June 19, 2008
Whenever I've been watching one of the billions of presidential debates over the last few months, my roommate has occasionally asked me "what are they going to do to bring these gas prices down?" And my answer has been pretty pathetic: "uhm, there's not enough refineries, and China's increasing the demand, so it's out of their control until we switch to renewable fuels.... I think".
But the more I really thought about it, the more that simply didn't make sense. If Exxon is making a BILLION dollars in profit for the first three months of this year, that means that their revenues have vastly outpaced their expenditures. So, even if the processing of crude oil had become so much more expensive because of bottlenecks in the pipeline, which would, presumably, drive up the price of a barrel of oil, it still doesn't account for the huge profit disparity.
And then I saw this segment on "Countdown with Keith Olberman" last night.
In short, it's all Enron's fault. Enron and Phil Graham.
So, the question is, if the so-called "Enron Loophole", that allows energy speculators to simultaneously drive up the price of oil while hording it as an investment and then reaping insane profits, has single-handedly caused the price of oil to double since it's inception, why haven't ANY of the Presidential candidates talked about it this year? After all, you would think that Enron is a pretty easy boogeyman to present for further public flogging.
And, yes, I'm talking to YOU, Senator Obama.
Some legislation has been passed to address this, but there's much more work to be done. If you want to help do something about it, check out StopOilSpeculators.com.
The other thing that concerns me is that, near the end of Keith's report, he mentioned the term "oil bubble".
Having lived through both the 1st internet bubble and now a real estate bubble, the thought of an oil bubble makes me extremely nervous. I mean, sure, if the bubble burst, the oil prices should collapse, which would be easier on my petrol budget. But, if all of these financial institutions are acting as major oil speculators, would the crash of the oil market make some collapse like Bear Sterns, pouring even more salt in the wounds of the credit crisis?