The US are British Petroleum, Chevron, Conoco Philips, Shell, and Exxon Mobil.

The above quote was taken from the New York Times, business section, published on February 1, 2008. “ The company (Exxon Mobil) reported Friday that it beat its own record for the highest profits ever recorded by any company, with net income rising 3 percent to $40,6 Billion, thanks to surging oil prices. The company’s sales, more than $404 billion, exceeded the gross domestic product of 120 countries. Exxon Mobil earned more than $ 1,287 for every second of 2007.”

Our National debt on Sep. 30, 2007, according to Treasury Direct..gov, was $9,007,653,372,262.48 ( more than 9 trillion US Dollar).The Outstanding Public Debt as of 10 Jul.2011 is $14,351,211,676,995.38 ( more than 14 trillion US Dollar) according to the U.S. National Debt Clock. How is it that the country is plunging into a record debt while companies makes a record profits?

Ever since the oil price hike, the American media rallied the American general public to blame foreign entities for the oil price hike. The U.S government, the oil industry as well as the media knew from the beginning that it was not foreign entities. It was the greed of Wall Street, the American oil companies and the speculators.  Exxon Mobil paid  $100million in “advertising” in 2007 according to different sources in the Internet.

The American economy is much bigger, stronger and more resilient than any average person can think, even with the economy troubles that we are experiencing. No foreign government or entity can threaten this economy. The only threat, if any, comes from within. The latest hits that our economy endured in the last few years are from the oil, the real estate, and the auto industry, which were caused by greed, mismanagement or both of our Americam companies. To put hypothetical number to the size of the US economy, let us assume that every individual in the US, including the newborn, spend $1.00 a day which means that $311 million circulating that day.  According to the U.S Department of Labor Statistics, the average American consumer (unit) spent $49.684 in 2007. The ideal solution for this troubled economy is to put more money in the hand of Americans so that they can save and spend more. Having said that, I do not propose a rebate that is similar to President W. Bush rebate. One more thought about the subject that, the European Union was created not only to end the hostility among its nation members, but also to boost their economy and to be compatible with the American and the Chinese economies.

The Solution 

Through out the 20^th Century many countries experienced smeller situation, not speculation, but price increase and manipulation. The only solution that these countries found to combat the situation is by nationalizing the oil industry. There are 50 oil run states companies in the world, 28 of which are fully government owned according to industry publication Petroleum Economist.  The people of Brazil started a campaign to regain their control over the oil industry in 1946 under the historical slogan “the oil is ours”, which lead to the creation in 1953 of Petrobas (government run oil company). The current Venezuelan President re-nationalizes the oil industry in 2002, which create tension with the American administration during President George W. Bush. Needles to say PDVSA (Venezuelan government controlled oil company) contribute $61.4 billion to social development fund in Venezuela between 2004 and 2010. The price of the gallon of unleaded gas in both countries is less than one-third the price we pay in the US at the pump.  Many countries in South America, Africa, and Asia nationalize the oil industry knowing and believing that oil is a national treasure for their citizens, and it should benefits individuals and should be used as a tool to boost the country’s industrial sector.

It is unconstitutional for the US government to nationalize an existing company or corporation; also it is illegal to monopolize any industry or corporation. The government has to take it upon itself to create a publicly traded oil company, controlled by the government, .as a competitive company along with the other oil companies Doing so, the average American will pay much less and save more money. More manufacturing companies will be erected, more jobs will be created, and the government can finance, from the oil revenue, more programs for its citizens, also can fund more programs for alternative fuel, and green energy. Further more we will be able to eliminate the country’s deficit.  The benefits are un-imaginable. In the current situation only few thousands, stockholders, whom can afford buying stocks, are profiting and getting richer while the average person is cutting his spending and saving to pay for the oil price increase.     

People and their buying power can make strong economy. Corporations by it self without the people cannot make a strong economy. Empowering the people, and holding corporate to a level of ethical standards and a sense of a citizenship are the sure way to achieve a strong economy. Therefore the power of making any economy decisions should not be controlled only by corporations and their lobbyist. The above five oil companies in the US spent $ 65.8 million lobbing in 2008, $29 million of which was from Exxon mobile according to Center for American Progress.

Many politicians and economists in Washington DC trying to re- adapt the “ trickle-down theory” to “fix” the economy. The “trickle –down economics” was implemented by the Regan administration under the name of “Supply Side Economics” according to David Stockman, Regan budget director, when he said in an interview that the “supply-side economics” was used to promote a trickle- down idea. Trickle-down theory suggests that giving a huge tax cuts and incentives for corporations will result in reviving the economy. David Stockman who championed these tax cuts became skeptical of them later.   Milton Friedman, a Noble Price winner and Regan Economic Advisor, suggested this theory.  The economist John Kenneth Galbraith noted that “trickle-down economics” had been tried in the US in 1890’s under the name of “horse and sparrow theory” which was partly to blame for the Panic of 1896 (more information available online).

I can not emphasize enough on the fact that the base of strong economy is the people, not the big corporations, in other words people buying power is the foundation of strong economy not corporation. Not to be redundant, corporations are component of strong economy not the foundation. I said this again and again to drive one point that is the government has to provide its citizens with social, education, health, and other programs then fund these programs from the country national resources. In other words if the US government should take it upon it self to dig, refine, and sell the oil to its citizens and to the industrial companies. I will not mind paying $2.00 for example for a gallon of unleaded gas, which bare a reasonable profit, if this profit pays for social, educational, health, and many more programs to benefit the average American. Further more the spirit of the trickle-down theory is un-American, where dose it say in the constitution “take care of the rich, so the others might benefit”:

Conclusion

As I am writing this, the news media are reporting of meetings between President Obama and the Republican Leader John Boehner, to decide on the debt and spending issues. Both of them seem to be focused on raising taxes and or spending money we do not have. Both of them are suppose to be highly educated, experienced in politics and economy, yet, it seems to me, that they cannot think outside the box. Or may be, I say that with sadness, are controlled or influenced by corporations and their lobbyists which forbade them from thinking outside the box. Whatever was the case both of them, my opinion; do not deserve to be in office. I think that most politicians in Washington DC are working for rich Americans, not average American and they too should not be in office. In retrospect my thoughts are taken me to the year of 1776 the American Revolution in which many historians and scholar agreed that some of the main reasons for the revelation are moral issues, tax issues, and tea issue. Do you see any resemblance? Just replace the King then by our present day politicians, the tea then is the oil now, and the tax issues then and now, not to forget the morality of benefiting the rich and forgetting the average, the only difference we do not have leaders like Washington, Adams, and others. 

Many economists suggested that the $4.00 price for a gallon of unleaded gas would be the new benchmark. I think that these economists are very cautious in their prediction. I think that the oil companies are training the American consumer to accept a higher gas price in the near future. I am stating this for one good reason, which is there is no limit for human greed unless it stopped. This nation is a can do nation, Laws can be re-written, politicians can be straiten out, if the people said, “this is our oil” it shall, and should be done. Make no mistake, I am not advocating communism or socialism, I am a constitutionalist, which states in other words, this land, resources, government and economy is by the people for the people, not by the people for the few. All I am saying that we live in a great country, yet we have many serious issues which effect our way of life one of which is the oil. All I am saying is “THE OIL IS OURS”

this article is not proof-red yet, please excuse any stracture and grammar errors.